SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q





(Mark One)



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



For the quarterly period ended September 30,
2015



OR



[ ] TRANSITION REPORT UNDER SECTION 13 OF
15(d) OF THE EXCHANGE ACT OF 1934



From the transition period ___________ to ____________.



Commission File
Number000-30371



DYNARESOURCE,
INC.

(Exact name of small business issuer as specified
in its charter)







|Delaware                                                           |  | 94-1589426                       
|------------------------------------------------------------------ |  | ---------------------------------
|(State or other jurisdiction of incorporation
    or organization) |  | (IRS Employer Identification No.)





222 W Las Colinas
Blvd., Suite 744 East Tower, Irving, Texas 75039

(Address of principal executive offices)



(972) 868-9066

(Issuer's telephone number)



N/A

(Former name, former address and former fiscal
year, if changed since last report)



Indicate by check mark whether the registrant
(1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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:

Yes [X] No [ ]



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

| |                             |  |                              
| | --------------------------- |  | -----------------------------
| | Large Accelerated Filer [ ] |  | Accelerated Filer [ ]        
| | Non-Accelerated Filer [ ]   |  | Smaller Reporting Company [X]
| |                             |  |                              

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



Yes [ ] No [X].



As of November 15, 2015, there were 16,722,825 shares of Common
Stock of the issuer outstanding.





1










TABLE OF CONTENTS







|                                                             |                                                            |                                            
|------------------------------------------------------------ | ---------------------------------------------------------- | -------------------------------------------
|PART I.                                                      | FINANCIAL STATEMENTS                                       |                                            
|                                                             |                                                            |                                            
|ITEM 1.                                                      | Unaudited Financial Statements                             | 3-6                                        
|                                                             | Notes to Unaudited Financial Statements                    | 7-11                                       
|                                                             |                                                            |                                            
|ITEM 2.                                                      | Management's Discussion and Analysis and Plan of Operation | 12-20                                      
|ITEM 3.                                                      | Quantitative and Qualitative Disclosure About Market Risk  | 21                                         
|ITEM 4.                                                      | Controls and Procedures                                    | 22                                         
|                                                             |                                                            |                                            
|                                                             |                                                            |                                            
|PART II.                                                     | OTHER INFORMATION                                          |                                            
|                                                             |                                                            |                                            
|ITEM 1.                                                      | Legal Proceedings                                          | 23-25                                      
|                                                             |                                                            |                                            
|ITEM 2.                                                      | Unregistered Sales of Securities and Use of Proceeds       | 25                                         
|                                                             |                                                            |                                            
|ITEM 3.                                                      | Default Upon Senior Securities                             | 25                                         
|                                                             |                                                            |                                            
|ITEM 4.                                                      | Mine Safety Disclosures                                    | 26                                         
|                                                             |                                                            |                                            
|ITEM 5.                                                      | Other Information                                          | 26                                         
|                                                             |                                                            |                                            
|ITEM 6.                                                      | Exhibits                                                   | 26                                         
|                                                             |                                                            |                                            
|                                                             |                                                            |                                            
|SIGNATURES
        
        
        
        CERTIFICATIONS |                                                            | 26
        
        
        
        27-29
|EXHIBIT 31.1                                                 | CHIEF EXECUTIVE OFFICER CERTIFICATION                      |                                            
|                                                             |                                                            |                                            
|EXHIBIT 31.2                                                 | CHIEF FINANCIAL OFFICER CERTIFICATION                      |                                            
|                                                             |                                                            |                                            
|EXHIBIT 32.1                                                 | CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350           |                                            
|                                                             |                                                            |                                            
|                                                             |                                                            |                                            







2










PART I

ITEM 1.	FINANCIAL STATEMENTS

DYNARESOURCE, INC.

Consolidated
BALANCE SHEETS

|                                                              |  | September 30, |             | December 31,
|------------------------------------------------------------- |  | ------------- | ----------- | ------------
|                                                              |  | 2015          |             | 2014        
|                                                              |  | (Unaudited)   |             | (Audited)   
|ASSETS                                                        |  |               |             |             
|Current Assets:                                               |  |               |             |             
|Cash and Cash Equivalents                                     |  | $             | 3,240,546   |             
|Accounts Receivable                                           |  |               | —           |             
|Inventories                                                   |  |               | 87,863      |             
|Foreign Tax Receivable and Other Current                      |  |               | 451,888     |             
|Total Current Assets                                          |  |               | 3,780,297   |             
|                                                              |  |               |             |             
|Mining Equipment and Fixtures (Net of Accumulated             |  |               |             |             
|Depreciation of $948,542 and $967,207)                        |  |               | 650,129     |             
|Mining Concessions                                            |  |               | 4,132,678   |             
|Investments in Affiliate                                      |  |               | 70,000      |             
|Receivables from Affiliate                                    |  |               | 160,372     |             
|Other Assets                                                  |  |               | 20,261      |             
|                                                              |  |               |             |             
|TOTAL ASSETS                                                  |  | $             | 8,813,737   |             
|                                                              |  |               |             |             
|LIABILITIES AND EQUITY                                        |  |               |             |             
|Current Liabilities:                                          |  |               |             |             
|Accounts Payable                                              |  | $             | 231,796     |             
|Note Payable                                                  |  |               | —           |             
|Due to Non-controlling Interest                               |  |               | 231,500     |             
|Advances from Related Parties                                 |  |               | 150,000     |             
|Accrued Expenses                                              |  |               | 666,287     |             
|Total Current Liabilities                                     |  |               | 1,279,583   |             
|                                                              |  |               |             |             
|Notes Payable                                                 |  |               | 956,250     |             
|Note Payable—Related Party                                    |  |               | —           |             
|Financial Statement Derivative Liabilities                    |  |               | 5,117,941   |             
|                                                              |  |               |             |             
|TOTAL LIABILITIES                                             |  | $             | 7,353,774   |             
|                                                              |  |               |             |             
|Preferred Stock, Series C, $.0001 par value, 1,733,221 shares |  |               |             |             
|Authorized, 1,733,221 and 0 shares issued and outstanding     |  | $             | 4,333,053   |             
|                                                              |  |               |             |             
|Stockholders’ Equity:                                         |  |               |             |             
|Preferred Stock, Series A, $.0001 par value, 1,000 shares     |  |               |             |             
|Authorized, 1,000 and 1,000 issued and outstanding            |  | $             | 1           |             
|Preferred Stock, $.0001 par value, 19,000,000 shares          |  |               |             |             
|Authorized,  0 shares issued and outstanding                  |  |               | —           |             
|Common Stock, $.01 par value, 25,000,000 shares authorized,   |  |               |             |             
|16,722,825 and 14,146,024 shares issued and outstanding       |  |               | 167,228     |             
|Preferred Rights                                              |  |               | 40,000      |             
|Additional Paid In Capital                                    |  |               | 54,671,258  |             
|Treasury Stock                                                |  |               | (4,219,515  | )           
|Accumulated Other Comprehensive Income                        |  |               | 5,002,489   |             
|Accumulated Deficit                                           |  |               | (51,768,048 | )           
|Total DynaResource, Inc. Stockholders’ Equity                 |  |               | 3,893,413   |             
|Non-Controlling Interest                                      |  |               | (6,766,503  | )           
|                                                              |  |               |             |             
|TOTAL EQUITY                                                  |  | $             | (2,873,090  | )           
|                                                              |  |               |             |             
|TOTAL LIABILITIES AND EQUITY                                  |  | $             | 8,813,737   |             
|                                                              |  |               |             |             

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





3






DYNARESOURCE, INC.

Consolidated Statements of Operations and
Other Comprehensive Loss

(unaudited)



|                                                                                  |  | Three Months September 30, 2015 |            | Three Months September 30, 2014 |  | Nine Months September 30, 2015 |            | Nine Months September 30, 2014
|--------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | ------------------------------- |  | ------------------------------ | ---------- | ------------------------------
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|REVENUES                                                                          |  | $                               | —          |                                 |  | $                              | 297,638    |                               
|COSTS AND EXPENSES OF MINING                                                      |  |                                 |            |                                 |  |                                |            |                               
|OPERATIONS                                                                        |  |                                 |            |                                 |  |                                |            |                               
|Production Costs Applicable to Sales                                              |  |                                 | —          |                                 |  |                                | 56,559     |                               
|Mine Operating Costs                                                              |  |                                 | —          |                                 |  |                                | 29,769     |                               
|Pre-Pilot Production Costs                                                        |  |                                 | 662,420    |                                 |  |                                | 719,313    |                               
|Property Holding Costs                                                            |  |                                 | 178,564    |                                 |  |                                | 104,470    |                               
|General and Administrative                                                        |  |                                 | 565,420    |                                 |  |                                | 549,947    |                               
|Share Based Compensation                                                          |  |                                 | 791,400    |                                 |  |                                | —          |                               
|Depreciation and Amortization                                                     |  |                                 | 35,443     |                                 |  |                                | 20,003     |                               
|Total Operating Expenses                                                          |  | $                               | 2,233,247  |                                 |  | $                              | 1,480,061  |                               
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|NET OPERATING LOSS                                                                |  |                                 | (2,233,247 | )                               |  |                                | (1,182,423 | )                             
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|OTHER INCOME (EXPENSE)                                                            |  |                                 |            |                                 |  |                                |            |                               
|Foreign Currency Gains (Losses)                                                   |  |                                 | (1,359,680 | )                               |  |                                | (174,392   | )                             
|Interest Income (Expense)                                                         |  |                                 | (35,759    | )                               |  |                                | (55,515    | )                             
|Inducement Costs                                                                  |  |                                 | (293,822   | )                               |  |                                | —          |                               
|Other Income (Expense)                                                            |  |                                 | 60,947     |                                 |  |                                | 18         |                               
|Total Other Income (Expense)                                                      |  | $                               | (1,628,314 | )                               |  | $                              | (229,889   | )                             
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|NET LOSS BEFORE TAXES                                                             |  | $                               | (3,861,561 | )                               |  | $                              | (1,412,312 | )                             
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|TAXES                                                                             |  |                                 | —          |                                 |  |                                | —          |                               
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|NET LOSS                                                                          |  | $                               | (3,861,561 | )                               |  | $                              | (1,412,312 | )                             
|ACCRETION DUE TO PREFERRED C SHS                                                  |  |                                 | —          |                                 |  |                                | —          |                               
|DEEMED DIVIDEND ON PREF C                                                         |  |                                 | (43,687    | )                               |  |                                | —          |                               
|ATTRIBUTABLE TO NON-CONTROLLING INTERESTS                                         |  |                                 | 262,976    |                                 |  |                                | 96,496     |                               
|ATTRIBUTABLE TO COMMON SHAREHOLDERS                                               |  | $                               | (3,642,272 | )                               |  | $                              | (1,315,816 | )                             
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|EARNINGS PER SHARE DATA ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC.: |  |                                 |            |                                 |  |                                |            |                               
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|Basic and Diluted Loss per Common Share                                           |  | $                               | (.22       | )                               |  | $                              | (.11       | )                             
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|Weighted Average Shares Outstanding, Basic and Diluted                            |  |                                 | 16,380,368 |                                 |  |                                | 12,433,220 |                               
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|OTHER COMPREHENSIVE LOSS                                                          |  |                                 |            |                                 |  |                                |            |                               
|NET LOSS PER ABOVE                                                                |  | $                               | (3,861,561 | )                               |  | $                              | (1,412,312 | )                             
|Accretion Expense of Preferred Stock to Redemption Value                          |  |                                 | —          |                                 |  |                                | —          |                               
|Deemed Dividend for Pref Shs C                                                    |  |                                 | (43,687    | )                               |  |                                | —          |                               
|Foreign Currency Translation Gains (Losses)                                       |  |                                 | (1,435,514 | )                               |  |                                | (18,801    | )                             
|TOTAL OTHER COMPREHENSIVE LOSS                                                    |  |                                 | (1,435,514 | )                               |  |                                | (18,801    | )                             
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|TOTAL COMPREHENSIVE LOSS                                                          |  | $                               | (5,340,762 | )                               |  | $                              | (1,431,113 | )                             
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               
|ATTRIBUTABLE TO:                                                                  |  |                                 |            |                                 |  |                                |            |                               
|EQUITY HOLDERS OF DYNARESOURCE, INC.                                              |  | $                               | (5,237,525 | )                               |  | $                              | (1,348,652 | )                             
|NON-CONTROLLING INTERESTS                                                         |  | $                               | (103,237   | )                               |  | $                              | (82,461    | )                             
|TOTAL COMPREHENSIVE LOSS                                                          |  |                                 | (5,340,762 | )                               |  |                                | (1,431,113 | )                             
|                                                                                  |  |                                 |            |                                 |  |                                |            |                               



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





4






DYNARESOURCE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                         |  | September 30, 2015 |            | September 30, 2014
|-------------------------------------------------------- |  | ------------------ | ---------- | ------------------
|                                                         |  | (Unaudited)        |            | (Unaudited)       
|CASH FLOWS FROM OPERATING ACTIVITIES                     |  |                    |            |                   
|Net Loss                                                 |  | $                  | (7,127,184 | )                 
|Adjustments to reconcile net loss to cash                |  |                    |            |                   
|used in Operating activities                             |  |                    |            |                   
|Issuance of Common Stock for Services                    |  |                    | 435,000    |                   
|Issuance of Treasury Shares for Services                 |  |                    | 842,535    |                   
|Inducement Expense                                       |  |                    | 293,822    |                   
|Adjustment Mark to Market for Preferred Stock, Series C  |  |                    | (60,515    | )                 
|Depreciation and Amortization                            |  |                    | 53,253     |                   
|                                                         |  |                    |            |                   
|Change in Operating Assets and Liabilities:              |  |                    |            |                   
|Accounts Receivable                                      |  |                    | 19,496     |                   
|Receivables from Affiliate and Other Current             |  |                    | 12,598     |                   
|Foreign Tax Receivable                                   |  |                    | (248,962   | )                 
|Accounts Payable                                         |  |                    | (605       | )                 
|Accrued Liabilities                                      |  |                    | (145,081   | )                 
|CASH FLOWS (USED IN) OPERATING ACTIVITIES                |  |                    | (5,925,643 | )                 
|                                                         |  |                    |            |                   
|CASH FLOWS FROM INVESTING ACTIVITIES                     |  |                    |            |                   
|Retirement of Property                                   |  |                    | 58,754     |                   
|Purchase of Property                                     |  |                    | (549,110   | )                 
|Other Assets                                             |  |                    | 24,307     |                   
|CASH FLOWS (USED IN) INVESTING ACTIVITIES                |  |                    | (466,049   | )                 
|                                                         |  |                    |            |                   
|CASH FLOWS FROM FINANCING ACTIVITIES                     |  |                    |            |                   
|Proceeds from Advance from Related Party                 |  |                    | 325,000    |                   
|Proceeds from Sale of Preferred Stock, Series C          |  |                    | 3,455,000  |                   
|Proceeds from Note                                       |  |                    | 500,000    |                   
|Repurchase of Common Stock                               |  |                    |            |                   
|Proceeds from Sale of Common Stock                       |  |                    | 2,917,750  |                   
|Proceeds from Sale of Preferred Stock, Series B          |  |                    | —          |                   
|Payment of Note Payable                                  |  |                    | (203,500   | )                 
|Proceeds from Notes Payable                              |  |                    | —          |                   
|Loan from Non-Controlling Interest                       |  |                    | —          |                   
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES              |  |                    | 6,994,250  |                   
|                                                         |  |                    |            |                   
|Effect of Foreign Exchange                               |  |                    | 2,387,029  |                   
|                                                         |  |                    |            |                   
|NET INCREASE (DECREASE) IN CASH                          |  |                    | 2,989,587  |                   
|                                                         |  |                    |            |                   
|CASH AT BEGINNING OF PERIOD                              |  |                    | 250,959    |                   
|                                                         |  |                    |            |                   
|CASH AT END OF PERIOD                                    |  | $                  | 3,240,546  |                   
|                                                         |  |                    |            |                   
|                                                         |  |                    |            |                   
|SUPPLEMENTAL DISCLOSURES                                 |  |                    |            |                   
|Cash Paid for Interest                                   |  | $                  | 145,584    |                   
|Cash Paid for Income Taxes                               |  | $                  | —          |                   
|                                                         |  |                    |            |                   
|NON CASH TRANSACTIONS                                    |  |                    |            |                   
|Redemption of Preferred Stock, Series B for Common Stock |  | $                  | —          |                   
|Conversion of Notes Payable to Common Stock              |  | $                  | (842,904   | )                 
|Issuance of Treasury Shares to Subsidiary                |  | $                  | 1,305,000  |                   
|Capitalization  of Accrued Interest to Notes             |  | $                  | 33,119     |                   
|Conversion of Advance to Common
    Stock                |  | $                  | 175,000    |                   
|Derivative Liabilities due to Golden Post                |  | $                  | 5,178,458  |                   
|Accretion of Preferred Stock to Redemption Value         |  | $                  | 4,637,178  |                   
|Issuance of Common Stock for Treasury Stock              |  | $                  | (1,305,000 | )                 



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





5








DYNARESOURCE, INC.

Consolidated
Statements of Changes in Stockholders’ Equity





|                                                             |  | Preferred |       |          |  | Preferred |   | Preferred |  |            |   |         |  |           |   | Additional |  |           |            |            |   | Other         |         |             |   |           |        |  | 
|------------------------------------------------------------ |  | --------- | ----- | -------- |  | --------- | - | --------- |  | ---------- | - | ------- |  | --------- | - | ---------- |  | --------- | ---------- | ---------- | - | ------------- | ------- | ----------- | - | --------- | ------ |  | 
|                                                             |  | Series A  |       | Series A |  | Series B  |   | Series B  |  | Common     |   | Common  |  | Preferred |   | Paid In    |  | Treasury  |            | Treasury   |   | Comprehensive |         | Accumulated |   |           |        |  | 
|                                                             |  | Shares    |       | Amount   |  | Shares    |   | Amount    |  | Shares     |   | Amount  |  | Rights    |   | Capital    |  | Shares    |            | Amount     |   | Income        |         | Deficit     |   | Total     |       
|                                                             |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|Balance, January 1, 2015                                     |  | 1,000     |       | 1        |  | —         |   | —         |  | 14,146,024 |   | 141,461 |  | 40,000    |   | 50,042,582 |  | 1,378,013 |            | (4,152,750 | ) | 2,495,629     |         | (40,383,731 | ) | 8,183,192 |        |  | 
|                                                             |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|Sale of Common Shares                                        |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           | 1,169,500  |            |   |               | 11,695  |             |   |           |        |  | 
|Issuance of Shares to Subs                                   |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           | 750,000    |            |   |               | 7,500   |             |   |           |        |  | 
|Issuance of Common Shs for Services                          |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           | 250,000    |            |   |               | 2,500   |             |   |           |        |  | 
|Issuance of Treasury Shs for Services                        |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|Other Comprehensive Income                                   |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|Establishment of Derivative   related to Golden Post Funding |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|Sale of warrants to Golden Post Funding                      |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|Fractional Shares                                            |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           | 139        |            |   |               |         |             |   |           |        |  | 
|Note Conversion to Stock                                     |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           | 337,162    |            |   |               | 3,372   |             |   |           |        |  | 
|Advance Conversion to Stock                                  |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           | 70,000     |            |   |               | 700     |             |   |           |        |  | 
|Inducement Costs                                             |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|Net Loss                                                     |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|                                                             |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|                                                             |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|Balance, September 30,2015                                   |  |           | 1,000 |          |  |           | 1 |           |  |            | — |         |  |           | — |            |  |           | 16,732,825 |            |   |               | 167,228 |             |   |           | 40,000 |  | 
|                                                             |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 
|                                                             |  |           |       |          |  |           |   |           |  |            |   |         |  |           |   |            |  |           |            |            |   |               |         |             |   |           |        |  | 



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





6








DYNARESOURCE, INC.

Notes
to the UNAUDITED Consolidated Financial Statements

September 30, 2015 and 2014

NOTE 1 – NATURE OF OPERATIONS
AND BASIS OF PRESENTATION

DynaResource, Inc. (The “Company”,
“DynaResource”, or “DynaUSA”) 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 pilot production of precious
metals.

The interim consolidated financial statements
included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission (“SEC”).  Certain information and note disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
has been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included
are adequate to make the information presented not misleading.

In management’s opinion, the unaudited
Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2015 and 2014,
the Consolidated Balance Sheets as of September 30, 2015 (unaudited) and December 31, 2014, and the unaudited Consolidated
Statements of Cash Flows for the nine months ended September 30, 2015 and 2014, contained herein, reflect all adjustments, consisting
solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results
of operations and cash flows on a basis consistent with that of the Company’s prior audited annual consolidated financial
statements.  However, the results of operations for the interim periods may not be indicative of results to be expected for
the full fiscal year.  Therefore, these financial statements should be read in conjunction with the audited financial statements
and notes thereto and summary of significant accounting policies included in the Company’s Form 10-K for the year ended
December 31, 2014.  Except as noted below, there have been no material changes in the footnotes from those accompanying
the audited consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31,
2014. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.  All inter-company
accounts and transactions have been eliminated.

Certain amounts for the three and nine
month periods ending September 30, 2014 have been adjusted to current reporting format.

NOTE 2 – INVESTMENT IN AFFILIATE/RECEIVABLES
FROM AFFILIATE/OTHER ASSETS

DynaResource Nevada, Inc., a Nevada
Corporation (“DynaNevada”), with one operating subsidiary in México, DynaNevada de México, S.A. de C.V.
(“DynaNevada de México”) have common officers, directors and shareholders with the Company. The total amount
loaned by the Company to DynaNevada at December 31, 2010 was $805,760. 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 $0.25 / Share.  On December 31, 2010, the Company converted its receivable from DynaNevada into 3,223,040
Shares of DynaNevada; and as a result, the Company owns 19.92% of the outstanding share capital of DynaNevada. DynaNevada is a
related entity, and through its subsidiary in México (DynaNevada de México), (“DynaNevada de México”),
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 México completed the Option with IMMSA so that it now owns 100% of Santa Gertrudis. In June, 2010, DynaNevada de México
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. The Company currently
has a receivable from DynaResource Nevada, Inc. of $160,372 and an investment balance of $70,000 as of September 30, 2015. The
balances as of December 31, 2014 were $172,968 in receivables and $70,000 in investment, respectively.

NOTE 3 – PROMISSORY NOTES

Notes Payable – Series I

In April and May, 2013, the Company entered
into note agreements with individual shareholders in the principal amount of $1,495,000, of which $340,000 was then converted to
Series B Preferred shares within the same year, netting to proceeds of $1,155,000 (the “Series I Notes” Series I).
The Series I Notes bear simple interest at twelve and a half percent (12.5%), accrued interest for twelve months, and with the
accrued interest to be added to the principal, and then interest to be paid by the Company, quarterly in arrears. The
holders of the Series I 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 tonnes) processed through
the existing, or improved mill facilities at San Jose de Gracia. 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 cash reserve. This net profit percentage (if any) would be
paid quarterly in arrears based on the profits generated (if any) for the prior quarter. At the time of the Series I Notes,
there were no proven or probable reserves and the Company had not produced any net profits. Consequently, the fair value of the
net profits interest on the date of the Series I Note was deemed to be zero. Further, no payments have been made under the terms
of this codicil. The Notes originally matured on December 31, 2015. In April, 2015, the notes were extended to December 31, 2016.

The Company has the right to prepay the
Series I Notes with a ten percent (10%) penalty. The notes are secured by the Company’s stock at $5 per share.



7






The Series I Note holder retains the
option, at any time prior to maturity or prepayment, to convert any unpaid principal and accrued interest into Common Stock at
$5.00 per share. If the Series I Note is converted into Common Stock, at the time of conversion, the holder would also receive
warrants, in the same number as the number of common shares received upon conversion, to purchase additional common shares of the
Company for $7.50 per share, with such warrants expiring on December 31, 2015. In 2013, the Company offered an inducement to all
Series I Note holders to convert their Series I Notes and accrued interest into Series B Preferred Stock (“Series B”),
$5/Share, which Series B was convertible into common stock on a 2 for 1 basis (i.e., $2.50 stock). This conversion into Series
B created $197,771 in inducement expense, with an offset to additional paid in capital. In 2013, $340,000 principal and $22,734
of capitalized accrued interest of the Series I Notes were converted into Preferred Stock, Series B and 72,546 shares were issued.
At September 30, 2014, these 72,546 Series B shares were converted into 145,092 common shares.

In April, 2015, the Company received
note extensions (allonges) from all Series I note holders to ensure that all Series I Notes were in good standing and it also extended
the maturity date of the Series I Notes to December 31, 2016.

Notes Payable – Series II

In 2013 and 2014, the Company entered
into additional note agreements of $199,808 and $250,000, respectively (the “Series II Notes”) with similar terms as
the Series I notes. The Series II 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 Series II 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 tonnes) processed
through the existing, or improved mill facilities at San Jose de Gracia. 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 cash reserve. This net profit percentage (if any) would be
paid quarterly in arrears based on the profits generated (if any) for the prior quarter. At the time of the Series II notes,
there were no proven or probable reserves and the Company had not produced any net profits. Consequently, the fair value of the
net profits interest on the date of the Series II note was deemed to be zero. Further, no payments have been made under the terms
of this codicil. The Notes mature on December 31, 2016.

The Company retains the right to prepay
the Notes with a ten percent (10%) penalty. The notes are secured by the Company’s stock at $5 per share. 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, 2016.

Series I and Series II Notes Outstanding

The principal and interest balances on
the Series I Notes as of September 30, 2015 and December 31, 2014 were $765,000 and $1,285,607, respectively. The principal and
interest balances on the Series II Notes as of September 30, 2015 and December 31, 2014 were $191,250 and $474,278, respectively,
for total Note balances of $956,250 and $1,759,885 as of September 30, 2015 and December 31, 2014, respectively. The accrued interest
for these notes was $29,883 and $109,292 as of September 30, 2015 and December 31, 2014, respectively. The principal balance on
the Note—Related Party was $0 and $250,000 as of September 30, 2015 and December 31, 2014, respectively.

In April, 2015, the Company received
allonges (note extensions) from all noteholders to ensure that all notes were in good standing and also confirmed the maturity
of the Series II notes to be December 31, 2016. We have evaluated the terms of the allonges and have concluded that they are not
extinguishments as defined in EITF 96-19.

Note Conversion Contracts

On June 30, 2015, the Company entered
into conversion agreements with six (6) note holders. Principal and interest in the amount of $809,784 plus $33,119 of accrued
interest (total of $842,903) was contracted to convert into 337,162 common shares. In addition, 337,162 warrants are to be issued
which provide the option to purchase common shares at $2.50, with all warrants expiring December 31, 2017. The Company recorded
$293,822 inducement expense related to these conversion transactions.

On August 17, 2015, these common shares
and warrants were issued.

NOTE 4 – STOCKHOLDERS’
EQUITY

Issuance of Series C Senior Convertible
Preferred Shares

On June 30, 2015, the Company issued
1,600,000 Series C Senior Convertible Preferred Shares (the “Series C Preferred Shares”) at $2.50 per share for gross
proceeds of $ 4,000,000, as well as issuing 133,221 additional Series C Preferred Shares due to anti-dilution provisions (with
no cash remuneration). These Series C Preferred Shares are convertible to common shares at $2.50 per share, through February 20,
2020. The Series C Preferred Shares may receive a 4% per annum dividend, payable if available, and in arrears. A description of
the transaction which included the issuance of the Series C Preferred Shares is included below.

Financing
Agreement with Golden Post Rail, LLC, a Texas Limited Liability Company



| | 1. | On May 6, 2015, the Company, Golden Post Rail, LLC, a
    Texas limited liability company (“Golden Post”), and Mr. Koy W. (“J.D.”} Diepholz, Charman-CEO of
    the     Company entered into a Securities Purchase Agreement (the “SPA”). Pursuant to the SPA, Golden Post
    acquired the following securities:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8






| | a) | 1,600,000
                                         shares of Series C Senior Convertible Preferred Stock (the “Series C Preferred”)
                                         at a purchase price of $2.50 per share ($4M USD), plus an additional 133,221 shares of
                                         Series C Preferred pursuant to anti-dilution provisions. The Series C Preferred is entitled
                                         to receive dividends at the per share rate of four percent (4%) per annum, ranks senior
                                         (in priority) to the Common Stock, the Series A Preferred Stock, and each other class
                                         or series of equity security of the Company. The Series C Preferred is convertible into
                                         Common Stock of the Company at the price of $2.50 per share, and is entitled to anti-dilution
                                         protection for (i) subsequent equity issuances by the Company and (ii) changes in the
                                         Company’s ownership of DynaResource de México SA de CV (“DynaMéxico”).
                                         The Series C Preferred is also entitled to preemptive rights, and the holder has the
                                         right to designate one person to the Company’s Board of Directors as a Class III
                                         director.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | A
                                         Common Stock Purchase Warrant (the “Golden Post Warrant”) for the purchase
                                         of 2,166,527 shares of the Company’s Common Stock, at an exercise price of $2.50
                                         per share, and expiring June 30, 2020. The anti-dilution protections contained in the
                                         terms of the Series C Preferred are essentially replicated in the Golden Post Warrant.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | On
                                         May 6, 2015, the Company executed a Promissory Note (the “Golden Post Note”)
                                         payable to Golden Post in the principal amount of $500,000, and bearing interest at 8%.
                                         The principal amount of the Golden Post Note and accrued interest to June 30, 2015 in
                                         the amount of $6,000 were credited against amounts payable to the Company pursuant to
                                         the Securities Purchase Agreement described above.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Pursuant
                                         to the SPA, the Company executed a Registration Rights Agreement pursuant to which Golden
                                         Post may require the Company to register the shares of Common Stock which may be issued
                                         upon the conversion of the Series C Preferred and the shares of Common Stock issuable
                                         upon the exercise of the Warrant, including any additional shares of Common Stock issuable
                                         pursuant to anti-dilution provisions.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Due to
underlying anti-dilutive provisions contained in the Series C Preferred Shares and the Golden Post Warrant, the Company incurred
derivative liabilities of $2,152,700 in connection with the Series C Preferred Shares, and $3,025,758 in connection with the Golden
Post Warrant. Additionally, the Company fully accreted the discount related to the Series C Preferred Shares and the Golden Post
Warrant in the amount of $4,637,178, which is reflected “below” the net income (loss) amount. Legal fees of $45,000
was deducted from the proceeds of this transaction at closing.

In the current quarter, these contracts
were adjusted from mark to market and a reduction of the derivative liability was recorded in the amount of $60,517, with the offset
to other expense.

Also in the current quarter, the Company
reported $40,000 deemed dividend for Golden Post Rail related to its 4% dividend terms. As the Company has not declared these dividends,
it is required only as an item “below” the net income (loss) amount.

Due to the nature of this transaction
as mandatorily redeemable, the preferred shares are classified as “temporary equity” on the balance sheet.

Common Stock Issuances

During the three months ended September
30, 2015, the Company issued 407,162 common shares for the conversion of notes, accrued interest and advances at $2.50 per share.
These stock issuances also included the issuance of 407,162 warrants exercisable at $2.50 per share, expiring December 31, 2017.
During the nine months ended September 30, 2015, the Company issued 1,169,500 common shares for cash at $2.50 per share, and the
Company also issued 1,319,000 Warrants, with 1,020,000 of these warrants exercisable at $2.50 per share expiring December 31, 2017
and 149,500 warrants exercisable at $5 per share through December 31, 2015 and 149,500 warrants exercisable at $7.50 per share,
expiring December 31, 2016.

During the nine months ended September
30, 2015, the Company issued 1,169,500 shares of common stock for cash of $2,917,750.

During the nine months ended September
30, 2015, the Company issued 750,000 common shares to Mineras de DynaResource S.A. de C.V. (“DynaMineras”, a wholly
owned subsidiary) in exchange for services at a fair value of $1.74 per share. The shares are carried in Treasury for consolidation
purposes.

During the nine months ended September
30, 2015, the Company issued 250,000 shares to Dynacap Group Ltd., a related party, for services rendered at a fair value of $1.74
per share.

Treasury Stock Distributions

During the current quarter, the Company
recognized $791,400 of expense related to the distribution of 395,700 treasury shares for services rendered. During the first quarter
2015, the Company recognized $51,135 in expense for the distribution of 20,000 treasury shares.

In August, 2014, the Company distributed
20,000 treasury shares.

Note Conversions

As described in Note 3, Six (6) Noteholders
converted principal and interest in the amount of $809,784 plus $33,119 of accrued interest (total of $842,903) into 337,162 shares
of common stock ($2.50 per share). In addition, 337,162 warrants were issued, exercisable at $2.50 per share, expiring December
31, 2017.



9






Chairman / CEO Conversion of Advance

During the current quarter and as noted
above, the Company converted $175,000 of advances from the CEO for the issuance of 70,000 shares of common (at $2.50 per share)
as well as issuing 70,000 warrants, exercisable at $2.50 per share, expiring December 31, 2017.

NOTE
5 – RELATED PARTY TRANSACTIONS

Dynacap Group Ltd.

The Company paid $22,500 and $45,750
to Dynacap Group, Ltd. (an entity controlled by an officer of the Company (“Dynacap”) for consulting and other fees
during the three and nine months ended September 30, 2015. For the three and nine months ended September 30, 2014, the amounts
paid to Dynacap were $16,000 and $69,750, respectively.

The Company also issued 250,000 shares
of common stock in February, 2015 to Dynacap for services performed.

Cash Advances by Management

Company Chairman/CEO contributed
$175,000, and Company CFO contributed $150,000 in the nine months ended September 30, 2015 as advances to the Company. The
CEO also received 20,000 treasury shares in the current quarter.

As noted above, the Company converted
$175,000 of advances from the CEO for the issuance of 70,000 shares of common (at $2.50 per share) as well as 70,000 warrants,
exercisable at $2.50 per share, expiring December 31, 2017.

CFO Conversion Contract of Note Receivable

On April 24, 2015, the Company’s
CFO agreed to convert a $281,500 note ($250,000 principal and capitalized interest of $31,250) into common stock at $2.50 per share.
On June 30, 2015, this agreement was revised to be included with the additional other note holders that agreed to note conversion
as of June 30, 2015 and received the same terms as other shareholders. Therefore, an additional $6,792 of accrued interest through
June 30, 2015 yielded a total of 115,217 common shares (at $2.50 per share) and 115,217 warrants. These shares and warrants were
issued on August 17, 2015.

NOTE 6 – COMMITMENTS AND
CONTINGENCIES

The Company is required to pay taxes
in México in order to maintain mining concessions owned by DynaMéxico.  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, the Company does not anticipate that DynaMéxico will have any issues in meeting the minimum annual expenditures
for the concessions, and DynaMéxico retains sufficient carry-forward amounts to cover over 20 years of the minimum expenditure
(as calculated at the 2014 minimum, adjusted for annual inflation of 4%).

In
addition to the surface rights held by DynaMéxico pursuant to the Mining Act of México and its Regulations
(Ley Minera y su Reglamento), DynaMineras maintains access and surface rights to the SJG Project pursuant to a 20-year Land
Lease Agreement with the Santa Maria Ejido community adjacent to San Jose de Gracia. The 20
Year Land Lease Agreement with the Santa Maria Ejido was 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 DynaMineras of $1,359,443
Pesos (approx. $85,000 USD), commencing in 2014.The Land Lease Agreement provides DynaMineras 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).

In September 2008, the Company entered
into a 37-month lease agreement for its corporate office.  In June, 2015, the Company entered into a one-year extension
of the lease through August 31, 2016. The Company paid rent expense of $41,800 and $31,700 related to this lease for the nine months
ended September 30, 2015 and 2014, respectively.

Other Contingencies

The Company's mining and exploration
activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations
are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health
and the environment, and believes its operations are materially in compliance with all applicable laws and regulations. The Company
has made, and expects to make in the future, expenditures to comply with such laws and regulations.

Litigation

The Company believes that no material
adverse change will occur as a result of the legal 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 México. Further,
the Company believes there is no legal basis for which to conduct arbitration proceedings. (See Item 2. Management’s Discussion
and Analysis of Financial Conditions and Results of Operations; and see Part II, Item 1. Legal Proceedings.)





10






NOTE 7 – NON-CONTROLLING
INTEREST

The Company’s Non-Controlling Interest
recorded in the consolidated financial statements relates to an interest in DynaResource de México, S.A. de C.V. of 20%.
Changes in Non-Controlling Interest for the nine months ended September 30, 2015 and 2014, respectively were as follows:

|                                           |  | Sept 30, 2015 |            | Dec 31, 2014
|------------------------------------------ |  | ------------- | ---------- | ------------
|                                           |  |               |            |             
|Beginning balance                          |  | $             | (6,181,229 | )           
|Operating income (loss)                    |  |               | (380,045   | )           
|Share of other comprehensive income (loss) |  |               | (205,229   | )           
|Ending balance                             |  | $             | (6,766,503 | )           
|                                           |  |               |            |             

The Company began allocating a portion
of other comprehensive income (loss) to the non-controlling interest with the adoption of ASC 160 as of January 1, 2009. However,
this amount is only reflected in the income statement.

NOTE 8 – SUBSEQUENT EVENTS

Damages Awarded to DynaMéxico
in México Litigation

On October 5, 2015 DynaResource de México
SA de C.V. (“DynaMéxico”), was awarded in excess of $48 M USD (Forty-Eight Million Dollars) in damages from
Goldgroup Resources, Inc. (the “Goldgroup Damages”) by virtue of a Sentencia Definitiva (the “Definitive Sentence”)
issued by the Thirty Sixth Civil Court of the Superior Court of Justice of the Federal District of México (Tribunal Superior
de Justicia del Distrito Federal), File number 1120/2014. The Definitive Sentence included the considerations and resolutions by
the Court, and additional Resolutions were also ordered in favor of DynaMéxico (together the Goldgroup Damages and the additional
Resolutions are referred to as, the “Oct. 5, 2015 Resolution”). The October 5, 2015 Resolution is described below;
See Part II, Item 1., Legal Proceedings, $48 M USD in Damages Awarded to DynaMéxico in México Litigation.

Gold Sales

On November 3, 2015, DynaMineras reported
the delivery for sale of an approximate 350 Oz gold contained in concentrates (exact weights in gold and silver oz. to be determined
at final settlement).

|NOTE 9 – 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 September 30, 2015 and 2014, carrying
value of the Company’s financial assets and liabilities, such as cash, receivables, inventories approximate fair value because
of their short maturity. The derivative liabilities are measured at fair value using quoted market prices and estimated volatility
factors based on historical quoted market prices for the Company’s common stock and are classified within Level 3 of the
valuation hierarchy.

Fair Value Measurement at September 30, 2015
Using:

|                                                            |  | September 30, 2015 |            | Quoted Prices In Active Markets For Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |   | Significant Unobservable Inputs (Level 3)
|----------------------------------------------------------- |  | ------------------ | ---------- | -------------------------------------------------------------- |  | --------------------------------------------- | - | -----------------------------------------
|                                                            |  |                    |            |                                                                |  |                                               |   |                                          
|Derivative Liabilities—December 31, 2014  beginning balance |  |                    | —          |                                                                |  |                                               | — |                                          
|Golden Post Derivatives June 30, 2014                       |  |                    | (5,178,456 | )                                                              |  |                                               | — |                                          
|Golden Post Mark to Market Derivative Adjustment            |  |                    | 60,515     |                                                                |  |                                               |   |                                          
|Totals September 30, 2015 Balance                           |  |                    | (5,117,941 | )                                                              |  |                                               | — |                                          
|Fair Value Measurement at September 30, 2014 Using:         |  |                    |            |                                                                |  |                                               |   |                                          
|                                                            |  |                    |            |                                                                |  |                                               |   |                                          
|                                                            |  |                    |            |                                                                |  |                                               |   |                                          
|None                                                        |  |                    | —          |                                                                |  |                                               | — |                                          
|Totals                                                      |  |                    | —          |                                                                |  |                                               | — |                                          
|                                                            |  |                    |            |                                                                |  |                                               |   |                                          



11




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

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q 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 heading “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 is an “OTC Reporting
Issuer” as that term is defined in BC Multilateral Instrument 51-105, Issuers Quoted in the U.S. Over-the-Counter Markets,
promulgated by the British Columbia Securities Commission. Accordingly, certain disclosure in this quarterly report has been prepared
in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of United States
securities laws. In Canada, an issuer is required to provide technical information with respect to mineralization, including reserves
and resources, if any, on its mineral exploration properties in accordance with Canadian requirements, which differ significantly
from the requirements of the United States Securities and Exchange Commission (the “SEC”) applicable to registration
statements and reports filed by United States companies pursuant to the Securities Act or the Exchange Act. As such, information
contained in this annual report concerning descriptions of mineralization under Canadian standards may not be comparable to similar
information made public by United States companies subject to the reporting and disclosure requirements of the SEC and not subject
to Canadian securities legislation. This annual report may use the terms “measured mineral resources”, “indicated
mineral resources” and “inferred mineral resources”. While these terms are recognized and required by Canadian
securities legislation (under National Instrument 43-101, Standards of Disclosure for Mineral Projects), the SEC does not
recognize them. United States investors are cautioned not to assume that any part or all of the mineral deposits in these categories
will ever be converted to reserves. In addition, “inferred mineral resources” have a great amount of uncertainty as
to their existence and economic and legal feasibility. It cannot be assumed that all or any part of a measured mineral resource,
indicated mineral resource or inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities legislation,
estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, although they may form,
in certain circumstances, the basis of a “preliminary economic assessment” as that term is defined in National Instrument
43-101, Standards of Disclosure for Mineral Projects. U.S. investors are cautioned not to assume that any part or all of
any reported measured, indicated, or inferred mineral resource estimates referred to herein or in the Technical Report are economically
or legally mineable.

Company

The Company is a minerals investment,
management, and exploration company, and currently conducting test mining and pilot milling operations through an operating subsidiary
in México, with specific focus on precious and base metals in México. 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. (“DynaUSA”).

In 2000, the Company formed DynaResource
de México S.A. de C.V. (“DynaMéxico”) for the purpose of acquiring and holding mineral properties and
mining concessions in México and, specifically for acquiring and consolidating the Mining District of San Jose de Gracia.
DynaMéxico completed the consolidation of the entire SJG District to DynaMéxico in 2003 (approx. 15 sq. km. at that
time), with the exception of the San Miguel Mining Concession (7 Hectares, for which DynaMéxico is proceeding towards accomplishing
the transfer of title, under previously signed sale and purchase agreements).

DynaMéxico currently owns a portfolio
of mining concessions, equipment, camp and related facilities which comprise the San José de Gracia Project (“SJG”).
The mining concessions cover 69,121 hectares (170,802 acres) on the west side of the Sierra Madre mountain range, in northern Sinaloa
State.



12






The
Company currently owns 80% of the outstanding shares ofDynaMéxico. We
also own 100% ofMineras de DynaResource S.A. de C.V. (“DynaMineras”), the exclusive operator
of the San José de Gracia Project, under contract with DynaMéxico, and we own 100% of DynaResource Operaciones de
San Jose de Gracia, S.A. de C.V., (“DynaOperaciones”), a company which manages the personnel registered to work at
the San Jose de Gracia Project.

San Jose de Gracia - History

Historical production records from
San Jose de Gracia (“SJG”) report 1,000,000 Oz gold 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 15 sq. km.

DynaMéxico was formed in
March 2000, for the purpose of acquiring the concessions comprising the SJG District, and to consolidate all ownership of SJG under
DynaMéxico. DynaMéxico focused on acquisition and consolidation work through 2003, and reported a virtually clear
title and consolidated ownership to the district at December 31, 2013.

Drilling – Exploration Programs
(1997 – 2000)

A drill program was conducted at SJG
in 1997 to 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 to 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 to 2000, and assayed an average 6.51 g/t gold.

Structure of Company / Operations

Activities in México are currently
conducted by DynaMineras; with the management of personnel being contracted by DynaMineras through to DynaOperaciones. Executive
Management of DynaResource, Inc. and consultants manage the operating companies in México; while the Chairman/CEO of DynaUSA
is the President of each of DynaMéxico, DynaMineras and DynaOperaciones. Fees for management and administration are charged
by DynaMineras and DynaOperaciones, which are eliminated in consolidation.

Exclusive Operating Entity at
San Jose de Gracia

Under agreement with DynaMéxico,
Mineras de DynaResource S.A. de C.V. (“DynaMineras”) has been named the exclusive operating entity at the San Jose
de Gracia Project. DynaResource owns 100% of DynaMineras.

DynaMéxico General Powers of
Attorney

The Chairman-CEO of DynaUSA also serves
as the President of DynaMéxico. The President of DynaMéxico holds broad powers of attorney granted by the shareholders
of DynaMéxico which gives the current President significant and broad authority within DynaMéxico.

Company Ownership and Description
of Subsidiaries

A description of the subsidiaries owned
by the Company and its ownership in each is summarized below:

DynaResource de México, S.A.
de C.V.:80% Owned by DynaResource, Inc.

| | · | 100% owner of the San Jose de Gracia Property;
| | - | ----------------------------------------------

Mineras de DynaResource, S.A. de C.V.:		100%
Owned by DynaResource, Inc.

| | · | Exclusive Operator of the San Jose de Gracia Project;
| | - | -----------------------------------------------------

| | · | Entered into Exploitation Agreement (“EAA”) with DynaMéxico (See EAA below);
| | - | ----------------------------------------------------------------------------

| | · | Entered into 20-year Surface Rights Agreement with the Santa Maria Ejido (See Surface Rights Agreement below);
| | - | --------------------------------------------------------------------------------------------------------------

DynaResource Operaciones de San Jose
de Gracia, S.A. de C.V.:100% Owned by DynaResource, Inc.

| | · | Personnel Management Company at San Jose de Gracia;
| | - | ---------------------------------------------------

Pilot Production Activities (2003
– 2006)

DynaMéxico, conducting operations
through DynaMineras, 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 tonnes, at an average grade of approximately 15-20 g/t. Production costs were reported
at approximately $175/Oz. gold in this small scale, pilot production operation (See results in table below). The pilot operations
at SJG consisted of the installation of a gravity/flotation processing circuit to an existing mill, and initial test runs with
tailings were completed in 2002. Actual test mining at the higher grade San Pablo area of the property commenced in March 2003.

|Mined and Milled Tonnage           | 42,000 tonnes
|---------------------------------- | -------------
|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    





13






Suspension of Production Activities (2006)

The Company initiated the test production
activity in 2003 and, at that time, gold prices were depressed. Exploration funding opportunities, while available, were deemed
to be too dilutive by Company management. Subsequently, in 2006, commodities prices were improving and the Company was able to
negotiate financing in order to fund exploration activities. Therefore, the Company suspended test mining activities in 2006 in
order to focus on the exploration of the vast SJG District. While the test mining and pilot milling operations were considered
successful (see results in the table above), a small scale production operation was not expected to provide the necessary capital
in order to fund exploration of the vast SJG District. The limited-scope pilot production activity provided significant benefits
through confirmation of production grades, metallurgy and process, efficiency of recoveries, and production costs.

Drilling programs (2007 –
2011)

Drilling programs completed by the
Company’s subsidiaries produced 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://www.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.

Mineral Resource Estimate and Technical Report 43-101 (2012)

In 2012, DynaMéxico commissioned
Servicios y Proyectos Mineros (“SPM”) for the production of Technical
Report 43-101 (“43-101”) at San Jose de Gracia. Additionally, DynaMéxico commissioned Mr. Robert Sandefur, a
senior reserve analyst for Chlumsky, Armbrust & Meyer LLC, Lakewood, CO (“CAM”) to produce a mineral resource estimate
for the 4 main vein systems at the property.

Parameters Used to Estimate the Mineral
Resource Estimate--The data base for the San Jose de Gracia Project consists of 372 drill holes of which 361 are diamond drill
holes (“DDH”) and the remaining 11 were reverse circulation holes “(RC”), with a total drilling of 75,878
meters. The 2012 DynaMéxico-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 S.A. de C.V. (“Minop”), a subsidiary
(or affiliate) of Goldgroup Mining Inc. (“Goldgroup”) 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 Argillic Zone (3 holes). The data base also includes rock
and chip sampling, regional stream sediment sampling, and IP Surveys.

Density--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 was 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.

Mineral Resource Estimate - Construction
of Wireframes--Mineral Resources were estimated by Mr. Sandefur within wireframes constructed by technical personnel of Minop.
Minop was contracted by Mineras de DynaResource S.A. de C.V. (“DynaMineras”).

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 “blocks” 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) | the block was 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.
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 DynaMéxico from San Pablo of some 42,000 tonnes mill 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 CAM elected not to include this material in “Indicated” because of the higher nugget effect at La Purisima,
and because there was apparently historic underground mining there. 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.



14






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 DynaMéxico 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, Mr. Sandefur does not believe that significant mining has
occurred within the volumes defined by the wireframes.

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.

Mineral Resource Estimate and 43-101
Technical Report - Data Verification--Mr. Ramon Luna Espinoza (“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.

National Instrument 43-101 (“NI
43-101”) Mineral Resource Estimate for the San Jose de Gracia Property (2012)

The Company received from DynaMéxico
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 DynaMéxico-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 (“CAM”). The Resource Estimate concentrates on four separate main vein systems
at SJG: Tres Amigos, San Pablo, La Union, and La Purisima.

ThemineralresourceestimatespreparedbyMr.RobertSandefurforthisTechnicalReportincludeIndicatedResourcesatTresAmigosof893,000tonneswithanaveragegradeof4.46g/t(128,000Oz.Au),andatSanPabloof 1,308,000tonneswith
anaveragegradeof6.52g/t (274,000Oz.Au).
The estimatealsoincludes anInferredResourceof3,953,000tonnesinaggregateforthefourveinsystems, with an
average grade of 5.83
g/t (741,000 Oz.
Au). The resource estimate
is reported using
a 2.0 g/t cutoff grade,
with the effective
date of February 6, 2012.The following tables are
summaries of the 2012DynaMéxico-CAM
Mineral Resource Estimateof thefour main vein
systems and also a table summary
disclosing the aggregate ofthe mineral resources
of those four vein
systems.





Mineral Resource
and Classification for San Jose de Gracia Project


TRES AMIGOS INDICATEDAu Cut Off (g/t)


Tonnes


Au g/t


Au Oz


Ag g/t


Ag Oz


Cu%


CuKg


Pb%


PbKg


Zn%


ZnKg1.00



1,128,000



3.85



139,000



9.18



333,000



0.19



2,137,000



0.05



570,000



0.33



3,774,0002.00



893,000



4.46



128,000



10.34



297,000



0.21



1,875,000



0.06



499,000



0.37



3,276,0003.00



608,000



5.37



105,000



11.31



221,000



0.22



1,338,000



0.06



374,000



0.39



2,349,000










TRES AMIGOS INFERRED1.00



1,937,000



4.91



306,000



9.46



589,000



0.21



4,028,000



0.05



981,000



0.34



6,600,0002.00



1,453,000



6.05



282,000



11.01



514,000



0.23



3,390,000



0.06



802,000



0.38



5,460,0003.00



950,000



7.93



242,000



11.47



350,000



0.20



1,935,000



0.07



620,000



0.43



4,107,000
  SAN PABLO INDICATEDAu Cut Off (g/t)


Tonnes


Au g/t


Au Oz


Ag g/t


Ag Oz


Cu%


CuKg


Pb%


PbKg


Zn%


ZnKg1.00



1,482,000



5.94



283,000



11.92



568,000



0.26



3,839,000



0.01



158,000



0.03



500,0002.00



1,308,000



6.52



274,000



12.72



535,000



0.28



3,607,000



0.01



147,000



0.04



458,0003.00



1,091,000



7.32



257,000



13.69



480,000



0.30



3,241,000



0.01



132,000



0.04



405,000
  SAN PABLO INFERRED1.00



756,000



4.65



113,000



9.25



225,000



0.17



1,273,000



0.01



74,000



0.03



227,0002.00



532,000



6.02



103,000



11.33



194,000



0.20



1,074,000



0.01



51,000



0.03



161,0003.00



426,000



6.92



95,000



11.89



163,000



0.22



935,000



0.01



40,000



0.03



131,000






15








LA UNION INFERREDAu Cut Off (g/t)


Tonnes


Au g/t


Au Oz


Ag g/t


Ag Oz


Cu%


CuKg


Pb%


PbKg


Zn%


ZnKg1.00



1,221,000



4.72



185,000



12.81



503,000



0.15



1,856,000



0.02



250,000



0.04



532,0002.00



849,000



6.11



167,000



13.71



374,000



0.19



1,579,000



0.03



221,000



0.05



448,0003.00



580,000



7.79



145,000



16.51



308,000



0.23



1,340,000



0.03



196,000



0.07



403,000
  LA PURISIMA INFERREDAu Cut Off (g/t)


Tonnes


Au g/t


Au OZ


Ag g/t


Ag OZ


Cu%


CuKg


Pb%


PbKg


Zn%


ZnKg1.00



1,767,000



3.83



217,000



4.64



264,000



0.08



1,454,000



0.02



293,000



0.06



1,097,0002.00



1,119,000



5.25



189,000



5.63



203,000



0.10



1,150,000



0.02



209,000



0.06



707,0003.00



801,000



6.34



163,000



5.85



151,000



0.11



916,000



0.02



164,000



0.07



585,000
  SAN JOSE DE GRACIA TOTAL INDICATEDAu Cut Off (g/t)


Tonnes


Au g/t


Au OZ


Ag g/t


Ag OZ


Cu%


CuKg


Pb%


PbKg


Zn%


ZnKg1.00



2,610,000



5.03



422,000



10.73



901,000



0.23



5,976,000



0.03



728,000



0.16



4,273,0002.00



2,200,000



5.69



402,000



11.75



831,000



0.25



5,482,000



0.03



646,000



0.17



3,733,0003.00



1,699,000



6.62



362,000



12.84



701,000



0.27



4,579,000



0.03



506,000



0.16



2,754,000
  SAN JOSE DE GRACIA TOTAL INFERRED1.00



5,681,000



4.50



822,000



8.66



1,581,000



0.15



8,611,000



0.03



1,599,000



0.15



8,456,0002.00



3,953,000



5.83



741,000



10.11



1,285,000



0.18



7,193,000



0.03



1,283,000



0.17



6,776,0003.00



2,757,000



7.28



646,000



10.97



972,000



0.19



5,126,000



0.04



1,021,000



0.19



5,227,000






(Due
toroundingthenumbers inthe
above maynot check exactly. Thisis anestimateofinsituresourcesonlyandthereisno assurancethat anypart of
theseresources canbeconvertedtoreserves.
Gradesaregivento2decimalsand contained
metal tothe nearest 000forcomparative purposes anddonotimplythis degreeofaccuracy).

Allreferences toounces
in the2012DynaMéxico-CAMMineralResourceEstimateare referencesto troy ounces.Tonnes,containedounces,andcontainedkilogramsofmetalsaregiventothenearestthousand,andgradesarereportedtotwodecimalsforcomparativepurposesonlyanddonotimplythisdegreeof
accuracy.

National Instrument 43-101 Technical
Report on the San Jose de Gracia Property (2012)

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

The 2012 DynaMéxico Luna-CAM SJG
Technical Report was prepared by Mr. Ramon Luna Espinoza, BS, P. Geo., of Servicios
y Proyectos Mineros, Hermosillo, México, 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 DynaMéxico Luna-CAM SJG Technical Report includes as Section Fourteen (14) a Mineral Resource
Estimate for SJG as prepared by Mr. Sandefur (the “2012 DynaMéxico-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 (2012)

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

No Known Reserves

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.



16






Exploitation Amendment Agreement (“EAA”)

On May 15, 2013, DynaMineras entered
into an Exploitation Amendment Agreement (“EAA”) with DynaMéxico. The EAA grants to DynaMineras 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 DynaMineras to DynaMéxico; and,

(b) After Item (A) above, the receipt
by DynaMineras of 75% of gross receipts received by DynaMéxico from the sale of all minerals produced from SJG, to the point
that DynaMineras has received 200% of its advanced funds; and,

(c) after items (A) and (B) above;
the receipt by DynaMineras of 50% of all gross receipts received by DynaMéxico 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, DynaMineras shall receive a 2.5% NSR (“Net Smelter Royalty”) on all minerals sold from SJG over the
term of the EAA.

The total Advances made by DynaMineras
to DynaMéxico as of September 30, 2015 is $5,350,000. 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
DynaMineras with DynaMéxico in April 2005, wherein DynaMineras 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 (Third Amendment) provides for the continuation
of the 20 Year Term from the date of the Second Amendment (July 15, 2011).

Surface Rights Agreement

On
January 6, 2014 DynaMineras entered into a 20-year surface rights agreement withthe
Santa Maria Ejido Community surrounding the San Jose de Gracia Property (the “20 Year SRA”). The 20 Year SRA covers
an area of 4,399 hectares surrounding the main mineral resource areas of SJG, and provides for annual lease payments by DynaMineras
of $1,359,443 Pesos (approx. $85,000 USD), commencing in 2014.The 20 year SRA provides DynaMineras with surface access
to the core resource areas of SJG, and allows for all permitted mining, pilot production and exploration activities from the owners
of the surface rights (Santa Maria Ejido community).

Additionally,
DynaMineras expects to construct a Medical Facility and a Community Center within the SJG community in year 2015. DynaMineras reports
that land and building for which the medical facility and community center will be constructed have been approved for re-zoning
by the local community; and plans are being drawn for constructing the facilities.

Rehabilitation and Start-up of Pilot
Mill Facility at San Jose de Gracia

Under the terms of the Exploitation Amendment
Agreement (“EAA”), as described above, DynaMineras has rehabilitated the pilot mill facility at SJG and it has rehabilitated
the San Pablo mine. The SJG pilot mill facility (a gravimetric-flotation circuit) is designed to process bulk samples mined from
selected target areas of SJG, including San Pablo. Operations at SJG are managed by DynaMineras, and are projected to be similar
to those conducted by DynaMéxico during 2003-2006.

Current Operations - Test Underground
Mining and Pilot Mill Operations

Operational Permits for the rehabilitation
of the San Pablo Mine and for the refurbishment of the Pilot Mill Facility, including the installation of the Tailings Pond area
adjacent to the pilot mill facility were obtained in fall 2013, leading to the rehabilitation of the San Pablo Mine and the refurbishing
of the Pilot Mill Facility in 2014. Pilot Production Operations commenced in October 2014, with approximately 1,650 Oz. Gold being
delivered for sale during the startup testing phase.

DynaMineras reports the following summary
of its operations during 2014:

| | v | $ 4 M invested in the rehabilitation of mine, refurbishing of the pilot mill facility and start
up testing operations;
| | - | ----------------------------------------------------------------------------------------------------------------------

| | v | 8,850 Tons mined and processed through the pilot mill facility;
| | - | ---------------------------------------------------------------

| | v | 300 Tons of gold-silver concentrate produced and sold;
| | - | ------------------------------------------------------

| | v | 10.2 Kg of gold-silver Dore produced sold;
| | - | ------------------------------------------

| | v | 1,650 Oz gold sold;
| | - | -------------------

| | v | Approximately 3,000 Tons of semi-processed material remaining for re-processing; at an average
grade of 6 g/t;
| | - | --------------------------------------------------------------------------------------------------------------

DynaMineras expects to continue its test
mining and pilot mill production operations in 2015. (See Preparation for Pilot Production Improvement and Expansion below.)

Preparation for Pilot Production Improvement and Expansion

Subsequent to the rehabilitation of the
San Pablo mine, and subsequent to the refurnishing of the Pilot mill facility at SJG, and subsequent to the initial test mill runs
of the pilot mill facility through March 2015, DynaMineras is now improving and expanding its test mining activities and in order
to achieve higher volumes of bulk mining samples to be delivered to the pilot mill facility for processing. The Company is advancing
funds to DynaMineras for this purpose, and has budgeted approximately $ 3M USD for this improvement and expansion program, utilizing
the proceeds from the Golden Post transaction (See “Financing Agreement with Golden Post Rail, LLC, a Texas Limited Liability
Company”, above).



17






Competitive Advantage

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 and relationships in México give it a competitive advantage, even
though many competitors may be larger and have more capital resources.

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. The sale of gold and any bi-products would be subject to global market prices; which prices
fluctuate daily. DynaMéxico 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 DynaMineras
in the sale of concentrates or other products produced from San Jose de Gracia would depend upon these global market prices, less
deductions.

The Company’s operating subsidiaries,
DynaMineras 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 revenue of $140,548 and $884,484 for the
nine months ended September 30, 2015 and 2014.

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 2015, 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   |         | 
|2003                        |  | $    | 416   |  |     | $ | 320   |         | 
|2004                        |  | $    | 454   |  |     | $ | 375   |         | 
|2005                        |  | $    | 536   |  |     | $ | 411   |         | 
|2006                        |  | $    | 725   |  |     | $ | 525   |         | 
|2007                        |  | $    | 841   |  |     | $ | 608   |         | 
|2008                        |  | $    | 1,011 |  |     | $ | 713   |         | 
|2009                        |  | $    | 1,213 |  |     | $ | 810   |         | 
|2010                        |  | $    | 1,421 |  |     | $ | 1,058 |         | 
|2011                        |  | $    | 1,895 |  |     | $ | 1,319 |         | 
|2012                        |  | $    | 1,792 |  |     | $ | 1,540 |         | 
|2013                        |  | $    | 1,694 |  |     | $ | 1,192 |         | 
|2014                        |  | $    | 1,380 |  |     | $ | 1,140 |         | 
|2015 (through Nov 13, 2015) |  | $    | 1,302 |  |     | $ | 1,083 |         | 



Source: Kitco, Reuters and the London Bullion Market Association

On November 13, 2015, the afternoon fixing gold prices were
(a) on the London Bullion Market - $1,081.50 per ounce; and (b) on the New York Commodity Exchange - $1,083.90 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.





18






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. DynaMéxico is involved with maintaining tailings ponds and test mining and pilot production activities
(through DynaMineras) with the oversight of SEMARNAT, the federal environmental agency of México.

Results for the Three and Nine Months Ended September 30,
2015 and 2014

In 2013, the Company was focused
on obtaining operational permits and raising funds, in order to prepare for rehabilitation of the San Pablo mine and refurbishing
the pilot mill facility at SJG; and preparing to install the tailings pond adjacent to the pilot mill facility. Operational permits
were obtained in fall 2013, leading to the rehabilitation of the San Pablo Mine and the refurbishing of the Pilot Mill Facility.

In the second quarter 2014, DynaMineras
commenced test mining and pilot mill operations at San Jose de Gracia. Further rehabilitation of the San Pablo mine and the tailings
pond area adjacent to the pilot mill facility continued into the fourth quarter. The rehabilitation of the San Pablo mine included
driving ramps and building access to the high grade areas of San Pablo as defined by core drill holes.

Throughout the year 2014, the test
pilot operations have yielded the underground mining and mill processing of approx. 8,841 tonnes of material, the production of
approximately 1,676 gross oz. au (and net of buyer’s price discount and refining costs approximately 1,438 oz au) of gold-silver
concentrates, and the receipt of $1,476,188 in revenues from the sale of gold-silver products from Dore and gravity-flotation concentrates.
Throughout the year, DynaMineras was active in rehabilitating and developing the San Pablo Mine and refurbishing the Pilot Mill
Facility and generally preparing to commence pilot production operations.

For the nine months ended September 30,
2015, the test pilot operations have yielded the production of an estimated 150 Oz gold from mill runs completed over a 10-day
period in January, from approximately 900 tons of mineralized feed material which was processed through the gravity and flotation
circuit of the Pilot Mill Facility at SJG. And, DynaMineras further reports mined inventory of approximately 1,000 tons, available
for processing through the pilot mill facility, and approximately 15 tons of gold concentrates available for delivery and sale.

REVENUE. Revenues for the nine months
ended September 30, 2015 and 2014 were $140,548 and $884,484, respectively. The Company commenced test mining and initial test
runs of the pilot mill facility in the 2nd quarter of 2014. Revenues for the three months ended September 30, 2015 and
2014 were $0 and $297,638, respectively. In the current quarter, the Company was engaged in the final stages of mine and mill preparation
and improvements to operations in order to commence and sustain consistent test mining and milling operations, and in closing financing
agreements in which to fund consistent operations.

PRODUCTION COSTS RELATED TO SALES. Production
costs related to sales for the three and nine months ended September 30, 2015 were $0 and $45,000, respectively. These are expenses
are directly related to the milling, packaging and shipping of gold and other precious metals product. Costs were nominal in 3rd
quarter, 2015 as the Company was engaged in the final stages of mine and mill preparation in order to commence consistent operations.
Production costs related to sales for the three and nine months ended September 30, 2014 were $56,559 and $162,552, respectively.
As the Company was not conducting consistent operations in the 1st Quarter of 2014, therefore, only costs incurred in
2nd quarter.

MINE OPERATING COSTS. Mine operating
costs for the three and nine months ended September 30, 2015 were $0 and $95,000, respectively. These costs are directly related
to the extraction of mine tonnage to be processed at the mill. Mine operating costs for the three and nine months ended September
30, 2014 were $29,769 and $86,222, respectively. Again, the main reason for low mining costs in the 1st and 2nd
quarters of 2014 is that San Pablo mine was being rehabilitated during the period, and little test mining activity was conducted.

PRE-PILOT PRODUCTION EXPENSES. Pre Pilot-Production
Expenses for the three and nine months ended September 30, 2015 were $662,420 and $1,462,981, respectively. The decrease in expense
in 2015 was due to the Company focusing on the final stages of mine and mill preparation and improvements in order to commence
and maintain consistent operations; and negotiating the financing in order to fund consistent operations (See financing agreement
with Golden Post Rail LLC., above). Pre Pilot-Production expenses for the three and nine months ended September 30, 2014 were $719,313
and $1,563,556, respectively. During the 1st quarter 2014, the San Pablo mine and the pilot mill facility were prepared
for initial test operations, and significant pre-pilot production expenses were incurred. These pre-pilot production costs were
nominal in the 2nd quarter 2014, as initial test operations were in process.

PROPERTY HOLDING COSTS. Property holding
costs for the three and nine months ended September 30, 2015 were $178,564 and $414,881, respectively. These costs are concessions
taxes, leases on land and other direct costs of maintaining the San Jose de Gracia property. For the three and nine months ended
September 30, 2014, the amounts were $104,470 and $391,493, respectively.

GENERAL AND ADMINISTRATIVE EXPENSES.
Operating expenses for the three and nine months ended September 30, 2015 were $565,420 and $1,286,064, respectively. For the three
and nine months ended September 30, 2014, the amounts were $549,947 and $1,414,065, respectively.

OTHER INCOME (EXPENSE). Other income
for the three and nine months ended September 30, 2015 was $(1,628,314) and $(2,633,018), respectively. Currency transaction gain
or (loss) was $(1,359,680) and $(2,204,363) for the three and nine months ended September 30, 2015, respectively. The reason for
this increased loss is the devaluation of the Mexican Peso in 2015. Other income, exclusive of currency transaction gain or (loss)
for the three and nine months ended September 30, 2014 was $(229,889) and $(321,154), respectively. Currency gain/(loss) was $(174,392)
and $(167,354) for the three and nine months ended, respectively.

NON-CONTROLLING INTEREST. The non-controlling
interest portion of the net loss for the three and nine months ended September 30, 2015 was $(262,976) and $(380,045), respectively.





19






COMPREHENSIVE INCOME (LOSS). Comprehensive
income (loss) includes the Company’s net income (loss) plus other comprehensive income (loss). For the three and nine months
ended September 30, 2015, the Company’s comprehensive income (loss) was $(1,435,514) and $(2,506,859), respectively. Comprehensive
income (loss) includes unrealized currency translation gain (loss) and accretion expenses related to the issuance of the Preferred
Stock, Series C.

Liquidity and Capital Resources

As of September 30, 2015, the Company
had working capital of $2,500,714, comprised of current assets of $3,780,297 and current liabilities of $1,279,583. This represents
an increase of $3,426,245 from the working capital (deficit) maintained by the Company of $(925,531) as of December 31, 2014, due
primarily to the closing of the financing agreement with Golden Post Rail, LLC, and due to sales of common stock during the period.
Net cash used in operations for the nine months ended September 30, 2015 was $(5,925,645) compared with $(3,315,899 for the nine
months ended September 30, 2014. In the 2014 period, net cash used was primarily related to the preparation of the San Pablo mine
and pilot mill facility in order to commence test mining and milling operations; while in the 2015 period, the net cash used was
primarily related to pre-pilot production expenses (payroll and activities in the mine and mill), and general and administrative
expenses.

As the Company was able to close
financing agreements in the second quarter 2015, during the third quarter it utilized financing proceeds to finalize its underground
mining plan, make improvements to the pilot mill facility, acquire mining and transportation equipment, engage a contract miner,
and add integral management and personnel. As a result, the Company realized the commencement of contract mining at San Pablo at
September 15, 2015, and a re-start of pilot mill operations projected for October, 2015.

Net cash used in investing activities
for the nine months ended September 30, 2015 and 2014 was $(466,049) and $(37,553), respectively. The current year amount is due
to the purchase of approximately $550,000 of machinery and equipment for use in the test mining and milling operations.

Net cash provided by financing activities
for the nine months ended September 30, 2015 and 2014 was $6,994,250 and $2,301,002, respectively. The primary components for the
current year are for the sale of preferred shares, series C and related notes for $4,000,000 and common share purchases of $2,917,750.
Proceeds are utilized to improve mining and milling operations, and to prepare to process bulk mined samples through the mill facility.
In the prior year, the primary component was issuance of preferred shares, Series B for cash of $1,743,500.

Non-Controlling Interest

Under the terms of the Earn In Agreement
(September 1, 2006 to March 15, 2011), Goldgroup Mining Inc. through its wholly owned subsidiary Goldgroup Resources, Inc. (Goldgroup),
through 2010, had contributed capital to DynaMéxico in order to acquire 25% of the outstanding shares (a shareholder interest)
of DynaResource de México, S.A. de C.V. (DynaMéxico). In March 2011, Goldgroup had contributed a total of $18 M USD
capital to DynaMéxico in order to acquire a total of 50% of the outstanding shares (a shareholder interest) of DynaMéxico.
From March 2011 through May 2013, Goldgroup owned 50% of the outstanding shares of DynaMéxico, and since May 2013 to current
date Goldgroup owns 20% of the outstanding shares of DynaMéxico. The applicable portion of the earnings or loss attributable
to Goldgroup is offset in this section. For the three and nine months ended September 30, 2015, the portion of the net loss attributable
to Goldgroup was $(262,976) and $(380,045), respectively.

Off-Balance
Sheet Arrangements

As of September 30, 2015, we did not
have any off-balance sheet arrangements (as that phrase is defined by SEC rules applicable to this report) which have or are reasonably
likely to have a material adverse effect on our financial condition, results of operations or liquidity.

Plan of Operation

The Plan of operation for the next
twelve months includes DynaMineras continuing the improvement and expansion of the pilot production mining and milling operations
at SJG, utilizing the proceeds from the recent sale of equity and the proceeds from the financing agreement with Golden Post Rail
LLC. The Company funds its general and administrative expenses in the US. The Company’s operating subsidiaries, DynaMineras
and DynaOperaciones, receive monthly fees for management of SJG activities and personnel. These amounts are eliminated in consolidation.
The Company believes that cash on hand, and including financing arrangements agreed to, is adequate to fund its ongoing general
and administrative expenses through 2015. The Company plans to seek additional debt funding during the next 12 months depending
on results of pilot production activities, market conditions, and other factors.

Capital Expenditures

The Company’s primary activities
relate to the test mining and pilot mill operations at the SJG property through its 100% owned operating subsidiary, DynaMineras.
DynaMineras is conducting activities at SJG under the terms of the Exploitation Amendment Agreement (the “EAA”, or,
“operating agreement”) with DynaMéxico. The Company utilized financing proceeds to advance funds to DynaMineras
in order that DynaMineras could: (a) finalize its underground mining plan; (b) make improvements to the pilot mill facility; (c)
acquire mining and transportation equipment; (d) engage a contract miner; and, (e) add integral management and personnel; among
other things. As a result, the Company realized the commencement of contract mining at San Pablo at September 15, 2015, and a re-start
of pilot mill operations projected for October, 2015.





20






No Known Reserves

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.

Capital Advances to Subsidiaries

DynaResource de México S.A.
de C.V. (“DynaMéxico”)

Equity Ownership of DynaMéxico

In May 2013, the Company acquired additional
shares in the outstanding equity in DynaMéxico in exchange for the retirement of accounts receivable of $2,393,803, which
amount was due from DynaMéxico at December 31, 2012. As a result, the Company currently owns 80% of the outstanding equity
of DynaMéxico.

Amounts Owed to DynaUSA and DynaMineras

As of September 30, 2015 the Company
had advanced $7,600,000 USD to DynaMineras and DynaMineras had advanced $5,350,000 USD to DynaMéxico. On September 5, 2014,
the Company issued 1,333,333 shares of its common stock to DynaMineras in exchange for the $4,000,000 receivable from DynaMéxico.
As a result of these transactions:

| | · | DynaMéxico owes $1,350,000 USD to DynaMineras; and,
| | - | ---------------------------------------------------

| | · | DynaMéxico owes $4,000,000 USD to DynaUSA.
| | - | ------------------------------------------

As of December 31, 2012 the Company and
DynaMineras agreed with DynaMéxico 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 México.

DynaResource Operaciones (“DynaOperaciones”)

The Company loaned DynaOperaciones $225,000
in 2012, which amount remains payable to the Company as of September 30, 2015.

Mineras de DynaResource (“DynaMineras”)

At September 30, 2015 DynaMineras owes
$7,600,000 to the Company, as described above.

Elimination upon Consolidation

All receivables and payables among all
subsidiary companies have been eliminated upon consolidation.

Future Advances to DynaMineras and
DynaMéxico from the Company

The Company expects to make additional
advances to DynaMineras and DynaMéxico. Future advances from DynaMineras to DynaMéxico 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 DynaMéxico and the Company.

Advances from Goldgroup Mining Inc.
(“Goldgroup”) to DynaMéxico

In 2014, Goldgroup advanced $111,500
to DynaMéxico and in 2013 Goldgroup advanced $120,000 USD to DynaMéxico. This total $231,500 is being carried by
DynaMéxico at September 30, 2015 as a Due to Non-Controlling Interest.

Note Receivable – Affiliate

DynaResource Nevada, Inc., a Nevada
Corporation (“DynaNevada”), with one operating subsidiary in México, DynaNevada de México, S.A. de C.V.
(“DynaNevada de México”) have common officers, directors and shareholders. The total amount loaned by the Company
to DynaNevada at December 31, 2010 was $805,760. 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
$0.25 / Share.  On December 31, 2010, the Company converted its receivable from DynaNevada into 3,223,040 Shares of DynaNevada;
and as a result, the Company owns 19.92% of the outstanding share capital of DynaNevada. DynaNevada is a related entity, and through
its subsidiary in México (DynaNevada de México), (“DynaNevada de México”), 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 México
completed the Option with IMMSA so that it now owns 100% of Santa Gertrudis. In June, 2010, DynaNevada de México 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. The Company currently has
a receivable from DynaResource Nevada, Inc. of $160,372 and an investment balance of $70,000 as of September 30, 2015.

ITEM
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.



21






Item
4.	Controls and Procedures

Evaluation of Disclosure
Controls and Procedures

The company carried out an evaluation
of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of September 30, 2015. 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 the company’s disclosure controls and procedures are effective to ensure that all material information required to be
filed in the quarterly report on Form 10-Q 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
by 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 September 30, 2015, our Chief Executive Officer and Chief Financial Officer as of September 30, 2015, and as of
the date of this Report, have concluded that as of the end of the period covered by this report, we have identified no material
weakness in our internal controls.

Corporate expenditures are processed
and paid by officers of the Company. However, the current number of transactions incurred by the Company does not justify additional
accounting staff to be retained.

Changes in Internal Controls over Financial Reporting

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







22






PART II

ITEM 1. 	Legal
Proceedings

US Litigation (Dallas, Texas) –
Company as Plaintiff

On December 27, 2012, the Company, and
DynaMéxico, 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 S.A.
de C.V. (“DynaMineras”), 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 DynaMéxico and in order to protect
the property, data, and assets of DynaMéxico.

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. (“DynaMineras”), which is 100% owned by DynaUSA, 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 DynaMineras and DynaMéxico; (2) the
signing of a 20 year land lease agreement between DynaMineras 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 DynaResource 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.

Litigation(s) in México –
Company is Plaintiff

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

Arbitration filed by Goldgroup

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, 2014 disputing that
any issues exist which provide for arbitration.

On December 9, 2014, DynaMéxico
filed a legal complaint against Goldgroup and the American Arbitration Association (“AAA”), which seeks to terminate
the arbitration proceedings. (See “DynaMéxico filed complaint against Goldgroup” below).

Ruling against Arbitration by
The Thirty Sixth Civil Court of the Superior Court of Justice of the Federal District of México

On October 5, 2015, the Thirty
Sixth Civil Court of the Superior Court of Justice of the Federal District of México (Tribunal Superior de Justicia del
Distrito Federal), File number 1120/2014 declared, among other resolutions, that:

| | (a) | The American Arbitration Association must abstain from hearing arbitration
procedure number 50 501 T 00226 14, or any other ongoing and/or future arbitration proceeding already filed or that may be filed
by the co-defendants Goldgroup against DynaResource;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | The the American Arbitration Association does not have jurisdiction to hear
any conflict and/or interpretation arising from the Earn In/Option Agreement, dated September 1, 2006; and,
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | The American Arbitration Association does not have jurisdiction to hear disputes
arising between shareholders of DynaMéxico, which disputes do not arise directly and immediately from the Earn In/Option
Agreement, dated September 1, 2006.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See $48 M USD in Damages Awarded
to DynaMéxico in México Litigation, below.





23






Complaint filed by Goldgroup against
the May 17, 2013 Shareholders Meeting of DynaMéxico

On February 2, 2014, Goldgroup Resources
Inc. filed a petition with the judge, tenth district Mazatlan, according to record 08/2014, in the ordinary commercial action,
against DynaResource Inc. and DynaResource de México, S.A. de CV. Goldgroup complains against the results of the shareholders
meeting of May 17, 2013, and petitions for the nullification of the meeting itself and for the nullification of the additional
shares of the outstanding capital of DynaMéxico issued to DynaResource, Inc. in satisfaction of debts owed.

DynaResource, Inc. and DynaMéxico
expect to vigorously defend all such complaints by Goldgroup, as there exists no legal basis for the complaint against the May
17, 2013 shareholders meeting of DynaMéxico.

DynaMéxico filed Complaint
against Goldgroup

On December 9, 2014 DynaMéxico
filed an Ordinary commercial lawsuit (Civil Claims), against Goldgroup Mining Inc., Goldgroup Resources Inc. ("Goldgroup",
a shareholder of DynaMéxico); and, against the American Arbitration Association ("AAA"); based at the Thirty Sixth
Civil Court in the Federal District of México, under file 1120 number / 2014 ("the DynaMéxico Trial").
The DynaMéxico Trial seeks to terminate the arbitration proceedings as DynaMéxico believes there is no legal basis
for arbitration, and the DynaMéxico Trial requests substantial damages are awarded DynaMéxico from and against Goldgroup
for:

| | a) | wrongfully using and disseminating confidential information and data
belonging to DynaMéxico;
| | -- | ---------------------------------------------------------------------------------------------

| | b) | asserting that Goldgroup owns any interest in the San Jose de Gracia
Project in northern Sinaloa, México (“SJG Project”), rather than accurately disclosing that Goldgroup owns a
common shares equity interest (shareholder’s interest) in DynaMéxico;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | improperly disclosing the percentage of common shares equity interest
(shareholder’s interest) owned by Goldgroup in DynaMéxico;
| | -- | --------------------------------------------------------------------------------------------------------------------------------

| | d) | improperly disclosing or implying that Goldgroup is the operator
of the San Jose de Gracia Project;
| | -- | ---------------------------------------------------------------------------------------------------

| | e) | attempting to delay, stop, or otherwise impair the financing of,
and further development of, the SJG Project;
| | -- | -------------------------------------------------------------------------------------------------------------

| | f) | making numerous threats against DynaMéxico management and
officers;
| | -- | -------------------------------------------------------------------

| | g) | failing to properly disclose that broad powers of attorney for acting
on behalf of DynaMéxico are held by an individual not affiliated with Goldgroup.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------

DynaMéxico believes the filing
of the DynaMéxico Trial to be necessary in order to protect the property and interests of DynaMéxico, and in order
to seek fair retribution and substantial damage amounts caused by Goldgroup against DynaMéxico and the SJG Project.

$48 M USD in Damages Awarded to DynaMéxico
in México Litigation

On October 5, 2015 DynaResource de México
SA de C.V. (“DynaMéxico”), was awarded in excess of $48 M USD (Forty-Eight Million Dollars) in damages
from Goldgroup Resources, Inc. (the “Goldgroup Damages”) by virtue of a Sentencia Definitiva (the “Definitive
Sentence”) issued by the Thirty Sixth Civil Court of the Superior Court of Justice of the Federal District of México
(Tribunal Superior de Justicia del Distrito Federal), File number 1120/2014. The Definitive Sentence included the considerations
and resolutions by the Court, and additional Resolutions were also ordered in favor of DynaMéxico (together the Goldgroup
Damages and the additional Resolutions are referred to as, the “Oct. 5, 2015 Resolution”).

The Oct. 5, 2015 Resolution affects DynaResource,
Inc., which currently holds 80% of the outstanding share capital of DynaMéxico. A concise translation to English of the
Oct. 5, 2015 Resolution issued in Spanish (the resolution portion of the Definitive Sentence) is set forth below:

FIRST:The action and litigation
based on commercial law filed by DynaMéxico is valid and enforceable, and where Goldgroup and the American Arbitration Association
were found to be in default, was proper.

SECOND: 	Goldgroup is declared
in breach of its corporate duties, for failure to refrain from claiming direct ownership of 50% of the San José de Gracia
Mining Project.

THIRD: 	Goldgroup is condemned
and ordered to pay to DynaMéxico the amount of USD $20,000,000 (Twenty Million Dollars) in damages caused by Goldgroup to
DynaMéxico, deriving from its breach of obligations in refraining from claiming direct ownership of 50% of the San Jose
de Gracia Mining Project; which amount should be paid within five days upon execution of this order and resolution.

FOURTH:Goldgroup is condemned
and ordered to pay to DynaMéxico the amount of USD $28,280,808.34 (Twenty Eight Million Two Hundred and Eighty Thousand
Eight Hundred and Eight and 34/100 Dollars), for breach of its corporate duty and covenants with regards to the San Jose de Gracia
mining project, as a result of depriving profits from DynaMéxico which DynaMéxico could have earned for the sale
of gold produced and extracted during the years 2013 and 2014; amounts that should be paid within five days upon execution of this
order and resolution.

FIFTH:Goldgroup is condemned
and ordered to pay losses and damages to DynaMéxico, which Goldgroup continues to cause, until full payment of the above
mentioned amounts has been made, which damages and losses shall be calculated by an expert opinion in a corresponding legal procedure
related to this litigation.

SIXTH:Pursuant to Article
1424 of the Commercial Code of México, the arbitration provision established under clause 8.16 of the Earn In/Option Agreement,
dated as of September 1, 2006, is ineffective and impossible to execute.

SEVENTH:This Court declares
that any controversy arising from the Earn In/Option Agreement must be brought and resolved under Mexican Law and by competent
Mexican Courts with proper jurisdiction, in recognition of the waiver and exclusion of the arbitration clause (contained in the
Earn In/Option Agreement) by both parties.





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EIGHT:This Court declares
that the American Arbitration Association must abstain from hearing arbitration procedure number 50 501 T 00226 14, or any other
ongoing and/or future arbitration proceeding already filed or that may be filed by the co-defendant Goldgroup against DynaResource.

NINTH:This Court declares
that the American Arbitration Association does not have jurisdiction to hear any conflict and/or interpretation arising from the
Earn In/Option Agreement, dated September 1, 2006.

TENTH:This Court declares,
that the American Arbitration Association does not have jurisdiction to hear disputes arising between shareholders of DynaMéxico,
which disputes do not arise directly and immediately from the Earn In/Option Agreement, dated September 1, 2006.

ELEVENTH:This Court declares,
that the American Arbitration Association does not have jurisdiction to hear any matters where Koy Wilber Diepholz, who is the
President of the Board of Directors of DynaMéxico, and has been personally sued in relation to the arbitration clause established
under clause 8.16 of the Earn In/Option Agreement, dated September 1, 2006, since he signed the mentioned instrument in representation
of the Company and not in his personal capacity.

TWELFTH:The expenses and
costs associated with these proceedings are hereby waived.

THIRTEENTH:LET IT SO BE
PUBLISHED. A Copy of this Order and Sentence shall be found in the corresponding record.

ORDERED, adjudged and decreed by the
Thirty Sixth Civil Judge of the Superior Court of the Federal District, Mr. JULIO GABRIEL IGLESIAS GOMEZ.

The October 5, 2015 Resolution constitutes
a public record which may be reviewed through the Courts in México City.

The Company believes that no material
adverse change will occur as a result of the legal 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 México. For purposes
of confidentiality, the Company does not provide more specific disclosure in this Form 10-Q.

DynaMéxico Statements of Fact

In recent years, Goldgroup has continuously
and consistently misrepresented its interest, ownership, and position related to DynaMéxico and the SJG Project. DynaMéxico
does herein state and represent the following:

| | 1. | At no time has Goldgroup owned any interest in the SJG Project; rather its only ownership interests
have been earned under agreement as a common shares equity interest (shareholder’s interest) of DynaMéxico;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Goldgroup currently owns 20% of the outstanding share capital of DynaMéxico;
| | -- | ----------------------------------------------------------------------------

| | 3. | Goldgroup does not currently own 50% of the outstanding share capital of DynaMéxico as Goldgroup
has recently stated in numerous public disclosures and public filings;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Goldgroup’s 20% ownership of DynaMéxico was ordered to be maintained and represented
as such (the “status quo”) by a Mexican Judge overseeing certain claims by Goldgroup;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | At no time during its involvement as a common shares equity interest holder (shareholder) of DynaMéxico,
has Goldgroup been an operator at the SJG Project;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | Since the earning of its shareholder’s interest in DynaMéxico (March, 2011), Goldgroup
has continuously refused to contribute funds to the ongoing maintenance, advance, and further development of the SJG Project;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7. | Consistently and continuously since March 2011, Goldgroup has sought and threatened to stop, delay,
or otherwise impair the financing, maintenance, advance and further development of the SJG Project.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 2. 	Unregistered
Sales of Equity Securities and Use of Proceeds

The Company reports the following sales
of equity securities during the quarterly period ending September 30, 2015:

The Company converted notes, accrued
interest and advances in exchange for 407,162 common shares for cash at $2.50 per share. These stock issuances were accompanied
by the issuance of 407,162 warrants, which are exercisable at $2.50 per share expiring December 31, 2017.

The sales/conversions of the securities
identified above were made pursuant to privately negotiated transactions that did not involve a public offering of securities and,
accordingly, the Company believes that these transactions were exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) thereof. Each investor represented that such investor either (A) is an “accredited investor,”
(B) has such knowledge and experience in financial and business matters that the investor is capable of evaluating the merits and
risks of acquiring the shares of the Company’s common stock or preferred stock, or (C) has appointed an appropriate person
to act as the investor’s purchaser representative in connection with evaluating the merits and risks of acquiring the securities.
All of the foregoing securities are deemed restricted securities for purposes of the Securities Act.

ITEM 3. 	Default
Upon Senior Securities

None.

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ITEM 4. 	Mine
Safety Disclosures

Not applicable.

ITEM
5. 	Other Information

None.

ITEM
6. 	Exhibits

Exhibit Number; Name of 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.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







SIGNATURES



In accordance with the requirements 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



/s/  K.W. (“K.D.”) Diepholz, Chairman / CEO



K.W. (“K.D.”) Diepholz, Chairman / CEO



Date: November 15, 2015





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