Orla Mining's Q1 2025 Earnings Call: Unpacking Contradictions in CapEx, Exploration, and Permitting
Earnings DecryptTuesday, May 20, 2025 5:26 am ET
2min read
Musselwhite's CapEx and Mine Life Extension, Exploration Program Size, Camino Rojo Permitting Process in Mexico, Musselwhite Exploration and Mine Life Extension, and Exploration Program at Musselwhite are the key contradictions discussed in Orla Mining Ltd.'s latest 2025Q1 earnings call.
Production and Guidance Update:
- Orla Mining reported a record quarter of gold production, driven by the integration of the Musselwhite Mine, which contributed nearly 18,000 ounces of gold in March.
- Updated guidance for 2025 provides production of 280,000 to 300,000 ounces of gold at consolidated cash costs of $850 to $1,050 per ounce, with Musselwhite expected to contribute 170,000 to 180,000 ounces.
- The update reflects additional investment in exploration and capital projects at Musselwhite, which are aimed at extending mine life and improving productivity.
Exploration and Growth Strategy:
- Orla Mining is allocating approximately $55 million for exploration spending in 2025, including $25 million at Musselwhite, to support mine life extension and potential expansion.
- The company is advancing exploration programs in Mexico, Nevada, and Canada, with a focus on increasing near-deposit oxide resources and discovering new zones of oxide mineralization.
- This strategy aims to define additional reserves and resources to support mine life extension and potential expansion, aligning with the 24-month objective set by the exploration team.
Financial Performance and Integration:
- Orla Mining reported a net loss of $70 million for the quarter, primarily driven by the impact of financial instruments issued in connection with the Musselwhite acquisition.
- Adjusted net earnings were $38.6 million, showing cash flow from operating activities before changes in non-cash working capital at $401 million.
- The company has initiated integration of Musselwhite, with investments in new underground mobile equipment and fleet rebuilding, aimed at improving mining rates and extending mine life.
Permitting and Regulatory Advancements:
- Orla Mining is progressing in its permitting for both Mexico and Nevada, with expectations to receive a resolution for the Camino Rojo expansion permit within the next couple of months.
- The company has purchased water rights required for the South Railroad Project and is working on engineering for the project, with a target notice of intent mid-2025.
- These advancements align with supportive government policies, such as the U.S. administration's focus on advancing American mineral production, which has expanded to include gold.
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Production and Guidance Update:
- Orla Mining reported a record quarter of gold production, driven by the integration of the Musselwhite Mine, which contributed nearly 18,000 ounces of gold in March.
- Updated guidance for 2025 provides production of 280,000 to 300,000 ounces of gold at consolidated cash costs of $850 to $1,050 per ounce, with Musselwhite expected to contribute 170,000 to 180,000 ounces.
- The update reflects additional investment in exploration and capital projects at Musselwhite, which are aimed at extending mine life and improving productivity.
Exploration and Growth Strategy:
- Orla Mining is allocating approximately $55 million for exploration spending in 2025, including $25 million at Musselwhite, to support mine life extension and potential expansion.
- The company is advancing exploration programs in Mexico, Nevada, and Canada, with a focus on increasing near-deposit oxide resources and discovering new zones of oxide mineralization.
- This strategy aims to define additional reserves and resources to support mine life extension and potential expansion, aligning with the 24-month objective set by the exploration team.
Financial Performance and Integration:
- Orla Mining reported a net loss of $70 million for the quarter, primarily driven by the impact of financial instruments issued in connection with the Musselwhite acquisition.
- Adjusted net earnings were $38.6 million, showing cash flow from operating activities before changes in non-cash working capital at $401 million.
- The company has initiated integration of Musselwhite, with investments in new underground mobile equipment and fleet rebuilding, aimed at improving mining rates and extending mine life.
Permitting and Regulatory Advancements:
- Orla Mining is progressing in its permitting for both Mexico and Nevada, with expectations to receive a resolution for the Camino Rojo expansion permit within the next couple of months.
- The company has purchased water rights required for the South Railroad Project and is working on engineering for the project, with a target notice of intent mid-2025.
- These advancements align with supportive government policies, such as the U.S. administration's focus on advancing American mineral production, which has expanded to include gold.
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