Dynacor Announces Total Sales of $105 Million and Net Income of Us$7.7 Million ($0.22 Per Share) in Fiscal 2012
MONTREAL, QUEBEC -- (Marketwire) -- 03/28/13 -- Dynacor Gold Mines Inc. (TSX: DNG) (Dynacor or the Company) a company with exploration projects and gold ore processing operations in Peru, has released its audited consolidated financial statements for the year-ended December 31, 2012. The Company is pleased to report that in 2012, it recorded a net income of $7.7 M ($0.22 per share) compared to $3.4 M ($0.10 per share) in 2011 and cash flow from operating activities of $9.2M ($0.26 per share) compared to $4.5 M ($0.13 per share) in 2011.
The audited consolidated financial statements along with the management's discussion and analysis are available on the Company's website www.dynacor.com, and the documents have been filed electronically with SEDAR at www.sedar.com.
All figures in this press release are in millions of US$ except where noted. Earnings per share and gross operating margin per ounce are in US$.
2012 HIGHLIGHTS
-- Sales of $105.0 M compared to $74.6M in 2011 a 40.8% increase over 2011;
-- Net income of $7.7M ($0.22 per share) compared to $3.4M ($0.10 per
share) in 2011;
-- Adjusted EBITDA of $13.9M compared to $7.0M in 2011 a 98.6% increase
over 2011;
-- Operating income of $12.5M compared to $6.4M in 2011 a 95.3% increase
over 2011;
-- Cash flow from operating activities before change in working capital
items of $9.2M ($0.26 per share) in 2012 compared to $4.5M ($0.13 per
share) a 105% increase over 2011;
-- 72,633 DMT (dry metric tonne) processed (64,041DMT in 2011) a 13.4%
increase over 2011;
-- Record annual production of 61,274 ounces of gold produced (46,026
ounces in 2011) a 33.1% increase over 2011;
-- Gross operating margin per ounce (1) of gold sold of $298 compared to
$244 in 2011;
-- Start of exploration program at Tumipampa in December 2012;
(1) Cash gross operating margin per ounce is calculated by subtracting the average cash cost of sale from the average selling price and 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 company.
Results from operations:
During the year the Company processed 72,633 DMT of ore compared to 64,041 DMT in 2011 a 13.4% increase which resulted in increased production and sales volume.
Total sales for the year amounted to $105.0M compared to $74.6M in 2011, an increase of $30.4M and 40.8% over 2011. This increase is explained by greater amount of gold produced combined with a higher gold price.
Gold production was up 33.1% with 61,274 ounces in 2012 compared to 46,026 ounces in 2011 and 59,910 ounces of gold were sold compared to 45,258 ounces in 2011 an increase of 32.4% over 2011. Average gold selling price per ounce was also higher at $1,674 in 2012 compared to $1,580 in 2011.
The average gold grade for 2012 was 0.90 oz/DMT compared to 0.77 oz/DMT in 2011 an increase of 16.9% which explains increase in ounces of gold produced and gross margin per ounce.
Financial Highlights:
For years ended
December 31,
(in $'000) 2012 2011
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Sales 104,994 74,568
Cost of sales 87,148 63,542
Gross operating margin 17,846 11,026
General and administrative expenses 3,495 3,321
Operating income 12,542 6,451
Net income and comprehensive income 7,716 3,382
Adjusted EBITDA(1) 13,891 7,034
Net Cash flow from operating activities before
change in working capital items 9,229 4,496
Cash flow from (used by) operating activities 3,929 574
Earnings per share
Basic $ 0.22 $ 0.10
Diluted $ 0.21 $ 0.09
Reconciliation of Net income and comprehensive
income to Adjusted EBITDA (1)
Net income and comprehensive income 7,716 3,382
Income taxes 4,708 2,746
Financial expenses 332 448
Depreciation 1,320 762
Impairment of exploration and evaluation assets 44 -
Revaluation of warrants (229) (304)
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Adjusted EBITDA(1) 13,891 7,034
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(1) Adjusted EBITDA: "Adjusted 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 company. The Company uses this non-GAAP measure as an
indicator of the cash generated by the operations and allows investor to
compare the profitability of the company 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
Operating Activities
Increased processing capacity, higher average gold grades and increased average gold selling price combined to generate $9.2M in cash flow from operations before changes in working capital items ($4.5M in 2011), an increase of $4.7M (105%) compared to 2011. Total cash generated from operating activities amounted to $3.9M compared to $0.6M in 2011. Changes in working capital items included increased costs invested in the year-end inventory of ore, finish goods and gold in process ($11.1M compared to $5.4M in 2011), greater trade and other receivables and payables at year-end and increased tax payables.
Investing Activities
During the year the Company invested $1.6M ($1.2M in 2011) in the acquisition of property, plant and equipment mainly to increase tailing ponds capacity and for the acquisition of small equipment for the plant and laboratory.
Additions to exploration and evaluation assets amounted to $0.8M in 2012 ($0.9 M in 2011) and were mostly comprised of capitalized salaries for the preparation of drilling platforms, costs related to road construction at Tumipampa and start of drilling activities in December 2012.
Financing activities
During 2012, the Company did not complete any share issue financing (nil in 2011).
The Company paid its quarterly interest and in December 2012 it paid a premium of $0.1M (CAD$72,000) to the holder of the CAD$1.2M payable debenture in accordance with the terms of the loan agreement. During the year, 300,000 stock options were exercised for gross proceeds of $0.1M (835,500 options for gross proceeds of $0.3M in 2011)
Liquidity
As at December 31, 2012, the Company's working capital amounted to $13.3M including $3.3M in cash ($7.9M, including $2.1M in cash at December 31, 2011).
As at December 31, 2012, the Company had no financial commitment besides 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.
2013 OUTLOOK
Dynacor's focus is to continue using the cash flow generated by its ore processing business to build long-term value for its shareholders by:
a. Continuing exploration of its Tumipampa property and defining mineral
resources and particularly its gold resources and;
b. Continuing to increase its gold and silver production from the
processing of purchased ore.
In 2013, the Company expects to process 75,000 DMT of ore and produce 66,000 ounces of gold.
New mill in Chala
The situation regarding the construction of the new 300 tpd mill is unchanged since our last financial report. The Company expected to obtain the construction permit before the end of 2012 and as at the date of this report has still not received it. Regular follow-up has been made with the local authorities. Construction of the new mill, which should be funded through a combination of debt and working capital, will begin upon reception of the necessary permit and will last eight months. The Company now anticipate starting production at its new facilities in 2014.
ABOUT DYNACOR GOLD MINES INC.
Dynacor is a gold exploration and mining company active in Peru through its subsidiaries since 1996. The Company differentiates itself from pure exploration companies as it also generates income and cash flow from its wholly owned ore processing plant in Peru. The Company's assets include five exploration properties, including the Tumipampa property, as well as its 220 tpd gold and silver ore processing mill at Acari. Dynacor's mill produces gold from the processing of ore purchased from small miners from all over Peru. 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.
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)
Website:http://www.dynacorgold.com
Twitter:http://twitter.com/DynacorGold
Facebook: facebook.com/DynacorGoldMines
Shares outstanding: 36,174,167
Contacts:
Jean Martineau
President and CEO
Dynacor Gold Mines Inc.
514-288-3224 ext. 228
Dale Nejmeldeen
Investor Relations
Dynacor Gold Mines Inc.
604.492.0099
M: 604.562.1348
nejmeldeen@dynacor.com