Q2 Financials found here

http://www.dynastymining.com/investors/sedar/DMM_Financial_Statements_2012_Q2.pdf

Some excerpts from Aug 15 2012 MD&A posted below.

http://www.dynastymining.com/investors/sedar/DMM_MDA_2012_Q2.pdf

"Page 4.

Although the Company has started mining, processing and selling gold at the Zaruma project, substantially all of the material has been less than 5 grams per tonne and the majority has not been part of the resource. It is therefore the Company's belief that there has been no material impact on the estimated resource as a result of the pre-commercial production mining that has taken place to date.


A significant improvement the company is currently making to the plant is the construction of a gravity concentration circuit to enable the more efficient processing of material containing high grade coarse gold. To date the Company has constructed and installed the majority of the crucial components of the circuit, including continuous stapes and a large high intensity leaching circuit, to increase the efficiency and is currently estimated to be recovering approximately 90% of the gold entering the circuit. A Falcon concentrator, aquired by the Company from a third party manufacturer, is on location in Zaruma and will be installed in due course. The high intensity leaching circuit will be used with the Falcone to process dore from concentrate on site rather than having to ship concentrate to a third party to be processed.

.....During the six months ended June 30, 2012 the Company sold approximately 9,500 ounces of gold and 15,400 ounces of silver for gross proceeds of approximately $16.1 million......

As at June 30, 2012 the Company had approximately 1,200 ounces of gold and 7,000 ounces of silver contained in dore bars, which is recorded as inventory in the consolidated financial statments, net of an estimated 5% royalty payable to the government of Ecuador, a 1.5 % net smelter return royalty to 1570926 Alberta Ltd and estimated refining and transportation fees.....

Subsequent to June 30, 2012 and up to the date of this report, the Company produced and exported dore bars containing an additional 3,087 ounces of gold and 12,177 ounces of silver of which 1,467 ounces of gold and 6,963 ounces of silver have been sold to date for aggregate proceeds of approximately $2.5 million. On July 23, 2012 a large group of armed robbers gained access to the plant and escaped with dore bars containing approximately 1300 ounces of gold and 4000 ounces of silver. The company has sufficient insurance to cover this type of loss with an internationally recognized insurance company. The company has filed a claim and has been assisting the insurance company in their assessment of the claim, however there is no assurance at this time that the Company will receive the full amount claimed.


Page 5.


.... The Company is currently mining and delivering to the plant an average of approximately 400 tonnes of primarily non resource material of varying grades per day.

......During the last quarter, as the declines at "Cabo de Hornos" have progressed to further depths to access the higher grade resource material there has been and continues to be an increased necessity to dewater the lower levels of the mine, leading to a slowing in mining operations. A primary cause of the accumulation in the water is believed to be the existence of the old abandoned mine workings in close proximity at the current level. Once the declines get beneath the level of the old mine workings the water intake to the mine is expected to subside. The Company expects to increase production in the near term once the lower levels of the "Cabo de Hornos" mine has been successfully dewatered and it commences developing, mining and delivering material to the plant from its other two mines, "Barbasco" and "Ayampamba"......



Page 10.

Financial Condition, Liquidity and Capital Resources

As at June 30, 2012, the Company had cash resources of $1.1 million and working capital (current assets less current liabilities) of $2.5 million, which included $2.1 million of gold and silver in dore form in inventory which was available for sale. The Company expects to use these funds together with cash received from future sale of precious metals to further mine development activities.

Subsequent to June 30,2012, and up to the date of this report, the Company produced dore bars containing an additional 3,087 ounces of gold and 12,177 ounces of silver of which 1,467 ounces of gold and 6,963 ounces of silver have been sold to date for aggregate proceeds of approximately $2.5 million.


Page 11


.......As at the date of this report, providing there is a successful and timely resolution to the company's insurance claim to recover the value of the stolen gold, the Company does not anticipate that it will require additional capital in the near future......."