Dynacor Gold Mines Inc. (Dynacor Symbol: Toronto Stock Exchange (TSX): DNG OTC (United States): DNGDF Shares outstanding: 39,713,877 PR-2018-08-18 Q2-2018: DYNACOR REPORTS
2018
Dynacor Gold Mines Inc. (Dynacor
Symbol:
Toronto Stock Exchange (TSX): DNG
OTC (United States): DNGDF
Shares outstanding: 39,713,877
PR-2018-08-18
Q2-2018: DYNACOR REPORTS
Montreal, August 14, 2018 – Dynacor Gold Mines Inc. (TSX: DNG / OTC: DNGDF) (Dy nacor or the
Corporation) a Corporation with gold and silver ore processing o perations and exploration projects in Peru,
released its unaudited condensed consolidated finan cial statements and
analysis (“MD&A”) for the three-month
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$ unless stated otherwise. Earnings per share and
variance % are calculated from rounded figures. Some additions might be incorrect due to rounding).
For the three- month period ended June 30, 2018,
powered by sales of $28.0 M which resulted in
compared to $0.3 M ($0.01 per share) for the three
Highlights for the second quarter of 201
(Variance %, are calculated based on rounded figures)
Operational
• Gold production of 20,610 ounces, an increase of 13.3% compared to Q2
Financial
• Sales of $28.0 M in Q2- 201
• Gross operating margin of $3.
• Net income and comprehensive income of $1.3
M in Q2-2017;
• EBITDA (1) of $2.7 M in Q
• Cash flow from operating activities before change in wor king capital items of $2.
share (2) in Q2-2018, an increase of 57.1% compared to Q2
• Cash on hand of $10.8 M
Strategic
• In Q2- 2018, the Corporation announced the implementation of a
buyback program.
1
Dynacor )
Toronto Stock Exchange (TSX): DNG
2018: DYNACOR REPORTS SALES OF US $28.0M AND
NET INCOME OF US $1.3 M
Dynacor Gold Mines Inc. (TSX: DNG / OTC: DNGDF) (Dy nacor or the
a Corporation with gold and silver ore processing o perations and exploration projects in Peru,
released its unaudited condensed consolidated finan cial statements and the management's discussion and
month and six-month periods ended June 30, 2018.
These documents have been filed electronically with SEDAR at www.sedar.com and will be available on the
www.dynacor.com .
(All figures in this press release are in millions of US$ unless stated otherwise. Earnings per share and cash
variance % are calculated from rounded figures. Some additions might be incorrect due to rounding).
month period ended June 30, 2018, Dynacor recorded its 29 th consecutive quarter of profits
powered by sales of $28.0 M which resulted in net income $1.3 M ($0.03 per share)
per share) for the three -month period ended June 30, 2017
quarter of 201 8
Variance %, are calculated based on rounded figures)
Gold production of 20,610 ounces, an increase of 13.3% compared to Q2 -2017
201 8, an increase of 28.4% compared to Q2-2017;
Gross operating margin of $3. 5 M (12.6%) in Q2-2018, an increase of 29.6 %
Net income and comprehensive income of $1.3 M in Q2- 2018 ($0.03 per share),
in Q 2-2018, an increase of 35.0% compared to Q2-2017;
flow from operating activities before change in wor king capital items of $2.
, an increase of 57.1% compared to Q2 -2017;
M at end of Q2-2018 compared with $4.8 M at year-end 2017
2018, the Corporation announced the implementation of a normal course issuer bid share
$28.0M AND
Dynacor Gold Mines Inc. (TSX: DNG / OTC: DNGDF) (Dy nacor or the
a Corporation with gold and silver ore processing o perations and exploration projects in Peru, has
the management's discussion and
and will be available on the
cash -flow per share are in US$. All
consecutive quarter of profits ,
per share) a significant increase
(“Q 2-2017”).
2017 .
% compared to Q2-2017;
2018 ($0.03 per share), compared to $0.3
2017;
flow from operating activities before change in wor king capital items of $2. 2 M and $0.06 per
end 2017 .
normal course issuer bid share
2
Recent events
On June 19, 2018, the Corporation released it strat egic plan highlights for years 2018 to 2021 with ma in
goals to increase profitability, to accelerate grow th in Peru and other jurisdiction, to promote Dynac or’s eco-
responsible business model to specific stakeholders and plan direct return to shareholders. REF: “DYNACOR:
SETTING THE COURSE TO THE FUTURE Strategic Plan 2018-2021”-June 19, 2018
(1) EBITDA: “Earnings before interest, taxes and depreciation” is a non-IFRS financial performance measure 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 performance 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.
Overview Q2-2018
During Q2-2018, the market price of gold averaged $ 1,307/oz, compared to $1,257/oz in Q2-2017. The ave rage
gold price for the period was higher in comparison to last year, however the second quarter of 2018 sa w the
price of gold falling by 6% affecting slightly on t he quarter gross margin. Nevertheless, the Corporat ion
continued increasing its ore purchased level compar ed to the previous quarter (Q1-2018) at a monthly a verage
exceeding 7,500 tonnes and is pushing to raise that level to over 8,000 tonnes for the next quarter to remain in
line with our production forecast.
Total volume processed during the quarter was 23,17 2 tonnes (average of 268 tpd) compared to 16,310 to nnes
(average of 192 tpd) in Q2-2017 an increase of 42.0 %.
Gold production was 20,610 ounces in Q2-2018 compar ed to 18,185 in Q2-2017 a 13.3% increase explained by
greater volume of ore processed at lower gold grades.
Total sales amounted to $28.0 M compared to $21.8 M in Q2-2017 an increase of 28.4% explained by the
increase in gold price ($1.1 M) and the increase in sales volumes ($5.1 M).
3
Results from operations
Financial statement highlights
Three -month periods
ended June 30,
Six -month periods
ended June 30,
(in $'000) 2018 2017 2018 2017
Sales 27,955 21,754 54,545 46,482
Cost of sales (24,440) (19,056) (47,406) (40,684)
Gross operating margin 3,515 2,698 7,139 5,798
General and administrative expenses (1,332) (1,055) (2,452) (2,129)
Transition, maintenance and other expenses - (197) - (384)
Selling expenses (1) (2) (4) (5)
Operating income 2,182 1,444 4,683 3,280
Net income and comprehensive Income 1,251 284 2,852 1,221
Earnings per share
Basic $0.03 $0.01 $0.07 $0.03
Diluted $0.03 $0.01 $0.07 $0.03
The gross operating margin amounted to $3.5 M in Q2 -2018 compared to $2.7 M for the same period in 201 7
due to higher sales.
Net income was $1.3 M for the three-month period en ded June 30, 2018, compared to $0.3 M for the same
period in 2017. The quarter increase in net income compared to 2017 is explained by the increase in gr oss
operating margin combined with the absence of inter est on the long-term loan and of transition costs i n Q2-
2018.
Last year (Q2-2017) results had been highly affecte d by extreme weather conditions impacting small sca le
miner’s production and therefore ore supply.
Three -month periods
ended June 30,
Six -month periods
ended June 30,
(in $'000) 2018 2017 2018 2017
Reconciliation of net income and
comprehensive income to EBITDA (1)
Net income and comprehensive income 1,251 284 2,852 1,221
Income taxes 802 733 1,544 1,387
Financial expenses 63 291 132 585
Depreciation 583 643 1,141 1,291
Write-off of exploration assets 7 94 7 94
EBITDA (1) 2,706 2,045 5,676 4,578
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Cash flow from operating, investing and financing a ctivities and working capital/liquidity
Operating activities
During Q2-2018, the cash flow from operations, befo re changes in working capital items, amounted to $2 .2 M
($4.7 M for the six-month period ending June 30, 20 18), compared to $1.4 M in Q2-2017 ($3.3 M for the six-
month period ending June 30, 2017) explained mainly by the increase in gross operating margin.
During Q2-2018, total cash from operating activitie s amounted to $3.2 M ($7.7 M for the six-month peri od
ending June 30, 2018) compared to $1.4 M in Q2-2017 ($4.5 M for the six-month period ending June 30, 2 017).
Changes in working capital items amounted to $1.0 M ($3.0 M or the six-month period ending June 30, 20 18)
compared to nil and $1.2 M for the same periods in 2017.
Investing Activities
During Q2-2018, there were investment of $0.6 M ($1 .0 M for the six-month period ending June 30, 2018) for
the acquisition of property, plant and equipment ($ 0.2 M and $0.4 M for the same periods in 2017) main ly
relating to the additions to the Chala plant and the expansion of the tailing pond.
Additions to exploration and evaluation assets duri ng Q2-2018, amounted to $0.2 M ($0.4 M for the six- month
period ending June 30, 2018) (similar to the same p eriods in 2017).
Financing Activities
In Q4-2017, the Corporation fully reimbursed the lo ng-term loan thirteen months before maturity. In Q2 -2017,
interest expenses and transaction costs amounted to $0.2 M ($0.4 M for the six-month period ending Jun e 30,
2017). As well, in 2018, the Corporation disbursed $0.5 M to complete the site restoration at its old Huanca
Metalex plant.
Working capital and liquidity
As at June 30, 2018, the Corporation’s working capi tal amounted to $18.7 M, including $10.8 M in cash ($16.0
M, including $4.8 M in cash at December 31, 2017).
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 prevailing market conditions at the beginn ing of the
year. The processing plant ran at a 90% capacity ra te during the second quarter of 2018. Efforts are o ngoing to
regain the constant 300 tpd production rate and to push for greater volume by year end.
The Corporation produced 20,610 ounces of gold in Q 2-2018 for a cumulative 39,682 ounces for the first
semester slightly below the objective of 40,900 oun ces for that period due to lower ore grade processe d. The
2018 forecast is between 90,000 to 94,000 ounces. T his production forecast considers the fact that his torically
our second half production results are consistently higher than the first half.
5
Exploration
The IP Geophysics on the disseminated mineralizatio n on the Quartzites and on the Sumac Brecciated
Quartzite zone will be completed near the end of Se ptember. This will allow for confirmation of target s to be
drilled from surface shortly afterwards.
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 20 17, Dynacor produced 79,897 ounces of gold, a 9% in crease as compared with 2016
(73,477 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
Director, Investor Relations
Dynacor Gold Mines Inc.
T: 604.492.0099 | M: 604.562.1348