Dynacor: A Dividend Dynamo with Global Growth in Its Sights

Dynacor Group Inc. (TSX:DNG) is emerging as a compelling investment opportunity for those seeking both reliable income and strategic growth potential. With a track record of consistent dividend increases and ambitious expansion plans across West Africa and Latin America, the company is positioned to deliver outsized returns for shareholders in 2025 and beyond. Here's why investors should take notice now.

A Dividend Machine with Room to Grow

Dynacor has established itself as a dividend stalwart, having increased its monthly payout from CA$0.01 per share in 2023 to CA$0.0133 per share in 2025, a 33% total increase over two years. This growth, supported by a low payout ratio of 20%–21% of earnings, leaves ample room for future hikes. With a current dividend yield of 3.3%—nearly double the Canadian Metals and Mining sector average of 1.5%—investors are rewarded handsomely for their patience.

The dividend's sustainability is underscored by Dynacor's robust financial health. As of Q1 2025, the company held CA$59 million in cash, up from CA$25.8 million at year-end 2024, following a CA$22 million equity offering to fuel growth. This liquidity buffer ensures dividends remain secure even as the company invests in global expansion.

Global Expansion: Fueling Future Growth

Dynacor's strategy isn't just about sustaining dividends—it's about scaling operations to unlock new revenue streams. The company aims to produce 500,000 AuEq ounces annually by 2030, up from 120,000–130,000 ounces in 2025, through a five-year plan focused on:

West Africa: Building a New Frontier

• Senegal: A 50-tonne-per-day (tpd) pilot plant is nearing construction, with site work starting by late June 2025. This project, costing CA$4 million, is a critical first step in establishing a foothold in the region.
• Ghana & Côte d'Ivoire: Dynacor is engaging local partners and awaiting regulatory clarity to secure land concessions. These markets, rich in artisanal mining opportunities, could add 100,000+ AuEq ounces annually by 2030.

Latin America: Expanding Beyond Peru

• Ecuador: A conditional offer to acquire a 1,500 tpd processing plant (pending CA$9.75 million in funding) would nearly double Dynacor's processing capacity in the region.
• Peru: The flagship Veta Dorada plant, operating at full capacity, remains the backbone of production, with exploration at the Tumipampa property offering further upside.

These expansions are underpinned by strong demand for ethically sourced gold, particularly from luxury brands. Dynacor's PX IMPACT® gold program, which reinvests premiums into community projects, aligns with ESG trends, enhancing its appeal to socially conscious investors.

Risks and Rewards: Why the Timing is Right

Critics, including activist shareholder iolite Partners, have questioned governance and capital allocation decisions. However, Dynacor's strong cash flow (CA$5.8 million in Q1 operating cash flow) and disciplined approach to expansion—focusing on low-cost, high-impact projects—mitigate execution risks.

The current valuation of Dynacor's shares offers a rare entry point. At a price-to-sales ratio of 1.2x (vs. peers averaging 2.0x), the stock is undervalued relative to its growth trajectory.

Final Verdict: A Buy Now Opportunity

Dynacor combines consistent dividend growth with high-potential expansion in regions primed for gold production. With a dividend yield of 3.3%, a CAGR of 15% in payouts since 2023, and a pipeline of projects targeting $1 billion in annual sales by 2030, this is a stock poised to outperform.

Act now while the valuation remains attractive and the dividend story is underappreciated. Investors who ignore this opportunity risk missing out on a triple win: income today, growth tomorrow, and a stake in a company reshaping the future of ethical mining.

Disclosure: The author holds no position in Dynacor Group Inc. at the time of writing.