Orla looking to add asset in 2024

Orla has a development pipeline that includes the Cerro Quema gold-copper project in Panama, the South Railroad gold project in Nevada, US and the sulphides at its Camino Rojo gold oxide mine in Zacatecas, Mexico. However, each of these is several years away from development.

"We see opportunities and, with the uncertainty in Panama and the development timeline in Nevada, we need to look at inorganic opportunities in the short term," said Simpson.

The company aims to target precious metals projects that are permitted or already in production in the Americas, with a production profile of between 100,000ozpa and 500,000ozpa, and with an all-in sustaining cost of less than US$1300/oz.

"We don't need any more unpermitted development projects or exploration. We need a permitted project through to a multi-asset producer," said Simpson.

Orla's shareholders include Newmont and Agnico Eagle Mines, which Simpson says have indicated they want to work with the company. Newmont has indicated it wants to divest $2 billion worth of assets following the completion of its acquisition of Newcrest Mining later this year.

"They are responsible companies, and if they are going to hand over an asset, it is very important to them that they put in the hands of a company that they can trust to do things right for their communities and workers," said Simpson.

Orla is on track to produce 100,000 to 110,000oz this year. It achieved an AISC of $698/oz during the June quarter, making it one of the lowest-cost gold producers in the world.

Panama

Orla's ability to advance on its Cerro Quema project in Panama is on hold until the government concludes the ratification of the contract it negotiated earlier this year with First Quantum Minerals for the Cobre Panama copper mine.

This is currently in Congress, and various community groups have organised protests against its ratification on broadly nationalistic grounds and expressing concern about water and community impacts.

"If things don't get settled with Cobre Panama, we will have to wait a lot longer, but I think it will get settled.

The government has taken a very responsible approach to negotiating with First Quantum and how the new contract benefits all Panamanians. The process in Congress includes a certain amount of time for the public and deputies to express their views as part of a public and transparent process. I expect that by the end of this Congress session, it will be approved, although the negative voices won't go away," said Simpson.

For Orla, the outcome of this process could see the government update its approach to mining, as could the situation with the Panama Canal, which underpins and drives the Panamanian economy. Low rainfall and water levels have seen the Panama Canal Authority restrict the number of vessels passing through due to a lack of water, reducing the country's income from the canal.

"The canal is absolutely influencing things. Any reduction in the canal economics will enable other industries to be listened to, which didn't happen in the past. When the benefit from the canal is diminished, the government has to look to other sectors to help. The COVID-19 effect and the reduction of canal traffic due to the water level will enable people to consider that other industries might be helpful to diversify their economy," said Simpson.

Nevada

In Nevada, Orla faces a multi-year NEPA permitting process for its Railroad gold project. The company has submitted a mine plan of operations and aims to receive a Record of Decision at the end of 2025.

"The only change from the feasibility study is from a run-of-mine operation to a two-stage crush. In Nevada, like we did in Mexico, we will start predicting when the green light for the investment will be and start construction engineering with the EPCM contractor, start buying kit and other things so that once we have green-lighted the project we can go straight into construction," said Simpson.

In the meantime, the company has $120 million in the bank. It recently converted its $140 million in debt into a full revolver, which it aims to down before its next construction project to have the liquidity in the revolver available.