Dynacor prepares for maiden resource at Tumipampa

Dynacor Gold Mines (TSX: DNG; US-OTC: DNGDF) is preparing to table the first-ever resource calculation at its Tumipampa gold-copper exploration project, 500 km southeast of Lima, Peru.

Jean Martineau, Dynacor’s president and CEO, told The Northern Miner over the phone as he arrived at the 12th International Gold and Silver Symposium in Lima that the resource will largely encompass the high-grade gold found within the project’s Manto Dorado, Manto Nazareno, and Lisa epithermal vein and mantos systems, and is scheduled for completion soon.

He said construction of the company’s 300- to 600-tonne-per-day Veta Dorada processing facility in the town of Chala, 600 km south of Lima, is over 90% complete. The plant is scheduled to process ore bought from artisanal miners by July or August this year.

Once complete, Dynacor will own two operating mills in Peru, the other being its Metalex-Huanca plant — a 250-tonne-per-day facility, 450 km south of Lima, that has produced gold and silver since 1998.

“The new mill is going to be a big game changer for us, because it will increase our production, and therefore profit,” Martineau said. “We’ll generate substantially more cash over the coming months, which will fund exploration at Tumipampa and drive the project forward.”

The company largely used internal cash flows to pay for the US$15-million plant, he said, but it also used US$5 million from a US$10-million credit facility it closed in January.

Dynacor produced 15,807 oz. gold in the first quarter and generated US$20.4 million in sales, ending the quarter with a net income of US$700,000, or US2¢ per share.

The company has released results of a 7,500-metre drill program that included 20 drill holes targeting the mantos and vein systems from underground exploration drifts.

A drill intercept from a moderately dipping mineralized structure known as “Manto Dorado” includes 10.21 grams gold per tonne and 0.96% copper over 3.7 true width metres, whereas the parallel-trending Manto Nazareno cut 2.24 grams gold and 4.4% copper over 3.5 true width metres.

A steeply dipping vein known as the “Lisa” crosscuts the structures, with drill holes returning 7.14 grams gold over 2.5 true width metres and 8.84 grams gold over 1 true width metre.

The work builds upon channel samples taken from drifts and raises along the mineralized structures. The Manto Dorado averaged 27.83 grams gold and 1.7% copper over 1.5 metres wide within a 26-metre-long drift, whereas a 65-metre raise built up-dip along the same mineralization averaged 21.88 grams gold and 1.7% copper over 1.2 metres wide.

In the Manto Nazareno structure, the company excavated a 31-metre raise, which averaged 8.87 grams gold at widths of 1.5 metres.

In the Lisa vein, a 5-metre drift averaged 16.11 grams gold at 1.9 metres wide.

“We did a lot of underground exploration because we had the possibility to start small production there, and we could use our mill to bulk-sample,” Martineau said.

The company plans to complete a 1,500-tonne bulk sample and process it in its Metalex-Huanca mill — 18 hours by road from the project — once Veta Dorada comes online.

So far, the mineralization has been traced from surface up to 500 metres down-dip, and Martineau and his team reckons that mineralization could extend for another 2.3 km towards a porphyry system that was discovered during surface exploration late last year.

“When we first started with exploration we had just four high-grade gold veins. Now we’ve identified up to 45 gold veins, a huge skarn and a disseminated gold zone at surface — and we think the porphyry could be the mineralized source,” he said. “We have a much bigger project than we thought … and it’s evolving fast.”

The porphyry, known as “El Potro,” has been traced at surface for 1.7 km by 750 metres, and returned 25 surface grab samples ranging from 0.01% to 0.2% copper, and 14 samples ranging between 0.1 gram gold to 2.51 grams gold.

Only one drill hole in the recent drill program intercepted the margins of the porphyry system, Martineau noted, revealing altered and fractured core possibly associated with a regional fault zone. A 0.6-metre sample from the drill hole returned 0.2% copper and 0.05 gram gold.

Exploration this year, Martineau says, will focus on geochemical and geophysical surface work to better define drill targets across the 48.4 sq. km project area.

The company expects to ramp up drilling at Tumipampa once cash flows from Veta Dorada.

Tumipampa sits at 4,500 metres above sea level on a barren plateau that straddles the Andahuaylas-Yauri porphyry and skarn belt to the east and a regionally trending corridor of epithermal gold and silver mineralization to the west — both known to host large base and precious metal deposits.

Dynacor’s closest neighbours include MMG, with its Las Bambas copper project to the east; Southern Copper (NYSE: SCCO), with its Los Chancas copper project to the east; Panoro Minerals (TSXV: PML), with its Antilla copper-molybdenum project to the south; and Bear Creek Mining’s (TSXV: BCM) La Yegua copper-molybdenum-gold project to the northeast.

North and northeast are Minas Buenaventura’s (NYSE: BVN) Orcopampa gold-silver mine; Hochschild Mining’s (US-OTC: HCHDF) Arcata gold-silver and Pallancata silver projects; Hudbay Minerals’ (TSX: HBM; NYSE: HBM) Constancia gold-copper mine; and First Quantum Minerals’ (TSX: FM) Haquira copper-gold project.

Dynacor has US$7.3-million cash in its treasury and its shares have traded within a 52-week range of $1.30 to $2.32 per share, and at $2.09 at press time.

The company has 37.4 million shares outstanding for a $75.2-million market capitalization.