VANCOUVER, BC, July 28, 2021 /CNW/ - Orla Mining
Ltd. (TSX: OLA) (NYSE: ORLA) ("Orla" or the "Company") is
pleased to provide the results of a Pre-Feasibility Study ("PFS")
and mineral resource and mineral reserve estimates on its Cerro
Quema Oxide Gold Project (the "Project" or "Cerro Quema") located
in the Azuero Peninsula, Los Santos
Province, Panama. The PFS
demonstrates the possibility of a low cost, high return heap leach
project. The estimated Project after-tax net present value ("NPV")
(5% discount rate) is $176 million
with an after-tax internal rate of return ("IRR") of 38% at a gold
price of US$1,600 per ounce.
"We believe that our assets in Panama represent an opportunity for organic
growth in our business," stated Jason
Simpson, President and Chief Executive Officer of Orla. "The
results of the PFS suggest that Cerro Quema can be another
low-risk, high margin oxide project for Orla. The completion of the
PFS provides a pathway towards continued engineering, project
advancement, and a future construction decision. We also believe
there is significant opportunity for project optimization and
mineral resource expansion in Panama and work is just beginning."
Key Updated Pre-Feasibility Study Highlights:
Table 1:
Pre-Feasibility Study Highlights
|
|
Units
|
Values
|
Throughput Rate per
Day
|
tonnes
|
10,000
|
Total Ore to Leach
Pad
|
M tonnes
|
21.7
|
Gold Grade
(Average)
|
g/t
|
0.80
|
Silver Grade
(Average)
|
g/t
|
2.2
|
Contained
Gold
|
ounces
|
562,000
|
Contained
Silver
|
ounces
|
1,526,000
|
Average Gold
Recovery
|
%
|
87%
|
Average Silver
Recovery
|
%
|
26%
|
Recovered
Gold
|
ounces
|
489,000
|
Recovered
Silver
|
ounces
|
399,000
|
Mine Life
|
years
|
6.0
|
Average Annual Gold
Production
|
ounces
|
81,000
|
Strip
Ratio
|
waste :
ore
|
0.66
|
Initial
Capex
|
US$
million
|
$164
|
Avg. Life of Mine
Operating costs
|
$/t ore
processed
|
$10.34
|
Total Cash Cost (net
of by-product credits)1
|
$/oz Au
|
$511
|
All-In Sustaining
Cost ("AISC")1
|
$/oz Au
|
$626
|
Pre -Tax - NPV (5%
discount rate)
|
US$
million
|
$233
|
Pre-Tax
IRR
|
%
|
48%
|
After-Tax - NPV (5%
discount rate)
|
US$
million
|
$176
|
After-Tax
IRR
|
%
|
38%
|
Payback
|
years
|
1.7
|
|
1 Total
cash cost and AISC are non-GAAP measures and are net of silver
credits and includes royalties payable. See reference below
regarding non-GAAP measures.
|
* All
dollar amounts in US dollars
|
Unless otherwise indicated, all dollar amounts ($ and US$) in
this press release refer to United
States dollars.
The PFS continues to support an open pit mine and heap leach
operation. Since the 2014 Pre-Feasibility Study ("2014 PFS"),
significant additional drillhole data has been added, rendering the
2014 mineral resource and mineral reserve estimates non-current.
The main notable physical changes from the 2014 PFS include
improved water management infrastructure including active and
passive water treatment plants for the waste rock facilities and
heap leach facilities, a more detailed design for a larger heap
leach pad with increased capacity, a three-phase heap leach
facility, redesign of the two-phase waste rock facilities, and an
update of all costs. The PFS was conducted using a gold price of
$1,600 per ounce and a silver price
of $20 per ounce and is expressed in
U.S. dollars.
The new mineral reserve estimate at Cerro Quema includes proven
and probable mineral reserves of 21.7 million tonnes at a gold
grade of 0.80 grams per tonne ("g/t") and a silver grade of 2.18
g/t, for total mineral reserves of 0.56 million ounces of gold and
1.53 million ounces of silver. This compares to 19.7 million tonnes
at a gold grade of 0.77 g/t for a mineral reserve estimate of 0.49
million ounces in the 2014 PFS, representing an increase of
approximately 15% in contained ounces.
The mineral resource estimate for the La Pava and Quema deposits
at Cerro Quema consists of an oxide zone and a mixed zone. The
sulphide zones for these deposits and for the adjacent Caballito
deposit are not included in this mineral resource estimate. The new
indicated mineral resource estimate at Cerro Quema is 56.7 million
tonnes at 0.70 g/t gold and 2.07 g/t silver, resulting in an
estimated 1.27 million ounces of gold and 3.78 million ounces of
silver. Inferred mineral resources are 6.00 million tonnes at 0.33
g/t gold and 2.84 g/t silver, resulting in an estimated additional
0.62 million ounces of gold and 5.3 million ounces of silver.
Mineral resources are inclusive of mineral reserves. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.
Further details on the mineral resource and mineral reserve
estimates are provided below.
Cerro Quema 2021 Pre-Feasibility Study
The Project considers open pit mining of 21.7 million tonnes of
ore from the La Pava and Quema-Quemita pits and will be developed
in multiple phases. Ore will be crushed to 80% passing 105 mm in a
single stage jaw crusher. Lime will be added to the crushed ore for
pH control before being conveyor stacked and leached with a dilute
cyanide solution. Pregnant leach solution will flow by gravity to a
pregnant solution pond and will then be pumped to an ADR
(Adsorption, Desorption, Recovery) plant for recovery of metal
values. Gold and silver will be loaded onto activated carbon
(Adsorption) and then periodically stripped from the carbon in a
desorption circuit (Desorption), electrowon (Recovery) and smelted
to produce the final doré product.
Based on an ore processing rate of 10,000 tonnes per day or 3.65
million tonnes per year, the Project has an estimated six-year mine
life.
The Project's low stripping ratio, high gold recoveries, and low
operating costs all contribute to a low estimated AISC of
$626 per ounce of gold.
The PFS was prepared by a team of independent industry experts
including Kappes, Cassiday and Associates ("KCA"), Moose Mountain
Technical Services ("Moose Mountain" or "MM"), Resource Geosciences
Incorporated ("RGI"), Anddes Asociados ("Anddes" or "AA"),
HydroGeoLogica, Inc. or ("HGL"), and Linkan Engineering ("Linkan"
or "LE") with input from other consultant groups.
The PFS incorporates geological, assay, engineering,
metallurgical, hydrology, geotechnical, environmental, water
management, and hydrogeological information collected by Orla and
previous owners. Historical drilling up to the date of Orla's
acquisition of the Project in late 2016 total 50,571 metres in 577
RC drillholes and 31,432 metres in 154 diamond core drillholes.
Since acquiring the Project, Orla has completed a total of 8,117
metres in 64 diamond core drillholes at the Quema deposit.
Historical metallurgical test work programs on the Cerro Quema
property were commissioned by the prior operators of the Project. A
metallurgical test program was then commissioned by Orla in 2018 to
confirm the results and conclusions from the previous campaigns. In
total, 43 column leach tests, 67 bottle roll tests, and 30 vat
leach tests have been completed to date on the Cerro Quema ore
body. Metallurgical testing on the deposit determined a constant
field gold recovery of 88% for all La Pava oxide material and 86%
for all Quema-Quemita oxide material. Overall, oxide material from
La Pava and Quema-Quemita responds very well to cyanide bottle roll
and column leaching yielding high gold extractions and low reagent
consumptions. However, recoveries on mixed materials are less
amenable to heap leaching and are discounted to recoveries of 57%
for La Pava and 62% for Quema-Quemita. Mixed ore material only
represents 1.5% of total crusher feed during the life of the
Project. Metallurgical test work shows minimal additional gold
recovery improvement through finer crushing. Cement agglomeration
is also not required.
Table 2 presents a summary of the key assumptions and results of
the PFS:
Table 2: Summary
of Key Assumptions and Economics of the Cerro Quema Pre-Feasibility
Study
|
Production
Data
|
Units
|
Values
|
Life of
Mine
|
years
|
6.0
|
Mine
Throughput
|
tonnes/day
|
10,000
|
Mine
Throughput
|
tonnes/year
|
3,650,000
|
Total Tonnes to
Crusher
|
tonnes
|
21,738,052
|
Gold Grade
(Average)
|
g/t
|
0.80
|
Silver Grade
(Average)
|
g/t
|
2.2
|
Contained
Gold
|
ounces
|
562,000
|
Contained
Silver
|
ounces
|
1,526,000
|
Average Gold
Recovery
|
%
|
87%
|
Average Silver
Recovery
|
%
|
26%
|
Average Annual Gold
Production
|
ounces
|
81,000
|
Average Annual Silver
Production
|
ounces
|
66,000
|
Total Gold
Produced
|
ounces
|
489,000
|
Total Silver
Produced
|
ounces
|
399,000
|
Life of Mine Strip
Ratio
|
waste :
ore
|
0.66
|
Operating Costs
(Average LOM)
|
|
|
Mining
(mined)
|
/tonne
mined
|
$2.15
|
Mining
(processed)
|
/tonne
processed
|
$3.50
|
Processing &
Support
|
/tonne
processed
|
$4.44
|
General &
Administrative
|
/tonne
processed
|
$2.40
|
Total Operating
Cost
|
/tonne
processed
|
$10.34
|
Total Cash Cost (net
of by-product credits)1
|
/ounce Au
|
$511
|
AISC1
|
/ounce Au
|
$626
|
Capital Costs
(Excluding value added tax)
|
|
|
Initial
Capital
|
US$
million
|
$164
|
Life of Mine
Sustaining Capital
|
US$
million
|
$41
|
Life of Mine
Capital
|
US$
million
|
$204
|
Working Capital &
Initial Fills
|
US$
million
|
$7
|
Closure
Costs
|
US$
million
|
$15
|
Financial
Evaluation
|
|
|
Gold Price
Assumption
|
US$/ounce
|
$1,600
|
Silver Price
Assumption
|
US$/ounce
|
$20
|
Average Annual
Cashflow (Pre-Tax)
|
US$
million
|
$72
|
Average Annual
Cashflow (After-Tax)
|
US$
million
|
$62
|
IRR,
Pre-Tax
|
%
|
48%
|
IRR,
After-Tax
|
%
|
38%
|
NPV @ 5%
(Pre-Tax)
|
US$
million
|
$233
|
NPV @ 5%
(After-Tax)
|
US$
million
|
$176
|
Pay-Back Period
(After-Tax)
|
years
|
1.7
|
|
1 Total cash cost and AISC
are non-GAAP measures and are net of silver credits and includes
royalties payable. See reference below regarding non-GAAP
measures.
|
The Cerro Quema property is located in the Azuero Peninsula,
Los Santos Province, Panama, 193 straight-line kilometres southwest
of Panama City and 45 kilometres south-southwest of the town of
Chitré. Driving distance from Panama City is 255 kilometres.
Mineral concessions are comprised of three contracts between the
Republic of Panama and Minera
Cerro Quema SA, a wholly owned subsidiary of Orla. The original
20-year term for these concessions expired on February 26, 2017 (Contracts 19 and 20) and
March 3, 2017 (Contract 21). The
Company has applied for the prescribed 10-year extension to these
contracts as it is entitled to under Panamanian mineral law. Formal
approval of the extension of these concessions has not yet been
received. On March 6, 2017, the
Ministry of Commerce and Industry provided written confirmation to
the Company that it had received the extension applications, and
that exploration work could continue while the Company waits for
the renewal. Orla has received verbal assurances from government
officials that the renewal applications are complete with no
outstanding legal issues. Since the expiry of the concessions, Orla
has continued to receive ongoing exploration permits and the
Ministry of Commerce has continued to accept Orla's annual reports
and concession fees.
Orla owns the surface rights for 2,274.5 hectares of the land
required to mine the Cerro Quema mineral reserves and to construct
and operate a heap leach facility and most of the land required for
proposed upgrades to the project access road.
Although Panamanian regulations do not require mining projects
to present a detailed social assessment, Orla is committed to
preparing a comprehensive Social Impact Assessment in compliance
with international guidelines. Orla currently has an active
community and social program.
Sensitivity to Gold Price
Table 3: Project
Economics - Sensitivities to Gold Price
|
Gold Price
($/oz)
|
$1,250
|
$1,425
|
$1,600
|
$1,775
|
$1,950
|
After-tax NPV 5%
($M)
|
$79
|
$127
|
$176
|
$224
|
$272
|
After-tax IRR
(%)
|
21%
|
30%
|
38%
|
45%
|
52%
|
Payback
(years)
|
2.4
|
1.9
|
1.7
|
1.4
|
1.3
|
Capital and Operating Costs
Capital and operating costs for the process and general and
administration components of the Cerro Quema Project were estimated
by KCA with information from Anddes and Linkan. Costs for the
mining components were provided by Moose
Mountain. The estimated costs are considered to have an
overall accuracy of +/-25%.
Initial capital expenditures or pre-production capital for the
Cerro Quema Project is estimated at $164
million. Total capital for the life of the Project,
including sustaining and working capital, is estimated at
$212 million. This excludes
reclamation and closure costs which are estimated at $15 million.
Table 4 provides a breakdown of the capital costs for the
Project.
Table 4: Capital
Cost Summary (excl. value added tax)
|
Description
|
Cost (US$
M)
|
Pre-Production
Capital Costs
|
$98
|
Indirect
Costs
|
$6
|
Other Owner's
Costs
|
$12
|
EPCM
|
$11
|
Contingency
|
$21
|
Mining Capital &
Preproduction
|
$16
|
Total Initial
Capital
|
$164
|
Working Capital &
Initial Fills
|
$7
|
Sustaining Capital –
Mine & Process
|
$41
|
Total LOM Capital
(incl. working capital)
|
$212
|
Closure
Costs
|
$15
|
The average life of mine operating cost for the Project is
estimated to be $10.34 per tonne of
ore processed. Table 5 presents the LOM operating cost requirements
for the Cerro Quema Project.
Mining costs were estimated at $2.15 per tonne mined for the life of the project
and $3.50 per tonne of ore processed
and are based on quotes for mining equipment and estimated owner's
mining costs. Mine operations are planned to be typical of
similar small scale open pit operations, consisting of conventional
drill, blast, load, haul, and stockpile operations. Direct mining
and mine maintenance are planned as owner-operated mining
operations. The owner will be responsible for all equipment
mobilization/demobilization, operating, and labour costs as well as
maintenance of the mining equipment. Blasting unit operations will
be performed by a specific blasting company contractor.
Supervision, geology, and mine planning will be done by the
owner.
Process operating costs were estimated by KCA from first
principles. Labour costs were estimated using project specific
staffing, salary and wage and benefit requirements. Unit
consumptions of materials, supplies, power, water and delivered
supply costs were also estimated. Life of mine average processing
costs are estimated at $4.44 per
tonne of ore processed. The operating costs presented are based
upon the ownership of all process production equipment and site
facilities, with the exception of the onsite power generation set
which will be leased. The owner will employ and direct all process
operations, maintenance, and support personnel for all site
activities.
General administrative costs (G&A) were estimated by KCA
with input from Orla. G&A costs include project specific labour
and salary requirements and operating expenses, including social
contributions. G&A costs are estimated at $2.40 per tonne ore.
Operating costs were estimated based on US dollars during the
first quarter of 2021 and are presented with no added contingency
based upon the design and operating criteria present in the
PFS.
Table 5 summarizes the different components of the operating
costs:
Table 5: Life of
Mine Operating Cost Summary
|
Description
|
LOM
Costs
|
LOM
Costs
|
$/t
|
$/oz
|
Mining
|
$3.50
|
$156
|
Process
|
$4.44
|
$197
|
G&A
|
$2.40
|
$107
|
Total Operating
Costs
|
$10.34
|
$460
|
Refining &
Transport
|
—
|
$2
|
Royalties
|
—
|
$64
|
By-product
Credits
|
—
|
-$16
|
Total Cash Costs
(net of by-products)1
|
—
|
$511
|
Sustaining
Capital
|
—
|
$83
|
Reclamation
|
—
|
$31
|
AISC1
|
—
|
$626
|
|
1 Total
cash cost and AISC are non-GAAP measures and are net of silver
credits and includes royalties payable. See reference below
regarding non-GAAP measures.
|
Permitting
The permitting process has been ongoing and as of May 2021, the extension of the exploitation
contracts was signed by the Ministry of Commerce & Industry,
and Orla, and the documents are now with the Comptroller General
for final review and approval.
In February 2021, the Ministry of
Environment conducted their final site inspection of the project.
As a result of the positive site inspection review, the Category 3
Environmental & Social Impact Assessment ("ESIA") is in the
final stage of approval.
Opportunities
Infill drilling at La Pava, Quemita, and Caballito if successful
could expand the mineral resource and increase the confidence and
classification of the mineral resource. There is potential to
increase the oxide resource as well as to explore further the
sulphide mineral resource at La Pava and Quemita for gold-copper
mineralization. The current design will allow the heap leach pad
and the waste rock dump to accommodate additional tonnage in the
upstream site of those facilities if required. Caballito and Idaida
mineralization are open at depth and along strike and offer good
potential for copper-gold porphyry style mineralization.
At this time, the property is under-explored and there is
potential to discover both additional gold mineralization similar
to the La Pava and Quemita deposits and gold-copper mineralized
zones similar to Caballito. Any discoveries could positively impact
the economic value of the Project.
Next Steps
Orla will continue to advance the Project towards feasibility
level which would provide the basis for a construction decision.
Key areas of review include the following:
- Completion of additional feasibility level mine plan studies on
areas including drilling and blasting, detailed equipment sizing,
and contractor mining cost trade-off.
- Completion of confirmatory metallurgical test work on
representative samples for each metallurgical type, specifically
column leach tests on coarse crushed material and draindown
chemistry.
- Completion of additional studies and cost estimates for Project
surface and groundwater flows, quality, storage and treatment.
- Completion of additional geotechnical studies at the proposed
heap leach, waste rock dump, open pits, and processing areas.
- Evaluation on the availability of local services and personnel
to maximize local hiring and procurement.
- Investigation of power generation opportunities from the
overland conveying system to help alleviate the on-site power
generation requirements.
Mineral Reserves
Only indicated resource class materials are included in the
mineral reserve estimate. All inferred resource class material is
treated as waste in calculating economic pit limits and in
subsequent mineral reserves reporting, scheduling, and
economics.
Proven and probable mineral reserves are derived from the
indicated mineral resource class blocks within the designed pits
and are summarized in Table 6. Mineral reserves represent mined ore
processed through the crusher and delivered to the heap leach
facility.
Several gold deposits have been identified on the Cerro Quema
Property including La Pava, Quema-Quemita, and La Mesita deposits. Mineralization is hosted
by andesites and dacitic lava domes of the Rio Quema Formation. The
mineralization consists of disseminated pyrite, chalcopyrite, and
enargite; and stockworks of quartz, pyrite, chalcopyrite, and
barite with traces of galena and sphalerite. Gold occurs as
disseminated microscopic grains of native gold and as "invisible
gold" within the pyrite, particularly in the siliceous alteration
zone. Strong supergene alteration forms an oxidation cap or gossan
and has released the gold contained in the pyrite. The highest
grades of gold mineralization are near the surface and decrease
towards the lower limit of oxidation.
The Cerro Quema deposits are characterized by the presence of
widespread hydrothermal alteration that forms concentric halos
around mineralization. The presence of vuggy silica, alunite,
natro-alunite and enargite in addition to the hydrothermal
alteration pattern are compatible with a high sulphidation
epithermal system. The alteration pattern is fault controlled,
following E-W trending regional faults. Preliminary work completed
by the previous project owner and Orla suggests that there is the
potential of a porphyry deposit at depth.
The mineral reserve estimate for Cerro Quema is based on an open
pit mine plan and mine production schedule developed by
Moose Mountain.
The following table presents the mineral reserve estimation for
the Cerro Quema Oxide Project. Proven and probable mineral reserves
amount to 21.7 million tonnes at 0.80 g/t gold and 2.18 g/t silver
for 0.56 million contained gold ounces and 1.53 million contained
silver ounces. The mineral reserve was estimated based on a gold
price of US$1,250 per ounce and a
silver price of US$17.00 per ounce
while the mineral resource was estimated based on a gold price of
US$2,000 per ounce and a silver price
of US$26 per ounce.
Table 6: Cerro
Quema Mineral Reserves
|
Mineral Reserve
Category
|
000's
|
Gold
|
Silver
|
Gold
|
Silver
|
tonnes
|
(g/t)
|
(g/t)
|
(koz)
|
(koz)
|
La Pava Probable
Mineral Reserve
|
15,700
|
0.79
|
2.27
|
400
|
1,148
|
Quema Probable
Mineral Reserve
|
6,000
|
0.83
|
1.95
|
161
|
378
|
Total Probable
Mineral Reserves
|
21,700
|
0.80
|
2.18
|
562
|
1,526
|
|
|
Notes:
|
1.
|
The qualified person
responsible as defined under National Instrument 43-101 ("NI
43-101") for the Mineral Reserves is Jesse Aarsen, P.Eng of Moose
Mountain Technical Services. Jesse Aarsen is independent of Orla
Mining Ltd.
|
2.
|
Only Oxide and Mixed
material is included in the Mineral Reserve, all Sulphide material
is treated as waste.
|
3.
|
The minimum cut-off
grade used for ore/waste determination is NSR>= $6.34/tonne for
Oxide and $9.18 for Mixed at the La Pava deposit and $6.50/tonne
for Oxide and $8.35/tonne for Mixed at the Quema
deposit.
|
4.
|
Mineral Reserves have
an effective date of April 22, 2021. All Mineral Reserves in this
table are Proven and Probable Mineral Reserves. The Mineral
Reserves are not in addition to the Mineral Resources but are a
subset thereof. All Mineral Reserves stated above mining
dilution.
|
5.
|
Associated
metallurgical gold recoveries have been estimated as 86% for Oxide
and vary according to grade for Mixed material at both the La Pava
and Quema deposits.
|
6.
|
Associated
metallurgical silver recoveries have been estimated as 15% for
Oxide and 10% for Mixed material ta the La Pava deposit and 30% for
Oxide and 10% for Mixed material at the La Pava deposit.
|
7.
|
Mineral reserves are
based on a US$1,250/oz gold price, US$17/oz silver
price.
|
8.
|
Mineral reserves are
converted from mineral resources through the process of pit
optimization, pit design, production scheduling, stockpiling,
cut-off grade optimization and supported by a positive cash flow
model.
|
9.
|
Rounding as required
by reporting guidelines may result in summation
differences.
|
Mineral Resources
Table 7: Cerro
Quema Mineral Resource Estimate
|
Mineral Resource
Type
|
000's
|
Gold
|
Silver
|
Gold
|
Silver
|
tonnes
|
(g/t)
|
(g/t)
|
(koz)
|
(koz)
|
Oxide
|
|
|
|
|
|
Quema Indicated
Mineral Resource
|
9,305
|
0.67
|
1.97
|
200
|
589
|
Pava Indicated Mineral
Resource
|
21,488
|
0.65
|
2.03
|
451
|
1,402
|
Indicated Mineral
Resource
|
30,793
|
0.66
|
2.01
|
651
|
1,991
|
|
|
|
|
|
|
Mixed
|
|
|
|
|
|
Quema Indicated
Mineral Resource
|
8,367
|
0.72
|
2.08
|
195
|
560
|
Pava Indicated Mineral
Resource
|
17,519
|
0.76
|
2.18
|
428
|
1,228
|
Indicated Mineral
Resource
|
25,886
|
0.75
|
2.15
|
623
|
1,787
|
|
|
|
|
|
|
Total Indicated
Mineral Resource
|
56,679
|
0.70
|
2.07
|
1,274
|
3,779
|
|
|
|
|
|
|
Oxide
|
|
|
|
|
|
Quema Inferred Mineral
Resource
|
2,837
|
0.32
|
2.91
|
96
|
871
|
Pava Inferred Mineral
Resource
|
776
|
0.25
|
1.24
|
174
|
857
|
Inferred Mineral
Resource
|
3,613
|
0.31
|
2.55
|
303
|
2,526
|
|
|
|
|
|
|
Mixed
|
|
|
|
|
|
Quema Inferred Mineral
Resource
|
1,928
|
0.39
|
3.74
|
105
|
1,006
|
Pava Inferred Mineral
Resource
|
448
|
0.31
|
1.24
|
174
|
698
|
Inferred Mineral
Resource
|
2,376
|
0.38
|
3.27
|
313
|
2,720
|
|
|
|
|
|
|
Total Inferred
Mineral Resource
|
5,989
|
0.33
|
2.84
|
616
|
5,246
|
|
Notes:
|
1.
|
Resources are
reported using the 2014 CIM Definition Standards and were estimated
using the 2019 CIM Best Practices Guidelines.
|
2.
|
Mineral Resources are
reported inclusive of Mineral Reserves.
|
3.
|
Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability.
|
4.
|
The Mineral Resource
has been confined by a "reasonable prospects of eventual economic
extraction" pit using the following assumptions: US $2,000/oz. Au
and US $26/oz Ag; 99.9% payable Au; 98.0% payable Ag; $1.40/oz Au
and $1.20/oz Ag offsite costs (refining, transport and insurance);
a 4% NSR royalty.
|
5.
|
Metallurgical
recoveries are for Pava: 88% Au in oxides, 55% Au in Sulfides, for
Quema: 86% Au in oxides, 55% Au in sulfides, for all
deposits: Au Rec=0.9867*2.7183^(-0.1*%total
Sulfur)*100%-13%. Cu recovery in sulfides is 85% for all
deposits, Ag recovery is 30% oxides, 10% mixed in Pava, Ag recovery
is 15% in oxides and 10% in mixed in Quema.
|
6.
|
Pit slope angles are
40º.
|
7.
|
The specific gravity
of the deposit has been determined by Alteration Zone and Core
recovery and ranges between 2.07 and 2.62.
|
8.
|
Numbers may not add
due to rounding.
|
Project Risks
Minera Cerro Quema is still
awaiting mineral concession renewals from the government of
Panama as permitted by law. There
is no assurance that Orla will receive necessary approvals or
extensions or receive them within a reasonable time. Prior
operators and Minera Cerro Quema
have met legal requirements to maintain the mining concessions in
good standing, including paying all required annual fees and taxes
and submitting the required annual reports.
An ESIA and permits are in place for a continuous vat leach
operation, however, the current project envisioned by the PFS
requires a modification to the existing permits. To develop a mine
at Cerro Quema, a Category 3 ESIA is required from the Ministry of
Environment. An application for this permit was submitted in 2016
and the Ministry has completed the technical evaluation of the
ESIA. Timing of approval is presently not known but the Ministry's
response time has exceeded the time periods specified in Article 41
of the Decree Law 23 applicable to ESIA permit resolutions.
In 2020 Orla contracted Environmental Resource Management
("ERM") to assess if the information presented in the ESIA is in
accordance with the requirements established by Panamanian
regulations, International Finance Corporation Performance
Standards 2012 (IFC PS), and currently accepted industry best
practices. ERM found no deficiencies with respect to Panamanian
regulations but identified areas where environmental permitting
studies and management plans should be improved to meet
International Standards and currently accepted industry practices
(ERM, 2021).
The Project is subject to similar risks as comparable projects
and Orla believes it will mitigate many of those risks by early
engagement with the stakeholders involved in the Project, including
government permitting agencies and local stakeholders.
Orla has an active community relations and social program and
strives to maintain constructive relationships with local
communities. Management believes that maintaining a robust
community relations program can reduce and mitigate social risks
and improve overall operational sustainability.
"Our approach is to build economically beneficial,
environmentally considerate, and socially acceptable projects,
globally. The aim is to apply this approach to our projects in
Panama," added Simpson.
Orla has implemented a strict COVID-19 protocol at Cerro Quema,
including rigorous screening and testing programs to support the
health of Orla's employees and local communities. Cerro Quema has
been authorized for site activities by the Panamanian
government.
The PFS and the Cerro Quema Project may be subject to legal,
political, environmental or other risks that could materially
affect the development of the Project which are unknown at this
time but could materialize in the future.
Data Verification
The Qualified Person ("QP") for the mineral resource and mineral
reserve estimates visited the site on May 4,
2021. During this visit, collar locations were verified, as
were the core storage, security and sampling techniques. The
database provided to the QP by Orla has been checked with minor
corrections made to the database based on Certificate checks.
Check assays and twinned holes were previously completed, as
well as check assays done based on the QP's recommendations in 2020
concluding that the database is suitable for mineral resource
estimation. Historical drilling and RC drilling were statistically
validated and did not show a material bias. Therefore, the QP has
concluded that all past drilling is not biased and it has been used
for the mineral resource and mineral reserve estimates.
Additional supporting details regarding the information in this
release, will be provided in the new Cerro Quema technical report
which will be available on SEDAR within 45 days of this release,
including all qualifications, assumptions and exclusions that
relate to the PFS. The Cerro Quema Technical Report is intended to
be read as a whole, and sections should not be read or relied upon
out of context.
Qualified Persons
The PFS was overseen by KCA of Reno,
NV and the mineral resource and mineral reserve estimates
were conducted by Moose Mountain
of Canbrook, BC. The QPs responsible for the PFS and who will be
the authors of the corresponding technical report are Carl
Defilippi, RM SME; Sue Bird, M.Sc., P.E.; Jesse
Aarsen, P.E.; Denys Parra, RM SME; Matt Gray, Ph.D., C.P.G (AIPG), Brent
Johnson, RM SME, P.G.; Lee Josselyn, P.E.; and
Wade Brunham, M.Sc. PWS, R.P.Bio.,
each of whom is a Qualified Person for their respective sections of
the PFS and each of whom is Independent of Orla under the
definitions of NI 43-101, and have consented to being named in this
press release.
The scientific and technical information in this news release
has also been reviewed and approved by Carl Defilippi, RM SME;
Sue Bird, M.Sc., P.E.; Jesse
Aarsen, P.E.; Denys Parra, RM SME; Matt Gray, Ph.D., C.P.G (AIPG), Brent
Johnson, RM SME, P.G.; Lee Joselyn, P.E.; and
Wade Brunham, M.Sc. PWS, R.P.Bio,
each of whom is an Independent Qualified Person under NI
43-101.
This press release shall not constitute investment advice or
an offer to sell or the solicitation of an offer to buy securities
in the United States.
About Orla Mining Ltd.
Orla is developing the Camino Rojo Oxide Gold Project, an
advanced gold and silver open-pit and heap leach project, located
in Zacatecas State, Central
Mexico. The project is 100% owned by Orla and covers over
160,000 hectares. The technical report for the 2021 Feasibility
Study entitled "Unconstrained Feasibility Study NI 43-101 Technical
Report on the Camino Rojo Gold Project – Municipality of
Mazapil, Zacatecas, Mexico" dated
January 11, 2021, is available on
SEDAR and EDGAR under the Company's profile at
www.sedar.com and www.sec.gov, respectively. The technical
report is also available on Orla's website at www.orlamining.com.
Orla also owns 100% of the Cerro Quema Project located in
Panama which includes a near-term
gold production scenario and various exploration targets. The Cerro
Quema Project is a proposed open pit mine and gold heap leach
operation. An independent technical report for the 2021
Pre-Feasibility Study on the Cerro Oxide Gold Project prepared in
accordance with the requirements of NI 43-101 will be available
under Orla's profile on SEDAR and EDGAR within 45 days of this news
release.
Forward-looking Statements
This news release contains certain "forward-looking
information" and "forward-looking statements" within the meaning of
Canadian securities legislation and within the meaning of Section
27A of the United States Securities Act of 1933, as amended,
Section 21E of the United States Exchange Act of 1934, as amended,
the United States Private Securities Litigation Reform Act of 1995,
or in releases made by the United States Securities and Exchange
Commission, all as may be amended from time to time, including,
without limitation, statements regarding the results of the
pre-feasibility study and the anticipated capital and operating
costs, sustaining costs, net present value, internal rate of
return, payback period, process capacity, average annual metal
production, average process recoveries, concession renewal,
permitting of the Project, anticipated mining and processing
methods, proposed pre-feasibility study production schedule and
metal production profile, anticipated construction period,
anticipated mine life, expected recoveries and grades, anticipated
production rates, infrastructure, social and environmental impact
studies, availability of labour, tax rates and commodity prices
that would support development of the Project. Information
concerning mineral resource/reserve estimates and the economic
analysis thereof contained in the results of the pre-feasibility
study are also forward-looking statements in that they reflect a
prediction of the mineralization that would be encountered, and the
results of mining, if a mineral deposit were developed and mined.
Forward-looking statements are statements that are not historical
facts which address events, results, outcomes or developments that
the Company expects to occur. Forward-looking statements are based
on the beliefs, estimates and opinions of the Company's management
on the date the statements are made and they involve a number of
risks and uncertainties. Certain material assumptions regarding
such forward-looking statements were made, including without
limitation, assumptions regarding the price of gold and silver; the
accuracy of mineral resource and mineral reserve estimations;
that there will be no material adverse change affecting the
Company or its properties; that all required approvals will be
obtained, including concession renewals and permitting; that
political and legal developments will be consistent with current
expectations; that currency and exchange rates will be consistent
with current levels; and that there will be no significant
disruptions affecting the Company or its properties. Consequently,
there can be no assurances that such statements will prove to be
accurate and actual results and future events could differ
materially from those anticipated in such statements.
Forward-looking statements involve significant known and unknown
risks and uncertainties, which could cause actual results to differ
materially from those anticipated. These risks include, but are not
limited to: risks related to uncertainties inherent in the
preparation of pre-feasibility studies, including but not limited
to, assumptions underlying the production estimates not being
realized, changes to the cost assumptions, variations in quantity
of mineralized material, grade or recovery rates, changes to
geotechnical or hydrogeological considerations, failure of plant,
equipment or processes, changes to availability of power or the
power rates, ability to maintain social license, changes to
interest or tax rates, changes in project parameters, delays and
costs inherent to consulting and accommodating rights of local
communities, environmental risks, title risks, including concession
renewal, commodity price and exchange rate fluctuations, risks
relating to COVID-19, delays in or failure to receive access
agreements or amended permits, risks inherent in the estimation of
mineral reserves and mineral resources; and risks associated with
executing the Company's objectives and strategies, including costs
and expenses, as well as those risk factors discussed in the
Company's most recently filed management's discussion and analysis,
as well as its annual information form dated March 29, 2021, available on www.sedar.com and
www.sec.gov. Except as required by the securities disclosure laws
and regulations applicable to the Company, the Company undertakes
no obligation to update these forward-looking statements if
management's beliefs, estimates or opinions, or other factors,
should change.
Non-GAAP Measures
The Company has included certain non-GAAP performance
measures as detailed below. In the gold mining industry, these are
common performance measures but may not be comparable to similar
measures presented by other issuers and the non-GAAP measures do
not have any standardized meaning. Accordingly, it is intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
CASH COSTS PER OUNCE —
The Company calculated total cash costs per ounce by dividing
the sum of operating costs, royalty costs, production taxes,
refining and shipping costs, net of by-product silver credits, by
payable gold ounces. While there is no standardized meaning of the
measure across the industry, the Company believes that this measure
is useful to external users in assessing operating
performance.
ALL-IN SUSTAINING COSTS ("AISC") —
The Company has provided an AISC performance measure that
reflects all the expenditures that are required to produce an ounce
of gold from operations. While there is no standardized meaning of
the measure across the industry, the Company's definition conforms
to the all-in sustaining cost definition as set out by the World
Gold Council in its guidance dated June 27,
2013. Orla believes that this measure is useful to external
users in assessing operating performance and the Company's ability
to generate free cash flow from current operations. Subsequent
amendments to the guidance have not materially affected the figures
presented.
FREE CASH FLOW —
Free Cash Flow is a non-GAAP performance measure that is
calculated as cash flows from operations net of cash flows invested
in mineral property, plant and equipment and exploration and
evaluation assets. Orla believes that this measure is useful to the
external users in assessing the Company's ability to generate cash
flows from its mineral projects.
Cautionary Note to U.S. Readers
The disclosure contained or referenced herein uses mineral
reserve and mineral resource classification terms that comply with
reporting standards in Canada, and
mineral reserve and mineral resource estimates are made in
accordance with Canadian NI 43-101 and the Canadian Institute of
Mining, Metallurgy and Petroleum — CIM Definition Standards on
Mineral Resources and Mineral Reserves, adopted by the CIM Council,
as amended (the "CIM Definition Standards"). Canadian NI
43-101 establishes standards for all public disclosure an issuer
makes of scientific and technical information concerning mineral
projects. These standards differ significantly from the
mineral reserve disclosure requirements of the United States
Securities Exchange Commission (the "SEC") set forth in Industry
Guide 7. Consequently, information regarding mineralization
contained or referenced herein is not comparable to similar
information that would generally be disclosed by U.S. companies
under Industry Guide 7 in accordance with the rules of the SEC
which applied to U.S. filings prior to the current SEC
Modernization Rules (as defined herein). Further, the SEC has
adopted amendments to its disclosure rules to modernize the mineral
property disclosure requirements for issuers whose securities are
registered with the SEC under the Securities Exchange Act of 1934
("Exchange Act"). These amendments became effective February 25, 2019 (the "SEC Modernization Rules")
and, commencing for registrants with their first fiscal year
beginning on or after January 1,
2021, the SEC Modernization Rules replace the historical
property disclosure requirements included in SEC Industry Guide 7.
As a foreign private issuer that files its annual report on Form
40-F with the SEC pursuant to the multi-jurisdictional disclosure
system, the Company is not required to provide disclosure on its
mineral properties under the SEC Modernization Rules and will
continue to provide disclosure under NI 43-101 and the CIM
Definition Standards. The SEC Modernization Rules include the
adoption of terms describing mineral reserves and mineral resources
that are "substantially similar" to the corresponding terms under
the CIM Definition, but there are differences in the definitions
under the SEC Modernization Rules and the CIM Definition Standards.
Accordingly, there is no assurance any mineral reserves or mineral
resources that the Company may report as "proven mineral reserves",
"probable mineral reserves", "measured mineral resources",
"indicated mineral resources" and "inferred mineral resources"
under NI 43-101 would be the same had the Company prepared the
mineral reserve or mineral resource estimates under the standards
adopted under the SEC Modernization Rules. U.S. investors are also
cautioned that while the SEC recognizes "measured mineral
resources", "indicated mineral resources" and "inferred mineral
resources" under the Modernization Rules, investors should not
assume that any part or all of the mineralization in these
categories will ever be converted into a higher category of mineral
resources or into mineral reserves. Mineralization described using
these terms has a greater amount of uncertainty as to its existence
and feasibility than mineralization that has been characterized as
reserves. Accordingly, investors are cautioned not to assume that
any measured mineral resources, indicated mineral resources, or
inferred mineral resources that the Company reports are or will be
economically or legally mineable. Further, "inferred mineral
resources" have a greater amount of uncertainty as to their
existence and as to whether they can be mined legally or
economically. Therefore, U.S. investors are also cautioned not to
assume that all or any part of the "inferred mineral resources"
exist. Under Canadian securities laws, estimates of "inferred
mineral resources" may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. For the above
reasons, information contained or referenced herein regarding
descriptions of our mineral reserve and mineral resource estimates
is not comparable to similar information made public by U.S.
companies subject to reporting and disclosure requirements of the
SEC under either Industry Guide 7 or SEC Modernization
Rules.
SOURCE Orla Mining Ltd.