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DNG: Stacking Up Record Years; Looking Ahead to Growth

What you need to know:
• DNG reported Q4 and 2025 financial results which were slightly ahead of our estimates with 2025 revenue of $397.6M (+40% YoY) and 2025 OCF of $25.4M (+21% YoY).
• 2025 represented another solid year for DNG, taking advantage of the higher gold price to generate cash for its international expansion.
• Expansion plans remain on track with first ore in Senegal planned for Q2 and Q4 for the Svetlana plant in Ecuador.

This morning, Dynacor Group (DNG:TSX, DNGDF:OTC) announced its Q4 and full-year financial results, which came in slightly ahead of our estimates, driven by record gold prices and a strong operational recovery in Q4. Q4 production came in at the highest levels seen since Q4/23, while OCF hit an all-time quarterly record. Despite some challenges early on in 2025, DNG has put together another banner year with revenue up 40% and OCF up 21%. Aligning with guidance and the international expansion, we are expecting further strong growth in 2026, including production up 18% and revenue up 42%. We are maintaining our BUY rating and C$9.50/share target price on Dynacor.

Key Highlights
• Tonnes processed for Q4 came in at 44.9Kt (+9% YoY) compared to our estimate of 41.2Kt, as the plant delivered a strong operational recovery in the back half of the year following disruptions earlier in 2025. Full year 2025 tonnes processed were 165.9Kt (-6% YoY) vs. our estimate of 162.2Kt, with the decline attributable to a one-month government curfew affecting regional ASM activities, planned maintenance in Q2, and two weeks of ASM roadblocks in July.
• Production for the quarter was 32.8Koz AuEq (+20% YoY) and full-year production results came in at 113.8Koz AuEq (-3% YoY), both of which were pre-announced.
• Q4 sales came in at $137.4M (+20% YoY), in line with our estimate, driven by a record gold price environment (Q4 avg. realized price of $4,142/oz vs. $2,662/oz in Q4/24) combined with higher volumes. Full-year sales were $397.6M (+40% YoY), in line with our estimate.
• Gross cash margin for the quarter and year, respectively, was 12.0% and 11.8%, effectively in line with our 12.0% estimate for both.
• OCF (before working capital) was $8.8M (6.4% of revenue) in Q4 vs. our estimate of $7.7M. 2025 OCF was $25.4M (6.4% of revenue), which was also ahead of our forecast of $24.2M.
• Net income for Q4 came in at $7.2M vs. our estimate of $6.8M. Full year 2025 net income was $21.3M vs. our estimate of $20.8M.
• Capex for the year was $8.9M, below our estimate of $11.9M.
• The Company finished the year with $33.5M in cash and equivalents and $0.5M in debt.