Toronto Stock Exchange (TSX): DNG OTC (United States): DNGDF Shares outstanding: 38,799,756 PR-2020-08-12 DYNACOR REPORTS A NET LOSS OF US$ -0.7 M IN Q2-2020 DUE TO THE COVID-19 CRISIS BUT HAS A STRONG FINANCIAL SITUATION AFTER SIX MONT HS
1
2020
Dynacor Gold Mines Inc. ( Dynacor )
Symbol:
Toronto Stock Exchange (TSX): DNG
OTC (United States): DNGDF
Shares outstanding: 38,799,756
PR-2020-08-12
DYNACOR REPORTS A NET LOSS OF US$ -0.7 M IN Q2-2020 DUE TO THE COVID-19 CRISIS
BUT HAS A STRONG FINANCIAL SITUATION AFTER SIX MONT HS
Montreal, August 14 th, 2020 – Dynacor Gold Mines Inc. (TSX: DNG / OTC: D NGDF) (Dynacor or the
Corporation) has released its unaudited consolidated financial statements and the management's
discussion and analysis (MD&A) for the second quarter ended June 30, 2020.
These documents have been filed electronically with SEDAR at www.sedar.com and will be available on
the Corporation's website www.dynacor.com .
(All figures in this press release are in Ms of US$ unless stated otherwise. Earnings per share and ca sh-flow per share are in US$. All variance %
are calculated from rounded figures. Some additions might be incorrect due to rounding).
Impacted by the COVID-19 crisis, Dynacor, following thirty six (36) consecutive quarters of profits, recorded
a net loss of (-$0.7 M) (-$0.02 per share) compared to a net profit of $0.7 M ($0.02 per share) for the three-
month period ended June 30, 2019 (“Q2-2019”).
During the quarter, the Corporation concentrated it s effort to monetize its inventory and receivables,
reducing its risks and solidifying its overall fina ncial situation. The Corporation increased its cash position
by $4.5 M, from $16.1 M at March 31, 2020 to $20.6 M at June 30, 2020 and resumed its operations before
the end of the period.
Due to the very good financial results of Q1-2020, the net income for the six-month period ending
June 30, 2020 is $1.7 M compared to $1.9 M for the same period of 2019.
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Q2-2020 OVERVIEW AND HIGHLIGHTS
In Q2-2020, due to the ongoing COVID-19 worldwide c risis and the state of emergency declared in Peru,
the Corporation had to stop its ore purchase activities and temporarily shut-down its processing operations
during almost three months. This exceptional context obviously impacted the Corporation quarterly financial
and operational results. Considering its solid financial situation and the gradual resumption of its activities,
the Corporation pursued its dividend policy and dec lared in June, a 0.015$ CA per share dividend which
was paid in July.
Operational
• Volume of 3,244 tonnes processed compared to 22,73 7 tonnes in Q2-2019;
• Gold production of 1,897 ounces compared to 18,095 ounces in Q2-2019.
Financial
• Cash on hand of $20.6 M in Q2-2020 compared with $ 6.7 M at year-end 2019;
• Sales of $8.0 M, compared to $22.7 M in Q2-2019;
• Expenses related to the safeguard of all our produ ction and ore purchase department employees in
view of the resumption of activities amounted to $0.5 M during the quarter;
• Net loss of (-$0.7 M) or (-$0.02 per share), compa red to a net profit of $0.7 M in Q2-2019;
• EBITDA (1) of (-$0.1 M), compared to $1.9 M in Q2-2019;
• Cash flow from operating activities before change in working capital items of (-$0.03 M), compared to
$1.6 M in Q2-2019.
Cash return to Shareholders
• Quarterly dividend of CA$0.015 per share and total ing $0.4 M (CA$0.6 M) paid in July 2020.
(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 indicator of the cash generated by the operations and allows 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.
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RESULTS FROM OPERATIONS
Extract from Statement of net income and comprehens ive income (unaudited)
Total sales amounted to $8.0 M compared to $22.7 M in Q2-2019. The $14.7 M decrease is explained by
the decreases in ounces sold (-$17.2 M) partially offset by higher selling prices ($2.5 M).
All expenses incurred during the quarter, including fixed operation costs, were accounted as part of c ost
of sales, which explains the low gross operating margin.
Three-month periods
ended June 30,
Six-month periods
ended June 30,
(in $'000) 2020 2019 2020 2019
Sales 8,007 22,697 38,876 45,616
Cost of sales (7,975) (20,139) (33,895) (40,268)
Gross operating margin 32 2,558 4,981 5,348
General and administrative expenses (746) (1,150) (1,837) (2,107)
Other projects (13) - (141) -
Operating income (727) 1,408 3,003 3,241
Income before income taxes (755) 1,325 2,892 3,106
Net income and comprehensive
income (685) 757 1,700 1,937
Earnings per share
Basic (-$0.02) $0.02 $0.04 $0.05
Diluted (-$0.02) $0.02 $0.04 $0.05
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Reconciliation of non-IFRS measures
CASH FLOW FROM OPERATING, INVESTING AND FINANCING A CTIVITIES AND LIQUIDITY
Operating activities
During Q2- 2020, the cash flow from operations, before changes in working capital items, amounted to
(-$0.03 M) ($3.2 M for the six-month period ending June 30, 2020), compared to $1.6 M in Q2-2019
($3.5 M for the six-month period ending June 30, 20 19). This decrease between quarters is primarily
explained by the decrease in gross operating margin due to lower gold production.
During Q2-2020, total cash from operating activities amounted to $5.0 M ($18.1 M for the six-month period
ending June 30, 2020) compared to $0.4 M in Q2-2019 ($1.8 M for the six-month period ending
June 30, 2019). Changes in working capital items am ounted to ($5.0 M) ($14.9 M for the six-month perio d
ending June 30, 2020) compared to (-$1.2 M) in 2019 (-$1.6 M for the six-month period ending
June 30, 2019). The variance is mainly attributable to the variance in inventories.
Financing activities
In 2020, two increased quarterly dividends of CA$0. 015 per share were disbursed for a quarterly
consideration of $0.4 M (CA$0.6 M). In 2019, two quarterly dividends of CA$0.01 per share were disbursed
for a quarterly consideration of $0.3 M (CA$0.4 M).
In 2020 and 2019, the corporation made quarterly repayments of lease liabilities for $0.2 M.
Liquidity
As at June 30, 2020, the Corporation’s working capi tal amounted to $21.7 M, including $20.6 M in cash
($19.6 M, including $6.7 M in cash at December 31, 2019).
(in $'000) Three-month periods
ended June 30, Six-month periods
ended June 30,
2020 2019 2020 2019
Reconciliation of net income and
comprehensive income to EBITDA
Net income and comprehensive
income (685) 757 1,700 1,937
Income taxes (70) 568 1,192 1,169
Financial expenses 31 25 49 65
Depreciation 599 616 1,239 1,261
EBITDA (125) 1,966 4,180 4,432
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STATEMENT OF FINANCIAL POSITION
At June 30, 2020, total assets amounted to $70.2 M ($74.8 M as at December 31, 2019). Major variances
since last year-end come from the significant increase in the cash balance and decrease in inventories and
bank loan.
(in M $)
As at
June 30,
As at
December 31,
2020 2019
Cash 20.6 6.7
Inventories 4.6 18.3
Property, plant and equipment 19.9 21.0
Exploration and evaluation assets 18.8 18.7
Other assets 6.3 10.1
Total assets 70.2 74.8
Bank loan - 3.0
ARO 3.8 3.8
Other liabilities 5.5 8.0
Shareholders' equity 60.9 60.0
Total liabilities and equity 70.2 74.8
OUTLOOK
A health and safety protocol has been prepared containing the measures to be taken to monitor the risk of
exposure to COVID-19 at the Corporation workplaces including production unit, as well as establishing
prevention and control standards to prevent the app earance and/or spread of the virus and safeguard t he
health of workers, suppliers, customers and visitors.
The Corporation purchasing and processing operation s resumed in June and so far without any issues. In
July we processed an average of more than 230 tonne s per day and aiming to reach full capacity of
300 tonnes per day by the end of the third quarter.
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ABOUT DYNACOR
Dynacor is a dividend-paying gold production corpor ation headquartered in Montreal, Canada. The corpor ation is engaged in
production through the processing of ore purchased from the ASM (artisanal and small-scale mining) ind ustry. At present, Dynacor
produces and explores in Peru, where its management team has decades of experience and expertise. In 2 019, Dynacor produced
80,677 ounces of gold.
Dynacor produces environmental and socially respons ible gold through its PX IMPACT® gold program. A gr owing number of
supportive firms from the fine luxury jewelry, watchmakers and investment sectors are paying a small premium to our customer and
strategic partner for this PX IMPACT® gold. The premium provides direct investment to develop health and education projects to our
small-scale artisanal miner’s communities.
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 , performance or achievements of Dynacor, or indust ry results, to be materially
different from any future result, performance or ac hievement expressed or implied by such forward-look ing statements. These
statements reflect management’s current expectations regarding future events and operating performance as of the date of this news
release.
Dynacor (TSX: DNG / OTC: DNGDF)
Website: http://www.dynacor.com
Twitter: http://twitter.com/DynacorGold
Contact: For more information, please contact:
Director, Shareholder Relations
Dale Nejmeldeen
Dynacor Gold Mines Inc.
T: 514-393-9000 #230
Shares outstanding: 38,799,756