Record Quarterly Gold Production of 32,017
Ounces
VANCOUVER, BC, Jan. 16,
2023 /CNW/ - Orla Mining Ltd. (TSX: OLA)
(NYSE: ORLA) ("Orla" or the "Company") is pleased to provide an
operational update for the fourth quarter ended December 31, 2022. This news release also
includes the Company's 2023 annual guidance which contains the
outlook for production, operating and capital costs, and
exploration spending across the Company's portfolio.
(All amounts are in U.S. dollars unless otherwise
stated)
2022 Camino Rojo Oxide Mine
Operational Update
The Camino Rojo Oxide Mine produced 32,017 ounces of gold in the
fourth quarter of 2022, for a total of 109,596 ounces of gold for
the full year 2022, achieving the high end of the increased
production guidance range of 100,000 to 110,000 ounces. Orla's
initial production guidance for 2022 was 90,000 to 100,000 ounces
of gold and was increased at the end of the third quarter to a
range of 100,000 to 110,000 ounces of gold. Additional operational
details for the fourth quarter are found near the end of this news
release. All-in Sustaining Costs ("AISC")1,2 guidance
for the year 2022 has been maintained at $600 to $700 per
ounce of gold sold and financial results will be released in
advance of the Fourth Quarter and Year End 2022 Conference
Call.
Orla ended the year with a cash position of $96.6 million at December
31, 2022, a net increase of $7.5
million during the fourth quarter. During the fourth
quarter, the Company made the third of four payments to
Fresnillo plc ("Fresnillo"), for
the amount of $15 million, related to
the Layback Agreement (see news release dated March 23, 2020), and also made the first
quarterly principal repayment of $5.6
million on its credit facility.
2023 Guidance Summary
Gold
Production
|
oz
|
100,000 -
110,000
|
All-in Sustaining
Costs ("AISC")1,2
|
$/oz Au sold
|
$750 -
$850
|
Capital
Expenditures1,2
|
|
|
Sustaining
Capital Expenditures 1
|
$m
|
$6
|
Non-Sustaining Capital Expenditures 1
|
$m
|
$4
|
Exploration
|
|
|
Mexico
|
$m
|
$20
|
USA
(Nevada)
|
$m
|
$10
|
Panama
|
$m
|
$3
|
Total
Exploration
|
$m
|
$33
|
Site Admin &
Permitting Expenses (Nevada/Panama)
|
$m
|
$11
|
Corporate
G&A
|
$m
|
$15
|
1.
|
AISC, sustaining
capital and non-sustaining capital are non-GAAP measures. See the
"Non-GAAP Measures" section of this news release for
additional information.
|
2.
|
Exchange rates used to
forecast cost metrics include MXN/USD of 20.0 and CAD/USD of
1.28
|
"2022 was a defining year for Orla as we made the successful
transition from developer to producer," said Jason Simpson, President and Chief Executive
Officer of Orla. "In 2023, cash generation from the high-margin
Camino Rojo Mine will be invested
into our prospective growth pipeline, the local communities, paying
taxes, and strengthening our balance sheet to the benefit of all
our stakeholders."
Production and Cost
Outlook
Gold production from the Camino Rojo Oxide Mine is expected to
be 100,000 to 110,000 ounces in 2023. The Company's cumulative gold
production from 2022 and 2023 are expected to be in line with the
cumulative gold production from year 1 and 2 of the 2021 Camino
Rojo Feasibility Study. Average daily mine production at the
Camino Rojo Oxide Mine is expected to be above 40,000 tonnes per
day while average daily ore processing throughput is expected to be
above the design capacity of 18,000 tonnes per day.
Camino Rojo's operating costs are expected to total
approximately $65 million in 2023,
including royalties and net of change in inventory, while
sustaining capital expenditures1 are expected to total
$6 million, which includes
$2 million for the construction of an
ore stockpile dome cover for dust mitigation, $2 million for several small operational
improvement items, and $2 million for
capitalized exploration on the Camino Rojo layback area. The
$4 million in non-sustaining
capital1 relates to land acquisition at the Company's
South Railroad project in Nevada.
In 2023, Orla expects to make approximately $22 million in debt repayments on its credit
facility split evenly across quarters, and $23 million as a final payment relating to the
Fresnillo Layback Agreement to be paid in December 2023.
Income taxes accrued during 2022, including Mexican Special
Mining Duty, totalling approximately $35
million, will be paid in a lump sum in March
2023. Thereafter, Orla expects to pay income tax instalments
monthly, beginning in May 2023.
Approximately $11 million is
expected to be spent in 2023 related to site administration,
permitting, and pre-engineering expenses for the Company's projects
in the US and Panama.
_________________________________________
|
1.
|
Sustaining capital and
non-sustaining capital are non-GAAP measures. See the "Non-GAAP
Measures" section of this news release for additional
information.
|
Exploration Outlook
With the Camino Rojo Oxide Mine generating robust cash flows,
the Company is increasing investment in its large and prospective
exploration portfolio. The total expected exploration spend in 2023
is $35 million, with approximately
$22 million to be spent at Camino
Rojo in Mexico. Exploration at
Camino Rojo will focus on confirmation drilling of the oxide
pit layback, resource and reserve conversion, additional Camino
Rojo sulphide drilling to support development planning, and drill
testing of regional targets. The exploration program in
Mexico will start in early 2023
and extend until year end. In Nevada,
USA, exploration activities at the South Railroad Project,
located on the Carlin Trend, will focus on upgrading and increasing
oxide resources at satellite deposits and drill testing multiple
exploration targets. Exploration activities in Nevada will be weighted to the second half of
2023. In Panama, drilling at Cerro
Quema will focus on regional exploration in the first quarter of
2023, to take advantage of the dry season. Most of the exploration
costs in 2023 will be expensed, as per Orla's accounting policy.
Additional exploration details related to 2022 results and 2023
plans on individual country exploration programs will be provided
in the first quarter 2023.
2022 Camino Rojo Oxide Mine
Operational Detail
Mining and
Processing Totals
|
|
Q4 2022
|
FY 2022
|
Ore Mined
|
tonnes
|
2,227,611
|
8,299,621
|
Ore -
processed
|
tonnes
|
1,777,118
|
6,579,070
|
Low Grade Ore -
stockpiled
|
tonnes
|
450,493
|
1,720,551
|
Waste Mined
|
tonnes
|
1,556,189
|
5,535,125
|
Total Mined
|
tonnes
|
3,783,801
|
13,834,747
|
Strip Ratio
|
w:o
|
0.70
|
0.67
|
Total Ore Mined Gold
Grade
|
g/t
|
0.69
|
0.71
|
Ore -
processed
|
g/t
|
0.78
|
0.82
|
Low Grade Ore -
stockpiled
|
g/t
|
0.30
|
0.33
|
|
|
|
|
Ore Crushed
|
tonnes
|
1,744,711
|
6,485,707
|
Ore Stacked
|
tonnes
|
1,802,376
|
6,882,063
|
Stacked Ore Gold
Grade
|
g/t
|
0.79
|
0.82
|
Gold
Produced
|
oz
|
32,017
|
109,596
|
|
|
|
|
Daily Stacked
Throughput Rate – Average*
|
tpd
|
19,591
|
18,251
|
Daily Stacked
Throughput / Nameplate Capacity
|
%
|
108.84 %
|
101.39 %
|
Total Crushed Ore
Stockpile
|
tonnes
|
166,695
|
Total Crushed Ore
Stockpile Au Grade
|
g/t
|
0.86
|
Total ROM Ore
Stockpile**
|
tonnes
|
2,120,642
|
Total ROM Ore Stockpile
Grade
|
g/t
|
0.34
|
*Average stacking rate
calculation excludes truck-stacked overliner material (0 tonnes for
Q4 2022 and 220,432 tonnes for FY 2022).
|
**ROM ore stockpile
includes mined ore but yet crushed, and low-grade
stockpiles.
|
Fourth Quarter and Year End 2022
Conference Call
Orla will host a conference call on Friday, March 17, 2023, at 10:00 AM, Eastern Time, to provide a corporate
update following the release of its financial and operating results
for the fourth quarter and year ended 2022:
Dial-In Numbers:
Conference ID: 5844017
Toll Free Dial-In: 1 (888) 550-5302
Toll Dial-In: 1 (646)
960-0685
Webcast:
https://orlamining.com/investors/presentations-and-events/
Qualified Persons
Statement
The scientific and technical information in this news release
was reviewed and approved by Mr. J. Andrew
Cormier, P. Eng., Chief Operating Officer of the Company,
who is the Qualified Person 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,
Mexico. The property 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 (the "2021
Camino Rojo Feasibility Study"), is available on SEDAR and EDGAR
under the Company's profile at www.sedar.com and www.sec.gov,
respectively. Orla also owns 100% of Cerro Quema located in
Panama which includes a 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. Orla also owns
100% of the South Railroad Project, a feasibility-stage, open pit,
heap leach project located on the Carlin trend in Nevada. The technical report for the 2022
Feasibility Study entitled "South Railroad Project, Form
43-101F1 Technical Report Feasibility Study, Elko County, Nevada" dated March 23, 2022, is available on SEDAR and EDGAR
under the Company's profile at www.sedar.com and www.sec.gov,
respectively. The technical reports are available on Orla's website
at www.orlamining.com.
Non-GAAP Measures
The Company has included certain performance measures in this
news 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
("GAAP"). In addition to the below, refer to the "Non-GAAP
measures" section of the Company's Management's Discussion and
Analysis for the period ended September 30,
2022, for a more detailed discussion of these non-IFRS
measures and their calculation.
All-in Sustaining
Costs
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.
Sustaining and Non-Sustaining
Capital
The Company defines non-sustaining capital expenditures are
those expenditures which were (i) incurred to develop new
operations, or (ii) incurred at existing operations which will
materially increase production or mine life. Sustaining capital
expenditures are defined as all capital expenditures other than
non-sustaining capital expenditures. Sustaining capital is relevant
to the AISC metric as it is needed to maintain the Company's
current operations and provides improved transparency related to
our ability to finance these expenditures from current
operations.
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
production and cost outlook, including expected production, AISC,
processing throughputs, operating costs, sustaining and
non-sustaining capital expenditures, exploration and development
expenditures, corporate general and administrative expenses, debt
repayments and income tax payments; and the Company's exploration
outlook, including planned exploration spend and the goals and
timing of the Company's exploration
programs. 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
Company's ability to achieve the production, cost and development
expectations for its respective operations and projects; the price
of gold, silver, and copper; the accuracy of mineral resource and
mineral reserve estimations; prices for energy inputs, labour,
materials, supplies and services; 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
with Fresnillo Plc 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 18,
2022, which are 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.
Cautionary Note to U.S.
Readers
This news release has been prepared in accordance with
Canadian standards for the reporting of mineral resource and
mineral reserve estimates, which differ from the previous and
current standards of the United
States securities laws. In particular, and without limiting
the generality of the foregoing, the terms "mineral reserve",
"proven mineral reserve", "probable mineral reserve", "inferred
mineral resources,", "indicated mineral resources," "measured
mineral resources" and "mineral resources" used or referenced
herein and the documents incorporated by reference herein, as
applicable, are Canadian mineral disclosure terms as defined in
accordance with Canadian National Instrument 43-101 — Standards of
Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM") — CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the "CIM Definition
Standards").
For United States reporting
purposes, the United States Securities and Exchange Commission (the
"SEC") has adopted amendments to its disclosure rules (the "SEC
Modernization Rules") to modernize the mining property disclosure
requirements for issuers whose securities are registered with the
SEC under the Exchange Act, which became effective February 25, 2019. The SEC Modernization Rules
more closely align the SEC's disclosure requirements and policies
for mining properties with current industry and global regulatory
practices and standards, including NI 43-101, and replace the
historical property disclosure requirements for mining registrants
that were included in SEC Industry Guide 7. Issuers were required
to comply with the SEC Modernization Rules in their first fiscal
year beginning on or after January 1,
2021. As a foreign private issuer that is eligible to file
reports with the SEC pursuant to the multi-jurisdictional
disclosure system, the Corporation 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. Accordingly, mineral reserve and
mineral resource information contained or incorporated by reference
herein may not be comparable to similar information disclosed by
United States companies subject to
the United States federal
securities laws and the rules and regulations thereunder.
As a result of the adoption of the SEC Modernization Rules,
the SEC now recognizes estimates of "measured mineral resources",
"indicated mineral resources" and "inferred mineral resources." In
addition, the SEC has amended its definitions of "proven mineral
reserves" and "probable mineral reserves" to be "substantially
similar" to the corresponding CIM Definition Standards that are
required under NI 43-101. While the SEC will now recognize
"measured mineral resources", "indicated mineral resources" and
"inferred mineral resources", U.S. investors should not assume that
all or any part of the mineralization in these categories will be
converted into a higher category of mineral resources or into
mineral reserves without further work and analysis. 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, U.S. investors are
cautioned not to assume that all or any measured mineral resources,
indicated mineral resources, or inferred mineral resources that the
Company reports are or will be economically or legally mineable
without further work and analysis. Further, "inferred mineral
resources" have a greater amount of uncertainty 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
inferred mineral resources will be upgraded to a higher category
without further work and analysis. Under Canadian securities laws,
estimates of "inferred mineral resources" may not form the basis of
feasibility or pre-feasibility studies, except in rare cases. While
the above terms are "substantially similar" to CIM Definitions,
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 reserve or resource
estimates under the standards adopted under the SEC Modernization
Rules or under the prior standards of SEC Industry Guide 7.
SOURCE Orla Mining Ltd.