Orla Mining Closes New Financing DealBy Paloma Duran | Tue, 07/20/2021 - 12:14
Orla Mining announced it will obtain a new financing of US$35 million that will be used for development and exploration activities at Camino Rojo in Zacatecas, Mexico and Cerro Quema in Los Santos, Panama. If everything falls according to plan, Camino Rojo will start production in the first months of 2022.
Orla Mining announced it has closed its non-brokered prospectus financing that consists in 9,085,263 common shares at a price of C$4.75 (US$3.72) per share totaling gross proceeds of US$35 million. The offer was signed by a large institutional investor, Pierre Lassonde, Agnico Eagle Mines Limited and Trinity Capital Partners Corporation.
The company explained that the new financing will be used for the development of the Camino Rojo Gold Oxide Project and the Cerro Quema Gold Oxide Project, exploration activities, additional studies on the Camino Rojo Sulphide Project and for corporate purposes.
Camino Rojo is the company's flagship project in Mexico. Recently, Minera Camino Rojo, Orla Mining's transnational company, announced that construction of its Camino Rojo Oxide Project is currently 50 percent complete and expects production to begin in early 2022.
The company's strong operational and financial position is due to its management, which significantly reduced its risks for 2020. However, its greatest risk remains a COVID-19 outbreak that could suspend its construction and development activities, Jason Simpson, President and CEO of Orla Mining told to BNamericas.
“I am heartened with the impressive construction progress being made at Camino Rojo. In tandem with project construction, we continue to advance the other assets in our portfolio. Despite the challenges posed by the pandemic, our teams have managed admirably in keeping our people and communities safe, while creating value for our stakeholder,” said Simpson.
Camino Rojo’s construction is expected to be finished by early 2022. Meanwhile, the process plant and main facilities will be ready in 4Q21. If everything goes according to plan, Camino Rojo will produce its first doré bar in December, while a more constant production will be achieved until the first months of 2022. According to Simpson, the construction of Camino Rojo, which has not been complex, and its low capital costs, were the main factors that led Orla to acquire the project.
The project is expected to have an annual production of 94,000oz for 10.5 years. The company recently extended the mine life by 4 years and increased its reserves by 54 percent due to its Layback Agreement with Fresnillo. The agreement allows Orla to expand its Camino Rojo oxide pit within the Fresnillo mineral concession to better target its minerals.
“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,” Sergio Sáenz, General Manager of Minera Camino Rojo told MBN. In addition, Sáenz explained that in the first months the production will be higher than expected; however, after a while it will decrease.