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Canada's Dynacor plans gold mine at Peru Tumipampa project

Canada's Dynacor plans gold mine at Peru Tumipampa project

Posted by Juan Gavasa on March 08, 2014

Montreal-based Dynacor Gold Mines (TSX: DNG) plans to add a gold mine to its processing plant in Peru, CEO Jean Martineau said. Dynacor has found at least 16 high-grade gold veins and a potentially "huge" copper deposit at its Tumipampa gold-copper project in Apurímac region, Martineau told BNamericas.

"We're finding high grades in almost all the veins we've discovered. We still have a lot of exploration work to do, but it's going very well," Martineau said in an interview. "With our operation, we could finance that, we have the mill and a good team of people. It's something we can put into production ourselves."

Dynacor, which is exploring five properties in Peru, has found a copper-gold skarn measuring 4.2km by 1.5km, comparable to deposits like Southern Copper's (NYSE: SCCO) Los Chancas, Glencore Xstrata's (LSE: GLEN) Las Bambas, First Quantum Minerals' (TSX: FM) Haquira and Hudbay Minerals' (TSX: HDM) Constancia, Martineau said.

"To put it into production would cost billions of dollars, so that´s quite big," he said. "If these are economic deposits, we have to sit down to see whether we sell it or get somebody associated with us. We have different possibilities there."

Dynacorp is "comfortable" with gold prices at around US$1,200/oz as it operates its 250t/d Huanca gold processing plant with a 17% margin, Martineau said. Local gold producers who sell to Dynacorp would be "seriously" affected if gold drops to US$700-800/oz, he said. "We think the gold price shouldn't go much lower than what we saw in the past months, around US$1,200-1,250/oz.," Martineau said. "At these prices we shouldn't have problems."

Dynacor restarted gold exports earlier this month after additional requirements for documentation from Peruvian tax collection agency Sunat forced the company to suspend shipments for a month. Dynacor produced 19,220oz gold in the fourth quarter and a record 76,883oz in 2013, up 3.3% and 25.5%, respectively. Silver output totaled 131,686oz last year.

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