DynaResource, Inc.

Overview

• Ticker: DYNR
• U.S.-based minerals company focused on investment, development, production, and exploration of gold and silver in Mexico.
• Operating activities are conducted through wholly owned Mexican subsidiary DynaMéxico, which holds the San José de Gracia (SJG) mine concessions and related assets.
• Corporate structure (as of 12/31/2025): approximately 238 employees in Mexico and 3 employees in the United States and Canada. One wholly owned U.S. subsidiary (DynaMéxico US Holding, LLC) and four wholly owned Mexican subsidiaries (DynaMéxico, Mineras de DynaResources, DynaResource Operaciones de San José de Gracia, and Minera de Alica). Each Mexican subsidiary has one qualifying share held by the U.S. holding company as required under Mexican law.

Business model

• Core focus: advancing high-grade gold-silver assets, principally the SJG mine in Sinaloa, Mexico.
• Product: gold-silver concentrate produced on site and sold to a third party for further processing.
• Revenue: sales of concentrate priced in U.S. dollars with payability adjustments to the London PM gold fix and final settlements based on assay results.
• Hedging and offtake: commodity pricing arrangements under an Offtake Agreement to manage gold/silver price risk. Key 2024–2025 items:
  • September 2024: hedged roughly 75% of anticipated production (~9,000 oz) at $2,495/oz.
  • August 2025: added a min/max pricing structure hedging 6,000 oz (1,000 oz/month Sep 30, 2025 – Feb 27, 2026) with a $3,200/oz floor and $3,500/oz cap.
  • 2025 impact of these hedges: approximately negative $1.1 million (Sept 2024–Mar 2025) and approximately negative $2.6 million (Aug 2025) for the year.
  • Additional min/max collars placed in late 2025 extended into 2026 but were not effective in 2025.

Production and operations (SJG)

• Location: San José de Gracia mining district, Sinaloa, Mexico (near Guasave/Guamúchil).
• Concessions: 33 mining concessions totaling about 9,920 hectares (24,513 acres).
• Surface rights: 20-year land lease with the Santa Maria Ejido Community covering 4,399 hectares; lease payments in 2025 were approximately MXN 5.93 million (~US$304k).
• Water rights: secured via CONAGUA for 1,000,000 cubic meters/year.
• 2025 production profile:
  • Ore processed: ~260,694 tons (throughput near 710 tpd in Q4 2025).
  • Gold on concentrate produced: 21,393 ounces (gross).
  • Gold on concentrate sold: 20,848 ounces.
  • Average head grade: ~3.46 g/t Au for the year.
  • Overall recovery: ~73.69% in 2025.
• Throughput capacity:
  • Processing facility maximum instantaneous throughput: ~900 tpd.
  • 2025 target average operating throughput: ~750–800 tpd (800–900 tpd capacity under optimal conditions).
• 2025 capital projects:
  • Significant underground development and mine infrastructure enhancements.
  • Installation and commissioning of three Falcon gravity concentrators downstream of the ball mills to recover free gold and improve recoveries and throughput.
  • Ventilation improvements and planned Raise Bore projects to enhance underground development and safety.
• Corporate stage: SJG transitioned from an Exploration Stage issuer to a Production Stage issuer on January 1, 2025, following the declaration of proven and probable mineral reserves in a Technical Report Summary prepared under S-K 1300.

Mineral resources and reserves (SJG)

• 2025 Technical Report Summary (with independent consultant inputs) reports:
  • Proven & Probable Mineral Reserves: 1.607 million tonnes at 4.91 g/t Au, totaling about 253,000 ounces Au.
  • Indicated Resources: 286 kt at 6.74 g/t Au.
  • Inferred Resources: 97 kt at 4.37 g/t Au.
  • Life-of-mine: ~7 years based on current reserves, with potential to extend.
  • After-tax NPV (5% discount, base case $2,500/oz Au): ~$84.4 million (pre-tax $110.0 million).
  • After-tax NPV at $3,000/oz Au: ~$133.3 million (pre-tax $183.6 million).
  • All-in Sustaining Cost (AISC): ~$1,720/oz Au equivalent.
  • Operating cash cost: ~$1,327/oz Au equivalent.
• Resource estimates were prepared under S-K 1300; results are influenced by assumptions on gold price, recoveries, and other inputs.

Financial performance (2025)

• Revenue: $58,467,565.
• Operating costs: $40,223,275.
• Depreciation and depletion: $964,295.
• Gross profit: $17,279,995.
• General and administrative: $6,192,509.
• Stock-based compensation: $1,249,459.
• Accretion: $42,004.
• Right-of-use amortization: $98,388.
• Other expenses (net): $471,590.
• Operating income: $9,666,010.
• Foreign currency losses: $(5,139,258).
• Interest expense: $1,613,836.
• Derivative (mark-to-market) loss: $356,863.
• Other income/expense: $3,640,149.
• Taxes: mining tax expense $1,790,760; income tax expense (benefit) $3,586,557.
• Net income: $3,817,103.
• Deemed dividends on Series C and D preferred: $(234,299).
• Net income attributable to common stockholders: $3,582,804.
• Other comprehensive loss (unrealized foreign currency translation): $(6,858,814).
• Total comprehensive loss: $(3,041,711).

Balance sheet highlights (as of 12/31/2025)

• Total assets: $57,596,586.
• Cash: $4,171,891.
• Mineral property interests, plant and equipment, net: $12,080,255.
• Right-of-use assets, net: $500,392.
• Deferred tax asset: $3,727,567 (net $1,727,156 after liabilities).
• Foreign tax receivable: current $1,424,244; non-current $27,238,331.
• Current assets: $10,200,354.
• Current liabilities: $41,936,062.
• Temporary equity: Series C preferred $4,337,480; Series D preferred $1,520,000.
• Stockholders’ equity (deficiency): $(1,094,950).

Liquidity and financing

• Net working capital: negative $31,735,708.
• Outstanding indebtedness (non-operating and operating lines): approximately $15 million as of 12/31/2025.
• The company accessed revolving credit facilities and other financing to support operations and development.
• 2025 cash flow from operations: $5,757,148.
• 2025 cash used in investing activities: $11,526,369 (mostly capitalized mine development costs).
• 2025 cash provided by financing activities: $5,059,294.

Accounting and reporting

• 2025 restatements adjusted prior periods for mining duties and other tax accounting, with retroactive impact to 2021–2024.
• Transition to Production Stage in 2025 led to capitalization of development costs (~$8.9 million in 2025) and depreciation/depletion on a unit-of-production basis (~$1.4 million in 2025).

Concentrates, customers, and concentration risks

• A single purchaser under the ACL/RCL framework accounted for 100% of revenue and accounts receivable in 2024 and 2025.
• Sales and concentrates are priced in USD, while some operating costs are in MXN; the company manages hedging and currency exposure as part of operational risk.

Permits, surface rights, and environmental

• SJG operates under Mexican Mining Law and SEMARNAT environmental permitting, with water rights administered by CONAGUA and surface rights via Ejido agreements.
• Surface rights are secured by a 20-year lease with the Santa Maria Ejido (through 2033).
• Water rights secured for 1,000,000 m3/year from the SJG extraction infrastructure.
• Asset retirement obligations are recognized for closure and post-closure obligations; the ARO was updated during 2023–2025 with changes in estimate and capitalization to property.

Strategic outlook

• Targeting increased production through enhanced throughput (target 750–800 tpd in 2026; capacity up to 900 tpd).
• Continued underground development and expansion across Tres Amigos, San Pablo, San Pablo Sur, La Mochomera, and Palos Chinos veins, with exploration and delineation planned for 2026.
• Ongoing exploration aimed at growing mineral reserves and resources beyond the current defined structures at SJG.

Key takeaways

• DynaResource is a small-cap miner focused on the SJG asset in Sinaloa, Mexico, with a concentrated customer base and a production profile driven by mine optimization and expansion projects.
• 2025 revenue was approximately $58.5 million with net income of approximately $3.8 million; net income attributable to common stockholders was about $3.58 million.
• The company transitioned to Production Stage in 2025, capitalizing development costs and recognizing unit-of-production depreciation; 2025 capex was about $11.5 million, largely for underground development and processing improvements.
• Year-end 2025 balance sheet reflects negative working capital and outstanding indebtedness, with liquidity supported by credit and financing facilities.
• SJG’s concessions, surface rights, water rights, and environmental and permitting obligations are centered in Sinaloa, with ongoing permit and land-use activity typical of Mexican mining operations.