Dynacor's Gold Production Surpasses 46,000 Ounces  

MONTREAL - Dynacor Gold Mines Inc. reported that gold production for 2011 from its ore- processing plant delivered a company best 46,026 ounces, including a record month of 4,565 ounces for the month of December, 2011. This amounts to a year over year increase of 37% (2010 - 33,525 ounces) and a quarterly increase of 29% (Q4/2010 - 3,533 ounces) respectively.

The company processed 64,041 tonnes of ore at an average grade of 0.77 ounces of gold per tonne. Recovery for the year is ranked in the top quartile of the industry at 92.9%.

During the fourth quarter 2011, ore processed was 19,060 tonnes at an average grade of 0.75 ounces of gold per tonne, a little lower than the year average rate of 0.77 ounces per tonne. Recoveries were consistent at just above 92% resulting in the Company's historic best quarter of 13,157 ounces, a 26% increase compared to Q4-2010 (10,477 ounces).

At its current 220 tpd capacity, the Company should process close to 75,000 tonnes of ore on a yearly basis, which would represent a 17% throughput processing increase compared to 2011. Depending on the grade of ore purchased and processed, gold processing production should range between 50,000 and 52,000 ounces in 2012.

The comapany's Board of Director approved the construction of a new 300 tonne per day gold-ore processing plant in southern Peru which represents the key to the 'ramp-up' in production to a level in excess of 100,000 tonnes of ore per annum in a mid-term period. The Company is waiting for the obtaining of its environmental and construction permits to begin the construction.

Peru is the 6th largest gold producer in the world. The small scale mining community is rapidly expanding and Dynacor is positioning itself to become the foremost gold ore processing company in Peru. The new plant has been designed to be readily upgraded to 430 tonnes per day. This 'state of the art' gold-ore processing plant is to be built with an initial capacity of 300 tonnes per day.

At this time last year Dynacor generated $3.1 million in cash flow from operations for the full year. For the first nine months of 2011, Dynacor reported $3.5 million in cash flow from operations. This increase is the result of improved operational efficiencies and processes at the plant along with growth in our total production volumes.

The Company is in the strong position of self-funding its exploration budget for the coming season. Given the robust cash flow picture the Company enjoys, Dynacor is once again in the top quartile of lowest share counts in the junior mining sector. The Company expects to release information on its upcoming exploration program on its Tumipampa property in the first quarter of 2012.

The company's address is 2000, McGill College,Suite 510, Montreal H3A 3H3, 514.288.3224, fax: 514.288.8179, email: [email protected].