Dynacor Receives Positive ISS Recommendation FOR All Director Nominees and Meeting Resolutions at the Annual Meeting of Shareholders and Provides Corporate Updates

Dynacor Group Inc. (TSX: DNG) announced that Institutional Shareholder Services Inc. (ISS) recommends shareholders vote FOR all resolutions at the June 17, 2025 annual meeting, including the election of directors. This follows a special meeting on April 16, 2025, where shareholders voted against a resolution from iolite Capital Ltd. to increase the Board’s size and against iolite’s nominee for election to the board; Dynacor's board does not support iolite's subsequent nominee due to concerns about the candidate's qualifications and potential conflicts of interest, while highlighting Dynacor's strong performance, including a 159% shareholder return since 2017.

Analysis

Dynacor Group Inc. has secured a crucial endorsement from Institutional Shareholder Services (ISS), which recommends shareholders vote FOR all management resolutions at the June 17, 2025, annual meeting, reinforcing the board's position following recent shareholder activism. This support comes after Dynacor shareholders overwhelmingly rejected proposals from dissident iolite Capital Ltd. at a special meeting on April 16, 2025, to expand the board and install its nominee. Dynacor's board subsequently deemed iolite's AGM nominee unsuitable, citing the nominee's association with three companies involved in bankruptcy proceedings, a lack of experience in Dynacor's specialized artisanal gold processing sector and Latin American operations, and a pre-existing relationship with iolite. The company emphasizes its unique business model as an industrial ore processor, distinct from conventional gold miners, which results in lower stock volatility (159% DNG return since 2017 vs. 97% for GDXJ) and a cost structure tied to daily ore purchases with a ~15-day inventory turnover, naturally hedging gold price exposure and benefiting most from steady price increases. This operational distinction has contributed to significant shareholder value, with a 159% return since June 2017, outperforming both the S&P TSX Composite (73%) and the S&P 500 (143%), and recognition in the TSX30 2024. Dynacor boasts a 14-year history of stable profitability with a 15% EBITDA CAGR, a strong balance sheet holding $59 million in cash and no debt, and consistent capital returns, including a current ~3.36% annualized dividend. The company achieved record financial results in 2024 across multiple metrics, including sales and net income. Future growth hinges on international expansion, targeting 500,000 ounces of gold production by 2030, with a Senegal pilot plant de-risking African entry, alongside ongoing operational optimization in Peru, expected to enhance productivity from 2026.

Key Decisions for Investors

• Given ISS's positive recommendation and management's effective handling of activist challenges, shareholders should carefully consider supporting the incumbent board and its proposed resolutions at the AGM.
• Evaluate Dynacor's investment merits based on its distinctive industrial ore processing model which presents a different risk and return profile, including lower volatility and a unique sensitivity to gold price trends, compared to traditional mining equities.
• Closely monitor the execution of Dynacor's international expansion strategy, particularly the de-risking Senegal pilot plant and the goal of commissioning one new plant annually, as well as the impact of Peruvian operational efficiencies, as these are key to achieving the 2030 production target and driving future value.
• Investors should acknowledge the company's strong financial performance and shareholder returns, but remain cognizant that past activist pressure, although currently subdued, could re-emerge as a factor influencing market perception.