Unlocking Hidden Value: Orla Mining's Camino Rojo Underground Expansion and the Path to 2026 PEA Catalysts

In the world of mining, the most compelling opportunities often lie not in the obvious but in the unseen potential buried beneath the surface. Orla Mining's Camino Rojo project in Zacatecas, Mexico, is a prime example of this principle. With a recent NI 43-101-compliant technical report, a 15,000-metre drill program nearing completion, and a 2026 Preliminary Economic Assessment (PEA) on the horizon, the project is poised to unlock value through strategic exploration, resource conversion, and metallurgical optimization. For investors, this represents a rare convergence of geological promise and disciplined execution.

The Foundation: A Robust Underground Resource Base

The updated NI 43-101 report, filed on July 17, 2025, provides a comprehensive snapshot of Camino Rojo's underground resource. The deposit now hosts 50.1 million tonnes (Mt) of Measured and Indicated Mineral Resources at 2.45 g/t gold equivalent (AuEq), along with 5.6 Mt of Inferred Resources at 2.33 g/t AuEq. These figures are more than numbers—they represent a foundation for future production and a clear path to converting lower-confidence Inferred resources into higher-grade Measured and Indicated categories.

The geological model is equally compelling. Camino Rojo is segmented into three distinct zones:
1. Oxide zone (0–250 meters): Already in production via open-pit operations.
2. Sulphide zone (250–700 meters): A high-grade, metallurgically favorable section.
3. Zone 22 (700–1,300 meters): A newly defined, vertically extended zone with significant exploration upside.

Zone 22, in particular, is a game-changer. While it accounts for just 7% of the current Indicated resource, it remains open at depth and down-plunge, with drilling already reaching nearly 1,300 meters. This zone's potential to expand the resource base—especially in a sector where gold and zinc grades remain robust—cannot be overstated.

Strategic Drilling: The 15,000-Metre Catalyst

Orla's 15,000-metre drill program, now 90% complete, is a critical enabler of resource conversion. By targeting the upper portions of Zone 22 and the Sulphide zone, the program aims to upgrade Inferred resources to Measured and Indicated categories. This is not merely a technical exercise; it directly impacts valuation.

For context, the current resource includes 3.95 million ounces of gold and 278 million pounds of zinc, but only 70% of the tonnage is classified as Measured or Indicated. By upgrading this, Orla can strengthen its case for a Mineral Reserve classification, a prerequisite for project financing and long-term production planning.

Moreover, the drilling program is supporting the construction of an exploration drift, a key infrastructure step that will allow for tighter-spaced underground drilling. This is a low-cost, high-impact move that could accelerate resource definition and reduce the time-to-PEA timeline.

Metallurgical Breakthroughs and Processing Flexibility

What sets Camino Rojo apart is its metallurgical versatility. Orla's testing has identified three processing streams:
- Heap leach (3% of tonnage): Low-cost, low-recovery method for oxide material.
- Carbon-in-leach (CIL) (27% of tonnage): High-recovery method for free milling sulphides.
- CIL with pressure oxidation (POX) (70% of tonnage): A more complex but economically viable approach for refractory material.

Initial results from Zone 22 are particularly encouraging, with high gold recoveries via cyanidation and strong zinc recovery via flotation. These findings are critical for the PEA, which will evaluate the most cost-effective processing routes and their impact on cash flow.

The 2026 PEA: A Make-or-Break Milestone

The PEA, expected in 2026, will be the linchpin of Orla's value proposition. This study will assess the underground resource as an expansion of the existing oxide operation, with a focus on selectively targeting high-grade zones and leveraging existing infrastructure.

The strategic implications are clear:
1. Parallel operations: Underground mining can coexist with the open-pit, extending mine life and spreading capital expenditures.
2. Zinc leverage: With zinc prices still trading at multi-year highs, the project's polymetallic nature adds a layer of revenue stability.
3. Cost efficiency: By prioritizing metallurgically favorable material, Orla can minimize reagent and processing costs.

Investment Thesis: A Hidden Gem in the Gold Sector

Orla's current market capitalization (~$1.2 billion) is modest relative to its resource scale and expansion potential. The company trades at a discount to peers like Kinross Gold and Alamos Gold, despite its lower capital intensity and multi-metal asset base.

Key catalysts for near-term valuation growth include:
- Resource upgrades from the 15,000-metre drill program.
- PEA results that quantify the underground's economic viability.
- Exploration drift permitting and construction, which could begin in 2026.

For investors, the risk-reward profile is compelling. Camino Rojo is not a speculative play—it's a well-capitalized, geologically robust project with a clear path to production. The updated NI 43-101 report has already validated the resource base, and the drill program is delivering the data needed to convert this into a bankable reserve.

Final Thoughts

In an industry where exploration success is often fleeting, Orla Mining has positioned itself to unlock hidden value through a combination of strategic drilling, metallurgical innovation, and disciplined resource management. The Camino Rojo project is a textbook example of how a mining company can build value not through hype but through technical execution and geological insight.

For those willing to look beyond the noise, Orla offers a rare opportunity to participate in the next phase of a gold-silver-zinc project with the potential to become a mid-tier producer. The 2026 PEA will be a defining moment—but the groundwork has already been laid.