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TICKERS: DNG; DNGDF

Did This Gold Producer Knock It Out of the Park Again?
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Dynacor Group Inc. (DNG:TSX; DNGDF:OTCMKTS) recently reported Q3 2024 financial results, which showed significant year-over-year growth, according to an Atrium Research note.

Atrium Research analysts Ben Pirie and Nicholas Cortellucci, in a research report published on November 14, 2024, maintained their Buy rating on Dynacor Group Inc. (DNG:TSX; DNGDF:OTCMKTS) with a target price of CA$7.50. The report follows Dynacor's Q3 2024 financial results, which showed significant year-over-year growth. The report was titled "Dynacor Group — Knocked it Out of the Park . . . Again."

The analysts highlighted the strong quarterly performance, stating, "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." Sales reached $76.2M, significantly beating their estimate of US$61.6M.

Regarding operational performance, the analysts noted, "Operationally, the Company hit record tonnes processed, averaging 519tpd for a total of 47,721t, compared to 472tpd and 42,935t in Q2/24, respectively."

The report highlighted Dynacor's strong financial position, with the analysts stating, "Dynacor again improved its balance sheet, with US$42M in cash (up from $35M last quarter) with negligible debt, while also repurchasing shares."

The analysts emphasized growth initiatives, particularly noting Dynacor's planned expansion into West Africa: "On October 11, DNG announced its plans to construct a gold ore processing pilot plant in the Kédougou region of eastern Senegal. This is a key initiative for the Company as it will not only increase production but also better diversify its operations."

Atrium Research's valuation methodology is based on EBITDA multiples. The analysts explained, "DNG currently trades at 3.4x/3.1x 2024E/2025E EBITDA compared to Canadian industrials at 11.8x/10.9x and mining service firms at 4.3x/3.8x (universe average of 8.6x/8.2x), despite DNG posting one of the best sales and EBITDA CAGRs in the group."

In conclusion, Atrium Research's maintenance of their Buy rating and CA$7.50 target price reflects confidence in Dynacor's operational excellence and growth potential. The share price at the time of the report of CA$5.44 represents a potential return of approximately 37.9% to the analysts' target price, with an additional 2.6% dividend yield.


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  1. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for Atrium Research, Dynacor Group Inc., November 14, 2024

Analyst Certification Each authoring analyst of Atrium Research on this report certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated securities discussed (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the research, (iii) to the best of the authoring analyst’s knowledge, she/he is not in receipt of material non-public information about the issuer, (iv) the analyst does not own common shares, options, or warrants in the company under coverage, and (v) the analysts adhere to the CFA Institute guidelines for analyst independence.

About Atrium Research Atrium Research provides institutional quality issuer paid research on public equities in North America. Our investment philosophy takes a 3-5 year view on equities currently being overlooked by the market. Our research process emphasizes understanding the key performance metrics for each specific company, trustworthy management teams, unit economics, and an in-depth valuation analysis. For further information on our team, please visit https://www.atriumresearch.ca/team.

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