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Dynacor's (TSX:DNG) (OTC:DNGDF) June 2014 corporate presentation.
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INVESTOR PRESENTATION June -‐ 2014
Forward Looking Statements
This presentation contains certain forward-‐looking statements regarding operational information, future exploration and development plans and anticipated future production. Words such as, potential”, “building” “inferred”, “if”, “will”, “expect”, “forecast”, “estimate”, “consider”, “may”, “possible” and similar expressions have been used to identify these forward-‐looking statements. These statements are management’s current beliefs and are based on information currently available to management. Forward-‐looking statements involve significant risk and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-‐looking statements including, but not limited to, changes in general economic, political and market conditions and other risk factors. Although the forward-‐looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-‐looking statements. Investors should not place under reliance forward-‐looking statements. Forward-‐looking statements and other information contained herein concerning the metals and mining industry and Dynacor’s general expectations concerning the industry are based on estimates prepared by management using data from publicly available industry sources as well as from private sources, industry analysis and on assumptions based on data and knowledge of the this industry which the Company believes to be reasonable. However, this data is inherently imprecise. While Dynacor is not aware of any misstatements regarding any industry data presented herein, the industry involves risks and uncertainties and is subject to change based on various factors. There is no certainty the projections will be met.
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 2
A Gold Performer
Only 36 million shares outstanding
High-‐Reward
Home Run Potential
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 3
A non-‐dilutive business model
The key to $1.00 eps
A Non-‐Dilutive Strategy § An industrialized-‐type gold company with low risk business model in Peru
§ Operating in Peru for almost twenty years; well acclimatized to its customs and politics
§ Gold and silver production via ore-‐processing operation – CASH FLOW GENERATOR
§ Self finances exploration campaigns
§ 36.3 million shares outstanding
§ Net income of $9.1 million in fiscal 2013 ($0.25 earnings per share)
§ $17.8 million working capital as of March 31, 2014
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 4
Operations § Ore-‐Processing
§ Huanca: Producing
§ Chala: Emerging Producer
§ Exploration
§ Flagship Project: Tumipampa
§ Greenfield Projects: Anta and Casaden
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 5
PERU
Operating Areas
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 6
S
E W
N
Zoom
Huanca 1
Producer: 250 tpd
Chala 2
Emerging Producer: Awaiting plant permit on new 300 -‐600 tpd mill
Tumipampa 3
Exploration: Underground high-‐grade gold drilling; surface drilling on disseminated zone
Lima
DRIVING 0 HOURS 30 HOURS
Objectives § Short-‐term (12 months):
§ Produce 80,000 ounces on annual basis
§ Continue cross-‐cut to 750 meters
§ Underground drilling (Manto Dorado, Veta Rosa, Veta Tumi)
§ Geophysical, geochemical and surface drilling (Disseminated Breccia zone)
§ Begin exploration campaign on Anta (Ag)
§ Long-‐term (12-‐36 months) § Increase ore-‐processing capacity to 600 tpd (Chala)
§ Maximize shareholder value via direct production at Tumipampa
§ To be the leading ore-‐processing company in Peru
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 7
Delivering Over Time: Huanca
0
20,000
40,000
60,000
80,000
100,000
120,000
2010 2011 2012 2013
43,743
74,568
104,994 112,114
33,525
46,025
61,264
76,883
Operational Performance (2010-‐2013)
Sales ($000) Gold Production (oz) (000)
Sold 76,883 ounces with an average grade of 1.04 oz/tonne
(32.34 g/t Au) in 2013
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 8
Production Estimate With New Mill Expansion: Chala
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
300 TPD (0.90 OZ/T AU) 450 TPD (0.82 OZ/T AU) 600 TPD (0.75 OZ/T AU)
86,000
118,000
144,000
Gold ou
nces
Annual Production Estimate
Chala
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 9
Solid Operational Execution
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 10
25,000
45,000
52,000
66,000 70,000
33,525
46,025
61,264
76,883
Gold Production
2010 Guidance
2010 Actual
2011 Guidance
2011 Actual
2012 Guidance
2012 Actual
2013 Guidance
2013 Actual
2014 ???
Actual Cash Flow and Earnings Per Share
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 11
2011 2012 2013
$0.13
$0.26
$0.29
$0.09
$0.21
$0.25
Cash Flow/Share Earnings/Share
Earnings Scenario
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 12
300TPD 450TPD 600TPD 900TPD 1200TPD
86,000 Au oz/yr
118,000 Au oz/yr
144,000 Au oz/yr
216,000 Au oz/yr
288,000 Au oz/yr 0.29
EPS
0.39 EPS
$0.48 EPS
$0.71 EPS
$0.95 EPS
Planned Development Potential Future Development
NET PROFIT/OZ
NET PROFIT MARGIN
$118-‐126
8-‐11%
$10.3 MILLION $0.29 EPS $14.3 MILLION $0.39 EPS $17.2 MILLION $0.48 EPS $25.9 MILLION $0.71 EPS $34.5 MILLION $0.95 EPS
Earnings per share forecast based on: 36 million o/s | $120 per ounce net profit
Range over last 2
years 2012-‐2013
36 M shares
Tumipampa: High Grade Gold Project: § Ongoing cross-‐cut and underground drill program
§ Surface exploration and drilling on disseminated breccia zone
§ Surrounded by six senior miners in south central Peru
§ Released drill results of 115.7 g/t (3.7 ounces) Au in December 2013
§ Auto-‐financed exploration model
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 13
2014-‐2015 Exploration Campaign: Tumipampa § Exploration budget of $4.5 million
§ Excavate 420m cross-‐cut to Rosa/A/Tumi veins
§ Drill 12 holes (2000m) in the cross-‐cut
§ Drill 6 holes (1800m) in the disseminated zone
§ Geophysical studies of disseminated zone
§ Geochemical and mapping of disseminated zone
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 14
Tumipampa: Project Location
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 15
LIMA
CUZCO
Cuzco Region
Apurimac Region
Arequipa Region
“La Yegua” Cu/Au project
Joint Venture with Japan (JOGMEC)
Drilling campaign underway
“Cotobambas” 404Mt, 0.42% Cu
“Los Chancas” 355Mt, 0.62% Cu $1.2B projected
development budget
Dynacor “Tumipampa” Advancing High-‐Grade Gold zone
“Las Bambas” 1.7Bt, 0.60% Cu
SOLD FOR $6B TO CHINA/ 04/14
“Constancia” 277Mt, 0.43% Cu Acquired March/11 $520M ($0.10/lb Cu)
“Haquira” 569Mt, 0.64% Cu Acquired Oct/10
$460M ($0.06/lb Cu)
• HIGH-‐GRADE GOLD DEPOSIT • ADJACENT TO TUMIPAMPA’S SW BORDER • MINED BY LOCALS FOR OVER 10 YEARS • AVERAGE GRADE OF 1/OUNCE TONNE
• ORCOPAMPA / BUENAVENTURA • HIGH-‐GRADE GOLD/SILVER VEIN DEPOSIT • 2.1 MILLION OZ AU / 19.8 MILLION OZ AG • EXHIBITS SIMILAR CHARACTERISTICS TO TUMIPAMPA’S HIGH-‐GRADE VEIN STRUCTURE
0 km 200 km
$8 billion in development and 3.6 billion tons of ore surround
Tumipampa
Tumipampa: Project Display Model
1 VEIN
A VEIN
B VEIN
2007 VEIN
SAN PEDRO VEIN
BRECCIA
BRECCIA
Tumipam
pa River
Poctococha Lagoon
Balsacocha Lagoon
Patacocha Lagoon
ROSA
VEIN
Skarn (E) Cu-‐Au
Skarn (W) Cu-‐Au
Gold veins
Disseminated gold
Zone 4
Old Spanish gold-‐rich tailings
Cross-‐cut tunnel location
0 1 km
Ø 15 gold veins discovered to date Ø Ancient drifts from Spanish colonial period Ø 2 old stock piles discovered by Tumipampa River Ø Project consists of three types of gold mineralization: Skarn, Gold Veins and Disseminated Gold associated with
Breccias
Zone 3
Zone 2
Zone 1
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 16
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 17
VE
TA T
UM
I
VETA
R
OSA
HDD 11 HDD 07
HDD09 HDD10 HDD08
4200
4250
4300
4350 CRUCERO 330NW
MANTO DORADO
Continuación de Crucero 330NW
PROY HDD
PROY HDD
PROY HDD PROY HDD
HDD08-13- IM (463,00 m)
HDD18
4400
4450
HDD 21 TCD 06
A
B
C
D
E
0 100
GAL 190E CH 125
1 2
3
4 5
6 7
8
PROY HDD
PROY HDD
Future drill targets
HDD-‐2013
1 2 3 4
5 6 7 8
HDD Ancho (m) Au (g/t) Ag(oz/t) Cu (%)HDD01-350-IM 1.56 14.67 0.24 0.51HDD02-350-IM 1.10 115.66 0.52 3.03HDD03-350-IM 1.42 23.73 0.25 0.19HDD04-350-IM 0.60 7.25 0.10 0.42HDD05-350-IM 1.91 0.99 0.07 0.01HDD06-350-IM 1.10 0.37 0.09 0.10 HDD07-350-IM 1.20 3.08 0.17 0.32HDD08-350-IM 1.00 17.28 0.25 2.68HDD08-350-IM 1.50 14.31 0.69 9.57HDD08-350-IM 0.50 122.00 1.02 6.59HDD09-350-IM 1.70 7.09 0.09 0.46
Tumipampa: Cross Section of Underground Works
Tumipampa: Ongoing Drilling and Cross-‐cutting
§ Drilled 1753 meters in 2nd half of 2013
§ Excavated a 300 meter (978 foot) cross-‐cut measuring
3 meter (11.0 feet) wide X 2.5 meter (8.0 feet) high in
the Manto Dorado in 2013
§ Conducted a 1,064 ha geophysical study
including a magnetic and induced polarization survey in 2011
§ Collected 1,300 geochemical samples
§ Drilled a total of 14,060 meters at Tumipampa
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 18
Financial Overview As at December 31, 2013, the Company’s working capital amounted to $17.4M
Dynacor Gold Mines: A self-‐financed gold company: operating an ore-‐processing business to generate gold sales that fund the exploration of high-‐reward mineral properties.
”Dynacor Gold Mines is NOT a diluting asset.”
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 19
Three Year Overview
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 20
Senior Management
Experienced and well-‐balanced team with expertise in:
ü Geology/Exploration ü Metallurgy ü Custom milling ü Business management ü Finance ü Marketing
Since the inception of Dynacor Gold Mines Inc. in the fall of 2007, the management team has remained focused on a disciplined capital structure, via generating cash flow from its ore-‐processing division, to unlock the greater shareholder value through the exploration of its 100% owned Tumipampa advanced gold exploration project. Management strives to avoid dilution of its shareholders by repeated financings that typify the junior gold exploration sector.
JEAN MARTINEAU, PRESIDENT AND CEO • 20 YEARS EXPERIENCE IN THE RESOURCE INDUSTRY IN CANADA AND SOUTH AMERICA
• FORMER DIRECTOR OF WESDOME GOLD MINES 1999 – 2007
LEONARD TEOLI, VICE PRESIDENT AND CFO • 20 YEARS EXPERIENCE IN ACCOUNTING AND FINANCE EXECUTIVE • FORMER CFO OF DIA BRAS EXPLORATION 2003-‐2008 • STARTED CAREER WITH PRICE WATHERHOUSE 1987 – 1996 • MEMBER OF THE CANADIAN INSTITUTE OF CHARTERED ACCOUNTANTS SINCE 1990
JORGE LUIS CARDENAS, GENERAL MANAGER ORE-‐PROCESSING • MINING ENGINEER AND METALLURGIST • MORE THAN 20 YEARS EXPERIENCE IN MINING (18 YEARS WITH DYNACOR) ALONSO SANCHEZ, CHIEF GEOLOGIST • 15 YEARS EXPERIENCE AS A MINE AND EXPLORATION GEOLOGIST (EXPERT OF PERUVIAN GEOLOGY)
• FORMER GEOLOGIST OF PUBLICLY LISTED COMPANY BUENAVENTURA S.A.A FROM 1995-‐2006
• EXPERT IN EPITHERMAL GOLD, SILVER, TIN, TUNGSTEN, POLYMETALLIC DEPOSITS AND SKARNS IN PERU
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 21
Head Office
625, boul. René-‐Lévesque Ouest Suite 1105
Montréal, (Québec) H3B 1R2
(514) 393.9000
Dale Nejmeldeen Investor Relations (604) 492.0099
www.dynacorgold.com
2014-‐06-‐05 DYNACOR GOLD MINES | TSX:DNG 22