dynacor reports largequality drilling final

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Dynacor Gold just announced numerous high-quality drill intercepts at its Tumipampa residencein Peru. Grades ended up as high as thirty.33 g/t gold at a new deposit known as Manto Raquel, and42.fourteen g/t gold at Manto Dorado. These outcomes are good since they verify the continuity of mineralization at Manto Dorado,with drilling also discovering a new higher-grade deposit. I consider the latest share cost weakness provides a buying chance. This could switch into amassive copper-gold deposit that becomes a mine a single day.

Dynacor Gold (OTC:DNGDF)(simply click to enlarge)(Credit score: Yahoo Finance)Shares of Dynacor are down 15.76% above the previous calendar year, compared to a fortytwo.thirty% drop in the benchmark gold miners index, Market place Vectors Gold Miners ETF(NYSEARCA:GDX).Current Stock Value: $1.39Shares Fantastic: 36.32 millionIndustry Cap: $50.48 million52-7 days Assortment: $one.23-$2.09Shares of Dynacor Gold have bought off nearly 10% over the past thirty day period or so duemainly to weak spot in the value of gold. New diamond drilling outcomes at the company'sTumipampa home have basically long gone unnoticed by the market, even though these finalresults have very good implications for the organization in excess of the extended phrase.In addition, Dynacor is still profitable at present gold charges and has more than $20 million indoing work funds, so I feel the selloff is overdone to say the least.Very first, I would like to give a transient overview of the company's organization product. It'sstraightforward to feel the organization is a gold miner when you look at its name nevertheless,this is just not the reality. Dynacor is a lucrative gold ore processor and exploration company. Thebusiness operates the Huanca-Acari gold ore processing plant, purchasing higher-quality ore fromlocal miners and processing that ore at its facility.This enterprise design has led to Dynacor earning far more than $eight-$ten million per calendaryear in income circulation. For illustration, in 2013, the business earned $10.3 million in moneyflow, and previous yr it earned $eight.1 million. And, in Q1 2015, the firm attained $two.six millionin funds movement. Evidently, Dynacor is not nearly as influenced by the drop in the gold cost asstandard mining organizations, which have been reporting losses in excess of the past year or so.Gold generation guidance for 2015 is seventy five,000 to eighty,000 ounces, in accordance to thefirm. As talked about in a earlier article, the company has secured final permits for a newprocessing plant named Chala. Design has started, and once this plant is in production, it couldprobably triple Dynacor's overall creation as soon as it is at entire capability at 600 tonnes forevery working day (TPD), which could take place in just a number of many years.

At the initial ability of three hundred TPD, the plant must produce 86,000 ounces of gold, but atthe premier potential of 600 TPD, it could produce 144,000 ounces. It'll consider another six-7months to total and expense the business an added $8 million, but I think the new plant willclearly be a game-changer for Dynacor.DNG data by YChartsThe firm's profitable organization model indicates Dynacor does not have to problem debt orfairness to fund its operations or explore its high-prospective exploration house (as I will talkabout underneath). The firm has significantly less than forty million shares fantastic and has notissued any new shares in a number of many years.The worthwhile company product also means Dynacor is a healthy business financially. As ofMarch 31, Dynacor experienced $fourteen.5 million in cash and $21.one million in doing workmoney, with zero financial debt. Even right after funding the building at Chala, the organizationshould have at the very least $6+ million in funds and $ten+ million in functioning cash.New Drill Results at Tumipampa Are PositiveFinally, I'd like to get to the current drilling outcomes at the company's a hundred%-ownedTumipampa home in Peru, a deposit situated in the heart of a mining area in Peru exactly where$8 billion has been put in in improvement. The Tumipampa house consists of forty eight.42 sq.kilometres of land and is found following to a copper-gold deposit held by Southern Copper(NYSE:SCCO) other significant gold miners this kind of as Iamgold (NYSE:IAG), Yamana(NYSE:AUY) and Barrick (NYSE:ABX) personal claims bordering Tumipampa, in accordance tothe business site.In 2015, Dynacor documented outstanding channel sample outcomes from the Adriana vein(35.58 g/t Au), the Sondoro vein (31.16 g/t Au and 22.09 g/t Au), the Esperanza vein (10.94 g/tAu) and the Manto Lucha (28.sixty g/t Au). New diamond drilling benefits described on Julysixteen consist of four new drill holes at Tumipampa - a new substantial quality gold mineralizedstructure was found, known as the Manto Raquel, with grades up to 30.33 g/t Au. The MantoDorado construction was also drilled and the firm stories outcomes of up to forty two.14 g/t gold,including three.seven% copper.These benefits give the company and traders more confidence that Tumipampa will produce intoa large-quality mineral deposit that could produce gold and copper at reduced money costs. Anpreliminary forty three-101 source at Tumipampa is envisioned extremely before long and a goodrelease could offer a improve to the share cost. Over the prolonged time period, even so, Iconsider Dynacor will most likely locate a partner to assist advance the undertaking and restrictthe firm's cash requirements. The marketplace is putting small benefit of this deposit at themoment.The Stock is UndervaluedIn 2015, guidance at $1,200 gold phone calls for earnings for every share of $.18, in accordanceto the corporate presentation. This will arrive in a little bit reduced at current gold prices, but evennow exhibits the inventory is severely undervalued. If we just take a bearish stance and supposetotal-year earnings for every share of $.twelve, then with a recent share price of $one.39, thestock trades at a P/E ratio of just 11.fifty eight. If gold rallies and averages $1,two hundred foreach ounce, and the firm hits its estimate of $.18, the inventory would have a P/E of justseven.72.This valuation, of system, does not just take into account the company's 100%-owned

Tumipampa task, nor does it consider the progress spurt the organization is about to knowledgepursuing the completion of the Chala plant.Dynacor's stock value has fallen these days, but I think it has offered buyers with a present. Overthe long expression, I think shares will easily defeat peers and outperform the market.Editor's Notice: This post covers one particular or far more stocks trading at significantly less than$one for each share and/or with significantly less than a $100 million industry cap. Please beinformed of the hazards associated with these stocks.