Dynacor’s Gold Production Surpasses 46,000 Ounces in 2011

MONTREAL, QUEBEC–(Marketwire – Jan. 26, 2012) – Dynacor Gold Mines Inc. (“Dynacor” or “the Company”) (TSX:DNG) is pleased to announce that gold production for 2011 from its ore- processing plant delivered a company best 46,026 ounces, including a record month of 4,565 ounces for the month of December, 2011. This amounts to a year over year increase of 37% (2010 – 33,525 ounces) and a quarterly increase of 29% (Q4/2010 – 3,533 ounces) respectively.

During 2011, the Company processed 64,041 tonnes of ore at an average grade of 0.77 ounces of gold per tonne. Recovery for the year is ranked in the top quartile of the industry at 92.9%.

Q4-2011 Gold Production

During the fourth quarter 2011, ore processed was 19,060 tonnes at an average grade of 0.75 ounces of gold per tonne, a little lower than the year average rate of 0.77 ounces per tonne. Recoveries were consistent at just above 92% resulting in the Company’s historic best quarter of 13,157 ounces, a 26% increase compared to Q4-2010 (10,477 ounces).

At its current 220 tpd capacity, the Company should process close to 75,000 tonnes of ore on a yearly basis, which would represent a 17% throughput processing increase compared to 2011. Depending on the grade of ore purchased and processed, gold processing production should range between 50,000 and 52,000 ounces in 2012.

Complete production results will be released upon filing of the Company’s financials later in March 2012.

Plant Expansion

In October 2011, the Company’s Board of Director approved the construction of a new 300 tonne per day gold-ore processing plant in southern Peru (October 24, 2011 press release ) which represents the key to the ‘ramp-up’ in production to a level in excess of 100,000 tonnes of ore per annum in a mid-term period. The Company is waiting for the obtaining of its environmental and construction permits to begin the construction.

Peru is the 6th largest gold producer in the world. The small scale mining community is rapidly expanding and Dynacor is positioning itself to become the foremost gold ore processing company in Peru. The new plant has been designed to be readily upgraded to 430 tonnes per day. This ‘state of the art’ gold-ore processing plant is to be built with an initial capacity of 300 tonnes per day.

Cash Flow from Operations

At this time last year (Fiscal 2010 – December 31, 2010), Dynacor generated $3.1 million in cash flow from operations ($0.09 cash flow per share) for the full year. For the first nine months of 2011, Dynacor reported $3.5 million in cash flow from operations ($0.10 cash flow per share). This increase is the result of improved operational efficiencies and processes at the plant along with growth in our total production volumes.

Exploration

The Company is in the strong position of self-funding its exploration budget for the coming season. Given the robust cash flow picture the Company enjoys, Dynacor is once again in the top quartile of lowest share counts in the junior mining sector. The Company expects to release information on its upcoming exploration program on its Tumipampa property in the first quarter of 2012.

ABOUT DYNACOR GOLD MINES INC.

Dynacor is a gold exploration and mining 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 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

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