Dynacor Gold Mines Inc. (dynacor)
Symbol: DNG
Toronto Stock Exchange (TSX)
MONTREAL, May 22 /CNW Telbec/ - Dynacor Gold Mines Inc. (Dynacor TSX:DNG) is pleased to announce record gold sales of 6.71 million dollars as well as its financial results for the first 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.
Q1 2008 Highlights
- Record gold sales of 6.71 million dollars at an average sale price of
US$931 an ounce produced at an average custom milling cost of US$818;
- Gross earnings of $799,257 (before amortization) and $725,597 (after
amortization) and net earnings of $228,600 ($0.01 per share);
- Cash and cash equivalents of $1,488,297 and a working capital of
$4,490,273;
- For the first time in its history the Acari plant attained a daily
production capacity of 120t/day (a 100% increase since Q1 2006);
- Drilling of the Tumipampa property continued at a fast pace and the
Company expects to release these results during Q2
Overall, during Q1 2008 Dynacor operated in a favourable environment that
was characterized by a buoyant gold market. Record gold sales were attained
and the capacity of the Acari Plant was increased by 20% relative to Q4 2007.
Management is determined to pursue this expansion in the plant's capacity
during 2008. The Company also opened a new gold ore purchasing office in
Espinar/Cusco some 770 km south of the Acari where many new gold mining
operations have emerged in the last two years.
Operating Activities
The Company recorded net earnings of $228,600, or earnings per share of
$0.01. Gross earnings reached $725,597. Gross earnings were reduced, mainly,
by the general and administrative expenses of $416,792 and the stock-based
compensation of $174,004 in regards with the issuance of stock options during
the period.
Principal Financial Data (in $000)
Three-month
period ended
March 31, 2008
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Sales 6,710
Net earnings 229
Cash flow increase from operating activities before
Non-cash working capital items 481
Cash flow from operating activities 180
Cash and cash equivalents 1,488
Total assets 20,702
Shareholders' equity 17,812
Outstanding shares as at March 31 30,000,100
Gold Sales
Gold sales can be summarized as follows:
2008
Sales of gold (ounces) 7,266
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$
Sales 6,710,432
Cost of sales 5,911,175
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Gross earnings before amortization 799,257
Amortization 73,660
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Gross earnings 725,597
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In Q1 2008, total gold production came from the purchase of ore from local producers and was sold in the open market and the Company did not have any hedging activities.
OUTLOOK FOR 2008
Custom Gold Milling
Phase 1 of the increase in milling capacity has now been completed and the Acari mill now has a daily capacity of 120 tons/day. During Q1 2008, the Company installed a new additional ball mill (5.5 x 6 ft) and a new 16 x 16 ft cyanidation tank. Both of these new pieces of equipment have been tested and are now fully operational. Installation of the Merrill Crowe unit is now completed and this equipment is undergoing extensive testing before being commissioned. Once it is operational it will enable the Company to further increase its production capacity during Q2/Q3 2008.
The Company expects to process over 30,000 ounces of gold in 2008 and will gradually increase its capacity up to 150t/day by the end of 2008.
Exploration Activities
Phase 1 of the previously announced 11,000 meter drilling campaign of the Tumipampa property (see Press Release dated November 22, 2007) has been completed on schedule. In all 15 holes have been drilled adding up to a total of approximately 3,000 meters. Initial results on three drill holes were reported in a press release on the 12th of February 2008 and the Company is eagerly awaiting further results which will be reported as soon as possible.
Dynacor Gold plans to continue to explore actively its 100% owned Tumipampa property during Q3 and Q4 of 2008 and this will include drilling as well geophysical surveys and surface sampling.
Ivan Quiroz, Vice President Operations and Director, is a mining engineer and metallurgist, and a member of the Collegio de Ingenieros del Peru. He is Dynacor Gold's "Qualified Person" and is responsible for the technical information contained in this press release. Thus, Mr. Quiroz can testify to the precision and exactitude of the data and the mining and geological knowledge of the Acari plant, and the Tumipampa property, as required by National Instrument 43-101 and its annexes with respect to the reporting and content of this press release.
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.