UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM    10-K



| | [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | --- | ------------------------------------------------------------------------------------



For the fiscal year ended December
31, 2013



| | [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | --- | ----------------------------------------------------------------------------------------



For the transition period from _________________________
to _________________________



Commission File Number: _______000-30371_____________________





DYNARESOURCE, INC.



(Exact name of Registrant as specified
in its charter)



|                         |  |                              
|------------------------ |  | -----------------------------
|Delaware                 |  | 94-1589426                   
|(State of Incorporation) |  | (Employer Identification No.)



|                                                             |  |           
|------------------------------------------------------------ |  | ----------
|222 W. Las Colinas Blvd., Suite 744 East Tower Irving, Texas |  | 75039     
|(Address of principal executive offices)                     |  | (Zip Code)



Registrant’s telephone number:
  Phone:  (972) 868-9066; Fax:  (972) 868-9067





Securities registered pursuant to Section
12(b) of the Act:

None



Securities registered pursuant to Section
12(g) of the Act:



Common Stock; $0.01 Par Value

(Title of Class)



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.

Yes [ ]	No [X]



Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

|Yes [ ]	No [X]
|--------------





Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

1







Yes [X]	No [ ]



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).



Yes [X]	No [ ]



Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [X]





Indicate by a check mark whether the Registrant
is a large filer, an accredited filer, non-accredited filer, or a smaller reporting company. See the definitions of “large
accredited filer”, “accredited filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.



Large accredited filer 	[
]	Accredited filer	[ ]



Non-accredited filer	[ ]	Smaller
reporting company	[X]



Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act).



Yes [ ]	No [X]



The aggregate market value of common stock,
par value $0.01 per share, held by non-affiliates of the registrant, based on the average bid and asked prices of the common stock
on December 31, 2013 (the last business day of the registrant’s most recently completed fiscal year) was approximately $27
million.  For purposes of this computation, all officers, directors and 10% beneficial owners of the registrant are deemed
to be affiliates.  Such determination should not be deemed an admission that such officers, directors or 10% beneficial owners
are, in fact, affiliates of the registrant.



Number of common shares outstanding at April
15, 2014	 11,052,008







DOCUMENTS INCORPORATED BY REFERENCE





Listed below are documents incorporated herein by reference and
the part of this Report into which each such document is incorporated:



None.







2





DYNARESOURCE, INC.

FORM 10-K



TABLE OF CONTENTS



|PART I        |                                                                                                                                                                                   |  |  |   
|------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | --
|              |                                                                                                                                                                                   |  |  |   
|ITEM 1.       | Business                                                                                                                                                                          |  |  | 5 
|ITEM 1A.      | Risk Factors                                                                                                                                                                      |  |  | 19
|ITEM 1B.      | Unresolved Staff Comments                                                                                                                                                         |  |  | 23
|ITEM 2.       | Properties                                                                                                                                                                        |  |  | 23
|ITEM 3.       | Legal Proceedings                                                                                                                                                                 |  |  | 25
|ITEM 4.       | Mine Safety Disclosures                                                                                                                                                           |  |  | 26
|              |                                                                                                                                                                                   |  |  |   
|PART II       |                                                                                                                                                                                   |  |  |   
|              |                                                                                                                                                                                   |  |  |   
|ITEM 5.       | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities                                                                      |  |  | 27
|ITEM 6.       | Selected Financial Data                                                                                                                                                           |  |  | 27
|ITEM 7.       | Management’s Discussion and Analysis of Financial Condition and Results of Operation                                                                                              |  |  | 27
|ITEM 7A.      | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                        |  |  | 38
|ITEM 8.       | Financial Statements and Supplementary Data                                                                                                                                       |  |  | 38
|ITEM 9.       | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                                                                              |  |  | 59
|ITEM 9A.      | Controls and Procedures                                                                                                                                                           |  |  | 59
|ITEM 9B.      | Other Information                                                                                                                                                                 |  |  | 60
|              |                                                                                                                                                                                   |  |  |   
|PART III      |                                                                                                                                                                                   |  |  |   
|              |                                                                                                                                                                                   |  |  |   
|ITEM 10.      | Directors, Executive Officers and Corporate Governance                                                                                                                            |  |  | 60
|ITEM 11.      | Executive Compensation                                                                                                                                                            |  |  | 62
|ITEM 12.      | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder  Matters                                                                                   |  |  | 64
|ITEM 13.      | Certain Relationships and Related Transactions, and Director Independence                                                                                                         |  |  | 65
|ITEM 14.      | Principal Accounting Fees and Services                                                                                                                                            |  |  | 65
|              |                                                                                                                                                                                   |  |  |   
|PART IV       |                                                                                                                                                                                   |  |  |   
|              |                                                                                                                                                                                   |  |  |   
|ITEM 15.      | Exhibits and Financial Statement Schedules                                                                                                                                        |  |  | 67
|              |                                                                                                                                                                                   |  |  |   
|EXHIBIT INDEX |                                                                                                                                                                                   |  |  |   
|              |                                                                                                                                                                                   |  |  |   
|Exhibit 31.1  | Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002                             |  |  |   
|Exhibit 31.2  | Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002                             |  |  |   
|Exhibit 32.1  | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002 |  |  |   





3





FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K includes forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to in this annual report
as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to in this annual report
as the Exchange Act. Forward-looking statements are not statements of historical fact but rather reflect our current expectations,
estimates and predictions about future results and events. These statements may use words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “predict,” “project” and similar expressions
as they relate to us or our management. When we make forward-looking statements, we are basing them on our management’s beliefs
and assumptions, using information currently available to us. These forward-looking statements are subject to risks, uncertainties
and assumptions, including but not limited to, risks, uncertainties and assumptions discussed in this annual report. Factors that
can cause or contribute to these differences include those described under the headings “Risk Factors” and “Management
Discussion and Analysis and Plan of Operation.”



If one or more of these or other risks or uncertainties
materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected.
Any forward-looking statement you read in this annual report reflects our current views with respect to future events and is subject
to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and
liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are
expressly qualified in their entirety by this paragraph. You are cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date of this annual report. The Company expressly disclaims any obligation to release publicly any updates
or revisions to these forward-looking statements to reflect any change in its views or expectations. The Company can give no assurances
that such forward-looking statements will prove to be correct.



CAUTIONARY NOTE TO UNITED STATES INVESTORS - INFORMATION CONCERNING
PREPARATION OF RESOURCE AND RESERVE ESTIMATES



The
Company has elected to prepare reports under the Canadian Securities Administrators’ National Instrument 43-101 “Standards
of Disclosure for Mineral Projects” (“NI 43-101”).. These standards are materially different from the standards
generally permitted in reports filed with the United States Securities and Exchange Commission (“SEC”).

The
terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” used in this
report are Canadian mining terms defined in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)
in the CIM Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council. These definitions differ from the definitions
of those terms in Industry Guide 7 (“Guide 7”) promulgated by the SEC. Under U.S. standards, mineralization may not
be classified as a “reserve” unless a determination has been made that the mineralization could be economically and
legally produced or extracted at the time the reserve determination is made. Under Guide 7 standards, a “Final” or
“Bankable” feasibility study is required to report reserves, the three-year historical average precious metals prices
are used in any reserve or cash flow analysis to designate reserves, and the primary environmental analysis or report must be filed
with the appropriate government authority. One consequence of these differences is that “reserves” calculated in accordance
with Canadian standards may not be “reserves” under Guide 7 standards. U.S. investors should be aware that the Company’s
properties located in Mexico do not have “reserves” as defined by Guide 7 and are cautioned not to assume that any
part or all of the disclosed mineralized material will be confirmed or converted into Guide 7 compliant “reserves”.

Under NI 43-101, we report “Measured”,
“Indicated” and “Inferred” resources, which are measurements that are generally not permitted in filings
made with the SEC. The estimation of measured resources and indicated resources involve greater uncertainty as to their existence
and economic feasibility than the estimation of proven and probable reserves. U.S. investors are cautioned not to assume that any
part of measured or indicated resources will ever be converted into economically mineable reserves. The estimation of inferred
resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories
of resources. It cannot be assumed that all or any part of inferred resources will ever be upgraded to a higher category. Therefore,
U.S. investors are also cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally
or economically.



4





PART I



Item 1. 	Business

Company

DynaResource, Inc., the Company described
herein, is a Delaware corporation, with offices located at 222 W. Las Colinas Blvd., Suite 744 East Tower, Irving, Texas 75039.
It can be reached by phone at (972) 868-9066 and by fax at (972) 868-9067.



History

The Company was incorporated in
the State of California on September 28, 1937, under the name West Coast Mines, Inc. In November 1998, the Company re-domiciled
from California to Delaware and changed its name to DynaResource, Inc. (aka “DynaUSA”).

The Company is in the business of acquiring,
investing in, and developing precious metals properties, and the production of precious metals.

Through its 80% owned Mexican subsidiary,
DynaResource de México, S.A. de C.V. (“DynaMéxico”), the Company owns a portfolio of mining concessions
that currently includes its interests in the San José de Gracia Project (“SJG”) in northern Sinaloa State, Mexico.
The SJG District covers 69,121 hectares (170,802 acres) on the west side of the Sierra Madre mountain range.

A wholly owned subsidiary of the Company, Mineras
de DynaResource S.A. de C.V. (“MinerasDyna”), entered into an operating agreement with DynaMéxico on April 15,
2005 and, as a consequence of that agreement and subsequent amendments to that agreement, is the named exclusive operating entity
for the SJG Project.



In 2005, the Company formed another wholly
owned subsidiary, DynaResource Operaciones, SA de C.V. (“DynaOperaciones”). DynaOperaciones entered into a personnel
management agreement with MinerasDyna and, as a consequence of that agreement, is the exclusive management company for personnel
and consultants involved at the SJG Project.



At incorporation of DynaMexico, 100 shares
of Fixed Capital Series “A” shares were issued with DynaUSA receiving 99 shares and Koy W. Diepholz receiving 1 share.

From January 2008 through March 2011,
DynaMexico issued 100 Variable Capital Series “B” Shares to Goldgroup Resources Inc., a wholly owned subsidiary of
Goldgroup Mining Inc. Vancouver, BC. (“Goldgroup”), in exchange for Goldgroup’s contributing $18,000,000 USD
to DynaMexico. At the issuance of the 100 Series B Shares to Goldgroup, it owned 50% of the outstanding capital shares of DynaMexico.

On May 17, 2013, DynaResource agreed
to acquire a Certificate for 300 Series “B” Variable Capital Shares of DynaMexico, in exchange for the settlement of
accounts receivable from DynaMexico in the amount of $31,090,710 Mexican Pesos (approximately $2.4 M USD). After the issuance and
receipt of the 300 Series B Shares on June 21, 2013, DynaUSA holds 80% of the total outstanding Capital of DynaMexico. DynaMexico
owns 100% of the San Jose de Gracia Project in northern Sinaloa, Mexico ("SJG", and the "SJG Property"). (See
table representation of the outstanding Capital of DynaMexico below).

The exchange of shares by DynaMexico
for amounts payable to DynaUSA was unanimously approved by attending shareholders at a meeting of the shareholders of DynaMexico,
held on the second call for shareholder's meeting on May 17, 2013 in Mazatlan, Sinaloa, Mexico. Of the total amount of $31,090,170
Mexican Pesos exchanged for the 300 Shares, $150,000 Mexican Pesos was accounted for at the nominal value of $500 Mexican Pesos
per share, and the remaining balance of $30,940,710 Mexican Pesos was accounted for as a premium for the subscription of the shares
agreed to be paid by DynaUSA.

The date of issuance of the 300 Series
B Share Certificate was June 21, 2013. As a result of the issuance and exchange of the 300 Variable Capital shares for amounts
owed to DynaUSA, the accounts payable amount owed by DynaMexico to DynaUSA was retired in full. MinerasDyna, the 100 % owned subsidiary
of DynaUSA, continues to carry an amount receivable from DynaMexico of $2,150,000 USD at December 31, 2013, and MinerasDyna continues
to make cash advances to DynaMexico under the terms of the exploitation amendment agreement (“EAA”), below.

5





After the issuance of the 300 Series B Variable Capital shares of
DynaMexico to DynaUSA as described above, the current outstanding Capital of DynaMexico is set forth in the table below:



|DynaMexico Shareholder   |  | Fixed CapitalSeries "A" Shares |  | Variable CapitalSeries "B" Shares |  | Total Capital Shares(Series A and B)
|------------------------ |  | ------------------------------ |  | --------------------------------- |  | ------------------------------------
|DynaResource, Inc.       |  | 099                            |  | 300                               |  | 399                                 
|Koy W. Diepholz          |  | 001                            |  |                                   |  | 001                                 
|Goldgroup Resources Inc. |  |                                |  | 100                               |  | 100                                 
|Total Capital Issued     |  | 100                            |  | 400                               |  | 500                                 

DynaResource currently owns 80% of the
outstanding common shares of DynaMéxico.

On May 15, 2013, MinerasDyna entered
into an Exploitation Amendment Agreement (“EAA”) with DynaMexico. The EAA grants to MinerasDyna the right to finance,
explore, develop and exploit the SJG Property, in exchange for: (A) Reimbursement of all costs associated with financing, maintenance,
exploration, development and exploitation of the SJG Property, which costs are to be charged and billed by MinerasDyna to DynaMexico;
and, (B) After Item (A) above, the receipt by MinerasDyna of 75 % of gross receipts received by DynaMexico from the sale of all
minerals produced from SJG, to the point that MinerasDyna has received 200 % of its advanced funds; and, (C) After Items (A) and
(B) above; the receipt by MinerasDyna of 50 % of all gross receipts received by DynaMexico from the sale of all minerals produced
from SJG, and throughout the term of the EAA; and, (D) in addition to Items (A), (B), and (C) above, MinerasDyna shall receive
a 2.5 % NSR (“Net Smelter Royalty”) on all minerals sold from SJG over the term of the EAA.

The EAA is the third and latest Amendment
to the original Contract Mining Services and Mineral Production Agreement (the “Operating Agreement”), which was previously
entered into by MinerasDyna with DynaMexico in April 2005, wherein MinerasDyna was named the Exclusive Operating Entity at SJG.
The Operating Agreement was previously amended in September 2006 (the “First Amendment”), and amended again at July
15, 2011 (the “Second Amendment”). The Term of the Second Amendment is 20 years, and the EAA provides for the continuation
of the 20 Year Term from the date of the Second Amendment (July 15, 2011).

On
June 17, 2013, DynaMexico received from the Secretaria de Medio Ambiente Y Recursos Naturales, the Federal Environmental Authority
in Mexico ("SEMARNAT"), the approval and permission which allows for the rehabilitation and operation of the pilot mill
facility at SJG ("the Semarnat-SJG Mill Permit," and, the "Semarnat Exploitation Permit"). Under the terms
of the Semarnat-SJG Mill Permit, DynaMexico will be responsible to maintain the SJG pilot mill facility, and including the adjacent
tailings pond area, in compliance with the regulations described in la Norma Oficial Mexicana ("NOM-141-SEMARNAT-2003).

On
September 30, 2013, DynaMexico received from the Secretaria de Medio Ambiente Y Recursos Naturales, the Federal Environmental Authority
in México ("SEMARNAT"), the approval and permission which allows for the exploitation and mining activities at
the San Pablo Area of SJG ("the Semarnat-SJG San Pablo Exploitation Permit" and the "Semarnat Exploitation Permit").
Under the terms of the Semarnat Exploitation Permit, DynaMéxico will be restricted to conducting exploitation activities
within the San Pablo Area of SJG (as defined in the Map of the San Pablo area as submitted to Semarnat).

Subsequent to December 31, 2013,
MinerasDyna entered into a 20 Year Land Lease Agreement with the Santa Maria Ejido Community
surrounding San Jose de Gracia. The Land Lease Agreement is dated January 6, 2014 and continues through 2033. The Land Lease agreement
covers an area of 4,399 hectares surrounding the main mineral resource areas of SJG, and provides for annual lease payments by
MinerasDyna of $ 1,359,443 Pesos (approx. $104,250 USD), commencing in 2014. Additionally, under the description of the 20 Year
Land Lease, MinerasDyna expects to construct a Medical Facility at SJG in year 2014, and a Community Center in year 2015.

The Land Lease Agreement provides MinerasDyna
with surface access to the core resource areas of SJG (4,399 hectares), and allows for all permitted mining and exploration activities
from the owners of the surface rights (Santa Maria Ejido community).





6





Licenses and Concessions

The SJG District is comprised
of 33 mining concessions covering 69,121 hectares (171,802 acres) and is located within the Sierra Madre gold-silver belt, where
the majority of hydrothermal deposits in Mexico are located. The Company’s concessions, all of which are formally held by
DynaMéxico, are granted by the Mexican government, or acquired from previous owners. The Company’s concessions are
comprised of a combination of exploration concessions and development concessions, are filed in the Public Registry of Mining,
and are scheduled to expire from 2028 through 2058. The concessions can be renewed prior to the expiry dates. The table below
contains a listing of the mineral concessions currently held by DynaMéxico.

Under amendments to the Mining Act
of Mexico that came into effect on December 2006, the classifications of Mining Exploration Concessions and Mining Exploitation
Concessions were replaced by a single classification of Mining Concessions valid for a renewable term of 50 years, commencing from
the initial issuance date. To be converted into Mining Concessions at the time these amendments came into force, former exploration
and exploitation concessions had to be in good standing at the time of conversion. All of the SJG concessions were converted to
50-year Mining Concessions at the time the amendments to the Mining Act came into effect. To renew the 50-year term, Mining Concessions
must be in good standing at the time application is filed. An application for renewal must be filed within 5 years prior to expiration
of the term.

To maintain Mining Concessions in good
standing, the registered owner must (a) pay bi-annual mining duties in advance, by January 31 and July 31 each year, (b) file assessment
work reports by May 30 each year, for the preceding year (some exception rules apply), and (c) file by January 31 each year, statistical
reports on exploration / exploitation work conducted for the preceding year.

Notice of Commencement of Production
Activities and Annual Production Reports must be filed annually by January 31 each year for those concessions where mineral ore
extraction is taking place. As a general provision, registered owners of Mining Concessions must follow environmental and labor
laws and regulations in order to maintain their Mining Concessions in good standing.

As of the date of this Form 10-K,
all of the 33 mining concessions comprising the SJG Property are in good standing with respect to the payment of taxes and the
filing of assessment work obligations imposed by the Mining Act of Mexico and its Regulations.

Current Mining Concessions - San
José de Gracia

|Claim Name          | ClaimNumber | Staking date | Expiry     | Hectares | Taxes / ha (pesos)
|------------------- | ----------- | ------------ | ---------- | -------- | ------------------
|AMPL. SAN NICOLAS   | 183815      | 22/11/1988   | 21/11/2038 | 17.4234  | 111.27            
|AMPL. SANTA ROSA    | 163592      | 30/10/1978   | 29/10/2028 | 25.0000  | 111.27            
|BUENA VISTA         | 211087      | 31/03/2000   | 30/03/2050 | 17.9829  | 63.22             
|EL CASTILLO         | 214519      | 02/10/2001   | 01/10/2051 | 100.0000 | 31.62             
|EL REAL 2           | 216301      | 30/04/2002   | 29/04/2052 | 280.1555 | 31.62             
|FINISTERRE FRACC. A | 219001      | 28/01/2003   | 27/01/2053 | 18.7856  | 31.62             
|FINISTERRE FRACC. B | 219002      | 28/01/2003   | 27/01/2053 | 174.2004 | 31.62             
|GUADALUPE           | 189470      | 05/12/1990   | 04/12/2040 | 7.0000   | 111.27            
|LA GRACIA I         | 215958      | 02/04/2002   | 01/04/2052 | 300.0000 | 31.62             
|LA GRACIA II        | 215959      | 02/04/2002   | 01/04/2052 | 230.0000 | 31.62             
|LA LIBERTAD         | 172433      | 15/12/1983   | 14/12/2033 | 97.0000  | 111.27            
|LA NUEVA AURORA     | 215119      | 08/02/2002   | 07/02/2052 | 89.3021  | 31.62             
|LA NUEVA ESPERANZA  | 226289      | 06/12/2005   | 05/12/2055 | 40.0000  | 7.6               
|LA UNION            | 176214      | 26/08/1985   | 25/08/2035 | 4.1098   | 111.27            
|LOS TRES AMIGOS     | 172216      | 27/10/1983   | 26/10/2033 | 23.0000  | 111.27            
|MINA GRANDE         | 163578      | 10/10/1978   | 09/10/2028 | 6.6588   | 111.27            
|NUEVO ROSARIO       | 184999      | 13/12/1989   | 12/12/2039 | 32.8781  | 111.27            
|PIEDRAS DE LUMBRE 2 | 215556      | 05/03/2002   | 04/03/2052 | 34.8493  | 31.62             

7







|PIEDRAS DE LUMBRE 3    | 218992 | 28/01/2003 | 27/01/2053 | 4.3098      | 31.62 
|---------------------- | ------ | ---------- | ---------- | ----------- | ------
|PIEDRAS DE LUMBRE No.4 | 212349 | 29/09/2000 | 28/09/2050 | 0.2034      | 63.22 
|PIEDRAS DE LUMBRE UNO  | 215555 | 05/03/2002 | 04/03/2052 | 40.2754     | 31.62 
|SAN ANDRES             | 212143 | 31/08/2000 | 30/08/2050 | 385.0990    | 63.22 
|SAN JOSÉ               | 208537 | 24/11/1998 | 23/11/2048 | 27.0000     | 111.27
|SAN MIGUEL             | 183504 | 26/10/1988 | 25/10/2038 | 7.0000      | 111.27
|SAN NICOLAS            | 163913 | 14/12/1978 | 13/12/2028 | 55.5490     | 111.27
|SAN SEBASTIAN          | 184473 | 08/11/1989 | 07/11/2039 | 40.0000     | 111.27
|SANTA MARIA            | 218769 | 17/01/2003 | 16/01/2053 | 4.2030      | 31.62 
|SANTA ROSA             | 170557 | 13/05/1982 | 12/05/2032 | 31.4887     | 111.27
|SANTO TOMAS            | 187348 | 13/08/1986 | 12/08/2036 | 312.0000    | 111.27
|TRES AMIGOS 2          | 212142 | 31/08/2000 | 30/08/2050 | 54.4672     | 63.22 
|FINISTERRE 4           | 231166 | 18/01/2008 | 17/01/2058 | 2142.1302   | 5.08  
|FRANCISCO ARTURO       | 230494 | 06/09/2007 | 27/03/2057 | 62481.3815  | 5.08  
|TOTAL                  |        |            |            | 69,121.4010 |       

(1) According
to the records of the Mines Registry Office, the registered owners to 100% undivided title to the San Miguel (t.183504) mining
concession are: María Trinidad Acosta Salazar (25%), Miguel López Medina (25%), Josefa González Castro (25%)
and Otilia Tracy Vizcarra (25%). On October 17, 2000 and March 8, 2001 DynaMexico signed with each of Miguel Lopez Medina and Josefa
Gonzalez Castro, respectively, agreements for the transfer to DynaMexico of 50% undivided title to the San Miguel (t.183504) mining
concession (the “San Miguel Transfer Agreements”).

In respect to the San Miguel Transfer
Agreements, DynaMexico has been advised that in order for the San Miguel Transfer Agreements to produce legal effects and be eligible
for registration before the Mines Registry Office, DynaMexico is required to first obtain the legal consent to such transfers,
or the written relinquishment of first rights of refusal, from María Trinidad Acosta Salazar and Otilia Tracy Vizcarra
(or court-appointed estate executor).

In addition to the San Miguel Transfer
Agreements, DynaMexico has entered into the following Promise to Sell and Purchase Agreements (the “San Miguel Promise to
Sell and Purchase Agreements”):

(a) Promise to Sell and Purchase
Agreement signed on March 8, 2001 among DynaMexico and Maria Trinidad Acosta Salazar, the registered owner to 25% undivided title
to the San Miguel (t.183504) mining concession, and

(b) Promise to Sell and Purchase
Agreement signed on December 15, 2000 among DynaMexico and Margarita Tracy Vizcarra, the sister of the deceased Otilia Tracy Vizcarra.

In respect to the San Miguel Promise
to Sell and Purchase Agreements, DynaMexico has been advised that:

(a) with respect to the Promise to
Sell and Purchase Agreement signed on March 8, 2001 among DynaMexico and Maria Trinidad Acosta Salazar, to contact Ms. María
Trinidad Acosta Salazar to demand compliance with such agreement by executing the definitive transfer to DynaMexico of the 25%
undivided title to the San Miguel (t.183504) mining concession registered in her name, and

(b) with respect to the Promise to
Sell and Purchase Agreement signed on December 15, 2000 among DynaMexico and Margarita Tracy Vizcarra, the sister of the deceased
Otilia Tracy Vizcarra,the estate of Otilia Tracy Vizcarra requires
the appointment of a court-appointed executor that would be capable under Mexican law to formally grant the estate ́s consent
for the execution of the San Miguel Transfer Agreements, to relinquish the estate ́s first rights of refusal or to request
court approval for the transfer to DynaMexico of the 25% undivided interest in the San Miguel (t.183504) mining concession registered
in the name of the deceased Otilia Tracy Vizcarra.

Surface Lease Rights

In
addition to the surface rights held by DynaMexico pursuant to the Mining Act of Mexico and its Regulations (Ley Minera y su
Reglamento), MinerasDyna maintains access and surface rights to the SJG Project pursuant to the 20 year

8





Land
Lease Agreement (above) The 20 Year Land Lease Agreement with the Santa Maria Ejido Community
surrounding San Jose de Gracia is dated January 6, 2014 and continues through 2033. It covers an area of 4,399 hectares surrounding
the main mineral resource areas of SJG, and provides for annual lease payments by MinerasDyna of $ 1,359,443 Pesos (approx. $104,250
USD), commencing in 2014. Additionally, under the description of the 20 Year Land Lease, MinerasDyna expects to construct a Medical
Facility at SJG in year 2014, and a Community Center in year 2015.

The Land Lease Agreement provides MinerasDyna
with surface access to the core resource areas of SJG (4,399 hectares), and allows for all permitted mining and exploration activities
from the owners of the surface rights (Santa Maria Ejido community).

Property Location

The San Jose de Gracia mining property
surrounds the area of San Jose de Gracia, Sinaloa State, Mexico. San Jose de Gracia is located on the west side of the Sierra Madre
mountain range in the Sierra Madre Gold-Silver Belt, approximately 100 kilometers inland from Los Mochis, Sinaloa Mexico and approximately
200 kilometers north of Mazatlan, Sinaloa.

Access

The San José de Gracia Project
can be accessed by road, via a sealed highway from either Culiacan, the capital city of the State of Sinaloa (located to the south
of the San José de Gracia Project) or the city of Guamuchil (located to the southwest of SJG), to the small town of Sinaloa
de Leyva, then by gravel mountainous road to the village of San José de Gracia.

The San José de Gracia Project
can also be accessed by air. A gravel airstrip is located adjacent to the village of San José de Gracia which is located
at the southwestern portion of the property at the SJG Project, and the airstrip is suitable for light aircraft.

Climate and Operating Season

The climate is semi-tropical with a rainy
season dominating from late June / early July through September. Operations at the San José de Gracia Project are in part
dependent on the weather and some activities may be suspended during the rainy season.

Infrastructure and Local Resources

Power

A power line to the San José de
Gracia Project has been installed by the Comisión Federal de Electricidad, the only authorized power producer in Mexico.
The power line was installed in March 2012 from the municipality of Sinaloa de Leyva (La Estancia area), a distance of approximately
75 kilometers.

The power line is currently 220 volts
maximum capacity, which supports domestic use only, including the office and camp facilities at SJG, such as water pump, air conditioning,
refrigeration, lights, internet, and fans, as well as local residential use. Currently, the SJG Project produces its own diesel-generated
power for industrial use.

Water

The water source for the SJG camp is
from a water well located close to the river which runs just west of the village of San José de Gracia. DynaMexicohas obtained the water concession rights for this water source, which provide for usage of 1,000,000 cubic meters per year.
Currently, DynaMexico estimates its consumption of water to be approximately 10,000
liters per week.

Accommodations

The mine site area camp maintains facilities
which can accommodate about 50 persons. The village of San José de Gracia maintains few stores, and which offer only minimal
goods.

Offices – Camp Facilities

DynaMexico maintains an administrative
and logistics office in Guamuchil, located 125 kilometers southwest of the SJG property. The SJG Project sources many of its supplies
from Guamuchil, and from Los Mochis and Culiacan. A satellite dish installed at the SJG Property provides communications from the
SJG Property to Guamuchil.

The SJG property is described in
more detail in this Form 10-K, under Item 2, Properties.

Sierra Madre Gold-Silver Belt
in Mexico

9









Historical Production

SJG reports 1,000,000 Oz. gold historical production
from a series of underground workings. The major production reported was 471,000 Oz. Au at the La Purisima area of SJG, at an average
grade of 66.7 g/t; and production of 215,000 Oz. Au from the La Prieta area, at an average grade of 27.6 g/t. Mineralization at
SJG has been traced on surface and underground over a 15 square kilometer area.



1997-1998 Drilling – Exploration
Programs

A drill program was conducted at SJG
in 1997 - 1998 by a prior majority owner. Approximately 6,172 meters drilling was completed in 63 core drill holes. Significant
intercepts, including bonanza grades, outlined the down dip potential of the Northeast section (150 Meter NE to SW extent of the
Drilling) of the Los Hilos to Tres Amigos Trend of SJG. Surface and underground sampling in 1999 - 2000 confirmed high grades in
historic workings and surface exposures throughout the project area. These high grades outline the presence of mineralization shoots
developed within the veins. The mineralized shoots appear to be controlled by dilational jogs and/or vein intersections. A
total of 544 samples were collected in 1999-2000, and assayed an average 6.51 grams/ton gold.

Pilot Production Activities (2003
– 2006)

DynaMexico, conducting activities
through its operating sister companies MinerasDyna and DynaOperaciones, mined high-grade veins at the San Pablo area of SJG from
mid-2003 to June 2006. 18,250 Oz. gold was produced and sold from mill feed tonnage of 42,000 tons, at an average grade of approximately
15-20 g/t. Production costs were reported at approx. $ 175. / Oz. Au in this small scale, pilot production operation.

|Mined Tonnage                      | 42,500 tons
|---------------------------------- | -----------
|Production (Oz Au)                 | 18,250 Oz  
|Average Grade                      | 15-20 g/t  
|Recovery Efficiency (Plant)        | 85%        
|Recovery in Concentrate (Sales)    | 90%        
|Production Cost (Average, 4 Years) | $175 / Oz  

The small
scale mining and production activities at SJG consisted of improvements to an existing mill, including the installation of a gravity
/ flotation processing circuit, and initial test runs with tailings were completed in 2002. Actual mining at the higher grade San
Pablo area of the property commenced in March 2003.

Suspension of Production Activities

The Company initiated the test production
activity in 2003 at the time gold prices were depressed, and when exploration funding opportunities, while available, were deemed
to be too dilutive by Company management. While the test production was considered successful (see results in the table above),
a small scale production activity was not expected to provide the necessary capital in order to explore a project the size of SJG.

The earlier, limited-scope pilot
production activity provided significant benefits in terms of confirming production grades, metallurgy and process, efficiency
of recoveries, and production costs – all of which is valuable for larger scale production plans.

Earn In / Option Agreement –
Financing of Drilling – Exploration Programs

As gold prices continued to appreciate
into 2006, exploration financing opportunities increased and the Company negotiated and entered into an Earn In / Option Agreement
with Goldgroup Mining Inc. (“Goldgroup”), dated September 1, 2006. The

10





terms of the Earn In / Option Agreement
provided for Goldgroup to furnish $18,000,000 USDfinancing to DynaMexico for exploration expenditures
at SJG, in exchange for a 50% share interest in DynaMexico.

On June 21, 2013, DynaResource acquired
a Certificate for 300 Series “B” Variable Capital Shares of DynaMexico, in exchange for the settlement of accounts
receivable from DynaMexico in the amount of $31,090,710 Mexican Pesos (approximately $2.4 M USD). After the issuance and receipt
of the 300 Series B Shares, DynaUSA holds 80% of the total outstanding Capital of DynaMexico. DynaMexico owns 100% of the San Jose
de Gracia Project in northern Sinaloa, Mexico.

No Known Reserves

Currently, the Company’s drilling
programs (through DynaMexico) are exploratory in nature. The Company expects to commence pilot production activities in 2014.

The SJG Property is without known
reserves

Under U.S. standards, set forth
in SEC Industry Guide 7, mineralization may not be classified as a “reserve” unless a determination has been made that
the mineralization could be economically and legally produced or extracted at the time the reserve determination is made.

Future Drilling – Exploration
Programs

Further drilling programs at SJG are
contemplated, in view of the 2012 DynaMexico-CAM SJG Mineral Resource Estimate and the formal National Instrument 43-101(“NI
43-101”) Technical Report for San Jose de Gracia (the “2012 DynaMexico Luna-CAM SJG Technical Report”), and the
updated NI 43-101 Technical Report, dated December 31, 2012 (See “Updated National Instrument 43-101 Technical Report for
San Jose de Gracia”, below.)

The Company expects DynaMéxico
will be successful in expanding the size and scope of the resources at SJG through continued drilling and development programs
at San Pablo, Tres Amigos, La Cecena, Palos Chinos, La Union, La Purisima, and La Prieta. The Company expects extensions to mineralization
in all directions and down dip from the main target areas.

National Instrument 43-101 (“NI 43-101”) Mineral
Resource Estimate

The Company received from DynaMexico
on February 14, 2012 a National Instrument 43-101 (“NI 43-101”) Mineral Resource Estimate for San Jose de Gracia. The
NI 43-101 Mineral Resource Estimate was prepared by Mr. Robert Sandefur, BS, MSc, P.E., a Qualified Person (“QP”) as
defined under NI 43-101, and a senior reserve analyst for Chlumsky, Armbrust & Meyer LLC, Lakewood, CO (“CAM”).
The Mineral Resource Estimate concentrates on four separate vein systems at SJG: Tres Amigos, San Pablo, La Union, and La Purisima.

National Instrument 43-101 Technical
Report for San Jose de Gracia

The Company received from DynaMexico
on March 28, 2012 a National Instrument 43-101 (“NI 43-101”) compliant Technical Report for the San Jose de Gracia
Project (the “2012 DynaMexico Luna-CAM SJG Technical Report”, the “Technical Report”), and approved by
DynaResource de Mexico, SA de CV. (“DynaMexico”), the 100% owner of SJG.

The 2012 DynaMexico Luna-CAM SJG Technical
Report was prepared by Mr. Ramon Luna, BS, P.Geo., of Servicios y Proyectos
Mineros, Hermosillo, Mexico, anda Qualified Person as defined under NI 43-101; and by Mr. Robert Sandefur, BS, MSc, P.E.,
a senior reserve analyst for Chlumsky, Armbrust & Meyer LLC, Lakewood, CO., and a Qualified Person as defined under NI 43-101.
The 2012 DynaMexico Luna-CAM SJG Technical Report includes as Section Fourteen (14) a Mineral Resource Estimate for SJG as prepared
by Mr. Sandefur (the “2012 DynaMexico-CAM SJG 43-101 Mineral Resource Estimate”, the “Resource Estimate”).

The Company filed the Technical Report
on SEDAR (www.sedar.com) on March 28, 2012.

Updated National Instrument 43-101
Technical Report for San Jose de Gracia

The Company received from DynaMexico
on December 31, 2012, an updated NI 43-101 compliant Technical Report for the San Jose de Gracia Project (the “Updated 2012
DynaMexico Luna-CAM SJG Technical Report, and the “updated Technical Report”). The updated Technical Report was approved
by DynaMexico, and filed by the Company with SEDAR on December 31, 2012.

Commissioning of an Updated Mineral Resource
Estimate

During the fourth quarter 2012, DynaMexico,
through MinerasDyna, commissioned Chlumsky, Armbrust & Meyer LLC, Lakewood, CO. (“CAM”), Mr. Robert Sandefur, BS,
MSc, P.E., senior reserve analysis and a Qualified Person as defined under NI 43-101, for the purpose of updating the Mineral Resource
Estimate at San Jose de Gracia and to include lower grade

11





mineralized areas of San Jose de Gracia
using a .3 g/t Au cut off grade. This work is pending until the company deems it necessary to continue.

Commissioning of Metallurgical Testing

During the fourth quarter 2012, DynaMexico,
through MinerasDyna, engaged Kappes, Cassiday & Associates, Reno, NV. (“KCA”), for the purpose of designing a metallurgical
test program to confirm possible heap leach recoveries of specific mineralized areas of San Jose de Gracia. This work is pending
until the company deems it necessary to continue.

Company Transition from Exploration
to Mining – Production

The Company expects to transition its
business from that of a purely exploration company, to an exploration and production company in 2014. The basis for the exploration
and production activity is provided through the foundational resource for SJG as reported in the 2012 DynaMexico-CAM SJG Mineral
Resource Estimate (and Technical Report), and supported further by the company’s successful pilot production activities during
the 2003-2006 period.

SEMARNAT Permission for Operating
Mill Facility at San Jose de Gracia

On June 17, 2013, DynaMexico received
from the Secretaria de Medio Ambiente Y Recursos Naturales, the Federal Environmental Authority in Mexico ("SEMARNAT"),
the approval and permission which allows for the rehabilitation and operation of the pilot mill facility at SJG ("the Semarnat-SJG
Mill Permit," and, the "Semarnat Permit"). Under the terms of the Semarnat-SJG Mill Permit, DynaMexico will be responsible
to maintain the SJG pilot mill facility, and including the adjacent tailings pond area, in compliance with the regulations described
in la Norma Oficial Mexicana ("NOM-141-SEMARNAT-2003).

Rehabilitation of Pilot Mill Facility
at San Jose de Gracia

Under the terms of the Exploitation Amendment
Agreement (“EAA”), as described above, MinerasDyna is in process of the rehabilitating and planning the subsequent
operation of the pilot mill facility at SJG. The SJG pilot mill facility (a gravimetric-flotation circuit) is projected to process
bulk samples to be mined from selected target areas of SJG. Operations at SJG will be managed by MinerasDyna, and are projected
to be similar to those conducted by DynaMexico during the 2003-2006 Period.

SEMARNAT Permission for Exploitation
and Mining of the San Pablo Mine Area at San Jose de Gracia

On September 30, 2013, DynaMexico received
from the Secretaria de Medio Ambiente Y Recursos Naturales, the Federal Environmental Authority in Mexico ("SEMARNAT"),
the approval and permission which allows for the exploitation and mining activities at the San Pablo Area of SJG ("the Semarnat-SJG
San Pablo Exploitation Permit" and, the "Semarnat Exploitation Permit").

Regional Geology & Mineral Deposits

San José de Gracia lies within
the Sierra Madre Occidental Gold-Silver Belt, in a second-order Graben directly east of the regional-scale Grete Graben.  The
basement to the Sierra Madre Occidental consists of deformed Paleozoic sedimentary strata, which are non-conformably overlain by
Tertiary mafic to felsic volcanic and volcaniclastic strata known as the Lower Volcanic Series (“LVS”).  Strata
of the LVS are recognized as being spatially related to gold and silver mineralization in the region.  Volcanic and sedimentary
strata are capped by a thick sequence of non-deformed Late Tertiary ignimbrites, known as the Upper Volcanic Series (“UVS”).

Property Geology

The oldest rocks exposed at San José
de Gracia are deformed Paleozoic shale, sandstone, conglomerate and minor limestone, which are non-conformably overlain by andesite
and rhyodacite flows and tuffs of the LVS.  Volcanic and sedimentary strata are cut by quartz-feldspar porphyry, porphyritic
diorite bodies and fine-grained mafic dykes, which may be co-temporal with the LVS.  Ignimbrites of the UVS are exposed at
higher elevations on the property and are thought to act as a post mineralization cap rock, thereby indicating an Early to Mid
Tertiary (Paleocene to Eocene) age for gold mineralization at San José de Gracia.

Geologic Structure

Detailed mapping within the project area
has defined several stages of deformation, beginning with compression during the Laramide Orogeny which affected the Paleozoic
basement and formed flat-lying reverse faults, which have been reactivated as conduits for gold-bearing fluids in the La Prieta
trend (Table 2).  Extension in Tertiary time led to the development of second order structures, trending south, southwest
and southeast; which formed the major structural orientations for

12





mineralization at San José de
Gracia.  The latest phase of deformation is characterized by late-stage extension and southwest tilting.

Mineralization & Alteration

High grade gold mineralization at San
José de Gracia is hosted within andesite and rhyodacite of the LVS and underlying Paleozoic sediments as fault breccia veins
and crackle breccias that exhibit multiple stages of reactivation and fluid flow, as evidenced by crustiform/colloform textures
and cross cutting veins.  Locally, veins exhibit sharp, clay gouge hangingwall and footwall contacts with slickensides, indicating
reactivation of structurally-hosted veins subsequent to mineralization.  Gold grades can also be carried within the mineralized
halo adjacent to the principal veins as quartz-chlorite stockwork.  In addition to vein-hosted mineralization, broad zones
of un-mineralized clay alteration, developed southwest of the main mineralized trends, may overlie lower-grade, disseminated gold
mineralization at depth.

Alteration at San José de
Gracia is laterally and vertically zoned from discrete zones of silicification to broad zones of illite to clay alteration with
increasing elevation and/or distance from the main feeder structures.  Faulting and tilting of the mineralization system has
affected the surface distribution of alteration and in general has exposed deeper portions of the system in the northeast and exposed
shallower, more distal portions of the hydrothermal system in the southwest part of the property.

Six principal mineralized trends
have been identified at San José de Gracia, from south to north, consisting of:

| | 1. | La Purisima Ridge trend;
| | -- | ------------------------



| | 2. | Palos Chinos trend;
| | -- | -------------------



| | 3. | La Parilla to Veta Tierra trend (Including La Union);
| | -- | -----------------------------------------------------



| | 4. | San Pablo trend;
| | -- | ----------------



| | 5. | La Prieta trend, and
| | -- | --------------------



| | 6. | Los Hilos to Tres Amigos trend.
| | -- | -------------------------------

Lab

A field laboratory is maintained within
the camp facility. DynaMexico utilized the lab for internal assaying services during its production activities of 2003-2006. Assays
were performed by DynaMexico personnel for mined mineralization, feed mineralization, gravity and flotation concentrates, and tailings.
The current status of the lab and equipment is care and maintenance. The Company anticipates that MinerasDyna will utilize the
lab facility in the future for providing check assays to support ongoing exploration and bulk sampling works.

Mineral Resource Estimate - Construction
of Wireframes

Mineral Resources were estimated by Mr.
Sandefur within wireframes constructed by technical personnel of Minop SA de CV (“Minop”), a subsidiary of Goldgroup
Mining Inc. (“Goldgroup”). Minop was contracted by Mineras de DynaResource SA de CV. (“MinerasDyna”).

Mineral Resource Estimate - Parameters Used to Estimate
the Mineral Resource

The data base for the San Jose de Gracia
Project consists of 372 drill holes of which 361 are diamond drill holes and the remaining 11 were reverse circulation holes, with
a total drilling of 75,878 meters. The 2012 DynaMexico-CAM SJG Mineral Resource Estimate concentrates on four main mineralized
vein systems at SJG: Tres Amigos, San Pablo, La Union, and La Purisima. Of the 372 drill holes, 368 were drilled to test these
four main vein systems and the remaining four holes tested the Argillic Zone. Technical personnel of Minop built three dimensional
solids to constrain estimation to the interpreted veins in each swarm. The 172 holes most recently drilled (2009-2011), were allocated
as follows: Tres Amigos (64 holes), San Pablo (49 holes), La Union (24 holes), La Purisima (32 holes) and the Argillic Zone (3
holes).

Servicios
y Proyectos Mineros performed a database review and considers that a reasonable level of verification has been completed,
and that no material issues have been left unidentified from the drilling programs undertaken.

A total of 5,540 pieces of core were
measured for specific gravity using the weight in air vs. weight in water method. This represents an additional 3,897 measurements
taken in the 2009-11 drill seasons with density measurements taken from all mineral zones. Dried samples were coated with paraffin
wax before being measured. The results tabulated have been sorted by lithology and mineralized veins. The average specific gravity
of 5,051 wall rock samples is 2.59 while the average specific gravity for 489 samples of vein material is 2.68. CAM and Servicios
y Proyectos Mineros have reviewed the procedures and results, and opine that the results are suitable for use in mineral resource
estimation.



13







Mineral Resource Estimate - Explanation
of Resource Estimation

Resource estimation was done in
MineSight and MicroModel computer systems with only those composites that were inside the wireframe used in the estimate. Estimation
was done using kriging with the omni-directional variogram derived from all the data in each area for gold using the relative
variogram derived from the log variogram. High grades were restricted by capping the assays at a breakpoint based on the cumulative
frequency curves. Estimation was done using search radii of 100 x 100 x 50 m oriented subparallel to the general strike and dip
of the vein system in each area. A sector search, corresponding to the faces of the search box with a maximum of two points per
sector was used in estimation. A density of 2.68 based on within ‘vein density’ samples was used in the resource estimate.
Within each of the four areas there are approximately 20 to 40 veins in the vein swarm. Resources were estimated by kriging using
data from all veins in the swarm. In general, gold accounts for at least 80% of the value of contained metal at the project, so
the variograms for gold were used in estimation of the four other metals. Mineral Resources at Tres Amigos and San Pablo
were classified as “Indicated” as follows:

| | 1) | they were within a vein within the swarm which contained at least
7 drill holes;
| | -- | --------------------------------------------------------------------------------

| | 2) | they are within 25 m of the nearest sample point; and,
| | -- | ------------------------------------------------------

| | 3) | they were estimated by at least three drill holes.
| | -- | --------------------------------------------------

All other Mineral Resources were classified
as “Inferred”. Since there are no precise quantitative definitions of Measured, Indicated and Inferred, resource classification
is subjective and depends on the experience and judgment of the Qualified Person (“QP”) calculating the resource estimate.
CAM, Mr. Sandefur QP, allowed indicated material at Tres Amigos and San Pablo because of (1) the similarity of the variograms,
and (2) the fact of recent production by DynaMexico from San Pablo of some 42,000 tonnes plant feed at an average grade of approximately
15 g/t (“grams per tonne”).  Three of the individual veins at La Purisima satisfied criterion (1) above but Mr.
Sandefur elected not to include this material in “Indicated” because of the shorter first range at La Purisima. This
Mineral Resource Estimate for SJG does not include any ore loss or dilution outside wireframes, and as currently defined, is probably
most appropriate for a highly selective, small equipment underground operation.

The veins at San Jose de Gracia have
been historically mined for many years and historic mined volumes are not available. The one exception is the approximate 42,000
tonnes of ore processed by DynaMexico during its pilot production activities in 2003-2006. The resource table is not adjusted for
any historic mining. To validate that historic mining had not significantly reduced the resource, CAM reviewed the database for
all assays greater than 1 gram per ton gold that were next to missing values at the bottom of drill holes. Only four assays satisfying
this criterion were found, and on the basis of this review, CAM does not believe that significant mining has occurred within the
volumes defined by the wireframes.

No Known Reserves

The SJG property is without known reserves.
Mineral resources which are not mineral reserves do not have demonstrated economic viability. The quantity and grade of the “Indicated”
and “Inferred” mineral resources reported in the mineral resource estimate contained in this Form 10 K are estimates
only. There has been insufficient exploration to define any mineral reserves on the property, and it is uncertain if further exploration
will result in discovery of mineral reserves.

Currently, the Company’s drilling
programs are exploratory in nature. However, The Company expects to commence pilot production activities in 2014 using the foundational
resource for SJG as reported in the 2012 DynaMexico-CAM SJG Mineral Resource Estimate (and Technical Report), and supported further
by the company’s recent pilot production activities during the 2003-2006 period.

Mineral Resource Estimate and 43-101
Technical Report - Data Verification

Mr. Luna initially visited the San Jose
de Gracia Project in November 2010, and conducted site inspections at SJG in November 2011 and January 2012. Mr. Sandefur conducted
a site inspection of the SJG Project in January 2012. While at the Property in November 2011,
Mr. Luna inspected the areas of Tres Amigos, La Prieta, Gossan Cap, San Pablo, La Union, and La Purisima, and historic mining sites.
In January 2012, Mr. Sandefur and Mr. Luna inspected the areas of Tres Amigos, San Pablo, La Union, and La Purisima. Pictures of
the areas were taken. Many of the drill pads for the drilling programs of 2007 to 2011 were clearly located and identified. Mr.
Luna also inspected San José de Gracia’s core logging and storage facilities, the geology offices, the meteorological
station, the plant nursery, and the mill. Mr. Sandefur also inspected San José de Gracia’s core logging and storage
facilities.

2012 DynaMexico CAM Mineral Resource
Estimate and Technical Report - Qualified Persons

Mr. Luna and Mr. Sandefur each are a
“Qualified Person” as that term is defined in National Instrument 43-101 and is “independent” as that term
is also defined in National Instrument 43-101.

The Company filed the Technical Report
on SEDAR (www.sedar.com) on March 28, 2012. And, on December 31, 2012, the Company filed an updated
Technical Report on SEDAR.

14





DynaMexico Water Concession

The Company has been informed by DynaResource
de Mexico, SA de CV. (“DynaMexico”), the 100% owner of SJG, that DynaMexico has secured the Water Rights Concession
for the area surrounding SJG. The Director of Water Administration of the National Water Commission of Mexico (CONAGUA) formally
certified in writing the rights of DynaResource de Mexico, S.A. de C.V. to legally use, exploit and extract 1,000,000 m3 of water
per year from the DynaMexico extraction infrastructure located within the perimeter of the mining concessions comprising the San
Jose de Gracia Mining Property in Sinaloa State, Mexico. CONAGUA determined that the DynaMexico water rights are not subject to
any water rights concession or any other water extraction restriction. Water extracted by DynaMexico will be subject to applicable
levies imposed by the Mexican tax authorities in accordance with current Mexican tax laws.

Exclusive Operating Entity at
San Jose de Gracia

Under agreement with DynaMexico, Mineras
de DynaResource SA de CV. (“MinerasDyna”) has been named the exclusive operating entity at the San Jose de Gracia Project.
DynaResource owns 100% of MinerasDyna.

DynaMexico General Power of Attorney

The Chairman-CEO of DynaUSA also serves
as the President of DynaMexico and as the President of MinerasDyna. And, the President of DynaMexico holds a broad power of attorney
granted by the shareholders of DynaMéxico which gives the current President significant and broad authority within DynaMéxico.

Updated Mineral Resource Estimate

During the third quarter 2012, MinerasDyna
commissioned Chlumsky, Armbrust & Meyer LLC, Lakewood, CO. (“CAM”), Mr. Robert Sandefur, BS, MSc, P.E., senior
reserve analysis and a Qualified Person as defined under NI 43-101, for the purpose of updating the Mineral Resource Estimate at
San Jose de Gracia and to include lower grade mineralized areas of San Jose de Gracia using a .3 g/t Au cut off grade. This work
is pending until the company deems it appropriate to continue.

Metallurgical Testing

During the third quarter 2012, MinerasDyna
engaged Kappes, Cassiday & Associates, Reno, NV. (“KCA”), for the purpose of designing a metallurgical test program
to confirm possible heap leach recoveries of specific mineralized areas of San Jose de Gracia. This work is pending until the company
deems it appropriate to continue.

Capital Requirements

The mining industry in general requires
significant capital in order to take a property from the exploration, to development to production. These costs remain a significant
barrier to entry for the average company but once in production, there is a ready market for the final products, In the case of
SJG, the final product would be mainly gold, the price of which is determined by global markets, so there is not a dependence on
a customer base.

Gold

Gold Uses.    
Gold generally is used for fabrication or investment. Fabricated gold has a variety of end uses, including jewelry, electronics,
dentistry, industrial and decorative uses, medals, medallions and official coins. Gold investors buy gold bullion, official coins
and jewelry.

Gold Supply.    A
combination of current mine production, recycling and draw-down of existing gold stocks held by governments, financial institutions,
industrial organizations and private individuals make up the annual gold supply. Based on public information available for the
years 2008 through 2013, on average, current mine production has accounted for approximately 64% of the annual gold supply.

Gold Price.    The
following table presents the annual high, low and average daily afternoon fixing prices for gold over the past ten years on the
London Bullion Market ($/ounce):

|     |  |      |       |  |     |   |     |         |  |   |     | 
|---- |  | ---- | ----- |  | --- | - | --- | ------- |  | - | --- | 
|Year |  | High |       |  | Low |   |     | Average | 
|2002 |  | $    | 349   |  |     | $ | 278 |         |  | $ | 310 | 
|2003 |  | $    | 416   |  |     | $ | 320 |         |  | $ | 363 | 
|2004 |  | $    | 454   |  |     | $ | 375 |         |  | $ | 410 | 
|2005 |  | $    | 536   |  |     | $ | 411 |         |  | $ | 444 | 
|2006 |  | $    | 725   |  |     | $ | 525 |         |  | $ | 604 | 
|2007 |  | $    | 841   |  |     | $ | 608 |         |  | $ | 695 | 
|2008 |  | $    | 1,011 |  |     | $ | 713 |         |  | $ | 872 | 
|2009 |  | $    | 1,213 |  |     | $ | 810 |         |  | $ | 972 | 

15







|2010                         |  | $ | 1,421 |  |  | $ | 1,058 |  |  | $ | 1,225 | 
|---------------------------- |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|2011                         |  | $ | 1,895 |  |  | $ | 1,319 |  |  | $ | 1,572 | 
|2012                         |  | $ | 1,792 |  |  | $ | 1,540 |  |  | $ | 1,669 | 
|2013                         |  | $ | 1,694 |  |  | $ | 1,192 |  |  | $ | 1,411 | 
|2014 (through April 8, 2014) |  | $ | 1,385 |  |  | $ | 1,221 |  |  | $ | 1,293 | 



Source: Kitco, Reuters and the London Bullion Market Association



On April 8, 2014, the afternoon fixing
gold price on the London Bullion Market was $1,302 per ounce and the spot market gold price on the New York Commodity Exchange
was $1,310 per ounce.

Condition of Physical Assets and Insurance

Our business is capital intensive and
requires ongoing capital investment for the replacement, modernization or expansion of equipment and facilities. We, and our subsidiaries,
maintain insurance policies against property loss. Such insurance, however, contains exclusions and limitations on coverage, particularly
with respect to environmental liability and political risk. There can be no assurance that claims would be paid under such insurance
policies in connection with a particular event.

Environmental Matters

Our activities are largely outside the
United States and subject to governmental regulations for the protection of the environment. We conduct our operations so as to
protect public health and the environment and believe our operations are in compliance with applicable laws and regulations in
all material respects. DynaMexico is involved with reclamation matters with the oversight of Semarnat, the federal environmental
agency of Mexico.

Exploration
and Mining Permit Requirements (Mexico)

In
respect of permit requirements for mineral exploration and mining in Mexico, the most relevant applicable laws, regulations and
official technical norms are the following: the Federal Mining Act, and its Regulations, the Federal Environmental Protection
and Ecological Equilibrium Act, and its Regulations, the Federal Sustainable Forestry Development Act and its Regulations,
the Federal Explosives and Firearms Act, the National Waters Act and the Mexican Official Norm 120.

To
carry out mineral exploration activities, holders of mining concessions in Mexico are required to file at the offices of the Federal
Secretariat of the Environment and Natural Resources (“SEMARNAT”) a “Notice of Commencement of Exploration Activities”
under the guidelines of the Mexican Official Norm 120 (“Norm 120”). SEMARNAT is the office of the Federal Government
of Mexico responsible for the review and issuance of a CSUP (referenced below), the review of a Technical Justification Study (referenced
below) and the filing of Norm 120. Norm 120 is a notice to SEMARNAT only, and has no processing time.

If
contemplated mineral exploration activities fall outside of the parameters defined under Norm 120, a “Change of Soil Use
Permit” (“CSUP”) Application is required to be filed at the SEMARNAT under the guidelines of the Federal Sustainable
Forestry Development Act and its Regulations. To meet the requirements for issuance of a CSUP, the applicant must also file
a Technical Study (“Technical Justification Study”) to justify the change of soil use from forestry to mining, to demonstrate
that biodiversity will not be compromised, and to demonstrate that there will be no soil erosion or water quality deterioration
on completion of the mineral exploration activities.

As
a pre-requisite for issuance of a CSUP, Article 118 of the Federal Sustainable Forestry Development Act provides for the
posting of a bond to the Mexican Forestry Fund for remediation, restoration and reforestation of the areas impacted by the mineral
exploration activities.

To
carry out mining activities in Mexico, holders of mining concessions are also required to file an “Environmental Impact Assessment
Study” (“Environmental Impact Study”) under the guidelines of the Federal Environmental Protection and Ecological
Equilibrium Act and its Regulations, in order to evaluate the environmental impact of the contemplated mining activities.

As
a pre-requisite for approval of an Environmental Impact Study, the Federal Environmental Protection and Ecological Equilibrium
Act and its Regulations require the posting of a bond to guarantee remediation and rehabilitation of the areas impacted by
the mining activities.

If
the use of explosives materials is required for execution of mineral exploration or mining activities, an Application for General
Permit for Use, Consumption and Storage of Explosive (“Explosives Permit”) is required to be filed at the offices of
the Secretariat of National Defense (“SEDENA”) under the guidelines of the Federal Explosives and Firearms Act.

16





Under
the Federal Mining Act,holders of mining concessions in Mexico have the right to the use of the water coming from the mining
works. However, certification of water rights and/or issuance of water rights concessions are required from the National Water
Commission (“CONAGUA”) under the guidelines of theNational Waters Act.

DynaMexico
Permit Filings / Permits

| | · | On February 10, 2003,
SEDENA granted DynaMexico an Explosives Permit for the use and storage of explosives materials in SJG.
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | · | In June 2006, DynaMexico
ceased use of explosives materials in its mining activities at SJG, and requested suspension of the Explosives Permit. The Explosives
Permit has been temporarily suspended by SEDENA and DynaMexico will be required to file a re-activation application to re-activate
the Explosives Permit.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On June 28, 2010, DynaMexico
filed a Preventive Exploration Notice at the office of SEMARNAT in connection with contemplated mineral exploration activities
at the La Prieta, San Pablo, La Purísima, La Unión, Tres Amigos and La Ceceña
areas of the San José de Gracia Project.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On July 21, 2010, SEMARNAT
authorized DynaMexico to conduct the mineral exploration activities referenced in the Preventive Exploration Notice, for a term
of 36 months, as SEMARNAT determined that such activities fall within the framework of Norm 120. SEMARNAT’s approval was
subject to the following conditions: (a) DynaMexico’s filing of a CSUP Application (referenced below) and approval thereof
by SEMARNAT, and (b) posting of a bond in the amount of $134,487 Mexican Pesos to guarantee remediation and rehabilitation measures
following the conclusion of the mineral exploration activities referenced in the Preventive Exploration Notice. The bond was timely
posted by DynaMexico.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On August 9, 2010, DynaMexico
filed at the offices of SEMARNAT a CSUP Application and a Technical Justification Study to carry out certain mineral exploration
activities at the La Prieta, San Pablo, La Purísima, La Unión, Tres Amigos and La Ceceña areas of the San
José de Gracia Project.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On December 20, 2010,
SEMARNAT approved the CSUP Application filed by DynaMexico with respect to the San José de Gracia Project and authorized
DynaMexico to conduct mineral exploration activities on 5.463 hectares of the San José de Gracia Project for a term of 36
months.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On March 8, 2012, the
Director of Water Administration of CONAGUA certified in writing the rights of DynaMexico to use exploit and extract 1,000,000
cubic meters of water per year from the extraction infrastructure located in San José de Gracia. CONAGUA determined that
DynaMexico’s water rights are not subject to any water rights concession or any other water extraction restriction. Water
extracted by DynaMexico will be subject to applicable levies imposed by the Mexican tax authorities under applicable tax laws.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- On June 17, 2013, DynaMexico received from the Secretaria
de Medio Ambiente Y Recursos Naturales, the Federal Environmental Authority in Mexico ("SEMARNAT"), the approval and
permission which allows for the rehabilitation and operation of the pilot mill facility at SJG ("the Semarnat-SJG Mill Permit,"
and, the "Semarnat Permit"). Under the terms of the Semarnat-SJG Mill Permit, DynaMexico will be responsible to maintain
the SJG pilot mill facility, and including the adjacent tailings pond area, in compliance with the regulations described in la
Norma Oficial Mexicana ("NOM-141-SEMARNAT-2003).

| | · | On July 31, 2013, SEMARNAT
authorized DynaMexico to conduct the mineral exploration activities referenced in the Preventive Exploration Notice, for a term
of an additional 18 months, extending the initial term of 36 months as SEMARNAT had determined on July 10, 2010. Semarnat determined
that such activities fall within the framework of Norm 120.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On September 30, 2013,
DynaMexico received from SEMARNAT the approval and permission which allows for mining activities and the exploitation of the San
Pablo area of San Jose de Gracia.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Subsequent to December 31, 2013, MinerasDyna enteredinto a 20 Year Land Lease Agreement with the Santa Maria Ejido Community surrounding San Jose de Gracia. The 20 Year Land Lease
Agreement is dated January 6, 2014 and continues through 2033. It covers an area of 4,399 hectares surrounding the main mineral
resource areas of SJG, and provides for annual lease payments by MinerasDyna of $ 1,359,443 Pesos (approx. $104,250 USD), commencing
in 2014. Additionally, under the description of the Land Lease Agreement, MinerasDyna expects to construct a Medical Facility at
SJG in year 2014, and a Community Center in year 2015.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17





The
land lease agreement provides MinerasDyna with surface access to the core resource areas of SJG (4,399 hectares), and allows for
all permitted mining and exploration activities from the owners of the surface rights (Santa Maria Ejido community).

DynaMexico
Bonding Requirements

| | · | Under the Exploration
Permit issued to DynaMexico on July 21, 2010, SEMARNAT imposed upon DynaMexico a bonding obligation in the amount of $ 134,487
Mexican Pesos to guarantee remediation and rehabilitation measures following the conclusion of the mineral exploration activities
referenced in the Preventive Exploration Notice. The bond was timely posted by DynaMexico.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Under the CSUP issued
to DynaMexico on December 20, 2010, SEMARNAT imposed upon DynaMexico a bonding obligation of $116,911 Mexican Pesos for reforestation
and remediation measures with respect to the San José de Gracia Project. The bond was timely posted by DynaMexico.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Permit
Processing Times (In General)

| | · | Processing time for review
and approval of a CSUP Application and Technical Justification Study varies depending on the workload of the SEMARNAT regional
office where an application is filed, but a processing time of four months is typical.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Processing time for review
and approval of an Environmental Impact Study varies depending on the workload of the SEMARNAT regional office where an application
is filed, but a processing time of six months is typical.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Processing time for issuance
of an Explosives Permit by SEDENA is approximately six months.
| | - | -------------------------------------------------------------------------------------------

| | · | Processing time for issuance
of a water rights concession by CONAGUA is approximately six months.
| | - | -------------------------------------------------------------------------------------------------

***

18





Item 1A. Risk Factors

Business Risk

The Company is involved in the
business of exploration and development of resource properties, which carries the inherent risk of failure.

The exploration and development of mineral
deposits involve significant risks which a combination of careful evaluation, experience and knowledge may not eliminate. There
is no assurance that the Company’s exploration programs will result in further discoveries of commercial mineralization bodies.



Nature of Mineral Exploration
and Mining

The Company’s future is
dependent upon its exploration programs. The exploration and development of mineral deposits involve significant risks over significant
periods of time. It is impossible to ensure that the current or proposed exploration programs on the Company’s property will
result in a profitable mining operation.

Whether a mineralized deposit will be
commercially viable depends on many factors, such as size and grade of the deposit, proximity to infrastructure, financing costs,
regulations, environmental protection, commodities prices, taxes, political risks. The impact of these factors cannot be accurately
predicted, but the combination of factors may result in the Company’s failure to provide a return on investment.



Competitive Business Conditions

The Company competes with many
larger, well capitalized companies which places the Company at a competitive disadvantage.

The Company competes with many companies
in the mining business, including large, established mining companies with substantial capabilities, personnel, and financial resources.
There is a limited supply of desirable mineral lands available for claim-staking, lease, or acquisition in Mexico where the Company’s
activities are focused. The Company may be at a competitive disadvantage in acquiring mineral properties, since it competes with
companies which have greater financial resources and larger technical staffs. From time to time, specific properties or areas which
would otherwise be attractive for acquisition or exploration are unavailable due to their previous acquisition by competitors or
due to the Company’s lack of financial resources.

Competition in the industry extends to
the technical expertise to find, advance, and operate mineral properties; the labor to operate the properties; and the capital
for the purpose of funding exploration and development activities on such properties. Many competitors explore for and mine precious
metals, and conduct refining and marketing operations on a world-wide basis. Such competition may make it more difficult for the
Company to recruit or retain qualified employees, to obtain equipment and personnel to assist in its exploration and production
activities, or to acquire the capital necessary to fund operations.



Government Regulations

The Company conducts its resource
exploration and development activities in Mexico, subject to rules and regulations for owning and maintaining mining concessions
and surface rights, environmental, water rights, hazardous wastes, explosives, reclamation, and others. There can be no certainty
that the Company maintains full compliance with all government regulations.

Mexico.Exploration
and development of minerals in Mexico may be carried out through Mexican companies incorporated under Mexican law by means of obtaining
exploration and development (exploitation) concessions. The Company’s concessions are granted by the Mexican government,
or acquired from previous owners, are filed in the Public Registry of Mining, and are scheduled to expire from 2028 through 2058.
Holders of exploration concessions may, prior to the expiration of such concessions, apply for one or more development concessions
covering all or part of the area covered by an exploration concession.

19





Environmental law in Mexico provides
for general environmental policies, with specific requirements set forth under regulations of the Ministry of Environment, Natural
Resources and Fishing, which regulate all environmental matters with the assistance of the National Institute of Ecology and the
Procuraduria Federal de Proteccion al Ambiente.

The primary laws and regulations governing
environmental protection for mining in Mexico are found in the General Law, the Ecological Technical Standards, and also in the
air, water and hazardous waste regulations, among others. In order to comply with the environmental regulations, a concessionaire
must obtain a series of permits during the exploration stage. Generally, these permits are issued on a timely basis after the completion
of an application by a concession holder. The Company believes it is currently in full compliance with the General Law and its
regulations in relation to its mineral property interests in Mexico.



Commodities Prices

Any potential economic success
of the Company’s properties will depend to a large extent to the market price of commodities; the future price of which is
impossible to predict.

The current value and potential value
for properties obtained by the Company is directly related to the market price for gold. The market price of gold may also have
a significant influence on the market price of the Company’s common stock. If the Company obtains positive drill results
and a property progresses to a point where a commercial production decision can be made, the decision to put a mine in production
and to commit funds necessary for that purpose would be made long before any revenue from production would be received. A decrease
in the market price of gold at any time during future exploration or development may prevent a property from being economically
mined or result in the write-off of assets whose value is impaired as a result of lower gold prices.

The price of gold is affected by numerous
factors beyond the Company’s control, including inflation, fluctuation of the United States dollar and foreign currencies,
global and regional demand, the purchase or sale of gold by central banks, and the political and economic conditions of major gold
producing countries throughout the world. During the last five years, the market price of gold has fluctuated between approximately
$608 and $1,895 per ounce. The volatility of gold prices represents a substantial risk which is impossible to fully eliminate.
In the event gold prices decline and remain low for prolonged periods of time, the Company might be unable to explore, develop,
or produce revenue from its properties.

No Significant Revenue

The Company suspended its production
activity in June 2006, and currently receives no significant revenue. There is a risk that the Company would expend available cash
and funding in exploration and administration costs, and would not be able to obtain further funding to continue its work.

In June 2006, production activities at
SJG were suspended, in order to focus on the exploration of the vast SJG district. Funds received by DynaMexico pursuant to the
Earn In Agreement were utilized for exploration and related activities. In addition, the Company maintains overhead in the US and
other costs which are not reimbursed. The Company and its subsidiaries have $1,143,344 cash on hand at December 31, 2013. The Company
could incur exploration expenses and corporate expenses greater than the amount of available cash on hand. The Company may need
to raise additional funds in order to support its activities. If the Company needs to raise additional capital, its common stock
could be diluted. Further, if the Company is unable to raise funds to meet its obligations, the value of its common stock may decline.



Substantial Control of Chairman
/ Preferred Shares

The Company’s Chairman and CEO
owns 100% of the Series A preferred stock, which give him the right to elect the majority of the board of directors.

K.W. (“K.D.”)  Diepholz,
the Company’s Chairman and CEO, owns 100% of the outstanding shares of Series A preferred stock, which hold special voting
rights. As a result, Mr. Diepholz has the ability to elect the majority of the Company’s Board of Directors. Such ownership
and the resultant concentration of control may have the effect of delaying, deferring or preventing a change in control of the
Company, even if the transaction would be beneficial to Company stockholders as a whole.





20





Capital Needs

The Company may need to raise additional
capital, which may not be available or may be too costly, and which, if not obtained, could cause the Company to cease operations.

The Company’s capital requirements
could be greater than its operating income. The Company believes it has adequate cash on hand for the foreseeable future, but it
does not have sufficient cash to indefinitely sustain operating losses. The Company’s liquidity depends on its ability to
raise capital through the sale of common stock or through debt or equity offerings. Additional financing may not be available,
or, if available, may be on terms unacceptable or unfavorable. If additional capital is required and not obtained, or if the Company
is not able to produce revenue from operations, or otherwise operate at a profit, the value of investment in the Company could
decline or be lost entirely.



Illiquid Market

The Company has a limited public market
trading on the pink sheets, and an active trading market may never materialize, and an investor may not be able to sell stock.

There is currently only a limited public market
for the Company’s Common Stock and there can be no assurance that a more robust trading market will develop further or be
maintained in the future. An active trading market may not develop and if not the market value could decline to a value below the
amount investors paid for stock. Additionally, if the market is not active or illiquid, investors may not be able to sell the securities
of the Company.



Penny Stock Classification

If a public trading market for the
Company’s common stock materializes, it may be classified as a ‘penny stock’ which would result in additional
requirements for trading the stock. These additional requirements could affect the liquidity of the stock.

The
SEC has adopted regulations which generally define a “penny stock” to be an equity security that has a market price
of less than $5.00 per share, subject to specific exemptions. The market price of the Company’s Common Stock may trade at
less than $5.00 per share and accordingly may be a “penny stock.” Brokers and dealers effecting transactions in “penny
stock” must disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine
that the purchaser is reasonably suitable to purchase the securities. These rules may restrict the ability of brokers or dealers
to sell the Common Stock and may affect an investor’s ability to sell such shares.



Title Matters

No Guarantee of Title

The
Company has investigated title to all mineral claims, and, to the best of its knowledge, title to all properties is in good standing.
The Company has received legal opinions from legal counsel, the most recent of which is dated September 15, 2012, which confirm
the title and good standing of DynaMexico and mineral claims comprising the SJG District. However, there can be no assurance of
complete title, nor guarantee of title.  The properties may be affected by undetected defects in title, such as the reduction
in size of the mineral claims and other third party claims affecting the Company's priority rights.

Dependence upon Key Personnel

The Company is dependent upon
the efforts and abilities of its management team.

The
loss of any member of the management team could have a material adverse effect upon the business and prospects of the Company.
In the event of such loss, the Company will seek suitable competent replacements, but there is no assurance that the Company will
be able to retain such replacements. The Company has obtained a Key Man Life Insurance program for its Chairman and CEO, which
would pay the proceeds of such policy to the Company in the event of his death.

Uncertainty of Resource Estimate

There can be no certainty that
any resource estimate by the Company’s consultants would ever be realized in production.

21





The
current formal resource estimate in respect of the SJG Property (the NI 43-101 Mineral Resource Estimate) is based on limited
information, such as historical data, drilling programs, the production activity conducted by the Company in 2003 – 2006,
and various reports, manual calculations and opinions. No assurance can be given that the anticipated tonnages and grades will
be achieved or that the estimated or indicated level of recovery will realized. The grade of mineralization actually recovered
or produced could differ significantly from the resource estimates.

No Known Reserves

Currently, the Company’s drilling
programs (through DynaMexico) are exploratory in nature.

The SJG Property is without known
reserves

Under U.S. standards, mineralization
may not be classified as a “reserve” unless a determination has been made that the mineralization could be economically
and legally produced or extracted at the time the reserve determination is made.

Environmental and Regulatory
Concerns

The Company operates in an industry
where there are significant environmental and regulatory requirements. The inability of the Company to satisfy these requirements
could cause the value of its common stock to decline.

The
current or future operations of the Company, including acquisition, leasing, and sales activities, involve mineral properties
which require permits from various federal, state and local governmental authorities. Such future operations are and will be governed
by laws and regulations governing prospecting, development, mining, production, exports, taxes, labor standards, occupational
health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters.  Companies engaged
in the development and operation of mines and related facilities generally experience increased costs, and delays in production
and other schedules as a result of the need to comply with applicable laws, regulations and permits. Additional permits and studies,
which may include environmental impact studies conducted before permits can be obtained, are necessary prior to operation of properties
in which the Company has interests.  Required permits could adversely affect the Company's ability to negotiate agreeable
acquisition, lease, or sales terms and therefore adversely affect the price of the Company’s common stock.

Competitive conditions affecting
the Company could negatively impact our business

The
potential value of the Company’s mining property is directly related to the market price for gold. The price of gold may
also have a significant influence on the market price of its common stock. If the Company obtains positive drill results and its
property progresses to a point where a commercial production decision can be made, the decision to put a mine in production and
to commit funds necessary for that purpose must be made long before any revenue from production would be received. A decrease
in the market price of gold at any time during future exploration and development may prevent the Company’s property from
being economically mined or could result in the write-off of assets whose value is impaired as a result of lower gold prices.
The price of gold is affected by numerous factors beyond our control, including inflation, fluctuation of the United States dollar
and foreign currencies, global and regional demand, the purchase or sale of gold by central banks, and the political and economic
conditions of major gold producing countries throughout the world. During the last five years, the market price of gold has fluctuated
between approximately $608 and $1,895 per ounce. The volatility of gold prices represents a substantial risk which no amount of
planning or technical expertise can fully eliminate. In the event gold prices decline and remain low for prolonged periods of
time, we might be unable to develop our property and produce revenue.

Majority Ownership of DynaMéxico

DynaResource owns an 80% share interest
in DynaMéxico – the 100 % owner of the SJG Project -- and the remaining 20% share interest is held by Goldgroup. As
a consequence of this shared ownership, any benefits to be derived from the ownership of DynaMéxico are shared on an 80%/20
% basis between the Company and Goldgroup.

A wholly owned subsidiary of DynaResource
-- Mineras de DynaResource S.A. de C.V. -- maintains an exclusive operating agreement with DynaMéxico. Additionally, another
wholly owned subsidiary of DynaResource -- DynaResource Operaciones de San Jose De Gracia S.A. de C.V. (“DynaOperaciones”)
maintains an exclusive agreement to manage the personnel registered as employees in Mexico.

22





Mr. K.W. (“K.D.”)  Diepholz,
the Company’s Chairman and CEO, is also President of DynaMexico and President of MinerasDyna, and Mr. Diepholz holds a broad
power of attorney granted by the shareholders of DynaMéxico. The powers of attorney give Mr. Diepholz authority superior
to that of any other person or group within DynaMéxico, (including the Board of Directors). The powers of attorney held
by Mr. Diepholz are consistent with the laws in Mexico, whose laws are based on a civil code.



Historical production of Gold at the
San Jose de Gracia Property May Not be Indicative of Future Production or Revenue

The SJG Property is a high-grade mineralized
system with reported historical production of over 1,000,000 Oz. Gold. The production occurred in the early 1900’s, prior
to the Mexican Revolution. Since that time, the property has seen small scale mining operations, from small scale local owners,
to the Company’s production in 2003–2006. Due to the uncertainties associated with exploration, including variations
in geology and structure, there is no assurance that the Company’s efforts will be successful in identifying mineralization
in sufficient quantities to define proven or probable reserves, and further there is no assurance that any such reserves could
be developed into a commercial operation. Investors in the Company’s securities should not rely on historical operations
as an indication that the SJG property will be developed into a commercial production in the future. The Company expects to incur
losses unless and until such time as one or more of its properties enters into commercial production and generates sufficient revenue
to fund continuing operations.



Item 1B. Unresolved Staff Comments

None.



Item 2.	Properties

Executive
Offices

The Company maintains its executive
offices of approximately 2,100 sq. ft., at 222 W. Las Colinas Blvd., Suite 744 East Tower, Irving, Texas 75039, at $3,840 per month,
plus utility services. The Company renewed a prior 3 year lease for an additional 1 year term commencing September, 2013.

San Jose de Gracia Mineral Property

DynaMexico owns 100% of the mineral
concessions at the San Jose de Gracia Property (“SJG”), located in Sinaloa State, Mexico, which is the only property
in which DynaMexico retains an interest. The Company owns 80% of the outstanding shares of DynaMexico. DynaMexico holds title to
33 concessions covering approximately 69,121 hectares (170,802 acres).

The property is located in and around
San Jose de Gracia, Sinaloa State, Mexico which is approximately 100 km northeast of Guamuchil, near the west coast of Mexico.
A small airstrip is located near San Jose de Gracia, and can be accessed by a small airplane or alternatively, by dirt mountain
road. Several roads on the property are accessible throughout the year, with the possible exception of July - September when the
rainy season sometimes causes flooding and runoff to make the roads difficult to navigate.

Currently, the Company’s
drilling programs (through DynaMexico) are exploratory in nature.

The SJG Property is without Known
Reserves

Under U.S. standards, mineralization
may not be classified as a “reserve” unless a determination has been made that the mineralization could be economically
and legally produced or extracted at the time the reserve determination is made.

SJG History

SJG reports 1,000,000 Oz. Gold historical
production from a series of underground workings. The major areas report 471,000 Oz. produced at the La Purisima area of SJG, at
an average grade of 66.7 g/t.; and 215,000 Oz. produced from the La Prieta area, at an average grade of 27.6 g/t. Mineralization
at SJG has been traced on surface and underground over a 15 square kilometer area.

Drilling programs at SJG were conducted
by a prior operator in 1997–1998, primarily at the Tres Amigos area, which outlined some of the down dip potential in this
area. Approximately 6,172 meters drilling was completed in 63 drill holes.

23





DynaMexico was formed in March 2000,
for the purpose of acquiring the concessions comprising the SJG District, and to consolidate all ownership of SJG under DynaMexico.
DynaMexico focused on acquisition and consolidation work through 2003, and reports a clear title and ownership to the district.

DynaMexico mined high-grade veins
at the San Pablo area of SJG from mid-2003 to June 2006, in a Pilot Production operation. 18,250 Oz Gold was produced and sold,
from mill feed tonnage of 42,500 tons, at an average grade of 15-20 g/t. Average production costs during the production period
were reported as $175/Oz.

Drilling programs conducted from 2007
through 2011

Drilling programs completed a total
of 298 drill holes covering 68,741 meters of drilling from 2007 through March 2011. Results of the drilling activity, including
the results of previous drilling in 1997-1998, appear in an “SJG Drill Intercepts Summary File through 11-298”, as
Exhibit 99.1 to our Form 10-Q for the period ended June 30, 2011 filed with the SEC on August 22, 2011, and available on EDGAR
at:

http://sec.gov/Archives/edgar/data/1111741/000112178111000241/ex99one.htm.

Additionally, the updated Drill Summary
File is posted on the Company’s web site at www.dynaresource.com.



National Instrument 43-101 (“NI
43-101”) Mineral Resource Estimate for the San Jose de Gracia Property

The Company received from DynaMexico
on February 14, 2012, a National Instrument 43-101 Mineral Resource Estimate for San Jose de Gracia. The NI 43-101 Resource Estimate
(the “2012 DynaMexico-CAM SJG Mineral Resource Estimate”, the “Resource Estimate”) was prepared by Mr.
Robert Sandefur, BS, MSc, P.E., a Qualified Person as defined under NI 43-101, and a senior reserve analyst for Chlumsky, Armbrust
& Meyer LLC, Lakewood, CO. The Resource Estimate concentrates on four separate main vein systems at SJG: Tres Amigos, San Pablo,
La Union, and La Purisima.

National Instrument 43-101 Technical Report
on the San Jose de Gracia Property

The Company received from DynaMexico
on March 28, 2012 a National Instrument 43-101 (“NI 43-101”) compliant Technical Report for the San Jose de Gracia
Project (the “2012 DynaMexico Luna-CAM SJG Technical Report”, the “Technical Report”), and approved by
DynaResource de Mexico, SA de CV. (“DynaMexico”), the 100% owner of SJG.

The 2012 DynaMexico Luna-CAM SJG Technical
Report was prepared by Mr. Ramon Luna, BS, P.Geo., of Servicios y Proyectos
Mineros, Hermosillo, Mexico, anda Qualified Person as defined under NI 43-101; and by Mr. Robert Sandefur, BS, MSc, P.E.,
a senior reserve analyst for Chlumsky, Armbrust & Meyer LLC, Lakewood, CO., and a Qualified Person as defined under NI 43-101.
The 2012 DynaMexico Luna-CAM SJG Technical Report includes as Section Fourteen (14) a Mineral Resource Estimate for SJG as prepared
by Mr. Sandefur (the “2012 DynaMexico-CAM SJG 43-101 Mineral Resource Estimate”, the “Resource Estimate”).

The Company filed the Technical Report
on SEDAR (www.sedar.com) on March 28, 2012.

Updated National Instrument 43-101
Technical Report for San Jose de Gracia

The Company received from DynaMexico
on December 31, 2012, an updated NI 43-101 compliant Technical Report for the San Jose de Gracia Project (the “Updated 2012
DynaMexico Luna-CAM SJG Technical Report, and the “updated Technical Report”). The updated Technical Report was approved
by DynaMexico, and filed by the Company on SEDAR on December 31, 2012.

Regional Geology & Mineral Deposits

San José de Gracia lies within
the Sierra Madre Occidental Gold-Silver Belt, in a second-order graben directly east of the regional-scale Grete Graben.  The
basement to the Sierra Madre Occidental consists of deformed Paleozoic sedimentary strata, which are non-conformably overlain by
Tertiary mafic to felsic volcanic and volcaniclastic strata known as the Lower Volcanic Series (“LVS”).  Strata
of the LVS are recognized as being spatially related to gold and silver mineralization in the region.  Volcanic and sedimentary
strata are capped by a thick sequence of non-deformed Late Tertiary ignimbrites, known as the Upper Volcanic Series (“UVS”).

Property Geology

The oldest rocks exposed at San
José de Gracia are deformed Paleozoic shale, sandstone, conglomerate and minor limestone, which are non-conformably overlain
by andesite and rhyodacite flows and tuffs of the LVS.  Volcanic and sedimentary strata are cut by quartz-feldspar porphyry,
porphyritic diorite bodies and fine-grained mafic dykes, which may be co-temporal with the LVS.  Ignimbrites of the UVS are
exposed at higher elevations on the property and are thought to act as a post

24





mineralization cap rock, thereby
indicating an Early to Mid-Tertiary (Paleocene to Eocene) age for gold mineralization at San José de Gracia.

Geologic Structure

Detailed mapping within the project
area has defined several stages of deformation, beginning with compression during the Laramide Orogeny which affected the Paleozoic
basement and formed flat-lying reverse faults, which have been reactivated as conduits for gold-bearing fluids in the La Prieta
trend (Table 2).  Extension in Tertiary time led to the development of second order structures, trending south, southwest
and southeast; which formed the major structural orientations for mineralization at San José de Gracia.  The latest
phase of deformation is characterized by late-stage extension and southwest tilting.

Mineralization & Alteration

High grade gold mineralization at
San José de Gracia is hosted within andesite and rhyodacite of the LVS and underlying Paleozoic sediments as fault breccia
veins and crackle breccias that exhibit multiple stages of reactivation and fluid flow, as evidenced by crustiform/colloform textures
and cross cutting veins.  Locally, veins exhibit sharp, clay gouge hangingwall and footwall contacts with slickensides, indicating
reactivation of structurally-hosted veins subsequent to mineralization.  Gold grades can also be carried within the mineralized
halo adjacent to the principal veins as quartz-chlorite stockwork.  In addition to vein-hosted mineralization, broad zones
of un-mineralized clay alteration, developed southwest of the main mineralized trends, may overlie lower-grade, disseminated gold
mineralization at depth.

Alteration at San José de
Gracia is laterally and vertically zoned from discrete zones of silicification to broad zones of illite to clay alteration with
increasing elevation and/or distance from the main feeder structures.  Faulting and tilting of the mineralization system has
affected the surface distribution of alteration and in general has exposed deeper portions of the system in the northeast and exposed
shallower, more distal portions of the hydrothermal system in the southwest part of the property.

Six principal mineralized trends have been identified
at San José de Gracia, from south to north. These consist of the:

| | 1. | La
                                         Purisima Ridge trend;
| | -- | -----------------------------------------------------------------
| | 2. | Palos Chinos trend;                                              

| | 3. | La Parilla to Veta Tierra trend (Including La Union);
| | -- | -----------------------------------------------------

| | 4. | San Pablo trend;
| | -- | ----------------

| | 5. | La Prieta trend, and
| | -- | --------------------

| | 6. | Los Hilos to Tres Amigos trend.
| | -- | -------------------------------

Lab

A field laboratory is maintained within
the camp facility. The Company utilized the lab for Assaying services during its production activities. Assays were performed by
Company personnel for mined mineralization, feed mineralization, gravity and flotation concentrates, and tailings. The current
status of the lab and equipment is care and maintenance. The Company anticipates utilizing the lab facility in the future for providing
quick check assays to support the exploration and bulk sampling works.



Item 3.	Legal Proceedings

US Litigation (Dallas, Texas) –
Company as Plaintiff

On December 27, 2012, the Company, and
DynaMexico, filed an Original Petition and Application for Temporary Injunction and Permanent Injunction in the 14th
Judicial District Court of Dallas, Texas (the “Petition”) against Defendants Goldgroup Mining Inc., Goldgroup Resources
Inc., and certain individuals acting in concert with Goldgroup (collectively “Goldgroup”). The Petition alleged, among
other things, that Goldgroup has wrongfully used property, confidential information and data belonging to DynaMéxico and
consistently failed to disclose several matters of material importance to the public.

The Petition requested that Goldgroup
be enjoined from: (a) using or disseminating any confidential information belonging to DynaMéxico, (b) asserting that Goldgroup
owns any interest in the San Jose de Gracia Project, rather than owning a common shares equity interest in DynaMéxico, (c)
improperly disclosing that Goldgroup is the operator of the San Jose de Gracia

25





Project, rather than Mineras de DynaResource
SA de C.V. (“Mineras”), and (d) failing to properly disclose that broad powers of attorney for acting on behalf of
DynaMéxico are held by a DynaUSA senior executive.

The Petition further requested, among
other things: (a) a temporary and permanent injunction; (b) declaratory relief; (c) disgorgement of funds alleged to have been
improperly raised as a consequence of Goldgroup’s wrongful actions; (d) cancellation of shares of DynaMéxico stock
held by Goldgroup; and, (d) actual and punitive damages.

At the time of the filing, the Company
believed the Petition to be necessary in order to protect its shareholder interests in DynaMexico and in order to protect the property,
data, and assets of DynaMexico.

Although Goldgroup challenged the jurisdiction
to the filed litigation in Texas, Goldgroup has acknowledged that it owns no direct interest in the San Jose de Gracia Property,
and it has acknowledged that Mineras de DynaResource SA de C.V. (“MinerasDyna”), DynaUSA’s 100% owned subsidiary,
is the exclusive operator of the San Jose de Gracia Project.  Additionally, recent developments in México in 2013,
including: (1) the signing of the Exploitation Amendment Agreement (“EAA”) between MinerasDyna and DynaMéxico;
(2) the signing of a 20 year land lease agreement between MinerasDyna and the Santa Maria Ejido Community surrounding the San Jose
de Gracia Project; and (3) the acquisition by DynaUSA of a majority interest in DynaMéxico; protect against Goldgroup’s
wrongfully obtaining and/or disseminating confidential data and information of DynaMéxico.  These recent developments
in México provided that the Dyna Parties non-suited the Texas action as announced on March 14, 2014, without prejudice to
asserting or consolidating claims in México, as well as to contemplate additional claims or regulatory actions against Goldgroup
in Canada.

Previously, the Dyna Parties have filed
 claims against Goldgroup in México, including, without limitation, claims for theft of confidential data and property
of DynaMéxico, claims for issuing misleading and inaccurate disclosures and, claims related to Goldgroup's asserting that
it owns interests that it does not own.

Goldgroup files for Arbitration

On March 14, 2014 Goldgroup filed for
arbitration, citing the Earn In Agreement dated September 1, 2006. The Company filed an answer on April 10, disputing that any
issues exist which provide for arbitration.

Litigation(s) in Mexico – Company
is Plaintiff

The Company, and DynaMexico have filed
several legal actions in Mexico against Goldgroup Mining Inc, Goldgroup Resources Inc., certain individuals employed or previously
employed by Minop, S.A. de C.V. (a Company operating in Mexico and associated with Goldgroup Mining Inc.), and certain individuals
retained as agents of Goldgroup Mining Inc. The Company and DynaMexico are plaintiffs in the actions filed in Mexico and the outcomes
are pending.

The Company believes that no material
adverse change will occur as a result of the actions taken, and the Company further believes that there is little to no potential
for the assessment of a material monetary judgment against the Company for legal actions it has filed in Mexico. For purposes of
confidentiality, the Company does not provide more specific disclosure in this Form 10-K.

Litigations – Company and/or
Officers and Directors as Defendants

Other than the Goldgroup claim for arbitration
above described, The Company, nor its Officers and Directors have received any formal notice of any legal actions filed against
them, nor is the Company or its Officers and Directors aware of any legal actions filed against them.

Item 4.	Mine Safety Disclosures

None.

26





PART II

Item
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common
stock is traded on the OTC Markets under the symbol "DYNR".  The following table sets forth, for the periods indicated,
the high and low bid quotations which set forth reflect inter-dealer prices, without retail mark-up or mark-down and without commissions;
and may not reflect actual transactions.



|Calendar Quarter Ending | Low  | High
|----------------------- | ---- | ----
|                        |      |     
|March 31, 2012          | 3.85 | 4.20
|June 30, 2012           | 3.25 | 4.15
|September 30, 2012      | 3.70 | 3.95
|December 31, 2012       | 3.10 | 4.00
|March 31, 2013          | 2.00 | 3.95
|June 30, 2013           | 1.20 | 3.25
|September 30, 2013      | 2.15 | 3.50
|December 31, 2013       | 1.21 | 3.50



No cash dividends on the Company common
stock have been declared or paid since the Company's inception. The Company had approximately 595 shareholders at December 31,
2013. This does not include shareholders that hold their shares in street name or with a broker.

During the fiscal year ended December
31, 2013, except as included in our Quarterly Reports on Form 10-Q or in our Current Reports on Form  8-K, we have not
sold any equity securities not registered under the Securities Act.

During the fiscal year ended December 31, 2013,
no securities of the Company were authorized for issuance under equity compensation plans.



Item 6.	Selected Financial Data

Not applicable.



Item 7.	Management’s
Discussion and Analysis of Financial Condition and Results of Operations

General

The Company currently holds 80%
of the outstanding shares of DynaResource de México, S.A. de C.V. (“DynaMéxico”), which owns 100% of
the mineral concessions and related interest to the San José de Gracia mining District (“SJG”). SJG is currently
comprised of 33 mining concessions covering approximately 69,121 hectares located in and around San José de Gracia, in northern
Sinaloa State, México (“SJG”). SJG is located on the west side of the Sierra Madre Mountains, approximately
250 kilometers inland from the port city of Los Mochis, Sinaloa; and approximately 500 kilometers north of Mazatlan, Sinaloa.

The SJG is a High-Grade Mineralized System
which reports historical production of over 1 M. Oz. AU, from a series of underground workings. DynaMéxico is focused on
the exploration and future exploitation of this vein-hosted, near surface, and over 400 hundred M. down – dip gold potential,
that occurs within fault breccia veins; and has been traced on surface and underground over a 15 Sq. Km. area.



Prior Drilling and Exploration Activity / SJG (1997 / 1998)

A drill program was conducted at
SJG in 1997 - 1998 by Golden Hemlock Explorations, Ltd., a prior partner at SJG. Approximately 6,172 meters drilling was completed
in 63 core drill holes. Significant intercepts, including bonanza grades, outlined down dip potential of the Northeast section
(150 Meter NE to SW extent of the Drilling) of the Los Hilos to La Cecena to Tres Amigos Trend.  And, Drill Hole 97-63 confirmed
down dip and extension at the Palos Chinos Area of SJG.

Surface and underground sampling in 1999 -
2000 conducted by the Company confirmed high grades in historic workings and surface exposures throughout the SJG district and
project area.  These high grades outlined the presence of mineralization shoots developed within the veins.  The mineralized
shoots appear to be controlled by dilational jogs and/or vein intersections. A total of 544 samples were collected in 1999-2000,
and assayed an average 6.51 grams/ton (g/t) gold.

27





Pilot Production Activities (2003
– 2006)

During the period 2003 through 2006,
DynaMéxico conducted underground mining and pilot production activities at SJG. The small scale production activities at
SJG consisted of improvements to an existing mill, including the installation of a gravity / flotation processing circuit. Initial
test runs with tailings from historical production were completed in 2002.  Actual mining at the high grade San Pablo area
of the SJG property commenced in March 2003. DynaMéxico produced 18,250 Oz. gold from Mid 2003 to June 2006; from mill feed
tonnage of 42,500 tons, at an average grade of approximately 15-20 g/t. Production costs were reported at approx. $175. /Oz.

Magnetic and IP Surveys

Magnetic and IP surveys were conducted
throughout the SJG district in 2009, covering an area of approximately 15 Sq. Km.

IP is the primary geophysical target
at SJG, and is expected to identify pyrite-based mineralization hosting gold. Initial Survey Grid lines were located approximately
perpendicular to inferred geologic strike. The data response from these grid lines indicate one or more IP sources that dip northwest.
Additional grid lines were crossed with the initial lines, and appear to identify two separate IP sources.

Grid lines to the South appear to indicate
an IP source at > 250 Meters.

Correlation between ground magnetic
and IP

In general the correlation between the
Magnetic and IP response and data was excellent.

Correlation with recent Drilling Programs
and known Mineralization

The data response of the surveys correlated
to the recent drilling programs and to the areas of known mineralization at SJG was excellent. Considering this excellent correlation
to known mineralization, additional areas of SJG showing similar data response could be indicative of additional target areas.

Identification of Additional Resource
Target Areas

Significant survey responses were reported
for the following areas; and are projected for follow up drilling:

San Pablo; Up Dip;

San Pablo; Displacement
Zone;

Tres Amigos; Down Dip and
Northwest;

Tres Amigos; Extension
Northeast;

Orange Tree; Down Dip;

La Cecena, Los Hilos, and
Tepehauje;

Palos Chinos;

La Prieta;

La Purisima; Down dip at
Southeast end;

Argyllic Zone; +
250 M. Down;

Activity for the Year Ended December
31, 2013 and 2012

In 2013, MinerasDyna, the Company's
100% owned subsidiary, in accordance with the terms of the Exploitation Amendment Agreement, refurbished the pilot production facility
at SJG, and rehabilitated the San Pablo mine, in order to process bulk mined ore samples from San Pablo through the pilot mill
facility. DynaMexico received permits as discussed above for the rehabilitation and operation of the mill facility and the exploitation
and mining of the San Pablo area of SJG. The basis for the mining activity and the operation of the pilot mill facility are the
NI 43-101 Mineral Resource Estimate, the Technical Report, the block models prepared as a result of the recent drilling activity,
and the recent production history of 2003-2006.

National Instrument 43-101 Mineral
Resource Estimate (NI 43-101) for San Jose de Gracia

The Company received from DynaMexico
on February 14, 2012 a National Instrument 43-101 (“NI 43-101”) Mineral Resource Estimate for the SJG property, with
an Effective Date of February 6, 2012.

The NI 43-101 Mineral Resource Estimate
was prepared by Mr. Robert Sandefur, BS, MSc, P.E., a Qualified Person as defined under NI 43-101, and a senior reserve analyst
for Chlumsky, Armbrust & Meyer LLC, Lakewood, CO (“CAM”). The Mineral Resource Estimate concentrates on four separate
vein systems at SJG: Tres Amigos, San Pablo, La Union, and La Purisima.



28





Updated National Instrument 43-101
Technical Report for San Jose de Gracia

The Company received an updated NI 43-101
compliant technical report from DynaMexico on December 31, 2012, for the San Jose de Gracia Project (the “Updated 2012 DynaMexico
Luna-CAM SJG Technical Report, and the “updated Technical Report”). The updated Technical Report was approved by DynaMexico,
and filed by the Company with SEDAR on December 31, 2012.

The Updated 2012 DynaMexico Luna-CAM
SJG Technical Report - Selected Drill Results by Target Area

Tres Amigos

Selected drill hole results for Tres
Amigos follow:

|Drill hole | Area        | From m | To m   | length (m) | Au g/t | Ag g/t | Cu%  | Pb%  | Zn% 
|---------- | ----------- | ------ | ------ | ---------- | ------ | ------ | ---- | ---- | ----
|97-002     | Tres Amigos | 42.70  | 58.20  | 15.50      | 3.99   | 15.10  | 0.38 | 0.00 | 0.00
|97-006     | Tres Amigos | 27.80  | 29.65  | 1.85       | 6.46   | 45.50  | 1.10 | 0.03 | 0.32
|97-007     | Tres Amigos | 57.00  | 67.00  | 10.00      | 3.41   | 12.20  | 0.09 | 0.00 | 0.00
|97-009     | Tres Amigos | 100.00 | 102.00 | 2.00       | 13.53  | 3.10   | 0.02 | 0.01 | 0.50
|97-012     | Tres Amigos | 24.50  | 26.20  | 1.70       | 8.57   | 34.90  | 0.39 | 1.00 | 4.30
|97-013     | Tres Amigos | 95.00  | 107.50 | 12.50      | 20.80  | 21.80  | 0.43 | 0.06 | 0.15
|97-035     | Tres Amigos | 126.00 | 132.00 | 6.00       | 8.84   | 14.20  | 0.28 | 0.00 | 0.13
|97-037     | Tres Amigos | 35.90  | 37.20  | 1.30       | 11.97  | 15.00  | 0.19 | 0.22 | 3.60
|97-039     | Tres Amigos | 40.20  | 43.20  | 3.00       | 29.50  | 44.60  | 0.58 | 0.95 | 7.45
|97-040     | Tres Amigos | 78.00  | 80.00  | 2.00       | 14.88  | 10.90  | 0.19 | 0.17 | 0.10
|97-040     | Tres Amigos | 92.00  | 94.00  | 2.00       | 10.81  | 16.30  | 0.38 | 0.01 | 0.78
|97-040     | Tres Amigos | 104.00 | 108.00 | 4.00       | 7.21   | 4.80   | 0.04 | 0.00 | 0.25
|97-045     | Tres Amigos | 100.00 | 106.00 | 6.00       | 11.46  | 3.40   | 0.03 | 0.02 | 0.17
|97-047     | Tres Amigos | 124.94 | 132.00 | 7.06       | 7.51   | 15.40  | 0.09 | 0.27 | 3.42
|97-050     | Tres Amigos | 78.00  | 80.00  | 2.00       | 8.53   | 10.80  | 0.05 | 0.78 | 2.00
|08-102     | Tres Amigos | 158.66 | 162.47 | 3.81       | 5.10   | 6.60   | 0.14 | 0.01 | 0.19
|08-104     | Tres Amigos | 67.45  | 68.80  | 1.35       | 26.20  | 327.90 | 1.60 | 0.23 | 0.01
|08-113     | Tres Amigos | 25.10  | 26.70  | 1.60       | 13.40  | 3.20   | 0.00 | 0.01 | 0.90
|08-115     | Tres Amigos | 153.30 | 159.00 | 5.70       | 8.31   | 8.30   | 0.17 | 0.00 | 0.07
|08-116     | Tres Amigos | 134.80 | 138.10 | 3.30       | 21.74  | 9.90   | 0.06 | 0.04 | 0.15
|08-118     | Tres Amigos | 27.84  | 31.88  | 4.04       | 5.18   | 30.50  | 0.38 | 0.80 | 5.68



|08-118 | Tres Amigos | 52.65  | 53.73  | 1.08 | 13.70 | 13.90 | 0.06 | 0.98 | 4.53
|------ | ----------- | ------ | ------ | ---- | ----- | ----- | ---- | ---- | ----
|10-150 | Tres Amigos | 285.61 | 288.49 | 2.88 | 10.93 | 14.24 | 0.32 | 0.01 | 0.03
|10-150 | Tres Amigos | 312.80 | 321.81 | 9.01 | 3.97  | 2.35  | 0.09 | 0.00 | 0.03
|10-151 | Tres Amigos | 208.38 | 216.20 | 7.82 | 22.19 | 14.70 | 0.36 | 0.01 | 0.06
|10-152 | Tres Amigos | 174.42 | 175.55 | 1.13 | 9.85  | 16.68 | 0.18 | 0.05 | 0.15
|10-153 | Tres Amigos | 207.47 | 211.10 | 3.63 | 5.36  | 12.92 | 0.33 | 0.05 | 0.23
|10-154 | Tres Amigos | 73.00  | 74.75  | 1.75 | 21.89 | 9.30  | 0.00 | 0.00 | 0.02
|10-175 | Tres Amigos | 135.93 | 140.00 | 4.07 | 3.41  | 8.34  | 0.15 | 0.28 | 0.56
|10-175 | Tres Amigos | 241.59 | 245.40 | 3.81 | 6.37  | 3.41  | 0.02 | 0.00 | 0.03
|10-176 | Tres Amigos | 221.04 | 228.91 | 7.87 | 2.00  | 7.02  | 0.18 | 0.09 | 1.02

29







|10-177 | Tres Amigos | 228.63 | 245.00 | 16.37 | 10.58  | 9.75   | 0.25 | 0.02 | 0.09
|------ | ----------- | ------ | ------ | ----- | ------ | ------ | ---- | ---- | ----
|10-178 | Tres Amigos | 222.55 | 233.45 | 10.90 | 4.22   | 8.11   | 0.31 | 0.01 | 0.13
|10-179 | Tres Amigos | 75.3   | 77.02  | 1.72  | 105.51 | 49.60  | 0.03 | 0.01 | 0.06
|10-179 | Tres Amigos | 174.85 | 179.52 | 4.67  | 5.70   | 15.89  | 0.11 | 0.00 | 0.16
|10-226 | Tres Amigos | 205.05 | 213.09 | 8.04  | 18.47  | 19.77  | 0.42 | 0.13 | 0.22
|10-227 | Tres Amigos | 176.95 | 186.75 | 9.80  | 8.42   | 11.92  | 0.41 | 0.04 | 0.33
|10-228 | Tres Amigos | 164.31 | 167.29 | 2.98  | 3.73   | 26.21  | 0.58 | 0.09 | 0.35
|10-230 | Tres Amigos | 244.91 | 249.45 | 4.54  | 18.09  | 15.48  | 0.53 | 0.02 | 0.03
|10-231 | Tres Amigos | 266.70 | 269.45 | 2.75  | 8.99   | 35.18  | 0.84 | 0.00 | 0.03
|10-233 | Tres Amigos | 177.00 | 179.40 | 2.40  | 5.42   | 2.87   | 0.03 | 0.04 | 0.41
|10-234 | Tres Amigos | 214.61 | 217.97 | 3.36  | 15.05  | 13.45  | 0.23 | 0.01 | 0.01
|10-235 | Tres Amigos | 147.65 | 151.15 | 3.50  | 2.95   | 0.55   | 0.01 | 0.00 | 0.01
|10-237 | Tres Amigos | 92.44  | 92.84  | 0.40  | 883.91 | 195.00 | 0.24 | 0.77 | 5.35
|11-246 | Tres Amigos | 107.30 | 108.20 | 0.90  | 63.85  | 10.10  | 0.03 | 0.01 | 0.01
|11-257 | Tres Amigos | 60.84  | 63.33  | 2.49  | 5.37   | 9.28   | 0.25 | 0.01 | 0.40
|11-257 | Tres Amigos | 92.00  | 94.66  | 2.66  | 5.00   | 6.74   | 0.25 | 0.02 | 1.16
|11-260 | Tres Amigos | 63.40  | 71.15  | 7.75  | 7.84   | 10.68  | 0.16 | 0.12 | 2.28
|11-265 | Tres Amigos | 47.95  | 52.17  | 4.22  | 3.07   | 2.14   | 0.07 | 0.00 | 0.08
|11-271 | Tres Amigos | 115.40 | 120.15 | 4.75  | 13.93  | 18.56  | 0.54 | 0.02 | 0.14
|11-278 | Tres Amigos | 66.75  | 67.40  | 0.65  | 16.34  | 2.80   | 0.02 | 0.02 | 0.08
|11-280 | Tres Amigos | 3.05   | 4.57   | 1.52  | 10.67  | 0.50   | 0.01 | 0.00 | 0.01



San Pablo

|           | Selected drill hole results for San Pablo follow: |       
|---------- | ------------------------------------------------- | ------
|Drill hole | Area                                              | From m
|07-007     | San Pablo                                         | 85.50 
|07-008     | San Pablo                                         | 115.80
|07-009     | San Pablo                                         | 167.40
|07-012     | San Pablo                                         | 19.70 
|07-023     | San Pablo                                         | 69.10 
|07-026     | San Pablo                                         | 65.90 
|07-027     | San Pablo                                         | 142.80
|07-029     | San Pablo                                         | 130.60
|07-031     | San Pablo                                         | 94.25 
|08-048     | San Pablo                                         | 219.46
|08-051     | San Pablo                                         | 183.55
|08-060     | San Pablo                                         | 235.70
|08-089     | San Pablo                                         | 173.80
|08-090     | San Pablo                                         | 190.70
|           |                                                   |       

30







|08-092 | San Pablo | 124.80 | 125.80 | 1.00 | 23.31  | 0.50   | 0.00 | 0.01 | 0.00
|------ | --------- | ------ | ------ | ---- | ------ | ------ | ---- | ---- | ----
|08-097 | San Pablo | 227.69 | 229.75 | 2.06 | 17.04  | 20.00  | 0.56 | 0.03 | 0.04
|09-131 | San Pablo | 95.55  | 96.65  | 1.10 | 28.25  | 20.30  | 0.26 | 0.17 | 0.18
|09-133 | San Pablo | 126.80 | 129.80 | 3.00 | 13.10  | 10.25  | 0.32 | 0.00 | 0.02
|09-134 | San Pablo | 79.09  | 81.57  | 2.48 | 4.33   | 9.46   | 0.36 | 0.00 | 0.02
|09-135 | San Pablo | 75.70  | 79.10  | 3.40 | 4.60   | 24.29  | 1.22 | 0.01 | 0.02
|09-137 | San Pablo | 135.90 | 140.87 | 4.97 | 5.35   | 12.46  | 0.31 | 0.00 | 0.01
|09-137 | San Pablo | 157.25 | 158.93 | 1.68 | 12.50  | 16.90  | 0.39 | 0.00 | 0.01
|09-138 | San Pablo | 150.62 | 153.59 | 2.97 | 8.80   | 10.46  | 0.28 | 0.00 | 0.02
|09-139 | San Pablo | 132.18 | 137.68 | 5.50 | 20.51  | 25.82  | 0.70 | 0.00 | 0.01
|09-140 | San Pablo | 99.92  | 102.20 | 2.28 | 4.59   | 67.30  | 1.77 | 0.00 | 0.01
|10-195 | San Pablo | 170.67 | 173.61 | 2.94 | 3.26   | 10.47  | 0.32 | 0.00 | 0.00
|10-197 | San Pablo | 48.15  | 51.82  | 3.67 | 7.96   | 13.18  | 0.49 | 0.00 | 0.03
|10-197 | San Pablo | 102.00 | 105.30 | 3.30 | 28.38  | 14.00  | 0.00 | 0.01 | 0.09
|10-199 | San Pablo | 4.68   | 6.24   | 1.56 | 9.14   | 4.10   | 0.02 | 0.00 | 0.00
|10-201 | San Pablo | 23.40  | 25.50  | 2.10 | 15.78  | 17.35  | 0.19 | 0.01 | 0.02
|10-203 | San Pablo | 70.65  | 76.15  | 5.50 | 332.86 | 143.90 | 0.02 | 0.00 | 0.01
|10-207 | San Pablo | 80.15  | 83.20  | 3.05 | 16.74  | 24.17  | 0.54 | 0.01 | 0.02
|10-212 | San Pablo | 46.80  | 51.60  | 4.80 | 5.90   | 6.97   | 0.38 | 0.01 | 0.22
|10-213 | San Pablo | 171.75 | 173.56 | 1.81 | 5.78   | 10.60  | 0.18 | 0.00 | 0.01
|10-215 | San Pablo | 186.80 | 190.27 | 3.47 | 15.82  | 14.68  | 0.41 | 0.03 | 0.02
|10-217 | San Pablo | 182.64 | 184.06 | 1.42 | 89.95  | 38.70  | 0.74 | 0.00 | 0.01
|10-219 | San Pablo | 155.84 | 157.25 | 1.41 | 10.82  | 11.84  | 0.39 | 0.00 | 0.01
|10-221 | San Pablo | 69.98  | 71.98  | 2.00 | 13.14  | 23.93  | 0.62 | 0.00 | 0.01





|10-224 | San Pablo | 122.82 | 125.05 | 2.23 | 5.29  | 18.70 | 0.69 | 0.02 | 0.04
|------ | --------- | ------ | ------ | ---- | ----- | ----- | ---- | ---- | ----
|10-224 | San Pablo | 148.60 | 154.95 | 6.35 | 7.04  | 13.31 | 0.57 | 0.00 | 0.01
|10-236 | San Pablo | 112.96 | 117.03 | 4.07 | 11.38 | 22.92 | 0.68 | 0.00 | 0.01
|11-247 | San Pablo | 63.60  | 65.45  | 1.85 | 10.49 | 5.92  | 0.01 | 0.00 | 0.02
|11-247 | San Pablo | 80.00  | 83.47  | 3.47 | 5.00  | 36.71 | 0.53 | 0.01 | 0.02
|11-249 | San Pablo | 108.20 | 109.93 | 1.73 | 8.21  | 30.29 | 0.80 | 0.00 | 0.02
|11-250 | San Pablo | 101.72 | 104.81 | 3.09 | 20.15 | 53.44 | 0.88 | 0.24 | 0.54
|11-263 | San Pablo | 119.88 | 121.13 | 1.25 | 9.47  | 21.70 | 0.65 | 0.01 | 0.04
|11-264 | San Pablo | 145.21 | 146.45 | 1.24 | 21.24 | 78.80 | 0.72 | 0.04 | 0.01
|11-268 | San Pablo | 92.65  | 94.25  | 1.60 | 11.74 | 21.13 | 0.37 | 0.01 | 0.04



La Union

Selected drill hole results for La Union
follow:



|Drill hole | Area | From m | To m | length (m) | Au g/t | Ag g/t | Cu% | Pb% | Zn%
|---------- | ---- | ------ | ---- | ---------- | ------ | ------ | --- | --- | ---

31







|92-001 | La Union | 46.00  | 60.96  | 14.96 | 2.58   | 0.00   | 0.00 | 0.00 | 0.00
|------ | -------- | ------ | ------ | ----- | ------ | ------ | ---- | ---- | ----
|97-027 | La Union | 20.30  | 21.30  | 1.00  | 6.14   | 12.50  | 0.05 | 0.24 | 0.04
|97-029 | La Union | 38.10  | 41.20  | 3.10  | 3.63   | 8.60   | 0.11 | 0.02 | 0.06
|97-030 | La Union | 75.00  | 78.10  | 3.10  | 4.62   | 9.10   | 0.50 | 0.00 | 0.01
|97-031 | La Union | 87.00  | 91.00  | 4.00  | 2.84   | 6.70   | 0.34 | 0.00 | 0.01
|97-034 | La Union | 45.70  | 47.70  | 2.00  | 8.87   | 4.10   | 0.14 | 0.00 | 0.01
|08-061 | La Union | 27.80  | 31.30  | 3.50  | 2.01   | 24.80  | 0.45 | 0.22 | 0.15
|08-076 | La Union | 32.75  | 34.85  | 2.10  | 36.09  | 47.80  | 0.43 | 0.80 | 1.06
|08-080 | La Union | 125.30 | 128.40 | 3.10  | 4.82   | 4.40   | 0.11 | 0.00 | 0.01
|09-143 | La Union | 55.36  | 56.76  | 1.40  | 12.08  | 8.80   | 0.13 | 0.01 | 0.01
|10-208 | La Union | 150.61 | 152.67 | 2.06  | 6.60   | 10.30  | 0.40 | 0.00 | 0.01
|10-216 | La Union | 39.24  | 42.20  | 2.96  | 12.36  | 3.45   | 0.06 | 0.00 | 0.01
|10-218 | La Union | 140.01 | 141.30 | 1.29  | 8.42   | 6.41   | 0.08 | 0.00 | 0.01
|10-223 | La Union | 29.52  | 31.14  | 1.62  | 9.90   | 6.60   | 0.02 | 0.00 | 0.02
|10-223 | La Union | 63.90  | 67.42  | 3.52  | 10.24  | 10.69  | 0.62 | 0.00 | 0.01
|11-244 | La Union | 73.82  | 74.86  | 1.04  | 9.79   | 65.20  | 1.42 | 0.03 | 0.37
|11-252 | La Union | 55.25  | 59.70  | 4.45  | 4.26   | 12.05  | 0.37 | 0.01 | 0.04
|11-256 | La Union | 51.61  | 52.85  | 1.24  | 144.08 | 138.60 | 1.06 | 1.61 | 1.78
|11-256 | La Union | 99.93  | 101.29 | 1.36  | 9.04   | 3.30   | 0.01 | 0.00 | 0.01
|11-298 | La Union | 49.15  | 49.85  | 0.7   | 49.39  | 20.80  | 0.20 | 0.01 | 0.03
|      

La Purisima

Selected drill hole results for La Purisima
follow:

|Drill hole | Area        | From m | To m   | length (m) | Au g/t | Ag g/t | Cu%  | Pb%  | Zn% 
|---------- | ----------- | ------ | ------ | ---------- | ------ | ------ | ---- | ---- | ----
|97-055     | La Purisima | 24.40  | 27.40  | 3.00       | 5.24   | 28.50  | 0.63 | 0.35 | 1.83
|97-063     | La Purisima | 54.50  | 61.50  | 7.00       | 3.13   | 4.00   | 0.07 | 0.02 | 0.00
|97-063     | La Purisima | 67.30  | 70.00  | 2.70       | 8.45   | 11.10  | 0.68 | 0.00 | 0.00
|07-016     | La Purisima | 32.45  | 34.60  | 2.15       | 5.20   | 4.20   | 0.22 | 0.00 | 0.01
|07-021     | La Purisima | 158.70 | 160.80 | 2.10       | 75.90  | 76.00  | 1.61 | 0.07 | 0.00
|07-036     | La Purisima | 91.40  | 92.82  | 1.42       | 4.47   | 2.60   | 0.01 | 0.01 | 0.06
|07-037     | La Purisima | 251.30 | 253.50 | 2.20       | 4.88   | 23.00  | 0.01 | 0.01 | 0.00
|07-039     | La Purisima | 197.55 | 200.80 | 3.25       | 10.93  | 4.60   | 0.04 | 0.00 | 0.01
|07-042     | La Purisima | 16.10  | 18.30  | 2.20       | 3.02   | 2.00   | 0.01 | 0.01 | 0.05
|08-068     | La Purisima | 135.40 | 137.00 | 1.60       | 18.16  | 8.30   | 0.04 | 0.03 | 0.22
|08-070     | La Purisima | 120.50 | 121.60 | 1.10       | 9.50   | 2.70   | 0.01 | 0.00 | 0.06
|08-082     | La Purisima | 151.60 | 153.30 | 1.70       | 18.16  | 0.10   | 0.00 | 0.00 | 0.04
|10-161     | La Purisima | 87.70  | 99.67  | 11.97      | 3.12   | 4.86   | 0.36 | 0.00 | 0.01
|10-186     | La Purisima | 92.10  | 93.45  | 1.35       | 14.73  | 11.17  | 0.47 | 0.00 | 0.00
|10-193     | La Purisima | 41.15  | 46.75  | 5.60       | 3.96   | 32.31  | 0.01 | 0.10 | 0.14
|10-198     | La Purisima | 35.05  | 36.58  | 1.53       | 13.64  | 6.10   | 0.14 | 0.00 | 0.00

32







|10-204 | La Purisima | 128.02 | 131.86 | 3.84 | 4.06  | 3.15  | 0.09 | 0.00 | 0.00
|------ | ----------- | ------ | ------ | ---- | ----- | ----- | ---- | ---- | ----
|10-204 | La Purisima | 173.15 | 174.58 | 1.43 | 7.21  | 5.57  | 0.08 | 0.00 | 0.01
|10-206 | La Purisima | 121.73 | 124.04 | 2.31 | 14.63 | 3.45  | 0.02 | 0.00 | 0.00
|11-282 | La Purisima | 27.43  | 30.48  | 3.05 | 6.21  | 3.44  | 0.01 | 0.02 | 0.03
|11-282 | La Purisima | 74.45  | 75.36  | 0.91 | 18.87 | 10.10 | 0.03 | 0.00 | 0.00
|11-282 | La Purisima | 152.40 | 153.92 | 1.52 | 7.79  | 1.40  | 0.04 | 0.00 | 0.00
|11-285 | La Purisima | 85.06  | 87.92  | 2.86 | 3.93  | 0.80  | 0.03 | 0.00 | 0.00
|11-285 | La Purisima | 98.50  | 102.15 | 3.65 | 6.70  | 3.87  | 0.20 | 0.00 | 0.01
|11-289 | La Purisima | 109.73 | 112.78 | 3.05 | 9.50  | 7.05  | 0.11 | 0.02 | 0.00
|11-293 | La Purisima | 38.11  | 39.27  | 1.16 | 10.06 | 0.50  | 0.01 | 0.00 | 0.00
|11-293 | La Purisima | 158.75 | 160.55 | 1.80 | 12.65 | 2.84  | 0.10 | 0.00 | 0.01



Block Model in Surpac software

The Company has compiled its manual calculation
and internal interpretation of the mineralization at SJG defined by drilling and production to date. The Company has also built
the block model of mineralization at SJG using Surpac (Gemcom) software. The current block model at SJG confirms mineralization
at San Pablo, Tres Amigos, La Union, Palos Chinos, and La Purisima; with portions of the mineralization in a high grade category,
and including mineralization at San Pablo and Tres Amigos, and is consistent with the CAM SJG Mineral Resource Estimate. The Company
will continue this Surpac modeling work as additional drill programs are planned and completed.

National Instrument 43-101 Technical
Report for San Jose de Gracia

The Company received from DynaMexico on March
28, 2012 a National Instrument 43-101 (“NI 43-101”) compliant Technical Report for the San Jose de Gracia Project (the
“2012 DynaMexico Luna-CAM SJG Technical Report”, the “Technical Report”), and approved by DynaResource
de Mexico, SA de CV. (“DynaMexico”), the 100% owner of SJG.

The 2012 DynaMexico Luna-CAM SJG Technical
Report was prepared by Mr. Ramon Luna, BS, P.Geo., of Servicios y Proyectos
Mineros, Hermosillo, Mexico, anda Qualified Person as defined under NI 43-101; and by Mr. Robert Sandefur, BS, MSc, P.E.,
a senior reserve analyst for Chlumsky, Armbrust & Meyer LLC, Lakewood, CO., and a Qualified Person as defined under NI 43-101.
The 2012 DynaMexico Luna-CAM SJG Technical Report includes as Section Fourteen (14) a Mineral Resource Estimate for SJG as prepared
by Mr. Sandefur (the “2012 DynaMexico-CAM SJG 43-101 Mineral Resource Estimate”, the “Resource Estimate”).

The Company filed the Technical Report
on SEDAR (www.sedar.com) on March 28, 2012.

Updated National Instrument 43-101
Technical Report for San Jose de Gracia

The Company received from DynaMexico
on December 31, 2012, an updated NI 43-101 compliant Technical Report for the San Jose de Gracia Project (the “Updated 2012
DynaMexico Luna-CAM SJG Technical Report, and the “updated Technical Report”). The updated Technical Report was approved
by DynaMexico, and filed by the Company with SEDAR on December 31, 2012.

Preliminary Economic Assessment Report

DynaMexico approved and released the
National Instrument 43-101 (“NI 43-101”) Technical Report for SJG on March 28, 2012, and DynaMexico approved and released
the NI 43-101 Updated Technical Report for SJG on December 31, 2012.

Structure of Company / Operations

Activities in México are conducted
by DynaMéxico, through operating agreement to the operating subsidiary of DynaResource, Inc., Mineras de DynaResource SA
de CV. (“MinerasDyna”); with the management of personnel being contracted by MinerasDyna through to the personnel management
subsidiary, DynaResource Operaciones, SA de CV (“DynaOperaciones”). DynaResource, Inc. management and consultants continue
to manage the 3 subsidiaries in México; while Chairman / CEO K.D. Diepholz is the President of each of the 3 companies.
Management and administrative fees are charged by MinerasDyna and DynaOperaciones, which are eliminated in consolidation.

Competitive Advantage

33









The Company, through its subsidiaries,
has been conducting business in México since March 2000. During this period the Company believes it has structured its
subsidiaries properly and strategically, and during which time the Company has retained key personnel and developed key relationships
and support. The Company believes its experience and accomplishments in México gives it a competitive advantage, even though
many competitors may be larger and have more capital resources.

Drilling Programs

Further drilling programs at SJG are
anticipated, but those plans will take into consideration the recent NI 43-101 2012 DynaMexico-CAM SJG Mineral Resource Estimate
and the recommendations made in the 2012 DynaMexico Luna-CAM SJG 43-101 Technical Report and the updated Technical Report. The
Company expects DynaMexico to plan continued drilling programs at SJG at San Pablo, Tres Amigos, La Cecena, Palos Chinos, La Union,
La Purisima, and La Prieta. And, the Company expects DynaMexico’s continued exploration efforts to confirm extensions to
mineralization in all directions and down dip from the main target areas.

Note Receivable – Affiliate

DynaResource Nevada, Inc., a Nevada Corporation
(“DynaNevada”), with one operating subsidiary in México, DynaNevada de México, SA de CV (“DynaNevada
de Mexico”) have common officers, directors and shareholders. The total amount loaned by the Company to DynaNevada at December
31, 2010 was $750,000 USD. The terms of the Note Receivable provide for a “Convertible Loan”, repayable at 5% interest
over a 3 year period, and convertible at the Company’s option into Common Stock of DynaNevada at $0.25 / Share.  DynaNevada
is a related entity, and through its subsidiary in México (DynaNevada de México), (“DynaNevada de Mexico”),
has entered into an Option agreement with Grupo México (“IMMSA”) in México, for the exploration and development
of approximately 3,000 hectares in the State of San Luis Potosi (“the Santa Gertrudis Property”). In March, 2010, DynaNevada
de Mexico completed the Option with IMMSA so that it now owns 100% of Santa Gertrudis. In June, 2010, DynaNevada de Mexico acquired
an additional 6,000 Hectares in the State of Sinaloa (“the San Juan Property”). The Company has loaned additional funds
to DynaNevada since 2010 for maintenance of concessions and other nominal required fees and expenses.

Competition

DynaMéxico retains 100% of the
rights to concessions over the area of the San José de Gracia property and it currently sees no competition for mining on
the lands covered by those concessions. If DynaMéxico were to re-start production activities, the sale of gold and any bi-products
would be subject to global market prices, which prices fluctuate daily. DynaMexico was successful in selling gold concentrates
produced from SJG in prior years, and the Company expects a competitive market for produced concentrates and/or other mineral products
in the future. Actual prices received by DynaMéxico would depend upon these global market prices, less deductions.

DynaMexico conducted mining and milling
operations at SJG from March 2003 through June, 2006. This activity was suspended in order to focus on the exploration of the vast
SJG District. The Company’s operating subsidiaries, MinerasDyna and DynaOperaciones, receive monthly fees for management
of the SJG activities and personnel. These fee amounts are eliminated in consolidation. Other than those intercompany fees, the
Company reported no revenue in 2013 and 2012. The Company expects revenues from mining and production in 2014.

RESULTS FOR THE YEARS ENDED DECEMBER 31, 2013 and 2012

REVENUE. Revenue for the years ended
December 31, 2013 and 2012 was $0 and $0. DynaMexico ceased its production activities in 2006 in order to focus efforts on exploration
and drilling activity, for the purpose of defining resources. The Company expects revenues from conducting pilot production activities
in 2014.

EXPLORATION EXPENSES. Exploration and
development costs were $968,590 and $895,713 for the years ended December 31, 2013 and 2012 respectively. The increase in costs
was due to the increase in activity in refurbishing the mill and preparing to run bulk samples through the mill, whereas in the
prior year, the focus was on completing the resource reports and preparing for the next phase of development.

OPERATING EXPENSES. Operating expenses
for the years ended December 31, 2013 and 2012 were $2,395,103 and $3,129,601 respectively. The above expenses include depreciation
and amortization amounts of $67,475 and $193,767 for the years ended December 31, 2013 and 2012, respectively.

OTHER INCOME (EXPENSE). Other income
and expense, exclusive of currency translation gain or (loss) included interest income of $463 and $835 for the years ended December
31, 2013 and 2012, respectively, and interest expense of $133,349 and $0 for the years ended December 31, 2013 and 2012, and other
expense of $4,204 and $62,859 for the years ended

34





December 31, 2013 and 2012, respectively.
Currency translation gain or (loss) was ($81,539) and $339,980 for the years ended December 31, 2013 and 2012, respectively.

NON-CONTROLLING INTEREST. The non-controlling
interest portion of our net loss for the year ended December 31, 2013 and 2012 was $604,135 and $1,525,745, respectively.

COMPREHENSIVE (LOSS). Comprehensive loss
includes the Company’s net loss plus the unrealized currency translation gain (loss) of ($151,730) and ($30,583) for the
years ended December 31, 2013 and 2012. The comprehensive loss was $(3,127,117) and $(2,243,856) for the years ended December 31,
2013 and 2012, respectively.

Noncontrolling Interest

Under the terms of the Earn In Agreement,
Goldgroup Mining Inc. (Goldgroup), through 2010, had earned and owned a 25% interest in DynaResource de Mexico, S.A. de C.V. (DynaMexico),
since March 2011 through May 2013, Goldgroup's ownership percentage was 50%, and since May 2013 Goldgroup’s ownership percentage
was 20%. The applicable portion of the earnings or loss attributable to Goldgroup is offset in this section. In the year ended
December 31, 2013 and 2012 the portion of the net loss attributable to Goldgroup was $604,135 and $1,525,745 respectively. The
decrease in the amount attributable to the non-controlling interest in the current year is due to a decrease in the percentage
allocation of expenses in DynaMexico.

Currency
Translation Income / Loss

The
currency translation (loss) was $(81,539) for the year ended December 31, 2013 and a gain of $339,980 for the year ended December
31, 2012. These gains or losses are caused by the fluctuation of the exchange rate between the United States dollar and the Mexican
peso.

The
Company’s comprehensive loss before the noncontrolling interest for the years ended December 31, 2013 and 2012 was ($3,127,117)
and ($2,243,856) respectively. The increase in the loss is attributed to more exploration activities and related costs in 2013
over 2012.

Plan
of Operation

The
Plan of operation for the next twelve months includes MinerasDyna commencing pilot production activities at SJG, while continuing
drilling and exploration activities. The amount allocated to each of these activities will depend on the results of the pilot
production activities. The Company is required to fund its general and administrative expenses in the US. The Company’s
operating subsidiaries, MinerasDyna and DynaOperaciones, receive monthly fees for management of SJG activities and personnel.
These amounts are eliminated in consolidation. Other than those intercompany fees, the Company reported no revenue in 2013 and
2012. The Company believes that cash on hand is adequate to fund its ongoing general and administrative expenses through 2014.
The Company plans to seek additional capital funding during the next 12 months depending on results of pilot production activities,
market conditions, results of drilling and exploration activities, and other circumstances.

Capital Expenditures

The Company’s primary activities
relate to the exploration of SJG property through its 80% owned subsidiary DynaMexico. Drilling and other services at SJG are contracted
through MinerasDyna, the operating entity under agreement with DynaMexico. The Company does not foresee significant capital purchases
in 2014 which would require funding from current cash reserves.

Liquidity and Capital Resources

As of December 31, 2013, the Company
maintained working capital of $958,162, comprised of current assets of $1,439,382 and current liabilities of $481,220. This represents
a decrease of $341,179 from the working capital maintained by the Company of $1,299,341 at December 31, 2012, due primarily to
the continued funding of operations in 2013 and expenses related to the refurbishment of the pilot mill facility and the rehabilitation
of the San Pablo mine at San Jose de Gracia.

Net cash used in operations for
the year ended December 31, 2013 increased to ($3,925,791) from ($2,647,026) for the year ended December 31, 2012. Again, this
was due to the increased activity relating to the refurbishing of the pilot mill facility and the rehabilitation of the San Pablo
mine, and the preparation for processing bulked mine samples through the pilot mill

35





facility. The pilot mill facility
is now operational and we expect to produce revenue from the running bulk samples processed through the mill facility in 2014,
in order to fund continuing operations.

Cash used in investing activities
was primarily for purchase of fixed assets of $120,533 in 2013 and cash provided primarily by proceeds of the disposal of fixed
assets of $603,504 in 2012.

Cash provided by financing activities
for the year ended December 31, 2013 was $3,641,625 compared to $898,544 for the year ended December 31, 2012. The significant
increase is due to the Company raising funds in order to refurbish the pilot mill facility and for rehabilitating the San Pablo
mine, and to prepare to process bulk mined samples through the mill facility. The main components were the issuance by the Company
of notes payable totaling $1,694,808 and selling Series B preferred stock of $1,939,500.

Advances to Subsidiaries

DynaResource de Mexico (“DynaMexico”)

In May 2013, the Company acquired additional
equity interest in DynaMexico in exchange for the retirement of accounts receivable of $2,393,803, which amount was due from DynaMexico
at December 31, 2012. As a result, as of May 17, 2013, the Company owned 80% of the outstanding equity of DynaMexico. All intercompany
balances eliminate in consolidation.

As of December 31, 2013, the Company
has no receivable from DynaMexico, however, the Company’s wholly owned subsidiary MinerasDyna had an accounts receivable
due from DynaMexico in the amount of $2,150,000.

As of December 31, 2012, Company has
an $806,935 account receivable from DynaMexico for expenditures incurred in the normal course of business since June 2000.

As of December 31, 2012, the Company
entered into an agreement with DynaMexico in which they agreed to a fee of $541,915 in order to continue to carry the amount as
a receivable. The fee was calculated as if interest had been charged at 4% interest compounded monthly over the period in which
the amounts accrued.

During the year ended December 31, 2012,
the Company incurred additional expenditures of $1,044,952 on behalf of DynaResource de Mexico, which was billed to DynaMexico
in December 2012.

As of December 31, 2012, the Company
had $2,393,803 due from DynaMexico.

Mineras de DynaResource (“MinerasDyna”)

As of December 31, 2013, the Company
had advanced $2,543,000 to MinerasDyna and MinerasDyna had advanced $2,150,000 to DynaMexico. The total amount of $2,150,000 is
a receivable owed to MinerasDyna from DynaMexico as of December 31, 2013.

As of December 31, 2012 the Company agreed
with DynaMexico to accrue interest on the total amount receivable until repaid or otherwise retired. The interest rate to be accrued
is agreed to be simple annual interest at the rate quoted by the Bank of Mexico.

The receivables from MinerasDyna and
DynaMexico have been eliminated upon consolidation.

As of December 31, 2012 the Company received
a commitment from DynaMexico to accrue interest on the total amounts receivable until repaid or otherwise retired. The interest
rate to be accrued is agreed to be simple annual interest at the interest rate quoted by the Bank of Mexico.



Advances from Goldgroup Mining Inc.
(“Goldgroup”)

In January 2013, Goldgroup advanced $120,000
USD to DynaMexico. This $120,000 contribution from Goldgroup was the first contribution from Goldgroup to DynaMexico since March
2011. And, in January 2014, Goldgroup advanced $120,000 USD to DynaMexico.

Future Advances to MinerasDyna and
DynaMexico from the Company

The Company expects to make additional
advances to MinerasDyna and DynaMexico. Future advances from MinerasDyna to DynaMexico will be made under the terms of the Exploitation
amendment agreement. Other advances are agreed to be accrued in the same manner as previous receivables, until or unless otherwise
agreed between DynaMexico and the Company.



36





Sampling Process

The geological data contained
in this report was verified by an appropriate quality control person using industry standard quality controls and quality assurance
protocols utilized in exploration activities. Standard reference samples and various duplicates are inserted in each batch of
assays. Drill core samples are cut by saw on site and samples splits are prepared for shipment, sealed and then shipped for assaying.
Samples are sent to a certified assayer (Inspectorate Exploration & Mining Services Ltd., Vancouver, BC.) and analyzed for
gold by fire assay and for silver and 34 other trace and major elements in accordance with standard industry practices.

Drilling Programs

In the period September 2006 through
December 31, 2011, funding from Goldgroup provided for DynaMexico’s completing approximately 68,741 meters drilling at San
Jose de Gracia, resulting in a defined NI 43-101 Mineral Resource Estimate as described in the 2012 DynaMexico-CAM SJG Mineral
Resource Estimate. The Company expects MinerasDyna to plan continued and subsequent drilling programs at San Pablo, Tres Amigos,
La Cecena, Palos Chinos, La Union, La Purisima, and La Prieta / Rosario / Rudolpho. The Company expects further drilling programs
to confirm extensions to mineralization in all directions and down dip from the main target areas.

Mineralization at San José de Gracia

The Company was informed by DynaMéxico
that it had outlined significant mineralization from drilling activity at San Pablo, Tres Amigos, La Union, and La Purisima areas
of SJG as described in the recent NI 43-101 2012 DynaMexico-CAM SJG Mineral Resource Estimate. Further drilling is expected to
outline additional mineralization at these 4 major target areas at SJG, while additional mineralization are also expected to be
defined at La Prieta and the area Northeast of Tres Amigos. Other areas at SJG indicate clear potential to develop additional mineralization.

No Known Reserves

Currently, the Company’s drilling
programs (through DynaMexico) are exploratory in nature.

The SJG property is without known
reserves. Under U.S. standards, mineralization may not be classified as a “reserve” unless a determination has been
made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made.

Litigation

On December 27, 2012, the Company, and
DynaMexico, filed an Original Petition and Application for Temporary Injunction and Permanent Injunction in the 14th
Judicial District Court of Dallas, Texas (the “Petition”) against Defendants Goldgroup Mining Inc., Goldgroup Resources
Inc., and certain individuals acting in concert with Goldgroup (collectively “Goldgroup”). The Petition alleged, among
other things, that Goldgroup has wrongfully used property, confidential information and data belonging to DynaMéxico and
consistently failed to disclose several matters of material importance to the public.

The Petition requested that Goldgroup
be enjoined from: (a) using or disseminating any confidential information belonging to DynaMéxico, (b) asserting that Goldgroup
owns any interest in the San Jose de Gracia Project, rather than owning a common shares equity interest in DynaMéxico, (c)
improperly disclosing that Goldgroup is the operator of the San Jose de Gracia Project, rather than Mineras de DynaResource SA
de C.V. (“MinerasDyna”), and (d) failing to properly disclose that broad powers of attorney for acting on behalf of
DynaMéxico are held by a DynaUSA senior executive.

The Petition further requested, among
other things: (a) a temporary and permanent injunction; (b) declaratory relief; (c) disgorgement of funds alleged to have been
improperly raised as a consequence of Goldgroup’s wrongful actions; (d) cancellation of shares of DynaMéxico stock
held by Goldgroup; and, (d) actual and punitive damages.

At the time of the filing, the Company
believed the Petition to be necessary in order to protect its shareholder interests in DynaMexico and in order to protect the property,
data, and assets of DynaMexico.

Although Goldgroup challenged the jurisdiction
to the filed litigation in Texas, Goldgroup has acknowledged that it owns no direct interest in the San Jose de Gracia Property,
and it has acknowledged that Mineras de DynaResource SA de C.V. (“Mineras”), DynaUSA’s 100% owned subsidiary,
is the exclusive operator of the San Jose de Gracia Project.  Additionally, recent developments in México in 2013,
including: (1) the signing of the Exploitation Amendment Agreement (“EAA”) between Mineras and DynaMéxico; (2)
the signing of a 20 year land lease agreement between Mineras and the Santa Maria Ejido Community surrounding the San Jose de Gracia
Project; and (3) the acquisition by DynaUSA of a majority interest in DynaMéxico; protect against Goldgroup’s wrongfully
obtaining and/or disseminating confidential data and information of DynaMéxico.  These recent developments in Mexico
provided that the Dyna Parties non-suited the Texas action as announced by the Company on March 14, 2014, without prejudice to
asserting or consolidating claims in México, as well as to contemplate additional claims or regulatory actions against Goldgroup
in Canada.

37





Goldgroup files for Arbitration

On March 14, 2014 Goldgroup filed for
arbitration, citing the Earn In Agreement dated September 1, 2006. The Company filed an answer on April 10, 2104 disputing that
any issues exist which provide for arbitration.

Litigation in Mexico – Company
is Plaintiff

The Company, and DynaMexico have filed
several legal actions in Mexico against Goldgroup Mining Inc., Goldgroup Resources Inc., certain individuals employed or previously
employed by Minop, S.A. de C.V. (a Company operating in Mexico and associated with Goldgroup Mining Inc.), and certain individuals
retained as agents of Goldgroup Mining Inc. The Company and DynaMexico are plaintiffs in the actions filed in Mexico and the outcomes
are pending.

The Company believes that no material
adverse change will occur as a result of the actions taken, and the Company further believes that there is little to no potential
for the assessment of a material monetary judgment against the Company for legal actions it has filed in Mexico. For purposes of
confidentiality, the Company does not provide more specific disclosure in this Form 10-K.

Litigation – Company and/or
Officers and Directors as Defendants

Other than the Arbitration claim of
Goldgroup described above, The Company, nor its Officers and Directors have received any formal notice of any legal actions filed
against them, nor is the Company or its Officers and Directors aware of any legal actions filed against them.

Item 7A. Quantitative and
Qualitative Disclosures about Market Risk

Not applicable.



Item 8.	Financial Statements and Supplementary
Data

Incorporated into and forming an integral
part of this Form 10-K are the audited financial statements for the Company for the years ended December 31, 2013 and 2012. The
financial statements as of December 31, 2013 and 2012, of the Company included in this Form 10-K have been audited by The Hall
Group, CPAs, independent registered public accountants, as set forth in their report. The financial statements have been included
in reliance upon the authority of them as experts in accounting and auditing.



Financial Statements included in the Form 10-K:

Report of Independent Registered Public Accounting
Firm

Consolidated Balance Sheets as of December 31,
2013 and 2012

Consolidated Statements of
Operations for the Years Ended December 31, 2013 and 2012 and Cumulative Since Reentering the Exploration Stage (January 1, 2007)
through December 31, 2013

Consolidated Statement of
Changes in Stockholders’ Equity for the Years Ended December 31, 2013 and 2012

Consolidated Statements of
Cash Flows for the Years Ended December 31, 2013 and 2012 and Cumulative Since Reentering the Exploration Stage (January 1, 2007)
through December 31, 2013

Notes to the Consolidated
Financial Statements for the Years Ended December 31, 2013 and 2012



|
|



38





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM





To the Board of Directors and Management of

DynaResource, Inc.

Irving, Texas





We have audited the accompanying consolidated
balance sheets of DynaResource, Inc. and subsidiaries as of December 31, 2013 and 2012 and the related consolidated statements
of operations, stockholders’ equity and cash flows for the years ended December 31, 2013 and 2012 and for the period since
reentering the Exploration Stage (January 1, 2007) through December 31, 2013. These consolidated financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits of these financial
statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



We were not engaged to examine management’s
assertion about the effectiveness of DynaResource, Inc.’s internal control over financial reporting as of December 31, 2013
and 2012 and, accordingly, we do not express an opinion thereon.



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of DynaResource, Inc. and subsidiaries
as of December 31, 2013 and 2012 and the results of its operations and its cash flows for the years ended December 31, 2013 and
2012 and for the period since reentering the Exploration Stage (January 1, 2007) through December 31, 2013 in conformity with accounting
principles generally accepted in the United States of America.





/s/ The Hall Group, CPAs

The Hall Group, CPAs

Dallas, Texas







April 15, 2014

39





DYNARESOURCE, INC.

(An Exploration Stage Company)

Consolidated Balance Sheets

December 31, 2013 and 2012



|                                                                                                                                    |  |   | 2013                               |   |  |   | 2012                       |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------------------------------- | - |  | - | -------------------------- | -
|                                                                                                                                    |  |   |                                    |   |  |   |                            |  
|ASSETS                                                                                                                              |  |   |                                    |   |  |   |                            |  
|Current Assets:                                                                                                                     |  |   |                                    |   |  |   |                            |  
|Cash and Cash Equivalents                                                                                                           |  | $ | 1,143,344                          |   |  | $ | 1,522,652                  |  
|Receivables from Affiliate                                                                                                          |  |   | 0                                  |   |  |   | 48,000                     |  
|Foreign Tax Receivable                                                                                                              |  |   | 296,038                            |   |  |   | 40,022                     |  
|Other Current Assets                                                                                                                |  |   | 0                                  |   |  |   | 45,129                     |  
|Total Current Assets                                                                                                                |  |   | 1,439,382                          |   |  |   | 1,655,803                  |  
|                                                                                                                                    |  |   |                                    |   |  |   |                            |  
|Property:                                                                                                                           |  |   |                                    |   |  |   |                            |  
|Mining Camp Equipment and Fixtures (Net of Accumulated Depreciation of $851,861 and $790,318)                                       |  |   | 241,518                            |   |  |   | 207,919                    |  
|Mining Properties (Net of Accumulated Amortization of $519,400 and $519,400)                                                        |  |   | 4,183,967                          |   |  |   | 4,183,967                  |  
|Total Property                                                                                                                      |  |   | 4,425,485                          |   |  |   | 4,391,886                  |  
|                                                                                                                                    |  |   |                                    |   |  |   |                            |  
|Other Assets:                                                                                                                       |  |   |                                    |   |  |   |                            |  
|Investment in Affiliate                                                                                                             |  |   | 70,000                             |   |  |   | 70,000                     |  
|Receivables from Affiliate                                                                                                          |  |   | 186,840                            |   |  |   | 0                          |  
|Other Assets                                                                                                                        |  |   | 277,319                            |   |  |   | 197,283                    |  
|Total Other Assets                                                                                                                  |  |   | 534,159                            |   |  |   | 267,283                    |  
|TOTAL ASSETS                                                                                                                        |  | $ | 6,399,026                          |   |  | $ | 6,314,972                  |  
|                                                                                                                                    |  |   |                                    |   |  |   |                            |  
|LIABILITIES AND EQUITY                                                                                                              |  |   |                                    |   |  |   |                            |  
|Current Liabilities:                                                                                                                |  |   |                                    |   |  |   |                            |  
|Accounts Payable                                                                                                                    |  | $ | 114,498                            |   |  | $ | 196,252                    |  
|Due to Minority Shareholder                                                                                                         |  |   | 120,000                            |   |  |   | 0                          |  
|Accrued Expenses                                                                                                                    |  |   | 246,722                            |   |  |   | 160,210                    |  
|Total Current Liabilities
        
        Notes Payable, (Net of Current Portion of $0)                                            |  |   | 481,220
        
        1,354,808 |   |  |   | 356,462
        
        0 |  
|Total Non-Current Liabilities                                                                                                       |  |   | 1,354,808                          |   |  |   | 0                          |  
|                                                                                                                                    |  |   |                                    |   |  |   |                            |  
|TOTAL LIABILITIES                                                                                                                   |  | $ | 1,836,028                          |   |  | $ | 356,462                    |  
|                                                                                                                                    |  |   |                                    |   |  |   |                            |  
|Equity:                                                                                                                             |  |   |                                    |   |  |   |                            |  
|Series A Preferred Stock, $0.0001 par value, 1,000 shares authorized                                                                |  |   |                                    |   |  |   |                            |  
|1,000 and 1,000 shares issued and outstanding                                                                                       |  | $ | 1                                  |   |  | $ | 1,000                      |  
|Series B Preferred Stock, $0.0001 par value, 1,000,000 shares                                                                       |  |   |                                    |   |  |   |                            |  
|Authorized, 460,446 and -0- shares issued and outstanding                                                                           |  |   | 46                                 |   |  |   | 0                          |  
|Preferred Stock, $0.0001 par value, 19,000,000
        shares
        Authorized, -0- and -0- shares issued and
        outstanding |  |   | 0                                  |   |  |   | 0                          |  
|Common Stock, $0.01 par value, 25,000,000 shares authorized                                                                         |  |   |                                    |   |  |   |                            |  
|11,052,808 and 10,802,808  shares issued and outstanding                                                                            |  |   | 110,520                            |   |  |   | 108,020                    |  
|Preferred Rights                                                                                                                    |  |   | 40,000                             |   |  |   | 40,000                     |  
|Additional Paid In Capital                                                                                                          |  |   | 43,292,746                         |   |  |   | 40,429,500                 |  
|Treasury Stock                                                                                                                      |  |   | (707,750                           | ) |  |   | (50,750                    | )
|Other Comprehensive Income                                                                                                          |  |   | 252,611                            |   |  |   | 270,794                    |  
|Accumulated Deficit                                                                                                                 |  |   | (6,002,516                         | ) |  |   | (6,002,516                 | )
|Accumulated Deficit Since Reentering the Development Stage                                                                          |  |   | (26,692,834                        | ) |  |   | (23,714,647                | )
|Total DynaResource, Inc. Stockholders’ Equity                                                                                       |  |   | 10,292,824                         |   |  |   | 11,081,401                 |  

40







|Noncontrolling Interest      |  |   | (5,729,826 | ) |  |   | (5,122,891 | )
|---------------------------- |  | - | ---------- | - |  | - | ---------- | -
|TOTAL EQUITY                 |  |   | 4,562,998  |   |  |   | 5,958,510  |  
|TOTAL LIABILITIES AND EQUITY |  | $ | 6,399,026  |   |  | $ | 6,314,972  |  



The accompanying notes are an integral part
of these financial statements.



|
|



41





DYNARESOURCE, INC.

(An Exploration Stage Company)

Consolidated Statements of Operations

For the Years Ended December 31, 2013 and
2012

And Cumulative Since Re-entering the Development
Stage (January 1, 2007)

Through December 31, 2013



|                                                                                         |  | 2013 |            | 2012 |  | Cumulative Since  Reentering the Exploration Stage  (January 1, 2007 through December 31, 2013)
|---------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- |  | -----------------------------------------------------------------------------------------------
|                                                                                         |  |      |            |      |  |                                                                                                
|REVENUES                                                                                 |  | $    | 0          |      |  | $                                                                                              
|                                                                                         |  |      |            |      |  |                                                                                                
|EXPLORATION EXPENSES (exclusive of depreciation and amortization shown separately below) |  |      | 968,590    |      |  |                                                                                                
|GROSS PROFIT (DEFICIT)                                                                   |  |      | (968,590   | )    |  |                                                                                                
|                                                                                         |  |      |            |      |  |                                                                                                
|OPERATING EXPENSES                                                                       |  |      |            |      |  |                                                                                                
|Depreciation and Amortization  Stock Issued for Services                                 |  |      | 67,475 0   |      |  |                                                                                                
|General and Administrative                                                               |  |      | 2,327,628  |      |  |                                                                                                
|TOTAL OPERATING EXPENSES                                                                 |  |      | 2,395,103  |      |  |                                                                                                
|                                                                                         |  |      |            |      |  |                                                                                                
|NET OPERATING INCOME (LOSS)                                                              |  |      | (3,363,693 | )    |  |                                                                                                
|                                                                                         |  |      |            |      |  |                                                                                                
|OTHER INCOME (EXPENSE)                                                                   |  |      |            |      |  |                                                                                                
|Portfolio Income                                                                         |  |      | 463        |      |  |                                                                                                
|Currency Translation Gain (Loss)                                                         |  |      | (81,539    | )    |  |                                                                                                
|Interest (Expense)                                                                       |  |      | (133,349   | )    |  |                                                                                                
|Other Income (Expense)                                                                   |  |      | (4,204     | )    |  |                                                                                                
|TOTAL OTHER INCOME (EXPENSE)                                                             |  |      | (218,629   | )    |  |                                                                                                
|                                                                                         |  |      |            |      |  |                                                                                                
|NET INCOME (LOSS) BEFORE INCOME TAXES                                                    |  |      | (3,582,322 | )    |  |                                                                                                
|                                                                                         |  |      |            |      |  |                                                                                                
|Provision for Income Taxes (Expense) Benefit                                             |  |      | 0          |      |  |                                                                                                
|NET INCOME (LOSS)                                                                        |  | $    | (3,582,322 | )    |  | $                                                                                              
|Net Loss Attributable to Non-Controlling Interest                                        |  |      | 604,135    |      |  |                                                                                                
|NET LOSS ATTRIBUTABLE TO DYNARESOURCE, INC. SHAREHOLDERS                                 |  |      | (2,978,187 | )    |  |                                                                                                
|                                                                                         |  |      |            |      |  |                                                                                                
|Unrealized Loss on Securities Held for Sale                                              |  |      | 0          |      |  |                                                                                                
|Unrealized Currency Translation Gain (Loss)                                              |  |      | (151,730   | )    |  |                                                                                                
|                                                                                         |  |      |            |      |  |                                                                                                
|TOTAL COMPREHENSIVE INCOME (LOSS)                                                        |  |      | (3,129,917 | )    |  |                                                                                                
|Comprehensive (Income) Loss Attributable  To Non-Controlling Interest                    |  |      | 2,800      |      |  |                                                                                                
|                                                                                         |  |      |            |      |  |                                                                                                

42







|COMPREHENSIVE LOSS ATTRIBUTABLE TO                    |  |   |            |   |  |  
|----------------------------------------------------- |  | - | ---------- | - |  | -
|DYNARESOURCE, INC. SHAREHOLDERS                       |  | $ | (3,127,117 | ) |  | $
|                                                      |  |   |            |   |  |  
|EARNINGS PER SHARE, Basic and Diluted                 |  |   |            |   |  |  
|Weighted Average Shares Outstanding Basic and Diluted |  |   | 10,830,090 |   |  |  
|Income (Loss) per Common Share, Basic and Diluted     |  | $ | (0.2887    | ) |  | $





The accompanying notes are an integral part
of these financial statements.

43





DYNARESOURCE, INC.

(An Exploration Stage Company)

Consolidated Statement of Changes in Stockholders’
Equity

For the Years Ended December 31, 2013 and
2012







|                                                     |                      |                      |         |           |            |            |               |             |                 |               |             |              |            
|---------------------------------------------------- | -------------------- | -------------------- | ------- | --------- | ---------- | ---------- | ------------- | ----------- | --------------- | ------------- | ----------- | ------------ | -----------
|                                                     |                      |                      |         |           |            |            |               |             |                 | Deficit Since |            
|                                                     |                      |                      |         |           |            | Additional |               | Other       |                 | Reentering    |            
|                                                     | Preferred – Series A | Preferred – Series B | Common  | Preferred | Paid In    | Treasury   | Comprehensive | Accumulated | the Exploration |              
|                                                     | Shares               | Amount               | Shares  | Amount    | Shares     | Amount     | Rights        | Capital     | Stock           | Income        | Deficit     | Stage        | Totals     
|                                                     |                      |                      |         |           |            |            |               |             |                 |               |             |              |            
|Balance, January 1, 2012                             | 1,000                | 1,000                | -       | -         | 10,602,868 | 106,029    | 40,000        | 38,421,114  | -               | 575,600       | (6,002,516) | (21,493,034) | 11,648,193 
|                                                     |                      |                      |         |           |            |            |               |             |                 |               |             |              |            
|Sale of Common Shares                                |                      |                      |         |           | 199,140    | 1,991      |               | 1,260,459   |                 |               |             |              | 1,262,450  
|Common Stock Options Issued                          |                      |                      |         |           |            |            |               | 747,927     |                 |               |             |              | 747,927    
|Other Comprehensive Income                           |                      |                      |         |           |            |            |               |             |                 | (304,806)     |             |              | 304,806    
|Treasury Shares Purchased                            |                      |                      |         |           |            |            |               |             | (50,750)        |               |             |              | (50,750)   
|Net  Income (Loss)                                   |                      |                      |         |           |            |            |               |             |                 |               |             | (2,221,613)  | (2,221,613)
|                                                     |                      |                      |         |           |            |            |               |             |                 |               |             |              |            
|Balance, December 31, 2012                           | 1,000                | 1,000                | -       | -         | 10,802,008 | 108,020    | 40,000        | 40,429,500  | (50,750)        | 270,794       | (6,002,516) | (23,714,647) | 11,081,401 
|                                                     |                      |                      |         |           |            |            |               |             |                 |               |             |              |            
|Change in Par Value                                  |                      | (999)                |         |           |            |            |               | 999         |                 |               |             |              | 0          
|Sale of Series B Preferred Shares                    |                      |                      | 387,900 | 39        |            |            |               | 1,939,461   |                 |               |             |              | 1,939,500  
|Notes Payable Converted to Series B Preferred Shares |                      |                      | 68,000  | 7         |            |            |               | 339,993     |                 |               |             |              | 340,000    
|Notes Payable Converted to Series B Preferred Shares |                      |                      | 4,546   | 0         |            |            |               | 22,734      |                 |               |             |              | 22,734     
|Common Stock Issued for Services                     |                      |                      |         |           | 250,000    | 2,500      |               | 560,000     | (562,500)       |               |             |              | 0          

44







|Common Stock Options Issued |       |   |         |    |            |         |        | 59         |           |          |             |              | 59         
|--------------------------- | ----- | - | ------- | -- | ---------- | ------- | ------ | ---------- | --------- | -------- | ----------- | ------------ | -----------
|Other Comprehensive Income  |       |   |         |    |            |         |        |            |           | (18,183) |             |              | (18,183)   
|Treasury Shares Purchased   |       |   |         |    |            |         |        |            | (94,500)  |          |             |              | (94,500)   
|Net  Income (Loss)          |       |   |         |    |            |         |        |            |           |          |             | (2,978,187)  | (2,978,187)
|                            |       |   |         |    |            |         |        |            |           |          |             |              |            
|Balance,  December 31, 2013 | 1,000 | 1 | 460,446 | 46 | 11,052,008 | 110,520 | 40,000 | 43,292,746 | (707,750) | 252,611  | (6,002,516) | (26,692,834) | 10,292,824 



45





DYNARESOURCE, INC.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2013 and
2012

And Cumulative Since Re-entering the Development
Stage (January 1, 2007)

Through December 31, 2013



|                                                                                 |  | 2013 |            | 2012 |  | Cumulative Since  Reentering the Development Stage  (January 1, 2007) through December 31, 2013
|-------------------------------------------------------------------------------- |  | ---- | ---------- | ---- |  | -----------------------------------------------------------------------------------------------
|CASH FLOWS FROM OPERATING ACTIVITIES                                             |  |      |            |      |  |                                                                                                
|Net Income (Loss)                                                                |  | $    | (3,585,122 | )    |  | $                                                                                              
|Adjustments to reconcile net Income (loss) to cash used in operating activities: |  |      |            |      |  |                                                                                                
|Issuance of Common Stock for Services                                            |  |      | 0          |      |  |                                                                                                
|Issuance of Common Stock Options                                                 |  |      | 59         |      |  |                                                                                                
|Issuance of Preferred Stock for Services                                         |  |      | 0          |      |  |                                                                                                
|Depreciation and Amortization                                                    |  |      | 67,475     |      |  |                                                                                                
|(Gain) Loss on Disposition of Assets                                             |  |      | (5,931     | )    |  |                                                                                                
|Change in Operating Assets and Liabilities:                                      |  |      |            |      |  |                                                                                                
|Decrease in Accounts Receivable                                                  |  |      | 0          |      |  |                                                                                                
|(Increase) Decrease in Foreign Tax Receivable                                    |  |      | (256,016   | )    |  |                                                                                                
|(Increase) Decrease in Note Receivable – Related Party                           |  |      | (138,840   | )    |  |                                                                                                
|Decrease in Other Current Assets                                                 |  |      | 45,129     |      |  |                                                                                                
|(Increase) in Other Assets                                                       |  |      | (80,036    | )    |  |                                                                                                
|Increase (Decrease) in Accounts Payable                                          |  |      | (81,754    | )    |  |                                                                                                
|Increase in Accrued Expenses                                                     |  |      | 109,245    |      |  |                                                                                                
|(Decrease) in Deferred Tax Liability                                             |  |      | 0          |      |  |                                                                                                
|CASH FLOWS (USED IN) OPERATING ACTIVITIES                                        |  |      | (3,925,791 | )    |  |                                                                                                
|                                                                                 |  |      |            |      |  |                                                                                                
|CASH FLOWS FROM INVESTING ACTIVITIES                                             |  |      |            |      |  |                                                                                                
|Purchase of Fixed Assets                                                         |  |      | (120,533   | )    |  |                                                                                                
|Retirement of Fixed Assets                                                       |  |      | 25,391     |      |  |                                                                                                
|Conversion of Note Receivable to Equity                                          |  |      | 0          |      |  |                                                                                                
|Investment in Affiliate                                                          |  |      | 0          |      |  |                                                                                                
|Note Receivable to Affiliate                                                     |  |      | 0          |      |  |                                                                                                
|CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES                            |  |      | (95,142    | )    |  |                                                                                                
|                                                                                 |  |      |            |      |  |                                                                                                
|CASH FLOWS FROM FINANCING ACTIVITIES                                             |  |      |            |      |  |                                                                                                
|Proceeds from DynaMexico Earn In                                                 |  |      | 0          |      |  |                                                                                                
|Proceeds from Sale of Common Stock                                               |  |      | 0          |      |  |                                                                                                
|Proceeds from Sale of Preferred Stock – Series B                                 |  |      | 1,939,500  |      |  |                                                                                                
|Repurchase of Common Stock Options                                               |  |      | 0          |      |  |                                                                                                

46







|Loan from Minority Shareholder                             |  |   | 120,000   |   |  |   | 0          |   |  |   | 120,000    |  
|---------------------------------------------------------- |  | - | --------- | - |  | - | ---------- | - |  | - | ---------- | -
|Proceeds from Notes                                        |  |   | 1,694,808 |   |  |   | 0          |   |  |   | 1,694,808  |  
|Other Comprehensive Income (Loss)                          |  |   | (18,183   | ) |  |   | (313,146   | ) |  |   | 207,563    |  
|Purchase of Treasury Stock                                 |  |   | (94,500   | ) |  |   | (50,750    | ) |  |   | (517,729   | )
|Sale of Treasury Stock                                     |  |   | 0         |   |  |   | 0          |   |  |   | 472,375    |  
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                |  |   | 3,641,625 |   |  |   | 898,554    |   |  |   | 29,166,630 |  
|NET INCREASE (DECREASE) IN CASH                            |  |   | (379,308  | ) |  |   | (1,148,281 | ) |  |   | 322,504    |  
|                                                           |  |   |           |   |  |   |            |   |  |   |            |  
|CASH AT BEGINNING OF PERIOD                                |  |   | 1,522,652 |   |  |   | 2,670,933  |   |  |   | 820,840    |  
|CASH AT END OF PERIOD                                      |  | $ | 1,143,344 |   |  | $ | 1,522,652  |   |  | $ | 1,143,344  |  
|                                                           |  |   |           |   |  |   |            |   |  |   |            |  
|SUPPLEMENTAL DISCLOSURES                                   |  |   |           |   |  |   |            |   |  |   |            |  
|Non-Cash Issuance of Common Shares for Services            |  | $ | 0         |   |  | $ | 0          |   |  | $ | 2,748,564  |  
|Non-Cash Issuance of Preferred Shares for Services         |  | $ | 0         |   |  | $ | 0          |   |  | $ | 1,000      |  
|Non-Cash Conversion of Note Receivable to Equity           |  | $ | 0         |   |  | $ | 0          |   |  | $ | 750,000    |  
|Non-Cash Conversion of Notes Payable to Preferred Stock    |  | $ | 340,000   |   |  | $ | 0          |   |  | $ | 340,000    |  
|Non-Cash Conversion of Interest Payable to Preferred Stock |  | $ | 22,734    |   |  | $ | 0          |   |  | $ | 22,734     |  
|Cash Paid During the Year for Interest Expense             |  | $ | 0         |   |  | $ | 0          |   |  | $ | 0          |  
|Non-Cash Dividend of Property                              |  | $ | 0         |   |  | $ | 0          |   |  | $ | 129,822    |  



The accompanying notes are an integral part
of these financial statements.

47





DYNARESOURCE, INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012





NOTE 1 – NATURE OF ACTIVITIES
AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities, History and
Organization:

DynaResource, Inc. (The “Company”
or “DynaResource”) was organized September 28, 1937, as a California corporation under the name of West Coast Mines,
Inc.  In 1998, the Company re-domiciled to Delaware and changed its name to DynaResource, Inc. The Company is in the
business of acquiring, investing in, and developing precious metal properties, and the production of precious metals.

In 2000, the Company formed a wholly
owned subsidiary, DynaResource de Mexico S.A. de C.V. chartered in Mexico (“DynaMexico”).  This Company was
formed to acquire, invest in and develop resource properties in Mexico.  In 2005, the Company formed DynaResource Operaciones
de San Jose De Gracia S.A. de C.V. (“DynaOperaciones”), and acquired effective control of Mineras de DynaResource,
S.A de C.V. (formerly Minera Finesterre S.A. De C.V.), (“MinerasDyna”). The Company owned 25% of MinerasDyna and acquired
effective control of MinerasDyna by acquiring the option to purchase the remaining 75% of the Shares of MinerasDyna. The Company
finalized the option and acquisition of MinerasDyna in January 2010, and now owns 100% of MinerasDyna. The results of these
subsidiaries are consolidated with those of the Company.

From January 2008 through March 2011,
DynaMexico issued 100 Variable Capital Series “B” Shares to Goldgroup Resources Inc., a wholly owned subsidiary of
Goldgroup Mining Inc. Vancouver, BC. (“Goldgroup”), in exchange for Goldgroup’s contributing $18,000,000 USD
to DynaMexico. At March 14, 2011, Goldgroup owned 50% of the outstanding capital shares of DynaMexico.

On June 21, 2013, DynaResource acquired
a Certificate for 300 Series “B” Variable Capital Shares of DynaMexico, in exchange for the settlement of accounts
receivable from DynaMexico in the amount of $31,090,710 Mexican Pesos (approximately $2.4 M USD). After the issuance and receipt
of the 300 Series B Shares, DynaUSA holds 80% of the total outstanding Capital of DynaMexico.

The Company produced approximately $7,637,150
in revenues from production activities conducted during the years ended December 31, 2003 through 2006, and suspended this activity
voluntarily to concentrate its efforts on exploration and development.  In accordance with that decision, as of January
1, 2007, the Company reentered the Exploration Stage and has presented its cumulative results since reentering the Exploration
Stage, in accordance with Accounting Standards Codification (“ASC”) 915 “Development Stage Entities”
(formerly Statement of Financial Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting by Development
Stage Enterprises” (“SFAS No. 7”), and will continue this presentation until it again has revenues from operations.

The Company elected to become a voluntary
reporting issuer in Canada in order to avail itself of Canadian regulations regarding reporting for mining properties, more specifically,
National Instrument 43-101 (NI 43-101). This regulation sets forth standards for reporting resources in a mineral property and
is a standard recognized in the mining industry.

Significant Accounting Policies:

The Company’s management selects
accounting principles generally accepted in the United States of America and adopts methods for their application.  The
application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies
used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial
statements.

The
financial statements and notes are representations of the Company’s management which is responsible for their integrity
and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing
and maintaining a system of internal accounting control and preventing and detecting fraud.  The Company's system of
internal  accounting control is designed to assure, among other items, that  1) recorded  transactions  are
valid;  2) valid  transactions  are recorded;  and  3) transactions  are  recorded
in the proper  period in a timely  manner to produce financial  statements which present fairly
the

48





financial  condition,  results
of operations  and cash  flows of the  Company  for the  respective  periods  being
presented.

Basis of Presentation:

The Company prepares its financial statements
on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States.

Principles of Consolidation:

The financial statements include the
accounts of DynaResource, Inc. as well as DynaResource de Mexico, S.A. de C.V., DynaResource Operaciones S.A. de C.V. and Mineras
de DynaResource S.A. de C.V.  All significant inter-company transactions have been eliminated.  All amounts
are presented in U.S. Dollars unless otherwise stated.

Emerging Growth Company Critical Accounting
Policy Disclosure:

The Company
qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging
growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying
with new or revised accounting standards. As an emerging grown company, the Company can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. The Company may elect to take advantage of
the benefits of this extended transition period in the future.

Foreign Currency Translation:

The functional currency for the subsidiaries
of the Company is the Mexican peso.  As a result, the financial statements of the subsidiary have been re-measured from
Mexican pesos into U.S. dollars using (i) current exchange rates for monetary asset and liability accounts, (ii) historical exchange
rates for nonmonetary asset and liability accounts, (iii) historical exchange rates for revenues and expenses associated with nonmonetary
assets and liabilities and (iv) the weighted average exchange rate of the reporting period for all other revenues and expenses. In
addition, foreign currency transaction gains and losses resulting from U.S. dollar denominated transactions are eliminated. The
resulting re-measured gain or loss is reported as a separate component of stockholders’ equity (comprehensive income (loss)).

The financial statements of the subsidiaries
should not be construed as representations that Mexican pesos have been, could have been or may in the future be converted into
U.S. dollars at such rates or any other rates.

Relevant exchange rates used in the preparation
of the financial statements for the subsidiary are as follows for the years ended December 31, 2013 and 2012 (Mexican pesos per
one U.S. dollar):

|                                                  |       | Dec 31, 2013 | Dec 31, 2012
|------------------------------------------------- | ----- | ------------ | ------------
|                                                  |       |              |             
|Current exchange rate                             | Pesos | 13.07        | 13.02       
|                                                  |       |              |             
|Weighted Average exchange rate for the year ended | Pesos | 12.75        | 13.16       



Cash and Cash Equivalents:

The Company considers all highly liquid
debt instruments with a maturity of three months or less to be cash equivalents. At times, cash balances may be in excess
of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. At December 31, 2013, the Company had
a balance of $743,560 that was in excess of the FDIC insurance limit and $250,000 which is currently insured in full under the
FDIC’s temporary unlimited coverage on non-interest bearing transactions accounts, which expires on December 31, 2013. The
carrying amount approximates fair market value.

Accounts Receivable and Allowances
for Doubtful Accounts:

The allowance for accounts receivable
is recorded when receivables are considered to be doubtful of collection. No allowance has been established as all receivables
were deemed to be fully collectable.



49





Foreign Tax Receivable:

Foreign Tax Receivable (IVA) is comprised
of recoverable value-added taxes charged by the Mexican government on goods and services rendered.  Under certain circumstances,
these taxes are recoverable by filing a tax return.  Amounts paid for IVA are tracked and held as receivables until the
funds are remitted.  The total amount of the IVA receivable as of December 31, 2013 and 2012 was $296,038 and $40,022,
respectively.

Inventory:

As the Company ceased mining production
in 2006, there is no inventory as of December 31, 2013 and 2012.

Property:

Property is carried at cost. Depreciation
is provided over each asset’s estimated useful life. Upon retirement and disposal, the asset cost and related accumulated
depreciation are removed from the accounts and any resulting gain or loss is included in the determination of net income. Expenditures
for geological and engineering studies, maintenance and claim renewals are charged to expense when incurred. Additions and
significant improvements are capitalized and depreciated.

Mining Properties:

The Company is an ‘Exploration
Stage’ company as defined in “SEC Industry Guide 7”. Mining properties consist of 33 mining concessions
covering approximately 69,121 hectares, at the San Jose de Gracia property. The cost basis of the properties is deferred until
the properties are brought into production, at which time they will be amortized on the unit of production method based on estimated
recoverable reserves. The Company has elected to expense a minimal amount of amortization due to the effects of exploration
activities on the recoverable reserves.  If it is determined that the deferred costs related to a property are not recoverable
over its productive life, those costs will be written down to fair value as a charge to operations in the period in which the determination
is made. The amounts at which mineral properties and the related deferred costs are recorded do not necessarily reflect present
or future values.

The recoverability of the book value
of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following:

|• | estimated recoverable ounces of gold, silver or other precious minerals;                     
|- | ---------------------------------------------------------------------------------------------
|• | estimated future commodity prices;                                                           
|• | Estimated expected future operating costs, capital expenditures and reclamation expenditures.



A write-down to fair value will be recorded
when the expected future cash flow is less than the net book value of the property or when events or changes in the property indicate
that carrying amounts are not recoverable. This analysis will be completed as needed, and at least annually. As of the date
of this filing, no events have occurred that would require write-down of any assets. As of December 31, 2013, no indications
of impairment existed.

Exploration Costs:

Exploration costs not directly associated
with reserves on the mining concessions are charged to operations as incurred. Exploration, development, direct field costs and
administrative costs are expensed in the period incurred.

The carrying amounts of the mining concessions
are reviewed at each calendar year end to determine whether there is any indication of impairment. As of December 31, 2013, no
indications of impairment existed.

Advertising Costs:

The Company incurred no advertising costs
for the years ended December 31, 2013 and 2012.

Income Taxes:

Income from the parent company, DynaUSA,
is taxed at regular corporate rates per the Internal Revenue Code.  Although the Company has tax loss carry-forwards (see
Note 5), there is uncertainty as to utilization prior to their expiration. Accordingly, the future income tax asset amounts
have been fully offset by a valuation allowance. Income from the subsidiaries, are taxed at applicable Mexican tax law.

Use of Estimates:

In order to prepare financial statements
in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and
assumptions that affect the amounts reported in the

50





financial statements and determines whether
contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring
these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the
financial statements are based.

Comprehensive Income:

ASC 220 “Comprehensive Income”,
(formerly SFAS No. 130 “Reporting Comprehensive Income”), establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose financial statements. The Company’s comprehensive
income consists of net income and other comprehensive income (loss), consisting of unrealized net gains and losses on the translation
of the assets and liabilities of its foreign operations. For the years ended December 31, 2013 and 2012, the Company’s components
of comprehensive income were foreign currency translation adjustments and unrealized losses on securities held for sale.

Revenue Recognition:

The Company recognizes revenue in accordance
with ASC 605-10, "Revenue Recognition in Financial Statements", (formerly Staff Accounting Bulletin No. 104 (“SAB
104”). Revenue is recognized when persuasive evidence of an arrangement exists, delivery or service has occurred, the
sale price is fixed or determinable and receipt of payment is probable.

Revenues earned from the sale of precious
metal concentrates are recognized as the title to the material is passed to the buyer upon delivery.

Earnings per Common Share:

Earnings (loss) per share are calculated
in accordance with ASC 260 “Earnings per Share”. The weighted average number of common shares outstanding
during each period is used to compute basic earnings (loss) per share. Diluted earnings per share are computed using the weighted
average number of shares and potentially dilutive common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised. Potentially dilutive common shares consist of stock options and are excluded from the
diluted earnings per share computation in periods where the Company has incurred a net loss, as their effect would be considered
anti-dilutive.

There were no potentially dilutive common
stock equivalents as of December 31, 2013, therefore basic earnings per share equals diluted earnings per share for the year ended
December 31, 2013. The Company had 1,151,800 options outstanding at December 31, 2013 and 2012, respectively. As the Company
incurred a net losses during the years, ended December 31, 2013 and 2012, the basic and diluted loss per common share is the same
amount, as any common stock equivalents would be considered anti-dilutive.

Recently Issued Accounting Pronouncements:

The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company’s results of operations, financial position
or cash flows.



NOTE 2 – PROPERTY

Property consists of the following at
December 31, 2013 and 2012, respectively:

|                                   |  | 2013 |           | 2012
|---------------------------------- |  | ---- | --------- | ----
|                                   |  |      |           |     
|Mining camp equipment and fixtures |  | $    | 648,866   |     
|Transportation equipment           |  |      | 262,348   |     
|Lab equipment                      |  |      | 14,306    |     
|Machinery and equipment            |  |      | 43,187    |     
|Office furniture and fixtures      |  |      | 76,894    |     
|Office equipment                   |  |      | 11,673    |     
|Computer equipment                 |  |      | 36,105    |     
|Sub-total                          |  |      | 1,093,379 |     
|Less: Accumulated depreciation     |  |      | (851,861  | )   
|Total Property                     |  | $    | 241,518   |     
|                                   |  |      |           |     

51





Depreciation has been provided over
each asset’s estimated useful life.  Depreciation expense was $67,475 and $159,209 for the years ended December
31, 2013 and 2012, respectively.

NOTE 3 – MINING PROPERTIES

Mining properties consist of the following
at December 31, 2013 and 2012, respectively:



|                               |  | 2013 |           | 2012
|------------------------------ |  | ---- | --------- | ----
|San Jose de Gracia (“SJG”):    |  |      |           |     
|Mining Concessions             |  | $    | 4,703,367 |     
|Less: Accumulated Amortization |  |      | (519,400  | )   
|                               |  |      |           |     
|Total Mining Properties        |  | $    | 4,183,967 |     



Amortization expense was $0 and $34,558
for the years ended December 31, 2013 and 2012, respectively.

NOTE 4 – INVESTMENT IN AFFILIATE
/ RECEIVABLES FROM AFFILIATE

Through December 31, 2013 the Company
loaned a total of $805,760 USD to DynaResource Nevada, Inc. (“DynaNevada”), a Nevada Corporation, which owns 100% of
one operating subsidiary in Mexico, DynaNevada de Mexico, SA de CV., (“DynaNevada de Mexico”). The terms of the
Note Receivable provided for a “Convertible Loan”, repayable at 5% interest over a 3 year period, and convertible at
the Company’s option into common stock of DynaNevada at $.25 / Share.  DynaNevada is a related entity (affiliate),
and through its subsidiary DynaNevada de Mexico, has entered into an Option agreement with Grupo Mexico (IMMSA) in Mexico, for
the exploration and development of approximately 3,000 hectares in the State of San Luis Potosi (“The Santa Gertrudis Property”).
DynaNevada de Mexico completed the Option with IMMSA in March 2010, so that DynaNevada de Mexico now owns 100% of the Santa Gertrudis
Property. In June, 2010, DynaNevada de Mexico acquired an additional 6,000 hectares in the State of Sinaloa (the “San Juan
Property”).

On December 31, 2010, the Company exercised
its option to convert the note receivable and other receivable from DynaNevada into shares of common stock at a rate of $.25 per
share. The Company received 3,223,040 shares, which represents approximately 19.95% of the outstanding shares of DynaNevada. At
the time of the exchange, DynaNevada’s net book value was approximately $695,000, consisting of $30,000 cash and the remainder
unproven mining properties. DynaNevada has a contingent liability arising from the purchase of one of the mining properties, which
Management believes has no merit. Based upon the above, Management estimated the value of the Company’s DynaNevada shares
as of December 31, 2013 and 2012 to be $70,000. Management believes the impairment is temporary, and therefore an unrealized loss
of $735,760 has been recorded in other comprehensive income.

The Company has advanced funds to DynaNevada
on a regular basis in order for DynaNevada to meet its basis filing and reporting obligations with the Mexican authorities relating
to tax returns and paying taxes on its concessions. As of December 31, 2013 and 2012, the advances totaled $186,840 and $48,000,
respectively. The amounts in 2012 were carried as current assets and in 2013 all are carried in the other assets section.

NOTE 5 – PROMISSORY NOTES

Notes Payable – Series I

At December 31, 2013, the Company was
obligated to repay Promissory Notes in the amount of $1,205,000 (the “Notes”). The Notes bear simple interest at twelve
and a half percent (12.5%), accrued for twelve months, and with the accrued interest to be added to the principal, and
then interest will be paid by the Company, quarterly in arrears. The holders of the Notes (In Aggregate) are also entitled
to receive ten percent (10%) of the net profits received by the Company, and generated from the bulk sampling material
(if any, and up to fifty thousand tons) processed through the existing, or improved mill facilities at San Jose de Gracia.
This net profit percentage (if any) would be paid quarterly in arrears based on the profits generated (if any) for the
prior quarter. Such net profits (if any) are to be calculated after deducting all expenses related to the processing of the
bulk sample material, and after a prior deduction of thirty three percent (33%) from the profits, to be deposited
in a sinking fund. The Notes mature on December 31, 2015.

52





The Company has the right to prepay the
Notes with a ten percent (10%) penalty. The Note holder may, at any time prior to maturity or prepayment, convert any unpaid principal
and accrued interest into Series B Preferred Stock of the Company at $5.00 per share, or into Common Stock at $5.00 per share.
If the Note is converted into Common Stock, at the time of conversion, the holder would receive a warrant to purchase additional
common shares of the Company for $7.50 per share, such warrant expiring on December 31, 2015.

Notes Payable – Series II

At December 31, 2013, the Company was
obligated to repay Promissory Notes in the amount of $149,808 (the “Notes”). The Notes bear simple interest at twelve
and a half percent (12.5%), accrued for twelve months, and with the accrued interest to be added to the principal, and
then interest will be paid by the Company, quarterly in arrears. The holders of the Notes (In Aggregate) are also entitled
to receive ten percent (10%) of the net profits received by the Company, and generated from the bulk sampling material
(if any, on the second fifty thousand tons) processed through the existing, or improved mill facilities at San Jose de Gracia.
This net profit percentage (if any) would be paid quarterly in arrears based on the profits generated (if any) for the
prior quarter. Such net profits (if any) are to be calculated after deducting all expenses related to the processing of the
bulk sample material, and after a prior deduction of thirty three percent (33%) from the profits, to be deposited
in a sinking fund. The Notes mature on December 31, 2015.

The Company has the right to prepay
the Notes with a ten percent (10%) penalty. The Note holder may, at any time prior to maturity or prepayment, convert any unpaid
principal and accrued interest into common stock of the Company at $5.00 per share. At the time of conversion, the holder would
receive a warrant to purchase additional common shares of the Company for $7.50 per share, such warrant expiring on December 31,
2015.

In the third and fourth quarters of 2013, $340,000
of the promissory notes and $22,734 of accrued interest were converted to Series B Preferred Stock.



NOTE 6 – INCOME TAXES

The Company has adopted ASC 740-10, “Income
Taxes”, which requires the use of the liability method in the computation of income tax expense and the current and deferred
income taxes payable (deferred tax liability) or benefit (deferred tax asset). Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be realized.

The cumulative tax effect at the expected
tax rate of 34% (blended for U.S. and Mexico) of significant items comprising the Company’s net deferred tax amounts as of
December 31, 2013 and 2012, respectively:

Deferred Tax Asset Related to:

|                             |  | 2013 |            | 2012
|---------------------------- |  | ---- | ---------- | ----
|Prior Year                   |  | $    | 8,282,305  |     
|Tax Benefit for Current Year |  |      | 1,217,989  |     
|Total Deferred Tax Asset     |  |      | 9,500,294  |     
|Less: Valuation Allowance    |  |      | (9,500,294 | )   
|Net Deferred Tax Asset       |  | $    | 0          |     



The net deferred tax asset and benefit
for the current year is generated primarily from the cumulative net operating loss carry-forward which is approximately $32,500,000
at December 31, 2013, and will expire in the years 2025 through 2031.

The realization of deferred tax benefits
is contingent upon future earnings and is fully reserved at December 31, 2013.

NOTE 7 – RELATED PARTY TRANSACTIONS

DynaResource de Mexico (“DynaMexico”)

In May 2013, the Company agreed to receive
a Share Certificate for 300 Series “B” Variable Capital Shares of DynaMexico, in exchange for the settlement of accounts
receivable from DynaMexico in the amount of $31,090,710

53





Mexican Pesos (approximately $2.4 M USD).
After the issuance and receipt of the 300 Series B Shares on June 21, 2013, DynaUSA holds 80% of the total outstanding Capital
of DynaMexico. As of December 31, 2013, the Company’s wholly owned subsidiary MinerasDyna had an account receivable due from
DynaMexico in the amount of $2,150,000.

As of December 31, 2012, the Company
had an $806,935 account receivable from DynaMexico for expenditures incurred in the normal course of business since June 2000.

As of December 31, 2012, the Company
entered into an agreement with DynaMexico in which they agreed to a fee of $541,915 in order to continue to carry the amount as
a receivable. The fee was calculated as if interest had been charged at 4% interest compounded monthly over the period in which
the amounts accrued.

During the year ended December 31, 2012,
the Company incurred additional expenditures of $1,044,952 on behalf of DynaResource de Mexico, which was billed to DynaMexico
in December 2012.

As of December 31, 2012, the Company
had $2,393,803 due from DynaMexico, which is eliminated upon consolidation.

Mineras de DynaResource (“MinerasDyna”)

As of December 31, 2013, the Company
had advanced $2,543,000 to MinerasDyna. MinerasDyna had advanced $2,150,000 to DynaMexico as of December 31, 2013. The total amount
of $2,150,000 is a receivable owed to MinerasDyna from DynaMexico as of December 31, 2013.

As of December 31, 2012, the Company
agreed with DynaMexico to accrue interest on the total amount receivable until repaid or otherwise retired. The interest rate to
be accrued is agreed to be simple annual interest at the rate quoted by the Bank of Mexico.

The receivables from MinerasDyna and
DynaMexico have been eliminated upon consolidation.

Dynacap Group Ltd.

The Company paid $52,500 and $102,500
to Dynacap Group, Ltd. (an entity controlled by officers of the Company) for consulting and other fees during the years ended December
31, 2013 and 2012, respectively.

DynaNevada, Inc. and DynaNevada de Mexico
S.A. de C.V. (together “DynaNevada”)



The Company advanced DynaNevada $80,000
USD and $875,000 Mexican pesos (approximately $67,000 USD) in 2013 and 2012 respectively, for maintenance of its
corporate obligations and mining concessions.



NOTE 8 – STOCKHOLDERS’
EQUITY

Authorized Capital. The
total number of shares of all classes of capital stock which the corporation shall have the authority to issue is 45,001,000 shares,
consisting of (i) twenty-five million (25,000,000) shares of Common Stock, par value $.01 per share (“Common Stock”),
and (ii) twenty million and one thousand (20,001,000) shares of Preferred Stock, par value $0.0001 per share (“Preferred
Stock”), of which one thousand (1,000) shares shall be designated as Series A Preferred Stock.

Series A Preferred Stock:

The Company has designated 1,000 shares
of its Preferred Stock as Series A, having a par value of $0.0001 per share. Holders of the Series A Preferred Stock have the right
to elect a majority of the Board of Directors of the Company.  In October 2007, the Company issued 1,000 shares of Series
A Preferred Stock to its CEO. At December 31, 2013 and December 31, 2012 there were 1,000 and 1,000 shares of Series A Preferred
Stock outstanding, respectively. The par value changed from $1.00 to $0.0001 in the current year.

Series B Preferred Stock:

The Company has designated Series B Preferred
Shares having a par value of $0.0001 per share and it has authorized 1,000,000 Series B Preferred Shares.  Holders of the
Series B Preferred Shares have the right to convert into Common Stock of the Company on the following schedule:

54







|Date of Conversion          | # of Common Shares
        Received on Conversion
        For Each Preferred Share | # of Common Stock
        Warrants Received
        On Conversion for
        Each Preferred Share | Company
        can force the
        Option?
|--------------------------- | ---------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ---------------------------------------------
|April 1 to June 30, 2014    | 2                                                                                  | 0                                                                                                  | N                                            
|July 1 to Dec 31, 2014      | 1.5                                                                                | .75                                                                                                | N                                            
|January 1 to June 30, 2015  | 1                                                                                  | 1                                                                                                  | N                                            
|July 1 to December 31, 2015 | 1                                                                                  | 0                                                                                                  | Y                                            

The holders of Series B Preferred Shares
do not have voting rights and are not entitled to receive a dividend. At December 31, 2013 and December 31, 2012 there were 460,446
and 0 shares of Series B Preferred Stock outstanding, respectively.

In the third and fourth quarters of 2013, $340,000
of the promissory notes and $22,734 of accrued interest were converted to Series B Preferred Stock.



Preferred Stock:

In addition to the 1,000 shares designated
as Series A Preferred Stock and the 1,000,000 shares designated as Series B Preferred Stock, the Company is authorized to issue
an additional 19,000,000 shares of Preferred Stock, having a par value of $0.0001 per share. The Board of Directors of the Company
has authority to issue the Preferred Stock from time to time in one or more series, and with respect to each series of the Preferred
Stock, to fix and state by the resolution the terms attached to the Preferred Stock. At December 31, 2013 and December 31, 2012,
there were no other shares of Preferred Stock outstanding.

Separate Series; Increase or Decrease
in Authorized Shares. The shares of each series of Preferred Stock may vary from the shares of any other series thereof in
any or all of the foregoing respects and in any other manner. The Board of Directors may increase the number of shares of Preferred
Stock designated for any existing series by a resolution adding to such series authorized and unissued shares of Preferred Stock
not designated for any other series. Unless otherwise provided in the Preferred Stock Designation, the Board of Directors may decrease
the number of shares of Preferred Stock designated for any existing series by a resolution subtracting from such series authorized
and unissued shares of Preferred Stock designated for such existing series, and the shares so subtracted shall become authorized,
unissued and undesignated shares of Preferred Stock.

Common Stock:

The Company is authorized to issue 25,000,000
common shares at a par value of $0.01 per share. These shares have full voting rights. At December 31, 2013 and 2012, there were
11,052,008 and 10,802,008 shares outstanding, respectively. No dividends were paid in 2013 or 2012.

Preferred Rights:

The Company issued “Preferred Rights”
and received $158,500 in 2003 and $626,000 in 2002, for the rights to percentages of revenues generated from the San Jose de Gracia
Pilot Production Plant. This has been reflected as “Preferred Rights” in stockholders’ equity. As of December
31, 2004, $558,312 was repaid and as of December 31, 2005, an additional $186,188 was repaid, leaving a current balance of $40,000
and $40,000 as of December 31, 2013 and 2012, respectively.

Stock Issuances:

During 2013, the Company issued 387,900
Series B preferred shares for cash for $5.00 per share.

During 2013, the Company issued 68,000
Series B preferred shares for debt at $5.00 per share.

During 2013, the Company issued 4,546
Series B preferred shares for accrued interest at $5.00 per share.

During 2013, the Company issued 250,000
common shares to MinerasDyna for services. This has been reflected as treasury stock in the equity section of the financial statements.
Expense related to these services has been eliminated in consolidation.

During 2012, the Company issued 199,140
common shares for cash.

During 2012, the Company issued no shares
for services.

Treasury Stock:

55





During 2013, the Company repurchased
28,551 shares for $94,500.

During 2012, the Company repurchased
12,954 shares for $50,750.

Treasury stock is accounted for by the
cost method.

Options and Warrants:

The Company had 1,151,800 options or
warrants outstanding at December 31, 2013.

During 2013, no options were issued,
none were exercised and none expired. The Company recorded expense related to the issuance of these options in accordance with
the Black Scholes option pricing model.

The Company had 1,151,800 options or
warrants outstanding at December 31, 2012.

During 2012, 1,126,800 options were issued,
none were exercised and none expired. The Company recorded expense related to the issuance of these options in accordance with
the Black Scholes option pricing model.



NOTE 9 – EMPLOYEE BENEFIT
PLANS

During the years ended December 31,
2013 and 2012, there were no qualified or non-qualified employee pension, profit sharing, stock option, or other plans authorized
for any class of employees.

NOTE 10 – COMMITMENTS AND
CONTINGENGIES

The Company is required to pay Mexican
taxes in order to maintain their concessions. Additionally, the Company is required to incur a minimum amount of expenditures
each year for all concessions held. The minimum expenditures are calculated based upon the land area, as well as the age of
the concessions. Amounts spent in excess of the minimum may be carried forward indefinitely over the life of the concessions,
and are adjusted annually for inflation.   Based on Management’s business plans, they do not anticipate any
issues in meeting the minimum annual expenditures for the concessions, and the Company retains sufficient carry forward amounts
to cover over 20 years of the minimum expenditure (as calculated at the 2010 minimum, adjusted for annual inflation of 4%). In
2013, DynaMexico paid concession taxes of $2,812,922 Mexican pesos in January and the same amount in July which totals approximately
$441,500 US dollars.

In September 2008, the Company entered
into a 37 month lease agreement for its corporate office.  In August, 2013 the Company entered into a one year extension
of the lease through August 31, 2014. The Company paid rent expense of $48,008 and $46,080 related to this lease for the years
ended December 31, 2013 and 2012.

The following is a schedule of minimum lease
payments required under the existing lease as of December 31, 2013:



|Year Ended December 31: | Amount         
|----------------------- | ---------------
|                        |                
|                        | 2014           
|                        | 2015 and beyond
|                        |                



Litigation.

On December 27, 2012, the Company, and
DynaMexico, filed an Original Petition and Application for Temporary Injunction and Permanent Injunction in the 14th
Judicial District Court of Dallas, Texas (the “Petition”) against Defendants Goldgroup Mining Inc., Goldgroup Resources
Inc., and certain individuals acting in concert with Goldgroup (collectively “Goldgroup”). The Petition alleged, among
other things, that Goldgroup has wrongfully used property, confidential information and data belonging to DynaMéxico and
consistently failed to disclose several matters of material importance to the public.

The Petition requested that Goldgroup
be enjoined from: (a) using or disseminating any confidential information belonging to DynaMéxico, (b) asserting that Goldgroup
owns any interest in the San Jose de Gracia Project, rather than owning a common shares equity interest in DynaMéxico, (c)
improperly disclosing that Goldgroup is the operator of the San Jose de Gracia Project, rather than Mineras de DynaResource SA
de C.V. (“MinerasDyna”), and (d) failing to properly disclose that broad powers of attorney for acting on behalf of
DynaMéxico are held by a DynaUSA senior executive.

56





The Petition further requested, among
other things: (a) a temporary and permanent injunction; (b) declaratory relief; (c) disgorgement of funds alleged to have been
improperly raised as a consequence of Goldgroup’s wrongful actions; (d) cancellation of shares of DynaMéxico stock
held by Goldgroup; and, (d) actual and punitive damages.

At the time of the filing, the Company
believed the Petition to be necessary in order to protect its shareholder interests in DynaMexico and in order to protect the property,
data, and assets of DynaMexico.

Although Goldgroup challenged the jurisdiction
of Texas to the filed litigation , Goldgroup has acknowledged that it owns no direct interest in the San Jose de Gracia Property,
and it has acknowledged that Mineras de DynaResource SA de C.V. (“Mineras”), DynaUSA’s 100% owned subsidiary,
is the exclusive operator of the San Jose de Gracia Project.  Additionally, recent developments in México in 2013,
including: (1) the signing of the Exploitation Amendment Agreement (“EAA”) between Mineras and DynaMéxico; (2)
the signing of a 20 year land lease agreement between Mineras and the Santa Maria Ejido Community surrounding the San Jose de Gracia
Project; and (3) the acquisition by DynaUSA of a majority interest in DynaMéxico; protect against Goldgroup’s wrongfully
obtaining and/or disseminating confidential data and information of DynaMéxico.

These recent developments in México
provided that the Dyna Parties non-suited the Texas action as announced by the Company on March 14, 2014, without prejudice to
asserting or consolidating claims in México, as well as to contemplate additional claims or regulatory actions against Goldgroup
in Canada.

Goldgroup files for Arbitration

On March 14, 2014 Goldgroup filed for
arbitration, citing the Earn In Agreement dated September 1, 2006. The Company filed an answer on April 10, 2104 disputing that
any issues exist which provide for arbitration.

Litigation in Mexico – Company
is Plaintiff

The Company, and DynaMexico have filed
several legal actions in Mexico against Goldgroup Mining Inc., Goldgroup Resources Inc., certain individuals employed or previously
employed by Minop, S.A. de C.V. (a Company operating in Mexico and associated with Goldgroup Mining Inc.), and certain individuals
retained as agents of Goldgroup Mining Inc. The Company and DynaMexico are plaintiffs in the actions filed in Mexico and the outcomes
are pending.

The Company believes that no material
adverse change will occur as a result of the actions taken, and the Company further believes that there is little to no potential
for the assessment of a material monetary judgment against the Company for legal actions it has filed in Mexico. For purposes of
confidentiality, the Company does not provide more specific disclosure in this Form 10-K.

Litigation – Company and/or
Officers and Directors as Defendants

Other than the filing for arbitration
by Goldgroup described above, The Company, nor its Officers and Directors have received any formal notice of any legal actions
filed against them, nor is the Company or its Officers and Directors aware of any legal actions filed against them.

NOTE 11 – NON-CONTROLLING
INTEREST

The Company’s Non-controlling Interest
recorded in the consolidated financial statements relates to a minority interest in DynaResource de México, S.A. de C.V.
of 50% through May 17, 2013 and 20% thereafter. Changes in Non-controlling Interest for the years ended December 31, 2013 and 2012,
respectively:

|                                  |  |     
|--------------------------------- |  | ----
|                                  |  | 2013
|                                  |  |     
|Beginning balance                 |  | $   
|Operating income (loss)           |  |     
|Other comprehensive income (loss) |  |     
|Ending balance                    |  | $   



The Company began allocating a portion
of other comprehensive income (loss) to the non-controlling interest with the adoption of FASB 160 as of January 1, 2009.

57







|NOTE 12 – FAIR VALUE OF FINANCIAL INSTRUMENTS
|---------------------------------------------

The ASC guidance for fair value measurements
and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level
1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair
value hierarchy are described below:

Level 1 Inputs – Quoted
prices for identical instruments in active markets.

Level 2 Inputs – Quoted
prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active;
and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs – Instruments
with primarily unobservable value drivers.



As of December 31, 2013 and 2012, the
Company’s financial assets are measured at fair value using Level 3 inputs, with the exception of cash, which was valued
using Level 1 inputs. There were no financial liabilities as of December 31, 2013 and 2012.



|                          |  | Fair Value Measurement at December 31, 2012 Using: |          
|------------------------- |  | -------------------------------------------------- | ---------
|                          |  | December
31, 2013                                  |          
|Assets:                   |  |                                                    |          
|Cash and Cash Equivalents |  | $                                                  | 1,143,344
|Investment in Affiliate   |  |                                                    | 70,000   







|                          | Fair Value Measurement at December 31, 2011 Using: |  
|------------------------- | -------------------------------------------------- | -
|                          | December 31, 2012                                  |  
|Assets:                   |                                                    |  
|Cash and Cash Equivalents |                                                    | $
|Investment in Affiliate   |                                                    |  





NOTE 13 – SUBSEQUENT EVENTS

The Company has evaluated it activities subsequent
to December 31, 2013 through April 15, 2014 and noted the following reportable events:



Subsequent to December 31, 2013, MinerasDyna
enteredinto a 20 Year Land Lease Agreement with the Santa Maria Ejido Community surrounding
San Jose de Gracia. The land lease agreement is dated January 6, 2014 and continues through 2033. It covers an area of 4,399 hectares
surrounding the main mineral resource areas of SJG, and provides for annual lease payments by MinerasDyna of $ 1,359,443 Pesos
(approx. $ 104,250 USD), commencing in 2014. Additionally, under the description of the 20 Year Land Lease, MinerasDyna expects
to construct a Medical Facility at SJG in year 2014, and a Community Center in year 2015.



58





Item 9.	Changes in and Disagreements
with Accountants on Accounting and Financial Disclosure

None.



Item 9A. Controls and Procedures

Evaluation of Disclosure on Controls
and Procedures

We carried out an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
as of December 31, 2013. This evaluation was accomplished under the supervision and with the participation of our chief executive
officer / principal executive officer, and chief financial officer / principal financial officer who concluded that our disclosure
controls and procedures are effective to ensure that all material information required to be filed in the annual report on Form
10-K has been made known to them.

For purposes of this section, the term
disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information
required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seg.) is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure, controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
in our reports filed under the Securities Exchange Act of 1934, as amended (the "Act") is accumulated and communicated
to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.

Based upon an evaluation conducted for the
period ended December 31, 2013, our Chief Executive and Chief Financial Officer as of December 31, 2013 and as of the date of this
Report, has concluded that as of the end of the periods covered by this report, we have identified no material weakness in our
internal control.



Management’s Annual Report on
Internal Control Over Financial Reporting

Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f)
of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles
in the United States of America. Our internal control over financial reporting includes those policies and procedures that (i)
pertain to the maintenance records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts
and expenditures of the Company are being made only in accordance with authorizations of management of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s
assets that could have a material effect on the financial statements.

Because of inherent limitations, a system
of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

Our management conducted an evaluation
of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework at December 31, 2013. Based
on its evaluation, our management concluded that, as of December 31, 2013, our internal control over financial reporting was effective
and contained no material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal
control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s
annual or interim financial statements will not be prevented or detected on a timely basis.

This annual report does not include an attestation
report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s
report was not subject to the attestation by the Company’s registered public accounting firm pursuant to rules of the SEC
that permit the Company to provide only management’s report in this annual report.

59







Changes in Internal Controls over
Financial Reporting

We have not made any changes in our internal
controls over financial reporting that occurred during the period covered by this report on Form 10-K that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.



Item 9B. Other Information

None.



PART III

Item 10. Directors, Executive Officers and Corporate
Governance

The following table lists the names and
ages of the executive officers, directors and key consultants of the Company.  The directors will continue to serve until
the next annual shareholders meeting, or until their successors are elected and qualified. Mr. Diepholz, Mr. Smith, and Mr. Tidwell
have been elected to serve through 2013. All officers serve at the discretion of the President, Chairman of the Board of Directors,
and members of the Board of Directors.



|Name                                                                                                                        |  | Age |   | Position                                          |  | Held Since               
|--------------------------------------------------------------------------------------------------------------------------- |  | --- | - | ------------------------------------------------- |  | -------------------------
|K. W. (K.D.) Diepholz
        1303 Regency Court
        Southlake, Texas 76092                                             |  | 56  |   | Chairman of The Board,
        CEO, Treasurer     |  | May 1995
        May 1997
|                                                                                                                            |  |     |   |                                                   |  |                          
|Dr. Jose Vargas Lugo
        Enique Dunant Y5 de Mayo #963 L-3
        Francc, Los Parques
        Guamuchil, Sinc CP 81460 |  | 52  |   | President of Mexican
        Operations           |  | May 2013                 
|                                                                                                                            |  |     |   |                                                   |  |                          
|Keith Wellborn Brogoitti
        Ascencion, Paraguay                                                                        |  | 56  |   | Vice President of Mexican                         |  | May 2013                 
|                                                                                                                            |  |     |   |                                                   |  |                          
|Chad Mooney
        7016 Woodbridge Drive
        FlowerMound, Texas 75022                                                  |  | 62  | 7 | Executive Vice President–
        Capital Markets |  | Sept 2013                
|                                                                                                                            |  |     |   |                                                   |  |                          
|Charles Smith
        709-B West Rusk #580
        Rockwall, Texas 75087                                                    |  | 56  |   | Chief Financial Officer, Secretary and Director   |  | May 2005                 
|                                                                                                                            |  |     |   |                                                   |  |                          
|Melvin E. Tidwell
        4804 Piccadilly Place
        Tyler, Texas 75703                                                  |  | 66  |   | Director                                          |  | May 1994                 
|                                                                                                                            |  |     |   |                                                   |  |                          
|Bradford J. Saulter
        7618 Straits Lane
        Rowlett, Texas 75088                                                  |  | 52  |   | Vice President – Investor Relations               |  | May 1998                 









K.W. Diepholz - Graduated Lake Land
College; Communications and Business Emphasis; Regional Director-Fidelity Union Insurance and Investment, Dallas, Texas (1980 -1983);
President - KWD Properties Corporation, Mattoon, Illinois (1983 - 1989); a privately-held Oil & Gas Exploration and Development
Company involved in all phases of The Oil & Gas Business, and Various Types of Partnerships; Vice President - American Investment
Retirement Corporation, Phoenix, Arizona (1990 - 1991), Involved in Program Structuring for Pension Accounts; Vice President -
Ideal Securities, Inc., Dallas, Texas (1992);  Program Structuring and Marketing Management; President - DP Phoenix, a Real
Estate Investment Company, Phoenix, Arizona (1991 -1992);  Investment Program Structuring, Real Estate Acquisitions, General
Management;   Director:  Farm Partners, Inc., Dallas, Texas (1992-

60





Present);  General Management of this
General Partner to Precious Metals Limited Partnership; DP Group Ltd., Dallas, Texas (1993 - Present);  President of this
independent Marketing firm; Dynacap Group Ltd., Dallas, Texas (1992 - Present);  President of this Consulting and Management
firm, directing the management of certain Limited Liability Investment Companies; DynaResource, Inc. (f/k/a: West Coast Mines,
Inc.), Dallas, Texas (1994-Present);  Chairman, President, Treasurer, and Director. Special skills in the areas of Business
Development, Project Planning, Corporate Financing, Acquisition Analysis, Investment Program Interpretation and Structuring.  Mr.
Diepholz has been instrumental in the negotiations of: the acquisition of 24.9 % Net Profits Interest in the San José de
Gracia in 1995; the acquisition of an additional 25 % interest in San José de Gracia in 1998; the acquisition and consolidation
of 100 % of the rights to the San José de Gracia from prior owners, culminating at March, 2000; the acquisition and consolidation
of several outstanding Concessions at the San José de Gracia from previous Mexican owners during 2000-3; the Direction and
Management of the production operation at SJG; and the negotiation of the Stock Purchase / Earn In Agreement with Goldgroup Mining,
Inc. in 2006. Mr. Diepholz is the current Chairman / CEO of the Company; and he holds the same position with DynaResource Nevada,
Inc., an affiliated Company. Mr. Diepholz is also the current President of the following subsidiaries of the Company in Mexico;
DynaResource de Mexico (“DynaMexico), and holding all the Powers of Attorney for the Company, Mineras de DynaResource (“MinerasDyna”),
and DynaResource Operaciones (“DynaOperaciones”); And, Mr. Diepholz is also the President of DynaNevada de Mexico,
the wholly owned subsidiary of DynaResource Nevada Inc.



Dr. Jose Vargas Lugo.	Dr. Vargas
is a licensed physician with graduate from the Universidad Nacional Autonoma de Mexico (UNAM); and is a 4th year law
student at Universidad Autonoma de Sinaloa (UAS). Dr. Vargas commenced his relation with the mining business with Minera Industrial
Peñoles as a Medical Assistant to the Mining Services Division of Peñoles in Fresnillo, Zacatecas. Since 1993, Dr.
Vargas has been a supplier of industrial goods and services in and around the municipalities of Sinaloa de Leyva and Mocorito Sinaloa.
Dr. Vargas has worked with companies such as Compañía Minera El Rosarito, which was conducting operations at San
Jose de Gracia during the period 1993 – 1995. Dr. Vargas later provided services and supplies to Mineras Finesterre at San
Jose de Gracia, and to Minera Pangea, which was owned by Queenstake Resources, then Nevada Pacific, and now US. Gold. Dr. Vargas
began working with DynaResource de Mexico in spring 2000; as it commenced activities to acquire and consolidate the San Jose de
Gracia District. Over the past + 10 Years, Dr. Vargas has proven to be an integral part of the Company’s activities at San
Jose de Gracia and in Sinaloa State; involved in all facets of the Company’s business. Dr. Vargas has proven instrumental
in the areas of public relations, community relations, governmental affairs, environmental matters, and overall management of the
company’s business activities in Mexico. Dr. Vargas is expected to be a leader for the Company’s activities in Mexico
for the foreseeable future.



Keith W. Brogoitti.	Mr. Brogoitti
has more than 30 years operational and managerial experience in mineral exploration, development, and production involving uranium,
base metal and precious metal sectors of the mining industry. Mr. Brogoitti worked on the development of one of the first commercial
gold/silver heap leach projects in Nevada.  He has held various management positions with Ivanhoe Mines Ltd., Newmont, Bema
Gold and Compañía Minera Antamina. He has also worked as a technical consultant for Placer Dome, Noranda, Compañía
Minera Antamina, Kennecott, Phelps Dodge, Asarco and BHP. Mr. Brogoitti has extensive international work experience in the Middle
East, Asia and Central and South America.

Chad Mooney. Mr. Mooney has over
35 year’s highly productive history on Wall Street, and brings with him an extraordinary record of achievement in financial
management and public and private capital markets. Mr. Mooney previously built a top 10 business at Smith Barney, where he was
the largest equity syndicate producer, as well as having the largest listed equity trading business. Mr. Mooney chaired the Director’s
Advisory Group at Smith Barney, representing all financial advisors at Smith Barney, and he reported directly to his mentor, Mr.
Jamie Dimon, the current Chairman and CEO of financial giant, JP Morgan Chase & Co. From 1990 to 2004, Mr. Mooney served as
Director of Investments for Smith Barney, and personally oversaw and advised $ 3.5 B. in client assets. In 2000, after playing
a key role in building the largest water company in the world (U.S. Filter, a NYSE Listed Company) Mr. Mooney coordinated the sale
of U.S. Filter to Vivendi, for $ 8.1 B Cash. Joining DynaUSA is September, 2013, Mr. Mooney is expected to work directly with Company
Chairman-CEO Mr. K.D. Diepholz, and will manage the Company’s interface with public and private capital, capital markets,
Investment Banks and individual investors.

Charles Smith.     Mr.
Smith graduated from Boston University, Boston, Massachusetts in 1979 and since that time has been a Certified Public Accountant
involved in all phases of business including audit and tax matters. He is a

61





consultant to various companies.
 Some of Mr. Smith’s business affiliations the past five years include:  Chief Financial Officer of DynaResource,
Inc. – May 2005 to present. Chief Financial Officer of Med Careers Group, Inc. – September 2013 to present. Chairman
of Dynacap Group, Ltd. - a consulting and management firm - 1992 to the present. Sole proprietor as a Certified Public Accountant
- 1983 to the present. President, Secretary, Treasurer and Director of Surface Coatings, Inc. – November 2012 to present.
Chief Financial Officer of Specialty Contractors, Inc. – April 2013 to present. Principal of Yorkdale Capital, a financial
and consulting firm – 2006 to present.

Melvin E. Tidwell, P.E. -
Professional Engineer, registered in California in 1977; Control Systems Engineer; Instrument Engineer on over 80 Projects Worldwide;
Instrument Startup Engineer on over 50 Projects Worldwide; Affiliated / Associated with following Companies over the past 25 years:
Weyerhaeuser Company, Howe-Baker Engineers, LaGloria Oil & Gas Co., IWATANI Electronics (Japan), EQM (Mexico), Kyodo Oxygen
Co., Ltd. (Japan), Chin Yang Fine Chemical Co. (South Korea), Hankuk Glass Mfg. Co. (South Korea), Hunt Oil Co., Liquid Carbonics
Co., Celanese Mexicana (Mexico), Grain Power Tucumcari Ltd., Jetco Chemical Inc., Claiborne Gasoline Co., Conoco, Chevron, Metano
Gas (now Exxon), Union Oil, Texaco Angola, Petrofac, Alfurat (Syrian Oil Co.), Arco, Chevron / Placer Cego, Tidwell & Associates;
 with  Engineering / Management Experience in the following Project Areas:  Startup & Engineering - $ 160 Million
Linerboard Paper Mill; Chief Instrument Engineer - chemical division;  DEA Gas Treating & Sulfur Recovery Plant;  One
Part / million H2 Plant;  Startup Hydrogen Plants;  H2 / CO Cosorb Plant;  Startup H2 / CO synthesis Gas Plant &
Cold Box; Startup Ethanol Plant;  Specialties Chemicals Expansion - Foxboro 200 instruments;  Startup & Calibration
75,000 BPD Crude Distillation Facility;  Instrument Engineer - 1st Oxygen Enrichment Cope Unit;  Instrument Engineer,
Startup & checkout - 30 TPD Selectox SRU;  Instrument Engineer - Offshore Oil & Gas Production Facility;  Lead
Instrument Engineer - 60,000 BPD Oil Production Facility;  Instrument Checkout, Calibration, and Inspection prior to startup
- Selectox Sulfur Units (Honeywell TDC 3000 DCS) (Foxboro 760 Electronics Controllers);  Startup Amine Plant and Sulfur Plant,
and System Engineering (Foxboro and Westinghouse PLC); Instrument Engineer, Field Startup and Checkout - CCR, HDS, MTBE, Hydrogen
and Cryogenic Plants. Founder, President - Tidwell & Associates, a private engineering consulting Firm (1993 to Present); Director
– DynaResource, Inc. (f/k/a: West Coast Mines, Inc.), Dallas, (1994 to present).

Bradford J. Saulter - Attended
University of Texas, Austin, Texas; Marketing Department of Metagram, Inc., a Dallas National Marketing Company; Regional Manager
for Lugar, Lynch, & Associates, A Dallas Financial Services Company, Involved in Sales & Marketing of Various Investment
Products; Independent Marketing Consultant; Series 22 & 63 Securities License; Vice President / Marketing - Dynacap Group Ltd.
(1992 - Present); Director: Farm Partners, Inc. (1992 - Present), Vice President – Investor Relations - DynaResource, Inc.,
Dallas, Texas (1995 to present).

To the knowledge of the Company,
no present or former director, executive officer, or person nominated to become a director or executive of the Company, or consultants
to the Company, has ever:

1.) Filed a bankruptcy petition
by or against any business of which such person was a general partner or executive officer whether at the time of the bankruptcy
or with two years prior to that time;

2.) Had any conviction in
a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

3.) Been subject to any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
and,

4.) Been found by a court of
competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal
or state securities or commodities law, and the judgment has not been reversed suspended or vacated.



Item 11.	 Executive Compensation

62





The following officers received
the following compensation for the years ended December 31, 2013 and 2012. These officers do not have employment contracts with
the Company.

|Name and principal position                         | Year              | Salary                    | Bonus               | Stock Awards      | Option Awards     | Nonequity incentive plan compensation | Nonqualified deferred compensation | All other compensation
        *
|--------------------------------------------------- | ----------------- | ------------------------- | ------------------- | ----------------- | ----------------- | ------------------------------------- | ---------------------------------- | --------------------------------
|K.W. Diepholz
        CEO, President                | 2013
        2012 | $225,000
        $225,000 | None
        None   | None
        None | None
        None | None
        None                     | None
        None                  | $
20,500
        $ 28,145       
|Dr. Jose Vargas Lugo                                | 2013
        2012 | $90,000
        None      | None
        None   | None
        None | None None         | None
        None                     | None
        None                  | None
        None               
|Keith W Brogoitti                                   | 2013
        2012 | $60,000
        None      | None
        None   | None
        None | None
        None | None
        None                     | None
        None                  | None
        None               
|Chad Mooney
        Exec VP – Capital Mkts          | 2013
        2012 | $30,000
        None      | None
        None   | None
        None | None
        None | None
        None                     | None
        None                  | None
        None               
|Charles Smith
        CFO, Secretary                | 2013
        2012 | None
        None         | None
        None   | None
        None | None
        None | None
        None                     | None
        None                  | $10,0000 None                   
|                                                    |                   |                           |                     |                   |                   |                                       |                                    |                                 
|Bradford J. Saulter
        VP – Investor Relations | 2013
        2012 | $72,000
        $72,000   | $5,000
        None | None
        None | None
        None | None
        None                     | None
        None                  | None
        $13,625            
|                                                    |                   |                           |                     |                   |                   |                                       |                                    |                                 
|Melvin E. Tidwell, Director                         | 2013
        2012 | None
        None         | None
        None   | None
        None | None
        None | None
        None                     | None
        None                  | None
        None               
|                                                    |                   |                           |                     |                   |                   |                                       |                                    |                                 
|                                                    |                   |                           |                     |                   |                   |                                       |                                    |                                 

* As disclosed
in the financial statements, the Company paid consulting fees to Dynacap Group, Ltd. This remuneration was paid from the funds
received by Dynacap.

|                                     | Option Awards                                                       | Stock Awards                                                         
|------------------------------------ | ------------------------------------------------------------------- | ---------------------------------------------------------------------
|Name and principal position          | Number of Securities Underlying Unexercised options (#) exercisable | Number of Securities Underlying Unexercised options (#) unexercisable
|K.W. Diepholz
        CEO, President | None                                                                | None                                                                 
|                                     |                                                                     |                                                                      

63







|Charles Smith
        Secretary, CFO                                   | None | None | None | N/A | N/A | None
|---------------------------------------------------------------------- | ---- | ---- | ---- | --- | --- | ----
|                                                                       |      |      |      |     |     |     
|Dr. Jose Vargas Lugo
        President of Mexico
        Operations    | None | None | None | N/A | N/A | None
|                                                                       |      |      |      |     |     |     
|Keith W. Brogoitti
        Vice-President of Mexico
        Operations | None | None | None | N/A | N/A | None
|                                                                       |      |      |      |     |     |     
|                                                                       |      |      |      |     |     |     
|Melvin Tidwell
        Director                                        | None | None | None | N/A | N/A | None
|                                                                       |      |      |      |     |     |     
|Bradford J. Saulter
        VP – Investor Relations                    | None | None | None | N/A | N/A | None
|                                                                       |      |      |      |     |     |     
|                                                                       |      |      |      |     |     |     

Name of

Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth the amount
and nature of beneficial ownership of each of the executive officers and directors of the Company and each person known to be a
beneficial owner of more than five percent of the issued and outstanding shares of the Company as of December 31, 2013.  The
following table sets forth the information based on 11,052,008 common shares issued and outstanding as of December 31, 2013.



|COMMON SHARES | Beneficial Owner                                                                                    | Address                                                                                                                                  | Common
        Shares | Percent
        Ownership
|------------- | --------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | -------------------------
|              |                                                                                                     |                                                                                                                                          |                       |                          
|Common Stock  | K.W. (“K.D.”) Diepholz
        Chairman / CEO                                                       | 1303 Regency Court
        Southlake, Texas 76092                                                                                        | 1,457,065             | 13.18%                   
|              |                                                                                                     |                                                                                                                                          |                       |                          
|Common Stock  | Dr. Jose Vargas Lugo                                                                                | Enrique Dunant Y 5 #963 L-3
                                Francc. Los Parques
                                Guamuchil, Sin. CP 81460 | 124,508               | 1.13%                    
|              |                                                                                                     |                                                                                                                                          |                       |                          
|Common Stock  | Keith W. Brogoitti                                                                                  | Ascencion, Paraguay                                                                                                                      | 0                     | 0.00%                    
|              |                                                                                                     |                                                                                                                                          |                       |                          
|Common Stock  | Chad Mooney
        Exec VP – Capital Mkts                                                          | 7106 Woodbridge Drive
        Flower Mound, Texas 75022                                                                                  | 0                     | 0%                       
|              |                                                                                                     |                                                                                                                                          |                       |                          
|Common Stock  | Charles Smith
        Secretary; Director, CFO                                                      | 709-B West Rusk #580
        Rockwall, Texas 75087                                                                                       | 164,250               | 1.49%                    
|              |                                                                                                     |                                                                                                                                          |                       |                          
|Common Stock  | Children of
        Charles Smith, through
        Smith First Family LP.;
        Andrew Smith, GP | 4247 Clairmont
        Birmingham, AL 35222                                                                                              | 331,250               | 3.00%                    
|              |                                                                                                     |                                                                                                                                          |                       |                          

64







|Common Stock | Melvin E. Tidwell
        Director;                                          | 4804 Picadilly Place
        Tyler, Texas 75703 | 75,845    | 0.60% 
|------------ | ---------------------------------------------------------------------------- | ----------------------------------------------- | --------- | ------
|             |                                                                              |                                                 |           |       
|Common Stock | Bradford J. Saulter
        VP., Investor Relations                          | 7618 Straits Lane
        Rowlett, Texas 75088  | 112,531   | 1.02% 
|             |                                                                              |                                                 |           |       
|             | All Officers, Directors And Beneficial owners
        as a Group (5 Persons) |                                                 | 2,265,449 | 20.50%



None of the Shares described above are
subject to options which are either (a) vested, or, (b) will vest within 60 days.

OPTIONS

The officers and directors and those
5% beneficial owners held the following options as of December 31, 2013:

|None.            |  |                  |  |                                                 |  |                  |  |                  
|---------------- |  | ---------------- |  | ----------------------------------------------- |  | ---------------- |  | -----------------
|PREFERRED SHARES |  |                  |  |                                                 |  |                  |  |                  
|                 |  | Beneficial Owner |  | Address                                         |  | Preferred Shares |  | Percent Ownership
|Preferred        |  | K.W. Diepholz    |  | 1303 Regency Court
        Southlake, TX. 76092 |  | 1,000            |  | 100.0%           



Item 13.     Certain Relationships
and Related Transactions, and Director Independence

The Company has paid cash remuneration
for services to Dynacap Group Ltd., a private consulting firm.   Mr. K.W. Diepholz - Chairman and CEO of the Company
and Mr. Charles Smith, CFO and Secretary, are the Managers of Dynacap Group, Ltd.

The following has been paid for
the years ended December 31, 2013 and 2012:

In 2013, the Company paid $52,500 to Dynacap Group,
Ltd. for consulting and other fees;

In 2012, the Company paid $102,500 to Dynacap Group,
Ltd. for consulting and other fees.

The Company is not aware of any other
material relationships or related transactions between the Company and any officers, directors or holders of more than five percent
of any class of outstanding securities of the issuer.



Item 14. Principal Accounting Fees and Services

(1) Audit Fees

The aggregate fees billed for professional
services rendered by our auditors, for the audit of the registrant's annual financial statements and review of the financial statements
included in the registrant's Form 10-K and Form 10-Q(s) or services that are normally provided by the accountant in connection
with statutory and regulatory filings or engagements, for fiscal years 2013 and 2012 was $67,593 and $75,500, respectively.



(2) Audit Related Fees

None



(3) Tax Fees

None

65





(4) All Other Fees

None



(5) Audit Committee Policies and Procedures

The Company does not have an audit committee.



(6) If greater than 50 percent, disclose
the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the
most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent
employees.



Not applicable.

66





PART IV



Item 15. Exhibits and Financial Statement Schedules



|No.    | Description                                                                                                                                                                                         
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 * | Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                
|31.2 * | Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                
|32.1 * | Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



___________________



* Filed herewith.







SIGNATURES



Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



DynaResource, Inc.



By:  /s/  K.W. (“K.D.”) Diepholz

K.W. Diepholz, President

(Principal Executive Officer)



By:  /s/  Charles Smith

Charles Smith, Chief Financial Officer

(Principal Financial Officer)





Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.

|                           |  |                                              |  |               
|-------------------------- |  | -------------------------------------------- |  | --------------
|Signature                  |  | Title                                        |  | Date          
|                           |  |                                              |  |               
|/s/ K.W. (“K.D.”) Diepholz |  | President, Chief Executive Officer,          |  | April 15, 2014
|K.W. (“K.D.”) Diepholz     |  | Chairman, Director                           |  |               
|                           |  | (principal executive officer)                |  |               
|                           |  |                                              |  |               
|/s/  Charles Smith         |  | Chief Financial Officer                      |  | April 15, 2014
|Charles Smith              |  | (principal financial and accounting officer) |  |               







67