January 19, 2010 / 2:17 PM / 8 years ago

UPDATE 2-Jaguar Mining says Q4 gold output below expectations

* Q4 gold production 39,890 oz vs. 37,916 oz

* Says cash operating costs rise

* Sees 2010 gold production to rise 29-40 pct

* Explores sale of Sabara operation in Brazil

* Shares down as much as 11 pct (Adds details, share movement)

Jan 19 (Reuters) - Gold producer Jaguar Mining Inc (JAG.TO) said its fourth-quarter production rose but was below expectations mainly due to lower-than-anticipated grades at its Turmalina mine in Brazil, sending its Toronto-listed shares down more than 11 percent.

However, the Concord, New Hampshire-based miner, which operates in Brazil, guided a 29 percent to 40 percent rise in 2010 production.

For 2010, the company expects to produce 200,000 ounces to 217,000 ounces of gold at a cash operating cost of $489 to $500.

Jaguar produced 39,890 ounces of gold at an average cash operating cost of $539 per ounce for the latest fourth quarter, compared with 37,916 ounces at $396 per ounce in the same period last year.

During 2009, Jaguar produced 155,102 ounces of gold at an average cash operating cost of $468 per ounce, it said in a statement.

The company said its Sabara operation in Brazil, which was idled for eight months and only produced 6,460 ounces of gold in 2009 compared to 18,199 ounces in 2008, also hurt production plans.

Jaguar said it is considering alternatives for the Sabara operation, including a sale, and plans to record a charge of about $3.4 million in the fourth quarter.

Jaguar’s cash operating costs shot up due to a sharp rise in the Brazilian real and lower grades at its Turmalina mine, the company said.

Quarterly mine production at Turmalina totaled 179,783 tons of ore at an average run-of-mine grade of 4.34 grams per ton, compared with 126,777 tons of ore at ROM grade of 6.01 grams per ton last year.

Gold sales for the quarter rose to 35,944 ounces at an average price of $1,099 per ounce from 35,138 ounces at $793 per ounce, a year-ago.

As of Dec. 31, 2009, the company held cash and cash equivalents of about $121.3 million.

Jaguar Mining shares were down C$1.30 at C$12.18 in late morning trade Tuesday on the Toronto Stock Exchange. The New York-listed shares of the company fell as much as 9 percent to $11.61. (Reporting by R. Manikandan in Bangalore; Editing by Gopakumar Warrier)

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