Mr. Jean Martineau reports

DYNACOR OBTAINS FINAL CONSTRUCTION PERMIT FOR ITS NEW GOLD ORE-PROCESSING PLANT IN CHALA

Dynacor Gold Mines Inc. has obtained the construction permit for its new gold ore processing plant in Chala (southern Peru). The construction permit has been issued by the Ministry of Energy and Mines (MEM) in Lima which regulates medium- and large-scale (capacity greater than 350 tonnes per day) mining operations throughout Peru. The company is currently commissioning the best construction companies with the required experience and record.

The new plant will have an initial ore processing capacity of 300 tonnes per day (tpd) (102,000 tonnes per year (t/y)). The Chala plant has been designed to be readily expanded to 450 tpd (153,000 t/y) and then to 600 tpd (204,000 t/y) by adding additional processing lines and ball mills.

The Chala facility will be built on a 135-hectare site that is part of a 200-hectare mining concession which was purchased by Dynacor in March, 2011. This concession is located in the department of Arequipa, district of Chala, in the heart of one of the most productive gold mining regions of Peru. The total construction cost has been estimated at $10-million (U.S.) and will be entirely financed internally.

The above-mentioned total cost includes $2.3-million (U.S.) that has already been spent on general infrastructure and equipment, including:

• A five-kilometre hardened road connecting the site to the Pan-American South highway;
• A power line connected to the national power grid;
• Water wells and water storage tanks as well as a pumping station;
• A perimeter security fence and gate;
• Housing facilities for the company's employees and construction crews;
• Milling heavy equipment including two seven-by-eight-foot ball mills that have already been tested at the Huanca mill.

Dynacor expects to process in excess of 102,000 tonnes of purchase ore per year at its new facility in Chala, compared with a processing capacity of 85,000 t/y in Huanca.

The company is very pleased that despite the difficult operational climate for most junior mining companies, its autofinancing business model has allowed the company to finance the expansion of its gold processing operations and the continuing exploration of its mining properties. Finally, Dynacor's management wishes to underline that it carefully selected the Chala site and that it is an ideal location for Dynacor's new gold ore processing plant since it:

• Offers easy highway access for ore producers from all over Peru;
• Has ample space for tailing ponds for many years and a favourable climate;
• Offers access to the Peruvian national grid;
• Is located in a mining-friendly region.

The company expects that its new gold processing plant at Chala will create value for its shareholders for many years since it will benefit from increased production volume and reduced operating costs.

We seek Safe Harbor.