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High quality advanced stage oxide gold heap leach project with significant historical mineral reserves and resources:

  • Near-surface oxide gold and silver deposit and a deeper sulphide zone
    • 1.7Mozs* of oxide gold Proven and Probable Reserves*
    • 7.4Mozs* of sulphide gold Measured & Indicated resource along with significant silver, lead and zinc by-products

All of the mineral reserves and resources estimates herein are historical estimates and Orla is not treating such estimates as current. 

  • Large prospective land package in a mining-friendly region
    • Approximately 206,000-hectare land position, with excellent exploration potential
    • Water concessions granted
    • Ejido agreements in place; strong community relationships
    • Excellent regional infrastructure: 4-lane highway, roads, major powerline, rail, water and no houses over deposit or development area

Summary

  • Located 50km SE of Penasquito in the State of Zacatecas in the Municipality of Mazapil, State of Zacatecas, near the village of San Tiburcio.
  • Host formation is the same as that peripheral to the diatremes at Penasquito
  • 8 mineral concessions representing approximately 2,059 square kilometers
  • Camino Rojo deposit is an intrusive related, polymetallic Au, Ag, Zn, and Pb deposit.
  • Mineralization consists of Au, Ag, Zn and Pb in carbonate veins and breccias
  • Exploration has been carried out under agreements between the project operators and local Ejidos (communal agrarian cooperatives).

Historical

The most recent NI 43-101 Technical Report on Camino Rojo was published on October 16, 2009 and amended on November 30, 2009.  Its available on SEDAR under the profile of Canplats Resources Corporation. Since acquiring Camino Rojo in 2010, Goldcorp completed in excess of 250,000 metres of drilling, conducted airborne and ground geophysical surveys and did extensive geological and mineralogical investigations. Numerous metallurgical studies were also conducted, including detailed mineralogical studies, column leach studies for oxide ore, size fraction analysis, variability test work and sulphide flotation studies.

Historical Reserve and Resource Estimates*

As reported by Goldcorp at June 30, 2016, mineral reserves and resources for Camino Rojo are shown below. These mineral reserves and resources estimates are historical and Orla is not treating such estimates as current.

MINERAL RESERVES (Oxide & Transitional)*

Category

Tonnes (Mt)

Au (g/t)

Ag (g/t)

Au (Mozs)

Ag (Mozs)

Proven

-

-

-

-

-

Probable

75.52

0.70

14.22

1.70

34.53

Total Reserve

75.52

0.70

14.22

1.70

34.53

MINERAL RESOURCES (Sulphide)*

Category

Tonnes (Mt)

Au (g/t)

Ag (g/t)

Au (Mozs)

Ag (Mozs)

Measured

-

-

-

-

-

Indicated

223.08

1.05

9.02

7.50

64.72

M&I Resource

223.08

1.05

9.02

7.50

64.72

Inferred

17.16

0.88

9.06

0.49

5.00

*Note: Mineral Reserves and Resources estimate as reported by Goldcorp in the AIF for the financial year ended December 31, 2016, available to Canadian investors at www.sedar.com under Goldcorp’s profile. Mineral Reserves and Mineral Resources were prepared by Goldcorp in accordance with NI 43-101 under the supervision of a qualified person. The historical mineral reserve and resource estimates were estimated in accordance with the CIM Definition Standards and were calculated by Goldcorp using metal prices of $1,200 per gold ounce and $18 per silver ounce, and mineral resources were calculated using $1,400 per gold ounce, $20 per silver ounce, $1.00 per pound of lead and $1.00 per pound of zinc. A NI 43-101 Technical Report on Camino Rojo is available on SEDAR under the profile of Canplats Resources Corporation (acquired by Goldcorp in 2010). The last NI 43-101 Technical Report on Camino Rojo was produced on October 16, 2009 and amended on November 30, 2009. Orla is not treating these historical estimates as current and has not completed sufficient work to classify the historical estimate as current mineral reserves or mineral resources for Orla’s purposes. Although Orla is not treating this information as current estimates, it believes the Goldcorp work is reliable and that the information, which was made publicly available by Goldcorp, may be of assistance to investors. The Company intends to review all project data, validate data quality, create a new geological model and then make a new resource estimate in the upcoming months. As well, the Company will be reviewing metallurgical information and key economic parameters in order to evaluate the potential economics of an open pit gold and silver mine and heap leach extraction facility.

Key terms of Acquisition from Goldcorp

Acquisition:

Acquisition of Camino Rojo S.A. de C.V. from Goldcorp Inc.

Consideration:

31.86M common shares of Orla, representing a 19.9% interest in Orla post transaction
2.0% NSR on all metal production from the project, except for metals produced under the sulphide JV as described below
Option regarding the potential future sulphide JV as described below

Goldcorp Rights:

For as long as it holds at least 10% of the common shares, Goldcorp will have the right to:

  • Nominate one director to the board of Orla
  • Participate in future equity offerings in order to maintain its pro rata ownership
 

Sulphide Option

Orla will be operator of Camino Rojo and will have full rights to explore, evaluate, and exploit the property. However, in the event sulphide projects are defined through one or more positive pre-feasibility studies outlining a development scenario as outlined below, Goldcorp will have an option to enter into a joint venture with Orla for the purpose of future exploration, advancement, construction, and exploitation of such a sulphide project. The structure of the joint venture will depend on the following circumstances:

  1. for sulphide projects where ore from Camino Rojo is processed using the existing infrastructure of Penasquito, the applicable sulphide project would be operated by Goldcorp, who would hold a 70% interest, with Orla owning 30%; or
  2. for standalone sulphide projects with a mine plan containing at least 500 million tonnes of proven and probable reserves using standalone facilities not associated with Penasquito, the applicable sulphide project would be operated by Goldcorp, who would hold a 60% interest, with Orla owning 40%.

ROFR to Orla:

Orla will retain a ROFR on Goldcorp’s NSR, Goldcorp’s portion of the sulphide project, following the exercise of its option, and certain claims retained by Goldcorp

* Mineral reserve and resource estimates for Camino Rojo as reported by Goldcorp as of June 30, 2016 and prepared in accordance with NI 43-101. M&I mineral resource shown inclusive of mineral reserve. Orla is not treating these historical estimates as current and has not completed sufficient work to classify the historical estimate as current mineral reserves or mineral resources for Orla’s purposes. The increase in Orla’s reserves and resources represents the addition to Orla’s gold reserves and resources effective December 31, 2016, and is subject to the closing of the transaction which is subject to certain customary conditions.