TSX-listed Jaguar Mining on Monday moved to reassure investors that production at its Turmalina mine would stabilise in the coming quarters, after the company’s share price took a beating last week when it warned of lower-than-initially thought production at the Brazil operation.
In a statement addressing the recent management changes and operating progress, Jaguar explained that geotechnical issues in the higher-grade areas of Turmalina required modifying the mining sequence in the second quarter. This resulted in lower ore tonnage and grade.
The firm stated that it had identified several priorities at Turmalina, which would return its production to its historical profile. Some of its near-term priorities include modifying the mining approach to minimise the number of unfilled open stopes. It would also convert from blind back stopes to cut-and-fill stoping below sill pillars to ensure minimal exposure from unfilled stope walls.
Jaguar would further use top down drilling to ensure better quality control, adhere to backfilling in the stoping cycle to reduce unfilled open stopes, use better blasting techniques to reduce vibration into the rock mass, and improve ore control drilling, planning and execution to improve confidence in the ore production plan.
The miner expressed confidence that it would achieve its revised production guidance of 80 000 oz to 85 000 oz, without any incremental costs. It also believed that the mine would drive operational cash flow by the fourth quarter of 2018.
"Our top priority remains delivering key operational improvements at Turmalina as a path to returning to a growing and sustainable production profile more reflective of our large base of mineral resources,” said newly appointed interim CEO Benjamin Guenther.
Guenther succeeded Rodney Lamond, who last week resigned as CEO and director of the company.
Jaguar’s share price fell by 25% to 19c a share on August 15 when it announced the lower production guidance. The company’s stock remains at that level, despite the update issued on Monday.