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• DNG reported another record quarter, posting 20% YoY sales growth and 50% YoY EBITDA growth due to the increased gold price and record levels of ore processed.
• Dynacor again improved its balance sheet, with $42M in cash (up from $35M last quarter) with negligible debt, while also repurchasing shares.
• We remain bullish on DNG going into 2025 and beyond as its kicks off its plans for expansion in both Peru and West Africa.
Yesterday after market close, Dynacor Group (DNG:TSX, DNGDF:OTC) reported stellar Q3 financials, largely beating our estimates on cash flow. Similar to Q2, the quarter was primarily driven by the elevated gold price and operational excellence. We continue to believe DNG can sustain its historical production growth rates (~10%) as it begins its next phase of growth and the gold price remains supportive. We are maintaining our BUY rating and target price on Dynacor at C$7.50/share.
Key Highlights
• Tonnes processed came in at 47.7Kt (+7% YoY) translating to 30.0Koz AuEq produced (-12% YoY) comparing to our estimates of 44.3Kt and 30.8Koz AuEq.
• Given the largely increased gold price ($2,485/oz selling price), sales came in at $76.2M (+20% YoY), beating our $61.6M estimate (assuming $2,000/oz).
• Cash gross margin for the quarter was 15% compared to our estimate of 13% and 12% in Q3 last year.
• Gross operating margin was $10.3M or $337/oz compared to our model that assumed $7.1M or $231/oz.
• Operating cash flow (before working capital) was $6.6M (9% of revenue) significantly beating our estimate of $4.0M (7% of revenue) while EBITDA also beat our estimate, reaching $8.9M vs. our $5.8M. After working capital changes, OCF came in at $10.3M and FCFF came in at $9.0M.
• Net income came in at $5.9M or $0.16/share vs. our estimates of $3.1M or $0.09/share.
• The Company ended the quarter with $42.0M in cash compared to $34.7M at the end of Q2/24.
DNG: Knocked it Out of the Park...Again
What you need to know:• DNG reported another record quarter, posting 20% YoY sales growth and 50% YoY EBITDA growth due to the increased gold price and record levels of ore processed.
• Dynacor again improved its balance sheet, with $42M in cash (up from $35M last quarter) with negligible debt, while also repurchasing shares.
• We remain bullish on DNG going into 2025 and beyond as its kicks off its plans for expansion in both Peru and West Africa.
Yesterday after market close, Dynacor Group (DNG:TSX, DNGDF:OTC) reported stellar Q3 financials, largely beating our estimates on cash flow. Similar to Q2, the quarter was primarily driven by the elevated gold price and operational excellence. We continue to believe DNG can sustain its historical production growth rates (~10%) as it begins its next phase of growth and the gold price remains supportive. We are maintaining our BUY rating and target price on Dynacor at C$7.50/share.
Key Highlights
• Tonnes processed came in at 47.7Kt (+7% YoY) translating to 30.0Koz AuEq produced (-12% YoY) comparing to our estimates of 44.3Kt and 30.8Koz AuEq.
• Given the largely increased gold price ($2,485/oz selling price), sales came in at $76.2M (+20% YoY), beating our $61.6M estimate (assuming $2,000/oz).
• Cash gross margin for the quarter was 15% compared to our estimate of 13% and 12% in Q3 last year.
• Gross operating margin was $10.3M or $337/oz compared to our model that assumed $7.1M or $231/oz.
• Operating cash flow (before working capital) was $6.6M (9% of revenue) significantly beating our estimate of $4.0M (7% of revenue) while EBITDA also beat our estimate, reaching $8.9M vs. our $5.8M. After working capital changes, OCF came in at $10.3M and FCFF came in at $9.0M.
• Net income came in at $5.9M or $0.16/share vs. our estimates of $3.1M or $0.09/share.
• The Company ended the quarter with $42.0M in cash compared to $34.7M at the end of Q2/24.
Underlying
DYNACOR GROUP INC.
Provider
Atrium Research Corporation
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Ben Pirie
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