Peru
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Canada's Dynacor Gold increases earnings 18%

Bnamericas Published: Saturday, March 29, 2014

Montreal-based Dynacor Gold Mines (TSX: DNG), which buys and processes ore from gold and silver miners in Peru, said it boosted net income by 18.3% last year as higher gold output and lower financial expenses offset slumping metals prices.

Net income was US$9.1mn compared with US$7.7mn the previous year as sales rose 6.8% to US$112mn from US$105mn, Dynacor said Friday in a statement.

Gold production rose 25.5% to 76,883oz last year from 61,274oz in 2012 after the company upgraded its Huanca processing plant to 240t/d from 230t/d. Silver output fell to 131,685oz from 157,862 ounces the previous year, the company said. Grades of ore processed averaged 32.4g/t gold last year compared with 28g/t in 2012.

Dynacor sold gold at US$1,412/oz in 2013 compared with US$1,674/oz the year before. The company said it boosted cash reserves to US$8.5mn by the end of the year from US$3.3mn at end-2012.

The company boosted capex spending to US$3.7mn last year from US$1.6mn in 2012 including equipment for the Huanca plant upgrade and pre-construction investment at its Chala plant project, it has spent US$2mn to date.

Dynacor said it invested US$2.3mn last year in exploration at its Tumipampa copper-gold deposit, where it plans to allocate US$4.5mn in exploration work this year. The company, which is exploring five properties in Peru, has found a potentially "huge" copper deposit at Tumipampa, located in Apurímac region, CEO Jean Martineau told BNamericas in February.

The company, which cut financing expenses to US$182,000 last year from US$398,000 in 2012, became debt-free after paying second quarter interest and reimbursement in June of outstanding long-term debt which had matured.

Dynacor, which in February suspended gold exports for a month due to additional requirements for documentation from the Peruvian government, said it resumed ore processing and exports and expects its operations to run at full capacity in "upcoming weeks."

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