Exhibit
99.2
  GRAPHIC
                KPMG
      LLP
                Telephone
                (416)
      777-8500Chartered
      Accountants
                Fax
                (416)
      777-8818Suite
      3300 Commerce Court West
                Internet
                www.kpmg.caPO
      Box 31 Stn Commerce CourtToronto
      ON M5L 1B2Canada
   
 
 AUDITORS'
REPORT ON RECONCILIATION TO UNITED STATES GAAP
    To
the Board of Directors of Jaguar Mining Inc.
  On
March 23, 2009, we reported on the consolidated balance sheets of Jaguar Mining
Inc. ("the Company") as at December 31, 2008 and 2007 and the consolidated
statements of operations and comprehensive loss, cash flows and
shareholders  equity for each of the years in the three-year period
ended December 31, 2008 which are included in the annual report on Form 40-F. In
connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related supplemental note entitled
"Schedule of Reconciliation between Canadian and U.S. GAAP" included in the Form
40-F. This supplemental note is the responsibility of the Company's management.
Our responsibility is to express an opinion on this supplemental note based on
our audits.
  In
our opinion, such supplemental note, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
   
  Chartered
Accountants, Licensed Public Accountants
  Toronto,
Canada
 March
23, 2009
 
 
 KPMG
LLP, a Canadian limited liability partnership is the Canadian
 member
firm of KPMG International, a Swiss cooperative.
   
 
 
 Jaguar
Mining Inc.
 Schedule
of Reconciliation between Canadian and U.S. GAAP
 Years
ended December 31, 2008, 2007 and 2006
 (Expressed
in thousands of U.S. Dollars)
 
 
 Canadian
generally accepted accounting principles (“Canadian GAAP”) varies in certain
significant respects from the principles and practices generally accepted in the
United States (“U.S. GAAP”).  The effect of these principal
differences on the Company’s consolidated financial statements is quantified
below and described in the accompanying notes:
 
 Consolidated
      Statements of Operations
                                
                                Note
                                
                                
                                December
      31,
                                  2008
                                
                                
                                December
      31,
                                  2007
                                
                                
                                December
      31,
                                  2006Net
      Loss under Canadian GAAP
                                
                                
                                
                                
                                $
                                (4,256
                                )
                                
                                $
                                (27,660
                                )
                                
                                $
                                (12,746
                                )Increase
      in gold revenue
                                
                                
                                b
                                
                                
                                
                                
                                
                                
                                
                                -
                                
                                
                                
                                850Increase
      in production costs
                                
                                
                                a,
      b
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (540
                                )Increase
      in inventory write-down
                                
                                
                                a,
      b, c
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (1,904
                                )Decrease
      in depletion and amortization
                                
                                
                                a,
      b, c
                                
                                
                                
                                901
                                
                                
                                
                                372
                                
                                
                                
                                1,531Increase
      in exploration costs
                                
                                
                                a,
      c
                                
                                
                                
                                (27,381
                                )
                                
                                
                                (24,252
                                )
                                
                                
                                (14,434
                                )Decrease
      in amortization of deferred financing fees
                                
                                
                                d
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                698Increase
      in interest expense
                                
                                
                                f
                                
                                
                                
                                (1,365
                                )
                                
                                
                                -
                                
                                
                                
                                -Increase
      (decrease) in future income taxes recovered
                                
                                
                                a
                                
                                
                                
                                (2,182
                                )
                                
                                
                                1,761
                                
                                
                                
                                (209
                                )Net
      loss under U.S. GAAP
                                
                                
                                
                                
                                
                                $
                                (34,283
                                )
                                
                                $
                                (49,779
                                )
                                
                                $
                                (26,754
                                )Basic
      and fully diluted loss per share under U.S. GAAP
                                
                                
                                
                                
                                
                                $
                                (0.54
                                )
                                
                                $
                                (0.93
                                )
                                
                                $
                                (0.62
                                )
 
 Consolidated
      Balance Sheets
                                  
                                  Note
                                  
                                  
                                  December
      31,
                                    2008
                                  
                                  
                                  December
      31,
                                    2007
                                  
                                  
                                  December
      31,
                                    2006Total
      assets under Canadian GAAP
                                  
                                  
                                  
                                  
                                  $
                                  303,834
                                  
                                  
                                  $
                                  234,231
                                  
                                  
                                  $
                                  124,130Increase
      (decrease) in inventory
                                  
                                  
                                  a,
      c
                                  
                                  
                                  
                                  (278
                                  )
                                  
                                  
                                  (146
                                  )
                                  
                                  
                                  170Increase
      (decrease) in other assets
                                  
                                  
                                  d,
      f
                                  
                                  
                                  
                                  652
                                  
                                  
                                  
                                  2,859
                                  
                                  
                                  
                                  (1,321
                                  )Decrease
      in property, plant and equipment
                                  
                                  
                                  a,
      b
                                  
                                  
                                  
                                  (14,909
                                  )
                                  
                                  
                                  (2,240
                                  )
                                  
                                  
                                  (310
                                  )Decrease
      in mineral exploration projects
                                  
                                  
                                  a,
      c
                                  
                                  
                                  
                                  (59,862
                                  )
                                  
                                  
                                  (46,185
                                  )
                                  
                                  
                                  (24,772
                                  )Total
      assets under U.S. GAAP
                                  
                                  
                                  
                                  
                                  
                                  $
                                  229,437
                                  
                                  
                                  $
                                  188,519
                                  
                                  
                                  $
                                  97,897Total
      liabilities under Canadian GAAP
                                  
                                  
                                  
                                  
                                  
                                  $
                                  107,110
                                  
                                  
                                  $
                                  132,712
                                  
                                  
                                  $
                                  34,755Decrease
      in future income tax liability
                                  
                                  
                                  a
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (2,182
                                  )
                                  
                                  
                                  (421
                                  )Increase
      (decrease) in notes payable
                                  
                                  
                                  d
                                  
                                  
                                  
                                  2,019
                                  
                                  
                                  
                                  2,859
                                  
                                  
                                  
                                  (1,707
                                  )Total
      liabilities under U.S. GAAP
                                  
                                  
                                  
                                  
                                  
                                  $
                                  109,129
                                  
                                  
                                  $
                                  133,389
                                  
                                  
                                  $
                                  32,627Shareholders'
      equity under Canadian GAAP
                                  
                                  
                                  
                                  
                                  
                                  
                                  196,724
                                  
                                  
                                  
                                  101,519
                                  
                                  
                                  
                                  89,375Reverse
      Cdn GAAP adjustment to opening equity
                                  
                                  
                                  d
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  (165
                                  )
                                  
                                  
                                  -Cumulative
      U.S. GAAP adjustment
                                  
                                  
                                  
                                  
                                  
                                  
                                  (76,416
                                  )
                                  
                                  
                                  (46,224
                                  )
                                  
                                  
                                  (24,105
                                  )Shareholders'
      equity under U.S GAAP
                                  
                                  
                                  
                                  
                                  
                                  
                                  120,308
                                  
                                  
                                  
                                  55,130
                                  
                                  
                                  
                                  65,270Total
      liabilities and shareholders' equity under U.S. GAAP
                                  
                                  
                                  
                                  
                                  
                                  $
                                  229,437
                                  
                                  
                                  $
                                  188,519
                                  
                                  
                                  $
                                  97,897
 
 
  1
  Jaguar
Mining Inc.
 Schedule
of Reconciliation between Canadian and U.S. GAAP
 Years
ended December 31, 2008, 2007 and 2006
 (Expressed
in thousands of U.S. Dollars)




The
following shows the significant impact on operating, investing and financing
cash flows after considering U.S. GAAP adjustments:
 
 Consolidated
      Statements of Cash Flows
                            
                            Note
                            
                            
                            December
      31, 2008
                            
                            
                            December
      31, 2007
                            
                            
                            December
      31, 2006Cash
      used in operations under Canadian GAAP
                            
                            
                            
                            
                            $
                            (1,410
                            )
                            
                            $
                            1,457
                            
                            
                            $
                            (7,647
                            )Mineral
      exploration
                            
                            
                            a,
      c
                            
                            
                            
                            (27,381
                            )
                            
                            
                            (24,252
                            )
                            
                            
                            (14,434
                            )Cash
      used in operations under U.S. GAAP
                            
                            
                            
                            
                            
                            $
                            (28,791
                            )
                            
                            $
                            (22,795
                            )
                            
                            $
                            (22,081
                            )Cash
      used in investing activities under Canadian GAAP
                            
                            
                            
                            
                            
                            $
                            (89,297
                            )
                            
                            $
                            (63,092
                            )
                            
                            $
                            (50,085
                            )Mineral
      exploration
                            
                            
                            a,
      c
                            
                            
                            
                            27,381
                            
                            
                            
                            24,252
                            
                            
                            
                            14,434Cash
      used in investing activities under U.S. GAAP
                            
                            
                            
                            
                            
                            $
                            (61,916
                            )
                            
                            $
                            (38,840
                            )
                            
                            $
                            (35,651
                            )
 
 a)
              Mineral
      Properties
 
 Under
Canadian GAAP, the Company capitalizes all costs related to the acquisition,
exploration and development of non-producing mineral
properties.  Under U.S GAAP, exploration and development costs are
expensed as incurred, until the establishment of commercially mineable reserves
is complete, at which time any further development costs are
capitalized.
 
 As of
February 17, 2006, a bankable feasibility study determined that there were
commercially mineable reserves at the Sabara Mine.  For U.S. GAAP
purposes, all exploration costs related to Sabara prior to the second quarter of
2006 have been expensed and all development costs subsequent to April 1, 2006
have been capitalized.
 
 On
August 7, 2007, a bankable feasibility study determined that there were
commercially mineable reserves at the Santa Isabel mine for U.S. GAAP
purposes.  All exploration costs related to Santa Isabel mine prior to
the fourth quarter of 2007 have been expensed and all development costs after
October 1, 2007 have been capitalized, for U.S. GAAP purposes.
 
 On
September 11, 2008, a bankable feasibility study determined that there were
commercially mineable reserves at the Satinoco mine for U.S. GAAP purposes. All
exploration costs related to Satinoco mine prior to the fourth quarter of 2008
have been expensed and all development costs after October 1, 2008 have been
capitalized, for U.S. GAAP purposes.
 
 On
September 17, 2008, a bankable feasibility study determined that there were
commercially mineable reserves at the Pilar and Roca Grande mines for U.S. GAAP
purposes. All exploration costs related to the Pilar and Roca Grande mines prior
to the fourth quarter of 2008 have been expensed and all development costs after
October 1, 2008 have been capitalized, for U.S. GAAP purposes.
  2
  Jaguar
Mining Inc.
 Schedule
of Reconciliation between Canadian and U.S. GAAP
 Years
ended December 31, 2008, 2007 and 2006
 (Expressed
in thousands of U.S. Dollars)
 
 
 a)
              Mineral
      Properties (continued)
 
 For
U.S. GAAP purposes, all exploration and development expenses not related to
Sabara, Turmalina, Santa Isabel, Satinoco, Pilar and Roca Grande have been
expensed.  Due to differences in the asset bases for Canadian and U.S.
GAAP, the annual depreciation, amortization and depletion charge will
differ.
 
 For
Canadian GAAP, cash flows relating to mineral property exploration are reported
as investing activities. For U.S. GAAP, these costs would be characterized as
operating activities to the extent that they are not capitalized.
 
 b)
              Transition
      from Development Stage to
Production
 
 Under
U.S. GAAP, new production facilities are placed in service once the facility has
been constructed and fully tested to the point where it can be shown that it is
capable of producing its intended product. Under Canadian GAAP, new production
facilities are placed in service when output reaches a significant portion of
the facility’s design capacity. As such, the new Sabara plant was placed in
service on January 1, 2006 for U.S. GAAP purposes and on August 1, 2006 for
Canadian GAAP purposes. Sales revenue of $1,247,000 and costs of $1,112,448
incurred during the period January 1, 2006 to August 1, 2006 have been
capitalized under Canadian GAAP. This revenue was recognized in the statement of
operations, and production costs and fixed asset amortization were included in
inventory and expensed through cost of sales to the extent the inventory
produced was sold to third parties for U.S. GAAP purposes.
 
 c)
              Stripping
      Costs
 
 Under
Canadian GAAP, the Company accounts for stripping costs in accordance with
EIC-160, “Stripping Costs Incurred in the Production Phase of a Mining
Operation” (“EIC-160”). Under EIC-160, stripping costs are accounted for
according to the benefit received by the Company and are capitalized if the
stripping activity can be shown to represent a betterment to the mineral
property. A betterment occurs when the stripping activity provides access to
sources of reserves that will be produced in future periods that would not have
been accessible in the absence of this activity. However, under U.S. GAAP, as
outlined under EITF Issued No. 04-6, “Accounting for Stripping Costs Incurred
During Production in the Mining Industry” (“EITF 04-6”), all stripping costs
incurred during the production of a mine are considered variable production
costs during the period that the stripping costs are incurred.
 
 d)
              Deferred
      Financing Fees
 
 Prior
to January 1, 2007, the Company accounted for its deferred financing fees as an
asset, which for Canadian GAAP purposes were amortized to the statement of
operations over the period of the related debt, on a straight-line
basis.  For U.S. GAAP, the Company is required to defer and amortize
the financing fees, directly related to incurring the debt, to the statement of
operations using the interest method. Also, U.S. GAAP requires that the
unamortized fees are presented on the balance sheet as a separate asset.
Beginning on January 1, 2007, Canadian GAAP requires that the Company amortize
deferred financing fees in the same manner as U.S. GAAP except that the debt
issuance costs will be netted against the related debt.  Foreign
denominated deferred financing fees are considered monetary items under Canadian
GAAP and are subject to foreign currency gains or losses resulting from periodic
translation procedures whereas these deferred financing fees are considered
non-monetary under US GAAP and are not subject to foreign currency gains
or
  3
  Jaguar
Mining Inc.
 Schedule
of Reconciliation between Canadian and U.S. GAAP
 Years
ended December 31, 2008, 2007 and 2006
 (Expressed
in thousands of U.S. Dollars)




losses
resulting from periodic translation procedures.  An adjustment was
made to the opening deficit for Canadian GAAP purposes to account for the change
in accounting method relating to the deferred financing fees incurred prior to
January 1, 2007.
 
 e)
              Statement
      of Comprehensive Income/Loss
 
 There
is no statement of Comprehensive Income shown for U.S GAAP purposes due to the
fact that there are no differences between net income/loss and comprehensive
income/loss.
 
 f)
              Early
      Repayment Option
 
 For
Canadian GAAP, the Company separated the early repayment option for the private
placement notes (Note 10(g)) and recorded the fair value of $1.3 million related
to this embedded derivative asset and a corresponding decrease in interest
expense for the year ended December 31, 2008, under Canadian GAAP. Under U.S.
GAAP, the Company is not permitted to separate the early repayment
option.
 
 g)
              Stock
      Appreciation Rights Plan
 
 A Stock
Appreciation Rights Plan (“SAR”) was established during the year which allows
the Company to grant performance awards to senior officers, employees or
consultants of the Company.  SARs that call for eventual settlement in
cash based upon the increase in price of the Company’s common stock from the
grant date to a future vesting date(Note 14) and are
recorded at intrinsic value under Canadian GAAP. Under U.S. GAAP, the cost of
stock-based awards that are settled in cash, or may be settled in cash at the
discretion of the senior officers, employees or consultants, are required to be
measured at fair value on each reporting date.
 
 h)
              Comparative
      Figures
 
 Certain
comparative figures have been reclassified to conform to the current year’s
presentation.
 
 i)
              Recent
      Accounting Pronouncements
 
 i.
              Accounting
      for Uncertainty in Income Taxes
 
 In June
2006, the FASB issued FIN 48 “Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 provides guidance
on the recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken on a tax return. FIN 48 requires that the Company recognize in its
financial statements the impact of a tax position if that position is more
likely than not of being sustained on audit, based on the technical merits of
the position. It also provides criteria for derecognition, classification,
interest and penalties, accounting in interim periods and disclosure. The
interpretation is effective for fiscal years beginning after December 15, 2006
with the cumulative effect of the change in accounting principle recorded as an
adjustment to the opening balance of retained earnings. As a result of
implementing FIN 48 in 2007, the Company determined there was no impact on the
consolidated financial statements.
 
  4
  Jaguar
Mining Inc.
 Schedule
of Reconciliation between Canadian and U.S. GAAP
 Years
ended December 31, 2008, 2007 and 2006
 (Expressed
in thousands of U.S. Dollars)
 
 
 i)
              Recent
      Accounting Pronouncements
(continued)
 
 ii.
              Fair
      Value Measurements
 
 In
September 2006, the FASB issued SFAS 157, “Fair Value Measurements” (“SFAS
157”), which defines fair value, establishes a framework for measuring fair
value and a framework for measuring assets and liabilities at fair values when a
particular standard describes it. In addition, SFAS 157 prescribes a more
enhanced disclosure of fair value measures and requires additional expanded
disclosure when non-market data is used to assess fair values. The provisions of
SFAS 157 are effective for fiscal years beginning after November 15, 2007 except
that the standard has been deferred to fiscal years beginning after November 15,
2008 for non-financial assets and liabilities. As a result of implementing the
required portions of SFAS 157 in 2008, the Company determined that there was no
impact on the consolidated financial statements.
 
 iii.
              The
      Fair Value Option for Financial Assets and Financial
      Liabilities
 
 In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115.” This pronouncement permits entities to use the fair value
method to measure certain financial assets and liabilities by electing an
irrevocable option to use the fair value method at specified election dates.
After election of the option, subsequent changes in fair value would result in
the recognition of unrealized gains or losses as period costs during the period
the change occurred. SFAS No. 159 becomes effective as of the beginning of the
first fiscal year commencing after November 15, 2007, with early adoption
permitted. However, entities may not retroactively apply the provisions of SFAS
No. 159 to fiscal years preceding the date of adoption. As a result of
implementing SFAS 159 in 2008, the Company determined that there was no impact
on the consolidated financial statements.
 
 iv.
              Business
      Combinations
 
 In
December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). SFAS No. 141(R)
establishes principles and requirements of how an acquirer recognizes and
measures, in its financial statements, the identifiable assets acquired, the
liabilities assumed, any non-controlling interest in the acquiree and the
goodwill acquired. SFAS No. 141(R) also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination. SFAS No. 141(R) is effective for fiscal years beginning after
December 15, 2008.  The Company is currently evaluating the impact
that the adoption of this pronouncement will have on its consolidated financial
statements.
  5
  Jaguar
Mining Inc.
 Schedule
of Reconciliation between Canadian and U.S. GAAP
 Years
ended December 31, 2008, 2007 and 2006
 (Expressed
in thousands of U.S. Dollars)




i)
              Recent
      Accounting Pronouncements
(continued)
 
 v.
              Non-controlling
      Interests in Consolidated Financial
Statements
 
 In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements - an amendment of Accounting Research Bulletin
No. 51” (“SFAS No. 160”). SFAS No. 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income attributable to the parent and to
the non-controlling interest, changes in a parent’s ownership interest, and the
valuation of retained non-controlling equity investments when a subsidiary is
deconsolidated. SFAS No. 160 also establishes disclosure requirements that
clearly identify and distinguish between the interests of the parent and the
interests of the non-controlling owners. SFAS No. 160 is effective for fiscal
years beginning after December 15, 2008. The Company is currently evaluating the
potential impact that the adoption of SFAS No. 160 will have on its consolidated
financial statements.
 
 vi.
              Derivative
      Instruments
 
 In
March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities - an amendment of SFAS No. 133”, (SFAS
“161”), which requires enhanced disclosures about an entity’s derivative and
hedging activities and thereby improves the transparency of financial reporting.
Disclosing the fair values of derivative instruments and their gains and losses
in a tabular format provides a more complete picture of the location in an
entity’s financial statements of both the derivative positions existing at
period end and the effect of using derivatives during the reporting period.
Entities are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related
hedged items affect an entity’s financial position, financial performance, and
cash flows. SFAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. The Company is
currently evaluating the potential impact that the adoption of SFAS No. 161 will
have on its financial statements.
 
 vii.
              Determination
      of the Useful Life of Intangible
Assets
 
 In
April 2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life
of Intangible Assets” (“FSP 142-3”) which amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FASB Statement No. 142,
“Goodwill and Other Intangible Assets” (“FAS 142”). The intent of this FSP is to
improve the consistency between the useful life of a recognized intangible asset
under FAS 142 and the period of expected cash flows used to measure the fair
value of the asset under FASB Statement No. 141, “Business Combinations” (“FAS
141”). FSP 142-3 is effective for the Company’s fiscal year beginning January 1,
2009 and will be applied prospectively to intangible assets acquired after the
effective date. The Company does not expect that the adoption of FSP 142-3 will
have an impact on the Company’s financial statements.
 
  6
  Jaguar
Mining Inc.
 Schedule
of Reconciliation between Canadian and U.S. GAAP
 Years
ended December 31, 2008, 2007 and 2006
 (Expressed
in thousands of U.S. Dollars)
 
 
 i)
              Recent
      Accounting Pronouncements
(continued)
 
 viii.
              Hierarchy
      of Generally Accepted Accounting
Principles
 
 In May
2008, the FASB issued FASB Statement No. 162, “The Hierarchy of Generally
Accepted Accounting Principles” (FAS 162) which identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of non-governmental entities that are
presented in conformity with U.S. generally accepted accounting principles
(“GAAP”). FAS 162 was effective November 15, 2008, which was 60 days following
the Security and Exchange Commission’s approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity with GAAP”. The adoption of FAS 162 has had no impact on the
Company’s consolidated financial position, results of operations or cash
flows.
  7