Orla Mining Reports Fourth Quarter and Year End 2023 Results
Record Annual Production Driving Continued Cash Flow Generation
(All amounts expressed in
- Fourth quarter gold production was a record 34,484 ounces and gold sold was 31,300 ounces (pre-released). Full year 2023 gold production was a record 121,877 ounces, exceeding the Company's increased full year gold production guidance range of 110,000 to 120,000 ounces (initial production guidance range was 100,000 to 110,000 ounces).
- All-in sustaining costs ("AISC")1 was
$802 per ounce of gold sold during the fourth quarter 2023. Full year 2023 AISC was$736 per ounce of gold sold, within the Company's revised full year 2023 AISC guidance of$700 to$800 per ounce of gold sold (initial AISC guidance range was$750 to$850 per ounce of gold sold). - Adjusted earnings1 for the fourth quarter were
$15.7 million or$0.05 per share. - Net loss for the fourth quarter was
$58.4 million or ($0.19 ) per share. This includes a non-cash impairment charge of$72.4 million on theCerro Quema Project . - During the quarter, the
Panamanian Ministry of Commerce and Industry ("MICI") rejected the requests for extension for the three mining concessions comprising Cerro Quema and declared the concessions cancelled. This cancellation followedPanama's passing of Executive Decree No. 23/2023 inOctober 2023 and Law 407 inNovember 2023 . The Company is exploring all legal remedies available in response to these cancellations and intends to file a Notice of Intent to Arbitrate under the Panama-Canada Free Trade Agreement (the "FTA"). - Cash flow from operating activities before changes in non-cash working capital during the fourth quarter was
$24.7 million . - Exploration and project expenditure was
$12.6 million during the quarter, of which$3.3 million was capitalized and$9.3 million was expensed. - As at
December 31, 2023 , Orla's cash balance was$96.6 million and net cash1 was$8.3 million . During the quarter, the Company repaid$25 million towards its revolving credit facility, reducing the balance outstanding under the facility to$88.4 million . The Company also paid the final installment of$22.8 million to Fresnillo plc ("Fresnillo") as part of the layback agreement.
"The fourth quarter bookended a second consecutive year of operational outperformance at the
-
_______________________________________ |
1 AISC, adjusted earnings and net cash are non-GAAP measures. See the "Non-GAAP Measures" section of this news release for additional information. |
Table 1: Financial and Operating Highlights |
|
Q4 2023 |
FY 2023 |
Operating |
|
|
|
Gold Produced |
oz |
34,484 |
121,877 |
Gold Sold |
oz |
31,300 |
118,993 |
Average Realized Gold Price1 |
$/oz |
|
|
Cost of Sales – Operating Cost |
$M |
|
|
Cash Cost per Ounce1 |
$/oz |
|
|
All-in Sustaining Cost per Ounce1 |
$/oz |
|
|
|
|
|
|
Financial |
|
|
|
Revenue |
$M |
|
|
Net Income (Loss) |
$M |
|
|
Adjusted Earnings1 |
$M |
|
|
Earnings (loss) per Share – basic |
$/sh |
|
|
Adjusted Earnings per Share – basic1 |
$/sh |
|
|
|
|
|
|
Cash Flow from Operating Activities |
$M |
|
|
Free Cash Flow1 |
$M |
|
|
|
|
|
|
Financial Position |
|
|
|
Cash and cash equivalents |
$M |
|
|
Net cash (debt)1 |
$M |
|
|
1
Non-GAAP measure. Please see the "Non-GAAP Measures" section of this news release for additional information. Free cash flow in Q4 includes final payment of |
In the fourth quarter, exploration efforts were concentrated on drilling activities at Camino Rojo in
In 2023, a comprehensive drilling program at Camino Rojo covered a total of 57,715 metres, with 37,677 metres allocated to infill and extension drilling on the Sulphides deposit, 6,503 metres drilled on the near-mine oxide extension, and 13,535 metres dedicated to regional exploration aimed at uncovering new satellite discoveries.
Following positive results from the 2023 Sulphides Extension drill program, exploration efforts in 2024 will shift from infill drilling of the Caracol-hosted Sulphides to focus on assessing the extensions of the Camino Rojo deposit, referenced below. The Company will also continue to advance underground resources estimation and advance the economic evaluation of the Caracol-hosted mineralization.
High grade poly-metallic gold-silver-zinc intersections continue to support potential for Camino Rojo Sulphides Extensions
Orla has confirmed and discovered new sulphide mineralization extending beyond the established open pit mineral resource boundaries at Camino Rojo. This drilling and mineralization is building on an updated geological model and the success of the previously reported CRSX22-15C hole drilled 200 metres down-plunge from the existing resources.
The highly positive intercepts, both historical and recent, justified the execution of a new drill section in the second half 2023, targeting 450 metres down-plunge from the existing resources, along the dike zone structure. This significant step-out drilling initiative consisted of drilling 2,400 metres, targeting the area around the positive historical intercept in hole CR12-366D (15.7 g/t Au, 29.0 g/t Ag, 0.73% Zn, 0.10 % Pb, 0.08% Cu (19.6 g/t AuEq) over 4.5 metres. This new drill section confirmed the presence of significant polymetallic semi-massive to massive sulphide replacement mineralization.
Initial metallurgical testing on polymetallic sulphide mineralization material from CRSX-22-07 and CRSX-22-08C were positive with high gold recovery reported in both CIL bottle roll tests between 81-96% and rougher flotation on the CRSX-22-07 material produced a gold concentrate with 85-88% gold recovery. Open-circuit zinc cleaner tests on material from CRSX-22-07 produced a zinc concentrate with zinc grades of 52% and over 85% zinc recovery. These results suggest this new style of mineralization may be amenable to both standard cyanide processing and flotation. Orla plans to further explore these promising results through additional metallurgical test work in 2024.
For additional details, please see press releases dated
Near mine oxide layback drilling seeking to confirm mineralization with targeted mineral resource addition
The Company completed drilling in the oxide pit layback to confirm and delineate mineralization on the Fresnillo property, located immediately north of and adjacent to the
Orla completed 14,695 metres of drilling in the first full year of exploration at
Initial results released on
Subsequent to quarter end, the Company announced on
An additional release of results related to the North Bullion deposit and other regional targets, as well as exploration plans for 2024, will be released in the coming weeks.
Full drill results are available at www.orlamining.com.
In
The Company is exploring all legal remedies available to protect its historical investments and potentially unlock additional value for its stakeholders in respect of the
In light of these events, the Company has evaluated the facts, circumstances, and the significant uncertainties associated with mining in
As set forth in the Company's
Gold Production |
Oz |
110,000 – 120,000 |
Total Cash Cost (net of by-product) |
$/oz au sold |
|
All-in sustaining cost ("AISC") |
$/oz au sold |
|
Capital Expenditures |
$m |
|
Sustaining capital expenditures |
$m |
|
PP&E / Leases |
|
|
Exploration – capitalized |
|
|
|
|
|
Non-sustaining capital expenditures |
$m |
|
Projects |
|
|
Exploration – capitalized
|
|
|
Exploration Expenses & |
$m |
|
Corporate G&A (inclusive of share-based compensation) |
$m |
|
1. AISC is a non-GAAP measure. 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 +/ |
Camino Rojo's 2024 total cash cost is expected to be in a range of
Income tax expense during 2024, including Mexican Special
Orla's audited financial statements and management's discussion and analysis for the year ended
The scientific and technical information in this news release was reviewed and approved by Mr.
Orla will host a conference call on
Dial-In Numbers / Webcast:
Conference ID: |
5844017 |
Toll Free: |
1 (888) 550-5302 |
Toll: |
1 (646) 960-0685 |
Webcast: |
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,
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 |
Q4 2023 |
Q4 2022 |
|
2023 |
2022 |
Revenue |
$ 62,946 |
$ 56,758 |
|
$ 233,643 |
$ 193,230 |
Silver sales |
(1,166) |
(229) |
|
(2,688) |
(836) |
Gold sales |
61,780 |
56,529 |
|
230,955 |
192,394 |
Ounces of gold sold |
31,300 |
32,438 |
|
118,993 |
107,502 |
AVERAGE REALIZED GOLD PRICE |
$ 1,974 |
$ 1,743 |
|
$ 1,941 |
$ 1,790 |
|
|
|
|
|
|
Net cash (debt) 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.
|
|
|
Cash and cash equivalents |
$ 96,632 |
$ 96,278 |
Less: Current portion of long term debt |
— |
(45,000) |
Less: Long term debt |
(88,350) |
(100,795) |
|
$ 8,282 |
$ (49,517) |
|
|
|
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 |
Q4 2023 |
Q4 2022 |
|
2023 |
2022 |
Net income (loss) for the period |
$ (58,442) |
$ 18,690 |
|
$ (27,010) |
$ 45,770 |
Impairment and derecognition of exploration properties |
72,743 |
— |
|
72,743 |
— |
Unrealized foreign exchange |
1,300 |
1,971 |
|
(843) |
(1,862) |
Loss on extinguishment of credit facility |
— |
— |
|
1,547 |
13,219 |
Accretion on deferred revenue |
123 |
— |
|
676 |
— |
Share based compensation related to PSUs |
(22) |
— |
|
121 |
— |
Other |
— |
— |
|
517 |
— |
ADJUSTED EARNINGS |
$ 15,702 |
$ 20,661 |
|
$ 47,751 |
$ 57,127 |
|
|
|
|
|
|
Millions of shares outstanding – basic |
314.5 |
304.5 |
|
311.5 |
272.2 |
Adjusted earnings per share – basic |
$ 0.05 |
$ 0.07 |
|
$ 0.15 |
$ 0.21 |
|
|
|
|
|
|
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:
|
Q4 2023 |
Q4 2022 |
|
2023 |
2022 |
Exploration & evaluation expense |
$ 9,316 |
$ 5,605 |
|
$ 34,616 |
$ 18,939 |
|
|
|
|
|
|
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 |
Q4 2023 |
Q4 2022 |
|
2023 |
2022 |
Cash flow from operating activities |
$ 21,903 |
$ 31,836 |
|
$ 65,296 |
$ 95,311 |
Cash flow from investing activities |
(30,062) |
(20,188) |
|
(41,728) |
(13,356) |
FREE CASH FLOW |
$ (8,159) |
$ 11,648 |
|
$ 23,568 |
$ 81,955 |
|
|
|
|
|
|
Millions of shares outstanding – basic |
314.5 |
304.5 |
|
311.5 |
272.2 |
Free cash flow per share – basic |
$ (0.03) |
$ 0.04 |
|
$ 0.08 |
$ 0.30 |
|
|
|
|
|
|
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
Figures are presented only from
CASH COST |
Q4 2023 |
Q4 2022 |
|
2023 |
2022 |
Cost of sales – operating costs |
$ 16,383 |
$ 13,482 |
|
$ 57,672 |
$ 36,231 |
Royalties |
1,562 |
1,439 |
|
5,795 |
3,755 |
Silver sales |
(1,166) |
(229) |
|
(2,688) |
(617) |
Other |
|
|
|
(517) |
(503) |
CASH COST |
$ 16,779 |
$ 14,692 |
|
$ 60,262 |
$ 38,866 |
|
|
|
|
|
|
Ounces sold |
31,300 |
32,438 |
|
118,993 |
86,618 |
Cash cost per ounce sold |
$ 536 |
$ 453 |
|
$ 506 |
$ 449 |
|
|
|
|
|
|
ALL-IN SUSTAINING COST |
Q4 2023 |
Q4 2022 |
|
2023 |
2022 |
Cash cost, as above |
$ 16,779 |
$ 14,692 |
|
$ 60,262 |
$ 38,866 |
General and administrative expenses |
3,913 |
2,741 |
|
13,408 |
7,634 |
Share based payments |
558 |
526 |
|
2,818 |
1,582 |
Accretion of site closure provisions |
127 |
160 |
|
521 |
395 |
Amortization of site closure provisions |
(64) |
105 |
|
324 |
448 |
Sustaining capital |
3,590 |
2,116 |
|
7,935 |
3,533 |
Sustaining capitalized exploration expenses |
— |
— |
|
1,476 |
— |
Lease payments |
214 |
216 |
|
820 |
442 |
ALL-IN SUSTAINING COST |
$ 25,117 |
$ 20,556 |
|
$ 87,564 |
$ 52,900 |
|
|
|
|
|
|
Ounces sold |
31,300 |
32,438 |
|
118,993 |
86,618 |
All-in sustaining cost per ounce sold |
$ 802 |
$ 634 |
|
$ 736 |
$ 611 |
|
|
|
|
|
|
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
This news release has been prepared in accordance with Canadian standards for the reporting of mineral resource and mineral reserve estimates, which differ from the previous and current standards of
For
As a result of the adoption of the SEC Modernization Rules, the
SOURCE