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TSX-V: JAG
TORONTO, Feb. 27, 2015 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX-V: JAG) announces its intention to
issue up to $20 million of 12% senior
secured convertible debentures (the "Debentures") and the
initiation of a strategic review process.
CONVERTIBLE DEBENTURE ISSUANCE
The Company intends to issue up to $20
million principal amount of Debentures on a non-brokered
private placement basis pursuant to exemptions under applicable
securities laws (the "Offering"). The Company plans to use
the net proceeds of the Offering to repay the outstanding
$12.4 million credit facility held by
Renvest Mercantile Bancorp Inc. ("Renvest") and for general
corporate purposes. The Offering is expected to close on or
about March 26, 2015, subject to
receipt of all required regulatory approvals, including the
approval of the TSX Venture Exchange (the "TSX-V").
The Debentures will be senior secured obligations of Jaguar and
will assume the senior security package currently held by Renvest
under its existing credit agreement, which matures on December 31, 2015. The Debentures will mature
three years from the closing date of the Offering.
The Debentures will bear interest at a rate of 12% per annum,
payable in US dollars semi-annually commencing six months from the
closing date of the Offering. The Debentures will be convertible
into Jaguar common shares at a conversion price of C$0.50 per share, representing a 13% premium to
the 30 day VWAP price of Jaguar common shares and a conversion rate
of 2,500 Jaguar shares per $1,000
principal amount of Debentures, based on Canadian dollar exchange
rate of 0.80. Upon conversion, holders will be entitled to
receive accrued and unpaid interest up to, but excluding, the date
of conversion.
The Debentures will not be redeemable for a period of six months
from the closing date. On and after such date and prior to
the date that is two years from the closing date of the Offering,
the Debentures may be redeemed by Jaguar, in whole or in part from
time to time, with 30 days written notice, at a price of 108% of
the principal outstanding in the first year, 104% in year two and
at par in year three, plus any accrued and unpaid interest.
Jaguar does not intend to list the Debentures on the TSX-V. The
Debentures and the Jaguar common shares issuable on conversion of
the Debentures will be subject to a four month and one day hold
period under Canadian securities laws from the date of issue of the
Debentures.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
STRATEGIC REVIEW PROCESS
Jaguar further announces that its board of directors (the
"Board") has formed a special committee ("Special Committee") to
initiate a strategic review process to explore alternatives for the
enhancement of shareholder value. As such, the Special
Committee appointed Origin Merchant Partners as its exclusive
financial advisor in conjunction with the process. The review
will consider various alternatives for the Company, including:
merger opportunities, the potential sale of the Company's assets,
potential partnership or joint venture agreements and any other
options with the objective of maximizing value for the Company's
shareholders.
There can be no assurance that the Company's efforts will be
successful or that this process will result in any transaction. The
Company does not intend to provide additional updates with respect
to this process unless and until the Board approves a transaction
arising from the strategic review, together with
recommendations.
The Company's ongoing development and production activities at
its operations in Brazil will be
unaffected by this strategic review process.
About Jaguar Mining Inc.
Jaguar is a gold producer with mining operations in a prolific
greenstone belt in the state of Minas Gerais, Brazil. Additionally, Jaguar wholly owns the
large-scale Gurupi Development Project in the state of Maranhão,
Brazil. In total, the Company owns
mineral claims covering an area of approximately 197,000-hectares.
Additional information is available on the Company's website at
www.jaguarmining.com.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute
"Forward-Looking Statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation. Forward-looking statements include, but are
not limited to, management's assessment of Jaguar's future plans
and operation. Certain statements throughout this press release
constitute forward-looking statements (forecasts) under applicable
securities laws relating to future events or future performance.
Forward-Looking Statements can be identified by the use of words
such as "are expected", "is forecast", "is targeted",
"approximately", "plans", "anticipates" "projects", "anticipates",
"continue", "estimate", "believe" or variations of such
words and phrases or statements that certain actions, events or
results "may", "could", "would", "might", or "will" be taken, occur
or be achieved. Forward-Looking Statements involve known and
unknown risks, uncertainties and other factors, which may cause the
actual results or performance to be materially different from any
future results or performance expressed or implied by the
Forward-Looking Statements the success of closing this transaction
on the projected timeline, that regulatory approval will be
obtained, the final terms of the Debentures that will be issued in
connection with the Offering. Forward-looking information is based
on current expectations, estimates and projections that involve a
number of risks and uncertainties which could cause actual results
to differ materially from those anticipated by Jaguar and described
in the forward-looking information. The forward-looking information
contained in this press release is made as of the date hereof and
Jaguar undertakes no obligation to update publicly or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, unless required by
applicable securities laws. The forward-looking information
contained in this press release is expressly qualified by this
cautionary statement.
Forward-Looking Statements involve known and unknown risks,
uncertainties and other factors may cause the actual results,
performance or achievements to be materially different from those
expressed or implied by the forward-looking statements. Such risk
factors include, among others the risk of Jaguar's not the success
of closing this transaction on the projected timeline, that
regulatory approval will be obtained, the final terms of the
Debentures that will be issued in connection with the Offering, as
well as those factors disclosed in the Company's current Annual
Information Form and Management's Discussion and Analysis, as well
as other public disclosure documents, available on SEDAR at
www.sedar.com. Although the Company has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate. The forward-looking statements contained
herein are presented for the purposes of assisting investors in
understanding the Company's plan, objectives and goals and may not
be appropriate for other purposes. Accordingly, readers should not
place undue reliance on forward-looking statements. These
Forward-Looking Statements represent the Company's views as of the
date of this press release. The Company anticipates that subsequent
events and developments may cause the Company's views to change.
Factors, which could cause results or events to differ from current
expectations, include, among other things, actions taken against
the Company by governmental agencies and securities and other
regulators and other factors not currently viewed as material that
could cause actual results to differ materially from those
described in the Forward-Looking Statements. The Company does not
undertake to update any Forward-Looking Statements, either written
or oral, that may be made from time to time by or on behalf of the
Company subsequent to the date of this discussion except as
required by law.
SOURCE Jaguar Mining Inc.