Mr. Vernon Baker reports

JAGUAR MINING ANNOUNCES LANDMARK SETTLEMENT OF MAJOR ENVIRONMENTAL FINE, DELIVERING SUBSTANTIAL FINANCIAL BENEFIT

Jaguar Mining Inc. has concluded negotiations regarding a significant environmental fine with the state of Minas Gerais, Brazil. The company has reached a favourable agreement to settle this administrative penalty for 59,988,878.25 Brazilian reals, representing a substantial reduction from an initial estimated liability of 320 million Brazilian reals. This landmark settlement underscores Jaguar Mining's pro-active engagement and unwavering commitment to responsible corporate conduct, strengthening its financial position and providing clarity for future operations.

Context and resolution

The environmental fine stemmed from an infraction notice issued following a partial slide at the Satinoco dry stacking pile (refer to news release dated Dec. 9, 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.

Key terms of the agreement

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:

• Socioenvironmental projects contribution: 24.5 million Brazilian reals (approximately $4.45-million (U.S.)) will be allocated to specific socioenvironmental 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 favourable to the company's cash flow. The full completion of these projects is planned within 36 months of the agreement's judicial confirmation (a standard procedure).
• Instalment payment: The remaining balance of 35,488,878.25 Brazilian reals (approximately $6.45-million) will be paid in 60 equal monthly instalments.
• Grace period: A grace period of 12 months to start both instalments, commencing from the date of the agreement's judicial confirmation, will precede the start of the monthly instalment payments. For the 60-month instalment principal amount (35.5 million Brazilian reals), this grace period will incur interest determined by the SELIC rate. The SELIC (Sistema Especial de Liquidacao e de Custodia) is Brazil's basic interest rate, set by the Brazilian Central Bank (Banco Central do Brasil) 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 instalments will begin.

This comprehensive agreement not only resolves a substantial administrative penalty for a significantly reduced amount (an approximate 81.3-per-cent reduction from the initial 320-million-Brazilian-real estimated liability) but also includes provisions that are highly beneficial to Jaguar Mining's financial planning and operational focus.

The reduction of the fine was based on a series of critical considerations, as outlined in the Termo de Autocomposicao (TAC) no 17/2025, which collectively painted a less severe picture of the incident's impact than initially estimated and highlighted the company's proactive measures, namely:

Limited scope and absence of catastrophic consequences:

The TAC notes the Satinoco tailings slide had limited impact:

• No fatalities, physical injuries or widespread health harm;
• No disruption to public water/energy or total road closures;
• Public calamity status was denied by federal authorities, challenging initial severity;
• Affected area was small: 9.83 hectares total, only 1.35 ha outside company's direct zone.

Jaguar Mining's pro-active engagement and mitigating actions

Jaguar's Brazilian subsidiary, MSOL, demonstrated unwavering cooperation by swiftly implementing an emergency action plan (PAE) and timely corrective measures, a pro-active response explicitly recognized as an attenuating circumstance. MSOL also committed to extensive environmental restoration, including a plan for recovery of degraded areas. Furthermore, the company expended significant, continuous resources on community assistance and job preservation during operational suspension, which directly strained its financial capacity.

Legal uncertainties and risk mitigation for the state

The state acknowledged MSOL's valid legal arguments regarding aggravating factors and recidivism, recognizing the initial fine's disproportionate nature and risk of judicial challenge. The TAC emphasized avoiding prolonged litigation and uncertain collection by embracing a consensual administrative transaction. This strategy was deemed a legally sound and efficient way to allocate resources for environmental repair, making the settlement a clear win-win over a protracted dispute.

Shareholder value proposition

The successful negotiation and favourable terms of this settlement significantly reduce a major contingent liability, thereby strengthening Jaguar Mining's balance sheet and enhancing its overall financial stability. This resolution emphatically underscores the company's commitment to prudent financial management and robust corporate governance. By definitively addressing this fine, Jaguar Mining can now refocus its resources and management attention squarely on its core mission: optimizing its gold mining operations in Brazil, driving sustainable production and delivering long-term value to its shareholders. This positive outcome significantly reduces uncertainty and paves the way for continued operational progress and growth.

"We are incredibly proud of the collaborative spirit and diligent work that led to this landmark settlement," said Luis Albano Tondo, deputy chief executive officer of Jaguar Mining. "This agreement is an important milestone reached in our robust plan to resume operations in MTL, as outlined in our news release dated July 9, 2025, and is a clear testament to the company's effort to address the Satinoco incident comprehensively and responsibly. It secures a clear path forward for Jaguar Mining, reinforcing our financial stability and allowing us to focus on sustainable growth while reaffirming our unwavering commitment to environmental stewardship and the well-being of the communities in Minas Gerais. This truly is a win-win for all stakeholders involved."

Qualified person

Scientific and technical information contained in this press release has been reviewed and approved by Luis Albano Tondo, BSc, MiningEng, MEngSc, MBA, FAusIMM, deputy chief executive officer, who is also an employee of Jaguar Mining and is a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (NI 43-101).

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