|By Marketwired .||
|May 14, 2014 04:18 PM EDT||
MONTREAL, QUEBEC -- (Marketwired) -- 05/14/14 -- Dynacor Gold Mines Inc. (TSX:DNG) (OTC:DNGDF) (Dynacor or the Corporation) a Corporation with gold and silver ore processing operations and exploration projects in Peru, has released its unaudited condensed consolidated financial statements for the three-month period ended March 31, 2014.
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).
In January 2014, the Peruvian Government and its Customs and Excise Agency (Sunat) implemented a series of new vigorous measures to crack-down on illegal gold mining and illegal gold exports. This led to long and unpredictable delays for the sale and export of Dynacor's gold production and consequently impacted the Corporation's cash liquidity and its ability to purchase ore. Because of the uncertainties the Corporation was faced with, management decided to temporarily and voluntarily suspend its ore purchases and slow down its ore processing activities. At one point during Q1-2014, the Corporation had accumulated in excess of 170 kg of unsold finished gold dore bars valued at that time at $7.5 M.
Dynacor was able to resume its gold sales and exports in early March 2014. Nevertheless, as of March 31, 2014 the Corporation still had approximately 121 kg of produced and unsold gold dore bars. Since then this gold inventory has been exported and sold.
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 March 31, 2014, Dynacor recorded a net income of $0.9 M ($0.02 per share) compared to $3.0M ($0.08 per share) in Q1-2013; and a cash flow from operating activities before changes in working capital items of $1.3M ($0.03 per share) (1) in Q1-2014 compared to $3.1M ($0.09 per share) (1) a 58.1% decrease over Q1-2013.
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 Peru. On March 25, 2014, the associations of small miners and the Peruvian authorities came to an agreement whereby the formalization process for the independent miners already registered with the Government will be extended for a period of two years. Accordingly, since the Corporation solely purchases ore from Government registered miners, it does not foresee any further issues with respect to our ore purchasing operations.
-- 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 $8.9 M at March 31, 2014 compared to $8.5 M at December 31, 2013; -- Gold and silver sales of $12.3 M compared to $33.3 M 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 $0.9M in Q1-2014 ($0.02 per share) compared to $3.0M ($0.08 per share) in Q1-2013; -- EBITDA of $1.8 M in Q1-2014 compared to $4.6M in Q1-2013; -- Cash flow from operating activities before change in working capital items of $1.3M ($0.03 per share) (1) in Q1-2014 compared to $3.1M ($0.09 per 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 March 31, 2014, the Corporation increased its net shareholder equity by 3.1% from $31.8 M at year-end 2013 to $32.8 M at March 31, 2014.
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 $12.3 M including $0.4 M in silver sales compared to $33.3 M including $0.9 M in silver, a total decrease of 63.1% compared to Q1-2013 due to reduced production and ore grades, reduced average sale price per ounce and accumulation of unsold gold dore produced during the quarter.
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.
At March 31, 2014 the Company's working capital amounted to $17.8M compared to $17.4M at December 31, 2013, an increase of 2.3%.
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 $0.08 Diluted $0.02 $0.08 Reconciliation 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
During Q1-2014, the Company recorded a net income of $0.9M ($0.02 per share) compared to $3.0M ($0.08 per share) in 2013 a decrease of $2.1M and 70% compared to Q1-2013.
As explained, the decrease in net income is due the decrease of $3.0M (54.6%) in the gross operating margin due to reduced processing operations during the period ($2.6M in Q1-2014 compared to $5.6M in Q1-2013).
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 $1.3M for Q1-2014 compared to $3.1M for Q1-2013.
Total cash generated from operating activities amounted to $1.3 M compared to $3.8 M in 2013. At March 31, 2014 ore inventory were of three days of production as the Corporation was resuming purchasing ore to rebuild its ore inventory. Trades and other receivables decreased by $4.2 M over year-end 2013 figure as the Company recovered Peruvian sales tax related to Q3 and Q4 of 2013.
During the period, the Company invested $0.6M ($0.3M in Q1-2013) to increase the gold recovery rate at 250 tpd and build a new tailing pond at Huanca.
Additions to exploration and evaluation assets amounted to $0.2 M in Q1-2014 ($0.5 M in Q1-2013). The Q1-2014 costs related to the final process of the 2013 exploration campaign and the preparation of an environmental impact assessment at Tumipampa.
Liquidity and working capital
As at March 31, 2014, the Company's working capital amounted to $17.8M including $8.9M in cash compared to $17.4M including $8.5M in cash at December 31, 2013.
As at March 31, 2014, the Company had no financial commitment beside those disclosed in the section Long Term Liabilities and Contractual Obligations and has no restrictions in transferring funds from Peruvian subsidiaries to the parent Company.
2014- Ore processing outlook
Ore processing operations
Due to the uncertainties that prevailed during Q1-2014 in Peru, the Corporation was not in a position to publish any production guidance for 2014.
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 $3.0M within an overall program to continue into 2015 estimated at $4.5 M.
With the current situation prevailing in Peru, the Corporation is facing additional delays in the obtaining of its construction permit at Chala. The Corporation will inform of any development as they occur.
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 now 250 tpd gold and silver ore processing mill at Huanca. Dynacor's mill produces gold from the processing of ore purchased from many registered miners. 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)
Shares outstanding: 36,373,587
President and CEO
T: 514-288-3224 ext. 228
Dynacor Gold Mines Inc.
T: 604.492.0099 or M: 604.562.1348
E: [email protected]
"We help companies that are using a lot of Software as a Service. We help companies manage and gain visibility into what people are using inside the company and decide to secure them or use standards to lock down or to embrace the adoption of SaaS inside the company," explained Scott Kriz, Co-founder and CEO of Bitium, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nov. 27, 2014 07:00 PM EST Reads: 1,276
15th Cloud Expo, which took place Nov. 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, expanded the conference content of @ThingsExpo, Big Data Expo, and DevOps Summit to include two developer events. IBM held a Bluemix Developer Playground on November 5 and ElasticBox held a Hackathon on November 6. Both events took place on the expo floor. The Bluemix Developer Playground, for developers of all levels, highlighted the ease of use of Bluemix, its services and functionalit...
Nov. 27, 2014 07:00 PM EST Reads: 1,141
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
Nov. 27, 2014 06:00 PM EST Reads: 1,691
Some developers believe that monitoring is a function of the operations team. Some operations teams firmly believe that monitoring the systems they maintain is sufficient to run the business successfully. Most of them are wrong. The complexity of today's applications have gone far and beyond the capabilities of "traditional" system-level monitoring tools and approaches and requires much broader knowledge of business and applications as a whole. The goal of DevOps is to connect all aspects of app...
Nov. 27, 2014 06:00 PM EST Reads: 989
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
Nov. 27, 2014 05:00 PM EST Reads: 1,271
When an enterprise builds a hybrid IaaS cloud connecting its data center to one or more public clouds, security is often a major topic along with the other challenges involved. Security is closely intertwined with the networking choices made for the hybrid cloud. Traditional networking approaches for building a hybrid cloud try to kludge together the enterprise infrastructure with the public cloud. Consequently this approach requires risky, deep "surgery" including changes to firewalls, subnets...
Nov. 27, 2014 04:45 PM EST Reads: 1,125
Want to enable self-service provisioning of application environments in minutes that mirror production? Can you automatically provide rich data with code-level detail back to the developers when issues occur in production? In his session at DevOps Summit, David Tesar, Microsoft Technical Evangelist on Microsoft Azure and DevOps, will discuss how to accomplish this and more utilizing technologies such as Microsoft Azure, Visual Studio online, and Application Insights in this demo-heavy session.
Nov. 27, 2014 04:45 PM EST Reads: 1,070
DevOps is all about agility. However, you don't want to be on a high-speed bus to nowhere. The right DevOps approach controls velocity with a tight feedback loop that not only consists of operational data but also incorporates business context. With a business context in the decision making, the right business priorities are incorporated, which results in a higher value creation. In his session at DevOps Summit, Todd Rader, Solutions Architect at AppDynamics, discussed key monitoring techniques...
Nov. 27, 2014 04:30 PM EST Reads: 1,129
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water,...
Nov. 27, 2014 04:00 PM EST Reads: 1,204
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
Nov. 27, 2014 04:00 PM EST Reads: 1,590
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
Nov. 27, 2014 03:00 PM EST Reads: 1,234
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Nov. 27, 2014 03:00 PM EST Reads: 853
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
Nov. 27, 2014 03:00 PM EST Reads: 1,420
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
Nov. 27, 2014 01:00 PM EST Reads: 1,619
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
Nov. 27, 2014 11:00 AM EST Reads: 1,229