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Dynacor Announces Record Sales of US$29.3 M and Net Income of US $2.8 M ($0.08 per Share) in Q3-2012
Published : November 09, 2012
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MONTREAL, QUEBEC--(Marketwire - Nov. 9, 2012) - Dynacor Gold Mines Inc. (News - Market indicators) (Dynacor or the Company), a company with exploration projects and gold and silver ore processing operations in Peru, is pleased to report that it just completed a record breaking financial quarter in terms of production, sales and net income. For the three-month period ended September 30, 2012, Dynacor recorded a net income of $2.8 M ($0.08 per share) (cumulative of $5.7 M ($0.16 per share) for the nine-month period ended September 30, 2012) compared to a net income of $1.8 M ($0.05 per share) and cumulative $3.0 M ($0.08 per share) for the same periods in 2011. The unaudited condensed interim consolidated financial statements along with the management 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 figures in this press release are in rounded millions of US$ except where noted. Earnings per share and gross operating margin per ounce are in US$. Variances in % are calculated with the rounded figures.

Q3-2012 HIGHLIGHTS

  • Sales of $29.3 M compared to $20.0 M in Q3-2011 a 46.5 % increase;
  • Net income of $2.8M ($0.08 per share), compared to $1.8 M ($0.05 per share) in Q3-2011, an increase of $ $1.0 M (55.6%);
  • Adjusted EBITDA of $4.8 M compared to $2.4 M in Q3-2011;
  • Operating income of $4.3 M compared to $2.0 M in Q3-2011;
  • Gross operating cash margin per equivalent Au ounce of $317 compared to $254 in Q3- 2011;
  • Cash flow from operating activities before changes in working capital items of $3.5 M ($0.10 per share) compared to $1.5 M ($0.04 per share) in Q3-2011 an increase of $2.0M (134%);
  • 19,629 DMT (dry metric tons) processed (16,575 DMT in Q3-2011) a 18.4 % increase over Q3-2011;
  • 17,168 ounces of gold produced during the quarter (11,134 ounces in Q3-2011) a 54.2% increase over Q3- 2011;
  • New monthly record production of 5,757 ounces in September 2012;

Operating Results

During the three-month period ended September 30, 2012 the Company recorded a net income of $2.8 M ($0.08 per share) (cumulative net income of $5.7 M ($0.16 per share) for the nine-month period ended September 30, 2012) compared to a net income of $1.8 M in Q3-2012 ($0.05 per share) and cumulative of $3.0 M ($0.08 per share) for the respective periods in 2011.

Dynacor has achieved its best ever financial and operational quarterly results. This is due to the Company's ore-processing division operating at optimal production levels, processing higher ore grades and a consistent rising gold price throughout the period.

During the third quarter of 2012, the Company processed 19,629 DMT of ore (16,575 in Q3-2011) an 18.4 % increase, at an average grade of 0.93 Oz Au/ DMT (29.1 g/t Au) compared to an average grade of 0.73 Oz Au/DMT (22.6 g/t Au) in Q3-2011.

Third quarter production was 17,168 ounces of gold (cumulative of 42,671 ounces for the nine- month period ended September 30, 2012) compared to 11,134 ounces in Q3-2011 (cumulative of 32,868 ounces for the nine-month period in 2011) a respective increase of 54.2% and 29.8% over the same periods in 2011.

This gold production is higher than the 2012 quarterly projections of approximately 12,500 ounces per quarter and above the previous quarter's production as the Company was the beneficiary of higher grade ore supply currently available due to the vigorous regulations implemented by the Peruvian authorities which is affecting the competition and therefore yielding additional high grade quality ore supply.

Total sales for the period amounted to $ 29.3 M (cumulative nine-months of $ 73.6 M in 2012) compared to $20.0 M in Q3-2011 (cumulative nine-months of $52.8 M in 2011) an increase of $9.3 M (46.5%) over Q3-2011 (cumulative increase of $20.8 M (39.4%) compared to 2011). The quarter sales increase compared to 2011 is explained by increased gold production. The average gold selling price per ounce was at $1,664 in Q3-2012 compared to $1,712 in Q3-2011.

The gross operating margin for the quarter amounted to $5.6 M (19.0%) compared to $3.0 M (14.8%) in Q3-2011. The gross operating cash margin(1) per equivalent Au ounce sold was at $317 in Q3-2012 compared to $254 in Q3-2011 a 24.8% increase over 2011. This increase in the gross operating margin and cash margin per ounce is primarily attributable to the higher production, higher ore grade processed compared to 2011 and a steady increasing market gold price during the period.

(1) Cash operating gross margin is calculated by subtracting the average cash cost of sale from the average selling price and is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another company. It is used by management as an indicative measure of margin per unit in an environment not involving capital investment.

Gold production and sales figures:    
  Three months Nine months
  September 30, September 30,
  2012 2011 2012 2011
Gold Production (Au ounces) 17,168 11,134 42,671 32,868
Gold sales (Au ounces) 16,949 11,121 42,375 32,733
Gold sales (equivalent Au ounces) 17,628 11,699 44,416 33,665
         
         
         
Financial Highlights:              
  For the three-month   For the nine-month  
  periods ended   periods ended  
  September 30,   September 30,  
(in $'000) 2012 2011   2012   2011  
               
Sales 29,341 20,015   73,565   52,800  
Cost of sales 23,752 17,042   61,201   44,364  
Gross operating margin 5,589 2,973   12,364   8,436  
General and administrative expenses 739 682   2,402   2,404  
Operating income 4,335 1,958   8,748   5,148  
Net income 2,784 1,750   5,699   2,987  
Adjusted Net income(1) 2,798 1,349   5,501   2,692  
Adjusted EBITDA(2) 4,802 2,362   9,849   5,555  
               
Net Cash flow from operating activities before changes in working capital items 3,469 1,547   6,927   3,604  
Cash flow from operating activities  1,472 1,759   3,184   907  
               
Earnings per share              
Basic $0.08 $0.05   $0.16   $0.08  
Diluted $0.07 $0.05   $0.15   $0.08  
               
Reconciliation of Net income to              
Adjusted net income(1)              
Net income 2,784 1,750   5,699   2,987  
Revaluation of warrants 14 (401 ) (198 ) (295 )
Adjusted net income 2,798 1,349   5,501   2,692  
               
               
Reconciliation of Net income              
to Adjusted EBITDA(2)              
Net income 2,784 1,750   5,699   2,987  
Income taxes 1,388 664   3,099   2,043  
Financial expenses 123 118   228   341  
Depreciation 493 231   1,021   479  
Revaluation of warrants 14 (401 ) (198 ) (295 )
Adjusted EBITDA 4,802 2,362   9,849   5,555  
 
 
(1) Adjusted net income: is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another company. The Company uses this non-IFRS measure to compare the results without considering the non-cash effect generated by the change in value of the warrants which can vary from a period to another due to its nature.
 
(2) Adjusted EBITDA: "Adjusted Earnings before interest, taxes, depreciation and amortization, revaluation of warrants" is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another company. The Company uses this measure as an indicator of the cash generated by the operations and allows investor to compare the profitability of the company with others by canceling effects of different assets bases, effects due to different tax structures as well as the effects of different capital structures.

CASH FLOW FROM OPERATING, INVESTING AND FINANCING ACTIVITIES AND WORKING CAPITAL

Operating Activities

Cash flows generated by operating activities before changes in working capital items amounted to $3.5 M during the third quarter of 2012 ($0.10 per share) (cumulative of $6.9 M for the nine-month period and $0.19 per share) compared to $1.5 M ($0.04 per share) and cumulative $3.6 M ($0.10 per share) in 2011. This increase is due to the plant capacity increase realized in Q3 and Q4 of 2011 and higher ore grade processed during the quarter.

Changes in working capital items during the quarter amounted to ($2.0 M) (cumulative ($3.7 M) for the nine-month period) ($0.2 M in Q3-2011 and cumulative ($2.7M) in 2011) and were composed of increased inventories of ore and gold in process ($3.2 M) due to higher volume and higher grade, increased income taxes payable of $0.4 M, an increase in accounts payable and accrued liabilities of $0.6 M and the reduction of current income tax asset of $0.1 M.

Investing Activities

During the period the Company invested $0.2 M (cumulative $1.2 M for the nine-month period ended September 30, 2012) ($0.1 M and cumulative $1.0 M in 2011) for the acquisition of small equipment for the plant and laboratory.

Liquidity and Working Capital

As at September 30, 2012, the Company's working capital amounted to $12.1 M including $3.6 M in cash as compared to $7.9 M, including $2.1 M in cash as at December 31, 2011.

2012 OUTLOOK

Ore processing

The Company objectives for 2012 were established and published as follows:

  • Operate its processing plant at its full capacity of 220 tpd during most of 2012. This would represent a total plant throughput of approximately 75,000 tons of ore;
  • Using a grade of 0.71 ounce per DMT and an average price of $1,650 per ounce for 2012, this throughput would produce over 49,000 ounces of gold and sales of gold and silver of approximately $85 M;

Due to the excellent third quarter results, the overall actual results of the processing activities for the nine month period ended September 30, 2012, are exceeding the year to date 2012 forecasts as follows;

  • Total of 42,670 ounces of gold produced is 14.9 % above the year to date forecast due to higher grade ore processed during the third quarter;
  • Sales of $73.6 M representing 87% of the yearly estimated forecasts;

Without unforeseen circumstances, the Company is confident it will surpass its annual production guidance of approximately 50,000 ounces of gold in 2012.

New mill in Chala

The situation regarding the construction of the new 300 tpd mill is unchanged since our last financial report. The Company has filed applications for the environment and construction permits, which it expects to obtain before the end of 2012. Construction of the new mill, which should be funded through a combination of debt and working capital, will begin upon reception of the necessary permits and the Company expects it to be in operation in 2013.

Exploration

The planned 2012 program is temporarily delayed. The Company obtained at the end of September, its environmental permit which is the most important part of the permitting process and is still waiting, from the Peruvian authorities, the final exploration permit which will enable the start of the Company's' drilling program on Zone 4 of its Tumipampa project.

Management has been expecting the release of this permit during the last few weeks. The Company continues to monitor the situation closely and hopes to receive the permit shortly to finally enable the start of the drilling program.

Contractors have mobilized their equipment on site and are ready to work.

The original exploration program for 2012 on the Tumipampa exploration property was planned as a two part program as follows;

  • In zone 4, in the skarn, a drilling program of 4,100 meters - 9 holes to be drilled;
  • A first 300 meter long cross cut through the Manto Dorado toward the Rosa Vein to be excavated in order to prepare an underground drilling program of 2,000 meters with the objective to obtain a NI 43-101 Resource estimation in 2013;

Since all access roads and drilling pads are completed, the upcoming drilling program should run as a continuous operation even throughout the rainy season.

The program is budgeted at $2.3 M and management currently expects to finance 100% of the exploration campaign using auto-generated cash flow from its ore processing operations.

ABOUT DYNACOR GOLD MINES INC.

Dynacor is a gold mining exploration company active in Peru through its subsidiaries since 1996. The Company differentiates itself from pure exploration companies as it also generates income and cash flow from its wholly owned ore processing plant in Peru. The Company's assets include six exploration properties, including the Tumipampa property, along with its recently upgraded 220 tpd ore processing mill at Acari. Dynacor's mill produces gold from the processing of ore purchased from local producers. 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, suppliers 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.

Website: http://www.dynacorgold.com

Twitter: http://twitter.com/DynacorGold

Facebook: http://www.facebook.com/pages/Dynacor-Gold-Mines-Inc/222350787793085

Shares outstanding: 35,820,167



Jean Martineau
President and CEO
514-288-3224 ext. 228
or
Dale Nejmeldeen
Investor Relations
Dynacor Gold Mines Inc.
604-492-0099
M: 604-562-1348
nejmeldeen@dynacorgold.com
Data and Statistics for these countries : Peru | All
Gold and Silver Prices for these countries : Peru | All
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Dynacor Gold Mines

PRODUCER
CODE : DNG.TO
ISIN : CA26779X1015
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In the News and Medias of Dynacor Gold Mines
10/24/2011Dynacor plans 2nd Peru gold-ore processing plant
Financings of Dynacor Gold Mines
12/20/2010Closes $4.5 Million Private Placement and Redeems Convertibl...
Nominations of Dynacor Gold Mines
6/19/2013Announces the Results of the Vote for the Election of Direct...
6/20/2012Denis Lachance Joins Dynacor's Board of Directors
5/6/2009appoints a new Director
Financials of Dynacor Gold Mines
4/1/2011Generates $3.1 M in Cash Flow from Operations in Fiscal 2010...
10/29/2010Surpasses 10,500 ounces of gold milled in the third quarter ...
4/1/2010Reports its Financial Results for Fiscal Year 2009
4/1/2008announce its financial results for the fourth quarter.
Project news of Dynacor Gold Mines
8/30/2013Increases Its 2013 Gold Production Guidance to 71,000 oz.
7/16/2013(Tumipampa)Strikes High Gold Grades at Tumipampa
4/18/2013Boosts Quarterly Gold Production to an All-Time Best of 20,0...
1/24/2013Announces Best Monthly, Quarterly and Yearly Gold Production...
12/12/2012(Tumipampa)Commences Skarn Drilling and Excavation of a Cross-Cut at Tu...
11/29/2012New Record Gold Production in October of 6,169 Ounces
7/18/2012June 2012 Record Gold Production
7/11/2012(Tumipampa)2012 Tumipampa Exploration Update
5/8/2012(Tumipampa)Expands Tumipampa Land Holdings
4/19/2012Gold and Silver Production Continues to Soar in Q1-2012
3/5/2012(Tumipampa)Tumipampa 2012 Diamond Drilling to Start in April
2/23/2012(Tumipampa)d’or Dynacor : Rapport technique 43-101 sur Tumipampa publ
11/22/2011Continues to Increase its Gold Processing Capacity and Repor...
9/19/2011(Tumipampa)Tumipampa Exploration Update
7/7/2011(Tumipampa)Tumipampa Exploration Update
6/23/2011Announces Best Month of Production in the Company's History
3/25/2011(Tumipampa)Intercepts 0.73% Cu Over 10.6m Including 3.55% Cu, 72.27 g/t...
3/8/2011(Tumipampa)Tumipampa Exploration Update
1/28/2011(Tumipampa)Tumipampa Drilling Campaign is Underway
11/18/2010(Tumipampa)Announces a $5.45 Million Drilling Campaign, on Its Tumipamp...
11/12/2008(Acari)Custom milling capacity increases by 75% at Acari plant
11/12/2008(Acari)Custom milling capacity increases by 75% at Acari plant
9/4/2008(Tumipampa)Tumipampa: Dynacor hits 15.3 g/t of gold over 4.9 meters in ...
7/15/2008(Tumipampa)Tumipampa: three types of gold mineralization uncovered
4/16/2008(Acari)Increases its gold production capacity
2/12/2008(Tumipampa)Tumipampa: first drilling results
Corporate news of Dynacor Gold Mines
9/27/2013(Tumipampa)Discovers Disseminated Gold Mineralization at Tumipampa
8/14/2013Q2-2013: Cash on Hand $10 Million, EBITDA of $2.4 Million an...
5/29/2013Announces First Steps for its New 300 tpd Gold Ore-Processin...
5/13/2013Announces Best Quarter Results Ever with Net Income of US$3....
5/13/2013Announces Best Quarter Results Ever with Net Income of US$3....
5/7/2013(Tumipampa)Drilling at Tumipampa Reveals High Levels of Anomalous Polym...
3/28/2013Announces Total Sales of $105 Million and Net Income of Us$7...
1/29/2013Comments on Recent Market Activity
1/11/2013Obtains Environmental Permit for New Ore-Processing Facility...
11/9/2012Announces Record Sales of US$29.3 M and Net Income of US $2....
11/9/2012Announces Record Sales of US$29.3 M and Net Income of US $2....
9/18/2012Boosts Metal Sales To Record Levels of USD $9.96 Million in ...
8/24/2012Gold Production and Grades Jump Significantly Marking the Th...
8/14/2012Announces Second Quarter Net Income of US $1.2 Million ($0.0...
5/14/2012Announces Record Net Quarterly Income of US $1.7 Million ($0...
3/29/2012Announces Record Sales of US$74.6 Million and Net Income of ...
2/23/2012(Tumipampa)Tumipampa NI 43-101 Report Published
11/15/2011News Release
11/14/2011Reports Q3-2011 Results: Adjusted EBITDA of $2.4 M, Earnings...
9/20/2011News Release
9/9/2011Announces an Increase in its Gold Custom Milling Capacity
8/15/2011Reports an Adjusted EBITDA of $2.1M in Q2-2011
7/22/2011Announces Record Gold (21,734 ounces) and Silver (40,416 oun...
6/17/2011Reports an Adjusted EBITDA of $ 1.1 M in Q1 2011
6/2/2011News Release
4/14/2011Custom Milling Operation Produces 9,926 Ounces of Gold in th...
11/15/2010Generates $1.3 million in Cash Flow from Operations in Q3-20...
8/12/2009reports net earnings of $0.6M for Q2 2009
5/19/2009reports net earnings of $0.8 M for Q1 2009
2/24/2009increases its Milling Capacity by 100%
2/10/20092008 gold sales of 36,800 ounces totalling more than 34M$ at...
2/10/2009Communiqu=E9 de presse
11/18/2008News Release
11/12/2008Communiqu=E9 de presse
9/8/2008hits 15.3 g/t of gold over 4.9 meters in a newly discovered ...
8/27/2008reports record gold sales of 8.27 million dollars in Q2 2008
8/25/2008reports record gold sales of 8.27 million dollars in Q2 2008
5/23/2008reports record gold sales of 6.71 million dollars in Q1 2008
4/16/2008increases its gold production capacity
4/2/2008Annonce un bénéfice net pour l'année 2007
4/1/2008Reports net earnings for the year ended 2007
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TORONTO (DNG.TO)
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