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Like many other mining companies, emerging gold producer Jaguar Mining Inc. (JAG) is taking steps to lower its risk and conserve capital. The company said on Friday that it is delaying its Caeté project in Brazil, with plans to get going on it again once market conditions improve.

According to Blackmont Capital analyst Richard Gray, the delay is a "prudent move," but it also reduces the growth profile that was vital to the Jaguar investment thesis.

"The lower production growth in 2009 [now 40%] takes some shine off the story," he wrote in a note to clients.

Jaguar now expects production of 165,000 to 175,000 ounces in 2009 at cash costs of  $405 to $460 an ounce. That is well below Mr. Gray's prior estimate of 235,000 ounces at cash costs of  $385 an ounce.

He cut his target price on the stock to C$8.25 a share from C$11.00 a share because of the reduced cash flow estimates for next year. He still rates it a "buy," and wrote that it is an ideal takeover candidate for its attractive growth, valuation and exploration upside.

All figures in US$ unless otherwise indicated.

Source: Jaguar Mining: Practicing Prudence