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Dynacor Begins Preparations for Construction of Gold Ore-Processing Plant at Chala, Peru

Dynacor Gold Mines Inc. (Dynacor or the Company) a company with gold ore-processing operations and exploration projects in Peru, is pleased to announce it has begun the first preparative steps in view of the construction of its new 300 tpd plant at Chala, in southern Peru.

Upon receipt of the final construction permit from the Ministry of Energy and Mines, Dynacor will begin the construction of this new plant. The plant is expected to be commissioned eight months thereafter.

Pre-construction activities

As of April 15th 2013, Dynacor has begun preparing the 100 hectare site for the construction of its ore-processing plant. The following activities are now underway:

  • Water storage tanks and pumping systems are being installed to pump water from the Company's water wells which are situated at a distance of about 6 km from the plant site.
  • A perimeter security fence is being built as well as access gates.
  • Housing facilities for the company's employees and for the construction crews are being built.
  • Dynacor signed an agreement with the municipality of Chala to assist in the construction of a 10 km road that will connect Old Chala to New Chala. This road will pass directly in front of the Company's Chala ore-processing plant.

The new 300 tpd mill will require two 2100 x 2400 ball mills. A first one has been purchased and shipped to Lima; the second one has been ordered and is being built. Heavy construction equipment has also been ordered.

Why Chala?

Chala is situated 610 km south of Lima in the heart of one of the most productive mining regions of Peru. In 2012, Peru was the sixth largest gold producing country and the third largest silver producer in the world. Chala is hooked up to the Peruvian national power grid and is located right on the Pan American highway that runs right through the country from the north down to its southern border with Chili. In summary, Chala is an ideal location for Dynacor's new plant since it:

  • is a mining friendly area;
  • has access to energy;
  • has a well-developed road infrastructure; and
  • offers easy access for ore producers from all over the country.

Jean Martineau, Dynacor's President and Chief Executive Officer stated, "We are very pleased to have taken the first steps towards the construction of our new mill. The obvious result with the new mill is an increase in revenues and production, and lower production costs. The Company's cash reserve at March 31, 2013 was at a historical high of $ 6.4 M and is still currently increasing due to our ore processing operations. We do not anticipate the need to raise capital from the markets to build our new facility in Chala. Management is currently negotiating a bank loan that should cover the Company's cash flow requirements during the construction. We are looking forward to building our new gold ore-processing plant and becoming one of the leading ore-processing companies in Peru."

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