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INVESTOR PRESENTATION August - 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.
8/29/2014 DYNACOR GOLD MINES | TSX:DNG 2
A Gold Performer
Only 36 million shares outstanding
High-Reward
Home Run Potential
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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
36.4 million shares outstanding
Net income of $9.1 million in fiscal 2013 ($0.25 earnings per share)
$19.2 million working capital as of June 30, 2014
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Operations
Ore-Processing
Huanca: Producing
Chala: Emerging Producer
Exploration
Flagship Project: Tumipampa
Greenfield Projects: Anta and Casaden
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PERU
Operating Areas
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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
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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
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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
Go
ld o
un
ces
Annual Production Estimate
Chala
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Solid Operational Execution
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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
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2011 2012 2013
$0,13
$0,26
$0,29
$0,09
$0,21
$0,25
Cash Flow/Share Earnings/Share
Earnings Scenario
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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 [VALUE]
EPS
[VALUE] EPS
[VALUE] EPS
[VALUE] EPS
[VALUE] 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
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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 5 holes (1800m) in the disseminated zone
Geophysical/surface studies of disseminated zone
Channel samples 19.49 g/t Au, 0.35 oz/t Ag (July 2014)
Geochemical and mapping of disseminated zone
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Tumipampa: Project Location
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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
BRECCIA
Poctococha Lagoon
Balsacocha Lagoon
Patacocha Lagoon
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
15 gold veins discovered to date Ancient drifts from Spanish colonial period 2 old stock piles discovered by Tumipampa River Project consists of three types of gold mineralization: Skarn, Gold Veins and Disseminated Gold associated with
Breccias
Zone 3
Zone 2
Zone 1
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VE
TA
TU
MI
HDD 11
HDD 07
HDD09 HDD10
HDD08
4200
4250
4300
4350 CRUCERO 330NW Continuación de Crucero 330NW
PROY HDD
PROY HDD
PROY HDD PROY HDD
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 0.51
HDD02-350-IM 1.10 115.66 0.52 3.03
HDD03-350-IM 1.42 23.73 0.25 0.19
HDD04-350-IM 0.60 7.25 0.10 0.42
HDD05-350-IM 1.91 0.99 0.07 0.01
HDD06-350-IM 1.10 0.37 0.09 0.10
HDD07-350-IM 1.20 3.08 0.17 0.32
HDD08-350-IM 1.00 17.28 0.25 2.68
HDD08-350-IM 1.50 14.31 0.69 9.57
HDD08-350-IM 0.50 122.00 1.02 6.59
HDD09-350-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
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Financial Overview
As at June 30, 2014, the Company’s working capital amounted to $19.2M
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.”
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Three Year Overview
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Senior Management
Experienced and well-balanced team with expertise in:
Geology/Exploration Metallurgy Custom milling Business management Finance 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
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Head Office
625,René-Lévesque Blvd West Suite 1105
Montreal, (Quebec) H3B 1R2
(514) 393.9000
Dale Nejmeldeen Investor Relations
(604) 492.0099
www.dynacorgold.com
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