Orla Mining Reports Third Quarter 2024 Financial Results
Company Striding Towards Record Year of Production and Cash Flow
(All amounts expressed in
- Third quarter gold production was 43,788 ounces and gold sold was 38,265 ounces. As a result of the continued outperformance at Camino Rojo, the Company increased its full year gold production guidance to 130,000 to 140,000 ounces. (pre-released).
- Third quarter all-in sustaining cost1 ("AISC") was
$720 per ounce of gold sold, while year to date AISC was$798 per ounce of gold sold. Full year AISC is expected to reach the low end of the improved guidance range of$800 to$900 per ounce of gold sold. - Net income for the third quarter was
$21.1 million or$0.07 per share. - Adjusted earnings1 for the third quarter were
$19.2 million or$0.06 per share. - Third quarter operating profit margin2 of 65%, and net profit margin3 of 21%.
- Cash flow from operating activities before changes in non-cash working capital during the third quarter was
$52.0 million . - In October, the Company repaid the entirety of the outstanding balance on its revolving credit facility totalling
$58.4 million , establishing the Company as debt free with cash on hand of$133.4 million onOctober 31, 2024 . The undrawn credit facility will remain in place and total pro forma liquidity totals$283.4 million atOctober 31, 2024 . - Exploration and project expenditure1 was
$17.4 million during the quarter, of which$3.7 million was capitalized and$13.7 million was expensed. - Recent exploration success across the portfolio includes identification of near-deposit expansion opportunities at
South Railroad (released), and ongoing drilling that is intersecting mineralization from 0.5 to up to one kilometre beyond the current Camino Rojo Sulphide mineral resource, with new drill results forthcoming. - As part of
South Railroad Project permitting, the Company has completed 15 of 20 Supplemental Environmental Reports (SERs), required by theUS Bureau of Land Management (BLM) prior to issuing a Notice of Intent (NOI), expected to be published in early 2025. The Company is targeting a Record of Decision (final permitting decision) by mid-2026. - As at
September 30, 2024 , Orla's cash balance was$180.9 million , an increase of$26.6 million over the previous quarter. Net cash1 at the end of the quarter was$122.5 million .
_________________________ |
1 Non-GAAP measure. Refer to the "Non-GAAP Measures" section of this press release. |
"Our business continues to make strong progress across all areas with highlights during the quarter in operations, development, and exploration. Most notably,
-
Table 1: Financial and Operating Highlights |
|
Q3 2024 |
YTD 2024 |
Operating |
|
|
|
Gold Produced |
oz |
43,788 |
110,217 |
Gold Sold |
oz |
38,265 |
105,186 |
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 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 |
|
|
|
$m |
|
|
1 Non-GAAP measure. Refer to the "Non-GAAP Measures" section of this news release. |
Sustaining capital during the third quarter of 2024 totaled
During the second half of 2023, we initiated a program to test the impact of reduced crushed size from P80 28mm to P80 23mm. As a result, 2024 production has seen an increase of approximately 5% in the realized gold recovery due to the finer crusher size.
Earlier in 2024, the Company submitted modifications to its MIA permit, (Environmental Impact Statement, in Spanish, Manifesto de Impacto Ambiental, or "MIA"), for the Camino Rojo mine to support pit laybacks. While these modifications were not approved by SEMARNAT, the Company has since completed and re-submitted the permit application on
In the third quarter, exploration focused on drilling activities at Camino Rojo in
This quarter, near-mine exploration at Camino Rojo focused on the promising
In late June, Orla issued a news release highlighting positive drill intersections and metallurgical results from the first half of 2024 at the Camino Rojo Sulphide Extension. These results confirm the presence of flat-lying (mantos) and steep sulphide replacement-style mineralization, along with skarn-type alteration, extending at least 500 meters down plunge from the existing resource.
Drilling is continuing to target deeper extensions, from 0.5 to 1 kilometre down plunge. Chalcopyrite-bearing intercepts indicate a newly identified copper-rich phase of mineralization, with ongoing drilling further defining down-plunge extensions of both the copper-gold and gold-silver-zinc trends. An update on recent Zone 22 exploration progress is planned for the fourth quarter. Regional exploration began in the second quarter, with drilling underway at three targets and assays pending.
On
Recent drilling has intersected significant gold mineralization, demonstrating strong potential to expand oxide gold beyond projected open-pit boundaries, potentially extending mine life at the
With the acquisition and integration of the
Permitting and development efforts are advancing, with construction targeted to begin in 2026 and first gold production anticipated in 2027.
|
|
Original 2024 Guidance |
Updated 2024 Guidance |
YTD Q3 2024 |
Gold Production |
Oz |
110,000 - 120,000 |
130,000 - 140,0000 |
110,217 |
Total Cash Cost (net of by-product)1 |
$/oz au sold |
|
|
|
AISC1 |
$/oz au sold |
|
|
798 |
Capital Expenditures |
$m |
|
No change |
|
Sustaining capital expenditures |
$m |
|
|
|
Non-sustaining capital expenditures |
$m |
|
|
|
Exploration Expenses & |
$m |
|
|
|
1. Total Cash Cost and AISC are non-GAAP measures. 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 +/ |
Orla's unaudited financial statements and management's discussion and analysis for the quarter ended
The scientific and technical information in this news release was reviewed and approved by Mr.
Third Quarter 2024 Conference Call
Orla will host a conference call on
Dial-In Numbers / Webcast:
Conference ID: 8182356
Webcast: https://orlamining.com/investors/presentations-and-events/
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)
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 |
Q3 2024 |
Q3 2023 |
|
YTD Q3 2024 |
YTD Q3 2023 |
Revenue |
$ 99,307 |
$ 60,294 |
|
$ 251,155 |
$ 170,697 |
Silver sales |
(4,516) |
(623) |
|
(9,082) |
(1,522) |
Gold sales |
94,791 |
59,671 |
|
242,073 |
169,175 |
Ounces of gold sold |
38,265 |
31,061 |
|
105,186 |
87,693 |
AVERAGE REALIZED GOLD PRICE |
$ 2,477 |
$ 1,921 |
|
$ 2,301 |
$ 1,929 |
|
|
|
|
|
|
Net cash 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 |
$ 180,898 |
$ 96,632 |
Less: Long term debt |
(58,350) |
(88,350) |
|
$ 122,548 |
$ 8,282 |
|
|
|
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 |
Q3 2024 |
Q3 2023 |
|
YTD Q3 2024 |
YTD Q3 2023 |
Net income for the period |
$ 21,144 |
$ 5,370 |
|
$ 62,894 |
$ 31,432 |
Related to the previous year |
— |
517 |
|
— |
517 |
Unrealized foreign exchange |
(2,074) |
(1,437) |
|
(4,505) |
(2,143) |
Loss on extinguishment of credit facility |
— |
1,547 |
|
— |
1,547 |
Accretion of deferred revenue |
122 |
553 |
|
366 |
553 |
Share based compensation related to PSUs |
42 |
51 |
|
333 |
143 |
ADJUSTED EARNINGS |
$ 19,234 |
$ 6,601 |
|
$ 59,088 |
$ 32,049 |
|
|
|
|
|
|
Millions of shares outstanding – basic |
320.3 |
313.8 |
|
317.8 |
310.5 |
Adjusted earnings per share – basic |
$ 0.06 |
$ 0.02 |
|
$ 0.19 |
$ 0.10 |
|
|
|
|
|
|
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:
|
Q3 2024 |
Q3 2023 |
|
YTD Q3 2024 |
YTD Q3 2023 |
Exploration & evaluation expense |
$ 13,653 |
$ 11,233 |
|
$ 25,046 |
$ 25,300 |
|
|
|
|
|
|
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 |
Q3 2024 |
Q3 2023 |
|
YTD Q3 2024 |
YTD Q3 2023 |
Cash flow from operating activities |
$ 52,699 |
$ 25,019 |
|
$ 129,818 |
$ 43,393 |
Cash flow from investing activities |
(7,387) |
(6,230) |
|
(16,517) |
(11,666) |
FREE CASH FLOW |
$ 45,312 |
$ 18,789 |
|
$ 113,301 |
$ 31,727 |
|
|
|
|
|
|
Millions of shares outstanding – basic |
320.3 |
313.8 |
|
317.8 |
310.5 |
Free cash flow per share – basic |
$ 0.14 |
$ 0.06 |
|
$ 0.36 |
$ 0.10 |
|
|
|
|
|
|
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
CASH COST |
Q3 2024 |
Q3 2023 |
|
YTD Q3 2024 |
YTD Q3 2023 |
Cost of sales – operating costs |
$ 20,509 |
$ 16,039 |
|
$ 57,142 |
$ 41,289 |
Related to the previous year |
— |
(517) |
|
— |
(517) |
Royalties |
2,466 |
1,479 |
|
6,232 |
4,233 |
Silver sales |
(4,516) |
(623) |
|
(9,082) |
(1,522) |
CASH COST |
$ 18,459 |
$ 16,378 |
|
$ 54,292 |
$ 43,483 |
|
|
|
|
|
|
Ounces sold |
38,265 |
31,061 |
|
105,186 |
87,693 |
Cash cost per ounce sold |
482 |
527 |
|
516 |
496 |
|
|
|
|
|
|
ALL-IN SUSTAINING COST |
Q3 2024 |
Q3 2023 |
|
YTD Q3 2024 |
YTD Q3 2023 |
Cash cost, as above |
$ 18,459 |
$ 16,378 |
|
$ 54,292 |
$ 43,483 |
General and administrative expenses |
4,018 |
3,123 |
|
11,765 |
9,495 |
Share based payments |
591 |
534 |
|
2,637 |
2,260 |
Accretion of site closure provisions |
121 |
137 |
|
364 |
394 |
Amortization of site closure provisions |
139 |
128 |
|
392 |
388 |
Sustaining capital |
4,059 |
1,757 |
|
13,428 |
4,345 |
Sustaining capitalized exploration expenses |
1 |
780 |
|
542 |
1,476 |
Lease payments |
164 |
247 |
|
538 |
606 |
ALL-IN SUSTAINING COST |
$ 27,552 |
$ 23,084 |
|
$ 83,958 |
$ 62,447 |
|
|
|
|
|
|
Ounces sold |
38,265 |
31,061 |
|
105,186 |
87,693 |
All-in sustaining cost per ounce sold |
720 |
743 |
|
798 |
712 |
|
|
|
|
|
|
Exploration and Project Development Costs
Exploration and project development costs are calculated as the sum of these costs, some of which have been expensed and some of which have been capitalized. The Company believes this measure provides a more fulsome understanding to readers of the level of expenditures incurred on such activities during the period.
EXPLORATION AND PROJECT DEVELOPMENT COSTS |
Q3 2024 |
Q3 2023 |
|
YTD Q3 2024 |
YTD Q3 2023 |
Exploration and evaluation expense |
$ 13,653 |
$ 11,233 |
|
$ 25,046 |
$ 25,300 |
Expenditures on mineral properties capitalized |
3,710 |
4,560 |
|
10,689 |
9,433 |
EXPLORATION AND PROJECT DEVELOPMENT |
$ 17,363 |
$ 15,793 |
|
$ 35,735 |
$ 34,733 |
|
|
|
|
|
|
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
SOURCE