Orla Mining (ORLA) 40FR12B Initial registration of securities (Canada)

Exhibit 99.09

Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

Presented in United States dollars

ORLA MINING LTD.

Condensed Interim Consolidated Balance Sheets

(Unaudited – Thousands of United States dollars)

	June 30			December 31			January 1
As at	2020			2019			2019
				(restated, notes 3 and 22)			(restated, notes 3 and 22)
ASSETS
Current assets
Cash and cash equivalents	$	54,665		$	23,106		$	12,234
Accounts receivable		71			94			282
Prepaid expenses		128			53			151
		54,864			23,253			12,667
Restricted funds		528			509			150
VAT recoverable (note 7)		1,895			1,340			622
Deposits on long term assets (note 5(a)(i))		9,801			—			—
Construction in progress (note 5(a)(i))		1,453			—			—
Equipment (note 6)		343			284			252
Exploration and evaluation assets (note 5(d))		118,113			125,643			124,099
TOTAL ASSETS	$	186,997		$	151,029		$	137,790
LIABILITIES
Current liabilities
Trade and other payables (note 8)	$	843		$	802		$	1,278
Accrued liabilities		3,060			1,578			1,405
		3,903			2,380			2,683
Lease obligations		100			44			—
Camino Rojo project loan (note 9)		13,630			12,961			—
Newmont loan (note 10)		8,007			9,647			4,475
Accrued liabilities – long term		386			261			—
Site closure provisions (note 11)		558			575			626
TOTAL LIABILITIES		26,584			25,868			7,784
SHAREHOLDERS' EQUITY
Share capital (note 13)		214,958			159,230			153,852
Reserves		30,349			30,061			19,931
Accumulated other comprehensive income (loss)		(9,393	)		(1,027	)		(3,393	)
Accumulated deficit		(75,501	)		(63,103	)		(40,384	)
TOTAL SHAREHOLDERS' EQUITY		160,413			125,161			130,006
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	186,997		$	151,029		$	137,790

Events after the reporting period (notes 13(b), 14(a), 14(d), and 21)

Authorized by the Board of Directors on August 10, 2020, for issuance.

/s/ Elizabeth McGregor	/s/ Jason Simpson
Elizabeth McGregor, Director	Jason Simpson, Director

The accompanying notes are an integral part of these consolidated financial statements.

Page 2

ORLA MINING LTD.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Unaudited – Thousands of United States dollars, except per-share amounts)

	Three months ended June 30						Six months ended June 30
	2020			2019 (restated note 3)			2020			2019 (restated note 3)
EXPLORATION AND EVALUATION EXPENSES (note 5)
Assays and analysis	$	14		$	39		$	29		$	122
Drilling		—			215			—			729
Geological		205			334			420			971
Engineering		252			618			530			1,302
Environmental		16			173			91			317
Community and government		71			165			2,521			350
Land and water use, claims and concessions		(68	)		6			3,160			2,312
Project management		—			60			—			93
Project review		—			46			6			88
Site activities		113			302			461			886
Site administration		167			657			913			1,087
Recognition of site closure provisions		—			—			15			—
		770			2,615			8,146			8,257
GENERAL AND ADMINISTRATIVE EXPENSES
Office and administrative		194			83			379			284
Professional fees		230			110			406			204
Regulatory		66			34			148			65
Salaries and benefits		527			450			791			833
		1,017			677			1,724			1,386
OTHER EXPENSES (INCOME)
Depreciation (note 6)		382			25			625			47
Share based payments (note 14)		612			673			1,384			1,615
Interest income and finance costs (note 12)		648			35			1,260			256
Foreign exchange loss (gain)		(1,220	)		7			(741	)		20
		422			740			2,528			1,938
LOSS FOR THE PERIOD	$	2,209		$	4,032		$	12,398		$	11,581
OTHER COMPREHENSIVE LOSS (INCOME)
Items that may in future periods be reclassified to profit or loss:
Foreign currency differences arising on translation of foreign operations		1,205			(338	)		8,366			(1,138	)
TOTAL COMPREHENSIVE LOSS	$	3,414		$	3,694		$	20,764		$	10,443
Weighted average number of common shares outstanding (millions)		224.4			179.5			205.9			179.5
Loss per share - basic and diluted	$	0.01		$	0.02		$	0.06		$	0.06

The accompanying notes are an integral part of these consolidated financial statements.

Page 3

ORLA MINING LTD.

Consolidated Statements of Cash Flows

(Unaudited – Thousands of United States dollars)

	Three months ended June 30						Six months ended June 30
	2020			2019			2020			2019
Cash flows provided by (used in):				(restated note 3)						(restated note 3)
OPERATING ACTIVITIES
Loss for the period	$	(2,209	)	$	(4,032	)	$	(12,398	)	$	(11,581	)
Adjustments for items not affecting cash:
Depreciation		202			25			445			47
Share based compensation		612			673			1,384			1,615
Changes in site closure provisions charged to exploration expense		—			—			15			—
Newmont loan proceeds received in excess of fair value (note 10)		—			—			—			(715	)
Amortization of project loan transaction costs (note 9)		167			—			187			—
Accretion of the Newmont loan (note 10)		(8	)		56			57			324
Interest expense on leases		45			—			45			—
Lease payments		(456	)		—			(456	)		—
Exploration expenses paid via issuance of common shares		—			48			—			48
Changes in non-cash working capital:
Accounts receivable and prepaid expenses		(91	)		168			(65	)		315
Trade and other payables		26			199			30			(589	)
Accrued liabilities		57			(498	)		1,888			(498	)
Cash used in operating activities		(1,655	)		(3,361	)		(8,868	)		(11,034	)
FINANCING ACTIVITIES
Proceeds on issuance of common shares		54,959			—			54,959			—
Proceeds – warrants exercised		1,547			261			1,547			261
Proceeds – stock options exercised		128			—			219			—
Share issuance costs		(2,095	)		(12	)		(2,095	)		(12	)
Payment of principal portion of lease liabilities		—			(10	)		—			(10	)
Advances received on the Newmont loan		—			—			—			2,674
Cash provided by financing activities		54,539			239			54,630			2,913
INVESTING ACTIVITIES
Purchase of equipment		39			(3	)		(8	)		(3	)
Construction in progress		(1,014	)		(1	)		(1,551	)		(1	)
Deposits on long term assets		(10,467	)		—			(10,467	)		—
Restricted cash funded		(17	)		(57	)		(21	)		(303	)
Value added taxes paid, not immediately recoverable		(674	)		(138	)		(843	)		(293	)
Cash used in investing activities		(12,133	)		(199	)		(12,890	)		(600	)
Effects of exchange rate changes on cash		(1,508	)		(71	)		(1,313	)		328
Net increase (decrease) in cash		39,243			(3,392	)		31,559			(8,393	)
Cash, beginning of period		15,422			7,233			23,106			12,234
CASH, END OF PERIOD	$	54,665		$	3,841		$	54,665		$	3,841
Cash consist of:
Bank current accounts and cash on hand	$	54,665		$	3,841		$	54,665		$	3,841

The accompanying notes are an integral part of these consolidated financial statements.

Page 4

ORLA MINING LTD.

Consolidated Statements of Changes in Equity

(Unaudited – Thousands of United States dollars)

	Common shares					Reserves
	Number of shares (thousands)		Amount			Share based payments reserve			Warrants reserve			Total			Accumulated Other Comprehensive Income			Retained earnings (deficit)			Total
Balance at January 1, 2019 (restated, note 3)		179,315	$	153,852		$	6,867		$	13,064		$	19,931		$	(3,393	)	$	(40,384	)	$	130,006
Shares issued for property payments		59		48			—			—			—			—			—			48
Warrants exercised		563		400			—			(134	)		(134	)		—			—			266
Share issuance costs		—		(12	)		—			—			—			—			—			(12	)
RSUs redeemed		196		162			(162	)		—			(162	)		—			—			—
Share based payments		—		—			1,615			—			1,615			—			—			1,615
Loss for the period		—		—			—			—			—			—			(11,581	)		(11,581	)
Other comprehensive loss		—		—			—			—			—			1,138			—			1,138
Balance at June 30, 2019		180,133	$	154,450		$	8,320		$	12,930		$	21,250		$	(2,255	)	$	(51,965	)	$	121,480
Balance at January 1, 2020		187,102	$	159,230		$	8,159		$	21,902		$	30,061		$	(1,027	)	$	(63,103	)	$	125,161
Shares issued pursuant to a financing		36,600		54,959			—			—			—			—			—			54,959
Share issuance costs		—		(2,095	)		—			—			—			—			—			(2,095	)
Warrants exercised		1,108		1,818			—			(271	)		(271	)		—			—			1,547
Options exercised		360		399			(178	)		—			(178	)		—			—			221
RSUs redeemed		359		289			(289	)		—			(289	)		—			—			—
Bonus shares issued (note 14(d))		500		358			(358	)		—			(358	)		—			—			—
Share based payments		—		—			1,384			—			1,384			—			—			1,384
Loss for the period		—		—			—			—			—			—			(12,398	)		(12,398	)
Other comprehensive loss		—		—			—			—			—			(8,366	)		—			(8,366	)
Balance at June 30, 2020		226,029	$	214,958		$	8,718		$	21,631		$	30,349		$	(9,393	)	$	(75,501	)	$	160,413

The accompanying notes are an integral part of these consolidated financial statements.

Page 5

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated). All currency figures in tables are in thousands, except per-share amounts)

1. CORPORATE INFORMATION AND NATURE OF OPERATIONS

Orla Mining Ltd. was incorporated in Alberta in 2007 and was continued into British Columbia in 2010 and subsequently into Ontario under the Business Corporations Act (Ontario) in 2014. The “Company”, “Orla”, “we”, and “our” refer to Orla Mining Ltd. and its subsidiaries. The registered office of the Company is located at Suite 202, 595 Howe Street, Vancouver, Canada.

The Company is engaged in the acquisition, exploration, and development of mineral properties, and holds the Camino Rojo gold and silver project in Zacatecas State, Mexico, and the Cerro Quema gold project in Panama.

These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at June 30, 2020, the Company had not advanced any of its properties to commercial production and was not able to fund day-to-day activities through operating activities. During the reporting period, the Company completed a C$75 million ($55 million) equity financing. The Company has received $25 million of a $125 million project loan facility in respect of the Camino Rojo project.

The Company’s continuation as a going concern is dependent upon successful results from our mineral exploration and development activities and our ability to attain profitable operations and generate cash or raise equity capital or borrowings sufficient to meet current and future obligations and strategic objectives. We expect to fund operating costs of the Company over the next twelve months with cash on hand and with further loan advances.

During the reporting period, there was a global outbreak of the novel coronavirus (“COVID-19”), which has had an impact on businesses through the restrictions put in place by the governments in the various jurisdictions where the Company conducts its activities. In common with all businesses in the jurisdictions in which we operate, our activities are restricted by government orders related to, among others, travel, business operations, and stay-at-home orders. As of the date of these financial statements, it is not possible to determine the extent of the impact that this global health emergency will have on the Company’s activities in the future as the Company cannot predict the ultimate geographic spread of the disease, the duration of the outbreak, and possible government, societal, and individual responses to the situation. We continue to monitor our activities, in particular with regard to the safety of our personnel and the communities where we conduct our activities.

2. BASIS OF PREPARATION

These condensed interim consolidated financial statements have been prepared in accordance with IAS 34 «Interim Financial Reporting» and do not include all the information required for full annual financial statements.

The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

These condensed interim consolidated financial statements are presented in United States dollars and include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated upon consolidation.

On August 10, 2020, the Board of Directors approved these consolidated financial statements for issuance.

3. CHANGE OF PRESENTATION CURRENCY

As a result of the continued advancement of the Camino Rojo Project, the Company changed its presentation currency from Canadian dollars to United States dollars effective January 1, 2020. The change in the financial statement presentation currency is an accounting policy change and has been accounted for retrospectively. The balance sheets for each period presented have been translated from the related subsidiary’s functional currency to the new US dollar presentation currency at the rate of exchange prevailing at the respective balance sheet date except for equity items, which have been translated at accumulated historical rates from the related subsidiary’s date of incorporation. The statements of income and comprehensive income were translated at the average exchange rates for the reporting period, or at the exchange rate prevailing at the date of transactions. Exchange differences arising in 2018 on translation from the related subsidiary’s functional currency to the United States dollar presentation currency have been recognized in other comprehensive income and accumulated as a separate component of equity.

Page 6

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated). All currency figures in tables are in thousands, except per-share amounts)

In prior reporting periods, the translation of the Company’s subsidiaries that had a United States dollar or Mexican peso functional currency into the Company’s presentation currency of the Canadian dollar gave rise to a translation adjustment which was recorded as an adjustment to accumulated other comprehensive income (“AOCI”), a separate component of shareholders’ equity. With the retrospective application of the change in presentation currency from the Canadian dollar to the US dollar, the AOCI related to the translation of US dollar functional currency subsidiaries was eliminated. However, with the retrospective application of the change in presentation currency to the US dollar, the Company’s corporate office, which has a Canadian dollar functional currency, resulted in an AOCI balance. The AOCI balance generated by the Mexican peso entities has been adjusted since it now reflects the translation into the new US dollar presentation currency.

(a) Adjustment to previously reported financial information due to change in presentation currency

For comparative purposes, the consolidated balance sheets as at December 31, 2019 and January 1, 2019 include adjustments to reflect the change in the presentation currency to the US dollar, which is a change in accounting policy. The exchange rates used to translate the amounts previously reported into US dollars at December 31, 2019 were 1.2988 CAD/USD and 18.87 MXN/USD, and at January 1, 2019 were 1.3642 CAD/USD and 19.65 MXN/USD. Refer to note 22(a) for the effects of the translation.

For comparative purposes, the consolidated statement of loss and comprehensive loss for the three and six months ended June 30, 2019 includes adjustments to reflect the change in the presentation currency to the US dollar, which is a change in accounting policy. The exchange rates used to translate the amounts previously reported into US dollars for the three and six months ended June 30, 2019 were 1.3338 CAD/USD and 19.16 MXN/USD, which were the average exchange rates for the period. Refer to note 22(b) for the effects of the translation.

(b) Functional currency

The functional currencies of the Company and its subsidiaries, all of which are wholly owned, remained unchanged and were as follows for periods presented.

Orla Mining Ltd.	Canadian dollars
Minerometalúrgica San Miguel S de RL de CV	Mexican pesos
Minera Camino Rojo SA de CV	Mexican pesos
Minera Cerro Quema SA	United States dollars
Monitor Gold Corporation	United States dollars

4. SIGNIFICANT ACCOUNTING POLICIES

We applied the same accounting policies in these condensed interim consolidated financial statements as those applied in the Company’s annual audited consolidated financial statements as at and for the year ended December 31, 2019.

In preparing these condensed interim consolidated financial statements, the significant judgements we made in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual consolidated financial statements as at and for the year ended December 31, 2019.

You should read these condensed interim consolidated financial statements in conjunction with the Company’s annual audited consolidated financial statements as at and for the years ended December 31, 2019 and 2018.

Page 7

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated). All currency figures in tables are in thousands, except per-share amounts)

5. EXPLORATION AND EVALUATION

(a) Camino Rojo Project

The Camino Rojo Project lies 190 km NE of the city of Zacatecas, 48 km S-SW of the town of Concepcion del Oro, and 54 km S-SE of Newmont Corporation’s (“Newmont”) Peñasquito Mine. In November 2017, we acquired the Camino Rojo Project, a gold and silver oxide heap leach project located in Zacatecas State, Mexico, from Goldcorp Inc. (now called Newmont Corporation).

The Company and Newmont also entered into an option agreement regarding the potential development of sulphide operations at Camino Rojo. Pursuant to the option agreement, Newmont will, subject to the applicable sulphide project meeting certain thresholds, have an option to acquire a 60% or 70% interest in the applicable sulphide project. The Royalty excludes revenue on the sale of metals produced from a sulphide project where Newmont has exercised its Sulphide Option. We maintain a right of first refusal on the sale if Newmont elects to sell the Royalty, in whole or in part.

We have applied for and expect to receive permits for the construction of a mine at Camino Rojo. In anticipation of such approvals, we have already commenced activities such as construction engineering and design work which are not necessarily of an exploration and evaluation nature. Consequently we are presenting these costs as construction in progress.

(i) Construction in progress

	Total
Construction in progress at historical rates
At December 31, 2019	$	—
Additions		1,551
At June 30, 2020	$	1,551
Accumulated foreign exchange on translation
At December 31, 2019		—
Due to changes in exchange rates		(98	)
At June 30, 2020	$	(98	)
Construction in progress
At December 31, 2019	$	—
At June 30, 2020	$	1,453

The figures in the above totals do not include down payments which we have made on key components and construction items related to the Camino Rojo project. At June 30, 2020, down payments and advances totaled $9,801,000 (December 31, 2019 – $nil).

(b) Cerro Quema Project

The Cerro Quema Project is located on the Azuero Peninsula in Los Santos Province, Panama. The project is at the exploration and development stage for a proposed open pit mine with process by heap leaching.

In December 2016, we acquired 100% of the Cerro Quema Project by acquiring Pershimco Resources Inc. through the issuance of a combination of Orla common shares and warrants, and the assumption of Pershimco’s long term debt, which we subsequently paid off. We own the mineral rights as well as the surface rights over the current mineral resource areas, proposed mine development areas, and priority drill target areas.

Page 8

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated). All currency figures in tables are in thousands, except per-share amounts)

The original 20-year terms for these concessions expired in February and March of 2017. The Company has applied for the prescribed ten year extension to these concessions as it is entitled to under Panamanian mineral law. In March 2017, the Ministry of Commerce and Industry provided written confirmation to the Company that the extension applications had been received and that exploration work could continue while the Company awaits renewal of the concessions. As of the date of these financial statements, final concession renewals have not been received; however, we continue to receive ongoing drilling, water use, environmental and other permits, and have paid concession taxes, in the normal course.

(c) Monitor Gold Project

The Monitor Gold Project consists of three separate option agreements consisting of 422 claims covering 3,416 hectares in Nye County, Nevada, USA.

In 2019, these consisted of $50,000 in share issuances, a $20,000 in advance royalty payments, and $30,000 in work commitments, all of which requirements were met by the Company. For 2020, these consist of $40,000 in advance royalty payments, and $75,000 in work commitments, both of which requirements for 2020 have been met. To maintain the options, minimum payments and work commitments are required for each year to 2038.

(d) Exploration and evaluation assets

	Camino Rojo			Cerro Quema		Monitor Gold		Total
Acquisition costs at historical rates
At December 31, 2019	$	42,615		$	82,429	$	314	$	125,358
Additions		—			—		—		—
At June 30, 2020	$	42,615		$	82,429	$	314	$	125,358
Accumulated foreign exchange on translation
At December 31, 2019		285			—		—		285
Due to changes in exchange rates		(7,530	)		—		—		(7,530	)
At June 30, 2020	$	(7,245	)	$	—	$	—	$	(7,245	)
Acquisition costs
At December 31, 2019	$	42,900		$	82,429	$	314	$	125,643
At June 30, 2020	$	35,370		$	82,429	$	314	$	118,113

Page 9

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated). All currency figures in tables are in thousands, except per-share amounts)

(e) Exploration and evaluation expense

Three months ended June 30, 2020	Camino Rojo			Cerro Quema		Monitor Gold		Other		Total
Assays and analysis	$	14		$	—	$	—	$	—	$	14
Geological		168			37		—		—		205
Engineering		230			22		—		—		252
Environmental		(4	)		20		—		—		16
Community and government		(29	)		100		—		—		71
Land, water use, and claims		(68	)		—		—		—		(68	)
Site activities		19			94		—		—		113
Site administration		76			91		—		—		167
	$	406		$	364	$	—	$	—	$	770

Six months ended June 30, 2020	Camino Rojo		Cerro Quema		Monitor Gold		Other		Total
Assays and analysis	$	28	$	—	$	1	$	—	$	29
Geological		352		68		—		—		420
Engineering		474		56		—		—		530
Environmental		54		37		—		—		91
Community and government		2,341		180		—		—		2,521
Land, water use, and claims		3,120		—		40		—		3,160
Project review		—		—		—		6		6
Site activities		167		294		—		—		461
Site administration		550		363		—		—		913
Recognition of site closure provisions		15		—		—		—		15
	$	7,101	$	998	$	41	$	6	$	8,146

Three months ended June 30, 2019	Camino Rojo		Cerro Quema		Monitor Gold			Other			Total
Assays and analysis	$	39	$	—	$	—		$	—		$	39
Drilling		215		—		—			—			215
Geological		226		163		22			(77	)		334
Engineering		618		—		—			—			618
Environmental		173		—		—			—			173
Community and government		120		45		—			—			165
Land, water use, and claims		6		1		(1	)		—			6
Project management		60		—		—			—			60
Project review		—		—		—			46			46
Site activities		198		104		—			—			302
Site administration		144		512		1			—			657
	$	1,799	$	825	$	22		$	(31	)	$	2,615

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ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated). All currency figures in tables are in thousands, except per-share amounts)

Six months ended June 30, 2019	Camino Rojo		Cerro Quema		Monitor Gold		Other		Total
Assays and analysis	$	99	$	23	$	—	$	—	$	122
Drilling		729		—		—		—		729
Geological		504		441		26		—		971
Engineering		1,302		—		—		—		1,302
Environmental		317		—		—		—		317
Community and government		209		141		—		—		350
Land, water use, and claims		2,234		2		76		—		2,312
Project management		93		—		—		—		93
Project review		—		—		—		88		88
Site activities		430		456		—		—		886
Site administration		307		778		2		—		1,087
	$	6,224	$	1,841	$	104	$	88	$	8,257

6. EQUIPMENT

	Cost									Accumulated depreciation									Net book value
	Begin of year		Changes during the period		Effect of FX			End of period		Begin of year		Changes during the period		Effect of FX			End of period		Begin of year		End of period
Machinery and equipment	$	324	$	4	$	(19	)	$	309	$	205	$	16	$	(3	)	$	218	$	119	$	91
Office equipment		36		—		(4	)		32		15		1		(2	)		14		21		18
Computers and software		150		4		(10	)		144		96		13		(4	)		105		54		39
Vehicles		21		—		—			21		2		—		—			2		19		19
Land – leases		—		3		—			3		—		2		—			2		—		1
Buildings – leases		89		229		(19	)		299		18		115		(2	)		131		71		168
Office equipment – leases		—		31		(2	)		29		—		24		(2	)		22		71		7
Road vehicles – leases		—		274		(17	)		257		—		274		(17	)		257		71		—
Total	$	620	$	545	$	(71	)	$	1,094	$	336	$	445	$	(30	)	$	751	$	284	$	343

7. VALUE ADDED TAXES (“VAT”) RECOVERABLE

Our Mexican entities pay value-added taxes (called “IVA” in Mexico) on certain goods and services we purchase.

We also paid approximately 74 million Mexican pesos (approximately $3,860,000) of IVA on the initial acquisition of the Camino Rojo project, which is classified within exploration and evaluation assets as part of acquisition cost (note 5(a) and 5(d)).

Page 11

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

8. TRADE AND OTHER PAYABLES

	June 30, 2020		December 31, 2019
Trade payables	$	386	$	492
Payroll related liabilities		372		208
Lease obligations – current		85		23
Interest payable on Camino Rojo project loan		—		79
	$	843	$	802

9. CAMINO ROJO PROJECT LOAN

In December 2019, the Company entered into a loan agreement with Trinity Capital Partners Corporation (“Trinity Capital”) and certain other lenders with respect to a credit debt facility of US$125 million for the development of the Camino Rojo Oxide Gold Project (the “Credit Facility”).

The Credit Facility provides a total of US$125 million to the Company, available in three tranches. The first tranche of US$25 million was drawn down by the Company on December 18, 2019 upon execution of the definitive loan documentation. Tranches 2 and 3 provide US$50 million each, available for drawdown after satisfaction of conditions precedent, including the receipt of certain key permits required for the development of the Camino Rojo project.

The Credit Facility is denominated in United States dollars, and bears interest at 8.80% per annum, payable quarterly commencing March 31, 2020, and is secured by all the assets of the Camino Rojo Project and the fixed assets of the Cerro Quema Project. The principal amount is due upon maturity at December 18, 2024, with no scheduled principal payments prior to maturity. The Company may prepay the loan, in full or in part, at any time during the term without penalty, by using cash flow from operations. The Credit Facility does not impose on the Company any mandatory requirements of hedging, production payments, offtake, streams, or royalties.

On December 18, 2019, the Company issued 32.5 million common share purchase warrants, with an exercise price of C$3.00 per warrant and an expiry date of December 18, 2026, to the lenders.

	Six months ended June 30, 2020		Year ended December 31, 2019
Balance, beginning of year	$	12,961	$	—
Amounts drawn down during the period		—		25,000
Cash transaction costs		—		(3,158	)
Warrants issued to the lenders		—		(8,968	)
Amortization of the transaction costs		187		86
Foreign exchange		482		1
Balance, end of period	$	13,630	$	12,961

Page 12

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

10. NEWMONT LOAN

As part of the Company’s acquisition of the Camino Rojo project from Newmont (then, Goldcorp Inc.), Newmont agreed to provide interest-free loans to the Company for all the annual landholding costs on the Camino Rojo project from November 7, 2017 until December 31, 2019. The loans are to be repaid upon declaration of commencement of commercial production of a heap leach operation at the Camino Rojo Project. To the date of these financial statements, 219,446,000 pesos had been advanced by Newmont under this agreement. No further advances in respect of this loan are expected.

The original agreement provided that the Company may, at its option, repay any amounts owing to Newmont, prior to maturity, in the form of (a) a lump sum cash payment, (b) the issuance of additional common shares of the Company, or (c) a combination of cash and shares (subject to certain maximum ownership limits). During the quarter ended June 30, 2020, the Company agreed with Newmont that the repayment would be made in cash.

Because the loan is non-interest bearing, for accounting purposes at date of each advance, we discount the expected payments using a risk-adjusted discount rate and an estimated repayment date. Amounts received in excess of fair value on the date of the advances were credited to exploration expense.

	Mexican pesos  (thousands)		Mexican pesos (thousands)		US dollars (thousands)
	Undiscounted		Discounted
At January 1, 2019		121,865		87,917	$	4,475
Advances received		97,601		72,897		3,676
Accretion during the year		—		21,886		1,104
Foreign exchange		—		—		392
At December 31, 2019		219,466		182,700	$	9,647
Accretion year to date		—		1,231		57
Foreign exchange		—		—		(1,697	)
At June 30, 2020		219,466		183,931	$	8,007

11. SITE CLOSURE PROVISIONS

	Camino Rojo Project		Cerro Quema Project		Total
At December 31, 2019	$	232	$	343	$	575
At June 30, 2020	$	215	$	343	$	558

Page 13

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

12. INTEREST INCOME AND FINANCE COSTS

	Three months ended June 30						Six months ended June 30
	2020			2019			2020			2019
Interest on Camino Rojo project loan (note 9)	$	536		$	—		$	1,117		$	—
Amortization of Camino Rojo project loan costs (note 9)		167			—			187			—
Accretion on Newmont loan (note 10)		(8	)		56			57			324
Interest expense on leases		40			1			48			1
Interest income		(87	)		(22	)		(149	)		(69	)
	$	648		$	35		$	1,260		$	256

13. SHARE CAPITAL

(a) Issued share capital

On April 3, 2020, the Company closed an equity financing of 36,600,000 common shares at a price of C$2.05 per common share for aggregate gross proceeds to the Company of C$75,030,000 ($54,959,000). After share issuance costs of $2,095,000 net proceeds were $52,864,000.

In the six months ended June 30, 2020, the Company issued:

· 1,107,500 common shares pursuant to the exercise of warrants (note 13(b)) for proceeds of $1,547,000.

· 360,000 common shares pursuant to the exercise of stock options (note 14(a)) for proceeds of $221,000.

· 359,000 common shares pursuant to the vesting of RSUs (note 14(b)).

· 500,000 common shares pursuant to the vesting of bonus shares (note 14(d)).

(b) Warrants

The following summarizes information about the number of warrants outstanding during the period.

Expiry date	Exercise price		December 31 2019		Issued		Exercised			June 30 2020
February 15, 2021	C$	2.35		8,790,600		—		(407,500	)		8,383,100
July 8, 2021	C$	0.62		570,000		—		—			570,000
June 12, 2022	C$	1.65		5,842,500		—		(700,000	)		5,142,500
November 7, 2022	C$	1.40		3,000,000		—		—			3,000,000
December 18, 2026	C$	3.00		32,500,000		—		—			32,500,000
Total number of warrants				50,703,100		—		(1,107,500	)		49,595,600
Weighted average exercise price			C$	2.61		—	C$	1.91		C$	2.63

Subsequent to the reporting period, 320,000 warrants were exercised, for gross proceeds to the Company of $239,000.

Page 14

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

14. SHARE-BASED PAYMENTS

The Company has four different forms of share-based payments for eligible recipients – stock options, restricted share units (“RSUs”), deferred share units (“DSUs”), and bonus shares.

Share based payments expense	Three months ended June 30				Six months ended June 30
	2020		2019		2020		2019
Stock options	$	398	$	415	$	776	$	1,005
Restricted share units		138		136		260		174
Deferred share units		—		—		217		190
Bonus shares		76		122		131		246
Share based payments expense	$	612	$	673	$	1,384	$	1,615

(a) Stock options

Stock options outstanding	Number			Weighted average exercise price
As at January 1, 2019		9,124,005		C$	1.23
Granted		2,199,322			1.08
Exercised		(1,358,491	)		1.16
Expired or cancelled		(47,500	)		1.48
As at December 31, 2019		9,917,336			1.20
Granted		1,683,438			2.29
Exercised		(360,000	)		0.83
As at June 30, 2020		11,240,774		C$	1.38
Vested, December 31, 2019		7,229,622		C$	1.22
Vested, June 30, 2020		8,967,638		C$	1.29

The options granted during the six months ended June 30, 2020 had an aggregate grant date fair value of $1,153,600 (C$1,575,000) which was determined using a Black Scholes option pricing model with the following assumptions:

· Expected volatility 47%, expected life 5 years, Canadian dollar risk free interest rate 0.6%, dividends nil.

The options granted during the six months ended June 30, 2019 had an aggregate grant date fair value of $737,000 (C$932,000) which was determined using a Black Scholes option pricing model with the following weighted average assumptions:

· expected volatility 50%, expected life 5 years, Canadian dollar risk free interest rate 1.5%, dividends nil.

Subsequent to the reporting period, 755,789 stock options were exercised, for gross proceeds to the Company of $716,000 and 300,000 stock options were granted, with an aggregate grant date fair value of $359,700.

Page 15

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

(b) Restricted Share Units

	Total			Number vesting in the year
Number of RSUs outstanding:	number			2020			2021		2022		2023
Outstanding, December 31, 2019		1,014,972			365,882			365,880		283,210		—
Awarded during the period		320,450			—			106,819		106,816		106,815
Vested and settled during the period		(359,215	)		(359,215	)		—		—		—
Outstanding, June 30, 2020		976,207			6,667			472,699		390,026		106,815

RSUs are valued based on the closing price of the Company’s common shares immediately prior to award.

Subsequent to the reporting period, 48,181 RSUs vested and were settled by the issuance of 48,181 common shares.

(c) Deferred Share Units

DSUs outstanding:	Number
Outstanding, December 31, 2019		508,780
Awarded		135,745
Outstanding, June 30, 2020		644,525

DSUs are valued based on the closing price of the Company’s common shares immediately prior to award.

(d) Bonus shares

Bonus shares outstanding:	Number
Outstanding, December 31, 2019		1,500,000
Vested and issued during the period		500,000
Outstanding, June 30, 2020		1,000,000

During 2017, the Board of Directors awarded 500,000 common shares to the non-executive Chairman of the Company as bonus shares. The bonus shares are subject to a vesting period from June 19, 2017 to June 18, 2020 (the “Eligibility Period”). If the non-executive Chairman ceases to be the director of the Company before the Eligibility Period ends, the bonus shares will be forfeited. The bonus shares will become issuable (1) after the Eligibility Period on the date that the non-executive Chairman ceases to act as a director of the Company, or (2) upon a change of control of the Company.

Page 16

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

We estimated the fair value of the bonus shares ($1.31 each) based on the market price of the common shares at the date of the grant. Accordingly, the amount of $655,000 is being recognized on a straight line basis over the Eligibility Period.

On November 13, 2018, the Board of Directors awarded 1,000,000 bonus shares to an officer of the Company. The bonus shares vest in four tranches of 250,000 bonus shares each, issuable upon the achievement of certain share price thresholds particular to each tranche. Upon initial recognition we estimated the dates that each of these market condition tranches would vest, such dates ranging from December 2019 to March 2022. Consequently, the award date fair value ($537,000, or $0.537 per bonus share) is being recognized over these four periods.

During the three months ended June 30, 2020, two of these tranches vested and the bonus shares were issued.

Subsequent to the reporting period, the third and fourth tranches of 250,000 each vested, but no common shares had yet been issued as of the issuance date of these financial statements.

15. RELATED PARTY TRANSACTIONS

The Company’s related parties include:

Related party	Nature of the relationship
Key management personnel	Key management personnel are the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, and members of the Board of Directors of the Company.

(a) Key Management Personnel

Compensation to key management personnel was as follows:

	Three months ended June 30				Six months ended June 30
	2020		2019		2020		2019
Short term incentive plans
Salaries	$	596	$	457	$	732	$	631
Directors’ fees		41		38		84		69
		637		495		816		700
Share based payments		489		511		1,119		1,270
Total	$	1,126	$	1,006	$	1,935	$	1,970

Page 17

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

(b) Transactions

The Company had no other material transactions with related parties, other than with key management personnel as described above, during the three and six months ended June 30, 2020, or during the year ended December 31, 2019.

(c) Outstanding balances at the Reporting Date

At June 30, 2020, estimated accrued short term incentive compensation to key management personnel totaled $253,000 and was included in accrued liabilities (December 31, 2019 – $540,000).

16. SUPPLEMENTAL CASH FLOW INFORMATION

The non-cash investing and financing activities of the Company include the following:

	Three months ended June 30					Six months ended June 30
	2020			2019		2020		2019
Financing activities
Stock options exercised, credited to share capital with an offset to reserves		94			—		179		—
Warrants exercised, credited to share capital with an offset to reserves		—			—		271		—
Shares issued on maturity of RSUs, credited to share capital with offset to reserves		66			112		289		112
Shares issued on vesting of bonus shares, credited to share capital with offset to reserves		—			—		357		—
Investing activities
Initial recognition of right of use assets with an offset to lease obligation		(80	)		—		537		—

Page 18

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

17. SEGMENT INFORMATION

(a) Reportable segments

The operating segments of the Company are based on the reports which are reviewed by the chief operating decision maker (“CODM”) in making strategic resource allocation decisions. These operating segments are the Panamanian projects, the Mexican projects, and the corporate office. The projects are each managed by a dedicated General Manager and management team. Additionally, the corporate office oversees the plans and activities of early stage exploration projects, such as the Monitor Gold project.

None of these segments yet generate revenue from external customers, and each of the projects are focused on the exploration and evaluation of mineral properties.

(b) Geographic segments

We conduct our activities in four geographic areas: Mexico, Panama, the United States, and Canada.

	Mexico		Panama		USA		Canada		Total
At June 30, 2020
Equipment	$	235	$	36	$	—	$	72	$	343
Exploration and evaluation assets		35,370		82,429		314		—		118,113

	Mexico		Panama		USA		Canada		Total
At December 31, 2019
Equipment	$	140	$	48	$	—	$	96	$	284
Exploration and evaluation assets		42,900		82,429		314		—		125,643

18. CAPITAL MANAGEMENT

Our objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration, evaluation, and development of our mineral properties and to maintain a flexible capital structure. In the management of capital, we include long term loans and share capital.

There were no changes to our policy for capital management during the three and six months ended June 30, 2020.

We manage our capital structure and adjust it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the Company’s capital structure, we may issue new shares, take on additional debt, acquire or dispose of assets, or adjust the amount of cash and short-term investments. To maximize ongoing development efforts, we do not currently pay dividends.

At the end of 2019, we entered into a Project Finance Facility (note 9) pursuant to which we have drawn $25 million of a total available $125 million. The Project Finance Facility requires us to maintain a minimum working capital of $5 million.

Our investment policy is to invest the Company’s excess cash in low risk financial instruments such as term deposits and higher yield savings accounts with major Canadian banks. By using this strategy, the Company preserves its cash resources and is able to marginally increase these resources through the yields on these investments. Our financial instruments are exposed to certain financial risks, which include currency risk, credit risk, liquidity risk and interest rate risk.

Page 19

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

Our ability to carry out our long-range strategic objectives in future years depends on our ability to raise financing from lenders, shareholders, and other investors. We continue to regularly review and consider financing alternatives to fund the Company’s ongoing exploration and development activities.

19. FINANCIAL INSTRUMENTS

(a) Fair value hierarchy

To provide an indication of the reliability of the inputs used in determining fair value, we classify our financial instruments into the three levels prescribed by the accounting standards.

Level 1 The fair value of financial instruments traded in active markets (such as publicly traded equity securities) is based on quoted (unadjusted) market prices as at the reporting date. The quoted market price used for financial assets held by the Company is the closing trading price on the reporting date. Such instruments are included in Level 1.

Level 2 The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, we include that instrument in Level 2.

Level 3 If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. We have no financial assets or liabilities included in Level 3 of the hierarchy.

At June 30, 2020, the carrying values and fair values of our financial instruments by category were as follows:

				Fair value
	Classification	Carrying value		Quoted prices in active market for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Approximate fair value due to short term nature of the instrument		Fair value
Financial assets
Cash and cash equivalents	FVTPL	$	54,665	$	54,665	$	—	$	—	$	—	$	54,665
Accounts receivable	Amortized cost		10		—		—		—		10		10
Restricted funds	Amortized cost		378		—		378		—		—		378
		$	55,053		54,665	$	378	$	—	$	10	$	55,053
Financial liabilities
Trade payables	Amortized cost	$	386	$	—	$	—	$	—	$	386	$	386
Lease obligation	Amortized cost		539		—		—		—		539		539
Camino Rojo project loan	Amortized cost		13,630		—		13,630		—		—		13,630
Newmont loan	Amortized cost		8,007		—		8,007		—		—		8,007
		$	22,562	$	—	$	21,637	$	—	$	925	$	22,562

Page 20

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

At December 31, 2019, the carrying values and fair values of our financial instruments by category were as follows:

					Fair value
	Classification	Carrying value			Quoted prices in active market for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Approximate fair value due to short term nature of the instrument		Fair value
Financial assets
Cash and cash equivalents	FVTPL	$	23,106		$	23,106	$	—	$	—	$	—	$	23,106
Accounts receivable	Amortized cost		18			—		—		—		18		18
Restricted funds	Amortized cost		509	��		—		509		—		—		509
		$	23,633			23,106	$	509	$	—	$	18	$	23,633
Financial liabilities
Trade payables	Amortized cost	$	802		$	—	$	—	$	—	$	802	$	802
Lease obligation	Amortized cost		67			—		—		—		67		67
Camino Rojo project loan	Amortized cost		12,961			—		12,961		—		—		12,961
Newmont loan	Amortized cost		9,647			—		9,647		—		—		9,647
		$	23,477		$	—	$	22,608	$	—	$	869	$	23,477

Our policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

20. COMMITMENTS AND CONTINGENCIES

(a) Commitments

During the period ended June 30, 2020, the Company issued purchase orders for long lead equipment necessary for the construction of the Camino Rojo mine. At June 30, 2020, these outstanding purchase orders totaled $12,981,000 (December 31, 2019 – $2,483,000), which we expect will be filled in the next 12 months.

In the event of a change in control, the Company is committed to severance payments amounting to approximately $2,550,000 (December 31, 2019 – $2,020,000) to certain officers and management. No amounts have been recorded in these consolidated financial statements to reflect such severance payments.

(b) Litigation

We may, from time to time, be a party to legal proceedings, which arise in the ordinary course of our business. We are not aware of any pending or threatened litigation that, if resolved against us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

21. EVENTS AFTER THE REPORTING PERIOD

(a) Share Issuances

Subsequent to the reporting period, the Company issued common shares from the exercise of stock options (note 14(a)) and warrants (note 13(b)), and the vesting of RSU’s (note 14(b)). Certain bonus shares had vested but had not yet been settled.

Page 21

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

22. EFFECT OF THE CHANGE IN PRESENTATION CURRENCY

The effects of the change in presentation currency discussed in note 3 above were as follows.

(a) Effect on the consolidated balance sheets as at December 31, 2019 and January 1, 2019

	December 31, 2019						January 1, 2019
	USD			CAD			USD			CAD
ASSETS
Current assets
Cash and cash equivalents	US$	23,106		C$	30,009		US$	12,234		C$	16,686
Accounts receivable		94			122			282			385
Prepaid expenses		53			64			151			206
		23,253			30,195			12,667			17,277
Restricted funds		509			662			150			205
Value added taxes recoverable		1,340			1,747			622			849
Equipment		284			370			252			344
Exploration and evaluation assets		125,643			163,383			124,099			169,282
TOTAL ASSETS	US$	151,029		C$	196,357		US$	137,790		C$	187,957
LIABILITIES
Current liabilities
Trade and other payables	US$	802		C$	1,042		US$	1,278		C$	1,743
Accrued liabilities		1,578			2,049			1,405			1,916
		2,380			3,091			2,683			3,659
Lease obligations		44			57			—			—
Camino Rojo project loan		12,961			16,833			—			—
Newmont loan		9,647			12,573			4,475			6,103
Accrued liabilities – long term		261			338			—			—
Site closure provisions		575			748			626			745
TOTAL LIABILITIES		25,868			33,640			7,784			10,507
SHAREHOLDERS' EQUITY
Share capital		159,230			208,186			153,852			201,077
Reserves		30,061			39,348			19,931			25,960
Accumulated other comprehensive income (loss)		(1,027	)		(1,036	)		(3,393	)		4,797
Accumulated deficit		(63,103	)		(83,781	)		(40,384	)		(54,384	)
TOTAL SHAREHOLDERS' EQUITY		125,161			162,717			130,006			177,450
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	US$	151,029		C$	196,357		US$	137,790		C$	187,957

Page 22

ORLA MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and six months ended June 30, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

(b) Effect on the consolidated statement of loss and comprehensive loss for the six months ended June 30, 2019

	Six months ended June 30, 2019
	USD			CAD
EXPLORATION AND EVALUATION EXPENSES
Assays and analysis	US$	122		C$	159
Drilling		729			972
Geological		971			1,297
Engineering		1,302			1,742
Environmental		317			423
Community and government		350			467
Land and water use, claims and concessions		2,312			3,085
Project management		93			124
Project review		88			118
Site activities		886			1,181
Site administration		1,087			1,450
		8,257			11,018
GENERAL AND ADMINISTRATIVE EXPENSES
Office and administrative		284			379
Professional fees		204			273
Regulatory and transfer agent		65			87
Salaries and benefits		833			1,114
		1,386			1,853
OTHER EXPENSES (INCOME)
Depreciation		47			62
Share based payments		1,615			2,160
Interest and finance costs		256			346
Foreign exchange loss (gain)		20			24
		1,938			2,592
LOSS FOR THE YEAR	US$	11,581		C$	15,463
OTHER COMPREHENSIVE LOSS (INCOME)
Items that may in future periods be reclassified to profit or loss:
Foreign currency differences arising on translation of foreign operations		(1,138	)		5,443
TOTAL COMPREHENSIVE LOSS	US$	10,443		C$	20,906
Weighted average number of common shares outstanding (millions)		179.5			179.5
Loss per share - basic and diluted	US$	0.06		C$	0.09

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