Orla Mining rallies on gold permit news
Orla Mining Ltd. [OLA-TSX; ORRLF-OTC] said it has received a key environmental permit it needs to begin development of the company’s Camino Rojo Oxide gold project in Zacatecas, Mexico.
The company said the Mexican Federal Environmental Department (SEMARNAT) has granted approval of Orla’s Environmental Impact Permit. The approval is conditional on Orla’s meeting certain customary conditions and standard requirements which the company intends to complete in the coming weeks.
The announcement was released after the close of trading on August 13, 2020. It comes after Orla recently raised $75 million from a bought deal financing to fund exploration and development at Camino Rojo.
On Friday, Orla shares jumped 6.3% or 41 cents to $6.89 and now trade in a 52-week range of $7.51 and $1.42.
The Camino Rojo Oxide Gold Project is an advanced gold and silver open-pit heap leach project. The project is 100%-owned by Orla and covers over 160,000 hectares.
Hosting 1.03 million ounces of gold and 20.1 million ounces of silver reserves Camino Rojo will be Orla’s first mine. It is expected to produce 97,000 ounces of gold annually at an all-in-sustaining cost of US$575 an ounce
Orla acquired the Camino Rojo from Newmont Goldcorp Corp. [NGT-TSX, NEM-NYSE] in November 2017 in return for the issuance of 32 million Orla shares, or 19.9% of the shares outstanding.
To fund development of Camino Rojo, Orla recently entered into a loan agreement with Trinity Capital Partners Corp. and certain other lenders in connection with a previously announced US$125 million project financing facility,
The credit facility was arranged by Trinity Capital and included a syndicate of lenders led by Agnico-Eagle Mines Ltd. [AEM-TSX, NYSE], Pierre Lassonde and Trinity Capital, creating a key alignment between debt and equity holders who will support the company’s development going forward.
Pierre Lassonde is best known for his long association with Franco Nevada Mining Corp. [FNV-TSX, NYSE]. He holds an 11.6% stake in Orla, according to company documents.
Detailed engineering at Camino Rojo is now 73% complete and over US$50 million has been committed to order long-lead time items. Exploration work is ongoing to test near-mine targets. Receipt of the permit allows Orla to draw down the remaining US$100 million of the US$125 million project finance facility.
Orla now has two key permits required to commence development of the project and the company remains on track to produce the first gold in 2021.
Aside from Camino Rojo, Orla also owns 100% of the Cerro Quema Project in Panama, which includes a near term production scenario and various exploration targets. The Cerro Quema Project is a proposed open pit mine and gold heap leach operation.