ORLA - Earnings call transcript Q2 2022

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Operator

Ladies and gentlemen, good morning, and welcome to the Orla Mining Conference Call for the Second Quarter 2022. My name is Sheryl, and I will be your conference operator today. [Operator Instructions] Please be advised that this call is being recorded. I would like to turn the meeting over to Andrew Bradbury, Vice President of Investor Relations and Corporate Development for Orla Mining. Please go ahead, Mr. Bradbury.

Andrew Bradbury

welcome Second and Conference XXXX operator, Call. you, to Quarter Orla's Results Thank

we indicated. forward-looking Officer, to Orla today including executive will otherwise of be direct President U.S. today's Jason call regarding will During call, over All statements. the making and contains cautionary dollars, to the discussed dollar and on these forward-looking which you first statements. second presentation, this Executive slides Simpson. the important notes team, you. Jason, to would amounts unless Chief refer And morning is I

Jason Simpson

Andrew. with continue combination our value for Thanks, executes formula to I'd and team refresher we like our assets, our of that consistently. quality all you begin to partners. a This and a impressive formula, walk generated the thus results. far, Orla always be will has value-creating tremendous team stakeholders, company Today, on a of through quarterly

marked see from second to with first transition up, was you official the some was and our the period mining, safely the made milestones and exciting declaration processing second production of gold a will been Operations quarter The ramping the have metrics. and quarter which commercial producer. events. in developer as production with producer We

foundation cash we financial our margins, upon. on to the strong and in generated on guidance. addition Operating strong a track puts very the flows way costs flows, well us are robust debt XXXX refinancing cash We the position, remain producer build to low-cost and meeting to annual flexible These quarter. with in production the as recent during providing a

meet to track annual cost on also guidance. are We

this high-return project securityholder we acquisition step heap place will results were pass call Standard diversify Financial strengthen and morning excited quarter. Gold transaction the of the the the Gold of is portfolio expected in capital highly to Trend. with prolific Nevada, end Orla's vote Orla's are financial and During by now the Carlin The later leach of Morin, a the attractive pleased the intensity, I'll jurisdiction. Ventures, the the assets, for low Chief of This South we of taking discuss Etienne announce project owner Standard to into closing the Railroad week. located to Officer, quarter, the to

Etienne Morin

Thanks, Jason.

During ounce XX,XXX the Camino per sold, produced to while XX,XXX quarter, like realized sold inflation XXX,XXX diesel. confident lower price reminder consumption key rates, ounces. sold, annual at Cash we per and nearly $X,XXX $XXX have ounces, the net of to we remain all-in that just Rojo of our clear price -- these have was ounces XX,XXX prices cyanide, XX,XXX for we ounce. offset and of increases low-cost consumables, June mainly at unit these was cost of gold Year-to-date a X% a in about quarter mention on while ounce over production achieving per was seen electricity cost some guidance status. I'd nearly of and production been cost sustaining XX by ounces $XXX

with key project of that mainly Camino $XX portion expense cost of Rojo were was the in quarter. adjusting share. noncash $XX.X cost $XXX of $X.XX $XX.X cash refunds the flow Adjusted facility. guidance $XXX the tax -- was earnings generation noncash million flow was VAT for flow operating for The received before the cost from of million loan issued unamortized to cash associated with activities items million sustaining sorry, all-in Meanwhile, to warrants capital or the of related value-added supported quarter. during our ounce. maintain $XX.X transaction per to generation, the the free per the or quarter was by continue We Cash working million, connection

facility. premium paid for We onetime adjusted of million that $X.X the repayment also a on early

for adjusted million foreign we gain unrealized $X.X the during exchange of quarter. Lastly,

previously increased finance project much facility, at facility we a with reduced April, a we new offering announced credit initial As flexibility our refinanced cost successfully in of capital.

June As strong flow generated of XX the approximately cash was at a $XX for our the the approximately generation, quarter of flow $XX million. result and cash million. The balance in strong exercise also cash included options warrants

Operating received will of also call update. VAT date, an second million refunds We hand operating provide the and I'll our and received government million quarter, $XX of over from Andrew value-added the Cormier, to refunds. Mexican tax in now the Officer, $XX Chief who development we've to over

Andrew Cormier

Etienne. Thanks,

culture towards positive at and site safety Our throughout the quarter. health, continued environment

over a injury COVID-XX has the days one XXX vaccine. at and gone without lost have workforce least a received of We XX% of time dose

per day achieve the we average were a achievement look and XX,XXX to above stacked tonne, and of per which the the rate quarter, for mine steady-state of site operations. stabilize a X and whole nameplate stacking grade at second X.XX ore tremendous team capacity per processing stacking was daily tonnes is an on capacity the activities optimize X.X they quarter, million to tonnes rigs the rate to quarter, nameplate consistent Achieving In average mined of operation. an will X.X up grams at day. continues of million by grams the XX,XXX second focused Rojo, Camino During per average at at tonnes We grade ramping an tonne. of tonnes

July and The for PEA sulfides geometallurgical our plan. updated mine results reconciling over mine is development which recoveries metallurgical work. estimate, recoveries line to a is process X we and understanding in Mined mineral characteristics sulfides, sulfides for stand-alone designs. XX, recovery quarter, summary period. in project processing Rojo underground date to The been Rojo holes progress X the confirmed used The X a sulfide will sulfide we zones tonnes resource completed sulfides the continuity with work year. confirm end an multiple of continue the program XXXX. for of pit the grade completing the support Rojo currently reinforce the objective Phase previous in the half potential cutoff towards released option also of of to we form Camino used metallurgical will our higher of basis model. options to of continue model To increased project. determine of Phase of Camino XX,XXX determining to for processing XX-hour to greatly for on and the and and results Camino well the In geologic are a second and support respective compared with be metallurgical the in X,XXX advancement, on has a the Camino wide expected metallurgical Phase reported antennas are and the new being to to Rojo the fact, in results metallurgical the a open The optimal The grade block zones will Earlier designs ore we're stacked of grades targeted the meter drill to have Five an to sulfide model drill the program. of mineralization. gold be program are are the

progress. with to developing processing process resource working A are We selected also model finalize is in update options. the the in design the and mining criteria financial

focused exploration on In across along infill and Quemita with Caballito, addition will through $XX drilling XX,XXX finalized. increasing we metallurgical for back of expansion the near build valuation XXXX, Panama we of the drilling make and meters total, reserves, with to advancement the deposit targets The in Camino I'll mine total with Rojo quarter Quema sulfides, cash. exploration to on planned up the are regional defined XXXX XXXX X in and second At Phase was new half spending tools in Mexico, of oxide and Panama La second La to Palona. Panama. development an Prieta that, the supporting testing sulfide ramped continue in in at drill to Cerro as also And the drills targets. program XXXX other In million In Diamond and Cerro quarter drill XXXX approximately across the moving Jason. call to at at discoveries. the is Exploration the XXXX. Mexico and to for the scenario in completed results pass second satellite priority being Quema Pelona at the is portfolio of in expected have effort continue drilling,

Jason Simpson

Thank announce of into Ventures. expansion our with Standard the we Nevada June, In Gold acquisition to Andrew. were pleased you,

the will capital, present outlined flow, We leach Standards stakeholder net Key Rojo, jurisdictions and in will X first X strategy all-in superior at ounces heap later ounces lead into Reserves at XXXX are over XXX,XXX the cost complexity annual value now of X.X X% meeting Shareholders free tonne. Camino be we'll mines a taking tonne look $X,XXX responsibly results X.XX support million That X end project mine low the both along ounces cash gold Orla initial million for ounce. build the of after-tax this discount $XX by operating South value cash-generating X.XX February transaction of include: experience years geology. resources which acquisition mine and focus million with the we to economics. gold indicated a are million Railroad capital prospective years after-tax over a attractive creating morning, South fits life portfolio week. rate very $XXX over and as our our Railroad, expect GSV measured another expressed X.X grams project our project Gold per XX% annual building leach cash mine building have before and grams ounces years and of of average per and to closing Life similar sustaining and million with in with heap great and study average of flow internal place rate. margin is of the return. operating first and taking shareholders in the in high XXX,XXX project. gold and $XXX intensity, GSV of nicely to highlights of feasibility low life. of at per the special of production average This

year. levels our an progressing record of Land ounces towards from with Railroad U.S. will Management. and South ambitions a life project that the Bureau X-year is mine growth starts decision XXX,XXX of of support production per The

we the to process continues, permitting will recoveries. As including gold at opportunities the optimize look project,

low Cerro foundational in along projects intensity, foundational have with similar Railroad our be with quick will South characteristics, We will be a -- capital payback return and These building expect Camino periods. high Rojo Quema. business

We competencies mines sheet, strong and the free financial With and will build with strong building generation, have we our flow balance facility credit cash our of operating gold to our project. margins. core next improved leverage resources

within which Sylvain believe the the new potential XXX% there. future production Camino contiguous land the largest deposits. the on this and a Nevada and is increase the is several at opportunities ounces, The prospective a intersections. the strategically Trend. second gold package already medium oxides of for XX,XXX high-grade his Quema at wide XX,XXX we by Rojo we Standard including X.XX package resource boundary year's sulfide inferred the plan. to production grams is has an additional how discovery can resource prospective and is ounces hectare expansion, Phoenix and the resource team South determining oxide target-rich Mines Cerro believe XXX,XXX addition in through owns Lewis best located conversion term. targets the in have It Railroad we environment, Lewis oxides expand discovery. within an the that railroad and tonne of property, target explore land and of Gold definition resource to there project situated also to the mineralization project, of guidance opportunity and zones on Building space mineral for and that new South of XXX,XXX of is operations multiple The provides property of Carlin are have Gold per begun expansion, there

course, permitting, strength. the and is production, this financing get Of steps this engineering, to but into require will necessary construction our

this leach heap the to production. leach production large in annual for future, charting Panama that projects, now resources land growth. three all resources heap three path packages, three Nevada sulfide high-margin believe projects; leg and of the next a provide Orla's will we just includes exploration ounces of the XXX,XXX sulfide of oxide Beyond Mexico, pipeline

discovery discovered, already hectares feed XXX,XXX through resources profile. value have we will the the production prolific and for mining districts. Beyond This future of exploration land almost our provides within opportunity shareholder

in and Our Nevada. current are opportunities excited additional and the targets prospects very geologists with

by success. stakeholder gold, of emblematic our producing This we and growth. seeing effort they exploring, and and to of like developing the remain hard assets, At of back to cash call from questions. work for we have team. generating results creating support partners you're of high-quality stakeholders operating express steadfast tremendous pursuing a shared quarter gratitude We undertaken communicate like all comes to this personal the and to the our year-over-year, to was our point, any company this contribute my in our key for I operator amount I'd be achieve and Performance through would who strive appreciate the like pass strategy to today. value the sincere and the

Operator

Instructions] question is Adams Markets. [Operator CIBC from Your of first Bryce Capital

Bryce Adams

and wanted I Mexico. CapEx touch in to operating on costs

spend So guidance. the tonne well cost you still like full $XX metrics non-sustaining. be And then year-to-date, as in question calls in firstly burn per sustaining on million have QX the second items to the to ore? useful. tracking rock Do of me those tonne below the mining for on operating costs, your you as $X million very G&A talk guidance? can on us processing of would outlined and expect looks Guidance those and per CapEx. to If rate in available, that CapEx It you is is

Jason Simpson

Bryce. for got per the and the the looking for. tonne you're thanks Yes, cost question, answer start I'll that Etienne's

Let's start with CapEx.

CapEx, primarily stockpile water for that So to diversion of you and spend dome in we the terms expect over including control, you're money saw it do a site. when that the -- on is dust sustaining

work that scheduled So continue. is still to

In the fact, that now dust control contractor work. we're for selecting

the lot we of spend money the had to do project, power million. with communicated, to In a of million, the previously was intend $X which under including installation as just on of budget we out and terms we've $X about the completion all scope, line, When were under that the of the still not, because of were of mine. the we by of that non-sustaining, do over construction construction

reduced So that that $XX spend. million from nonsustaining be will capital

to over OpEx Now tonne. the cost per

over color So he around to hand give that. Etienne, can you I'll it some

Etienne Morin

is per process level, per high is tonne, costs cost mining Camino per the year-to-date Roj $X.XX at at $X.XX tonne, tonne. Just and $X.XX year-to-date unit Bryce, is G&A

Bryce Adams

$X.XX G&A?

Etienne Morin

Yes.

Bryce Adams

Perfect.

against positively in drive months, those change the XX there So anything could that do XX, tracking technical the step next Is you think in costs? report. a

Jason Simpson

Yes.

not terms of this quarters. and it script In touched we site and what previous as Etienne We're seeing immune in on talked in on -- to again, we're cost about his inflation.

again, to in Bryce, unit feasibility is cyanide price you presume mining. we we year that, lower is offset work We saw pointed diesel of our consuming feasibility key of consumption, engineering the you that represent across that the in still less fact are consumables some in seeing the increases by, been and what the kind kind But today. would results But specific that budgeting that that's process use and that consumption. as of that Etienne cited, first we're out in of achieving and the power, matter same doing

in -- essentially different offset. that's heading two So those directions things have

costs consider too of When the start it's to to we into mine. we'll process could the point, we over think belt processing XXXX. might I we're later that early any whether to build -- this At of want carry into think that I wouldn't for our life reductions. years we say mining costs we forward the under into budgeting our I of get to this offer and quarter, plan future think what year don't operation going

Bryce Adams

Okay. cost very good Thanks look the a control. like appreciated. Much work It lot. does on

congratulations. So

Jason Simpson

Bryce. Thanks,

Operator

Simpson, Jason now over questions further will There time. this are to CEO, the call turn remarks. closing I no at for

Jason Simpson

no efforts our there's our in team like Since projects and for creating further thank value. key Thanks. advancing I'd continued questions, stakeholder to their

into are call follow-up I'd for hesitate everybody And have our and As their tuning this to out like time any morning. Orla, conference to available. always, to should questions, we reach always never you thank

Operator

your conference participation. today's concludes you for call. This Thank

disconnect. now may You

Orla Mining (ORLA) 13 Aug 222022 Q2 Earnings call transcript