Guatemala

[johnlw]

JNI- MD&A

http://www.sedar.com/csfsprod/data50/filings/00706772/00000001/C%3A%5Csedarpdf%5Cjagmda1110.pdf

Highlights:

Exploration
Since the start of the Sechol drilling program in March 2004, 567 HQ core holes with acceptable core recoveries,
totalling 7435 metres, have been completed. These include holes drilled on regular 100m x 100m grids on El Inico
(225 holes; 3305m), El Segundo (250 holes; 2618m) and Rio Negro (27 holes; 377m) together with 18 holes (252m)
for samples for bulk density determination and 47 holes (883m) on two close-spaced grids (25m x 25m) on El
Inicio for geostatistical variability data. Drilling is currently ongoing on the Rio Negro grid. A part of the El
Segundo area and the Pozo Azul area are subject to land access negotiations and will be drilled when these are
satisfactorily concluded. Resource estimation based on the results of the 100m x 100m drilling will be undertaken on
its completion.

A program to evaluate high priority nickel laterite targets in the other exploration licenses held by Jaguar is
advancing. Reconnaissance mapping and sampling have been completed in the San Lucas licenses located 20 km to
the north-west of Sechol and results are pending. A broad spaced reconnaissance drilling program will be designed
and implemented as warranted by results. Reconnaissance exploration will commence in November on the Marichaj
license located 15 km to the north of Sechol.

Technical Development
During the third quarter, laboratory work continued at the pilot plant on Jaguar’s ACLP technology. The Company
now has enhanced its understanding of how the ACLP operates and is continuing its development of the
metallurgical flowsheet using more representative ore samples from the El Inicio deposit.
In May and September, 2004 the Company filed patent applications with respect to its proprietary technology in all
significant countries for a process to recover nickel and cobalt from laterite and sulphide ores, respectively, claiming
priority from the previously filed provisional applications.

Financial
Interest revenue amounted to $400,000 (2003-$20,000) for the nine month period due to the financing activities and
cash balances of $24,100,000 (2003-$2,700,000) on deposit at September 30. Operating expenses (excluding the
non-cash items of stock compensation and amortization) for the nine months ended September 30 increased to
$1,600,000 (2003-$800,000) due to increased staff, travel, office and shareholder costs required to manage the
expanding activities. In August 2004, stock options were granted at an exercise price of $1.00 resulting in a noncash
stock compensation expense of $325,000 (2003-$728,000).
Exploration expenditures in Guatemala were concentrated on the above mentioned drilling program. During the
first nine months of 2004, these expenditures totaled $4,300,000 as compared to the $300,000 spent in 2003.
Furthermore, $1,000,000 has been spent on metallurgical process costs in pilot plant campaigns at PRO’s testing
facility. During the nine months ended September 30, 2004 over $900,000 was expended on capital assets and
patent rights, regarding the processing for recovery of value metals from sulphide-based ores, were acquired for
$270,000.
As of November 9, 2004, the Company had outstanding 107,736,432 common shares together with 5,945,000 stock
options and 21,400,000 warrants which, if exercised, would amount to a fully diluted position of 135,081,432
common shares.