Dynacor Reports Q2-2026 Results and Updates on Tax Contingencies
Dynacor Reports Q2-2026 Results and Updates on Tax Contingencies
Montreal, August 13, 2026 – Dynacor Group Inc. (TSX: DNG) (“Dynacor” or the “Corporation”) today
announced its unaudited financial and operational results 1 for the second quarter ended June 30, 2026.
“Our Q2-2026 results reflect both strong execution and a transformative step forward in achieving our near-
term expansion strategy,” said Daniel Misiano, President and CEO. “This third consecutive quarter of strong
operational performance showcases the results of our optimisation projects and positions us strongly to
achieve 2026 production guidance. Our operational strength translated into robust gold sales despite a
double-digit dip in the gold market. The combination of gold’s sustained decline and our inventory build-up
led to a longer inventory turnover, which impacted our financial performance in the quarter. We are
unwinding inventory levels in the third quarter and expect margins to normalize in the second half of 2026.
Beyond our core operations, we achieved a strategic milestone in the period: first ore feed to our Galam
plant, marking the beginning of our transition into a geographically diversified gold processor. With both our
Senegal and Ecuador plants on track, we continue to position Dynacor to deliver long-term value for our
shareholders.”
Q2-2026 Highlights¹
Operations:
o Processed 48,300 tonnes (531 tpd), its highest quarterly throughput, and a second consecutive
quarter operating above design capacity.
o Produced 31,907 gold-equivalent (AuEq) oz, among the highest historical levels.
Financial:
o Sales of $144.4 million, the second-highest quarterly sales.
o Gross margin of $5.6 million, driven by the sharp, steady decline in gold pricing and amplified by
the high inventory level:
o Gold market price declined by approximately $700/oz in the quarter: from $4,700/oz at
the beginning of April to about $4,000/oz at quarter-end.
o Higher inventory than the historical average due to the build-up of buffer stock to increase
supply resiliency during the presidential election period.
o EBITDA 2 of $3.2 million, including $0.3 million in non-recurring expenses.
o Operating cash flows before changes in working capital items of $1.5 million.
o Net income of $1.1 million.
o Cash gross operating margin of $206 per AuEq oz sold 3.
Tax contingencies: In June 2026, the Corporation’s Peruvian subsidiary challenged the tax
assessment made by the Peruvian Tax Administration (SUNAT) for the 2015 fiscal year at a hearing
before the Peruvian Tax Court. The Tax Court is expected to issue its decision shortly.
o The assessment mainly relates to the validity of ore purchased from certain suppliers, which the
Corporation considered as legitimate transactions and therefore tax-deductible expenses.
1 All figures are in US dollars unless stated otherwise. All variance % are calculated from rounded figures. Some additions might be
incorrect due to rounding.
2 EBITDA: “Earnings before interest, taxes and depreciation” is a non-IFRS financial performance measure with no standard
definition under IFRS Accounting Standards. It is therefore possible that this measure may not be comparable with a similar
measure of another corporation. The Corporation uses this non-IFRS measure as an indicator of the cash generated by the
operations and allows investors to compare the profitability of the Corporation with others by canceling effects of different asset
bases, effects due to different tax structures as well as the effects of different capital structures. EBITDA is calculated on page 18 of
the Corporation’s MD&A for the three- and six-month periods ended June 30, 2026, with additional information provided in section
17, “Non-IFRS Measures.”
3 Cash gross operating margin per AuEq ounce is in US$ and is calculated by subtracting the average cash cost of sale per equivalent
ounce of Au from the average selling price per equivalent ounce of Au and is a non-IFRS financial performance measure with no
standard definition under IFRS Accounting Standards. It is therefore possible that this measure may not be comparable with a similar
measure of another company. Cash gross operating margin per AuEq ounce is calculated on page 16 of the Corporation’s MD&A for
the three and six-month periods ended June 30, 2026, with additional information provided in section 17, “Non-IFRS Measures.”
o The maximum aggregate amount of the Corporation’s exposure for the 2015 fiscal year including
additional penalties and interest is $8.7 million.
o If Dynacor disagrees with the Tax Court’s decision, it can file an appeal before the Judicial Court.
Under Peruvian law, Dynacor is required to pay the tax assessment, penalties and default interest
before submitting an appeal, which routinely takes several years.
o The tax assessments made by the SUNAT for fiscal years 2016, 2017 and 2019 are also being
challenged by the Corporation. The outcome of the hearing before the Tax Court for the fiscal
year 2015 may have implications for the assessments relating to fiscal years 2016, 2017 and
2019, as they involve similar matters.
o The maximum aggregate amount of the Corporation’s exposure for the fiscal years 2016, 2017
and 2019 including additional penalties and interest is approximately $16.1 million.
For more information, refer to note 19 "Other commitments and other contingencies" of the Corporation's
condensed interim consolidated financial statements. 4 The Corporation will provide additional
information when the Tax Court will have rendered its decision.
Steady execution of international expansion:
o Senegal: First ore feed on time; hot commissioning ongoing; and pilot plant over 95% complete.
o Ecuador: Rehabilitation of Svetlana plant some 40% complete; and processing of first ore
expected in Q4-2026.
Continued focus on shareholder returns: Disbursed a monthly dividend representing CA$0.16 per
share on an annual basis or a 2.4 % dividend yield based on the current share price.
Corporate:
o Following the June 19, 2026 Annual General Meeting (AGM), Mr. Daniel Misiano was appointed
President and Chief Executive Officer of Dynacor. He succeeded Mr. Jean Martineau who had
held the position from 2007 until that date.
o Following the 2026 AGM, Dynacor’s Board of Directors appointed Mr. Réjean Gourde as Chair,
replacing Mr. Pierre Lépine who had chosen not to stand for re-election.
o In the quarter, Dynacor released its 2025 ESG Report, outlining its sustainability performance and
socio-economic contributions in 2025.
4 The Corporation's condensed interim consolidated financial statements as at June 30, 2026 and for the three-month and six-month
periods ended June 30, 2026 (unaudited).
Senegal Expansion
In the quarter, construction of Dynacor’s Galam pilot plant in southeastern Senegal reached over 95%
completion and the plant entered the commissioning stage, with first ore processed at quarter-end. The
Corporation continues to target first gold pour in Q3-2026.
Following commissioning of the front-end process plant:
Hot commissioning activities are progressing across the grinding, leaching, gold refining and Merrill
Crowe circuits.
Operational readiness:
Recruitment of the first plant operators and maintenance staff is ongoing.
An initial stockpile of gold-bearing ore has been built from local suppliers, in line with Dynacor’s
start-up target. Purchasing of ore from additional supplier groups is expected to continue in August.
The assay laboratory has been fully commissioned and is in use.
The tailings storage facility cell has been lined and is operational.
Figure 1: Ball mill commissioning activities
Ecuador Expansion
Rehabilitation work on the Svetlana processing plant has reached about 40% completion and is advancing
towards the targeted Q4-2026 restart. The plan is to launch the production capacity at 300 tpd before
progressively increasing to 500 tpd.
Rehabilitation of the milling circuit (ball mill area) is over 60% complete with the crushing and leaching
circuits about 50% completed. Most replacement pieces of equipment have been purchased. A
geotechnical review of the working tailings pond is in progress, and assessment of the assay laboratory is
ongoing.
All permits are on track for Q4-2026 including an Investment Protection Agreement with the government of
Ecuador and a commercialisation permit.
Figure 2: Overview of Svetlana processing plant
2026 Outlook versus Actuals
At quarter-end, the Corporation’s performance was tracking its 2026 guidance:
Sales between $530-$580 million (YTD $298.5 million).
Net income between $22-$26 million (YTD $8.4 million).
Production between 125,000-135,000 AuEq ounces (YTD 64,698 AuEq ounces).
Capital expenditure of $32.5-$39 million (YTD $11.1 million) to achieve the 2026 growth plan and
sustain current operations of which $22-$25 million in Ecuador, $6-$8 million in Peru,
$4-$5 million in Senegal and $0.5-$1 million in other jurisdictions.
The Corporation anticipates that total 2026 capital expenditures will come in at the lower end of its guidance
of $32.5-$39 million due to the completion of certain planned investments in 2027. The tightening of
guidance is not expected to impact the Corporation’s 2026 operations.
A number of assumptions were made in preparing the 2026 outlook including
Production range includes first ore from the Senegal and Ecuador plants. This estimate assumes that
the Svetlana plant processes first ore in Q4-2026 and that operations exit the year at a throughput rate
of approximately 150 tpd.
Price of gold: $4,200 per ounce.
No increase in installed operating capacity in Peru and steady ore supply.
The ore grade supplied may vary with the evolution of the gold price and the purchasing conditions. Final
purchasing conditions in Ecuador and Senegal are yet to be determined.
As most of the Corporation's cost of sales relates to the daily purchasing of ore, its margin and net income
are favourably (unfavourably) impacted by the inventory level at quarter-start, the gradual
appreciation (depreciation) of the gold price, and by the ore supply in the period.
Operations Overview
During Q2-2026, the Corporation processed a record 48,300 tonnes (531 tpd on average), record
quarterly throughput and a significant increase compared to Q2-2025.
Strong production in Q2-2026 was mainly driven by higher tonnes processed, and improved recovery
rates compared to Q2-2025.
Three-month periods
ended June 30,
Six-month periods
ended June 30,
2026 2025 2026 2025
Volume processed (in tonnes) 48,300 38,152 94,955 81,493
Tonnes per day 531 419 525 450
AuEq ounces produced 31,907 24,955 64,698 52,005
Financial Overview
Q2-2026 Quarterly Results
During Q2-2026, the gold price decreased from an average of approximately $4,700/oz in April to around
$4,200/oz in June, before ending the quarter at approximately $4,000/oz, negatively impacting gross
margin.
Total sales amounted to $144.4 million compared to $79.7 million in Q2-2025. The $64.7 million
increase is explained by the higher average gold sales price (+$37.3 million), in combination with the
higher volumes of gold ounces sold (+$27.4 million) mainly due to the higher tonnes of ore processed.
The Q2-2026 gross operating margin reached $5.6 million (3.9% of sales) compared to $7.1 million
(9.0% of sales) in Q2-2025. The current quarter was unfavorably impacted by the sustained decrease
in gold prices throughout the quarter, combined with higher inventory levels throughout the quarter.
General and administrative expenses totaled $4.0 million in Q2-2026 compared to $3.3 million in
Q2-2025. The increase is primarily attributable to the expansion of the management team to reinforce
organizational capacity and processes in the context of the Corporation’s international expansion.
Foreign exchange result was mainly impacted by the revaluation of monetary assets and liabilities
denominated in Peruvian sol due to fluctuations in the Peruvian sol against the US dollar.
A $0.9 million income tax expense was also recorded during Q2-2026, compared to $1.5 million in
Q2-2025. The effective tax rate continues to be influenced by the variance throughout the period of the
Peruvian sol against the US$, which is the Corporation’s functional currency. Future fluctuations will
positively or negatively affect the current and deferred tax at the end of each period.
Three-month periods
ended June 30,
Six-month periods
ended June 30,
(in $'000) (unaudited) 2026 2025 2026 2025
Sales 144,423 79,706 298,510 159,674
Cost of sales (138,795) (72,560) (275,490) (143,552)
Gross operating margin 5,628 7,146 23,020 16,122
General and administrative expenses (4,006) (3,315) (7,869) (5,719)
Other project expenses (18) (517) (83) (991)
Operating income 1,604 3,314 15,068 9,412
Financial income net of expenses (10) 302 (87) 512
Write-off of exploration and evaluation
assets (4) (8) (4) (8)
Foreign exchange gain (loss) 413 1,390 (613) 1,665
Income before income taxes 2,003 4,998 14,364 11,581
Current income tax expense (1,138) (1,416) (5,947) (3,189)
Deferred income tax (expense) recovery 262 (113) 33 226
Net income and comprehensive
income 1,127 3,469 8,450 8,618
Earnings per share
Basic $0.03 $0.08 $0.20 $0.21
Diluted $0.03 $0.08 $0.20 $0.21
Q2-2026 Year-To-Date Results
During the six-month period ended June 30, 2026, the gold price increased from approximately
$4,400/oz in January to approximately $5,400/oz in February, before declining to approximately
$4,000/oz by the end of June, impacting the Corporation’s financial results for the period.
Total sales for the six-month period ended June 30, 2026, amounted to a record $298.5 million,
compared to $159.7 million for the same period in 2025. The $138.8 million increase is explained by the
higher average gold price (+$100.5 million), in combination with the higher quantities of gold-equivalent
ounces sold (+$38.3 million) due to the higher tonnes of ore processed and improved recoveries.
Cash Flows, Working Capital and Liquidity Overview
Investing activities
In Q2-2026, Dynacor invested $7.1 million in capital expenditure of which $1.9 million was applied
toward the construction of the ore-processing pilot plant in Senegal, $3.9 million in Ecuador and
$1.3 million in Peru, mainly to maintain or improve plant efficiency.
Working Capital and Liquidity
As at June 30, 2026, the Corporation’s working capital amounted to $79.4 million, including $14.8 million
in cash ($81.9 million, including $33.4 million in cash as at December 31, 2025). The variances are
mainly due to increases in inventory and sales tax receivables.
Three-month periods
ended June 30,
Six-month periods
ended June 30,
(in $'000) (unaudited) 2026 2025 2026 2025
Operating activities
Net income, adjusted for non-cash items 1,515 4,156 11,585 9,955
Changes in working capital items (9,634) (2,849) (16,850) 6,837
Net cash (used in) from operating activities (8,119) 1,307 (5,265) 16,792
Investing activities
Change in short-term investments - 3,000 - 3,000
Acquisition of property, plant and
equipment, net of proceeds from disposal
and other (6,967) (818) (10,875) (2,122)
Net cash (used in) from investing activities (6,967) 2,182 (10,875) 878
Financing activities
Issuance of common shares - - - 20,433
Repurchase of common shares - (1,162) - (1,162)
Dividends paid (1,217) (1,209) (2,447) (2,324)
Other (93) 18 (20) 74
Net cash (used in) from financing activities (1,310) (2,353) (2,467) 17,021
Change in cash during the period (16,396) 1,136 (18,607) 34,691
Effect of exchange rate fluctuations on
cash 505 954 (113) 878
Cash, beginning of the period 30,659 53,298 33,488 19,819
Cash, end of the period 14,768 55,388 14,768 55,388
Consolidated Statement of Financial Position
As at June 30, 2026, total assets amounted to $187.8 million ($181.5 million as at December 31, 2025).
Major variances since year-end 2025 are mainly explained by higher inventory and additions to property,
plant and equipment that have partially lowered cash levels. Total liabilities remained generally consistent
over the period.
As at June 30, As at December 31,
(in $'000) (unaudited) 2026 2025
Cash 14,768 33,488
Accounts receivable 33,250 37,221
Inventories 57,959 39,016
Prepaid expenses and other assets 1,394 516
Current tax assets 2,584 2,158
Property, plant and equipment 58,198 49,442
Exploration and evaluation assets 18,583 18,575
Right-of-use assets 592 625
Deferred tax assets 452 418
Total assets 187,780 181,459
Trade and other payables 30,224 30,417
Asset retirement obligations 14,863 14,830
Lease liabilities 485 520
Share unit plan liabilities 1,118 790
Shareholders' equity 141,090 134,902
Total liabilities and shareholders’ equity 187,780 181,459
About Dynacor
Dynacor Group is an ore processing company dedicated to producing gold sourced from artisanal miners.
Since its establishment in 1996, Dynacor has pioneered a responsible mineral supply chain with stringent
traceability and audit standards for the fast-growing artisanal mining industry. By focusing on formalized
miners, the Canadian company offers a win-win approach for governments and miners globally. Dynacor
operates the Veta Dorada plant and owns a gold exploration property in Peru. The company is expanding
to West Africa and within Latin America.
The premium paid by luxury jewellers for Dynacor’s PX Impact® gold goes to Fidamar Foundation, an
NGO that mainly invests in health and education projects for artisanal mining communities in Peru. Visit
www.dynacor.com for more information.