Orla Mining Reports Third Quarter 2024 Financial Results

2024-11-12

NASDAQ - Nasdaq Stock Market · Gold · Antimony · Silver · United States

Canada NewsWire

Company Striding Towards Record Year of Production and Cash Flow

VANCOUVER, BC , Nov. 12, 2024 /CNW/ - Orla Mining Ltd. (TSX: OLA) (NYSE: ORLA) ("Orla" or the "Company") today announces the results for the third quarter ended September 30, 2024 .

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(All amounts expressed in U.S. dollars unless otherwise stated)

Third Quarter 2024 Highlights

Third quarter gold production was 43,788 ounces and gold sold was 38,265 ounces. As a result of the continued outperformance at Camino Rojo, the Company increased its full year gold production guidance to 130,000 to 140,000 ounces. (pre-released) . Third quarter all-in sustaining cost 1 ("AISC") was $720 per ounce of gold sold, while year to date AISC was $798 per ounce of gold sold. Full year AISC is expected to reach the low end of the improved guidance range of $800 to $900 per ounce of gold sold. Net income for the third quarter was $21.1 million or $0.07 per share. Adjusted earnings 1 for the third quarter were $19.2 million or $0.06 per share. Third quarter operating profit margin 2 of 65%, and net profit margin 3 of 21%. Cash flow from operating activities before changes in non-cash working capital during the third quarter was $52.0 million . In October, the Company repaid the entirety of the outstanding balance on its revolving credit facility totalling $58.4 million , establishing the Company as debt free with cash on hand of $133.4 million on October 31, 2024 . The undrawn credit facility will remain in place and total pro forma liquidity totals $283.4 million at October 31, 2024 . Exploration and project expenditure 1 was $17.4 million during the quarter, of which $3.7 million was capitalized and $13.7 million was expensed. Recent exploration success across the portfolio includes identification of near-deposit expansion opportunities at South Railroad (released), and ongoing drilling that is intersecting mineralization from 0.5 to up to one kilometre beyond the current Camino Rojo Sulphide mineral resource, with new drill results forthcoming. As part of South Railroad Project permitting, the Company has completed 15 of 20 Supplemental Environmental Reports (SERs), required by the US Bureau of Land Management (BLM) prior to issuing a Notice of Intent (NOI), expected to be published in early 2025. The Company is targeting a Record of Decision (final permitting decision) by mid-2026. As at September 30, 2024 , Orla's cash balance was $180.9 million , an increase of $26.6 million over the previous quarter. Net cash 1 at the end of the quarter was $122.5 million .

| _ | | 1 Non-GAAP measure. Refer to the "Non-GAAP Measures" section of this press release. 2 Defined as revenue minus cost of sales, divided by revenue. 3 Defined as net income divided by revenue. |

"Our business continues to make strong progress across all areas with highlights during the quarter in operations, development, and exploration. Most notably, Camino Rojo's operations are generating significant cash flow which has allowed us to repay our debt well ahead of schedule and providing the foundation to invest in future growth and discovery."

Jason Simpson , President and Chief Executive Officer of Orla

Financial and Operations Update

| Table 1: Financial and Operating Highlights | | Q3 2024 | YTD 2024 | | Operating | | | | | Gold Produced | oz | 43,788 | 110,217 | | Gold Sold | oz | 38,265 | 105,186 | | Average Realized Gold Price 1 | $/oz | $2,477 | $2,301 | | Cost of Sales – Operating Cost | $m | $20.5 | $57.1 | | Cash Cost per Ounce 1 | $/oz | $482 | $516 | | All-in Sustaining Cost per Ounce 1 | $/oz | $720 | $798 | | | | | | | Financial | | | | | Revenue | $m | $99.3 | $251.2 | | Net Income (Loss) | $m | $21.1 | $62.9 | | Adjusted Earnings 1 | $m | $19.2 | $59.1 | | Earnings per Share – basic | $/sh | $0.07 | $0.20 | | Adjusted Earnings per Share – basic 1 | $/sh | $0.06 | $0.19 | | | | | | | Cash Flow from Operating Activities before Changes in Non-Cash Working Capital | $m | $52.0 | $126.9 | | Free Cash Flow 1 | $m | $45.3 | $113.3 | | | | | | | Financial Position | | Sept 30, 2024 | Dec 31, 2023 | | Cash and Cash Equivalents | $m | $180.9 | $96.6 | | Net Cash 1 | $m | $122.5 | $8.3 |

| 1 Non-GAAP measure. Refer to the " _Non-GAAP Measures _" section of this news release. |

Third Quarter 2024 Financial and Operations Summary

The Camino Rojo Oxide Gold Mine produced 43,788 ounces of gold in the third quarter of 2024 at an average ore stacking rate of 18,434 tonnes per day. The average mining rate during the third quarter was 51,982 tonnes per day with a strip ratio of 1.46. The higher strip ratio in the quarter is a result of a mine pit redesign to ensure consistent access to ore to maintain balanced production. The average grade of ore stacked during the third quarter was 0.93 g/t gold, in-line with plan. Gold sold during the third quarter 2024 totaled 38,265 ounces and cash costs and AISC totaled $482 and $720 per ounce of gold sold, respectively.

Sustaining capital during the third quarter of 2024 totaled $4.1 million . This included mainly the construction of phase 2 of the heap leach pad which was completed during the quarter.

During the second half of 2023, we initiated a program to test the impact of reduced crushed size from P80 28mm to P80 23mm. As a result, 2024 production has seen an increase of approximately 5% in the realized gold recovery due to the finer crusher size.

Earlier in 2024, the Company submitted modifications to its MIA permit, (Environmental Impact Statement, in Spanish, Manifesto de Impacto Ambiental, or "MIA"), for the Camino Rojo mine to support pit laybacks. While these modifications were not approved by SEMARNAT, the Company has since completed and re-submitted the permit application on November 11th , addressing SEMARNAT's observations.

Exploration Update

In the third quarter, exploration focused on drilling activities at Camino Rojo in Mexico and the South Carlin Complex (including South Railroad) in Nevada . By the end of the quarter, a total of 40,743 metres had been drilled, with 27,358 metres in Mexico and 13,385 metres in Nevada .

Camino Rojo:

This quarter, near-mine exploration at Camino Rojo focused on the promising Camino Rojo Extension, now referred to as "Zone 22". A 30,000-metre drill program is underway to test and expand the potential of this still-open mineralization beneath existing resources at the Camino Rojo deposit. The Company drilled 8,739 metres and completed 8 holes during the quarter.

In late June, Orla issued a news release highlighting positive drill intersections and metallurgical results from the first half of 2024 at the Camino Rojo Sulphide Extension. These results confirm the presence of flat-lying (mantos) and steep sulphide replacement-style mineralization, along with skarn-type alteration, extending at least 500 meters down plunge from the existing resource.

Drilling is continuing to target deeper extensions, from 0.5 to 1 kilometre down plunge. Chalcopyrite-bearing intercepts indicate a newly identified copper-rich phase of mineralization, with ongoing drilling further defining down-plunge extensions of both the copper-gold and gold-silver-zinc trends. An update on recent Zone 22 exploration progress is planned for the fourth quarter. Regional exploration began in the second quarter, with drilling underway at three targets and assays pending.

South Railroad (South Carlin Complex) Exploration and Permitting Update:

On October 31, 2024 , the Company released an update on exploration and permitting activities at the South Railroad Project.

Recent drilling has intersected significant gold mineralization, demonstrating strong potential to expand oxide gold beyond projected open-pit boundaries, potentially extending mine life at the Pinion and Dark Star deposits. Higher-grade sulphide gold mineralization is also being encountered. Exploration drilling will continue through the season, with follow-up drilling at Pinion and Dark Star, as well as exploration from Jasperoid Wash to the Pony Creek project area in the southern part of the property.

With the acquisition and integration of the Pony Creek property, the expanded land package is now referred to as the South Carlin Complex. This complex, which includes the Company's South Railroad Project, spans a 30-kilometer strike length and covers approximately 25,000 hectares along the Carlin Trend.

Permitting and development efforts are advancing, with construction targeted to begin in 2026 and first gold production anticipated in 2027.

2024 Guidance Tracking – Q3 Update

| | | Original 2024 Guidance | Updated 2024 Guidance | YTD Q3 2024 | | Gold Production | Oz | 110,000 - 120,000 | 130,000 - 140,0000 | 110,217 | | Total Cash Cost (net of by-product) 1 | $/oz au sold | $625 - $725 | $550 - $650 | $516 | | AISC 1 | $/oz au sold | $875 - $975 | $800 - $900 | 798 | | Capital Expenditures | $m | $31.0 | No change | $24.2 | | Sustaining capital expenditures | $m | $18.0 | | $14.0 | | Non-sustaining capital expenditures | $m | $13.0 | | $10.2 | | Exploration Expenses & Project Development (expensed) | $m | $31.0 | $34.0 | $25.0 |

| 1. Total Cash Cost and AISC 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 18.0 and CAD/USD of 1.33. A +/-1.0 change to the MXN/USD exchange rate would have an impact of +/-$10/oz on AISC. |

Financial Statements

Orla's unaudited financial statements and management's discussion and analysis for the quarter ended September 30, 2024 , are available on the Company's website at www.orlamining.com , and under the Company's profiles on SEDAR+ and EDGAR.

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, 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 of Disclosure for Mineral Projects .

Third Quarter 2024 Conference Call

Orla will host a conference call on Wednesday November 13, 2024 , at 10:00 AM, Eastern Time , to provide a corporate update following the release of its financial and operating results for the third quarter 2024:

Dial-In Numbers / Webcast:

USA / International Toll: +1 (646) 307-1963 USA Toll-Free: +1 (800) 715-9871 Canada – Toronto: +1 (647) 932-3411 Canada – Toll-Free: +1 (800) 715-9871 Conference ID: 8182356 Webcast: https://orlamining.com/investors/presentations-and-events/

About Orla Mining Ltd.

Orla's corporate strategy is to acquire, develop, and operate mineral properties where the Company's expertise can substantially increase stakeholder value. The Company has two material gold projects: (1) Camino Rojo, located in Zacatecas State, Mexico and (2) South Railroad, located in Nevada , United States . Orla is operating the Camino Rojo Oxide Gold Mine, a gold and silver open-pit and heap leach mine. The property is 100% owned by Orla and covers over 139,000 hectares which contains a large oxide and sulphide mineral resource. Orla is also developing the South Railroad Project, a feasibility-stage, open pit, heap leach gold project. The project is located on the Company's 25,000-hectare South Carlin Complex, in Nevada , which contains several mineral resources and exploration targets. Orla also owns 100% of Cerro Quema located in Panama which includes a pre-feasibility-stage, open-pit, heap leach gold project and a copper-gold sulphide resource. The technical reports for the Company's material projects are available on Orla's website at www.orlamining.com , and on SEDAR+ and EDGAR under the Company's profile at www.sedarplus.ca and www.sec.gov , respectively.

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 this section, all currency figures in tables are in thousands, except per-share and per-ounce amounts.

Average Realized Gold Price

Average realized gold price per ounce sold is calculated by dividing gold sales proceeds received by the Company for the relevant period by the ounces of gold sold. The Company believes the measure is useful in understanding the gold price realized by the Company throughout the period.

| AVERAGE REALIZED GOLD PRICE | Q3 2024 | Q3 2023 | | YTD Q3 2024 | YTD Q3 2023 | | Revenue | $ 99,307 | $ 60,294 | | $ 251,155 | $ 170,697 | | Silver sales | (4,516) | (623) | | (9,082) | (1,522) | | Gold sales | 94,791 | 59,671 | | 242,073 | 169,175 | | Ounces of gold sold | 38,265 | 31,061 | | 105,186 | 87,693 | | AVERAGE REALIZED GOLD PRICE | $ 2,477 | $ 1,921 | | $ 2,301 | $ 1,929 | | | | | | | |

Net Cash

Net cash is calculated as cash and cash equivalents and short-term investments less total debt adjusted for unamortized deferred financing charges at the end of the reporting period. This measure is used by management to measure the Company's debt leverage. The Company believes that in addition to conventional measures prepared in accordance with IFRS, net debt is useful to evaluate the Company's leverage and is also a key metric in determining the cost of debt.

| NET CASH | Sep 30, 2024 | Dec 31, 2023 | | Cash and cash equivalents | $ 180,898 | $ 96,632 | | Less: Long term debt | (58,350) | (88,350) | | NET CASH | $ 122,548 | $ 8,282 | | | | |

Adjusted Earnings and Adjusted Earnings per share

Adjusted earnings excludes deferred taxes, unrealized foreign exchange, changes in fair values of financial instruments, impairments and reversals due to net realizable values, restructuring and severance, and other items which are significant but not reflective of the underlying operational performance of the Company. The Company believes these measures are useful to market participants because they are important indicators of the strength of operations and the performance of the core business. With the addition of performance share units ("PSUs") at the end of Q1 2023, the Company expects greater volatility in share-based payments expense going forward. Accordingly, the effect of these PSUs in the calculation of adjusted earnings was excluded.

| ADJUSTED EARNINGS | Q3 2024 | Q3 2023 | | YTD Q3 2024 | YTD Q3 2023 | | Net income for the period | $ 21,144 | $ 5,370 | | $ 62,894 | $ 31,432 | | Related to the previous year | — | 517 | | — | 517 | | Unrealized foreign exchange | (2,074) | (1,437) | | (4,505) | (2,143) | | Loss on extinguishment of credit facility | — | 1,547 | | — | 1,547 | | Accretion of deferred revenue | 122 | 553 | | 366 | 553 | | Share based compensation related to PSUs | 42 | 51 | | 333 | 143 | | ADJUSTED EARNINGS | $ 19,234 | $ 6,601 | | $ 59,088 | $ 32,049 | | | | | | | | | Millions of shares outstanding – basic | 320.3 | 313.8 | | 317.8 | 310.5 | | Adjusted earnings per share – basic | $ 0.06 | $ 0.02 | | $ 0.19 | $ 0.10 | | | | | | | |

Companies may choose to expense or capitalize their exploration expenditures. The Company expenses exploration costs based on its accounting policy. To assist the reader in comparing against those companies which capitalize their exploration costs, please note that included within Orla's net income (loss) for each period are exploration costs which were expensed, as follows:

| | Q3 2024 | Q3 2023 | | YTD Q3 2024 | YTD Q3 2023 | | Exploration & evaluation expense | $ 13,653 | $ 11,233 | | $ 25,046 | $ 25,300 | | | | | | | |

Free Cash Flow

The Company believes market participants use Free Cash Flow to evaluate the Company's operating cash flow capacity to meet non-discretionary outflows of cash. Free Cash Flow is not meant to be a substitute for the cash flow information presented in accordance with IFRS. Free Cash Flow is calculated as the sum of cash flow from operating activities and cash flow from investing activities, excluding certain unusual transactions.

| FREE CASH FLOW | Q3 2024 | Q3 2023 | | YTD Q3 2024 | YTD Q3 2023 | | Cash flow from operating activities | $ 52,699 | $ 25,019 | | $ 129,818 | $ 43,393 | | Cash flow from investing activities | (7,387) | (6,230) | | (16,517) | (11,666) | | FREE CASH FLOW | $ 45,312 | $ 18,789 | | $ 113,301 | $ 31,727 | | | | | | | | | Millions of shares outstanding – basic | 320.3 | 313.8 | | 317.8 | 310.5 | | Free cash flow per share – basic | $ 0.14 | $ 0.06 | | $ 0.36 | $ 0.10 | | | | | | | |

Cash Costs and All-In Sustaining Costs

The Company calculates cash cost per ounce by dividing the sum of operating costs and royalty costs, net of by-product silver credits, by ounces of gold sold. Management believes that this measure is useful to market participants in assessing operating performance.

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 market participants in assessing operating performance and the Company's ability to generate free cash flow from current operations.

| CASH COST | Q3 2024 | Q3 2023 | | YTD Q3 2024 | YTD Q3 2023 | | Cost of sales – operating costs | $ 20,509 | $ 16,039 | | $ 57,142 | $ 41,289 | | Related to the previous year | — | (517) | | — | (517) | | Royalties | 2,466 | 1,479 | | 6,232 | 4,233 | | Silver sales | (4,516) | (623) | | (9,082) | (1,522) | | CASH COST | $ 18,459 | $ 16,378 | | $ 54,292 | $ 43,483 | | | | | | | | | Ounces sold | 38,265 | 31,061 | | 105,186 | 87,693 | | Cash cost per ounce sold | 482 | 527 | | 516 | 496 | | | | | | | |

| ALL-IN SUSTAINING COST | Q3 2024 | Q3 2023 | | YTD Q3 2024 | YTD Q3 2023 | | Cash cost, as above | $ 18,459 | $ 16,378 | | $ 54,292 | $ 43,483 | | General and administrative expenses | 4,018 | 3,123 | | 11,765 | 9,495 | | Share based payments | 591 | 534 | | 2,637 | 2,260 | | Accretion of site closure provisions | 121 | 137 | | 364 | 394 | | Amortization of site closure provisions | 139 | 128 | | 392 | 388 | | Sustaining capital | 4,059 | 1,757 | | 13,428 | 4,345 | | Sustaining capitalized exploration expenses | 1 | 780 | | 542 | 1,476 | | Lease payments | 164 | 247 | | 538 | 606 | | ALL-IN SUSTAINING COST | $ 27,552 | $ 23,084 | | $ 83,958 | $ 62,447 | | | | | | | | | Ounces sold | 38,265 | 31,061 | | 105,186 | 87,693 | | All-in sustaining cost per ounce sold | 720 | 743 | | 798 | 712 | | | | | | | |

Exploration and Project Development Costs

Exploration and project development costs are calculated as the sum of these costs, some of which have been expensed and some of which have been capitalized. The Company believes this measure provides a more fulsome understanding to readers of the level of expenditures incurred on such activities during the period.

| EXPLORATION AND PROJECT DEVELOPMENT COSTS | Q3 2024 | Q3 2023 | | YTD Q3 2024 | YTD Q3 2023 | | Exploration and evaluation expense | $ 13,653 | $ 11,233 | | $ 25,046 | $ 25,300 | | Expenditures on mineral properties capitalized | 3,710 | 4,560 | | 10,689 | 9,433 | | EXPLORATION AND PROJECT DEVELOPMENT | $ 17,363 | $ 15,793 | | $ 35,735 | $ 34,733 | | | | | | | |

Forward-looking Statements