Jaguar Mining Inc. (JAG:TSX) posted a Q1/23 that met expectations, reported Research Capital Corp. analyst Stuart McDougall in a May 11 research note.
"We have updated our model for the results and continue to recommend purchase as a Buy," McDougall wrote.
122% Possible Return
The analyst pointed out that this Canadian gold miner offers investors significant potential return, of 122%. This is reflected in the difference between Jaguar's current share price, CA$2.37, and Research Capital's target price on it, CA$5.25 per share.
Highlights of Results
McDougall summarized Jaguar Mining's Q1/23 results.
During the quarter, this company with two underground mines in Brazil's Iron Quadrangle sold 19,008 ounces of gold.
Unadjusted earnings per share (EPS) came in at US$0.03, Research Capital's exact forecast.
Cash flow per share (CFPS), however, was lower than expected, due primarily, McDougall noted, to higher cash taxes. CFPS was US$0.14; Research Capital estimated it would be US$0.16.
No Cost Surprises
As for costs, average total cash costs were on par, at US$1,084 per ounce (US$1,084/oz). This compared to Research Capital's projection of US$1,086/oz.
Jaguar Mining's Q1/23 all-in sustaining cost (AISC) came to US$1,575/oz, slightly above Research Capital's US$1,541/oz expectation.
"Stock-based compensation essentially account[ed] for the difference," McDougall explained.
Reported sustaining capex was US$7.2 million (US$7.2M), generally in line with Research Capital's US$6.9M estimate.
Balance Sheet Status
At Q1/23's end, Jaguar Mining had US$25.8M of cash, US$20.8M of working capital and US$7.1M of debt.
"We still do not foresee any requirements for external financing, barring any unforeseeable development," McDougall wrote.
For the Full Year
Jaguar Mining reiterated its guidance for full-year 2023 (FY23), noted McDougall. It expects to produce a total of 84,000–88,000 ounces of gold at an AISC of US$1,275–1,375/oz.
Compared to guidance, Research Capital estimates Jaguar's production for FY23 will wind up being in the lower end and AISC will be higher than the provided range, more like around US$1,415/oz.
"We expect the next three quarters to each to contribute about 22,000 oz at a consolidated total cash cost of about US$970/oz and an AISC of about US$1,365/oz," McDougall wrote.
Research Capital maintained its FY23 EPS and CFPS estimates for Jaguar (based on a flat gold price of US$1,850/oz) of US$0.24 and US$0.78, respectively.
|Want to be the first to know about interesting Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.||Subscribe|
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee.
- From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures for Research Capital Corp., Jaguar Mining Inc., May 11, 2023
Analyst Certification I, Stuart McDougall, certify the views expressed in this report were formed by my review of relevant company data and industry investigation, and accurately reflect my opinion about the investment merits of the securities mentioned in the report. I also certify that my compensation is not related to specific recommendations or views expressed in this report. Research Capital Corporation publishes research and investment recommendations for the use of its clients. Information regarding our categories of recommendations, quarterly summaries of the percentage of our recommendations which fall into each category and our policies regarding the release of our research reports is available at www.researchcapital.com or may be requested by contacting the analyst. Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.
Relevant Disclosures Applicable to Companies Under Coverage Relevant disclosures required under IIROC Rule 3400 applicable to companies under coverage discussed in this research report are available on our website at www.researchcapital.ca
General Disclosures The opinions, estimates and projections contained in all Research Reports published by Research Capital Corporation ("RCC") are those of RCC as of the date of publication and are subject to change without notice. RCC makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; RCC makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained therein and accepts no liability whatsoever for any loss arising from any use of or reliance on its Research Reports or its contents. Information may be available to RCC that is not contained therein. Research Reports disseminated by RCC are not a solicitation to buy or sell. All securities not available in all jurisdictions.
Potential Conflicts of Interest All Research Capital Corporation ("RCC") Analysts are compensated based in part on the overall revenues of RCC, a portion of which are generated by investment banking activities. RCC may have had, or seek to have, an investment banking relationship with companies mentioned in this report. RCC and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned in our Research Reports as principal or agent. RCC makes every effort possible to avoid conflicts of interest, however readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.
RC USA INC. Information about Research Capital Corporation’s Rating System, the distribution of our research to clients and the percentage of recommendations which are in each of our rating categories is available on our website at www.researchcapital.com. The information contained in this report has been drawn from sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in providing it does Research Capital Corporation assume any responsibility or liability. Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part without the express permission of Research Capital Corporation. US Institutional Clients – Research Capital USA Inc., a wholly owned subsidiary of Research Capital Corporation, accepts responsibility for the contents of this report subject to the terms and limitations set out above. US firms or institutions receiving this report should effect transactions in securities discussed in the report through Research Capital USA Inc., a Broker – Dealer registered with the Financial Industry Regulatory Authority (FINRA).