This management report for Dynacor Gold Mines Inc. (“Dynacor” or the “Company”) comments the major
activities of the Company which occurred during the year ended December 31, 2009 as well as the
subsequent period up to March 29, 2010.
Between the months of July 2008 to April 2009, the Peruvian authorities have withheld the sales tax
receivable from a Peruvian subsidiary. The sales tax is 19% of the sales value. The authorities have
informed the Company that the withholding is due to the fact that certain companies operating in the
same region as the Company were charging sales taxes and never remitting them to the Peruvian
authorities. These suppliers were shell operations. Dynacor vigorously contests this withholding. The
Peruvian authorities are conducting their tax audit which was expected to be completed in the fourth
quarter of 2009. The Company is waiting for the results of the audit. Thus, the Company was unable to
recover the withholding tax funds as planned in this quarter. Dynacor now considers receiving about 66%
of this amount in 2010. Since it is impossible to determine when the remaining 34% will be recovered, the
sum of $1.5M is presented as long term. As at December 31, 2009, the withholding amounts to
12,206,403 nuevo soles (approximately $4,400,000). The Company has taken all necessary measures to
recover these amounts. In the event the settlement attempts are not successful, the Company will
continue to operate at a reduced rate of output until such time that the Company significantly increases its
cash flow generated from operating activities or receives financing in the form of share issues or
borrowing. The Company has taken steps to this end.
Old management report:
They clearly can be held liable from the Dynacor Entity....they even stated that they (Dynacor) would issue debt or issue shares if the judgement goes against them.
I'm not laughing....can we get someone to respond to this (DNG management)?