MONTREAL, QUEBEC--(Marketwire - June 17, 2011) - Dynacor Gold Mines Inc. ("Dynacor" or the "Company") (News - Market indicators) today reported its financial results for the first quarter of 2011 ended March 31, 2011. The unaudited condensed interim financial statements along with the management's discussion and analysis are available on the Company's website www.dynacorgold.com and the documents have been filed electronically with SEDAR at www.sedar.com. All amounts are in U.S. dollars unless otherwise indicated.
Dynacor generated sales of $14.7 million compared to sales of $6.1 million in Q1-2010. It sold 10,083 ounces of gold compared to 5,342 ounces in Q1-2010. During the quarter the Company invested $0.8 million to increase output at the custom milling plant and to commence the Diamond drilling campaign at Tumipampa.
On January 1, 2011, International Financial Reporting Standards ("IFRS") became Canadian GAAP for publicly - accountable enterprises. DNG's interim and annual financial statements are therefore prepared in accordance with IFRS as of January 1, 2011, and comparable figures for 2010 have been restated accordingly. DNG has also therefore adopted the US dollar as its functional and reporting currency.
FINANCIAL HIGHLIGHTS
- 139% increase in revenue to $14.7 million ($6.1 million Q1-2010)
- 120% increase in adjusted EBITDA* of $1.1 million ($0.5 million in Q1-2010)
- 333% increase in operating income to $1.2 million ($0.3 million Q1-2010)
- 144% increase in gross margin to $2.2 million ($0.9 million Q1-2010)
| 1ST QUARTER INFORMATION |
|
| |
For the three-month periods |
| |
ended March 31 |
| (in $'000) |
2011 |
|
2010 |
| |
| Sales |
14,658 |
|
6,075 |
| Cost of sales |
12,435 |
|
5,231 |
| Gross margin |
2,223 |
|
905 |
| General and administrative expenses |
737 |
|
462 |
| Operating income |
1,228 |
|
332 |
| Net income (loss) |
(1,330 |
) |
151 |
| Adjusted Net Income |
344 |
|
151 |
| Adjusted EBITDA* |
1,106 |
|
510 |
| |
| Cash flow from operating activities before non-cash working capital |
|
|
|
| items |
533 |
|
141 |
| |
| Earnings (loss) per share, basic and diluted |
($0.04 |
) |
$0.01 |
| |
| Reconciliation of Net loss to Adjusted net income |
|
|
|
| |
| Net income (loss) |
(1,330 |
) |
151 |
| Loss on re-evaluation of warrants (non-cash charge) |
1,674 |
|
- |
| Adjusted net income |
344 |
|
151 |
CORPORATE HIGHLIGHTS
- Commencement of $5.5 million, 16,700 meter drilling and exploration program at Tumipampa
- The Company built 5 km of access roads at Tumipampa
- Invested $0.3 million in Diamond drilling at Tumipampa
- Invested $0.5 million in equipment at the custom milling plant to improve production yield at full 180 tpd capacity
- Construction of a new tailings pond at the custom milling plant
OPERATING ACTIVITIES
The Company generated an adjusted net income of $0.344M for Q1-2011 compared to $0.151M in Q1-2010. With the transition to IFRS, the Company recorded a loss on the revaluation of the outstanding warrants in the amount of $1.674M in Q1-2011. This liability is calculated in relation to the quoted stock price of the Company and is calculated at each reporting date. As a result of this non-cash charge, the Company generated a net loss of $1.33M for Q1-2011 (net loss = adjusted net income – non cash warrant charge).
Mr. Jean Martineau, President and Chief Executive Officer of Dynacor said, "We are pleased to report that our revenues more than doubled and our operating income more than tripled, sustaining the consistent growth and improving financial performance both year over year and sequentially."
* Adjusted EBITDA - "Adjusted Earnings before interest, taxes, depreciation and amortization" is a non-GAAP financial performance measure with no standard definition under IFRS and Canadian GAAP.
OUTLOOK FOR 2011
The Company estimates that it will process approximately 45,000 ounces of gold in 2011. Gold production from custom milling is expected to continue to increase in 2012 as a result of higher throughput at the mill and future expansion.
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. Dynacor's gold 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.
