Construction 22% Complete
VANCOUVER, BC, May 13, 2021 /CNW/ - Orla Mining Ltd.
(TSX: OLA) (NYSE: ORLA) ("Orla" or the "Company") is pleased to
provide results for the first quarter ended March 31, 2021.
(All amounts are in U.S. dollars unless otherwise
stated)
FIRST QUARTER 2021 HIGHLIGHTS:
- 430,000 person-hours worked at the Camino Rojo Oxide Project
(the "Project" or "Camino Rojo") with zero lost time incidents
("LTI") since the start of construction. There are currently 826
workers at the Project as part of construction activities with 15%
from the local communities, 30% from the State of Zacatecas, and 55% from other states
within Mexico.
- Continued development of Camino Rojo with activities now
focused on earth moving, concrete pouring, and structural and
mechanical installations in the areas of the crushing circuit,
Merrill-Crowe plant, heap leach and process pond, camp, and
administration offices.
- Camino Rojo engineering is 95% complete and construction is 22%
complete. Project capital committed totalled $104.6 million at the end of the first quarter
and $107.0 million on April 30, 2021. Contracts and purchases awarded
to date have been in line with estimated capital costs.
- Camino Rojo capital expenditures totalled $15.3 million in the first quarter and total
$64.3 million for the Project to
date, on April 30, 2021, out of a
total project capital expenditure estimate of $134.1 million.
- Exploration and evaluation expenditures totalled $4.9 million for the quarter.
- Net loss of $10.8 million or
$0.05 per share for the quarter.
- Cash of $31.2 million at
March 31, 2021 and $71.7 million on April 30,
2021.
- Payment of $25.0 million to
Fresnillo plc ("Fresnillo") in the
first quarter, as the first of three staged payments over a
three-year period, under the terms of the Layback Agreement.
- Third and final tranche drawdown of $50
million on the Project Finance Facility ("Credit Facility")
in April 2021. The funds will be used
towards the development of the Camino Rojo Oxide Project. A total
of $125 million has now been drawn on
the Credit Facility.
"We have carried great momentum into the first quarter of 2021,
and I am heartened with the impressive construction progress being
made at Camino Rojo," said Jason
Simpson, President and Chief Executive Officer of Orla
Mining. "In tandem with project construction, we continue to
advance the other assets in our portfolio. Despite the challenges
posed by the pandemic, our teams have managed admirably in keeping
our people and communities safe while creating value for our
stakeholders."
CAMINO ROJO OXIDE
CONSTRUCTION UPDATE
Detailed engineering is 95% complete, construction is 22%
complete, and 96% of project purchase orders have been issued. Most
major contracts have been awarded and the selected mining
contractor will be mobilizing to site during the second quarter. At
the end of the first quarter, commitments for equipment and
contracts totalled $104.6
million.
Construction activities have shifted from site clearing to earth
moving, concrete pouring, and structural and mechanical
installations. Concrete foundations for the primary and secondary
crushers have been completed and installation of structural steel
for the primary crusher has commenced. All the major components for
the crushing circuit have been received on site. The leach pad and
process facilities area have been cleared and excavation of the
process ponds has begun. Excavation of the pregnant solution pond
is complete with only final grading remaining. Heap leach conveyor
equipment has started to arrive at site while the construction of
the Merrill-Crowe plant has begun with the pouring of concrete and
the installation of the cyanide tank. Completion of the plant is
expected in October 2021. Drilling
and blasting in the pit for production of over liner material
commenced in February 2021.
Construction of the power line to the project remains ahead of
schedule and is nearly 82% complete. Progress on the camp
facilities is well advanced, with steel work ongoing. Installation
of the office buildings for the EPCM, mining contractor, and
Owner´s construction management team is complete. The first gold
production is planned for late 2021.
The Updated Camino Rojo Feasibility Study was released on
January 11, which includes the
layback area from the previously announced agreement with
Fresnillo, resulting in a 54%
increase in mineral reserves and a larger oxide pit. The Company is
planning to complete a 2,500-metre core drilling program on
Fresnillo's property and integrate
Orla's geological and resource models with Fresnillo's drill data. This work will enable
material on the Fresnillo
concession to be included in the measured and indicated mineral
resource categories and to be included in an updated mineral
reserve estimate.
As a condition of the Credit Facility, Orla completed the third
and final tranche drawdown of $50
million by the end of April. The funds will be used towards
the development of the Camino Rojo Oxide Project. A total of
$125 million has now been drawn on
the Credit Facility.
Several images highlighting construction progress at the Camino
Rojo Project are shown below and additional photographs are
available at
https://www.orlamining.com/projects/camino-rojo/gallery/.
CAMINO ROJO COMMUNITY
ACTIVITIES
Community activities during the quarter included the donation of
scholarships and food to the local communities of El Berrendo and San
Francisco de los Quijano. The Company is also in Phase 2 of
the construction of a local community centre. The Company is
working in collaboration with various local service providers to
ensure they have an opportunity to participate in construction
activities. An updated database of local services and people
available for work has been provided to the construction
contractors as the Company seeks to encourage opportunities for
local procurement and employment.
Orla's community relations team continues to maintain
communications with the local communities to understand how the
Company can best support them. Due to the necessary physical
distancing as a result COVID-19, Orla has reduced direct contact
with the local communities as a precautionary
measure. Community members over the age of 60 who wanted a
vaccination were provided one.
CAMINO ROJO SULPHIDE
PROJECT
The Company is advancing multiple development scenarios in
parallel on the Sulphide Project, which hosts 7.3 million
ounces of gold in measured and indicated mineral resource
categories (256 million tonnes at 0.88 g/t)1, and
expects to complete a Preliminary Economic Assessment ("PEA") by
year-end 2021. The development scenarios being evaluated include:
(1) an underground option with processing at Camino Rojo, (2) an
open pit option with processing at Camino Rojo, and (3) an open pit
option with processing at Newmont's Peñasquito plant.
A 6,000-metre directional core drilling program on the Camino
Rojo sulphide mineral resource was completed in April 2021. The main objective of the program was
to generate additional information regarding the continuity and
geometry of the higher-grade mineralization and to provide new
material for geotechnical and metallurgical studies. A portion of
the assay results have been received and the remainder are expected
in the second quarter. The assay results are being reviewed and
interpreted and will be used to support the refinement of the
geological model and the definition of metallurgical composites
planned during the second quarter of 2021.
CERRO QUEMA OXIDE PROJECT DEVELOPMENT
In Panama, the Company
continues work on the Cerro Quema Pre-Feasibility Study ("PFS")
update which is expected to be released in the second quarter of
2021. Specific ongoing work includes resource modelling, process
and metallurgy design, geotechnical drilling, hydrology testing,
and environmental planning and review. The previous Cerro Quema PFS
was completed in 2014 by the previous owner. All aspects of the
Cerro Quema project have been reviewed, assessed, and updated to
support a future construction decision.
2021 OUTLOOK AND UPCOMING MILESTONES
- Maintain robust health and safety protocols, including COVID-19
prevention measures, to support the health of employees and local
communities.
- Continue construction activities at the Camino Rojo Oxide Gold
Project towards a targeted first pour in the fourth quarter of
2021.
- Complete the update to the Pre-Feasibility Study at the Cerro
Quema Oxide Gold Project.
- Further the Preliminary Economic Assessment study on the Camino
Rojo Sulphide Project for completion in 2021.
- Continue exploration programs with activities focused on
supporting study work and new target identification.
COVID-19 RISK MANAGEMENT
The Company maintains robust organization-wide COVID-19
protocols to support the health of employees and local
communities. Orla is closely monitoring the potential impacts from
the pandemic on areas including on-site construction, equipment
delivery and logistics, construction costs and schedule, as well as
community and government relations.
CONSOLIDATED FINANCIAL STATEMENTS
Orla's audited consolidated financial statements and
management's discussion and analysis for the three months ended
March 31, 2021 are available on the
Company's website at www.orlamining.com, and on SEDAR and EDGAR
under the Company's profile at www.sedar.com and at
www.sec.gov, respectively.
Qualified Persons Statement
The scientific and technical information related to Cerro Quema
and Camino Rojo in this presentation has been reviewed and approved
by Mr. J. Andrew Cormier, P. Eng.,
and Mr. Sylvain Guerard, P. Geo.,
who are the Qualified Persons as defined under NI 43-101
standards.
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. Please refer to the "Cerro Quema Project –
Pre-feasibility Study on the La Pava and Quemita Oxide Gold
Deposits" dated August 15, 2014,
which is also available on SEDAR at www.sedar.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 with
respect to the Company's construction and operation of projects, as
well as its objectives and strategies. 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,
that there will be no material adverse change affecting the Company
or its properties; that all required approvals will be obtained;
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, delays and
costs inherent to consulting and accommodating rights of local
communities, environmental risks, title risks, 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 19,
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.
Cautionary Note to U.S. Readers
We prepare our financial statements, which are incorporated
by reference herein, in United
States dollars and in accordance with International
Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board which differs from US
generally accepted accounting principles ("US GAAP") in certain
material respects, and thus are not directly comparable to
financial statements prepared in accordance with US GAAP.
The disclosure in this release 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"). 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 in this release is not comparable to
similar information that would generally be disclosed by U.S.
companies in accordance with the rules of the SEC. In particular,
the SEC's Industry Guide 7 applies different standards in order to
classify mineralization as a reserve. Accordingly, mineral reserve
estimates contained or referenced in this release may not qualify
as "reserves" under SEC standards. In addition, this release uses
the terms "measured mineral resources," "indicated mineral
resources" and "inferred mineral resources" to comply with the
reporting standards in Canada. The
SEC does not currently recognize mineral resources and U.S.
companies are generally not permitted to disclose mineral resources
of any category in documents they file with the SEC. Investors are
specifically cautioned not to assume that any part or all of the
mineral deposits in these categories will ever be converted into
mineral reserves as defined in NI 43-101 or Industry Guide 7.
Further, "inferred mineral resources" have a great amount of
uncertainty as to their existence and as to whether they can be
mined legally or economically. Therefore, investors are also
cautioned not to assume that all or any part of an inferred
resource could ever be mined economically. It cannot be assumed
that all or any part of "measured mineral resources," "indicated
mineral resources," or "inferred mineral resources" will ever be
upgraded to a higher category. Investors are cautioned not to
assume that any part of the reported "measured mineral resources,"
"indicated mineral resources," or "inferred mineral resources" in
this release is economically or legally mineable. 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")
but 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.
Investors are specifically cautioned that there are also
significant 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" or other measures 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. For the above reasons, information contained
in this presentation containing 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.
___________________________________
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1 The
Camino Rojo Mineral Resource estimate has an effective date of June
7, 2019 and was prepared using the CIM Definition. Additional
information can be found in the Camino Rojo Technical Report dated
June 25, 2019.
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SOURCE Orla Mining Ltd.