Environmental

Orla is committed to meeting or surpassing regulatory requirements in all of our exploration and development activities while working to protect the environment both within and beyond our operational boundaries. Our approach to the environment is guided by our Environmental, Sustainability, Health & Safety Policy. We are committed to:

• Identify and monitor, on an ongoing basis, all significant environmental aspects of our activities and establish appropriate objectives and strategies to manage them;
• Conduct all activities in compliance with the highest applicable legal requirement and endeavour to meet or surpass industry best practices and environmental norms applicable to our activities;
• Allocate sufficient resources to meet our environmental objectives including ensuring an effective closure strategy is in place at all stages of project development and that concurrent reclamation is undertaken as early as possible;
• Use best practices to prevent pollution, minimize sanitary and security risks, and optimize garbage management procedures to reduce waste, reuse materials, and promote recycling;
• Ensure that those subject to our Environmental, Sustainability, Health & Safety Policy understand their roles and responsibilities under the Policy, and encourage them to contribute to the management of environmental issues;
• Have a high level of preparedness to react to environmental accidents in order to contain, control, clean up, and eliminate negative environmental effects;
• Have the utmost respect for the local cultures, values, and traditions and adopt an open communication policy regarding Orla’s activities with all impacted parties in order to achieve transparency in the Company’s socio environmental performance.

Our ESG Materiality Assessment identified GHG Emissions and Water Management as two top environmental factors with the greatest potential to impact the value of our business.

Orla recognizes the risks that climate change pose for society, both in the regions where we operate and more broadly for the world as a whole.  As we complete construction and transition to producer status, we will be monitoring our GHG emissions levels to establish a baseline and to identify reduction opportunities, where possible. We remain thoughtful about our energy consumption and GHG emissions. For example, several initiatives that we recently advanced relating to energy usage and our Scope 1 emissions include:

• Installation of solar water heaters at the camp dorms and other facilities.
• Accelerated development of powerline development earlier than planned to eliminate the need for diesel powered generation at the mine site in the first year of operation.
• As part of mining operations, we are targeting the use of equipment with Tier 3 engine designs where possible, which will reduce emissions.

Over the longer term to reduce site GHG emissions, we will explore alternatives to diesel powered equipment such as conveyors or battery-operated vehicles.  We will also explore opportunities to increase our exposure to renewable power sources in Mexico, when available, which offers the biggest opportunity to impact our Scope 2 emissions.

We have developed environmental mitigation plans for our operations, including for water testing. The Camino Rojo site has been designed to ensure no process water leaves the site, rainwater precipitating on the site is collected and reused in processing and rainwater precipitating around the site is diverted around to prevent contact. We have received permits for water withdrawal but anticipate that our consumption rates are going to be significantly below the allowable amounts. The water permit was granted based on studies verifying that the impact to the watershed would not be detrimental.