Dynacor Q3-2013: Record Gold Sales of 20,598 oz and Net Income of $3.0 M (0.08$ per share)
MONTREAL, QUEBEC–(Marketwired – Nov. 14, 2013) – Dynacor Gold Mines Inc. (TSX:DNG) (Dynacor or the Corporation) a corporation with gold and silver ore processing operations and exploration projects in Peru, has released its unaudited condensed interim consolidated financial statements for the three and nine-month periods ended September 30, 2013. The Corporation is pleased to report that for Q3-2013, it recorded an operating income of $4.6M (cumulative nine months of $11.1M ) compared to $4.3M (and cumulative nine-months of $8.8 M) in 2012, and net income of $3.0 M ($0.08 per share) (cumulative nine-months of $7.0M ($0.19 per share)) compared to $2.8 M ($0.08 per share) and cumulative nine-months of $5.7 M ($0.16 per share) in 2012.
The unaudited condensed interim consolidated financial statements along with the management’s discussion and analysis “MD&A” are available on the Corporation’s website www.dynacor.com and the documents have been filed electronically on SEDAR at www.sedar.com.
All figures in this press release are in millions of US$ except where noted. Earnings per share and gross operating margin per ounce are in US$. All variance % are calculated with rounded figures.
Q3-2013 HIGHLIGHTS
- Record quarterly gold sales of 20,598 oz;
- Gold and silver sales of $28.1M in Q3-2013 compared to $29.3M in Q3-2012, a 4.1% decrease compared to Q3-2012 due to lower average gold price;
- Gross operating margin of $6.0 M and operating income of $4.6M compared to $5.6 M and $4.3M in Q3-2012, an increase of 7.1% and 7.0% respectively over 2012;
- Net income of $3.0M in Q3-2013 ($0.08 per share) compared to $2.8M ($0.08 per share) in Q3-2012;
- EBITDA of $4.7M compared to $4.8M in Q3-2012;
- Cash gross operating margin per ounce(1) of gold sold of $285 compared to $331 in Q3-2012;
- Cash flow from operating activities before change in working capital items of $3.5 M ($0.10 per share)(2) in Q3-2013 compared to $3.5 M ($0.10 per share)(2) in Q3-2012;
- Cash on hand of $10.3 M at quarter end compared to $3.3 M at December 31, 2012.
- Quarterly record of 20,652 DMT (dry metric tonne) of ore processed (19,629 DMT in Q3-2012) a 5.2% increase over Q3-2012;
- Dynacor starts underground drilling in the Manto Dorado structure at Tumipampa;
| (1)Cash gross operating margin per ounce is calculated by dividing the Corporation’s cash gross operating margin by the number of gold ounces sold during the period and is a non-GAAP 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 Corporation. The Corporation uses this non-GAAP measure which can also be helpful to investors as it provides a result on a production unit basis. |
| (2) Cash-flow per share is a non-GAAP 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 Corporation. See the ‘Non-IFRS Measures’ section of this MDA. The Corporation uses this non-GAAP measure which can also be helpful to investors as it provides a result which can be compared with the Corporation market share price. |
Results from operations:
During the period ended September 30, 2013, the Corporation processed a quarterly record high of 20,652 dry metric tonnes (DMT) of ore (cumulative of 58,114 DMT for the nine-month period) compared to 19,629 DMT in Q3-2012 (cumulative of 53,273 DMT in 2012), a 5.2% increase over Q3-2012. The plant operated at an average rate of 233 tpd.
During the period the Corporation produced 19,741 ounces of gold (cumulative 57,662 ounces) compared to 17,168 for the same period in 2012 (cumulative of 42,671 ounces), a 15.0% increase. The increase in gold production compared to 2012 is explained by a higher tonnage and gold content of ore processed. During the quarter the grades of ore processed averaged 1.015oz/DMT (31.58 g/t Au) compared 0.934 oz/DMT (29.06 g/t Au) in 2012.
Total sales for the period amounted to $28.1M (20,598 ounces of gold sold) (cumulative nine-months $87.3 and 58,309 ounces sold) compared to $29.3M (16,949 ounces sold) (cumulative $73.6 M and 42,375 ounces sold) for the same periods in 2012 a decrease of $1.2M and 4.1% over Q3-2012. Although ounces produced and sold were higher than for the same period in 2012, total sales were lower due to the decrease in the average selling price of gold (Q3-2013 at $1,324 per ounce as compared to $1,664 in Q3-2012).
Silver production was also slightly higher (40,148 ounces compared to 39,184 ounces in Q3-2012) mainly due to increased plant throughput.
The gross operating margin for the period amounted to $6.0 M (21.4%) compared to $5.6 M (19.0%) an increase of 7.1% over Q3-2012. This increase is explained by higher tonnage processed and higher gold grade of ore processed.
The gold cash operating gross margin per ounce was at $285 in Q3-2013 compared to $331 in Q3-2012 a 13,8% decrease compared to 2013 mainly due to a decrease in the price of gold compared to 2012.
FINANCIAL HIGHLIGHTS
| For the three-month periods ended September 30, |
For the nine-month periods ended September 30, |
||||
| (in $’000) | 2013 | 2012 | 2013 | 2012 | |
| Sales | 28,100 | 29,341 | 87,312 | 73,565 | |
| Cost of sales | 22,100 | 23,752 | 71,913 | 61,201 | |
| Gross operating margin | 6,000 | 5,589 | 15,399 | 12,364 | |
| General and administrative expenses | 993 | 728 | 2,825 | 2,366 | |
| Operating income | 4,553 | 4,346 | 11,130 | 8,784 | |
| Net income and comprehensive income | 3,045 | 2,784 | 6,964 | 5,699 | |
| EBITDA(1) | 4,716 | 4,812 | 11,715 | 9,885 | |
| Net Cash flow from operating activities before changes in working capital items | 3,478 | 3,468 | 8,090 | 6,927 | |
| Cash flow from operating activities | 1,597 | 1,472 | 12,317 | 3,184 | |
| Earnings per share | |||||
| Basic | $0.08 | $0.08 | $0.19 | $0.16 | |
| Diluted | $0.08 | $0.07 | $0.18 | $0.15 | |
| Reconciliation of Net comprehensive income to EBITDA (1) | |||||
| Net comprehensive income | 3,045 | 2,784 | 6,964 | 5,699 | |
| Income taxes | 1,468 | 1,388 | 3,732 | 3,099 | |
| Financial expenses | 16 | 133 | 150 | 264 | |
| Depreciation | 187 | 493 | 869 | 1,021 | |
| Revaluation of warrants | – | 14 | – | (198 | ) |
| EBITDA | 4,716 | 4,812 | 11,715 | 9,885 | |
| (1) EBITDA: “Earnings before interest, taxes, depreciation and amortization, revaluation of warrants and impairment” is a non-GAAP 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 Corporation. The Corporation uses this non-GAAP measure as an indicator of the cash generated by the operations and allows investor to compare the profitability of the Corporation 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
During the quarter the cash flow from operations before changes in working capital items amounted to $3.5 M ($0.10 per share) (cumulative of $8.1 M for the nine-month period ($0.21 per share)) compared to $3.5 M ($0.10 per share) (cumulative of $6.9 M ($0.19 per share)) in 2012. Total cash generated from operating activities amounted to $1.6 M (cumulative of $12.3 M) compared to $1.5 M (cumulative of $3.2 M) in 2012.
Investing Activities
During the period, the Corporation invested $1.0M (cumulative $ 2.3M for the nine month period) ($0.2 M in Q3-2012 and cumulative $1.2 M in 2012) for the acquisition of property, plant and equipment to be used at the current Huanca plant, including an additional $0.3 M for the extension of the tailing pond (cumulative of $0.6 M in 2013) and for the preparation of the construction at Chala. The Chala site has been readied for the construction phase. The worker’s camp and kitchen have been built and an electrical power line has been installed that connects the plant site to the national grid. Total investment to date for Chala including environmental, hydrogeological water and tailings studies, consultant fees, equipment and other procedures and permitting expenses amount to $1.4 M.
Additions to exploration and evaluation assets during the quarter amounted to $0.3 M ($0.05 M in Q3-2012) due to the ongoing exploration program at Tumipampa.
Financing activities
During Q3-2013, the Corporation did not complete any share issue financing (nil in Q3-2012).
During the period, 35,000 stock options were exercised for gross proceeds of $17,744 (cumulative 345,944 options exercised and proceeds of $106,809) (60,000 in Q3-2012 and cumulative 150,000 options for gross proceeds of $49,772 in 2012).
Working capital
As at September 30, 2013, the Corporation’s working capital amounted to $17.3M including $10.3M in cash ($13.3 M including $3.3 M in cash at December 31, 2012).
Ore processing outlook
The Corporation’s revised guidance for 2013 is to process 75,000 DMT of ore and produce 71,000 ounces of gold (revised from 66,000) at its 230 tpd ore processing plant at Huanca (Acari).
For the first nine month of 2013, the production, in terms of tons processed and total ounces produced, is as follows:
| Tons processed: 58,114 (Year to date guidance: 56,250) |
| Ounces Au produced: 57,662 (Year to date revised guidance: 53,250) |
Overall grades of purchased ore have continued to exceed expectations which have translated into increased gold production. The Corporation is confident that it will meet and probably surpass its 2013 gold production revised guidance of 71,000 ounces.
ABOUT DYNACOR GOLD MINES INC.
Dynacor is a gold and silver ore processing and a gold exploration and mining Corporation active in Peru through its subsidiaries since 1996. The Corporation differentiates itself from pure exploration companies as it also generates income and cash flow from its wholly owned gold ore processing plant in Peru. The Corporation’s assets include five exploration properties, including the Tumipampa property, as well as its 230 tpd gold and silver ore processing mill at Huanca. Dynacor’s mill produces gold from the processing of ore purchased from many different ore suppliers. Dynacor’s strength and competitive advantage comes with the experience and knowledge the Corporation 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.
Dynacor Gold Mines Inc. (TSX:DNG)
Website: http://www.dynacorgold.com
Twitter: http://twitter.com/DynacorGold
Facebook: www.facebook.com/DynacorGoldMines
Shares outstanding: 36,316,111
President and CEO
Dynacor Gold Mines Inc.
T: 514-288-3224 ext. 228
Dale Nejmeldeen
Investor Relations
Dynacor Gold Mines Inc.
T: 604.492.0099
M: 604.562.1348
nejmeldeen@dynacor.com