Orla raises 2024 gold production target in Mexico
Orla Mining Ltd. [OLA-TSX] said it has improved its production and cost guidance for 2024 as a result of higher stacked ore tonnes and improved metal recoveries of both gold and silver at its Camino Rojo mine in Zacatecas State, Mexico,
The company said it now expects to produce between 120,000 and 130,000 ounces of gold this year, up from a previous target of between 100,000 and 110,000 ounces. Orla has also reduced its all-in-sustaining cost (AISC) guidance for 2024 to a range of US$800 to US$900 per ounce of gold sold. That compares to original guidance of US$875 to US$975 an ounce.
The new targets are contained in the company’s 2024 second quarter results, which were released after the close of trading on August 12, 2024, when Orla shares closed at $4.98. The shares currently trade in a 52-week range of $6.52 and $3.53.
Orla said Camino Rojo has been performing better than planned, a scenario that has enable it to increase it production targets. During the second quarter, the operation produced 33,206 ounces of gold at an AISC US$782 per ounce of gold sold.
Net income in the second quarter was US$24.3 million or $0.08 per share.
As of June 30, 2024, Orla’s cash balance stood at US$154.3 million, an increase of US$36.2 million over the previous quarter. Net cash at the end of the quarter was US$76.0 million.
During the second half of 2023, the company launched a program to test the impact of reduced crushed size from P80 28 mm to P80 23 mm. The initial results of this test program were positive and resulted in higher gold recovery from the heap leach in the range of 3-5%. The company said the testing will continue in 2024, as will testing of reduced crush size on other ore types.
As well during the second quarter, Orla spent US$9.7 million in exploration and project development, of which US$3.1 million was capitalized and US$6.6 million was expensed.
As part of the near-mine exploration at Camino Rojo, the focus in the second quarter was on the promising Camino Rojo Extension, with a 30,000-metre drill program designed to test and expand the potential of the still-open mineralization at the expansive Camino Rojo deposit. The company drilled over 7,847 metres and 13 holes during the quarter with assays and metallurgical testing in progress.
Meanwhile, the 2024 exploration program at South Railroad began in late May, with a 23,000-metre drill program aimed at continuing to test potential extensions of known oxide deposits, such as the Pinion and Dark Star Development Projects, advancing satellite mineralized ones and exploring new targets throughout the remainder of the year.
Orla was in the news recently when the company said it had filed a request for arbitration against the Government of Panama under the Canada-Panama Free Trade Agreement regarding the cancellation of the Cerro Quema mining concession in late 2023.
The company’s preliminary estimate for its claim is US$400 million, plus pre-award and post award interest.