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Enter Symbol
or Name
USA
CA



Dynasty Metals & Mining Inc
Symbol DMM
Shares Issued 87,828,832
Close 2017-06-02 C$ 0.30
Market Cap C$ 26,348,650
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Dynasty Metals' Zaruma mill operating at 800 tpd

2017-06-05 20:45 ET - News Release

Mr. Keith Piggott reports

DYNASTY PROVIDES A CORPORATE UPDATE

Dynasty Metals & Mining Inc. has provided a corporate update on its operations. All figures provided are in U.S. dollars unless otherwise noted.

Highlights:

  • The company has achieved its targeted 800-ton-per-day operating rate at the mill. Trial plant operations during February, 2017, and March, 2017, were at approximately 500 tpd. Production was interrupted in April, 2017, and May, 2017, due to unusually heavy rainfall which resulted in blocked roads and other delays. This significantly affected mining activity. The rain has now ceased, and operations have resumed.
  • At Dynasty Goldfield, the company focused its mining activities in first quarter 2017 on the open pits. Approximately 1,245 ounces of gold was produced and sold to date in 2017. The company also currently has 400 ounces of Au on hand to be shipped and sold. In addition, the company has stockpiled 15,000 tons of mineralized material. Management estimates the stockpiled material will be processed into approximately 1,400 ounces of Au, which would be produced once it is milled in the upcoming months.
  • Forecast gold production for the remainder of 2017 is 15,000 to 20,000 ounces of Au at an estimated cash cost of $800 (U.S.) per ounce.

Update on Elipe SA financial conditions

Gold production plan

The company's zaruma mill currently has a capacity of 1,000 tpd. As per the company's press release on Jan. 9, 2017, the company's target utilized capacity was 500 tpd by Q1 2017 and 800 tpd by end of second quarter 2017. The company has already achieved its Q2 2017 target, and the mill is now operating at 800 tpd.

By mid-2018, the company expects to increase plant capacity from 1,000 tpd to 2,000 tpd through capital expenditures of $4.0-million. The source of financing is expected to be internal cash flow from operations, or outside sources through equity or debt financing if required.

The company currently has approximately 400 oz of Au on hand, and ready to be shipped and sold in the coming weeks. In addition, the company has stockpiled approximately 15,000 tons of mineralized material, which is expected to be processed into approximately 1,400 ounces of Au in the upcoming months.

2017 gold production forecast

The company expects to produce approximately 15,000 to 20,000 ounces of gold in the remainder of fiscal 2017, with a targeted cash cost of approximately $800 per ounce.

Resolution of working capital issue of Elipe SA

Elipe SA, the company's wholly owned subsidiary, has experienced financial distress due to the level of payables and other liabilities (which include, among other things, supplier payables, government payables and payroll remittances). The company has been in extensive negotiations with the liability holder's government-appointed representative as part of its commitment to normalizing payables and stabilizing operations. If the company does not rectify the situation in a timely manner, there is a risk that the representative may take legal action against Elipe, which may involve, among other things, dispositions of assets in order to finance outstanding liabilities.

Since the change in management in September, 2016 (see press release on Sept. 12, 2016), new management has focused its efforts to rectify the situation with the representative. On June 1, 2017, the company signed a payment plan contract with the representative to improve Elipe's financial condition.

The payment plan contract allows the company's Ecuadorian subsidiary to continue to conduct its mining operations and postpone any actions by the representative against its assets provided Elipe funds various outstanding liabilities on the attached schedule.

Date                                Payment (U.S. dollars)     

Initiation of payment plan contract        $100,000 (paid)   
July to August, 2017                   $500,000 per month
September to October, 2017             $550,000 per month
November to December, 2017             $600,000 per month
January to March, 2018                 $650,000 per month
April to May, 2018                     $700,000 per month
June, 2018                                     $3,800,000        
Total                                         $10,550,000       

The company believes that the payment schedule incorporated into the payment plan contract is manageable based on its production and operational forecasts.

Keith Piggott, president and chief executive officer of Dynasty, commented: "We are happy that we continue to improve the company's operations and financial condition since September, 2016. Other than the delays and complications caused by the unexpected heavy rainfall in April and May, 2017, our mill is now working efficiently and on track to meet 2017 operational targets, and will continue to ramp up. Our gold production and arrangement with our mining operator, Green Oil, continue to provide our company with healthy cash flow. Our recent payment plan contract provides a roadmap to reduce the company's liabilities."

About Dynasty Metals & Mining Inc.

Dynasty Metals & Mining is a Canadian-based mining company involved in the mining, exploration and development of mineral properties in Ecuador. The company is currently focused on gold production at its wholly owned Dynasty Goldfield project and continued development at its Zaruma mine. Mineral is treated at the company's wholly owned treatment plant close to the Zaruma mine operations. The company also owns other significant gold exploration projects, including the Jerusalem project (located 30 kilometres south of the Fruta del Norte project), the Copper Duke area and the Linderos area in southern Ecuador.

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