Author: Atrium Research September 25, 2026
Ben Pirie | Equity Research Analyst | [email protected] | 647-688-9661
Nicholas Cortellucci, CFA | Equity Research Analyst | [email protected] | 647-391-3314
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What you need to know:
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DNG provided a positive update on its operations across its three main assets. Importantly, rehabilitation at Svetlana in Ecuador is 65% complete and remains on schedule for its first ore feed in Q4.
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In Senegal, all commissioning has been completed, and the plant is now ramping production.
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As for Peru, DNG is reducing inventory and aims to reach 75% of its historical average by quarter-end; we estimate this to be ~$26M. We continue to expect total production to grow 23% in 2027.
Yesterday, Dynacor Group (DNG:TSX, DNGDF:OTC) provided a corporate update across its three main assets, making solid developments. We view the update as a strong positive, aligning with the projections in our model. The most near-term catalyst is the inventory reduction that management is guiding for in Q3 (reported mid-November), as well as Svetlana’s first ore feed in Q4. We are maintaining our BUY rating and C$9.50/share target price on Dynacor.
Ecuador DNG reported that plant rehabilitation is approximately 65% complete and remains on schedule for first ore feed in Q4/26. This aligns with our model. The upgrade of the main milling equipment has been completed, and the crushing area is more than 85% complete. Pre-commissioning is planned for October, beginning in the main process plant area; the ball mill has already been tested without load, and DNG is sourcing 500 tonnes of sterile rock for initial commissioning. First ore feed is scheduled for October, with commissioning continuing through Q4/26. The initial gold pour is also targeted for Q4, subject to the successful completion of plant rehabilitation and commissioning. The project remains on budget, having spent $9.5M through August of the projected $22-25M expected for 2026.
Additionally, installation of the electrical cable infrastructure has advanced with the Company signing an agreement with Ecuador’s national utility to secure a 6MW grid connection. Rehabilitation of the leaching infrastructure is ~70% complete, the tailings storage facility is expected to be operational at month-end, and DNG is ramping hiring. The Company has obtained its commercialization permit and approval from the Ministry of Environment and Energy is expected for Q4.
Senegal In Senegal, all commissioning activities have been completed, and the 50tpd plant is now ramping up. The Company has sourced additional stock from new suppliers and has preparations in place for its inaugural gold pour, while it continues to fill initial plant operator and other internal positions. We remind readers that the plant is expected to process 50tpd.
Peru DNG announced that ore inventory reduction is ongoing and is expected to reach 75% of the historical average by quarter-end. Inventory at the end of Q2 came in at $58.0M compared to $49.0M in Q1. The historical average is likely around $35M, so 75% would imply roughly $26M. As a reminder, our valuation methodology uses OCF (before WC changes), and as such, this does not impact our model.
Q2 Financials Recap Last month, DNG reported Q2 financial results including its highest-ever quarterly throughput and second-highest quarterly sales. Sales of $144.4M (+81% YoY) came in ahead of our estimate, while EBITDA of $3.2M and net income of $1.1M fell short due to the lower gold price. The stock has declined ~20% since these results have been posted. Our research note on the quarter can be found here.
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Atrium Research Ratings System
BUY: The stock is expected to generate returns of over 20% over the next 24 months.
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