Dynacor Gold Sales Increase 59% 

MONTREAL - Dynacor Gold Mines Inc. reported sales during the second quarter surged to $18.1 million compared to sales of $8.8 million in the second quarter of 2010, an increase of 106%. Dynacor sold 11,530 ounces of gold compared to 7,234 ounces in the second quarter of 2010, an increase of 59%.

Highlights include: Gold production of 11,808 ounces for Q2-2011 compared to 7,291 ounces in Q2-2010, an increase of 62%; Cash gross margin of $269 per ounce in Q2-2011 compared to $214 per ounce for the same period last year; Operating income of $2 million, a 132% year over year increase; Generated net income of $2.6 million and an adjusted net income of $1.0 million; Adjusted EBITDA of $2.1 million; Operating cash flows before changes in working capital of $1.5 million.

During the quarter ended June 30, 2011, Dynacor generated a net income of $2.6 million which represents a 340% increase from the second quarter 2010 ($0.6 million). The increase in net income for the quarter ended June 30, 2011 is a result of the increase in the sales volume of 59% in Q2-2011 compared to Q2-2010, an increase in the cash gross margin of $55 per ounce and the $1.6M gain on the revaluation of the warrants.

Operating cash flows before changes in working capital were a record $1.5 million during the second quarter of 2011, an increase of 120% compared to the second quarter of 2010 ($ 0.7 million).

Dynacor has produced 21,734 ounces of gold at an average realized margin of $236 per ounce through the first six months of 2011. Management is pleased to reiterate its production guidance for 2011 with gold production of 45,000 ounces. The combination of the Company's expansion plans in the first two quarters, the operational execution of our milling crew and the continued strength of gold prices have allowed the year-to-date average gross margin per ounce to be above the guidance range of $230 per ounce.

Gold production from custom milling is expected to continue to increase in 2012 as a result of higher throughput at the mill. The Company's $5.5 million drilling campaign at its 100% owned Tumipampa property will continue to advance in the second half of 2011. Dynacor plans to drill a total of 16,700 meters of which 1,830 meters were completed as at June 30, 2011. The objective is to focus on the 4.1 by 1.2 km skarn ore deposit in order to determine the depth of mineralization and verify the high-grade gold and copper mineralization discovered in surface channel samples. The company's address is 2000, McGill College, Suite 510, Montreal, QC H3A 3H3, 514.288.3224, fax: 514.288.8179, email: [email protected].