Jaguar Mining (TSX: JAG) has more than doubled its probable gold ounces at the MTL complex in Brazil including assets it bought from Iamgold (TSX: IMG; NYSE: IAG) in August.
The MTL Complex about 110 km west of Belo Horizonte in Minas Gerais state holds 2.5 million proven and probable tonnes grading 4.1 grams gold per tonne for 324,000 oz. contained metal, Jaguar said on Monday. That’s a 122% increase in ounces compared with 2022 figures, it said.
The expanded reserves will feed higher current production, which was 17,316 oz. in the third quarter, as the company aims to mine new zones within two years. The MTL Complex mineral deposits includes the Turmalina mine, the Faina project, the Pontal deposits and the Zona Basal open-pit deposit as well as the Pitangui project – São Sebastião mineral resource that Jaguar acquired from Iamgold.
“We expect this new mineral resource base to provide the foundation for increasing production rates at the MTL Complex with additional long-term potential,” president and CEO Vern Baker said in a release. “At our Pitangui project, work has already begun to continue the permitting process started by Iamgold.”
Jaguar says it aims to complete about 1,800 metres of access drift to reach the Faina area by year-end. It expects to begin developing within the gold-bearing structures next year as well as continuing infrastructure development. By July, the company plans to start some test stoping and grow the Faina resource at depth and along trend towards Pontal.
“Underground development could potentially start within two years and with processing capacity available at the Turmalina plant, we are optimistic about the opportunity to develop this new (Pitangui) project at low capital costs,” Baker said.
Pitangui holds 3.4 million indicated tonnes grading 4.1 grams gold for 448,000 oz. contained metal, the company said. The inferred amount is 3.3 million tonnes at 3.5 grams for 379,000 ounces.
The Faina project holds 787,000 probable tonnes grading 5.2 grams for 132,000 ounces. The MTL complex has 7.6 million inferred tonnes at 3.6 grams for 881,000 oz., the company said. The complex-wide consolidated measured and indicated category shows 8.5 million tonnes at 4.2 grams gold for 1.2 million oz., it said.
Jaguar’s all-share acquisition of Iamgold’s assest in Brazil was valued at $9 million plus a net smelter return royalty on the Pitangui and Acurui projects. The royalty is for $80 per ounce on the initial 250,000 oz. of gold sold from Pitangui, followed by a rate of 1.5%. The Acurui royalty is 1.5%.
Shares in Jaguar Mining fell 1% on Monday morning in Toronto to C$1.99 apiece, valuing the company at C$157 million. They’ve traded in a range of C$1.12 to C$3.31 over the last 12 months.
The company’s assets are located in Brazil’s Iron Quadrangle, an exploration area dating at least to the 1699 discovery of gold contaminated with iron and platinum-group metals. The Iron Quadrangle contains deposits such as AngloGold Ashanti’s (NYSE: AU) Morro Velho, Cuiabá and São Bento mines.
Jaguar is the second-largest gold producing company tenement holder in the Iron Quadrangle, holding some 690 sq. km. The company also owns the Paciência gold mine complex, which has been on care and maintenance since 2012.
