Dynacor: June 2014 Corporate Presentation

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


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


Operations §  Ore-‐Processing

§  Huanca: Producing

§  Chala: Emerging Producer

§  Exploration

§  Flagship Project: Tumipampa

§  Greenfield Projects: Anta and Casaden


PERU

Operating Areas


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


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


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


Solid Operational Execution


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


2011 2012 2013

$0.13

$0.26

$0.29

$0.09

$0.21

$0.25

Cash Flow/Share Earnings/Share

Earnings Scenario


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-‐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


Tumipampa: Project Location


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



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


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.”


Three Year Overview


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


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


Dynacor: June 2014 Corporate Presentation

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Transcript of Dynacor: June 2014 Corporate Presentation