Brazilians slash Jaguar tailings fine

Jaguar Mining (TSX: JAG) says it has negotiated down a fine from Brazil’s Minas Gerais state to about a fifth of the amount issued for a tailings rupture at the Turmalina gold mine in December

The incident, which occurred in early December at the Satinoco tailings pile at the MTL complex 130 km northwest of Belo Horizonte, displaced hundreds of local residents and affected multiple structures in the surrounding area. Jaguar was forced to suspend mine operations immediately and authorities levied a fine of 320 million reais (US$52.5 million) in January.

Jaguar is now to pay the State Secretariat for the Environment and Sustainable Development about 60 million reais, the company said in a release on Monday. 

Shares in Jaguar Mining traded 2.4% higher at $3.78 each on Monday afternoon in Toronto for a market capitalization of $300 million. The stock has now recovered its losses from the tailings incident, which took its price to as low as $1.97 apiece.

Environmental projects

Nearly half of the fine (about 24.5 million reais) will go to specific socio-environmental projects within the state of Minas Gerais. The balance can be paid in monthly instalments, with grace periods.

The settlement underscores Jaguar’s engagement and commitment to responsible corporate conduct, strengthening its financial position and providing clarity for future operations, it said in a statement.

The payment 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,” the company said. 

Restart plans

“This agreement is an important milestone reached in our robust plan to resume operations in MTL…and is a clear testament to the company’s effort to address the Satinoco incident comprehensively and responsibly,” Albano Tondo, Jaguar’s newly appointed deputy CEO, said in the release.

As disclosed earlier this month, the company has a “structured and comprehensive plan” to support the restart of operations at the MTL complex. This includes technical studies and construction adjustments to ensure the geotechnical safety factors at Satinoco meet or exceed industry standards.

Last year, the MTL complex, which contains the Turmalina mine and processing plant as well as three satellite deposits, produced 23,710 oz. of gold, representing more than a third of Jaguar’s total output. The company also operates the Caeté complex, which hosts the Pilar gold mine.