Vancouver, British Columbia–(Newsfile Corp. – May 26, 2021) – Montreal-based Dynacor Gold Mines (TSX: DNG) (OTC Pink: DNGDF), has reported record quarterly gold sales, along with the highest first quarter gold production in the company’s history. The company processes gold ore purchased from artisanal miners and the small-scale mining industry in Peru.
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Sales for the first quarter ending March 31, 2021 increased from $30.9 million to $40.9 million, an increase of 32.5% over the same quarter in 2020, with all numbers in US funds. The $10 million increase is explained by a higher volume of gold sold, at a higher average gold price, along with significantly higher gold recovery, approximately 3.4% higher than the first quarter of 2020.
The increase in sales is even more remarkable given that the first quarter of sales in 2020 included approximately $8.7 million which came from postponed gold exports from December 2019. Despite a slightly declining gold market price, Dynacor increased its quarterly sales for the third consecutive quarter. On May 13th, the company reported unaudited gold sales of 12.5 million for April.
However, net income for the quarter dropped slightly from $2.4 million or $0.06 per share in the first quarter of 2020 to $2.1 million or $0.05 per share for the current quarter, a decrease of $300,000. The current quarterly net income was impacted by the recording of a $300,000 deferred income tax expense and a $100,000 increase in general and administrative expenses. Despite the annual rainy season in Peru, the company continued attracting a large volume of ore, purchasing 32,135 tonnes slightly below the level of purchases in the last quarter of 2020.
Given the current inventory level and strong ore purchases, the company has initiated, ahead of schedule, the planned expansion of its Veta Dorada processing plant, which will increase the throughput level by 25% from 345 to 430 tonnes per day. This expansion, budgeted at $1.8 million, will be funded through internally generated cash flow and will enable Dynacor to increase production, improve cost efficiencies, create jobs and elevate the company to top spot as Peru’s largest purchaser and processer of gold ore from the artisanal and small-scale mining community.
As at March 31, 2021, the company had $17.2 million in cash on hand, up from $11.9 million at the end of December. In February, the company replaced the CDN$0.015 quarterly dividend with a monthly dividend of CDN$0.005, which has just been increased by 33% to $0.0067 monthly, giving investors a more constant cash flow.
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