january 2018 investor presentation - dynacor gold mines · barrick golden ideal gold mining super...

January 2018 Investor Presentation

A Gold Cash Flow Business Model

A lower riskgold producer

$13M+ CFannualized

$0.33 cash flow per share annualized

Paid off US$ 6.3 million of debt in last 5 months

26 consecutive quarters of profit

*CF (Cash Flow) based on Q3-2017 cash flow from operating activities before change in working capital annualized; US to CAD exchange 1.25

A Debt-Free Cash Generator

DNG – TSX | DNGDF - OTC (Q)dynacor.com 2

Capital Market Summary

Market Summary

Stock Price (Year High-Low) $1.50 - $2.75

Ticker Symbol DNG - TSX

Shares Outstanding (Basic) 39M

Warrants Nil

Average Daily Volume (Shares) 90,513

Monthly Dividend TBD

Dividend Yield TBD

Director & Senior Management Ownership 4%

Capital Structure

Market Capitalization 74M

Enterprise Value (As of Sept 30, 2017) 82M

Debt Nil


Shareholder Return 2008-2018

-200%

0%

200%

400%

600%

800%

1000%

1200%

1400%

1600%

1800%

2000%

2200%

DNG-TSX stock priceS/P TSX Global Gold Index

1558%

-38%

32% annualized return since

2008• Continues to profit through the cycles of the gold market

• Built to survive and prosper with or without a gold bull environment


Q3-2018Implied Share

PriceSee Slide #9

The Cash Flow Proven Dynacor Model

1Receive ore

shipments from

more than 400government registered

Peruvian artisanal gold miners

Weigh, assay and screen ore

deliveries for gold content

at our new modernized

plant

Pay miners after 24 hours from

delivery and process ore through mill

After 10-14 days of

processing

Receive payment for gold dore bars

from strategic partner, PX

Precinox

23

45


Record High Gold Production

dynacor.com DNG – TSX | DNGDF - OTC (Q)dynacor.com

5,208

6,733

5,181 5,087

6,206

6,895

6,287

7,0427,192

7,905

7,253

8,910

4,000

5,000

6,000

7,000

8,000

9,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Monthly gold production ounces (Jan-Dec 2017)

24,068 ounces produced in Q4-2017, an

annualized basis of nearly 100,000 ounces

+71%79,897 ounces

produced in 2017

6

Ore Supply and Deliveries Growing


185

220

200

180185

215

190

245

265270

265

300

160

185

210

235

260

285

310

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Average Monthly Ore Processing Rate (TPD) in 2017

2018 goal ramp up to

360 TPD(tonnes per day)

+62%

*TPD is rounded to the nearest five (5) units

7

Rising Cash Flow & Compelling Value


51

136105

159

40

65

90

115

140

165

Cash Flow Per Ounce $CAD$CAD

Q4 2016

Q1 2017

Q2 2017

Q3 2017

CF From Operations

1,067 2,326 1,917 3,268

CF Per Share

0.03 0.06 0.05 0.083

CF Multiple

11 11 9 9

Currently Trading With A Multiple of

8.9 Times Cash Flow

8

Annualizing CF On Last Quarter Report


CAD$(Millions)

Q3 2017 Q3 2018

(TTM)

Last 2Yrs Price to CF

Multiple Range

Q3 2018 Implied Share Price

Cash Flow From

Operations 3.3 13.0

10-13

$3.30 to

$4.16Cash Flow Per Share

0.08 0.33

Assumes 10-13 times $0.33

cash flow per share

(TTM)

10% 13% 12% 14%

51015

Q4-16 Q1-17 Q2-17 Q3-17

Gross Margin % +40%

9*CF (Cash Flow) based on Q3-2017 cash flow from operating activities before change in working capital annualized; US to CAD exchange 1.25

Strong Strategic Partner With Swiss Co

PX Precinox (www.pxgroup.com)

• Is one of 10 companies under the PX Group

• Experts in precious metal refining

• Mastered the process of high quality refining to finishing

• A leading Swiss producer of gold bars

• Partner of the PX Impact Gold Program


Circulating New PX Impact Gold

A lasting & positive contributionto the economic, social and environmental development of our mining communities

Environmental, social and ethical practices that respect human rights are an

integral part of the PX Impact Gold program

Guarantees complete traceabilityacross the gold ore supply chain coming

from government registered miners in Peru

The fund finances projectsin health, education, economic dev & the environment of the mining communities

An investment premium flows back

to our miner’s

communities

100% of the premium is paid into

the fund and reinvested into Dynacor’s mining

communities

PX ImpactEquals

Ethical Gold


Strategic Plan


Short Term Strategy > 3 – 12 Months• Self fund throughput growth to 360 TPD (CAPEX <$1M)• Propel Dynacor to largest gold ore processer in Peru (currently #2) • Define new dividend policy• Execute drill plan & advance flagship gold project, Tumipampa

Medium Term Strategy > 2 – 5 Years• Expand throughput growth to 600+ TPD• Bring to fruition low risk development plan on gold project, Tumipampa• Establish world renown brand as socially accountable high quality gold • Target yield contraction through responsible shareholder dilution plan and

per share growth (a sustainable/steady dividend history)

12

Our Exploration Asset, Tumipampa


• 500 km southeast of

Lima

• 9,756 ha

• Surface results pending

• Drilling planned for

2018 (drill results)

• 21,610 meters of drill

results

• 2,881 meters of

underground workings

13

Concession Map


CONCESSION MAP

TUMIPAMPA IV 2014

TUMIPAMPA III 2014

TUMIPAMPA VB 2014

TUMIPAMPAVI 2014

TUMIPAMPA VII 2014

TUMIPAMPA VIII 2014

PROYECTO TUMIPAMPA

MERIDIAN(HORIZONTE)

BARRICK

GOLDENIDEALGOLD

MINING

SUPERSTRONG

MERIDIAN(HORIZONTE)

MERIDIAN(HORIZONTE)

ORTEGA

TRIVEÑO

ORTEGA

ORTEGA ORTEGA

ORTEGA

CHANCADORA CENTAURO

IAM GOLD

SOUTHERNPERU

TAPAIRIHUAJA(VETADORADA)SOUTHERNPERU

BARRICKFRESNILLO PERU

SOUTHERNBARRICK

ANGLOAMERICAN

FRESNILLO PERU

BEER CREEK

CONCESIONES TUMIPAMPA

9755.60 Aprox. Has -Área neta

Total 22 Concesiones

Escala Gráfica

PETITORIOS EN DISPUTADESDE EL 2014

0 1 2km

ZONAS LIBRES

CONCESIONES PERSONASNATURALES Y/O PPM

TUMIPAMPA IX 2014

TUMIPAMPAX 2014

TUMIPAMPAXI 2014

TUMIPAMPAXII 2014

NICOLE 11

DISEMINADOTUMIPAMPA

V 2014

MINERA DEL NORTE SA

14

Geological Map Of Disseminated Zone


0 1 KM

N

Sym >=Minimum <Maximum

0.00 < 0.05

0.05 0.10

0.10 0.30

0.30 1.00

1.00 3.00

>= 3.00 100.00

Au (gr/tn)

Mármol

Km-Fe

Cuarzomonzonita

Laguna

patacocha

31.16 g/t AuVeta sondoro

22.09 g/t Au

7.38 g/t Au

4.86 g/t Au

9.01 g/t Au3.66 g/t Au

3.35 g/t Au

SECCION L 37800

35. 58 g/t AuBx. Adriana

11.30 g/t Au5.06 g/t Au4.56 g/t Au

19.49 g/t Au

3.17 g/t Au3.57 g/t Au

6.15 g/t Au

8.21 g/t Au7.63 g/t Au

18.18 g/t Au

16.79 g/t Au

10.94 g/t Au

28.60 g/t Au

Caliza Km-Fe

1.26 %/Cu

LEYENDA

BOFEDAL

CUARZO MONZONITA

MARMOL (Ki- Fe)

CALIZA (Ki-Fe)

CUARCITA

FALLA

VETAS

CUARZO DIORITA

EXOSKARN

CUATERNARIOLAGUNASANOMALIA CARGABILIDAD

Manto LuchaANOMALIA 2

ANOMALIA 3

ANOMALIA 4

ANOMALIA 1

ANOMALIA 5

ANOMALIA 6

Veta Cuyana

Cuerpo Sumac

15

Investment In Dynacor


Near Term Catalysts

✓Recent debt free status removes interest from 2018 financials✓Lower costs and higher earnings with greater gold production✓2018 quarterly financials comparing to 2017 start up year ✓Annualized CF per share of CAD $0.33 (P/CF range 10-13X)✓Defining new dividend policy (increases ROI) ✓Renewing Tumipampa drill campaign (drill results)

16

Forward Looking Statements

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This presentation contains certain forward-looking statements regarding operational information, futureexploration and development plans and anticipated future production. Words such as, potential”, “building”“inferred”, “if”, “will”, “expect”, “forecast”, “estimate”, “consider”, “may”, “possible” and similar expressions havebeen used to identify these forward-looking statements. These statements are management’s current beliefs andare based on information currently available to management.

Forward-looking statements involve significant risk and uncertainties. A number of factors could cause actualresults to differ materially from the results discussed in the forward-looking statements including, but not limitedto, 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. Investorsshould not place under reliance forward-looking statements.

Forward-looking statements and other information contained herein concerning the metals and mining industryand Dynacor’s general expectations concerning the industry are based on estimates prepared by managementusing data from publicly available industry sources as well as from private sources, industry analysis and onassumptions 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 anyindustry data presented herein, the industry involves risks and uncertainties and is subject to change based onvarious factors. There is no certainty the projections will be met.

Canadian | TSX: DNG

American | OTC (Q): DNGDF

dynacor.com | [email protected]

Director, Investor Relations Dale Nejmeldeen (604) 492 0099

january 2018 investor presentation - dynacor gold mines · barrick golden ideal gold mining super...

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