J Taylors WWW.MININGSTOCKS.

COM
D o w J o n e s /G o ld A n n u a l R e tu rn s

Gold
8 0%

6 0% D J IA %

Percentage Gains/(Loss)
4 0%
G o ld %

2 0%

0%

-2 0%

-4 0%

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997
Y e ar s 1 96 8 -1 9 9 6

Energy & Tech Stocks

Februa

Weekly Hotline Message (Now in our 36th Year) March 17, 2017

Dynacor Gold Mines Inc.

Business: Gold production in Peru, using ore
purchasing agreements; also exploration and
development on the Tumipampa Project.
Traded TSX: DNG
US OTC: DNGDF
Initial Coverage 8/13/10: US $0.32
Price 3/17/17: US $1.74
Shares Outstanding: 38,709,911
Market Cap: $ US$67 Million
EPS 9 Months in 2016: $0.08
Gold Resource (Historical non 43-101): 606,000 oz.
Progress Rating: A1
Telephone Number: 514- 393-9000
Website: www.dynacorgold.com

I have held this stock since the August 13, 2010, addition to this letter, for two reasons. First, management
simply continues
to do what it says
it will do, which is
grow the company
organically step
by step with
limited risk. With
organic growth, it
has been able to
virtually eliminate
shareholder
dilution, which
brings me to the
second reason I
have continued to
own these shares.
There is zero
value built into Dynacors shares for its Tumipampa Porphyry/Skarn/Vein Property. In the illustration
below, Dynacors Tumipampa Property is shown in red. All around it are world-class porphyry and skarn
deposits managed by the companies noted above.

TAYLOR HARD MONEY ADVISORS, INC. PO Box 780555, Maspeth, NY 11378 (718) 457-1426 March 17, 2017
 2
Dynacors President Jean Martineaus strategy was to use internally generated funds from its bread-and-butter ore
purchasing business to fund just enough early exploration of its highly prospective large-scale Tumipampa Project
to attract a major company to fund what is likely to be an enormous exploration budget. Now with the markets for
mining stocks back in an upswing, the big boys like those with major mines surrounding Tumipampa are knocking
ever-more loudly on Dynacors door. Im told that the big boys were especially aggressive this year at the PDAC. I
was further told that by the end of April, we may hear of an arrangement with a major on the Tumipampa Project.

There are three styles of mineralization that have been identified at Tumipampa. To the northeast on the above map
are veins from which the historical 606,000-ounce high-grade deposit is hosted. Dynacor has had plans to develop a
43-101 resource on that deposit and hire contract miners to mine it and then process it through its own plantor if
the deposit grows to sufficient size, install its own mill on site. As far as I know that is still the companys plan.

However, President Martineau has always maintained that the larger bulk-mineable world-class targets at
Tumipampa would need to be explored and developed toward production by a major. The large circular area in the
illustration above represents a huge area of disseminated mineralization. That as well as the porphyry target to the
northwest of this disseminated area would be targets for major mining companies, presumably one of those
companies with existing copper and gold mining operations next to Tumipampa.

What shape an agreement with a major might take, I do not know. I would expect/hope Dynacor will get some sort
of carried to production interest with an NSR. But what always attracted me to the Dynacor story was its limited
dilution thanks to its steady and growing earnings, because if something major is discovered akin to the world-class
deposits surrounding Tumipampa, these shares could become a moon shot overnight. In fact, with just an
announcement with a major, it should give Dynacors shares a boost. Again, I was told this past week that we may
learn of some sort of arrangement by the end of April. Stay tuned!

TAYLOR HARD MONEY ADVISORS, INC. PO Box 780555, Maspeth, NY 11378 (718) 457-1426 March 17, 2017
Copyright @ 2017 TAYLOR HARD MONEY ADVISORS, INC. ALL RIGHTS RESERVED
 3
Steadily Growing Profits

Meanwhile, management continues to stick to its knitting. It is only now starting to realize the benefits of its new
Veta Dorada Plant located in Chala Peru. The chart below shows the levels of gold production for Dynacor over the
past three years along with projected production this year, which is the first full year the company will benefit from
its much improved and more strategically located Veta Dorada Mill.

There are several positives for Dynacor with respect to this new mill. Most easily to calculate are lower costs related
to tailings disposal and electricity. With the new tailings facility, management calculates a $13-per-tonne savings.
At the Huanca Project, diesel fuel was used. At the new Chala plant, a power grid will be relied on for power
requirements and that will save Dynacor between $7 and $9 per tonne of ore processed.

Not as easily calculated yet are transportation savings. The prior mill was at an out-of-the-way location and larger
trucks were unable to drive into the plant. As such, larger loads were dumped at a nearby location at which point
Dynacor would incur costs related to loading that ore from the dump location to the plant. Management doesnt
know yet how much will be saved by the elimination of that operation, but it could be sizeable. Even if we assume
no transportation savings, margins should be considerably better. At the Huanca plant the average margin was $86
per tonne of processed ore. With just a $20 cost saving, the margin would jump to $106. Average mill head grades
purchased by Dynacor have been around 1 ounce per tonne.

In addition, the central location of the new plant figures to encourage more interest in Dynacors services. I have
learned, however, that there is some increased competition of late from other companies seeking to emulate
Dynacors business model, which buys gold ore from mom-and-pop mining operations in Peru. According to an
account from Dynacor, these newcomers are paying more for lower-grade ores. This is nothing new. There have
been other attempts to compete with Dynacor in the past but none of them have succeeded. Dynacors position is
that it is not going to become aggressive in bidding for this ore because the economics simply dont work. The
companys strategy is to let the competitors pay slightly more as they remain confident past will be prologue. Also,
some of the competitors are having trouble gaining enough ore to achieve a breakeven point. Dynacor has the
advantage of being in this business for more than 20 years. It has a loyal clientele. And I should note there is
another advantage of the new mill. Management is convinced it will be able to bump up its recoveries from the 92%
to 93% range at Huanca to the 96% to 97% range at Chala. That should also provide a competitive boost for
Dynacor.

TAYLOR HARD MONEY ADVISORS, INC. PO Box 780555, Maspeth, NY 11378 (718) 457-1426 March 17, 2017
Copyright @ 2017 TAYLOR HARD MONEY ADVISORS, INC. ALL RIGHTS RESERVED
 4
The Bottom Line

With production increasing into the 88,000 to 92,000 ounces this year and with the margin improving by about $20
per tonne from $86/tonne to $106/tonne, Im anticipating record profits for Dynacor. If it continues to process ore
grading 1 ounce gold per tonne as it has over the years, and the company produces 90,000 ounces in 2017, we
should expect a profit of around $9.5 million, or US$0.25 per share. However, management believes we wont see a
marked improvement in profit margins until the second half of this year as the business becomes normalized at the
new location.

But the really big story this year may well be at Tumipampa if a major mining company signs a joint venture
interest with Dynacor. As Dynacor does not yet have a very large following, its name recognition could rise
significantly if a company like Barrick, IAMGold, Fresnillo, or Yamana starts to fund exploration on a major target.
With just 38 million shares outstanding, Dynacor could become a star performer in 2017.

J Taylors Gold, Energy & Tech Stocks (JTGETS), is published monthly as a copyright publication of Taylor Hard Money Advisors, Inc. (THMA), Tel.:
(718) 457-1426. Website: www.miningstocks.com. THMA provides investment ideas solely on a paid subscription basis. Companies are selected for
presentation in JTGETS strictly on their merits as perceived by THMA. No fee is charged to the company for inclusion. The currency used in this publication is
the U.S. dollar unless otherwise noted. The material contained herein is solely for information purposes. Readers are encouraged to conduct their own research
and due diligence, and/or obtain professional advice. The information contained herein is based on sources, which the publisher believes to be reliable, but is
not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available information. Any opinions expressed are subject to
change without notice. The editor, his family and associates and THMA are not responsible for errors or omissions. They may from time to time have a position
in the securities of the companies mentioned herein. No statement or expression of any opinions contained in this report constitutes an offer to buy or sell the
shares of the company mentioned above. Under copyright law, and upon their request companies mentioned in JTGETS, from time to time pay THMA a fee of
$250 to $500 per page for the right to reprint articles that are otherwise restricted solely for the benefit of paid subscribers to JTGETS.

To Subscribe to J Taylors Gold, Energy & Tech Stocks Visit: https://www.miningstocks.com/select/gold

Receive J Taylors Gold, Energy & Tech Stocks monthly newsletter and weekly email messages for the period of your choice (U.S. and Canada). For
foreign postal delivery contact us at email below. Return to: PO Box 778555, Maspeth, NY 11378, USA. Phone or Fax: 718-457-1426, E-mail:
questions4rtaylor@gmail.com (Make check payable in US$ to Taylor Hard Money Advisors, Inc.)
Please Select Subscription:
Email delivery only (Monthly and Weekly Email Message):
One-year US $198.00
three-months US $69.00
U. S. Mail Delivery of monthly newsletter only (Weekly message by email only):
One-year US $240.00
three-months US $84.00
Name
Address
City State/Prov. Zip/Postal Code
Telephone Fax
Primary E-mail:
Secondary E-Mail:

Check
Visa
MasterCard
Discover

Card Number Exp.

(Last 3 digits of the number found on the
Signature 3-digit Code back of your credit card, below your signature)

TAYLOR HARD MONEY ADVISORS, INC. PO Box 780555, Maspeth, NY 11378 (718) 457-1426 March 17, 2017
Copyright @ 2017 TAYLOR HARD MONEY ADVISORS, INC. ALL RIGHTS RESERVED