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Dynacor Gold Mines Inc. (TSX:DNG - News) released its financial
results for the third quarter ended September 30, 2010. The financial
statements along with the management's discussion and analysis are available
on the Company's website www.dynacorgold.com;
the documents have been filed electronically with SEDAR at www.sedar.com.
Dynacor generated $1.3 million in cash flow
from operations in Q3-2010 compared to a use of $0.2 in Q3-2009. Cash flow
from operations before non-cash working capital items amounted to $1.0
million, an increase of $2.2 million compared to Q3-2009. For the nine-month
period ended September 30, 2010, Dynacor reported a
cash flow from operations before non-cash working capital items of $1.8
million, an increase of $1.4 million year-over-year.
"Dynacor
has surpassed significantly its objective of 7,000 to 9,000 ounces
established for the third quarter with sales close to 10,000 ounces and a
production above this level. At this pace, on an annual basis, Dynacor would produce more than 40,000 ounces. This
coupled with the cash gross margin of $237 per ounce will allow us to invest
to further increase the volume of gold and invest more into the exploration
of Tumipampa. Dynacor's
financial position remains strong with a working capital of $3.0 million of
which $2.2 million is cash and short-term
investments." commented Mr. Pierre Monet, Vice President and Chief
Financial Officer of Dynacor Gold Mines Inc.
RECORD GOLD SALES
Dynacor achieved record gold sales of $13.1
million for the quarter, $9.4 million more than the same period last year. It
sold 9,977 ounces of gold during the quarter compared to 3,321 ounces for the
corresponding quarter of 2009 and produced 10,576 ounces of gold, an increase
of 182% from the same period last year. The gross margin increased by $2.7
million compared to the same quarter last year. Cash gross margin per ounce
grew to $237 from $101 a year ago.
For the third quarter of 2010, Dynacor generated an EBITDA(1)
of $1.5 million compared to $1.0 million negative in Q3-2009. Dynacor continues to take the necessary steps to recover
the sales tax receivable withheld, however, it has decided, for conservative
purposes, to fully provide for the amount. Therefore, net loss amounted to
$1.0 million in Q3-2010 compared to $1.5 million for the corresponding
quarter of 2009.
"We are pleased with the third
quarter performance as it continues to exceed expectations. We can expedite
an aggressive exploration campaign focussed on our
flagship Tumipampa property. There are great
expectations considering the results obtained from surface samples collected
(see press release dated August 11, 2009 and January 27, 2010). The property
is located in a world class copper and gold skarn-porphyry
area" added Mr. Jean Martineau, President and Chief Executive Officer of
Dynacor Gold Mines Inc.
(1) EBITDA is a non-GAAP measure. See
the non-GAAP reconciliation in Dynacor's MDA
Q3 2010 HIGHLIGHTS
-- Production of gold for the quarter 10,576 ounces (3,756 ounces in Q3-
2009)
-- Gold sales of 9,977 ounces (3,321 ounces in 2009), an increase of 200%
-- EBITDA(1) of $1.5M (negative EBITDA of $1.0M in Q3-2009)
-- Cash flow generated from operating activities before change in non-cash
working capital items, $1.0M compared to a use of $1.2M in Q3-2009
-- Increase of $2.3M in operating income ($1.5M compared to a loss of $0.8M
in Q3-2009)
-- Gross margin before amortization of $237 per ounce compared to $101 per
ounce in Q3-2009
-- Peruvian sales tax receivable withheld was fully provisioned.
For the three-month For the nine-month
Key Financial Information(in periods ended on periods ended on
$'000) September 30, September 30,
-------------------------------------------
2010 2009 2010 2009
Sales 13,099 3,670 28,536 20,350
Cost of sales (excluding
amortization) 10,657 3,299 23,524 16,433
Gross margin 2,345 (329) 4,736 3,031
General and administrative
expenses 540 420 1,463 1,214
Earnings (loss) before
provision on the Peruvian
sales taxes withheld and
current income taxes 1,381 (1,066) 2,861 1.107
Net loss (911) (1,529) (90) (167)
EBITDA(1) 1,516 (967) 3,178 1,380
Cash flow from operating
activities before non-cash
working capital items 955 (1,250) (1,817) 431
Cash flow from operating
activities 1,276 (237) 780 (361)
Loss per share, basic and
diluted ($0.03) ($0.05) ($0.00) ($0.01)
OUTLOOK
Dynacor's focus is to continue using its cash
resources from its custom milling operation to build long-term value for its
shareholders through growth of its exploration properties.
In the short term, the Company estimates
in the fourth quarter 2010 it will process between 10,000 and 11,000 ounces
of gold. Dynacor is continuing geological surface
work, followed by a diamond drilling campaign. The Company expects to issue
shortly, an update on its drill campaign program nearing commencement at Tumipampa.
(1) EBITDA is a non-GAAP measure. See
the non-GAAP reconciliation in Dynacor's MDA
ABOUT DYNACOR GOLD MINES INC.
Dynacor is a gold exploration and mining
company active in Peru through its subsidiaries since 1996. The Company's
assets include the Acari, Casaden
and Tumipampa exploration properties. The Company's
mill produces gold by custom milling. Dynacor's
strength and competitive advantage comes with the experience and knowledge
the Company 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, performance or
achievement expressed 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.
Contact:
Jean Martineau
Dynacor Gold Mines Inc.
President & CEO
514-288-3224
Dale Nejmeldeen
Dynacor Gold Mines Inc.
Investor Relations
514-288-3224
778-574-2806
nejmeldeen@dynacor.com |
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