Investor Presentation (September, 2018)
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. dynacor.com dynacor.com DNG – TSX | DNGDF - OTC (Q)
About Dynacor • Headquartered in Montreal, Canada; • Produces environmentally responsible gold; • 20 years of experience in manufacturing gold dore bars from hundreds of Peruvian artisanal formalized miners; • 100% ownership of an advancing 9,102 hectare gold project with three different mineralized zones; • Lowest quartile for both basic and fully diluted shares outstanding 3 dynacor.com DNG – TSX | DNGDF - OTC (Q)
A Future Global Leader – Gold Ore Processing A low cost gold A dividend growth company; producing model in Peru Plans to leverage expertise and expand business model to both Peru and other that has jurisdictions; delivered 29 Decades of experience in the business of quarters of processing ore from small scale miners; consecutive net profits Blue chip long-term strategic partner in PX Precinox | PX Group; amounting to a cumulative USD Strong balance sheet with no debt and USD 40.7M 10.8 million cash on hand; (CAD 45.3M) Only 39.7 million shares outstanding. dynacor.com 4 dynacor.com DNG – TSX | DNGDF - OTC (Q)
The Dynacor Ore-Processing Model 3 Pay miners after Weigh, assay and 2 24 hours from screen ore delivery and deliveries for process ore gold content through mill at our new modernized plant 4 After 10-14 days Receive ore of processing 1 shipments from Receive payment 5 hundreds for gold dore bars government from strategic registered partner, PX Peruvian artisanal Precinox within 12 gold miners hrs of export 5 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Deliver, Return and Grow In 2018 Return Cash To Shareholders Growth Buyback Expand Grow Dividend Buyback Dynacor New Dividend Increase TPD By Look At Other Shares in 2018 Plan in 2018 20% in 2018/19 Projects in 2018 Share purchases Recently announced Expand capacity to Grow production in on the open new dividend 360 tpd from and out of Peru market at payment 300 tpd & monetize flagship market price project, Tumipampa “The Company Expects its Best Year Ever in 2018” *Cash gross operating margin per equivalent ounce Au, is calculated by subtracting the average cash cost of sale per equivalent ounces of Au from the average selling price per equivalent ounces 6 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Manufacturing Plant in Peru • New modern plant opened in October 2016; • 300 TPD CIP ore processing plant with design for future 600 TPD expansion; • 150,000 artisanal miners in Peru; • 15,000 currently in the formalization process; • Government announced 50% expect to be formalized in the next 5 years; • Currently hundreds of miners supply high grade ore to Dynacor 7 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Events Timeline 2016-2017 Receives Official Registration By SUNARP Of All Permits Receive Conformity Certificate From MEM Feb 22 Jun 13 File Updated 43-101 Tech Report For Tumipampa Nov 1 Double Land Concession Of Tumipampa Nov 10 Adds New Ore Providers Nov 18 Receive Water Usage Permit Jul 28 Extend High Grade Gold Raise At Begin Operations At New 300 TPD Plant Pay Off Long-Term Credit Facility And Tumipampa Become Debt-Free Sep 30 Feb 10 Dec 29 Reach Record High Of CAD $3.71 Per Share Form Strategic Alliance With PX Precinox And Launch Sep 6 New Impact Gold Program Close USD 10M Credit Facility Oct 12 Jan 15 Q1 2016 Q1 Q2 Q3 Q4 Q2 Q3 Q4 2017 2017 Mar 1 Extend Drift & Discover New Gold Zone At Tumipampa Sep 2 Receive Final Operating Permit Oct 14 Pour First Gold At New Plant May 25 Complete Construction Of USD 20M Processing Plant Jun 17 Issue 950K Shares For Proceeds Of CAD 1.7M Following Exercise Of 950K Warrants 8 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Catalyst Timeline Near-Term Receive Community Approval To Drill Test Tumipampa Disseminated zone Release Q1-2018 Financial Report Release 2017 Year-End Financials Announce 3 Year Strategic Plan Report Gold Production for 2018 Declare First Quarterly Dividend Launch Share Buyback Program Pay First Quarterly Dividend Declare Second Quarterly Dividend Pay Second Quarterly Dividend Q1 2018 2019 Q1 Q2 Q3 Q4 2019 Release Q2-2018 Financial Report Release Q3-2018 Financial Report Make Decision On Expanding Production Business To Other Jurisdiction Conduct Geophysical Study On Tumipampa DZ 9 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Current Valuation Ratios vs 5 Year Average Current Ratios vs 5 Year Average CURRENT 14.5 USD EPS 9.0 10.5 0.14 4.8 (TTM) 3.3 4.9 0.9 1.5 PE PCF PBV EV/EBITDA Current 5 YR Avg Variance -38% -40% -50% -54% PRICE DIFFERENCE *Please note: EBITDA is a non-IFRS financial measure 10 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Earnings Growth Back on Track TTM (Trailing Twelve Months) Earnings History (USD Millions) 29 Consecutive 9.1 9.0 9.0 Quarters of 8.7 Profit 8.1 1-Year 7.7 105% 7.0 6.9 6.5 Earnings 6.4 6.1 6.1 Growth 5.5 5.3 5.1 4.5 4.2 3.8 3.5 3.4 3.4 3.3 3.2 2.8 2.7 2.7 2.6 0.4 Q3-2011 Q1-2012 Q3-2012 Q1-2013 Q3-2013 Q1-2014 Q3-2014 Q1-2015 Q3-2015 Q1-2016 Q3-2016 Q1-2017 Q3-2017 Q1-2018 Dynacor TTM Earnings and Quarterly History 11 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Increase Profitability Recovery/ • Increase gold recovery rates • Increase production capacity to 360 tpd in 2018/19 Production and 450 tpd in 2020 Energy/ • Upgraded to electrical power vs costly diesel generators Chemicals • Optimize chemical and water recycling • Reduce consumption of chemicals Modernize/ • Improve automation • Develop new technology to reduce costs and Technology increase efficiency of each operational segment 12 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Accelerate Growth Latin Peru Globally America Double the Company’s current Expand company’s Purchase and/or processing capacity business model build other plants at the Veta Dorada worldwide plant Plan to have one new Enter into plant operating by 2021 partnerships to and a 3 rd plant in the expand more rapidly pipeline 13 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Strong Strategic Partner With Swiss Company PX Precinox • Is one of 10 companies under the PX Group • Experts in precious metal refining • Mastered the process of high quality refining • A leading Swiss producer of gold bars • Partner of the PX Impact Gold Program WWW.PXGROUP .COM 14 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Circulating New PX Impact Gold Environmental, social and ethical Guarantees complete traceability practices that respect human rights are an integral across the gold ore supply chain coming from part of the PX Impact Gold program government registered miners in Peru PX Impact An investment 100% of the premium flows back to premium is paid into the Equals our fund and reinvested into miner’s our Ethical Gold communities mining communities A lasting & positive contribution The fund finances projects to the economic, social and environmental in health, education, economic dev & the development of our mining communities environment of the mining communities 15 dynacor.com DNG – TSX | DNGDF - OTC (Q)
Capital Market Summary (June 30, 2018) Market Summary Stock Price (Year High-Low) $2.26 - $1.47 CAD Ticker Symbol DNG – TSX | DNGDF - OTC Shares Outstanding (Basic) 39.7M Warrants Nil Quarterly Dividend 0.01 CAD Dividend Yield 2.5% Director & Senior Management Ownership 3.64% Capital Structure Market Capitalization 72.6M CAD Debt Nil 16 dynacor.com DNG – TSX | DNGDF - OTC (Q)
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