With Jaguar Mining Inc. (JAG) recently completing an offering of C$150 million worth of notes, the company appears to be now turning its attention to a new, unexplored and undeveloped gold property.
Richard Gray, analyst with Blackmont, notes Jaguar is in exclusive negotiations for a property that has not yet commercially produced gold.
"The company indicated this property would have a purchase price of $39-million to $43-million, payable in Jaguar shares," he said in a note Friday.
The rest of the cash will be used to repurchase $86.3-million worth of 10.5% secured notes due in 2012. The new notes, due 2014, will provide a better interest rate and match-up to cash flows over the next five years, "given the company's dramatic growth profile," he said.
Production growth at the company is expected to jump to more than 400,000 ounces in 2012, from 115,000 ounces in 2008.
And by 2014, Blackmont expects Jaguar to be producing 640,000 ounces of gold a year.
Jaguar gets an Outperform rating with above average risk and a target price of $14.