Orla Mining's Q4 Earnings Call: South Railroad Timelines and Camino Rojo Permit Signals Clash with Prior Guidance

Date of Call: Mar 20, 2026

Financials Results

• Revenue: $378M from gold sales in Q4 2025
• EPS: $0.23 per share (net income); $0.42 per share (adjusted earnings) for Q4 2025

Guidance:

• Production guidance for 2026: 340,000 to 360,000 ounces of gold.
• All-in sustaining cost guidance for 2026: $1,550 to $1,750 per ounce.
• Targeting first gold production at South Railroad project in 2028.

Business Commentary:

Production Growth and Acquisition Impact:

• Orla Mining more than doubled its annual gold production through the addition of the Musselwhite mine, achieving six consecutive months of nearly uninterrupted ore supply, averaging nearly 4,000 tons per day.
• The acquisition of Musselwhite and record gold prices contributed significantly to this growth.

Financial Performance and Cash Flow:

• The company reported $378 million in revenue for the quarter, with a realized gold price of $4,025 per ounce, and free cash flow of $133 million.
• This strong cash flow enabled Orla to delever its balance sheet, initiate a dividend, and invest in business growth in multiple countries.

Camino Rojo and Permitting Developments:

• The Mexican authorities approved the environmental impact statement at Camino Rojo, allowing for the continuation of mining operations and underground exploration.
• The approval was a significant milestone, providing the necessary permits to advance the underground project and unlocking long-term potential.

Exploration and Resource Expansion:

• Orla completed extensive drilling programs, including over 12,500 meters of deep directional drilling at Musselwhite and nearly 22,000 meters at Camino Rojo.
• These efforts confirmed the extension of gold mineralization and supported the expansion of reserves and resources, contributing to future production growth.

South Railroad Project Progress:

• The optimized feasibility study for the South Railroad project confirmed an average annual output of 103,000 ounces of gold with an all-in sustaining cost of $1,485 per ounce.
• The project is progressing towards construction readiness, with targeting a final Record of Decision in mid-2026 and first gold production in 2028.

Sentiment Analysis:

Overall Tone: Positive

• "The fourth quarter 2025 was an incredibly strong period to end a pivotal year for Orla." "We generated significant cash flow, which positioned us to delever the balance sheet, initiate a dividend, and continue investing in the growth of our business." "We are guiding toward another record-breaking year."

Q&A:

• Question from Francesco Costanzo (Scotiabank): Can you just describe for us, how the mine plan at Camino Rojo might change going into this year and next or even longer term in response to the latest permit?
  Response: The 2026 mine plan will not change; the guidance already assumed the permit would be received. The plan focuses on returning to the top of the deposit and preparing the bottom for the underground portal, with oxide mining intended to continue until the end of the decade.

• Question from Francesco Costanzo (Scotiabank): With the permitting process at South Railroad on track for Q3 this year, can you give us a bit more color on some of the key development milestones you’re aiming to achieve this year?
  Response: In H1 2026, updates will focus on engineering, procurement, and equipment purchase orders. Upon receipt of the Record of Decision in Q3, construction will commence, with the first half of 2026 focused on mobilization and early work.

• Question from Vitali Kononov (Freedom Broker): Is the significant increase in capital expenditure budget in 2026, of which, over $200 million is attributed to South Carlin, contingent on the permitting and final investment decision, or should we expect this amount to be smoothed over the course of 2026?
  Response: The $200M guided for South Railroad is contingent on the receipt of the Record of Decision. Spending may increase if the decision is received earlier or decrease if delayed, with quarterly guidance to be provided.

• Question from Vitali Kononov (Freedom Broker): What’s your assessment of the cost of mining in the deeper areas (two kilometers below current mine sites) and have you done any step-out drilling horizontally?
  Response: Costs increase with depth due to material handling. A material handling system improvement study is planned to reduce costs by 2027. Lateral drilling has discovered additional satellite lenses, expanding the upper mine resource and influencing future capital and mill expansion plans.

Contradiction Point 1

South Railroad Project Update Scope and Timeline

The scope and expected timeline for the South Railroad project were presented differently in consecutive quarters.

Francesco Costanzo (Scotiabank) - Francesco Costanzo (Scotiabank)

2025Q4: Updates will focus on engineering, procurement, and final permits in the first half, with field mobilization and construction updates expected in the second half after the Record of Decision (targeted for mid-2026). - Jason Simpson(CEO) and Andrew Cormier(COO)

"Given the South Railroad permitting process is on track for Q3, what key development milestones are you targeting this year?" - Lauren McConnell (Paradigm Capital)

2025Q3: The feasibility update will bring the original 2020 Plan of Operations up to date for 2025... with a Record of Decision (ROD) by Q2 2026 and first gold in early 2028. - Jason Simpson(CEO)

Contradiction Point 2

Camino Rojo Permit Assumption in Guidance

The certainty of the Camino Rojo permit being included in 2026 guidance was stated differently.

Francesco Costanzo (Scotiabank) - Francesco Costanzo (Scotiabank)

2025Q4: The 2026 mine plan for Camino Rojo will not change as the permit was already assumed in the guidance. - Jason Simpson(CEO)

How might the mine plan at Camino Rojo change in the short-term, medium-term, and long-term due to the latest permit? - Andrew McKittrick (BMO Capital Markets)

2025Q3: Engagement with Mexican authorities is positive, and the company is confident in the permit being granted soon. - Jason Simpson(CEO)

Contradiction Point 3

Capital Expenditure Guidance for South Railroad

The $200M capex is directly tied to a future regulatory decision.

What is Vitali Kononov's role at Freedom Broker? - Vitali Kononov (Freedom Broker)

2025Q4: The $200 million guided for South Railroad is contingent on receiving the Record of Decision. Spending may increase if the decision is advanced or decrease if delayed. - Jason Simpson(CEO)

Is the $200 million South Carlin capital expenditure in 2026 contingent on permitting and final investment decisions, or will it be smoothed over the year? - Wayne Lam (TD Cowen, Research Division)

2025Q2: The revised guidance for Camino Rojo accounts for... changed mine sequencing due to the north wall event. - Jason Simpson(CEO)

Contradiction Point 4

Timing for Camino Rojo's Revised Mine Plan

A specific 2026 mine plan is declared unchanged versus a broader, flexible guidance.

Francesco Costanzo (Scotiabank) - Francesco Costanzo (Scotiabank)

2025Q4: The 2026 mine plan for Camino Rojo will not change as the permit was already assumed in the guidance. - Jason Simpson(CEO)

How might the Camino Rojo mine plan change in response to the latest permit over the next year, next year, and long-term? - Wayne Lam (TD Cowen, Research Division)

2025Q2: The revised guidance for Camino Rojo accounts for... changed mine sequencing due to the north wall event. - Jason Simpson(CEO)

Contradiction Point 5

Camino Rojo Mine Plan Certainty

Contradiction on whether the 2026 mine plan is finalized or still conditional.

Francesco Costanzo (Scotiabank) - Francesco Costanzo (Scotiabank)

2025Q4: The 2026 mine plan for Camino Rojo will not change as the permit was already assumed in the guidance. - Jason Simpson(CEO)

How is the mine plan at Camino Rojo expected to change in response to the latest permit over the next year, subsequent years, and long-term? - Allison Carson (Desjardins)

2025Q1: There is no concern about delays. Active conversations... indicate the permitting process is on schedule... a decision expected in the coming months as planned. - Jason Simpson(CEO)