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Dynasty Metals & Mining enlists contractor for Dynasty Goldfield project development

Dynasty Metals& Mining Inc. said April 27 that it has signed a definitivethree-year agreement with Green Oil S.A., contracting the latter's services forthe development of specific mining concessions within the project inEcuador.

In accordance with the deal, Green Oil will focus on surfaceexcavation of mineralized material on three of Dynasty's mining concessionswithin the project. The concessions are fully permitted for small-scale mining,allowing for open pit mining of up to 1,000 tonnes per concession per day.

The contractor must excavate a minimum of 400 tonnes per dayand 750 tonnes per day by the beginning of the third month and will only havethe right to mine open pit surface material as Dynasty retains the right toexplore and develop any and all underground mineralization on the threeconcessions and will keep the rights to the mineralized material developed undergroundwithin or beyond the agreement's three-year term.

Upon receipt of government approval, Green Oil will alsostart the construction of two roads connecting the project area to a maintransportation route.

The agreement's terms state that Green Oil will begin openpit excavation within 60 days of starting the road construction. Furthermore,the contractor will be responsible for the transportation of mineralizedmaterial from the point of excavation to the Zaruma processing plant, which isabout 180 kilometers away, as well as for securing the mineralized material andtracking truck loads during transport.

The contractor will also bear the costs for the roadconstruction as well as for all development, mining and transportation ofmineralized material.

Green Oil's compensation will be based on the cashequivalent of 35% of refined gold sales and 10% of refined silver sales fromthe concessions, based on international pricing of both commodities for paymentcalculation; it will also cover the proportional cost of transportation andrefining costs as per the said percentages.

Furthermore, Green Oil agreed to an unsecured loan provisiontotaling US$500,000 under the deal and has advanced US$170,000 to Dynasty as asign of good will, with the balance to be advanced within three business days.

The loan will be repayable in three equal installments inthe third, fourth and fifth month following the start of mining activities atthe project, financial resources coming from commercialization of relevantproduction.

Dynasty plans to use the loan's proceeds for general workingcapital.