Category: Uncategorized
- Published: 29 November -0001
Dynacor Gold Mines Inc. reports record gold sales of 8.27 million dollars in Q2 2008
Dynacor Gold Mines Inc. (Dynacor TSX:DNG) is pleased to announce record gold sales of 8.27 million dollars as well as its financial results for the 2nd quarter of 2008. The consolidated financial statements (all currency figures appear in Canadian dollars unless otherwise specified) along with the management\'s discussion and analysis are available for the viewing on the Dynacor\'s website at www.dynacorgold.com and the documents have been filed with SEDAR at www.sedar.com.
Highlights for the three-month and the six-month periods ended June 30, 2008
- Gold sales of 8,710 ounces at an average price of US$894 per ounce and
total gold sales of 15,976 ounces for the first six months of 2008.
- Gross earnings of $1,109,342 for the three-month period ($1,834,939 for
the six-month period ending June 30, 2008).
- Net earnings of $33,301 for the three-month period and net earnings of
$261,901 for the six-month period.
- Working capital of $4,245,367 (June 30, 2008).
- Cash and cash equivalents of $1.4M (June 30, 2008).
- For the three-month period ended June 30, 2008, investments amounted to
$416,458 ($227,678 in exploration (Tumipampa) and $188,780 in capital
assets for Acari) and $703,392 for the six-month period.
Sales
Gold sales are summarized as follows:
Three-month Six-month
period ended period ended
June 30, 2008 June 30, 2008
Sales of gold (ounces) 8,710 15,976
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$ $
Sales 8,269,690 14,980,122
Cost of sales 7,054,413 12,965,588
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Gross earnings before amortization 1,215,277 2,014,534
Amortization 105,935 179,595
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Gross earnings 1,109,342 1,834,939
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Total gold production came from the purchase of ore from local producers.
Three-
month period
ended on
June 30, 2008
$US/ounce
Average selling price 894
Average cash cost 765
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Margin before amortization 129
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Operating Activities for the three-month period ended June 30, 2008
The Company recorded net earnings of $33,301. The Company achieved gross
earnings of $1,109,342, which is an increase of US$16 per ounce in comparison
to the first quarter of 2008. Gross earnings were reduced, mainly, by the
selling expenses for Q1 and Q2 of $207,564 (commission of 1.9% of total
sales), general and administrative expenses of $477,060 and the stock based
compensation of $62,260 in relation to the grant of stock options during the
period. The Company recorded a foreign exchange loss of $147,621 resulting
from the decrease in value of the Nuevo Sol compared to the US dollar.
General and administrative expense can be itemized as follows:
Three- Six-
month period month period
ended on ended on
June 30, 2008 June 30, 2008
$ $
Peru 154,519 297,966
Salaries 104,687 211,835
Professional fees 98,077 167,054
Investor relations 43,036 82,756
Office expenses - Canada 48,265 83,616
Travel expenses 28,476 50,625
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477,060 893,852
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The Company shares the same senior management with Malaga Inc. Common
expenses are billed to the Company according to their use without surcharge.
The increase in the cost of Peru is mainly due to the increase in the
salaries, as the number of employees increased comparatively to 2007. The
professional fees consist of mainly additional charges relative to the 2007
year end audit. In 2007, there were no investor relations as the Company
wasn\'t public. Travel expenses are comprised of different trips to Peru by
management as well as meetings with investors.
The income tax burden is composed of the taxes of the Peruvian subsidiary,
at a rate of 30%. The effective tax rate is different than the statutory rate
because the Canadian parent company recorded a loss and cannot record this tax
benefit.
Outlook for Gold Production
In 2007, the Company had established a production goal of 25,000 ounces
for 2008 with a production capacity of 90 tons per day. This production goal
was updated in the first quarter of 2008 to 30,000 ounces. During the second
quarter, the production capacity increased to 120 tons per day and gold sales
reached 8,710 ounces (7,266 ounces in the first quarter) for a total of
15,976 ounces for the first 6 months of the year.
In early July, production reached 130 tons per day and Dynacor has started
installing new equipment that will allow it to further increase its daily
milling capacity. The Company\'s goal is to gradually increase production to
180t/day by the end of 2008.
Exploration Outlook
Tumipampa
The Tumipampa project is located 500 km from the city of Lima, in the
Chapimarca district, Province of Aymaraes, Department of Apurimac. Dynacor
Gold owns a total of 2,650 hectares which are adjacent to concessions being
explored by the following companies: Yamana Gold, Bear Creek and Southern
Peru.
In late 2007, the Company began a 4,000 meter drilling campaign and a
surface exploration program. Initial results were reported in February 2008
(see Press Release dated February 12, 2008) and further results reported in
July 2008 (see Press Release dated July 14, 2008).
The Company is very pleased with the results obtained so far that have led
to discovery of several new high grade veins and a mineralized Skarn structure
of unknown dimensions.
Overall, the results obtained suggest that three different types of
mineralization can be encountered on the Tumipampa property, namely:
1. Gold bearing vein structures with variable widths ranging from
0.1 to 7 meters and gold grades of up 20.2 g/t.
2. Disseminated gold mineralization associated with breccias in the
quartzite rock with gold grades up to 1 g/t, revealed by surface
samples.
3. Gold, copper and iron mineralization associated with Skarn-type
deposit at the interface between limestones (Ferrobamba formation) and
marbles and the intrusive body. Twenty-five surface channel and grab
samples showed gold, silver and copper mineralisation. Three samples
had approximately 1% copper and gold minerazation ranging from
2.67 g/t to 9.88 g/t. Twelve samples returned gold grades of over
1 g/t and up to 15.65 g/t.
Casaden Property
The Casaden property is located in the district of Magdalena, 890 km northeast of Lima, in the Chicama-Yanacocha (Newmont) corridor. In this region, large mining companies such as Newmont, Barrick, Gold Fields and Buenaventura have profitable mines. Casaden includes three mining concessions and covers an area of 1,600 hectares. Like its neighbors, the Casaden property contains disseminated epithermal gold deposits. Surface exploration work has been done on the property. The Company is currently studying several options in order to continue the exploration of Casaden.
ABOUT DYNACOR GOLD MINES INC.
Dynacor is a gold exploration and mining company, that has been active in Peru through its subsidiaries since 1996. The Company\'s assets include the Acari, Casaden and Tumipampa exploration properties. The Acari 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.
SOURCE: Dynacor Gold Mines Inc.
Jean Martineau, President & CEO, Dynacor Gold Mines Inc., (514) 288-3224; Renmark Financial Communications: Julien Ouimet, This email address is being protected from spambots. You need JavaScript enabled to view it.; John Boidman, This email address is being protected from spambots. You need JavaScript enabled to view it.; (514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial.com
