Dynacor Gold posts record EBITDA in Q2, shares rise
Dynacor Gold Mines Inc. [DNG-TSX} shares rallied Thursday after the company released its financial statements for the second quarter ended June 30, 2024.
Dynacor completed the quarter with sales of US$67.4 million, a net income of US$4.5 million (12 cents per share) and record EBITDA (earnings before interest, tax, depreciation and amortization) of US$8.3 million. That compares to sales of US$64.5 million, net income of US$4.5 million (12 cents) and EBITDA of US$6.6 million in the second quarter of 2023
Dynacor shares rose 3.54% or 18 cents to $5.26. The shares currently trade in a 52-week range of $5.75 and $3.00.
Dynacor is a dividend-paying industrial ore processor headquartered in Montreal. The company is engaged in gold production through the processing of ore purchased from the ASM (artisanal and small-scale mining) industry. Through a subsidiary called Veta Dorada, the company buys ore form Artisinal Small Miners who are enlisted in the formalizing process of the Peruvian government.
A key asset is the 500 tonnes per day Veta Dorada processing plant in Chala, Peru. In a May 9, 2024 press release, the company said the Veta Dorada plant was certified in compliance with the International Cyanide Management Code.
The Cyanide Code is a voluntary mining industry program centred on the safe and environmentally responsible management of cyanide by companies that produce gold and/or silver and by companies that manufacture, store and transport cyanide. The company said its Veta Dorada subsidiary is the first company that processes gold ore acquired from ASMs to obtain a successful certification.
During the second quarter of 2024, the Chala plant continued to run at its maximum 500 tonnes-per-day capacity, processing almost 43,000 tonnes. However, the company said gold equivalent (AuEq) production was reduced due to the lower grades of ore processed. In the second quarter, gold equivalent production reached 28,364 AuEq ounces, compared to 32,693 ounces in the second quarter of 2023.
The company said it currently has US$34.7 million in cash, up from US$22.5 million at the end of 2023.
In the second quarter of 2024, net income was affected by the recording of a US$3.1 million income tax expense, including a US$0.2 million (non-cash) deferred income tax expense (US$1.5 million, including the recording of withholding taxes on dividends received from a Peruvian subsidiary and a deferred tax recovery of US$0.3 million in the second quarter of 2023. The tax expense (current and deferred) is affected by the variance throughout the period of the Peruvian Sol against the US$.
Referring to the outlook for 2024, Dynacor is forecasting sales ranging between US$265 million and US$285 million, representing growth of 6.0-14% over 2023 sales. Net income is forecast at between US$12 million and US$15.0 million ($0.33-$0.41 per shares, and include expenses of US$2.7 million to advance other projects in other jurisdictions. So far in 2024, the company is in line with its financial forecasts