Dynacor Gold Mines Inc. reports record gold sales of 8.27 million dollars in Q2 2008

    Dynacor Gold Mines Inc. (dynacor)
    Symbol: DNG
    Toronto Stock Exchange (TSX)

    MONTREAL, Aug. 25 /CNW Telbec/ - Dynacor Gold Mines Inc. (Dynacor
TSX:DNG) is pleased to announce record gold sales of 8.27 million dollars as
well as its financial results for the 2nd quarter of 2008. The consolidated
financial statements (all currency figures appear in Canadian dollars unless
otherwise specified) along with the management's discussion and analysis are
available for the viewing on the Dynacor's website at www.dynacorgold.com and
the documents have been filed with SEDAR at www.sedar.com.

    Highlights for the three-month and the six-month periods ended June 30,

    - Gold sales of 8,710 ounces at an average price of US$894 per ounce and
      total gold sales of 15,976 ounces for the first six months of 2008.
    - Gross earnings of $1,109,342 for the three-month period ($1,834,939 for
      the six-month period ending June 30, 2008).
    - Net earnings of $33,301 for the three-month period and net earnings of
      $261,901 for the six-month period.
    - Working capital of $4,245,367 (June 30, 2008).
    - Cash and cash equivalents of $1.4M (June 30, 2008).
    - For the three-month period ended June 30, 2008, investments amounted to
      $416,458 ($227,678 in exploration (Tumipampa) and $188,780 in capital
      assets for Acari) and $703,392 for the six-month period.

    Gold sales are summarized as follows:

                                                Three-month        Six-month
                                               period ended     period ended
                                              June 30, 2008    June 30, 2008

    Sales of gold (ounces)                            8,710           15,976
                                              -------------    --------------
                                              -------------    --------------

                                                          $                $
    Sales                                         8,269,690       14,980,122
    Cost of sales                                 7,054,413       12,965,588
                                              -------------    --------------
                                              -------------    --------------

    Gross earnings before amortization            1,215,277        2,014,534
    Amortization                                    105,935          179,595
                                              -------------    --------------
    Gross earnings                                1,109,342        1,834,939
                                              -------------    --------------
                                              -------------    --------------

    Total gold production came from the purchase of ore from local producers.

                                                                month period
                                                                    ended on
                                                               June 30, 2008

      Average selling price                                              894
      Average cash cost                                                  765
      Margin before amortization                                         129

    Operating Activities for the three-month period ended June 30, 2008

    The Company recorded net earnings of $33,301. The Company achieved gross
earnings of $1,109,342, which is an increase of US$16 per ounce in comparison
to the first quarter of 2008. Gross earnings were reduced, mainly, by the
selling expenses for Q1 and Q2 of $207,564 (commission of 1.9% of total
sales), general and administrative expenses of $477,060 and the stock based
compensation of $62,260 in relation to the grant of stock options during the
period. The Company recorded a foreign exchange loss of $147,621 resulting
from the decrease in value of the Nuevo Sol compared to the US dollar.

    General and administrative expense can be itemized as follows:

                                                      Three-             Six-
                                               month period     month period
                                                   ended on         ended on
                                              June 30, 2008    June 30, 2008
                                                          $                $

    Peru                                            154,519          297,966
    Salaries                                        104,687          211,835
    Professional fees                                98,077          167,054
    Investor relations                               43,036           82,756
    Office expenses - Canada                         48,265           83,616
    Travel  expenses                                 28,476           50,625
                                              -------------    --------------
                                                    477,060          893,852
                                              -------------    --------------
                                              -------------    --------------

    The Company shares the same senior management with Malaga Inc. Common
expenses are billed to the Company according to their use without surcharge.
The increase in the cost of Peru is mainly due to the increase in the
salaries, as the number of employees increased comparatively to 2007. The
professional fees consist of mainly additional charges relative to the 2007
year end audit. In 2007, there were no investor relations as the Company
wasn't public. Travel expenses are comprised of different trips to Peru by
management as well as meetings with investors.
    The income tax burden is composed of the taxes of the Peruvian subsidiary,
at a rate of 30%. The effective tax rate is different than the statutory rate
because the Canadian parent company recorded a loss and cannot record this tax

    Outlook for Gold Production

    In 2007, the Company had established a production goal of 25,000 ounces
for 2008 with a production capacity of 90 tons per day. This production goal
was updated in the first quarter of 2008 to 30,000 ounces. During the second
quarter, the production capacity increased to 120 tons per day and gold sales
reached 8,710 ounces (7,266 ounces in the first quarter) for a total of
15,976 ounces for the first 6 months of the year.
    In early July, production reached 130 tons per day and Dynacor has started
installing new equipment that will allow it to further increase its daily
milling capacity. The Company's goal is to gradually increase production to
180t/day by the end of 2008.

    Exploration Outlook


    The Tumipampa project is located 500 km from the city of Lima, in the
Chapimarca district, Province of Aymaraes, Department of Apurimac. Dynacor
Gold owns a total of 2,650 hectares which are adjacent to concessions being
explored by the following companies: Yamana Gold, Bear Creek and Southern
    In late 2007, the Company began a 4,000 meter drilling campaign and a
surface exploration program. Initial results were reported in February 2008
(see Press Release dated February 12, 2008) and further results reported in
July 2008 (see Press Release dated July 14, 2008).
    The Company is very pleased with the results obtained so far that have led
to discovery of several new high grade veins and a mineralized Skarn structure
of unknown dimensions.
    Overall, the results obtained suggest that three different types of
mineralization can be encountered on the Tumipampa property, namely:

    1. Gold bearing vein structures with variable widths ranging from
       0.1 to 7 meters and gold grades of up 20.2 g/t.
    2. Disseminated gold mineralization associated with breccias in the
       quartzite rock with gold grades up to 1 g/t, revealed by surface
    3. Gold, copper and iron mineralization associated with Skarn-type
       deposit at the interface between limestones (Ferrobamba formation) and
       marbles and the intrusive body. Twenty-five surface channel and grab
       samples showed gold, silver and copper mineralisation. Three samples
       had approximately 1% copper and gold minerazation ranging from
       2.67 g/t to 9.88 g/t. Twelve samples returned gold grades of over
       1 g/t and up to 15.65 g/t.

    Casaden Property

    The Casaden property is located in the district of Magdalena, 890 km
northeast of Lima, in the Chicama-Yanacocha (Newmont) corridor. In this
region, large mining companies such as Newmont, Barrick, Gold Fields and
Buenaventura have profitable mines. Casaden includes three mining concessions
and covers an area of 1,600 hectares. Like its neighbors, the Casaden property
contains disseminated epithermal gold deposits. Surface exploration work has
been done on the property. The Company is currently studying several options
in order to continue the exploration of Casaden.


    Dynacor is a gold exploration and mining company, that has been active in
Peru through its subsidiaries since 1996. The Company's assets include the
Acari, Casaden and Tumipampa exploration properties. The Acari mill produces
gold by custom milling. Dynacor's strength and competitive advantage comes
with the experience and knowledge the Company has developed while working in
Peru. Its pride remains in maintaining respect and positive work ethics toward
its employees, partners and local communities.

For further information:

For further information: Jean Martineau, President & CEO, Dynacor Gold
Mines Inc., (514) 288-3224; Renmark Financial Communications: Julien Ouimet,
jouimet@renmarkfinancial.com; John Boidman, jboidman@renmarkfinancial.com;
(514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial.com

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890