Dynacor Gold Mines has best month of production in company’s history

Dynacor Gold Mines Inc.  (TSX:DNG) is pleased to provide a second quarter operations update. In the month of May, Dynacor produced from its custom milling plant a historic best of 4,183 ounces of gold (representing more than 50,000 ounces on an annualized rate).

Furthermore, during Q1-2011 the company, using cash directly generated from operations, optimized the plant’s yield at the current capacity of 180 tpd (tonnes per day). The expansion program, which included installation of an additional cyanidation tank and a 90 tpd ball mill, will facilitate a capacity increase from 180 tpd to just over 200 tpd during the 2nd part of 2011.

For the first five months of 2011 the company produced 17,642 ounces of gold from its custom-milling plant as compared to 9,625 ounces of gold during the comparable period in 2010 (an increase of 83%).

In addition, the company’s silver production is also increasing. As of the 31st of May 2011, Dynacor had produced 33,992 ounces of silver as compared to 14,132 ounces for the same 5-month period in 2010 (an increase of 141%).  Gold and silver production are expected to continue to increase through the balance of 2011 and into 2012 as Dynacor’s mill ramps up to its full capacity of 200 tonnes per day.

The company is well on target to produce approximately 45,000 ounces of gold in 2011.  Jean Martineau, President and Chief Executive Officer of Dynacor, said: “I am very pleased with the performance of our custom milling plant as both our gold and silver output increased during the second quarter 2011. As many analysts predict that the current strong price of silver will continue throughout 2011, we expect that our silver production will have an important impact on Dynacor’s cash flow from operations.”

Joey Trombino, Vice President and Chief Financial Officer of Dynacor, added: “The custom milling component of Dynacor’s business model has an important consequence in that it avoids dilution of its shareholders due to an untimely need for equity financing when the stock price is low. For instance during Q1-2011, Dynacor invested, from its auto-generated cash flow, $0.8 million, towards the ongoing exploration campaign at Tumipampa and the expansion of the custom milling plant.”

ABOUT DYNACOR GOLD MINES INC.

Dynacor is a gold exploration and mining company active in Peru through its subsidiaries since 1996. The company’s assets include the Acari, Casaden and Tumipampa exploration properties. Dynacor’s gold mill produces gold by custom milling.