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Jaguar Announces Major Growth Exploration Initiative

October 28, 2016

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Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) is pleased to announce that it has commenced an expanded and accelerated growth exploration initiative at its operating underground gold mines Turmalina, Pilar and Roça Grande located in the Iron Quadrangle, Minas Gerais, Brazil.

This initiative will be focused on brownfield exploration targets to expand and discover new mineral resources located in and around existing mine infrastructure that have a strong potential to further grow sustainable production, lower unit costs, increase cash flows and extend expected mine life. The Company's current ongoing exploration programs will continue to focus on increasing resources at its core assets through the upgrading of current Measured and Indicated Mineral ("M&I") Resources to Mineral Reserves.

Over the next 12 months, the Company expects to invest up to US$8 million in exploration and growth initiatives. Approximately 75% of the investment will be on underground work at the Company's core operating mines for drilling of step-out and down-dip extensions and targets. The remaining growth exploration investment is expected to be on the high priority targets Pacheca and Cubas located near Pilar Gold Mine.

Rodney Lamond, President and Chief Executive Officer of Jaguar, stated: "Considering our sizable footprint in the prolific greenstone belt of the Iron Quadrangle in Brazil, and the significant exploration potential across all of our operating mines, this accelerated growth exploration initiative is an exciting step towards assisting us in increasing our resources and extending our operating mine life. This program will also allow for the potential discovery of new resources to support our goal of growing our sustainable production profile. To date, we have made excellent progress with our infill resource drilling programs, however we now have the immediate means, to accelerate our resource growth objectives and to execute exploration programs on the numerous target areas that could potentially add significant new resources to the current mineral base."

Growth Exploration Highlights

Major growth capital investment primarily focused on increasing mineral resources at its core assets, and discovery of new resources near existing infrastructure at its operating mines.
Expanded growth exploration program includes approximately 31,000 metres ("m") of diamond drilling, including approximately 15,000 m deep down-plunge continuities of the ore bodies A and C at Turmalina and BFII and BF at the Pilar Gold Mine.
8,500 m of surface diamond drilling will be dedicated to test the high priority Pacheca and Cubas targets in the vicinities of the Pilar Gold Mine and other advanced targets.
Exploration targets generated, as a result of extensive compilation work from previous exploration campaigns, in and around the current mine sites will be followed up by geophysical surveys and diamond drilling. Subject to the results, an additional 7,750 m of surface drilling will be dedicated to test those targets.
Geophysics, soil geochemistry, trenching, plus prospecting and mapping will also be conducted to advance additional target areas for future drilling. Field work has already commenced at the Pacheca and Cubas targets, located near Pilar Gold Mine.
Turmalina Gold Mine

An underground drilling campaign of approximately 9,600 m will be dedicated to the test the down-plunge extension and continuity of ore bodies A and C.

Ore Body A
Deep diamond drilling of ore body A will be performed after the development of a new exploration horizon is positioned in the hanging wall of the mine. The proposed drilling is intended to reach the 12, 13 and 14 levels, up to 240 vertical m below current development and 160 m below the current inferred resources.

Ore Body C
Down-dip extension drilling of the South Eastern portion of Ore Body C is expected to generate new mineral resources that are near surface and to contribute in the near term to the Turmalina throughput profile.

IP Geophysics will test the hanging wall of Orebody C and eastern continuity of Orebody A. Following the IP work, an estimated 6,000 m surface diamond drilling program is expected to take place.

Pilar Gold Mine

An underground drilling campaign of approximately 5,100 m will be dedicated to test the down-plunge extension and continuity of ore bodies BFII, BF and BA.

Deep diamond drilling will be performed after the development of a new exploration horizon is positioned in the hanging wall of the mine. The proposed drilling is intended to reach the 12, 13 and 14 levels, up to 250 vertical metres below current development and 200 metres below the current inferred resources.

Approximately 3,500 m of surface diamond drilling on the Pacheca Target is planned. The Pacheca target is located three km NE of the Pilar mine and is characterized by a series of extensive open pit excavations made by Portuguese explorers during the 18th century. Similarly hosted in the Banded Iron Formation (BIF) encompassing most of the Iron Quadrangle, the Pacheca target is strongly delineated by soil Au geochemistry.

Surface diamond drilling on the Cubas Target of approximately 2,500 m is planned. The Cubas Target is identified by a number of deep IP anomalies situated on the southern continuity of the shear zone, which hosts the main Pilar ore bodies.

Roça Grande (RG) Gold Mine

During 2016, the Company undertook a compilation program of the available surface information. In light of the revised geological model, a review of the diamond drill-hole information will be carried out to consolidate the geological model. Soil geochemistry and a total of 1,750 m of drilling follow-up is expected to test the ore bodies' open continuities.

The Iron Quadrangle
The Iron Quadrangle has been an area of mineral exploration for centuries, dating back to the 16th century. The discovery in 1699-1701 of black gold contaminated with iron and platinum-group metals in the southeastern corner of the Iron Quadrangle gave rise to the name of the town Ouro Preto (Black Gold). The Iron Quadrangle contains world-class multi-million ounce gold deposits such as Morro Velho, Cuiabá and São Bento. Jaguar holds the second largest gold land position in the Iron Quadrangle with just over 25,000 hectares. 

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