- Dynacor Gold Mines (DNG) has reported its first net loss in 36 quarters, following a difficult few months for Peruvian miners.
- The company’s second quarter operations fell from 22,737 tonnes of ore processed last year to just 3,244 tonnes of ore processed this year
- Gold produced also fell from 18,095 gold ounces in last year second quarter to just 1,897 ounces in this year’s same quarter
- All this combined to form a net loss for the quarter of $700,000, compared to a profit of $700,000 in last year’s same quarter
- Dynacor Gold Mines (DNG) is down 3.83 per cent and is trading at C$2.26 per share
Dynacor Gold Mines (DNG) has reported its first net loss in 36 quarters, following a difficult few months for Peruvian miners.
Dynacor is a nominally a Peruvian gold producer, but it distinct from its peers in that it doesn’t actually operate any mines. Instead the company purchases unprocessed ore from artisanal and small-scale mining operations in the region, which it then processes through a third-party refinery.
During the COVID-19 stricken quarter, the company attempted to monetise its gold inventory and receivables, as the Peruvian Government shutdown mining operations throughout the country, cutting off Dynacor’s supply.
Consequently, the company was forced to stop its ore purchase activities and temporarily shut-down its processing operations for almost three months, which has subsitnaitally impacted its second quarter results.
In 2019’s same qaurter the company processed 22,737 tonnes of bought ore, versus just 3,244 tonnes this quarter. Quarterly gold production for the quarter dropped from 18,095 ounces last year to just 1,897 ounces this year. As a result, sales dropped from $22.7 million in last year’s June quarter to $8 million this year.
All this combined to form a net loss for the quarter of $700,000, compared to a profit of $700,000 in last year’s same quarter. However, a vastly improved gold price this year compared to last year helped alleviate some of the production losses.
The company also took steps to de-risk its operations and shore up its financial position by reinforcing its balance sheet.
Dynacor widely achieved the goal of strengthening its balance sheet, improving its overall cash position compared to last year’s second quarter by $4.5 million.
Dynacor Gold Mines (DNG) is down 3.83 per cent and is trading at C$2.26 per share at 11:53am EDT.