Jaguar Mining announces settlement of environmental fine

Jaguar Mining (JAGGF) announced the conclusion of negotiations regarding a significant environmental fine with the State of Minas Gerais, Brazil. The Company has reached a favorable agreement to settle this administrative penalty for BRL59,988,878.25, representing a substantial reduction from an initial estimated liability of R$320M. This landmark settlement underscores Jaguar Mining’s proactive engagement and unwavering commitment to responsible corporate conduct, strengthening its financial position and providing clarity for future operations. The environmental fine stemmed from an infraction notice issued following a partial slide at the Satinoco dry stacking pile (refer to News Release dated December 09, 2024). From the outset, Jaguar Mining has been dedicated to a transparent and responsible approach to addressing the incident and its implications. Through extensive negotiation, the Company and the State of Minas Gerais reached a comprehensive agreement that acknowledges mitigating factors and reciprocal concessions, leading to the greatly reduced final amount. The settlement is structured with terms aimed at supporting the Company’s financial liquidity and operational continuity, while providing fair compensation for the recognized damages caused by the incident: Socio-Environmental Projects Contribution:BRL24,500,000.00 will be allocated to specific socio-environmental projects within the State of Minas Gerais. Jaguar Mining will directly acquire the necessary items for these projects, allowing for flexibility in payment terms negotiated directly with suppliers, potentially extending payment periods and becoming more favorable to the Company’s cash flow. The full completion of these projects is planned within 36 months of the agreement’s judicial confirmation. Installment Payment: The remaining balance of BRL35,488,878.25 will be paid in 60 equal monthly installments.. Grace Period: A grace period of 12 months to start both installments, commencing from the date of the agreement’s judicial confirmation, will precede the start of the monthly installment payments. For the 60 month installment principal amount, this grace period will incur interest determined by the SELIC rate. The SELIC is Brazil’s basic interest rate, set by the Brazilian Central Bank to influence the economy, control inflation, and serve as a benchmark for other interest rates. This provides Jaguar Mining with valuable time to further stabilize its operations and financial flows before payments commence. Notably, Jaguar Mining can choose to anticipate the start of payments at any time during this grace period. Should this occur, the grace period will immediately terminate, and the timeline for paying the remaining installments will begin. This comprehensive agreement not only resolves a substantial administrative penalty for a significantly reduced amount (an approximate 81.3% reduction from the initial BRL320 million estimated liability) but also includes provisions that are highly beneficial to Jaguar Mining’s financial planning and operational focus.