Orla Mining Plunges 14.3%—Can the Pit Wall Collapse at Camino Rojo Be the Final Catalyst?

Summary
• Orla Mining (ORLA) slumps 14.3% to $10.12, its lowest since March 2025
• Pit wall collapse at Camino Rojo mine halts operations, triggering 5% production cut
• Bollinger Bands signal oversold territory as short-term RSI nears 67.46

Orla Mining’s stock has imploded on Thursday, trading 14.3% lower to $10.12 as heavy rains triggered a pit wall collapse at its Camino Rojo mine in Mexico. The sharp sell-off, which has pushed the stock to its 52-week low of $9.83, has drawn immediate attention from investors and analysts. With the gold sector itself under pressure amid easing trade tensions, the market is now weighing whether this is a buying opportunity or a deeper bearish signal.

Camino Rojo Mine Halt Sparks Production Uncertainty
The collapse of a temporary north pit wall at Orla’s Camino Rojo mine—caused by heavy rainfall—has forced a temporary suspension of mining operations. The incident, while not causing injuries or environmental damage, has disrupted 34% of Scotia Capital’s 2025 production estimates for Orla. Analysts like Ovais Habib of Scotia Capital have slashed full-year output forecasts by 5%, citing reliance on lower-grade stockpiles and higher rehabilitation costs. With Camino Rojo accounting for 38% of Orla’s net asset value, the market’s rapid reaction reflects fears of delayed production and elevated all-in sustaining costs.

Gold Sector Under Pressure as Trade Optimism Dampens Demand
The gold sector is broadly under pressure, with Newmont (NEM) down 0.48% as easing trade tensions reduce safe-haven demand. Orla’s selloff, however, is amplified by its direct exposure to the mine’s production halt and associated rehabilitation costs. While the sector faces macroeconomic headwinds, Orla’s stock is trading at a steeper discount due to its unique operational disruption.

Options Playbook: Capitalizing on Volatility Amid Uncertainty
• Bollinger Bands: $9.078–$12.653 (oversold territory)
• 200-day MA: $7.746 (below current price)
• Support/Resistance: $9.998–$10.06 (imminent test)
• MACD: 0.4117 (bullish divergence)
• RSI: 67.46 (neutral)

ORLA’s technicals paint a mixed picture. While the RSI suggests the stock is not yet overbought, the Bollinger Bands and 200-day MA indicate oversold conditions, hinting at potential mean reversion. However, the pit wall event has injected short-term volatility, making options a compelling alternative to directional bets.

Top Options Plays:
• ORLA20250815P10 (Put)
- Expiration: 2025-08-15
- Strike: $10.00
- IV: 51.62% (moderate)
- Delta: -0.4303 (balanced sensitivity)
- Theta: -0.002007 (low decay)
- Gamma: 0.299653 (high responsiveness)
- Turnover: 4513 (liquid)
- Why it stands out: This put option offers a 22.48% leverage ratio and is positioned to profit from a 5% downside move (projected payoff: $0.00 if ORLA hits $9.66).

• ORLA20251017P10 (Put)
- Expiration: 2025-10-17
- Strike: $10.00
- IV: 54.67% (moderate)
- Delta: -0.4147 (balanced sensitivity)
- Theta: -0.003451 (moderate decay)
- Gamma: 0.145203 (moderate responsiveness)
- Turnover: 1019 (liquid)
- Why it stands out: This longer-dated put provides a 10.65% leverage ratio and higher gamma, offering enhanced sensitivity to price swings as Orla navigates its production uncertainty.

Action Insight: Aggressive short-side players may consider ORLA20250815P10 for a bearish play if the $10.00 support level breaks, while ORLA20251017P10 offers a more conservative entry. Both contracts align with the 5% downside scenario, which could materialize if rehabilitation costs exceed estimates.

Backtest Orla Mining Stock Performance
The ORLA ETF has historically shown resilience following a significant intraday plunge of at least -14%. The 3-day win rate is 53.86%, the 10-day win rate is 58.43%, and the 30-day win rate is 71.81%, indicating that the ETF tends to rebound over short to medium terms. The maximum return observed was 13.64% over 30 days, suggesting that while there is potential for gains, the recovery period may be prolonged.

Act Now: Orla at Critical Juncture—What to Watch for Next
Orla’s 14.3% selloff has brought its stock to a critical juncture, with the $10.00 level now a psychological and technical inflection point. While the company’s long-term asset base—including 3.9 million contained gold ounces at Camino Rojo—remains intact, near-term volatility will hinge on production updates and the success of pit wall rehabilitation. Investors should monitor the 30-day support range ($9.998–$10.06) and the 200-day MA ($7.746) for directional clues. In the gold sector, Newmont (NEM)’s -0.48% decline underscores broader caution, but Orla’s unique catalyst may allow it to diverge. Watch for $10.00 breakdown or revised production guidance—either could trigger a sharp rebound or deepen the selloff.