Sergio Sáenz
General Manager
Minera Camino Rojo
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View from the Top

Camino Rojo Increases Gold Reserves by Over 50 Percent

By José Escobedo | Mon, 04/05/2021 - 13:58

Q: How has Orla Mining responded to the pandemic?

A: 2020 was certainly a difficult year, and 2021 does not seem to be much different so far, with COVID-19 and all the prevention measures, protocols and regulations put in place by governments, companies and other organizations put since the beginning of the pandemic.  Nevertheless, we were able to bring our project to the construction phase.  This is still a difficult time and having gotten this far is a great accomplishment, especially if we consider the mandatory shutdowns and restrictions placed on all economic activities.  Even today, we are faced with limited interaction with government agencies, mostly due to the limitations put in place to limit the number of government employees working from their offices, as well as limited working days and hours.  Regardless, we never stopped working, maintained a well-coordinated home office program, and implemented very strict protocols to protect our employees, their families and the communities. These protocols and measures included strict enforcement of hygiene and sanitary measures, use of personal protective equipment, use of disinfectants, social distancing, constant cleaning and disinfecting of tools, equipment, contact points, as well as the implementation of physical barriers in offices, lunchrooms, etc.

Q: The company has increased its gold mineral reserves at Camino Rojo by 54 percent. How is this project progressing?

A: We knew we had the additional mineral resources in our property but needed to reach an agreement with our neighbor to the north in order to have access to their property and reach the deeper mineral within our concession.  This was a long and slow process, but we were able to reach an agreement that benefited both companies, and we are now working on the environmental and regulatory aspects to expand our operation into the new property. The great news is that we were able to extend the life of the mine by four years while maintaining the same production rates.  It is important to note that the additional mineral is located within our original resources, but we are now able to reach them by stepping out into the neighbor’s property.  The additional life added to the current oxide mine plan also gives us additional time to conduct the studies necessary to explore and test the options to mine the large sulphide mineral resource underneath our current oxides pit footprint, which hosts 7.3 million ounces of gold in measured and indicated resource categories.

Q: How has the process with COFECE developed?

A: We did not expect any difficulties obtaining the approval by COFECE, but the details of the business transaction were submitted for their review in order to comply with anti-monopoly regulations, so we expect to have the final review and approval from them.  Just a normal business transaction between two mining companies reaching an agreement that benefit both parties.

Q: What are your production targets and strategy for Camino Rojo?

A: Our average annual production for the life of the mine will be 94,000 ounces of gold and 597,000 ounces of silver during 10.4 years of production as opposed to 6.8 years of mine life of the previous scenario.  This additional four years will also give us more flexibility to develop other projects, like the sulphide resource at Camino Rojo, the Cerro Quema in Panama, as well as continuing our exploration programs in both countries. The timeline for the construction of Camino Rojo did not change, but there were some delays in permitting, which we mostly attribute to the COVID-19 pandemic.  We expect to have the first pour in the later part of 2021 and complete the ramp up and fine tuning of the operation in the first quarter of 2022.

Q: How is the social responsibility strategy coming along for 2021?

A: Our social responsibility strategy is based in the conviction that we are part of the communities where we operate, therefore we strive to make these communities feel part of the process of building a mine and benefit from it, be it through direct employment or providing goods or services. They cannot be merely spectators watching us go to work, bring outside people to do the work and reap the benefits. We have implanted a very good community relations program, based in open and honest communication between them and the company.  As part of the initiatives, we are incorporating members of the communities into our workforce or as providers of goods and services.  In fact, during the construction phase, we have not had to hire or bring in any construction type dump trucks from outside, all trucks are owned by locals and contracted by the construction companies participating in the construction of the project at competitive rates.  Again, providing honest information in a timely manner, receiving feedback and acting on it is key to our relationship with our neighbors.

Q: This year, Zacatecas will see a change in government. How might this impact Camino Rojo?

A: I do not think it will have an impact in our project, we conduct our business in an institutional manner and with respect to laws and regulations.  I have worked in countries where you really expect a 180 degree turn after every election, but that is not the case in Mexico at all, with mature institutions and democracy.  We, at Orla are committed to working with all levels of government regardless of political affiliations.

Q: What are you most proud of in 2021?

A: I would say that I am most proud of the quality of people we were able to attract to our team at Camino Rojo.  There is a saying that great projects attract great people, and this has certainly been the case for us.  Whatever it takes, our team will go to any length to get the job done, whether is working 12 or more hours per day, driving long distances or working from home.  I am very proud of each one of them. Despite 2020 being a very difficult year in general, I believe we succeeded in reaching our goals, obtained the necessary permits and commenced the construction of Camino Rojo.  This was only possible because we had a team of dedicated people willing to go the extra mile to achieve our objectives.  We are now working on our next goal, which is to build a mine and produce the first metal this year.

Orla Mining is developing the Camino Rojo project, a high-quality, advanced oxide heap leach project in a low-risk jurisdiction. The company emphasizes a systematic approach to project development and strong shareholder returns.

José Escobedo José Escobedo Senior Editorial Manager