Dynacor Gold Mines Inc. (Dynacor Symbol: Toronto Stock Exchange (TSX) : DNG OTC (United States): DNGDF Shares outstanding: 39,654,344 PR-2018-03-06 DYNACOR EN REPORT
2018
Dynacor Gold Mines Inc. (Dynacor
Symbol:
Toronto Stock Exchange (TSX) : DNG
OTC (United States): DNGDF
Shares outstanding: 39,654,344
PR-2018-03-06
DYNACOR EN
REPORT
Montreal, March 29, 2018 – Dynacor Gold Mines Inc. (TSX
Corporation) a Corporation with gold
released its audited consolidated financial stateme nts and
for the year ended December 31, 201
These documents have been filed electronically with SEDAR at
Corporation's website www.dynacor.com
(All figures in this press release are in millions of US$
variance % are calculated from rounded figures
The Corporation ended the year with strength,
profits. Dynacor recorded a net income of $3.8 M ($0.10 per share) i n 2017 compared to $3.3 M ($0.09 per
share) in 2016, an increase of 15.2%.
2017 Highlights
Strategic
• Dynacor completed its first full year of processing activities at the Veta Dorada
issues;
• The long- term senior secured credit facility was completely repaid in December 2017,
to contractual maturity. Dynacor is now debt free.
Operational
• Gold production of 79,897 ounces in 2017, an
24,066 ounces in Q4-2017;
• Dynacor started the dismantling of the Huanca Metalex plant in Q4
Financial
• Sales of $101.7 M in 2017 an increase of 11.4% compared to 2016;
• Gross operating marg in of $13.4
• Net income of $3.8 M in 2017 ($0.10 per share), an increase of 15.2% com pared to 2016;
ynacor )
: DNG
EN DS 2017 SURPASSING US $100 M IN SALES AND
REPORT S A NET INCOME OF US$ 3.8 M
Dynacor Gold Mines Inc. (TSX : DNG / OTC: DNGDF
gold and silver ore processing operations and exploration projects
released its audited consolidated financial stateme nts and the management's discussion and analysis (MD&A)
year ended December 31, 201 7.
These documents have been filed electronically with SEDAR at www.sedar.com and will be available on the
www.dynacor.com .
(All figures in this press release are in millions of US$ unless stated otherwise. Earnings per share and cash
rounded figures . Some additions might be incorrect due to rounding).
The Corporation ended the year with strength, totalling sales of over $100 M and its seventh consecutive
recorded a net income of $3.8 M ($0.10 per share) i n 2017 compared to $3.3 M ($0.09 per
an increase of 15.2%.
Dynacor completed its first full year of processing activities at the Veta Dorada Plant without any operation
term senior secured credit facility was completely repaid in December 2017,
to contractual maturity. Dynacor is now debt free.
Gold production of 79,897 ounces in 2017, an increase of 8.7%, including an historical quarterly high of
of the Huanca Metalex plant in Q4 -2017.
in 2017 an increase of 11.4% compared to 2016;
in of $13.4 M (13.2 %) in 2017, an increase of 10.7% compared to 2016
in 2017 ($0.10 per share), an increase of 15.2% com pared to 2016;
US $100 M IN SALES AND
/ OTC: DNGDF ) (Dynacor or the
and exploration projects in Peru, has
the management's discussion and analysis (MD&A)
and will be available on the
cash -flow per share are in US$. All
its seventh consecutive year of
recorded a net income of $3.8 M ($0.10 per share) i n 2017 compared to $3.3 M ($0.09 per
Plant without any operation
term senior secured credit facility was completely repaid in December 2017, thirteen months prior
increase of 8.7%, including an historical quarterly high of
an increase of 10.7% compared to 2016 ;
in 2017 ($0.10 per share), an increase of 15.2% com pared to 2016;
• EBITDA (1) of $11.2 M, an increase of 24.4% compared to 2016;
• Cash flow from operating activities before change in working capital items of $8.6 M ($0.22 per share (2) ), an
increase of 38.7% compared to 2016.
(1) EBITDA: “Earnings before interest, taxes and de preciation” is a non-IFRS financial performance mea sure with no standard definition
under IFRS. It is therefore possible that this meas ure could not be comparable with a similar measure of another Corporation. The
Corporation uses this non-IFRS measure as an indica tor of the cash generated by the operations and all ows investor to compare the
profitability of the Corporation with others by canceling effects of different assets bases, effects due to different tax structures as well as the
effects of different capital structures.
(2) Cash-flow per share is a non-IFRS financial per formance measure with no standard definition under IFRS. It is therefore possible that
this measure could not be comparable with a similar measure of another Corporation. The Corporation us es this non-IFRS measure which
can also be helpful to investors as it provides a result which can be compared with the Corporation market share price.
2017 Overview
In 2017, despite extreme climate events that affect ed Peru and impacted the ore supply, the Corporatio n
monthly production constantly improved. For its fir st full year of operations, Dynacor’s new Veta Dora da plant
(Chala) achieved a record yearly production of 79,8 97 ounces of gold (compared to 73,476 ounces in 201 6)
including a monthly record high of 8,908 ounces in December. Total sales for the year amounted to $101 .7 M.
The Corporation’s daily ore processing rate increas ed steadily throughout 2017 reaching a 300 tpd aver age in
December 2017. The daily average rate was 226 tpd i n 2017 compared to 204 tpd in 2016.
Finally, after having kept the Huanca Metalex plant in care and maintenance mode for over a year and
considering the current ore market conditions in Pe ru and the ability for Dynacor to increase its proc essing
capacity at its new plant, the Corporation has take n the decision in late 2017 to definitively close i ts Huanca
Metalex plant and initiate decommissioning and site restoration.
Results from operations
Financial statements highlights
For the years ended
December 31,
(in $'000) 2017 2016
Sales 101,695 91,299
Cost of sales (88,282) (79,225)
Gross operating margin 13,413 12,074
General and administrative expenses (3,855) (4,122)
Transition, maintenance and other expenses (1,118) (303)
Selling expenses (12) (815)
Operating income
8,428 6,834
Net income and comprehensive income 3,841 3,289
Earnings per share
Basic $0.10 $0.09
Diluted $0.10 $0.08
In 2017, total sales amounted to $101.7 M compared to $91.3 M in 2016, a year over year increase of 11 .4%.
The net income was $3.8 M in 2017, compared to $3.3 M in 2016, an increase of 15.2% compared to 2016.
The 2017 net income includes elements such as the t ransition and maintenance expenses related to the
transfer of its ore processing operations from the Huanca Metalex Plant to the Veta Dorada (Chala) pla nt and all
provisions regarding the Huanca Metalex site closur e and restoration which amounted to $1.1 M as well as
interest expenses of $0.6 M paid on the long-term d ebt which was repaid in full in December 2017. Thos e
expenses will be considerably reduced in 2018. In 2 017, the foreign exchange loss amounted to $0.1 M
compared to $0.5 M in 2016.
Reconciliation of net income and comprehensive income
to EBITDA
For the years ended
December 31,
2017 2016
Net comprehensive income 3,841 3,289
Income taxes 2,922 2,277
Financial expenses 1,330 790
Depreciation 2,866 2,634
Write-off of exploration and evaluation assets 270 -
Gain on revaluation of financial instrument - (29)
EBITDA 11,229 8,961
Fourth quarter results
During the fourth quarter ended December 31, 2017, the Corporation recorded a net income of $1.4 M ($0 .04
per share) compared to $0.2 M ($0.01 per share) in the comparative period of 2016. The increase of $1. 2 M is
mainly due to the increase in the gross operating m argin ($1.8 M). This was partially offset by the in crease in
the income tax expense as well as a $0.2 M write-of f of asset in Q4-2017. Q4-2016 was negatively affec ted by
the first quarter of operations at the Veta Dorada Plant.
Cash flow from operating, investing and financing activities and liquidity
Operating Activities
For the year ended December 31, 2017, total cash ge nerated from operating activities amounted to $7.4 M
($0.19 per share), compared to $3.3 M ($0.09 per sh are) in 2016. The cash flow from operating activiti es
before change in working capital items amounted to $8.6 M ($0.22 per share), compared to $6.2 M ($0.16 per
share) in 2016. Changes in working capital items de creased by $1.2 M (decrease of $2.9 M in the compar ative
period) mainly relating to an increase in trade and other receivables.
Investing Activities
During the year ended December 31, 2017, the Corpor ation invested $0.7 M ($8.8 M for the year ended
December 31, 2016) for the acquisition of property, plant and equipment, mainly relating to additions to the
Chala plant.
Additions to exploration and evaluation assets during the year amounted to $0.6 M ($1.3 M in 2016).
Financing activities
On January 14, 2016, the Corporation entered into s enior secured credit facilities (the “Facility”) in the
aggregate amount of up to $10 M with third party le nders. The Facility consisted of a $7 M drawdown te rm loan
facility (the “Term Facility”) and a $3 M revolving facility (the “Revolver”) and was secured against the assets of
the Corporation, including the Veta Dorada Plant. T he Term Facility had a term of up to thirty-six mon ths and
bore interest at a rate of 10% per annum. The Revol ver had a term of twelve months, which was extended for
an additional period of twelve months and bore inte rest at a rate of 8.5% or Prime rate plus 6% per an num,
whichever is greater.
In December 2017, thirteen months prior to contract ual maturity, the Corporation completed the debt
reimbursement and is now debt free. During 2017, Dy nacor made repayments of $ 6.3 M.
Liquidity
As at December 31, 2017, the Corporation’s working capital amounted to $16.0 M, including $4.8 M in ca sh
($15.8 M, including $6.2 M in cash at December 31, 2016).
Outlook 2018
Ore processing
Dynacor expects 2018 to be its best year ever with a gold production estimated between 90,000 and 94,0 00
ounces. The gold production target for 2018 is base d on the current price of gold and current operatin g
conditions. The Corporation expects to return its p roduction to its full 300 tpd capacity soon after t he rainy
season and plans to expand the capacity to 360 tpd by the end of the year.
The dismantling of the Huanca Metalex plant is comp leted and the site restoration is well underway and should
be completed in the second quarter of 2018.
The Corporation is also looking at other opportunities in other jurisdictions.
Exploration
Following a new agreement with one the two local co mmunities, the Corporation will begin in 2018 a sta ge
surface drilling program on the disseminated gold z one. The drilling targets have been defined based o n all the
available geological data, geochemical sampling dat a, reinterpretation of the geophysical data and the
recommendations of independent experts (in dissemin ated gold deposits) whom visited the property last fall.
The drilling program will begin after the rainy sea son upon reception of the exploration permit and wi ll target the
disseminated gold zone, the Sumac breccia zone and targeting extensions of the Manto Dorado to the wes t.
The approved budget is $2.4 M over the next 24 mont hs.
ABOUT DYNACOR GOLD MINES INC.
Dynacor Gold Mines Inc. is a gold production corpor ation headquartered in Montreal, Canada. The corpor ation is engaged in production
through its government approved ore processing oper ations. At present, Dynacor produces and explores i n Peru where its management
team has decades of experience and expertise. In 2017, Dynacor produced 79,897 ounces of gold, a 8.7% increase as compared with 2016
(73,476 ounces). Dynacor trades on the Toronto Stock Exchange (DNG) and the OTC in the United States under the symbol (DNGDF).
FORWARD LOOKING INFORMATION
Certain statements in the foregoing may constitute forward-looking statements, which involve known and unknown risks, uncertainties and
other factors that may cause the actual results, pe rformance or achievements of Dynacor, or industry r esults, to be materially different from
any future result, performance or achievement expre ssed or implied by such forward-looking statements. These statements reflect
management’s current expectations regarding future events and operating performance as of the date of this news release.
Dynacor Gold Mines Inc. (TSX: DNG / OTC: DNGDF)
Website: http://www.dynacor.com
Twitter: http://twitter.com/DynacorGold
Facebook: facebook.com/DynacorGoldMines
For more information, please contact: Dynacor Gold Mines Inc.
Jean Martineau
President and CEO
#1105, 625 René-Lévesque Blvd.
Dynacor Gold Mines Inc.
Montreal, Quebec H3B 1R2
T: 514-393-9000 ext. 228
Dale Nejmeldeen
Investor Relations
Dynacor Gold Mines Inc.
T: 604.492.0099 | M: 604.562.1348