These documents have been filed electronically with SEDAR at www.sedar.com and will be available on the Corporation's website www.dynacor.com.
(All figures in this press release are in Ms of US$ unless stated otherwise. All amounts per share are in US$. All variance % are calculated from rounded figures. Some additions might be incorrect due to rounding).
Q2-2021 OVERVIEW AND HIGHLIGHTS
OVERVIEW
Dynacor completed the three-month period ended
The Corporation ore purchasing, and processing activities continued to be very strong with 31,280 tonnes of ore purchased and 30,374 tonnes processed.
With growing volumes of gold sold, the Corporation was able to increase its quarterly sales for the fourth consecutive quarter.
Considering the fast growth of its ore purchase volume, the Corporation decided to move ahead with the construction on the plant expansion which was originally planned for the third quarter. The expansion work has been completed in June well ahead of time and under budget.
The plant was fully commissioned and successfully ran at 400 tonnes per day (“tpd”) during 11 days in June. Subsequent to the quarter end, the daily throughput was increased to the maximum capacity of 430 tpd. The mill has been operating at full capacity for the last five weeks.
HIGHLIGHTS
Operational
- Ore inventory covering one month of production. With a new record quarter of ore purchased (31,280 tonnes in Q2-2021) and despite the increase in volume processed, the Corporation maintained a level of inventory exceeding 11,000 tonnes. This represents a 41.5% increase vs. the end of 2020.
- Highest quarterly volume processed. In Q2-2021, despite down-time periods due to maintenance or plant expansion activities, the Veta Dorada plant processed a historical high volume of 30,374 tonnes of ore (334 tpd average) compared to 29,327 in Q1-2021 (326 tpd) and 3,244 tonnes (136 tpd) in Q2-2020. (Considering 91 days in Q2-2021, 90 days in Q1-2021 and 24 potential working days due to Covid-19 restrictions plant shut-down in Q2-2020);
- Another quarter-to-quarter production increase. During Q2-2021, gold equivalent production amounted to 25,172 AuEq ounces compared to 21,975 AuEq in Q1-2021 (14.5% increase) and 1,935 AuEq ounces in Q2-2020.
Financial
- Record quarterly sales. With slightly higher average selling prices (+1.8%) and higher quantities sold (+2.7%), compared to the last record quarter (Q1-2021), sales amounted to
$42.8 million in Q2-2021 compared to$40.9 million in Q1-2021 and$8.0 million in Q2-2020; - Increased gross operating margin. Gross operating margin of
$6.5 million (15.2% of sales) in Q2-2021, compared to$5.3 million (13.0% of sales) in Q1-2021 and nil in Q2-2020; - Strong net income. Net income and comprehensive income of
$2.2 million (US$0.06 per share) similar to Q1-2021 ($2.1 million ) and compared to a net loss of (-$0.7 million ) in Q2-2020; - Record cash gross operating margin. The Q2-2021 cash gross operating margin in surpassing
$300 per AuEq ounce sold (1) compared to$257 in Q1-2021 and$117 in Q2-2020; - Quarter to quarter increase in EBITDA(2).
$5.0 million compared to$4.6 million in Q1-2021 (a 8.7% increase) and nil in Q2-2020; - Stable cash-flow from operating activities before change in working capital items. Cash flow from operating activities before change in working capital items of
$3.2 million (US$0.08 per share) (3), stable for the third consecutive quarter and compared to nil in Q2-2020; - Solid cash position. Cash on hand of
$13.4 million atJune 30, 2021 compared to$11.9 million at year-end 2020.
Cash Return to Shareholders
- 33% increase in monthly dividend from
June 2021 . During Q2-2021, dividends totaling$0.5 million (CA$0.6 million) were paid including a CA$0.0067 monthly dividend inJune 2021 .
(1) Cash gross operating margin per AuEq ounce is in US$ and is calculated by subtracting the average cash cost of sale per equivalent ounces of Au from the average selling price per equivalent ounces of Au and is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another company.
(2) EBITDA: “Earnings before interest, taxes and depreciation” is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another corporation. The Corporation uses this non-IFRS measure as an indicator of the cash generated by the operations and allows investor to compare the profitability of the Corporation with others by canceling effects of different assets bases, effects due to different tax structures as well as the effects of different capital structures.
(3) Cash-flow per share is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another corporation. The Corporation uses this non-IFRS measure which can also be helpful to investors as it provides a result which can be compared with the Corporation market share price.
RESULTS FROM OPERATIONS
Extract from Consolidated Statement of net income and comprehensive income
Three-month periods ended | Six-month periods ended | |||||||||||
(in $'000) | 2021 | 2020 | 2021 | 2020 | ||||||||
Sales | 42,777 | 8,007 | 83,686 | 38,876 | ||||||||
Cost of sales | (36,260 | ) | (7,975 | ) | (71,866 | ) | (33,895 | ) | ||||
Gross operating margin | 6,517 | 32 | 11,820 | 4,981 | ||||||||
General and administrative expenses | (2,002 | ) | (746 | ) | (3,210 | ) | (1,837 | ) | ||||
Other projects | - | (13 | ) | (16 | ) | (141 | ) | |||||
Operating income | 4,515 | (727 | ) | 8,594 | 3,003 | |||||||
Income before income taxes | 4,267 | (755 | ) | 8,195 | 2,892 | |||||||
Current income tax expense | (1,835 | ) | 85 | (3,389 | ) | (1,137 | ) | |||||
Deferred tax expense | (270 | ) | (15 | ) | (538 | ) | (55 | ) | ||||
Net income and comprehensive income | 2,162 | (685 | ) | 4,268 | 1,700 | |||||||
Earnings per share | ||||||||||||
Basic | $ | 0.06 | ( | ) | $ | 0.11 | $ | 0.04 | ||||
Diluted | $ | 0.06 | ( | ) | $ | 0.11 | $ | 0.04 |
Total sales amounted to
The Q2-2021 gross operating margin reached
General and administrative expenses amounted to
The Q2-2021 net income was again affected by the recording of a
Reconciliation of non-IFRS measures
(in $'000) | Three-month periods ended | Six-month periods ended | |||||||
2021 | 2020 | 2021 | 2020 | ||||||
Reconciliation of net income and comprehensive income to EBITDA | |||||||||
Net income and comprehensive income | 2,162 | (685 | ) | 4,268 | 1,700 | ||||
Income taxes | 2,105 | (70 | ) | 3,926 | 1,192 | ||||
Financial expenses | 57 | 31 | 108 | 49 | |||||
Depreciation | 648 | 599 | 1,291 | 1,239 | |||||
EBITDA | 4,972 | (125 | ) | 9,593 | 4,180 |
CASH FLOW FROM OPERATING, INVESTING AND FINANCING ACTIVITIES AND
WORKING CAPITAL AND LIQUIDITY
Operating activities
During Q2-2021, the cash flow from operations, before changes in working capital items, amounted to
During Q2-2021, total cash from operating activities amounted to (
Investing activities
During the three-month period ended
Financing activities
In Q2-2021, three monthly dividends totaling CA$0.0167 per share were disbursed for a total consideration of
During the period, 129,107 common shares (cumulative 180,332 common shares in 2021) were repurchased under the Corporation’s normal course issuer bid share buyback program for a total cash consideration of
In Q2-2021, 167,500 common shares were issued following the exercise by directors of the Corporation of 167,500 purchase options for a total consideration of
In 2021, the corporation made quarterly repayments of lease liabilities for
Working capital and liquidity
As at
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at
(in $'000) (unaudited) | As at | As at |
2021 | 2020 | |
Cash | 13,446 | 11,868 |
Accounts receivable | 8,858 | 8,434 |
Inventories | 17,127 | 13,401 |
Property, plant and equipment | 20,238 | 19,677 |
Right-of-use assets | 1,143 | 834 |
Exploration and evaluation assets | 18,526 | 18,510 |
Other assets | 4,027 | 3,572 |
Total assets | 83,365 | 76,296 |
Trade and other payables | 9,721 | 7,082 |
Asset retirement obligations | 3,585 | 3,604 |
Current tax liabilities | 1,275 | 1,124 |
Deferred tax liabilities | 1,574 | 1,036 |
Lease liabilities | 1,122 | 706 |
Shareholders' equity | 66,088 | 62,744 |
Total liabilities and equity | 83,365 | 76,296 |
OUTLOOK 2021
Ore processing
The Corporation continues to achieve strong levels of ore purchase which permitted the processing of high tonnage of ore during the period.
The Corporation recently announced the completion of the expansion project of its Veta Dorada processing plant which has enabled the increase of the throughput level from 345 tpd to 430 tpd, an increase of 25%.
For 2021, the Corporation issued financial and capital expenditure guidance(1), forecasting
(1) Assumptions
i) average CA/US exchange rate of 1.273:1
ii) 2021 financial guidance is based on an average gold price of
ABOUT DYNACOR
Dynacor is a dividend-paying industrial gold ore processor headquartered in
The corporation intends to expand its processing operations in other jurisdictions as well.
Dynacor produces environmental and socially responsible gold through its PX IMPACT® gold program. A growing number of supportive firms from the fine luxury jewelry, watchmakers and investment sectors pay a small premium to our customer and strategic partner for this PX IMPACT® gold. The premium provides direct investment to develop health and education projects for our artisanal and small-scale miner’s communities.
Dynacor is listed on the
FORWARD-LOOKING INFORMATION
Certain statements in the preceding may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Dynacor, or industry results, to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statements. These statements reflect management’s current expectations regarding future events and operating performance as of the date of this news release.
(
Shares Outstanding: 38 916 797
Website: http://www.dynacor.com
Twitter: http://twitter.com/DynacorGold
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