Orla Mining Plunges 15.58%: Can the Gold Miner Weather the Storm?

Summary
• Orla Mining (ORLA) slumps to an intraday low of $9.8307, a 15.58% drop from its previous close of $11.81
• Pit wall collapse at Camino Rojo mine halts operations, triggering immediate sell-off
• Technical indicators show mixed signals with RSI at 67.46 and MACD crossover near neutral

The stock’s steep decline reflects investor anxiety over operational disruption at a critical production site. With Camino Rojo accounting for 34% of Scotia Capital’s 2025 production estimates, the market is recalibrating risk as Orla navigates geotechnical assessments and potential guidance revisions.

Pit Wall Collapse Sparks Sharp Sell-Off
Orla Mining’s 15.58% intraday plunge stems from an uncontrolled material movement event at its Camino Rojo Oxide Mine in Mexico. Heavy rains destabilized the temporary north pit wall, forcing a temporary suspension of mining activities. While no injuries or environmental damage were reported, the incident threatens Q3 production targets, with analysts revising full-year gold output downward by 5%. The market’s reaction underscores the fragility of open-pit operations in volatile geologic conditions, compounding concerns over all-in sustaining costs and stockpile reliance.

Options Playbook: Navigating Volatility in a Bearish Scenario
• MACD: 0.41 (bullish divergence) | RSI: 67.46 (overbought threshold) | Bollinger Bands: Price at 9.078 (lower band)
• 200D MA: 7.7462 (well below current price) | 30D MA: 10.885 (near-term resistance)

With the stock trading near its 52-week low and facing a $10 support level, the technical setup favors bearish options strategies. Two contracts stand out:

• ORLA20250815P10 (Put): Strike $10, Expiry 2025-08-15, IV 58.60%, Leverage 18.65%, Delta -0.44, Theta -0.0031, Gamma 0.2667, Turnover $3,874
- High leverage and moderate delta position this put to profit from a 5% downside move (projected price $9.47), yielding a $0.53 payoff per share
• ORLA20251017P10 (Put): Strike $10, Expiry 2025-10-17, IV 56.27%, Leverage 10.07%, Delta -0.42, Theta -0.0036, Gamma 0.1422, Turnover $924
- Extended expiry and balanced Greeks make this a hedging play against prolonged weakness, with a projected $0.50 payoff at a 5% move

For aggressive bulls, the ORLA20250815C10 (Call) offers -71.50% price change, but its 0.55 delta implies limited upside potential in a bearish environment. Investors should monitor the $9.9984 support level and the 200D MA at $7.74 as critical thresholds.

Backtest Orla Mining Stock Performance
The ORLA ETF has demonstrated resilience following a significant intraday plunge of -16%. 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 a higher probability of positive returns in the short to medium term. The maximum return during the backtest period was 13.64%, which occurred on day 59, suggesting that while the ETF may experience volatility, it has the potential for recovery and even exceed pre-plunge levels.

A Crucial Crossroads for Orla: What to Watch Next
Orla’s near-term trajectory hinges on the duration of the Camino Rojo shutdown and the sufficiency of stockpile processing. While the $10 support level appears critical, a break below $9.078 (lower Bollinger Band) could accelerate selling. Sector leader Freeport-McMoRan (FCX) fell 0.256% today, highlighting mining sector fragility. Investors should prioritize short-term puts like ORLA20250815P10 for downside protection and watch for an 85%+ volume surge in the $9–$10 range as a potential reversal signal. For now, the path of least resistance remains bearish.