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On Friday, Canaccord Genuity analysts initiated coverage on Dynacor Group Inc (DNG:CN) with a Buy rating and set a price target of C$6.50. The analysts highlighted Dynacor’s unique position as the only publicly traded company focused solely on processing gold from the artisanal and small-scale mining (ASM) industry.
Dynacor Group, unlike traditional mining companies, does not engage in ore mining itself, which eliminates exploration risk but also limits its exposure to gold price fluctuations. The company’s competitive edge is attributed to its ability to purchase and accurately price ethically sourced, fully traceable ore. It processes ore grades with varying recovery rates from over 700 ASMs.
The analysts noted that Dynacor’s management has developed a specialized skill set over the past 25 years, consistently achieving gold recovery rates between 92% and 94% at its mill in southern Peru. This expertise is seen as a significant advantage in the ASM industry, which accounts for approximately 25% of global gold production.
Canaccord Genuity sees potential for Dynacor to expand its business model to other countries, capitalizing on its established processes and experience within the ASM sector. The analysts’ positive outlook is based on the company’s proven track record and its strategic approach to gold processing.
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