Toronto Stock Exchange (TSX): DNG OTC (United States): DNGDF Shares outstanding: 39,060,705 PR-2019-08-13 Q2-2019: DYNACOR REPORTS
2019
Dynacor Gold Mines Inc. (Dynacor)
Symbol:
Toronto Stock Exchange (TSX): DNG
OTC (United States): DNGDF
Shares outstanding: 39,060,705
PR-2019-08-13
Q2-2019: DYNACOR REPORTS
Montreal, August 15, 2019 – Dynacor
Corporation) , reports its financial results for its second quarter ended June 30, 2019.
The unaudited condensed consolidated financial statemen ts and the management's discussion and
analysis (MD&A) for the three -
electronically with SEDAR at
www.dynacor.com .
(All figures in this press release are in millions of US$ unless stated otherwise. Earnings per share and cash
US$. All variance % are calculated from rounded figures).
For the three- month period ended
quarter of profits with a net income of $
the same period of 2018.
Q2-2019 OVERVIEW AND HIGHLIGHTS
With a similar volume processed (22,737 tonnes in Q 2
production, however, decreased by 12.2% compared to Q2
ounces in Q2-2018). This decline
available ore processed during the period.
2018 due to the lower production
Those situations had a direct impact on our Q2
increased by 13.1% compared to Q1
1
Inc. (Dynacor)
Toronto Stock Exchange (TSX): DNG
OTC (United States): DNGDF
060,705
DYNACOR REPORTS ITS 33RD CONSECUTIVE QUARTER OF PROF
WITH A NET INCOME OF US$ 0.8 M
Dynacor Gold Mines Inc. (TSX: DNG / OTC: DNGDF) (Dynacor
its financial results for its second quarter ended June 30, 2019.
unaudited condensed consolidated financial statemen ts and the management's discussion and
-month and six- month periods ended June 30, 2019
electronically with SEDAR at www.sedar.com and will be available on the Corporation's website
(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).
month period ended June 30, 2019, Dynacor completed its thirty third
a net income of $ 0.8 M ($0.02 per share), compared to $1.3 M ($0.0
VERVIEW AND HIGHLIGHTS
With a similar volume processed (22,737 tonnes in Q 2 -2019 vs. 23,172 tonnes in Q2
decreased by 12.2% compared to Q2 -2018 (18,095 ounces in Q2
decline is mainly explained by a 9.4% decrease in the average grade of the
during the period. Volume of gold sold has decreased by 19.2% compared to
due to the lower production combined with the variances of gold in process.
a direct impact on our Q2 -2019 financial results. Nevertheless,
increased by 13.1% compared to Q1 -2019.
TIVE QUARTER OF PROF IT
Inc. (TSX: DNG / OTC: DNGDF) (Dynacor or the
its financial results for its second quarter ended June 30, 2019.
unaudited condensed consolidated financial statemen ts and the management's discussion and
month periods ended June 30, 2019 , have been filed
and will be available on the Corporation's website
(All figures in this press release are in millions of US$ unless stated otherwise. Earnings per share and cash flow per share are in
third (33 rd) consecutive
M ($0.0 3 per share) for
2019 vs. 23,172 tonnes in Q2 -2018), our
2018 (18,095 ounces in Q2 -2019 vs. 20,610
mainly explained by a 9.4% decrease in the average grade of the
by 19.2% compared to
Nevertheless, gold production
2
Operational and Strategic
• In Q2-2019, the Veta Dorada plant processed a tota l of 22,737 tonnes of ore compared to
23,172 tonnes in Q2-2018;
• Gold production of 18,095 ounces in Q2-2019 compar ed to 20,610 ounces in Q2-2018, a
decrease of 12.2% due to the lower average grade of ore processed;
• Sales of 17,402 ounces of gold compared to 21,524 ounces in Q2-2018 a decrease of 19.2% due
to the variation of gold in process inventories in Q2-2019 compared to Q2-2018;
• Tumipampa: Dynacor signed a mining and mineral pur chase agreement with artisanal miners to
begin extraction of materialized material from high -grade veins. The first deliveries occurred in
June 2019;
• Dynacor signed a letter of intent to globally expa nd its ore-purchasing and processing business in
Senegal (ref. Press release dated June 11, 2019).
Financial
• 33 rd consecutive quarter of profits;
• Sales of $22.7 M in Q2-2019, a decrease of 18.9% c ompared to Q2-2018;
• Gross operating margin of $2.6 M (11.3%) in Q2-201 9, a decrease of 25.7% compared to Q2-
2018;
• Net income of $0.8 M in Q2- 2019 ($0.02 per share), a decrease of 38.5% compare d to
Q2-2018;
• EBITDA (1) of $2.0 M in Q2-2019, a decrease of 25.9% compared to Q2-2018;
• Cash flow from operating activities before change in working capital items of $1.6 M and $0.04
per share (2) in Q2-2019, a decrease of 27.3% compared to Q2-201 8;
• Cash on hand of $13.2 M in Q2-2019 compared with $ 13.9 M at year-end 2018 mainly due to the
increase in other working capital items.
Cash Return to Shareholders
• Quarterly dividend of CA$0.01 per share and totali ng $0.3 M (CA$0.4 M) paid in April 2019;
• 247,224 shares repurchased during the quarter for $0.3 M (CA$0.4 M CAD).
(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 tha t this measure could not be comparable with a simil ar measure of another
corporation. The Corporation uses this non-IFRS mea sure as an indicator of the cash generated by the o perations and allows
investor to compare the profitability of the Corpor ation 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 uses 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.
3
RESULTS FROM OPERATIONS
Extract from Statement of net income and comprehens ive income
Total sales amounted to $22.7 M compared to $28.0 M in Q2-2018. The $5.3 M decrease is mainly
explained by the decreases in gold production and the number of ounces sold (-$5.4 M).
The gross operating margin amounted to $2.6 M in Q2 -2019 compared to $3.5 M in Q2-2018. The
variance compared with 2018 is attributable to lowe r gold production and sales combined with consisten t
fixed costs.
General and administrative expenses amounted to $1. 2 M and were similar to 2018.
Reconciliation of non-IFRS measures
CASH FLOW FROM OPERATING, INVESTING AND FINANCING A CTIVITIES AND LIQUIDITY
Operating activities
During Q2-2019, the cash flow from operations, befo re changes in working capital items, amounted to
$1.6 M ($3.5 M for the six-month period ending June 30, 2019), compared to $2.2 M in Q2-2018 ($4.7 M
for the six-month period ending June 30, 2018). Thi s decrease between quarters is primarily explained by
the decrease in gross operating margin.
Three -month periods
ended June 30,
Six -month periods
ended June 30,
(in $'000) 2019 2018 2019 2018
Sales 22,697 27,955 45,616 54,545
Cost of sales (20,139) (24,440) (40,268) (47,406)
Gross operating margin 2,558 3,515 5,348 7,139
General and administrative expenses (1,150) (1,333) (2,107) (2,456)
Operating income 1,408 2,182 3,241 4,683
Income before income taxes 1,325 2,053 3,106 4,396
Net income and comprehensive
income 757 1,251 1,937 2,852
Earnings per share
Basic $0.02 $0.03 $0.05 $0.07
Diluted $0.02 $0.03 $0.05 $0.07
(in $'000) Three -month periods
ended June 30, Six -month periods
ended June 30,
2019 2018 2019 2018
Reconciliation of net income and
comprehensive income to EBITDA (1)
Net income and comprehensive income 757 1,251 1,937 2,852
Income taxes 568 802 1,169 1,544
Financial expenses 25 63 65 132
Depreciation 616 583 1,261 1,141
Write-off of exploration assets 39 7 39 7
EBITDA (1) 2,005 2,706 4,471 5,676
4
Investing activities
During Q2-2019, net investments amounted to $0.8 M ($0.9 M for the six-month period ending
June 30, 2019) and related principally to the acqui sition of land, rolling stocks and additions to the tailing
pond ($0.6 and $1.0 M respectively for the same per iods in 2018).
Net additions to exploration and evaluation assets during Q2-2019 amounted to $0.1 M ($0.2 M for the
six-month period ending June 30, 2019) (similar amo unts for the same period in 2018).
Financing activities
A total of 247,224 shares were repurchased in Q2-20 19 (561,124 for the six- month period ending
June 30, 2019) for a total cash consideration of $0 .3 M ($0.7M for the six-month period ending June 30 ,
2019). For the three and six-month periods ending J une 30, 2018, 75,275 shares were repurchased for a
total consideration of $0.1 M.
In April 2019, the third quarterly dividend payment of CA$0,01 per share was disbursed for a total
consideration of $0.3 M ($0.6 M for the six-month period ending June 30, 2019).
Other financing activities consisted in the repayme nt of lease liabilities for $0.2 M ($0.3 M for the six-
month period ending June 30, 2019) ($0.1 M for the same reporting periods in 2018).
Liquidity
As at June 30, 2019, the Corporation’s working capi tal amounted to $20.4 M, including $13.2 M in cash
($19.7 M, including $13.9 M in cash at December 31, 2018).
2019 OUTLOOK
Ore processing
After six months of operations, our gold production is lower than in 2018, mainly due to the lower ave rage
grades of ore supplied to the plant. Subsequent to quarter-end, we registered in July, our highest mon th
ever in terms of volume of ore purchased with over 10,000 tonnes. We continue working to improve on
our 2019 production, which we believe should be in line with the 2018 production.
A production update will be released shortly.
5
Exploration
The Corporation is waiting for its new permit from the Peruvian Ministry of Energy and Mines (MEM).
Upon receipt of the permit, Dynacor will immediatel y start drilling the first phase of twelve (12) hol es
totaling 4,200 meters. The two priority targets consist of:
o Priority 1 targets to be 2,700 m (8 holes)
o Priority 2 targets to be 1,500 m (4 holes)
The MEM has sent a representative to assess if nati ve communities live in the propose exploration area
and if the work would affect their living. We are a waiting their report on that matter. If conclusive, they
could ask for community consultation on that matter which process could delay the start of the drillin g
campaign until 2020.
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 small scale artisanal miners. At present, Dyna cor produces and explores
in Peru where its management team has decades of experience and expertise. In 2018, Dynacor produced 81,314 ounces of gold, a
yearly best and 1.8% increase as compared with 2017 (79,897 ounces).
Dynacor produces environmental and socially respons ible gold through its ‘’PX Impact’’ gold program. A growing number of
supportive firms from the fine luxury jewelry, watchmakers and investment sectors are paying a small p remium to our customer and
strategic partner for this PX Impact gold. The prem ium provides direct investment to develop health an d 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 preceding 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, perfor mance or achievement expressed or implied by such f orward-looking statements.
These statements reflect management’s current expectations regarding future events and operating perfo rmance as of the date of
this news release.
Dynacor (TSX: DNG / OTC: DNGDF)
Website: http://www.dynacor.com
Twitter: http://twitter.com/DynacorGold
For more information, please contact: Dynacor
Dale Nejmeldeen
Director, Shareholder Relations
Dynacor
T: (604) 492-0099 | M: (604) 562-1348