Below is a Jaguar notice (available on SEDAR) note BRL rate is half the current rate, that means costs would reduce. Just food for thought as we ponder real value of the project.
Gurupi=Centrogold
January 31, 2011 2011-01
Concord, New Hampshire JAG - TSX/NYSE
Jaguar Announces Completion of Gurupi Feasibility Study and Provides Update of Development and Operations
Jaguar Mining Inc. (“Jaguar” or the “Company”) (JAG: TSX/NYSE) today announced it has completed a feasibility study for its Gurupi Project in Northern Brazil, which incorporates alternate technologies, and is providing a summary of the project herein. The Company is also updating its development activities during Q4 2010, which it believes will help support its FY 2011-2015 outlook for gold production and cash operating costs. Information detailing the Company’s preliminary operating performance results for Q4 2010 and FY 2010 is also being provided. An updated corporate presentation has been made available, which can be found on the Company’s website at
www.jaguarmining.com.
Gurupi Project Update and Overview
The Company has completed the feasibility study for the Gurupi project, and the related technical report will be filed on SEDAR today. At an assumed gold price of $1,066 per ounce, the project is estimated to produce a pre-tax internal rate of return (“IRR”) of 29.1% with a net present value (“NPV”) of approximately $337 million, at a discount rate of 6%. The feasibility study includes a technical review of an alternate processing scheme that provides certain potential advantages over traditional semi-autonomous grinding and carbon-in-pulp (“CIP”) treatment by incorporating high pressure grinding rolls (“HPGR”) and intensive concentration as an additional circuit at the front-end of the process. By incorporating these additional technologies, estimated annual cash operating costs are lower than the figures published in the Pre-Feasibility Study (May 2010), thereby further improving the project’s potential economic returns.
A summary of the Feasibility Study (2011) as filed is as follows:
Assumed Gold Price: US$1,066/oz
Average Mill Feed Grade: 1.10 g/t Au ROM Total Tonnage: 63,756,700 tonnes Mining Rate: Approx. 5.0 million tonnes per year over the life-of-mine Metallurgical Recovery: 85.6%
Total Gold Production: 1,932,920 gold ounces Annual Average Production: 148,690 gold ounces Mine Life: 13 years Start Production: 2013 Capital Cost: Pre-operational: $278.0 million Life-of-mine: $345.7 million Average Cash Cost: $445 per ounce of gold Average
Total Cash Cost: $676 per ounce of gold Assumed Exchange Rate: R$1.80 equals US$1.00 through 2012
R$1.90 equals US$1.00 2013 through 2025 NPV @ 6%: $337.0 million
2
After-tax IRR: 29.1% Cumulative Cash Flow: $639.3 million after tax Payback: 3.5 years
A table of sensitivities is included in the feasibility study to illustrate the impact of key factors such as capital cost, operating expenses, gold prices, exchange rates and recovery rates on the NPV and IRR.
As shown in the table of sensitivities, at current gold prices in excess of $1,300 per ounce, the NPV @ 6% would be over $550 million with an after-tax IRR of approximately 42%.
Based on an estimated 69,887,500 tonnes at an average grade of 1.12 grams per tonne, Gurupi contains total
gold mineral resources of 2,518,170 ounces. The project has
an additional 616,630 ounces of gold categorized as inferred resources, based on 18,676,700 tonnes at an average grade of 1.03 grams per tonne. As determined within the feasibility study, the Gurupi project has probable gold reserves of 2,327,930 ounces, based on 63,756,700 tonnes at an average grade of 1.14 grams per tonne. Gold reserves are included in the gold mineral resources as noted. The average waste-to-ore stripping ratio is estimated at 3.94.
The feasibility study was prepared for Jaguar by TechnoMine Services, LLC (“TechnoMine”) under the guidance of Ivan C. Machado, M.Sc., P.E., P.Eng., Principal of TechnoMine. Mr. Machado is a Qualified Person as such term is defined in NI 43-101. Actual operating costs, production and economic returns may differ materially from those anticipated by the feasibility study, and depend on a variety of factors, some of which are outside the control of the Company.
The Company is continuing with the work to enable the Gurupi project to receive an installation license. In addition to site preparation and other activities, the Company plans to conduct a 30,000 meter drill program on targets in close proximity to the main ore bodies identified in the feasibility study. Based on existing drill results from these nearby targets, management believes the mineral resource base for the project could increase. The basis is in-part tied to a study conducted by SRK Global (“SRK”), which recently completed an independent assessment of the Gurupi project. SRK’s team noted a significant area of potential gold mineralization not contained in the project’s current indicated mineral resource base. Management estimates the cost of this additional program will total approximately $12 million. This effort will include infrastructure development, drilling, metallurgical testing and technical analysis.
At the conclusion of the work program, the Company will determine whether to proceed with construction as outlined in the recently completed feasibility study, or if warranted, to increase the scope and scale of the project based on the additional drilling results and other analyses. Jaguar expects to reach a final determination later in 2011.
Since the above report was published considerable gold has been added to the resource and at VERY good grade.
