Vancouver, B.C., April 2, 2012 - Dynasty Metals & Mining Inc. ("Dynasty" or the "Company") (TSX: DMM, OTCQX: DMMIF) has released its audited consolidated financial statements for the year ended December 31, 2011 and related management's discussion and analysis, which are available for viewing on the Company's website (www.dynastymining.com) and on SEDAR (www.sedar.com).
All dollar amounts in Unites States dollars unless otherwise stated.
Production and Sales
In 2011, the Company had sales of approximately $34.2 million from shipments of approximately 20,500 ounces of processed gold and 64,000 ounces of processed silver derived from intermittent operations at its processing plant in Zaruma while continuing testing and making improvements to the facility. Since operations at the Company's Zaruma Gold Project are in the pre-commercial phase, the proceeds from the sale of precious metals, net of production expenses and taxes, are credited to mine development costs and not recorded in the Company's consolidated statements of operations as permitted under International Financial Accounting Standards.
In the fourth quarter of 2011 the Company commenced construction of a gravity concentration circuit to enable the more efficient processing of mined material containing higher grade coarse gold. The circuit is expected to be operational late in the second quarter of this year, providing certain equipment the Company has ordered from overseas is delivered on schedule.
The Company is developing three separate mines, of which one mine currently supplies the majority of material to the plant for processing. The declines at the other two mines are currently under construction with mining activity expected to commence later this year. The Company expects meaningful contributions from these mines once the declines are completed and mining activities commence. A significant proportion of material processed to date has been excavated during mine development and is not part of the Company's estimated resource set out in its Technical Reports on the Zaruma Gold Project.
The Company currently estimates that it has approximately 25,000 tonnes of mined material, at varying grade, stockpiled at the plant for future processing.
As at December 31, 2011, the Company had $9.0 million in cash and gold dore available for sale, compared to $6.4 million as at December 31, 2010. The increase is primarily the result of selling precious metals produced during pre-commercial testing less production costs, administration expenses and capital expenditures.
The majority of the proceeds from the sale of precious metals are being re-invested in the Zaruma Gold Project to continue the advancement of the three declines to continue to develop the project towards commercial production. The cash provided from gold and silver sales has allowed for the continued development of the project without the need for equity financing and further dilution to shareholders. As at December 31, 2011 the Company had 42.5 million shares outstanding and, with the exception of the exercise of incentive stock options, has not undertaken an equity financing since April, 2010.
Subsequent to December 31, 2011, the Company exported an additional 4,568 ounces of gold and 7,085 ounces of silver for sales of approximately $7.9 million. Production in the first quarter of 2012 was reduced as a result of processing lower grades while higher grade material is being stockpiled until the gravity concentration circuit is operational to ensure a reasonable recovery of gold.
The Company is engaged in discussions with the Government of Ecuador and is committed to working towards completing a mining agreement which will establish the royalty and other taxes payable to the Government and set the substantive terms under which the Company will continue its operations over the estimated life of its mines. During the interim, the Company continues to make royalty payments of 5% to the government based upon sales of precious metals.
The selected financial information presented herein is qualified in its entirety by, and should be read in conjunction with the Company's audited consolidated financial statements as at and for the year ended December 31, 2011 and the related notes thereon and Management's Discussion and Analysis, which are available on SEDAR.
About Dynasty Metals & Mining
Dynasty Metals & Mining Inc. is a Canadian based mining company involved in the exploration and development of mineral properties in Ecuador.
The Company has the producing Zaruma Gold Project, the advanced-stage Jerusalem Project, and a highly prospective exploration project, the Dynasty Copper-Gold Belt, which includes the advanced-stage Dynasty Goldfield.
For further information regarding the Company's Zaruma project readers should refer to the Company's Independent Technical Report entitled "Independent Preliminary Assessment - Zaruma Project - El Oro Province" dated August 21, 2006, available on SEDAR at www.sedar.com.
For further information please visit the Company's website at www.dynastymining.com, or please contact:
|Dynasty Metals & Mining Inc.|
Tel: (604) 687-0888
|Brisco Capital Partners Corp.|
Tel: (403) 262-9888
This news release contains certain forward-looking statements that reflect the current views and/or expectations of Dynasty with respect to its performance, operations and future events, including statements regarding the Company's mining contract negotiations with the Ecuadorian government and future business plans . There can be no assurance the Company will be able to continue to substantially finance its mine development activities from the sale of precious metals as there are numerous factors beyond the control of management that may impact future mine and plant production. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Company operates, including assumptions relating to the Company's ability to successfully negotiate a satisfactory exploitation contract; that all governmental approval and permits will be received; that the terms of the exploitation contract will allow the Company to develop its mining project in accordance with its business plan; and that the gravity concentration circuit will result in improved recovery of gold. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Investors are cautioned that all forward-looking statements involve risks and uncertainties including that the Company will be unable to negotiate an exploitation contract on terms satisfactory to the Company and in the expected timeframe or at all; that the terms and conditions of the final exploitation contract will be restrictive on the Company's business; that the terms and conditions of the exploitation contract will impede the Company's development plans at its Zaruma Project; that the Company will be unable to implement its business plan as anticipated; and other risks and uncertainties listed in the Company's public filings. Furthermore, past performance should not be viewed as an indication of future performance. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements, which are qualified in their entirety by this cautionary statement. There can be no assurance that forward-looking statements, or the material factors or assumptions used to develop such information, will prove to be accurate.