Image credits:
News Article

Orla’s Camino Rojo Gets the Green Light: Final Permit in Place

By Alejandro Ehrenberg | Fri, 08/14/2020 - 15:00

Orla Mining announced that SEMARNAT has approved the company's Environmental Impact Statement (MIA). The MIA is necessary for the development of the Camino Rojo gold project in Zacatecas. Orla has now been approved the two main permits to begin construction activities at Camino Rojo.

“We can now begin construction and maintain our schedule to produce our first gold in 2021. We would like to thank and recognize everyone who has worked on the permitting process and supported us to get to this point. We look forward to continuing to work closely with our various stakeholders, including the local communities around the Camino Rojo project,” stated Jason Simpson, Orla’s CEO. 

Detailed engineering is now over 73 percent complete, reported the company. Anticipating the receipt of the final permit — conditional upon Orla meeting certain customary conditions and standard requirements, which it intends to complete in the coming weeks — Orla has pre-ordered and committed over US$50 million for long-lead time items. Major contracts for earth moving and civil work are well advanced and are expected to be finalized in the coming weeks, the company added.

Under Mexico's current COVID-19 legislation, mining and construction are now allowed economic activities and the Camino Rojo site has been ramping up in strict compliance with Mexican Health Authority and company requirements, Orla explained. The company has implemented a strict COVID-19 protocol, including rigorous testing programs, as it begins a controlled mobilization to site for construction. Exploration work programs have already begun and are testing regional targets in the large area of prospective geology that surrounds the known deposit, Orla added.

Camino Rojo is set to become one of the most exciting mining projects in Mexico. In an interview with Mexico Business News, Simpson remarked that Orla’s aim is to conduct itself following the highest international standards. “Our ambition is to be a counter-example to any bad ventures that have tilted the conversation toward a negative tone in Mexico. When Mexico has to choose which company to support, we hope that it points to Orla as an example of modern, responsible mining,” he said.

Furthermore, Camino Rojo’s costs per ounce is among the lowest in the industry. “The reason our operating costs are low is that the geology allowed for an open pit mine and the metallurgy allowed for a heap leach project. An open-pit, heap-leach mine is the most cost-efficient option and got us just over US$500/oz on a by-product basis,” Simpson stated.

With regards to the project’s low sustaining capital costs, there are four factors behind them. “The first is the heap leach. There is no tailings dam to build up every year. The second is related to the open pit. In some open pits, if you have to move a lot of waste material to get to the gold, that stripping cost is capitalized. This results in a large annual capital number. But in our case, given our stripping ratio, we do not have a lot of waste material to move. A third point is our processing plant. When you have a multibillion-dollar plant, you must pay every year to fix and replace things that wear out. We have a heap leach and a small Merrill-Crowe plant. The final reason is the mobile fleet, which is also a capitalized cost,” Simpson explained.

Photo by:
Alejandro Ehrenberg Alejandro Ehrenberg Journalist and Industry Analyst