Mr. Rodney Lamond reports

JAGUAR EXCEEDS 2016 GOLD PRODUCTION GUIDANCE COMPANY POSITIONED FOR GROWTH AND HIGHER PRODUCTION IN 2017

Jaguar Mining Inc. has released consolidated operating results for the three and 12 months ended Dec. 31, 2016. All dollar amounts are in U.S. dollars unless otherwise stated.

Full-year 2016 highlights

• Record gold recovery, improving grades and higher throughput levels positioned the company to exceed 2016 production guidance with strong annual gold production of 96,536 ounces.
• The Turmalina gold mine delivered 25-per-cent-higher gold production of 63,186 ounces based on record gold recovery of 91.5 per cent, a 24-per-cent increase in ore milled, and improved head grade of 4.28 grams per tonne (g/t).
• Record gold recovery at Caete complex was 90.7 per cent and the company increased grade with gold production of 33,350 ounces.
• Pilar delivered strong full-year production of 27,878 ounces with improved grade of 3.35 g/t and record gold recovery of 90.8 per cent. Increased mining development at Pilar is expected to result in production growth in 2017.
• The company achieved key 2016 objectives in primary and secondary mine development, expansion and production across assets.
• Milling capacity at Turmalina increased with the recommissioning of mill No. 3 (announced Jan. 5, 2017).
• The company approved and began implementation in late 2016 of an exploration program of up to $8-million to focus on brownfield exploration targets near core assets, the majority of which will be spent in 2017.
• Two thousand seventeen guidance includes: estimated 10-per-cent-higher production of 100,000 to 110,000 ounces of gold, cash operating costs of $720 to $755 per ounce sold and all-in sustaining costs of $900 to $1,000 per ounce sold.
• Strong preliminary cash balance of approximately $26.4-million as at Dec. 31, 2016, compared with $15.3-million as at Dec. 31, 2015.

Fourth quarter 2016 highlights

• Consolidated gold production was 25,335 ounces, up 9 per cent, led by strong production at Turmalina of 16,027 ounces, up 11 per cent.
• Record consolidated gold recovery was 91.7 per cent, total ore milled was 237,000 tonnes, up 10 per cent, and average grade was 3.60 g/t.
• Turmalina gold production increased 11 per cent, the best quarterly production since the third quarter of 2011, with record recovery of 92.5 per cent, a 22-per-cent increase in ore milled and average grade of 4.37 g/t.
• Caete increased gold production to 9,308 ounces, up 7 per cent, and achieved record quarterly gold recovery of 90.8 per cent.

Rodney Lamond, president and chief executive officer of Jaguar, commented: "I am extremely pleased to report we exceeded our 2016 annual production guidance, producing 96,536 ounces of gold. We had a safe and strong finish to the year with higher production, improved grades and record gold recoveries during the fourth quarter. Throughout the year, we focused on positioning our company for the future and achieving our key objectives. The hard work of our employees and support groups contributed to a strong year as we successfully transformed our company profile into a growth producer while delivering record performances.

"In 2016, we increased mine development and exploration which delivered sustainable growth across all of our operating mines. Our team continued to build confidence in our current geological models and mine plans, while also improving productivity in our primary assets to support growth. We successfully completed the recommissioning of mill No. 3, a major milestone for Turmalina, which is expected to increase the daily processing capacity of the plant by 35 per cent and reduce unit costs. Additionally, the operational excellence program we commenced at Turmalina earlier in 2016 has paid off with initiatives to identify and eliminate waste and improve productivity, translating to tangible results and future growth opportunities. We will be rolling out the same program at Pilar, with a view to increase productivity and lower unit costs there as well.

"With all of the outstanding progress made this year, we expect 2017 to be the year we become a sustainable 100,000-plus-ounce gold producer, targeting production between 100,000 and 110,000 ounces. As we continue to grow, we are also focused on increasing efficiencies and implementing technology to decrease costs. Looking forward, increasing our sustainable-ounce profile in a safe way is our primary objective which will help us execute on a five-year target to become a 200,000-ounce gold producer, growing organically and opportunistically within our jurisdictions. We commence 2017 with a strengthened balance sheet, following the full conversion of convertible debentures to common shares last October, and we are well funded with a solid cash balance in our treasury. We expect to provide an update on the exploration growth pipeline programs and report an updated mineral reserve and mineral resource statement within the first quarter of 2017. Finally, I would like to thank all of our employees and stakeholders for their support, dedication and efforts during this transformational year."

2016 operating results

  
                     CONSOLIDATED PRODUCTION FOR THE QUARTER AND YEAR ENDED DEC. 31, 2016  
  
                                                               Q4 2016                     Q4 2015        
                                                  Turmalina     Caete     Total Turmalina     Caete     Total

Ore milled (tonnes)                                 122,000   115,000   237,000   100,000   116,000   216,000
Recovery (%)                                           92.5      90.8      91.7      91.3      89.8      90.5
Head grade (g/t)                                       4.37      2.79      3.60      4.79      2.59      3.90
Gold ounces
Produced (oz)                                        16,027     9,308    25,335    14,449     8,720    23,169
Sold (oz)                                            16,024     9,086    25,110    15,527     8,889    24,416
Development
Primary (m)                                             483       608     1,091       965        22       987
Secondary (m)                                           466       740     1,206       605       137       742
Definition, infill and exploration drilling (m)       5,123     4,790     9,913     6,774         -     6,774

  
                                                                  FY 2016                       FY 2015        
                                                   Turmalina      Caete      Total  Turmalina      Caete      Total

Ore milled (tonnes)                                  502,000    379,000    881,000    406,000    469,000    875,000
Recovery (%)                                            91.5       90.7       91.1       90.6       89.4       90.0
Head grade (g/t)                                        4.28       3.02       3.77       4.25       2.98       3.62
Gold ounces
Produced (oz)                                         63,186     33,350     96,536     50,659     39,762     90,421
Sold (oz)                                             63,639     33,639     97,277     51,818     41,169     92,987
Development
Primary (m)                                            2,985      2,477      5,462      3,568        227      3,795
Secondary (m)                                          2,620      2,131      4,751      2,003        230      2,233
Definition, infill and exploration drilling (m)       17,858     20,182     38,040     25,617     10,635     36,252
  

Details of the company's financial performance, including mine-by-mine analysis, capital and operating costs, will be included in its year-end and fourth quarter 2016 financial results expected to be released in March, 2017.

Cash balance

The preliminary cash balance as at Dec. 31, 2016, was approximately $26.4-million compared with a cash balance of $15.3-million as at Dec. 31, 2015, while investing in capital activities and maintaining a stable working capital position. During the fourth quarter, the company entered into an agreement with Sprott Private Resource Lending (Collector) LP for a secured $10.0-million loan facility to finance the company's accelerated growth exploration program.

Capital investments in 2016 were primarily financed through operating cash flows, a trend expected to continue into 2017. In addition to the increase in capital expenditures, Jaguar also paid $1.9-million in other debt principal and interest payments during the year. The strengthening of the Brazilian real during 2016 and the resulting foreign currency losses have had an impact on some of the gold price gains during the year.

2017 guidance

   
                                        2017 PRODUCTION AND COST GUIDANCE 
  
                                                             Turmalina           Caete           Consolidated 
                                                            Low     High      Low     High      Low        High

Gold production (ounces)                                 60,000   65,000   40,000   45,000  100,000     110,000
Percentage of total production (%)                           60       59       40       41      100         100
Cash operating costs (per ounce sold) (1)                  $600     $650     $900   $1,000     $720        $755
All-in sustaining costs (per ounce sold) (1)               $800     $850   $1,020   $1,180     $900      $1,000
Development
Primary (m)                                               2,500    2,900    2,200    2,600    4,700       5,500
Secondary (m)                                             2,200    2,700    3,400    3,850    5,600       6,550
Definition, infill and exploration drilling (m)          16,000   18,000   10,000   13,000   26,000      31,000
Growth exploration investment (core assets) (millions)                                         $7.5        $8.0

Note
(1) Cash operating costs and all-in sustaining costs are non-GAAP (generally accepted accounting principles) 
financial performance measures with no standard definition under international financial reporting standards. 
Two thousand seventeen cost guidance has been prepared on the basis of a foreign exchange rate of 3.5 
Brazilian reais versus the U.S. dollar.

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 to 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 multimillion-ounce gold deposits such as Morro Velho, Cuiaba and Sao Bento. Jaguar holds the second-largest gold land position in the Iron Quadrangle with just over 25,000 hectares.

About Jaguar Mining

Jaguar Mining has three gold-mining complexes and a large land package with significant upside exploration potential from mineral claims covering an area of approximately 191,000 hectares. The company's principal operating assets are located in the Iron Quadrangle, a prolific greenstone belt in the state of Minas Gerais and include the Turmalina gold mine complex and Caete gold mine complex which, combined, produce more than 95,000 ounces of gold annually. The company also owns the Paciencia gold mine complex, which has been on care and maintenance since 2012.

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