The unaudited condensed interim consolidated financial statements along with the management's discussion and analysis "MD&A" are available on the Company's website www.dynacor.com and the documents have been filed electronically with SEDAR at www.sedar.com.
(All figures in this press release are in millions of US$ unless stated otherwise. Earnings per share and gross operating margin per ounce are in US$. All variance % are calculated with rounded figures).
Dynacor was able to resume its gold sales and exports in early
The unexpected delays and their impact on the Corporation's operations have temporally affected Dynacor's Q1-2014 financial results. Dynacor is currently re-building its ore inventory and as of late April is operating its Huanca plant close to its maximum ore processing capacity.
During the three-month period ended
Jean Martineau Dynacor's President and CEO recently stated that "Under the circumstances and although we had to suspend our ore purchases and reduce production during the first quarter, I am very pleased with our Q1-2014 results and with the way the Corporation handled this difficult business environment in order to maintain a solid financial situation. Our Q1 results demonstrate the strength of our business model and despite all the difficulties we were able to record a net income."
Finally, during the month of March, 2014, the association of independent miners triggered a strike with the objective to get the Peruvian government to negotiate and clarify the ongoing formalization process in
January 2014, strong measures were taken by the Peruvian authorities to combat illegal gold mining and illegal gold exports from Peru(see overview above); -- Dynacor temporary stopped its ore purchases and gold exports for one month. Ore processing operations resumed in early March 2014; -- Cash on hand of $8.9M at March 31, 2014compared to $8.5M at December 31, 2013; -- Gold and silver sales of $12.3M compared to $33.3M in Q1-2013 a decrease of 63.1 %; -- Gold production of 12,175 oz compared to 20,027 oz in Q1-2013 a decrease of 39.2 %; -- Net income of $0.9Min Q1-2014 ( $0.02per share) compared to $3.0M( $0.08per share) in Q1-2013; -- EBITDA of $1.8M in Q1-2014 compared to $4.6Min Q1-2013; -- Cash flow from operating activities before change in working capital items of $1.3M( $0.03per share) (1) in Q1-2014 compared to $3.1M( $0.09per share) (1) a 58.1% decrease over Q1-2013;
(1) 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. The Company uses this non-GAAP measure which can also be helpful to investors as it provides a result which can be compared with the Company market share price.
Results from operations:
During the three-month period ended
During the period, due to the circumstances described above, the Huanca processing plant operated at a reduced pace processing overall 14,002 DMT of ore compared to 18,677 in Q1-2013 a decrease of 25.0% and produced 12,175 ounces of gold compared to 20,027 in Q1-2013 a decrease of 39.2%.
Total sales amounted to
The average gold grade for Q1-2014 was 0.92 oz/ DMT compared to 1.14 oz/DMT in Q1-2013 a decrease of 19.3% in the ore grade processed as Q1-2013 provided exceptionally unexpected high grade ore.
During the period, the Corporation completed its 2013 exploration program at Tumipampa and worked on the preparation of the next phase to be initiated in Q2-2014.
For three-months period ended March 31, (in $'000) 2014 2013 ---------------------------------- ---------------------------------- Sales 12,304 33,342 Cost of sales 9,748 27,700 Gross operating margin 2,556 5,642 General and administrative expenses 812 830 Operating income 1,553 4,286 Net income and comprehensive income 859 2,978 EBITDA(1) 1,834 4,617 Net Cash flow from operating activities before changes in working capital items 1,253 3,135 Cash flow from operating activities 1,253 3,840 Earnings per share Basic
$0.02 $0.08Diluted $0.02 $0.08Reconciliation of Net comprehensive income to EBITDA (1) Net comprehensive income 859 2,978 Income taxes 604 1,205 Financial expenses 29 93 Depreciation 342 341 ---------------------------------- EBITDA 1,834 4,617 ---------------------------------- ----------------------------------
(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
During Q1-2014, the Company recorded a net income of
As explained, the decrease in net income is due the decrease of
The important decrease in gold production and gold sales compared with last year, explains the decrease in cash flow from operations before changes in working capital items which amounted to
Total cash generated from operating activities amounted to
During the period, the Company invested
Additions to exploration and evaluation assets amounted to
Liquidity and working capital
2014- Ore processing outlook
Ore processing operations
Due to the uncertainties that prevailed during Q1-2014 in
The outlook for the next three quarters is now clearer and the Corporation can now confidently set a processing target of 75,000 DMT and a production target of 70,000 ounces of gold for 2014.
Total gold production in 2013, which was uninterrupted, was 76,883 ounces (78,681 DMT of ore processed). Production exceeded the initial 2013 guidance of 66,000 ounces of gold, since throughout the year overall grades of purchased ore continued to exceed forecasts. In 2013, the plant capacity was increased from 220 tpd at the beginning of 2013 to 230 and then 240 tpd during the third and fourth quarter of 2013.
2014- Exploration outlook
Following the high gold grade results obtained in 2013 from the cross cut and underground drilling of the Manto Dorado and the three other high grade veins Dynacor is planning to intensify its exploration of Tumipampa in 2014 and 2015. Further data is required in order to be able to publish a National Instrument 43-101 resource report.
The 2014 exploration campaign will begin immediately after the rainy season in Q2-2014 and will initially entail improving and hardening the 20-km access road to the property, building a safe storage area for sterile cross cut excavation rock as well as the construction of a new Tumipampa exploration camp with better facilities.
Exploration activities for 2014-2015 will include the following:
-- Geochemical and geological surface mapping of the disseminated gold area (120 ha); -- Geophysical studies of the disseminated gold area (120 ha): -- Excavation of a 420-meter extension of the cross cut towards the Rosa, A, Tumi veins; -- Underground drilling from the extended cross cut (12 drill holes 2000m) -- Surface drilling targeting the disseminated gold mineralization (6 drill holes 1800m)
Exploration expenditure for 2014 is budgeted at
With the current situation prevailing in
Dynacor is a gold and silver ore processing and a gold exploration and mining Corporation active in
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.
Shares outstanding: 36,373,587
FOR FURTHER INFORMATION PLEASE CONTACT:
Jean MartineauPresident and CEO T: 514-288-3224 ext. 228 Dale NejmeldeenInvestor Relations Dynacor Gold Mines Inc.T: 604.492.0099 or M: 604.562.1348 E: firstname.lastname@example.org Source: Dynacor Gold Mines Inc.