Orla’s earnings up, South Railroad progressing
Orla Mining Ltd. reported adjusted net earnings of $19.2 million, or 6 cents per share, and gold production of 43,788 ounces from its mine in Mexico, while providing an update on the South Railroad Project in Nevada.
The adjusted net earnings compared with $6.6 million in the third quarter of last year. Revenue totaled $99.3 million in the quarter and free cash flow totaled $45.3 million.
"Our business continues to make strong progress across all areas with highlights during the quarter in operations, development and exploration," said Jason Simpson, president and chief executive officer of Vancouver-based Orla.
He said that "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," he said in the earnings announcement.
Camino Rojo Oxide Gold Mine produced 43,788 gold ounces in the third quarter at an all-in sustaining cost of $720 per ounce, and Orla expects to produce 130,000 to 140,000 ounces of gold for the year at all-in sustaining costs of $800 to $900 per ounce of gold sold.
The average realized gold price for the quarter was $2,477 per ounce, compared with $1,921 per ounce in the 2023 quarter.
Orla also reported that the company has repaid the outstanding balance on its revolving credit facility totaling $58.4 million, so the company is now debt free, with cash on hand of $133.4 million as of Oct. 31.
The company's earnings report also stated that exploration and project expenditures totaled $17.4 million in the third quarter. Recent exploration across the portfolio includes identification of near-deposit expansion opportunities at South Railroad and new mineralization beyond Camino Rojo's sulfide mineral resource.
At South Railroad, which is in Elko County south of Interstate 80, Orla is continuing permitting work with the U.S. Bureau of Land Management. The company said it is anticipating the BLM will issue a notice of intent in early 2025 to begin the environmental impact statement process, leading to a record of decision by mid-2026.
Orla said in its exploration update that the engineering, procurement and construction management contract is set to be awarded later this year for the development of South Railroad, with basic and detailed engineering to proceed in 2025 and 2026 to align with construction following the BLM's record of decision.
Long-lead-time equipment will be identified with purchase orders potentially beginning in 2025, the company also said.
Gold production is planned for 2027, according to Orla.
The company also said Orla's Pony Creek property adjacent to the South Railroad Project acquired from Contact Gold Corp. in April has been integrated into the total land package now called the South Carlin Complex.
South Carlin Complex includes multiple mineralized zones and exploration targets on the Carlin Trend covering about 61,776 acres, or 97 square miles, according to Orla.
"Follow-up drilling at the South Railroad Project continues to highlight the potential for mineralization extensions along key mineralized structures beyond the projected open pits," Orla's senior vice president for exploration, Sylvain Guerard, said in the company's exploration update issued before the earnings announcement.
Orla reported then that new exploration showed significant gold intercepts that indicate strong potential to not only expand the boundaries of the planned open pit but extend mine life at the Pinion and Dark Star deposits.
Recent drilling at the Pinion deposit found gold intercepts that returned wider intervals of mineralization than nearby historical holes. Both the historic and current drilling suggests gold mineralization remains open outside the projected open pit at Pinion, extending about 1,640 feet to the southwest, according to Orla.
Dark Star results included 3.65 grams of gold per ton (0.13 ounces per ton) over 16.8 meters (55.1 feet) from one hole, the company reported.
Orla stated that drilling at South Railroad additionally is encountering higher grade sulfide gold mineralization. The initial mine plan is for heap leaching oxide ores. Sulfide ores require different processing. The ongoing drilling program is focused on defining new oxide mineralization and expanding the resource base.
