2015 Dynacor Gold Mines Inc. (Dynacor Symbol: DNG Toronto Stock Exchange (TSX) OTC: DNGDF Shares outstanding: 37,366,911
DYNACOR Q3-2015: OF PROFITS Montreal, November 13, 2015 – Corporation with gold and silver unaudited condensed consolidated financial statements “MD&A” for the three-month and nine 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$ All variance % are calculated from rounded figures The t hird quarter 2015 financial results reflects http://dynacor.com/investor-kit/ )
Despite challenging conditions , production, the Corporation recorded month net income of $2.8M and ($0.08 per share) cumulative of $4.7M ($0.13 per share) in 2014.
Jean Martineau Dynacor’s President and CEO has face of a dwindling availability of ore and consequ ently increasingly fierce competition in the purcha sing market Dynacor reinforced its ore purchasing networ k. In October 2015 best monthly production with the first nine (9) months of 2015, an increase of 2 8%. Finally, it is interesting to note that accordi ng to the export data published by th e Peruvian authorities the amount of gold exported by the seven (7) formal processing plants decreased by 22% whereas Dynacor’ s exports remained stable. We expect that our gold production will meet our production guidance for 2015
ynacor ) Toronto Stock Exchange (TSX) 2015: DYNACOR ANNOUNCES ITS 18 th CONSECUTIVE QUARTER AS IT EARNS A NET INCOME OF US$ 0.7M IN Q3
- Dynacor Gold Mines Inc. (TSX: DNG) (Dynacor or the Corporation and silver ore processing operations and exploration projects consolidated financial statements and the management's discussion and analysis and nine -month period ended September 30, 2015.
These documents have been filed electronically with SEDAR at www.sedar.com and will be 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).
hird quarter 2015 financial results reflects the 18th consecutive quarter of net income for Dynacor.
, as gold market price continued on its downward tren d affecting the Corporation recorded in Q3-2015 a net income of $0.7M ($0.02 per share) (cumulative nine month net income of $2.8M and ($0.08 per share) ) compared to $1.8 M ($0.05 per share) cumulative of $4.7M ($0.13 per share) in 2014.
Jean Martineau Dynacor’s President and CEO has recently stated " During the 1st semester of 2015, in the face of a dwindling availability of ore and consequ ently increasingly fierce competition in the purcha sing market Dynacor reinforced its ore purchasing networ k. In October , the Metalex- Huanca plant with 6, 808 ounces of gold as compared to an average of 5,307 ounces during the first nine (9) months of 2015, an increase of 2 8%. Finally, it is interesting to note that accordi ng to the e Peruvian authorities the amount of gold exported by the seven (7) formal processing plants decreased by 22% whereas Dynacor’ s exports remained stable. We expect that our gold production will meet our production guidance for 2015 .”
CONSECUTIVE QUARTER
IN Q3 -2015 (Dynacor or the Corporation ) a in Peru, has released its the management's discussion and analysis and will be available on the cash -flow per share are in US$.
the 18th consecutive quarter (see as gold market price continued on its downward tren d affecting ore a net income of $0.7M ($0.02 per share) (cumulative nine - compared to $1.8 M ($0.05 per share) in Q3-2014 and During the 1st semester of 2015, in the face of a dwindling availability of ore and consequ ently increasingly fierce competition in the purcha sing Huanca plant recorded its 6, 808 ounces of gold as compared to an average of 5,307 ounces during the first nine (9) months of 2015, an increase of 2 8%. Finally, it is interesting to note that accordi ng to the e Peruvian authorities the amount of gold exported by the seven (7) formal processing plants decreased by 22% whereas Dynacor’ s exports remained stable. We expect that our gold
Q3-2015 highlights
- Cash on hand of $10.1 M at September 30, 2015 comp ared to $14.0 M at December 31, 2014;
- Gold and silver sales of $18.5 M (cumulative nine- month $57.4 M) compared to $24.0 M in Q3-2014 (cumulative nine-month of $63.1 M in 2014) a quarte r to quarter decrease of $5.5 M (22.9%) (Cumulative nine-month decrease of 9.0%);
- Gold production of 15,607 oz in Q3-2015 (cumulativ e nine-month of 47,760 oz) compared to 19,217 oz in Q3-2014 (cumulative nine-month 49,000 in 2014 ) a quarter to quarter decrease of 18.8 % and year to date decrease of 2.5%;
- Gross operating margin of 13.5% in Q3-2015 (cumula tive nine-month of 16.4%) compared to 19.2% in Q3-2014 (cumulative nine-month 18.7% in 2014);
- Net income of $0.7M in Q3-2015 ($0.02 per share) ( cumulative nine-month of $2.8M and $0.08 per share) compared to $1.8M ($0.05 per share) (cumulat ive nine-month of $4.7M and $0.13 per share), a 61.1% quarter to quarter and 40.4% cumulative decrease compared to 2014;
- EBITDA (1) of $1.7 M in Q3-2015 (cumulative $6.3M) compared to $3.4 M in Q3-2014 (cumulative $8.8 M) a 50.0% quarter to quarter and 28.4% cumula tive decrease compared to 2014
- Cash flow from operating activities before change i n working capital items of $1.3 M ($0.04 per share) (2) (cumulative nine-month of $4.6 M and $0.13 per sha re) (2) in 2015 compared to $2.5M in Q3-2014 ($0.07 per share) (2) (cumulative nine-month of $6.2 M and $0.17 per shar e) (2) a 48.0% quarter to quarter and 25.8% cumulative decrease co mpared to 2014;
- (1) EBITDA: “Earnings before interest, taxes and deprec iation” is a non-GAAP financial performance measure with no standard definition under IFRS. It is therefore pos sible that this measure could not be comparable wit h a similar measure of another Corporation. The Corporation uses this non-GAAP measure as an indicator of the cash generated by the operations and allows investor to compare the profitability of the Corporation with others by canceling effects o f different assets bases, effects due to different tax structures as well as the effects of different capital structures. See th e ‘Non-GAAP Measures’ section 15 of this report.
- (2) Cash-flow per share is a non-GAAP 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. See the ‘Non-IFRS Measures’ section of this MDA. The Corporation uses this non-GAAP measure which can also be helpful to investors as it provides a result which can be compared with the Corporation market share price.
Results from operations:
During the period, the Metalex Huanca plant produce d 15,607 ounces of gold compared to 19,217 ounces o f gold in Q3-2014 a decrease of 18.8% explained by lo wer ore supplied which translated into lesser mill throughput.
During the period, Dynacor sold 16,373 gold equival ent ounces compared to 18,665 gold equivalent ounce s sold in Q3-2014 a 12.3% decrease compared to 2014 w hich, combined with reduced gold selling price affected sales which amounted to $18.5 M compared t o $24.0 M a decrease of 22.9% compared to Q3- 2014. Cumulative sales for nine-month amounted to $ 57.4 M ($63.1 M in 2014) a cumulative decrease of $5.7 or 9.0%);
Average gold price per gold equivalent ounce sold w as $1,128 per ounce in Q3-2015 compared to $1,287 i n Q3-2014 a 12.4% average selling gold price decrease .
The gross operating margin for the period amounted to $2.5 M (cumulative nine-month of $ 9.4 M) compared to $4.6 M (cumulative nine-month of $ 11.8 M) in 2014 a 45.7% quarter to quarter decrease and cumulative 20.3% decrease compared to 2014. This gr oss operating margin continues to reflect the abili ty of Dynacor’s business model to generate positive ca sh flow from operations even during a period where gold price is weakening.
During the period, general and administrative expen ses amounted to $0.8 M a decrease of $0.3 M compare d to Q3-2014 amount of $1.1 M. Selling expenses were down by $0.1M at $0.3 M compared to $0.4M Q3- 2014 since they are directly related to the sales level.
Income tax provision decreased by $0.6 M compared t o Q3-2014 due to lower taxable income in Peru durin g the quarter.
Financial highlights
For the three-month periods ended September 30, For the nine-month periods ended September 30,
(in $'000) 2015 2014 2015 2014
Sales 18,471 24,018 57,440 63,103
Cost of sales 15,951 19,388 47,990 51,290
Gross operating margin 2,520 4,630 9,449 11,813
General and administrative expenses 794 1,049 2,906 2,861
Operating income 1,406 3,169 5,566 7,892
Net income and comprehensive income 670 1,824 2,792 4,734
EBITDA (1) 1,708 3,442 6,328
8,796 Net Cash flow from operating activities
before changes in working capital items 1,259 2,470 4,608 6,152
Cash flow from operating activities 1,659 3,400 5,852 8,449
Earnings per share
Basic $0.02 $0.05 $0.08 $0.13
Diluted $0.02 $0.05 $0.07 $0.12
Reconciliation of Net comprehensive income to EBITDA (1)
Net comprehensive income 670 1,824 2,792 4,734
Income taxes 535 1,151 2,128 2,796
Financial expenses 38 32 98 87
Depreciation 465 435 1,310 1,179
EBITDA 1,708 3,442 6,328 8,796
- (1) EBITDA: “Earnings before interest, taxes and depreciation” is a non-GAAP 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-GAAP 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. See the ‘Non-GAAP Measures’ section 15 of this report.
CASH FLOW FROM OPERATING, INVESTING AND FINANCING A CTIVITIES AND WORKING CAPITAL
Operating Activities
Cash flows from operating activities before changes in working capital items amounted to $1.3 M (cumul ative nine-month of $4.6 M in 2015) compared to $2.5 M an d cumulative of $6.2 M in 2014) a 48.0% decrease compared Q3-2014 which is attributable to the combi nation of lower sales volume and lower gold sales price which affected the quarter gross margin by $2.1 M.
Total cash generated from operating activities amou nted to $1.7 M compared to $3.4 M in Q3-2014 a $1.7 M or 50.0% decrease compared to Q3-2014 due to the de crease in gross margin and a $0.5 M decrease in net changes in working capital items during the period.
Investing Activities
During the period, the Corporation invested $3.2M i n property, plant and equipment including $3.0M for the new Veta Dorada plant construction project in Chala.
Additions to exploration and evaluation assets amou nted to $1.6 M in Q3-2015 (cumulative $3.5 M in 201 5) ($0.4 M in Q3-2014 and cumulative $1.1 M in 2014) a s the underground exploration program at Tumipampa continued and where promising results were published throughout the period.
Financing activities
During Q3-2015, the Corporation did not complete an y financing (nil in Q3-2014).
Liquidity
As at September 30, 2015, the Corporation’s working capital amounted to $15.6M including $10.1M in cas h ($20.9 M including $14.0M in cash at December 31, 2014).
2015- Ore processing outlook Ore processing operation
The Corporation’s production guidance for 2015 is in the range of 64,000 to 68,000 ounces of gold.
As at September 30, 2015, total gold production amo unt to 47,760 ounces and considering October 2015 production of 6,808 ounces, management is confident it will meet its yearly guidance.
Veta Dorada Chala Plant
Construction progress at the Veta Dorada (Chala) pl ant is on schedule (see October 29, 2015 Press rele ase DYNACOR GOLD: VETA DORADA 300 TPD PLANT CONSTRUCTIO N IN CHALA IS 52% COMPLETED ) with completion expected for Q1-2016 and notwithstanding any government approval delays, commercial production should begin as planned, by the end of Q 2-2016.
The milling, processing and crushing areas of the p lant are being erected and all of the surrounding s ervice and storage areas being prepared. The tailing pond facility is being built and should be completed ear ly in 2016.
In view of the commissioning and start-up of the Ve ta Dorada (Chala) plant which will require forward ore stockpiling and additional financial resources Dyna cor’s management is currently seeking credit facili ties to secure the diligent construction and smooth transit ion of its ore processing operations to Chala.
ABOUT DYNACOR GOLD MINES INC.
Dynacor is a gold ore-processing and exploration Co rporation active in Peru since 1996. The Corporati on differentiates itself from pure exploration compani es as it generates income from its wholly owned ore - processing plant. Dynacor’s basic share count at 37 .4 million outstanding is in the lowest quartile of the resource sector. The Corporation's assets include t hree exploration properties, including the advanced highgrade gold Tumipampa property and an operating 85,0 00 tpa capacity gold and silver ore processing mill at Metalex-Huanca. The Corporation recently obtained i ts permit to construct a brand new 300 tpd mill in Chala Peru. This represents an important milestone for th e Corporation’s future growth. The Corporation’s strength and competitive advantage comes with the experience and knowledge it has developed while working in Peru. Its pride remains in maintaining respect and positive work ethics toward its employees, partners and local communities.
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, performance or achievements of Dynacor, or industry results, to be materially different from any future result, perfo rmance or achievement expressed or implied by such forward-lo oking 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) 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