Camino Rojo Commercial Production Expected
Imminently
VANCOUVER, BC, March 18, 2022 /CNW/ - Orla Mining
Ltd. (TSX: OLA) (NYSE: ORLA) ("Orla" or the "Company") today
announces the results for the fourth quarter and year ended
December 31, 2021.
(All amounts are in U.S. dollars unless otherwise
stated)
HIGHLIGHTS:
- The Camino Rojo Oxide Mine poured first gold on December 13, 2021. Gold production totalled 2,422
ounces in 2021 and totaled 15,934 ounces for the first two months
of 2022 ending February 28.
- The Company released 2022 guidance in February with gold
production of 90,000 to 100,000 ounces and all-in sustaining costs
("AISC") of $600 to $700 per ounce of gold sold1. The
Company is targeting the declaration of commercial production at
the Camino Rojo Oxide Mine at the end of the first quarter of
2022.
- The average daily stacking throughput year to date ending
February 28 was 15,116 tonnes per day
or 84.0% of nameplate capacity of 18,000 tonnes per day. Process
recoveries to date are in line with the metallurgical recovery
model.
- Construction at the Camino Rojo Oxide Mine is largely complete,
with the mine 98.9% complete at December 31,
2021, and 99.8% complete at February
28, 2022.
- Capital expenditures for the Camino Rojo Oxide Mine were
$115.9 million for the project as at
December 31, 2021, and $120.5 million as at February 28, 2022. Management anticipates the
Camino Rojo Oxide Mine to be completed within the total project
capital estimate of $134.1
million.
- During the fourth quarter, the Company released an initial
resource on Caballito copper-gold deposit in Panama.
- Exploration and evaluation expenditures totaled $2.9 million for the quarter and included
activities across the Company's portfolio. The Company anticipates
spending $15 million in 2022 on
exploration activities in an effort to expand resources on existing
deposits and make new discoveries.
- Net loss of $5.0 million or
$0.02 per share for the fourth
quarter of 2021.
- Cash balance of $20.5 million at
December 31, 2021, and $27.3 million at February
28, 2022.
"2021 was a monumental year for Orla as we constructed and
poured first gold at Camino Rojo, our first mine," said
Jason Simpson, President and Chief
Executive Officer of Orla. "As we ramp up gold production and cash
flow generation, we will be answering, 'What is next for Orla?'
through advancement of our rich pipeline."
CAMINO ROJO OXIDE MINE CONSTRUCTION AND OPERATIONS
UPDATE
Table 1:
Mining and Processing Totals
|
|
FY
2021
|
YTD 2022
(to Feb 28)
|
Mining
|
|
|
|
Total Ore
Mined
|
tonnes
|
2,058,041
|
1,181,896
|
Ore -
processed
|
tonnes
|
1,708,622
|
865,573
|
Low Grade Ore -
stockpiled
|
tonnes
|
349,419
|
316,323
|
Waste
Mined
|
tonnes
|
2,049,703
|
482,178
|
Total
Mined
|
tonnes
|
4,107,744
|
1,664,074
|
Strip
Ratio
|
w:o
|
1.00
|
0.41
|
Total Ore Mined Gold
Grade
|
g/t
|
0.71
|
0.67
|
Ore -
processed
|
g/t
|
0.78
|
0.79
|
Low Grade Ore -
stockpiled
|
g/t
|
0.36
|
0.36
|
|
|
|
|
Processing
|
|
|
|
Ore
Crushed
|
tonnes
|
954,661
|
839,558
|
Ore
Stacked
|
tonnes
|
1,188,328
|
1,105,034
|
Stacked Ore Gold
Grade
|
g/t
|
0.74
|
0.82
|
Gold
Poured
|
oz
|
2,422
|
15,934
|
|
|
|
|
Daily Throughput Rate
– Average*
|
tpd
|
9,955
|
15,116
|
Daily Throughput /
Nameplate Capacity
|
%
|
55.3%
|
84.0%
|
Total Crushed Ore
Stockpile
|
tonnes
|
473,784
|
225,847
|
Total Crushed Ore
Stockpile Au Grade
|
g/t
|
0.87
|
0.86
|
Total ROM Ore
Stockpile**
|
tonnes
|
395,995
|
720,794
|
Total ROM Ore
Stockpile Grade
|
g/t
|
0.42
|
0.39
|
*Average stacking
rate calculation excludes stacked overliner material (272kt in
2021, and 213kt YTD 2022).
**Crushed ore stockpile includes crushed ore in the crushed ore
stockpile, crushed unplaced overliner, and stockpiled overliner
fines. ROM stockpile includes low-grade stockpiles and ROM ore
stockpile.
|
Table 2: 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
|
Commissioning activities at the Camino Rojo Oxide Mine are
substantially complete, and mining and processing throughput rates
and availabilities are in line with the ramp-up plan. Capital
expenditures for the Camino Rojo Oxide Mine were $120.5 million at February
28, 2022, against the current project estimate at completion
of $134.1 million, which is
consistent with the total project capital expenditure estimate. The
remaining project spend is expected to occur in the first half of
the year. The project estimate at completion includes $3.5 million in unallocated contingency that is
not forecasted to be spent. Management therefore anticipates the
Camino Rojo Oxide Mine to be completed within the total project
capital estimate.
The main construction activities completed during the fourth
quarter of 2021 included ramp up of mining activities, mechanical
completion of the crushing system, conveying/stacking systems and
Merrill-Crowe plant. During the quarter, wet commissioning of all
the process areas was completed as well camp facilities. Placement
of overliner ore material on the heap leach pad and ore stacking
began in early October in preparation for cyanide leaching which
commenced in mid-November leading to first gold pour on
December 13, 2021.
Site activities that advanced early in the first quarter of 2022
included ramping up mining, crushing and stacking rates as well as
increasing capacity through the Merrill-Crowe plant. Construction
activities included installation of heap leach liner in cell two
and event pond, placement of overliner material on cell two of the
heap leach, commissioning of the third and final overland conveyor,
and construction of the airstrip.
CAMINO ROJO SULPHIDE PROJECT UPDATE
Orla continues to evaluate multiple development scenarios on the
Camino Rojo Sulphide Project. The development scenarios being
considered to potentially form the basis of a Preliminary Economic
Assessment ("PEA") currently include: (1) an underground mining
option, (2) an open pit mining option with processing at a
to-be-constructed sulphide facility at Camino Rojo, and (3) an open
pit mining option with processing at Newmont's Peñasquito plant.
Based on the additional drilling and testwork to date, all
development options remain possible.
Following a successful core drill program in 2021, an
8,250m follow-up drilling phase is
planned in 2022. The 2021 program confirmed wide zones of
higher-grade gold mineralization within the sulphide deposit while
also providing material for new metallurgical study, which remains
in progress. The 2021 drill program drilled a 6,079m, 14-hole program of south-oriented holes
on a 100-250m drill spacing and the
2022 program will infill drill and reducing the spacing to
50-125m. This tighter drill spacing
on the more optimal south orientation, combined with the extensive
south to north historical drilling, will seek to reinforce the
geological model and confirm continuity of wide zones of
higher-grade gold mineralization, supporting the advancement of
development planning and PEA targeted for year end 2022.
CERRO QUEMA OXIDE PROJECT UPDATE
In July 2021, Orla issued the
results of a PFS and mineral resource and mineral reserve estimates
for Cerro Quema. The PFS demonstrates the possibility of a low
cost, high return heap leach project. The estimated after-tax net
present value ("NPV") (5% discount rate) for Cerro Quema is
$176 million, with an after-tax
internal rate of return ("IRR") of 38% at a gold price of
$1,600 per ounce. The Company will
continue to advance the Cerro Quema engineering once the
environmental permit and concession renewals are received which
would provide the basis for a construction decision.
In February 2021, the Ministry of
Environment conducted its final site inspection of the project. As
a result of the positive site inspection review, the Category 3
Environmental and Social Impact Assessment is in the final stage of
approval. The final process will now require the signing and
publication of the resolution in the official government register
(the "Gazette") — this process is pending.
In May 2021, the extension of the
exploitation contracts Cerro Quema were signed by both the Ministry
of Commerce and Industry and by Orla. The documents are currently
with the Comptroller General for final review and approval. The
final process will now require the signing and publication of the
resolution in the official government register (the "Gazette") —
this process is pending.
CABALLITO COPPER-GOLD PROJECT UPDATE
During the quarter, the Company announced the mineral resource
estimate for the Caballito copper-gold deposit at the Company's
Cerro Quema project ("Cerro Quema") located in the Azuero
Peninsula, Los Santos Province,
Panama. Caballito is a large, copper-gold deposit that
represents an opportunity for the Company to potentially transform
the scale and scope of Cerro Quema beyond the separate oxide
project outlined in the July 2021
Pre-Feasibility Study ("PFS").
The mineral resource estimate for the Caballito copper-gold
deposit consists of the following:
Table 3a:
Caballito Sulphides
|
|
|
|
|
|
|
|
Class
|
Tonnes
|
CuEq
|
Cu
|
Au
|
Ag
|
CuEq
|
Cu
|
Au
|
Ag
|
(000s)
|
(%)
|
(%)
|
(g/t)
|
(g/t)
|
(Mlbs)
|
(Mlbs)
|
(koz)
|
(koz)
|
Indicated
|
31,952
|
0.96
|
0.83
|
0.31
|
2.2
|
676
|
585
|
315
|
2,260
|
Inferred
|
22,569
|
0.85
|
0.77
|
0.21
|
1.2
|
425
|
381
|
155
|
856
|
|
|
|
|
|
|
|
|
|
|
Table 3b:
Caballito Oxides
|
|
|
|
|
|
|
|
Class
|
Tonnes
|
Au
|
Ag
|
AuEq
|
Au
|
Ag
|
|
|
|
(000s)
|
(g/t)
|
(g/t)
|
(g/t)
|
(koz)
|
(koz)
|
|
|
|
Indicated
|
998
|
0.49
|
2.1
|
0.50
|
16
|
67
|
|
|
|
Inferred
|
3,619
|
0.36
|
2.3
|
0.37
|
41
|
268
|
|
|
|
Subsequent to quarter and year end, Orla filed an updated
technical report, prepared in accordance with the disclosure
standards under National Instrument 43-101 ("NI 43-101") for Cerro
Quema titled "Project Pre-Feasibility Updated NI 43-101
Technical Report on the Cerro Quema Project, Province of
Los Santos, Panama" dated January 18, 2022. The
updated technical report includes the July
2021 PFS, as well as the mineral resource estimate for the
Caballito copper-gold deposit noted above.
EXPLORATION PROGRAM
Please see Orla's March 14, 2022,
News Release, "Orla Mining Commences Near Mine and Regional
Exploration Programs at Camino Rojo and Cerro Quema", outlining
the Company's $15 million 2022
Exploration Program intended to expand existing resources and
discover new deposits.
UPCOMING MILESTONES
- Achieving commercial production at Camino Rojo Oxide Mine.
- Metallurgical results for Camino Rojo Sulphides Project.
- Resumption of exploration drill programs in Mexico and Panama.
CONSOLIDATED FINANCIAL STATEMENTS
Orla's audited consolidated financial statements and
management's discussion and analysis for the year ended
December 31, 2021, will be
available on the Company's website at www.orlamining.com, and will
be filed under the Company's profiles on SEDAR and EDGAR.
Qualified Persons Statement
The scientific and technical information related to Camino Rojo
and Cerro Quema in this news release was reviewed and approved by
Mr. J. Andrew Cormier, P. Eng.,
Chief Operating Officer of the Company, and Mr. Sylvain Guerard, P. Geo., Senior Vice
President, Exploration of the Company, who are the Qualified
Persons as defined under NI 43-101 standards.
FOURTH QUARTER 2021 CONFERENCE CALL
Orla will host a conference call on March
18, 2022, at 10:00 AM, Eastern
Time, to provide a corporate update:
Dial-In
Numbers:
|
|
Conference
ID:
|
2344046
|
Toll
Free:
|
(833)
499-1157
|
International:
|
(236)
712-2875
|
Webcast:
|
https://event.on24.com/wcc/r/3574536/AD172876D5106DB5F47DFA6AD29E853F
|
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, the
Company's upcoming milestones, and the timing of concession
renewals and permitting. 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, silver, and copper; 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: uncertainty and
variations in the estimation of mineral resources and mineral
reserves, including risks that the interpreted drill results may
not accurately represent the actual continuity of geology or grade
of the deposit, bulk density measurements may not be
representative, interpreted and modelled metallurgical domains may
not be representative, and metallurgical recoveries may not be
representative; the Company's reliance on Camino Rojo and risks
associated with its start-up phase; financing risks and access to
additional capital; risks related to natural disasters, terrorist
acts, health crises and other disruptions and dislocations,
including by the COVID-19 pandemic; risks related to the Company's
indebtedness; success of exploration, development, and operation
activities; foreign country and political risks, including risks
relating to foreign operations and expropriation or nationalization
of mining operations; concession risks; permitting risks;
environmental and other regulatory requirements; delays in or
failures to enter into a subsequent agreement with Fresnillo Plc
with respect to accessing certain additional portions of the
mineral resource at Camino Rojo and to obtain the necessary
regulatory approvals related thereto; the mineral resource
estimations for Camino Rojo being only estimates and relying on
certain assumptions; the Layback Agreement remaining subject to the
transfer of surface rights; delays in or failure to get access from
surface rights owners; risks related to guidance estimates and
uncertainties inherent in the preparation of feasibility and
pre-feasibility studies, including but not limited to, assumptions
underlying the production estimates not being realized, changes to
the cost of production, variations in quantity of mineralized
material, grade or recovery rates, geotechnical or hydrogeological
considerations during mining differing from what has been assumed,
failure of plant, equipment or processes, changes to availability
of power or the power rates, ability to maintain social license,
changes to exchange, interest or tax rates, cost of labour,
supplies, fuel and equipment rising, changes in project parameters,
delays, and costs inherent to consulting and accommodating rights
of local communities; uncertainty in estimates of production,
capital, and operating costs and potential production and cost
overruns; the fluctuating price of gold, silver, and copper; global
financial conditions; uninsured risks; competition from other
companies and individuals; uncertainties related to title to
mineral properties; conflicts of interest; risks related to
compliance with anti-corruption laws; volatility in the market
price of the Company's securities; assessments by taxation
authorities in multiple jurisdictions; foreign currency
fluctuations; the Company's limited operating history; risks
related to the Company's history of negative operating cash flow;
litigation risks; intervention by non-governmental organizations;
outside contractor risks; risks related to historical data; unknown
labilities in connection with acquisitions; the Company's ability
to identify, complete, and successfully integrate acquisitions;
dividend risks; risks related to the Company's foreign
subsidiaries; risks related to the Company's accounting policies
and internal controls; the Company's ability to satisfy the
requirements of the Sarbanes-Oxley Act of 2002; enforcement of
civil liabilities; the Company's status as a passive foreign
investment company for U.S. federal income tax purposes;
information and cyber security; gold industry concentration;
shareholder activism; risks associated with executing the Company's
objectives and strategies, 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 17, 2022, to be 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 ("IFRS"")). 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. 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 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.
1 AISC is a non-GAAP measure. See the
"Non-GAAP Measures" section of this news release for
additional information.
SOURCE Orla Mining Ltd.