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Dynacor Group Inc. (TSX: DNG)

Summary

Dynacor Group Inc. is a gold production corporation headquartered in Montreal, Canada. The corporation is engaged in production through its government licensed ore processing operations. At present, Dynacor produces and explores in Peru where its management team has decades of experience and expertise. In 2017, Dynacor produced 79,897 ounces of gold, a 9% increase as compared with 2016 (73,476 ounces in 2016). Dynacor trades on the Toronto Stock Exchange (DNG) and the OTC in the United States under the symbol (DNGDF).

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Share Structure

 (As of March 13, 2018)

Shares Outstanding: 38.8 million

Fully Diluted: 39.9 million

Market Capitalization: CAD$76 million

 

Investment Highlights

  • Annualized cash flow of US$0.28 per share
  • Average price to cash flow multiple of 10 times over the last 2 years
  • Debt free
  • 26 consecutive quarters of profit
  • Forecasting sales over US$100 million in 2018

Production and Projects:

  • Voted as Peru’s top gold ore processing company
  • Cash Flow Proven Dynacor Model:
    1. Receive ore shipments from more than 400 government registered Peruvian artisanal gold miners
    2. Weigh, assay and screen ore deliveries for gold content at our new modernized plant
    3. Pay miners after 24 hours from delivery and process ore through mill
    4. After 10-14 days of processing
    5. Receive payment for gold dore bars from strategic partner, PX Precinox
  • Short Term Strategy
    • Self-fund throughput growth to 360 tonnes per day (CAPEX < $1M)
    • Propel Dynacor to largest gold ore processer in Peru (currently #2)
    • Define new dividend policy
    • Execute drill plan & advance flagship gold project, Tumipampa
  • Medium Term Strategy
    • Expand throughput growth to 600+ tonnes per day
    • Bring to fruition low risk development plan on gold project, Tumipampa
    • Establish world renown brand as socially accountable high quality gold
    • Target yield contraction through responsible shareholder dilution plan and per share growth (a sustainable/steady dividend history)

 

Exploration Asset:

  • Tumipampa (Peru)
    • 500KM Southeast of Lima
    • 9,756 ha
    • Surface results pending
    • Drilling planned for 2018
    • 21,610 meters of drill results
    • 2,881 meters of underground workings

Management Profiles

Jean Martineau President & CEO

Jean Martineau has been the CEO and president of Dynacor Group since 2006 when the company was founded. Jean Martineau has worked in the Canadian mining industry for more than 25 years as a director of junior exploration companies and as an investment broker. During the last 20 years he has focused on South America and has acquired an in depth knowledge in the management of natural resource companies in South America. His Latin American expertise has been of prime importance in the development of Dynacor Group’ operations in Peru.

Leonard Teoli Vice-President & CFO

Léonard Teoli began his carrier with Price Waterhouse, in 1987 where he served clients in the mining industry until 1996. From 2003 to 2008 he was CFO of Diabras Exploration where he participated in the start-up in 2006 of a pilot mining operation in Mexico. Since then he acted as consultant and CFO for a couple of exploration companies with project in Canada and Morocco. He joined Dynacor’ management team as Vice-President and CFO after cumulating over 20 years of experience as an accounting and finance executive with several Canadian junior mining companies involved in exploration project worldwide. He is a member of the Canadian Institute of Chartered Accountants since 1990.

Alonso Sanchez Chief Geologist

Alonso Sanchez holds a MSc in Geology and a degree in Engineering from the Universidad National de Ingeniería (1995). He worked for 11 years for Buenaventura S.A.A. (Peru), the largest mining Peruvian mining company; 5 years as mine geologist and 6 years as exploration geologist. He has an in-depth knowledge of epithermal gold, silver, tin, tungsten and polymetallic deposits, as well as Skarn-type deposits in both Peru and Bolivia. He acts as the qualified person (“QP”) for the Company, and is a geologist affiliated to the American Institute of Professional Geologists (AIPG).

Jorge Luis Cardenas General Manager, Peru

Jorge Luis Cárdenas is an experienced mining engineer and a member of the Colegio de Ingenieros del Perú. He has more than 15 years’ experience in gold and copper mining and holds a degree engineering (1990) and a Masters in mine management (2006). From 1996 to 2003 he was Plant Superintendent for Minera Dynacor del Perú, a Dynacor Group Inc. subsidiary. From 2004 to 2007, he was Operations Manager and was promoted to General Manager of Dynacor Group Inc. in Peru in December 2007.

Jorge Luis has been the driving force behind the very successful development of the company’s custom milling business in Peru. He is an exceptionally talented top level executive who has a team of dedicated managers in Peru. Jorge Luis now focussed on aggressively growing the company’s custom milling business.