Dynacor Group's Strategic Acquisition in Ecuador
ACQUISITION TO ENHANCE PROCESSING CAPACITY
OPPORTUNITIES FOR GROWTH THROUGH EXPANSION
Montreal — Dynacor Group Inc. (TSX: DNG) is thrilled to unveil a significant development in its growth strategy with the signing of a share purchase agreement to acquire Arkham Metals SAS in Ecuador from Pelorus Minerals Limited. The total cost of this acquisition amounts to $9.75 million for full ownership of a permitted processing plant designed for 1,500 tons per day (tpd).
The newly acquired facility, referred to as “Svetlana,” is strategically situated in Portovelo, a key area rich in mining history within Ecuador's El Oro province. Although the plant has been under care and maintenance since the second quarter of 2020, Dynacor has ambitious plans to rejuvenate it. Under the company's expansion strategy, an additional investment of up to $25 million will be made to enhance the plant to achieve an operational capacity of 300 tpd by 2026. This initiative will be financed through previously secured funds amounting to $22.1 million.
Jean Martineau, President and CEO of Dynacor, articulated the importance of this acquisition, stating, "This purchase marks a pivotal moment in our goal to reach a production milestone of half a million ounces of gold. Not only does it represent our entry into a diverse geographical territory, but acquiring Svetlana will significantly boost our processing capacity. The plant provides us an excellent opportunity to expand our ore purchasing network, a vital element of our business model. We are deeply appreciative of our shareholders’ ongoing support and look forward to realizing our growth ambitions together."
Transaction Highlights and Insights
Understanding the strategic elements of this acquisition reveals why it is so crucial for Dynacor’s future:
Becoming a Multi-Asset Gold Processor
This acquisition enhances Dynacor's position as it secures its second processing facility and its first in Ecuador, thereby solidifying its footprint in the Latin American gold processing market. The plant, once operational, is projected to add around 75,000 ounces of silver equivalent to the company's annual production.
Leveraging Experience in Carbon-in-Pulp Technology
The acquisition of a carbon-in-pulp (CIP) processing plant aligns perfectly with Dynacor's extensive expertise in operating carbon-in-leach (CIL) facilities for several decades. This operational know-how will facilitate the optimization of Svetlana's production processes.
Potential for Increased Output and Market Reach
Svetlana is equipped to handle 1,500 tpd, although it will initially ramp up to a production capacity of 300 tpd. This strategic approach allows Dynacor to effectively manage operational costs while gradually increasing output. The deal includes vital components such as a dedicated mining fleet and a modern tailings dam, bolstering Dynacor's confidence in responding to the growing artisanal and small-scale gold mining (ASGM) sector in Ecuador.
Strategic Location for Growth
Positioned in Ecuador's primary gold processing hub, the plant is nestled within a region that boasts a longstanding tradition of artisanal mining. This favorable positioning provides Dynacor with a solid foundation for expansion and access to a larger network of gold sources.
About Dynacor Group Inc.
Founded in 1996, Dynacor Group is dedicated to creating a sustainable gold processing system aimed at benefiting artisanal miners. The company has established a responsible mineral supply chain with rigorous traceability standards. By catering to partially formalized miners, Dynacor fosters a cooperative approach beneficial to both mining communities and government entities. Currently, the firm operates its Veta Dorada plant and holds gold exploration rights in Peru, with plans to expand its operations to West Africa and elsewhere in Latin America.
Dynacor’s commitment extends beyond business, with the premium from its PX Impact® gold sales directed towards the Fidamar Foundation. This NGO invests in essential health and education programs for artisanal and small-scale mining communities in Peru.
Frequently Asked Questions
What is the main purpose of Dynacor's acquisition?
The acquisition aims to enhance Dynacor's processing capacity and diversify its geographic operations in gold processing.
How much is Dynacor paying for the processing plant?
The total cost for acquiring the processing plant is $9.75 million.
What production capacity is Dynacor targeting for the new plant?
Dynacor aims to ramp up the plant's operational capacity to 300 tons per day by 2026.
What credentials does Dynacor have in processing gold?
Dynacor has decades of experience in operating carbon-in-leach (CIL) facilities, which aligns well with the new carbon-in-pulp (CIP) plant technology.
What initiatives is Dynacor supporting for the mining communities?
The company supports community development through the Fidamar Foundation, focusing on health and education for artisanal mining communities.
