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Dynacor reports a new record quarter with sales of $61.9 million (157% increase over Q3-2020) and a net income of $3.5 million (US$0.09 per share) (CA$0.11 per share) in Q3-2021, on its way to a yearly production record of over 100,000 ounces of gold

Dynacor Gold Mines Inc. (TSX: DNG) (Dynacor or the Corporation) released its unaudited consolidated financial…

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This article was originally published by Resource World

Dynacor Gold Mines Inc. (TSX: DNG) (Dynacor or the Corporation) released its unaudited consolidated financial statements and the management’s discussion and analysis (MD&A) for the third quarter ended September 30, 2021.

These documents have been filed electronically with SEDAR at www.sedar.com and will be available on the Corporation’s website www.dynacor.com.

(All figures in this press release are in Ms of US$ unless stated otherwise. All amounts per share are in US$. All variance % are calculated from rounded figures. Some additions might be incorrect due to rounding).

Q3-2021 OVERVIEW AND HIGHLIGHTS

OVERVIEW

Dynacor completed the three-month period ended September 30, 2021 (“Q3-2021”) reporting a new quarterly sales record of $61.9 million and a net income of $3.5 million (US$ 0.09 per share), compared to sales of $24.1 million and a net income of $1.2 million (US$0.03 per share) in the third quarter of 2020 (“Q3-2020”).

The Corporation completed the expansion of its Veta Dorada plant at the end of Q2-2021. Therefore, Q3-2021 was the first quarter with our plant running at its new capacity of 430 tpd (+25% throughput from the previous 345 tpd). To date and since the end of June 2021, the mill has been operating at full capacity.

In Q3-2021, the Corporation ore purchasing, and processing activities continued to be very strong with 40,000 tonnes of ore supplied by artisanal miners and more than 36,000 tonnes processed. Since the beginning of 2021, the Corporation has been able to attract a volume of ore exceeding its increased capacity. This results in a continuous increase in ore inventory which will enable the Corporation to continue running at full capacity until year-end and into Q1-2022 as the rainy season approaches.

With growing volumes of gold produced and sold and a relatively stable gold market price since the beginning of 2021, the Corporation was able to increase its quarterly sales for the fifth consecutive quarter.

HIGHLIGHTS

The Q3-2021 figures are compared to Q3-2020. However, since Q3-2020 production was reduced following the three-month shut-down due to the Covid-19 crisis, Q3-2021 is also compared to the previous quarter (Q2-2021) which was a record quarter for the Corporation.

Operational

  • Increased ore inventory level and consistent ore purchases will enable the mill to run at its full capacity until the end of 2021. With a new record quarter of ore supplied (40,000 tonnes in Q3-2021) and the mill processing at full capacity, the Corporation increased its level of inventory to over 14,000 tonnes which represents more than one month of production;
  • Highest quarterly volume processed. In Q3-2021, the Veta Dorada plant processed a historical high volume of 36,281 tonnes of ore (394 tpd average) compared to 30,374 tonnes in Q2-2021 (334 tpd) and 23,064 tonnes (251 tpd) in Q3-2020;
  • Highest quarterly production. During Q3-2021, gold equivalent production amounted to 31,889 AuEq ounces compared to 25,172 AuEq ounces in Q2-2021 (+26.7%) and 13,629 AuEq ounces in Q3-2020.

Financial

  • Historical high quarterly sales. With significantly higher gold volumes sold (+48.5%) compared to the previous record quarter (Q2-2021) and with slightly lower selling prices (-2.5%) sales amounted to $61.9 million in Q3-2021 compared to $42.8 million in Q2-2021 and $24.1 million in Q3-2020;
  • Increased gross operating margin. Gross operating margin of $7.9 million in Q3-2021, compared to $6.5 million in Q2-2021 and $3.2 million in Q3-2020;
  • Historical high quarterly net income. Net income and comprehensive income of $3.5 million (US$0.09 per share), compared to $2.2 million in Q2-2021 (US$0.06 per share) and $1.2 million in Q3-2020 (US$0.03 per share);
  • Strong cash gross operating margin. Due to a (-6.4%) lower gold market prices compared to Q3-2020 and downward trend in gold market price during the period, the Q3-2021 cash gross operating margin per AuEq ounce sold was $242 (1) compared to $302 in Q2-2021 and $304 in Q3-2020;
  • Quarter to quarter increase in EBITDA(2). $7.2 million compared to $5.0 million in Q2-2021 (+44%) and $2.7 million in Q3-2020 (+167%) and a year-to-date increase of +$10.0 million or +143%;
  • Significant increase in cash-flow from operating activities before change in working capital items. Cash flow from operating activities before change in working capital items of $4.4 million (US$0.11 per share) (3), compared to $3.2 million in Q2-2021 and $2.3 million in Q3-2020;
  • Solid cash position. Cash on hand increased to $17.8 million at September 30, 2021 compared to $11.9 million at year-end 2020.

Cash Return to Shareholders

  • Three increased monthly dividends paid. During Q3-2021, dividends totaling $0.6 million (CA$0.8 million) were paid.

(1) Cash gross operating margin per AuEq ounce is in US$ and is calculated by subtracting the average cash cost of sale per equivalent ounces of Au from the average selling price per equivalent ounces of Au and is a non-IFRS 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 company.

(2) EBITDA: “Earnings before interest, taxes and depreciation” is a non-IFRS 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-IFRS 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.

(3) Cash-flow per share is a non-IFRS 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-IFRS 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

Extract from Consolidated Statement of net income and comprehensive income

Total sales amounted to $61.9 million compared to $24.1 million in Q3-2020. The significant $37.8 million increase is mainly due to an increased volume of gold sold due to record processing levels. Compared to the previous quarter (Q2-2021) sales increased by $19.1 million.

Q3-2021 sales also include $2.9 million coming from the partial release (approx. 60%) of gold bars retained in December 2019 by the Peruvian authorities.

The Q3-2021 gross operating margin amounted to $7.9 million which represents 12.7% of sales despite having been negatively impacted by the down trend in gold market prices during the quarter.

General and administrative expenses amounted to $1.2 million in Q3-2021 compared to $0.9 million in  Q3-2020. As expected, general and administrative expenses have significantly decreased (-$0.8 million) in Q3-2021 compared to Q2-2021.

The Q3-2021 net income was again mainly affected by the recording of a $0.3 million deferred income tax expense (cumulative 2021 of $0.9 million) resulting from the declining value throughout the period of the Peruvian Sol against the US$ and consequently FX variances applied on long term assets local tax basis.

Reconciliation of non-IFRS measures

CASH FLOW FROM OPERATING, INVESTING AND FINANCING ACTIVITIES AND WORKING CAPITAL AND LIQUIDITY

Operating activities

During Q3-2021, the cash flow from operations, before changes in working capital items, amounted to $4.4 million ($10.7 million for the nine-month period ending September 30, 2021), compared to $2.3 million in Q3-2020 ($5.5 million for the nine-month period ending September 30, 2020). This increase between quarters is primarily explained by the increase in gross operating margin due to higher gold production.

During Q3-2021, total cash from operating activities amounted to $5.7 million ($10.4 million for the nine-month period ending September 30, 2021) compared to (-$3.3 million) in Q3-2020 ($14.7 million for the nine-month period ending September 30, 2020). Changes in working capital items amounted to $1.3 million (-$0.2 million for the nine-month period ending September 30, 2021) compared to (-$5.6 million) in Q3-2020 ($9.3 million for the nine-month period ending September 30, 2020). The variance is mainly attributable to the variance in inventories and sales tax receivables.

Investing activities

During the three-month period ended September 30, 2021, the Corporation invested $0.5 million (cumulative nine-month 2021 of $2.1 million). This amount includes investments at the plant notably in relation to its capacity increase (+25% throughput level) completed during the second quarter, improvements in production processes and to new vehicles. All investments have been financed with internally generated cash-flows.

Financing activities

In Q3-2021, three monthly dividends totaling CA$0.0201 per share were disbursed for a total consideration of $0.6 million (CA$0.8 million). In Q3-2020, a quarterly dividend was disbursed for a total consideration of $0.4 million (CA$0.6 million).

During the period, 59,914 common shares (cumulative 240,246 common shares in 2021) were repurchased under the Corporation’s normal course issuer bid share buyback program for a total cash consideration of $0.1 million or CA$0.2 million (cumulative of $0.4 million or CA$0.6 million) (none in the first nine-month of 2020).

In Q3-2021, 54,594 common shares (cumulative of 222,094) were issued following the exercise purchase options for a total consideration of $0.1 million or CA$0.1 million ($0.3 million or CA$0.4 million).

In 2021, the corporation made repayments of lease liabilities and assets retirement obligations for $0.2 million ($0.5 million in 2020).

Working capital and liquidity

As at September 30, 2021, the Corporation’s working capital amounted to $34.2 million, including $17.8 million in cash ($25.4 million, including $11.9 million in cash at December 31, 2020).

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at September 30, 2021, total assets amounted to $88.4 million ($76.3 million as at December 31, 2020). Major variances since last year-end come from the significant increase in cash and in inventories and the impact of the additional deferred tax liability recorded 2021.

OUTLOOK 2021

Ore processing

Following an unprecedent productive quarter in Q3-2021, the Corporation is on its way to an historic annual production of over 100,000 gold equivalent ounces in 2021. In September 2021, the Corporation issued its revised guidance(1) forecasting from $185 to $190 million in sales and a net income ranging from $9.0 to  $9.5 million (US$0.23 to US$0.25 per share). Dynacor’s new sales guidance would represent an 82 to 87% year-over-year increase.

(1)   Assumptions

i) An average CA/US exchange rate of 1.25:1
ii) An average gold price of US$ 1,785 per ounce
iii) A consistent average grade in the ore received
iv) A stable currency exchange rate between Sol/US$/C$

ABOUT DYNACOR

Dynacor is a dividend-paying industrial gold ore processor headquartered in Montreal, Canada. The corporation is engaged in gold production through the processing of ore purchased from the ASM (artisanal and small-scale mining) industry. At present, Dynacor operates in Peru, where its management and processing teams have decades of experience working with ASM miners. It also owns a gold exploration property (Tumipampa) in the Apurimac department.

The corporation intends to expand its processing operations in other jurisdictions as well.

Dynacor produces environmental and socially responsible gold through its PX IMPACT® gold program. A growing number of supportive firms from the fine luxury jewelry, watchmakers and investment sectors pay a small premium to our customer and strategic partner for this PX IMPACT® gold. The premium provides direct investment to develop health and education projects for our artisanal and small-scale miner’s communities.

Dynacor is listed on the Toronto Stock Exchange (DNG).

FORWARD-LOOKING INFORMATION

Certain statements in the preceding 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: 38,883,244

Website: http://www.dynacor.com
Twitter: http://twitter.com/DynacorGold

CONTACT: For more information, please contact:

Director, Shareholder Relations
Dale Nejmeldeen
Dynacor Gold Mines Inc.
T: 514-393-9000 #230
E: [email protected]




Author: Resource World

Energy & Critical Metals

EV Nickel starts trading on TSX Venture Exchange

  TORONTO – EV Nickel Inc.’s [EVNI-TSXV] initial public offering (IPO) prospectus dated November 19, 2021, has been filed with and accepted by the…

 

TORONTO – EV Nickel Inc.’s [EVNI-TSXV] initial public offering (IPO) prospectus dated November 19, 2021, has been filed with and accepted by the TSX Venture Exchange and has begun trading on the Exchange.

The closing of the IPO, scheduled for December 2, 2021, was expected to have gross proceeds of $5,440,292 for a total of 1,442,200 flow-through (FT) common shares at 86 cents per FT common share and of 5.6 million units at 75 cents per unit. The company has 30,355,667 common shares issued and outstanding

EV Nickel, classified as a Tier 2 issuer, is a Canadian nickel exploration company, focused on the Shaw Dome area, south of Timmins, Ontario. The Shaw Dome area is home to its Langmuir project, which includes W4, the basis of a 2010 historical estimate of 677,000 tonnes at 1% nickel for approximately 15 million pounds of Class 1 nickel.

EV Nickel’s objective is to grow and advance a nickel business, targeting the growing demand for Class 1 nickel from the electric vehicle battery sector. EV Nickel has almost 9,100 hectares to explore across the Shaw Dome area and has identified 30 km of additional strike length.

“We are excited to get out into the public markets and begin telling the world about our wonderful assets, on the Shaw Dome, just south of Timmins,” said Sean Samson, president and CEO. “The world needs more nickel and especially the type of high-grade, clean nickel that we plan to build our business around. Decarbonization is the challenge of a lifetime and we plan to source the material that will help the EV [electric vehicle] companies grow and help address that challenge.”





Author: Editor

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Base Metals

Vision Lithium to Buy The Cadillac Canadian Lithium Property

Canadian-based exploration company Vision Lithium agreed to acquire 100% interest in 215 contiguous mining claims in Quebec, Canada.  Combined with an…

Vision Lithium Property Portfolio
Cadillac lithium property located approximately 40 km west of Val-d’Or. Source: Vision Lithium

Canadian-based exploration company Vision Lithium agreed to acquire 100% interest in 215 contiguous mining claims in Quebec, Canada. 

Combined with an additional 105 stakes claimed by the company, the group of claims will be collectively referred to as The Cadillac lithium property.  

Details of the agreement include the vendor groups receiving an aggregate cash consideration of $102,427.92 from Vision Lithium, as well as ​​issue a total of 4,300,000 common shares of the company. The shares are not divided evenly, with 1.5 million each going to the CMH Group and Fancamp, the Leblanc-Lavoie Group will receive 1 million and 300,000 Shares will go to the Tremblay Group. The company will also pay each vendor group a 2% net smelter return royalty on the claims. 

President & CEO of Vision Lithium Yves Rougerie commented in a press release, “The Cadillac lithium project is an exciting addition to our growing portfolio of lithium properties. The Property is located 10 km south of the Trans-Canada highway and only metres from the secondary road, ensuring easy access for logistics, materials and qualified manpower.”

The claims acquired by Vision Lithium combined with the additional 105 claims staked, means the property holds a total of 320 claims covering 18,378 hectares. The property is easily accessible year-round in an area with well-maintained roads. This is especially helpful since Quebec can become covered in snow for multiple months of the year, and established infrastructure gives the company a head start.

There are also at least 4 pegmatite dikes which are spaced approximately 100 metres apart and traced for at least 300 metres along on the property. 

Rougerie continued “The property hosts a cluster of close-spaced parallel lithium-bearing dikes. Spodumene has been observed in the outcropping dikes and we believe there are likely more dikes in the cluster. The dikes have seen surprisingly little historical exploration with only a handful of samples and no drilling to date.” 

High Potential for Additional Lithium Discoveries

Lithium crystals have been observed on all four dikes of the property, with even a few large crystals visible. 

The property is located approximately 10 km south of Cadillac, a historic mining town, and about halfway between the major mining centres of Rouyn-Noranda and Val-d’Or in Quebec. 

“We believe the potential for additional lithium discoveries within the main cluster area is excellent and the larger property also has tremendous upside potential for discovery. The entire area acquired and staked is very large at almost 200 square kilometres. We plan to aggressively explore the Property over the winter by drilling the main cluster of dikes and to plan and complete field work next summer over the large tract of land,” Rougerie said. 

There are a number of closing conditions and post-closing obligations for the company until the transaction is officially completed. This includes the execution of certain deeds and instruments of conveyance, and the approval of joining the TSX Venture Exchange. Completion of the transaction is expected to be finished in the coming days. 

Vision Lithium focuses on exploring and developing mineral assets such as lithium and copper in different parts of Canada. Other than the claims they have just received in the recent transaction, the company has operations in Manitoba, and multiple properties in New Brunswick and Quebec. The first drill program at the company’s Dome Lemieux copper property in Quebec has commenced. Vision has also recently completed the Red-Brook copper and zinc drill program in New Brunswick. 

Vision Lithium is focused on developing their Sirmac lithium project in Quebec which is a hard rock source of lithium. Lithium can either come from hard rock sources or brines, and about 50% of each make up the world’s lithium compound production. Both sources can produce battery-grade lithium, but the extraction process is very different. The company plans on using existing methods to extract lithium for the battery market. This is a key area for the company as demand for battery materials is soaring in the middle of a global energy transition. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

The post Vision Lithium to Buy The Cadillac Canadian Lithium Property appeared first on MiningFeeds.





Author: Matthew Evanoff

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Precious Metals

Gold Springs Discovers New Gold System – Shares Jump 20%

Gold Springs [GRC-TSX; GRCAF-OTCQB] reported assay results from hole J-21-015 with an average…

Gold Springs Resource Corp. [GRC-TSX; GRCAF-OTCQB] reported assay results from hole J-21-015 with an average of 1.0 g/t gold equivalent over more than 163 metres located 180 metres south of the discovery hole J-21-006 at the 100%-owned Gold Springs property located on the border of Nevada and Utah.

The results confirm the existence of a new gold-mineralizing system called intrusive-related gold system (IRGS) on a new target that the company has named Tremor. This new gold system is situated along the northern extension of the Jumbo trend of the large Gold Springs project of 8,000 hectares.

J-21-015 highlights include 1.0 g/t gold equivalent over 163.1 metres: 1.42 g/t gold equivalent over 33.5 metres within the vein, which includes 3.26 g/t gold equivalent over 10.7 metres within the vein; and 0.94 g/t gold equivalent over 123.5 metres within the intrusive and contact zone.

Randall Moore, executive vice-president of exploration, stated: “We have been anxiously awaiting these results, which now confirm what we believe to be a major new discovery. The existence of an IRGS at Gold Springs opens a potentially large area to develop a new gold resource. Hole J-21-015 extended both the high-grade vein system and the gold mineralization associated with the intrusive first seen in hole J-21-006. We would also like to highlight that both holes ended in gold mineralization. We are now awaiting assays from another 15 holes at Tremor that are currently in the laboratory for testing. Drilling has extended this northern vein for over 200 metres and the Tremor intrusive zone for 600 metres along strike as seen in the drill cuttings. The thickest intercept within the intrusive thus far has been 280 metres.”

The company is waiting to receive assays from 24 holes on two targets; 15 from Tremor and nine from White Point, in the coming weeks.

Gold Springs Resource is confident of the presence of an intrusive-related gold system within the Tremor target situated along the north extension of the Jumbo trend in Utah where a strong CSAMT (controlled source audio magnetotelluric) high resistivity anomaly extends for 1,200 metres.

The company completed 18 holes at Tremor designed to test the extent of the intrusive-hosted gold system. These holes demonstrate the intrusive extends for 600 metres and is open to the north, south and at depth. In addition, the vein system in hole J-21-006 has been traced for 200 metres. For details on hole J-21-006, which returned 6.87 g/t gold equivalent over 24.4 metres, included grades of 30.9 g/t gold equivalent over 4.6 metres.

The drill has moved to Charlie Ross where eight additional holes are planned to follow up that new discovery.

Author: Staff Writer

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