Targeting Gold Production of 90,000 – 100,000
ounces with AISC of $600-700/oz
VANCOUVER, BC, Feb. 24, 2022 /CNW/ - Orla Mining Ltd.
(TSX: OLA; NYSE: ORLA) ("Orla" or the "Company") is pleased to
provide the Company's first annual guidance which includes the
outlook for production, operating costs, capital costs, and
exploration spending at Orla's Camino Rojo
Mine in Mexico, and the
Cerro Quema Project in Panama.
(All amounts are
in U.S. dollars unless otherwise stated)
2022 Operational
Guidance and Outlook1
|
|
|
Gold
Production
|
oz
|
90,000 -
100,000
|
All-in Sustaining
Costs ("AISC")2,3
|
$/oz Au
sold
|
$600 -
$700
|
Capital
Expenditures3
|
|
|
Sustaining Capital Expenditures
|
$m
|
$5
|
Non-Sustaining Capital Expenditures
|
$m
|
$20
|
|
|
|
Exploration3
|
|
|
Mexico
|
$m
|
$10
|
Panama
|
$m
|
$5
|
Total
Exploration
|
$m
|
$15
|
|
|
|
|
|
1.
|
The outlook includes
full-year 2022 figures except for AISC which is calculated from
Q2-Q4 2022 based on an assumption of commercial production being
achieved on March 31, 2022.
|
2.
|
AISC is a non-GAAP
measure. See the "Non-GAAP Measures" section of this news
release for additional information.
|
3.
|
Exchange rates used
to forecast cost metrics include MXN/USD of 20.0 and CAD/USD of
1.25
|
"We are very pleased to provide our first annual production and
cost guidance" said Jason Simpson,
President and Chief Executive Officer of Orla Mining. "The ramp-up
of operations at Camino Rojo continues to be on schedule and we
remain confident in our ability to declare commercial production in
the first quarter of 2022."
PRODUCTION OUTLOOK
Gold production from the Camino Rojo Oxide Mine is expected to
be 90,000 to 100,000 ounces for the full year 2022, consistent with
the estimate for year one of production outlined in the 2021
Camino Rojo Feasibility Study. Gold production in
January totalled 6,263 ounces and the mine is expected to continue
to ramp up to design capacity during the first half of 2022. As
such, production is expected to increase in the second half of
2022.
COST OUTLOOK
AISC for the second quarter through to the fourth quarter of
2022 is forecast to be $600 to
$700 per ounce of gold sold. The
Company will begin accounting for AISC upon declaration of
commercial production at the Camino Rojo Oxide Mine, which the
Company anticipates will occur on or before March 31, 2022.
Total sustaining capital for 2022 is expected to total
$5 million with key items to include
$1 million in capitalized stripping,
$2 million for the erection of a
crushed ore stockpile dome, $1
million for a diversion channel, and miscellaneous
sustaining capital for the remainder. Most of the non-sustaining
capital relates to Camino Rojo direct project costs to be incurred
in 2022 as the Company completes construction activities during the
first quarter. As previously disclosed, construction of the Camino
Rojo Oxide Mine is expected to be completed within the total
project capital expenditure estimate.
EXPLORATION
Exploration spending for 2022 is expected to total $15 million with $10
million for activities in Mexico and $5
million for activities in Panama. The 2022 exploration program
objectives are as follows:
Mexico Exploration:
1. Camino Rojo oxides reserve conversion (2,500m diamond drilling)
- Confirmatory drilling in the Camino Rojo oxide pit that was the
subject of the Layback Agreement with Fresnillo Plc, with the
objective of increasing the mineral reserve estimate.
2. Camino Rojo sulphides Phase 2 drilling program
(8,250m diamond drilling)
- Extend coverage of south-oriented holes and target higher grade
areas of the deposit identified in the Phase 1 – 2021 drill program
as part of advancing development planning and a Preliminary
Economic Assessment.
3. Camino Rojo regional exploration program
- Reverse circulation drill testing and regional target
definition work to include rotary air blast drilling, induced
polarization survey, magnetic geophysical survey, soil sampling,
and trenching.
Panama Exploration:
4. Caballito infill and expansion drill program
(6,200m diamond drilling)
- Target expansion and upgrade of resources while providing
material for metallurgical study.
5. Assess regional potential (5,500m diamond drilling)
- Drill test priority targets at Quemita, Caballito, La Pelona,
and La Prieta.
Additional details on Orla's 2022 planned exploration program
will be provided in due course.
UPCOMING MILESTONES
- Achieving commercial production at Camino Rojo Oxide Mine.
- Metallurgical results for Camino Rojo Sulphides Project.
- Resumption of exploration drill programs.
Qualified Persons Statement
The scientific and technical information in this news release
has been reviewed and approved by Mr. J. Andrew Cormier, P. Eng., Chief Operating Officer
of the Company, who is the Qualified Persons as defined under NI
43-101 standards.
About Orla Mining Ltd.
Orla is operating the Camino Rojo Oxide Gold Mine, a gold and
silver open-pit and heap leach mine, located in Zacatecas State,
Central Mexico. The operation is
100% owned by Orla and covers over 160,000 hectares. The technical
report for the 2021 Feasibility Study on the Camino Rojo oxide gold
project 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 Cerro Quema located in Panama which includes a near-term gold
production scenario and various exploration targets. Cerro Quema is
a proposed open pit mine and gold heap leach operation. The
technical report for the Pre-Feasibility Study on the Cerro Quema
oxide gold project entitled "Project Pre-Feasibility
Updated NI 43-101 Technical Report on the Cerro Quema
Project, Province of Los Santos,
Panama" dated January 18,
2022, 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.
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 Company's 2022
guidance, including production, operating
costs and capital costs, the timing of the
declaration of commercial production at Camino Rojo, the Company's
exploration plans, including timing and the goals thereof, and the
Company's upcoming milestones. 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 timing of commencement of commercial
production at Camino Rojo; 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 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, risks related
to mining operations, 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 performance measures in this
press release which are not specified, defined, or determined under
generally accepted accounting principles (in the Company's case,
International Financial Reporting Standards). These are common
performance measures in the gold mining industry, but because they
do not have any mandated standardized definitions, they may not be
comparable to similar measures presented by other issuers.
Accordingly, the Company uses such measures to provide additional
information and you should not consider them in isolation or as a
substitute for measures of performance prepared in accordance with
generally accepted accounting principles.
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 November
14, 2018. 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. Upon commencing commercial
production and reporting actual AISC, we will provide a
reconciliation to IFRS figures then presented.
Cautionary Note to U.S. Readers
The disclosure 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 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.