| Dynasty Metals and Mining is reporting varying | | | | and tailings. It sounds pretty environmentally feasible |
| high-grade surface trenching results in the Cola district | | | | to me, so if USC and Dynasty are right and the |
| of the Dynasty Gold Project in Ecuador. Results | | | | permit comes through, it could be another indication |
| include up to 634.58 g/t of gold and 297 g/t of silver | | | | that the stock price is poised to rise, as one more |
| over 0.5 metres. Two veins are currently the focus | | | | risk is crossed off the list. |
| of trench and channel sampling in the Cola District - | | | | On the financial side, a search through SEDAR files |
| the "Sol" vein and the "Gold" vein. The veins are | | | | reveals promising numbers. An Independent |
| parallel and 30 metres apart and an additional | | | | Preliminary Assessment conducted by qualified person |
| network of similar veins exist to the north. The | | | | W.J. Holly dated July 12, 2006 revealed that the |
| average results of sampling in the "Gold" vein along | | | | Zaruma Gold Project with 1.5 million ounces of gold |
| 120 metres, with an average width of 0.52 metres | | | | would enjoy a 14.5-year mine life and a cash flow of |
| was 102 g/t of gold and 158.59 g/t of silver. Chief | | | | US$467 million. The assessment pegged annual gold |
| Financial Officer Bill McCartney comments: "We have | | | | production at 100,000 ounces and predicted a 116% |
| very high-grade surface trenching results. We are | | | | rate of internal return (IRR). The price of gold used |
| currently trying to define the size of the deposit. We | | | | for calculations was US $500/ounce. |
| hope to commence drilling this year." | | | | The Jerusalem project also looks good with an |
| At the company's Zaruma Project, Dynasty is | | | | undiscounted, pretax cash flow of $267 million and a |
| awaiting approval of its environmental impact study | | | | pre-tax IRR of 149%. The Jerusalem 43-101 technical |
| which has been submitted to the Ecuadorian Ministry | | | | report dated February 27, 2006 and revised in |
| of Energy and Mines. Bill McCartney told me that this | | | | January of 2007 states: "The authors believe that |
| is the final permit they need to start production. | | | | the overall project risk is low and the potential for |
| Dynasty expects to hear by the end of March and | | | | profitable operations is high". |
| then, says Bill McCartney, "it will be full steam ahead. | | | | The company's NI 43-101 total resource base is |
| We are pushing to production for the end of 2007 at | | | | approximately 4.6 million ounces of gold. Here's the |
| the Zaruma Project." | | | | remarkable thing about that: on a total resource |
| Despite last year's environmentally-friendly, anti-mining | | | | basis, including measured, indicated and inferred |
| protests in Ecuador, and the refusal of one Canadian | | | | resources, Dynasty's market cap per ounce of gold is |
| company's Environmental Impact Study by Ecuadorian | | | | only US$19/ounce, compared to the average junior |
| officials, Dynasty Metals reports that relations | | | | explorer which is approximately US$75. Once a junior |
| between the Ecuadorian government and the | | | | exploration company goes to production they |
| company are amicable and that so far things are | | | | typically jump to a market cap valuation of US$200 |
| progressing without any delay of the company's | | | | ounce, which for Dynasty would be a jump of 953%. |
| projects. Even with Ecuador's new president, Rafael | | | | With the Zaruma Project slated to go into production |
| Correa - a leftist economist and opponent of free | | | | this year, now is clearly the point that the stock |
| trade - taking office in January of this year, Dynasty | | | | chart will begin its climb. |
| management appears confident. When asked if he | | | | Always reassuring is the news in the USC report that |
| expects to get the final permit, Bill McCartney, CFO | | | | Dynasty Metals management holds 40% of company |
| of Dynasty Metals, reassures me they do. It's the | | | | shares. That should keep them working hard, while at |
| only permit left to get. These things just take time. | | | | the same time, institutional investors are involved, |
| Let's hope so. Correa's newly-appointed Minister of | | | | which shows there is investor confidence in Dynasty. |
| Energy and Mining, Alberto Acosta, has worked for | | | | Dynasty owns 100% of its projects so it is |
| environmental NGOs that have opposed mining in | | | | unencumbered by tricky relations that sometimes |
| other areas of the country. He is also known for his | | | | beleaguer joint venture projects. Dynasty remains in |
| opposition to free trade. | | | | control of exploration projects and financing for them. |
| So while some investors may consider the political | | | | The USC report also notes that Dynasty currently |
| situation in Ecuador to be enough of an incentive to | | | | has C$12 million in the bank, which will allow it to |
| stay away or wait longer, a USC Resource Consult | | | | develop its products without diluting stock. |
| profile of Dynasty, while acknowledging the risk, also | | | | I like to hear that President and CEO Robert Washer |
| hits reassuring tones in regards to Correa. | | | | has been living, working and negotiating in Ecuador |
| "Correa...has struck rather moderate notes after he | | | | for 14 years. That's enough time to allow him to gain |
| was elected." The profile points out that there have | | | | needed contacts and experience. He leads the |
| been ten different presidents in Ecuador during the | | | | company with 29 years of experience in mining |
| company's 14 years there and none have effected | | | | including discovering, developing and completing six |
| any devastation to the mining industry. They also | | | | gold mines. Also important is Washer's previous |
| note that, "The good relationship to the ministries | | | | experience in the energy industry in Ecuador, where |
| remains even if 'the head at the top is replaced'." | | | | he previously was chairman of the board and held |
| Dynasty's technical reports cite the highest standards | | | | the largest share at Avatar Petroleum Inc. |
| for environmental practices though. Describing | | | | So, with Zaruma and Jerusalem projects set to begin |
| environmental considerations with regards to tailings, | | | | production later this year or soon after, risk has been |
| Dynasty's 43-101 of February 2006 and January 2007 | | | | reduced compared to earlier stages and Dynasty |
| says: "Dynasty's plans will be an opportunity to | | | | could be poised near the top of the exploration |
| implement best practice tailings deposition, and in so | | | | company heap. Adding to the optimism is the bullish |
| doing, set a precedent for the industry as a whole." | | | | outlook for gold and silver, which has investors |
| It also outlines plans for revegetation following | | | | scrambling to find companies like this. |
| environmental impact from open pits, waste dumps | | | | |