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VANCOUVER, BC - May 29, 2018 - Orla Mining Ltd. (TSX VENTURE: OLA) ("Orla" or the "Company") is pleased to provide the results of a positive Preliminary Economic Assessment (“PEA”) and a mineral resource estimate on its 100% owned Camino Rojo Project located in Zacatecas State, Mexico.  The mineral resource and PEA support a technically simple open-pit mine and heap-leach operation that offers low capital and operating costs, rapid payback, and strong financial performance.

The new overall mineral resource at Camino Rojo is estimated to include measured and indicated mineral resources of 9.65 million ounces of gold and 102.4 million ounces of silver (354.9 million tonnes at 0.85 g/t gold and 8.97 g/t silver) and an inferred mineral resource of 1.82 million ounces of gold and 16.21 million ounces of silver (65.2M tonnes at 0.87 g/t gold and 7.73 g/t silver).  

The PEA is based on near-surface oxide and partly oxidized (transitional) material within the overall resource that can be processed by heap leaching.  All mineral resources and the proposed open pit are within Orla mineral concessions.  The Company has surface rights over the entire area of proposed development in the PEA.

PEA Highlights
 
Production Rate per Day
18,000 tonnes
Total Material to Leach Pad
42.5M tonnes
Average Grade Au / Ag (g/t)
0.71 / 13.56
Contained gold / silver ounces
966,000 / 18,517,000
Average Recovery Au / Ag
67% / 15%
Average Annual gold Production
97,500 ounces
Strip Ratio
0.58
Initial Capex
$125 million
Avg. LOM production costs (per tonne of material processed)
$8.02
Total By-Product Cash Cost1 ($/oz Au)
$499
All-In Sustaining Cost1 ($/oz Au)
$555
Pre -Tax - Net Present Value (5%) / Internal Rate of Return (“IRR”)
$231 million / 38.1%
After-Tax - Net Present Value (5%) / IRR
$121 million / 24.5%
Payback
3.3 years

includes royalties payable

“The results of the mineral resource estimate and PEA clearly show that Camino Rojo is an excellent project with potential for very low cost, 100,000 ounces per year gold and significant silver production from a relatively simple open pit mine and heap leach”, stated Marc Prefontaine, President and Chief Executive Officer.  “There is also longer-term economic potential in the large sulphide resource along with the extensive area of prospective exploration ground that Orla controls.   Only six months after acquiring the property we will be starting feasibility-level work with the aim of being in a position to make a production decision in the second quarter of 2019”.

Chuck Jeannes, Chairman of Orla, added, “We expect the development of Camino Rojo to provide the foundation for achieving our vision of growing Orla into a premier emerging gold producer. The PEA supports a relatively short period to cash flow generation, the fuel for future success. Concurrent with the development of Camino Rojo, we will be advancing our Cerro Quema project in Panama, which includes another simple, low capital intensity, high margin heap leach opportunity, along with a very exciting sulphide copper-gold discovery at the Caballito zone. This foundation of multiple high-quality assets provides geographic and operational diversity, a key to creating shareholder value.”

Opportunities for further improvement of the project include:

  • Entering into an agreement with the owner of the mineral concession located directly north of Orla’s concession which would allow the north pit wall to extend past the Orla property line and thus go deeper and include additional leachable resources located on the property.
  • The potential to steepen the north pit wall slope angle
  • The potential to reduce capital and operating costs by employing larger crush size, as test work to date shows only minor or no recovery decrease with larger crush size.
  • Increase in silver recoveries

Metallurgical drilling has commenced to provide additional materials for evaluation of crush size and silver recoveries, and geotechnical analysis of the pit wall is underway.

Feasibility work has already started, including environmental assessment studies and work towards permit submittals. The Company expects to complete the feasibility analysis during the first half of 2019. Contingent upon positive feasibility results, commencement of construction is expected to follow the receipt of necessary permits and first gold would be expected during the first half of 2021.

The PEA is based on an open pit mine using conventional trucks and loaders transporting heap leach material to a crushing plant and waste material to a waste rock pile both located within 500 metres of the pit.  Material will then be conveyed and stacked onto an adjacent heap leach pad.  The site’s proximity to infrastructure, low stripping ratio, compact footprint and flat pad location all contribute to the relatively low estimated production costs and project simplicity.

The PEA is preliminary in nature and includes the use of inferred mineral resources, which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that PEA results will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

Property Description:

Camino Rojo is located in Zacatecas State Mexico.  The current mineral resource is located 3 km off a paved 4-lane highway.  The area is flat and there are no known social or environmental impediments to mining.  Orla has water rights and a surface agreement over the mineral resource and area of proposed infrastructure.  The Company has all surface and mineral rights to develop the project modelled in the PEA scenario.  Pursuant to the agreement whereby Orla acquired the property, there is 2% net smelter return (“NSR”) royalty in favour of Goldcorp Inc. for any material processed by heap leaching. 

There is no one living directly over the proposed development area.  The town of San Tiburcio is located 4 km to the east of the proposed development.  Orla has a Collaboration and Social Responsibility agreement with the San Tiburcio ejido which includes a 30-year temporary occupation right and an expropriation right over the 2,487 hectares covering the proposed pit and infrastructure area.  The Company has an active community and social program in San Tiburcio and the other nearby communities of El Berrendo and San Francisco.

Camino Rojo comprises intrusive related, sedimentary strata hosted, polymetallic Au, Ag, As, Zn, and Pb mineralization.  The mineralized zones correspond to zones of sheeted sulfidic veins and veinlet networks, creating a bulk-mineable style of gold mineralization.   Mineralization is almost completely oxidized to a depth of approximately 120 meters and then variably oxidized below (Transitional to Sulphide).  The mineral resource was divided into oxide, high and low transitional and sulphide.  Only the oxide and transitional material were considered in the PEA study for heap leach extraction.

PEA Project Description
The project modelled in the PEA, in which all development is on mineral concessions currently controlled by Orla, is described below.  The PEA was overseen by Kappes Cassiday & Associates (“KCA”) of Reno, NV.

The Camino Rojo mine will be a conventional open pit mine.  Mine operations will consist of drilling holes, blasting and loading into off-road trucks with loaders.  Mineralized material will be delivered to the primary crusher and waste to the waste storage facility located southeast of the pit.  Pit angles are based on previous geotechnical studies and range from -45 to -53 degrees. Mineral resource within the designed pit is broken into pervasive mineralized oxide (Kp), incipiently mineralized oxide (Ki), high transitional (60 to 90% oxidized) and low transitional (30 to 60% oxidized) material.  Any material with less than 30% oxidation is categorized as waste.  Of the total of 42.5 million tonnes of material going to the crusher, 5 million tonnes are low grade mineral resources that will be stockpiled and then processed at the end of the mine life.  Approximately 385,000 tonnes of the material going to the crusher, or 1%, is categorized as inferred mineral resources.  The remainder is categorized as measured and indicated mineral resources. In addition to the mineral resource, 24.5 million tonnes of waste will be mined, resulting in a strip ratio of 0.58:1.

Run of mine resource material will be crushed at a rate of 18,000 tonnes per day to 80% passing 38 mm using a two-stage closed crushing circuit with a primary jaw crusher and secondary cone crusher.  After crushing, material will be conveyor stacked on the leach pad in 10-meter lifts.  Lime will be added to the material for pH control before being stacked and leached with a dilute cyanide solution.  Pregnant solution will flow by gravity to a pregnant solution pond before being pumped to a Merrill-Crowe plant for metal recovery.  Gold and silver will be precipitated from the pregnant solution via zinc cementation.  The precious metal precipitate will be dewatered using filters, dried in a mercury retort to remove mercury values, and smelted to produce the final doré product.

Recovery predictions and key process design parameters are based on the results of 88 column tests completed by previous operators.  Most test work was done at sizes ranging from -9.5 to -25.0 mm, with 6 tests at -38.0 mm.  Test work does not show a significant decrease in gold recovery with larger crush sizes.  The test work conducted to date is considered to be representative and is sufficient for these purposes.  Confirmatory metallurgical test work will be completed on representative samples of each mineral type, specifically column leach tests on coarse crushed material.

Key design parameters from the metallurgical test work are summarized below:

  • Crush size of 80% passing 38 mm.
  • Estimated gold recoveries (including 2% field deduction) of 70%, 58%, 60% and 49% for Kp Oxide, Ki Oxide, Transition-hi and Transition-lo materials, respectively, average of 67%.
  • Estimated silver recoveries (including 3% field deduction) of 13%, 20%, 17% and 20% for Kp Oxide, Ki Oxide, Transition-hi and Transition-lo materials, respectively, average of 15%
  • Design leach cycle of 80 days.
  • Average cyanide consumption of 0.35 kg/t material.
  • Average lime consumption of 1.25 kg/t material.

Approximately 260 process and general administrative people will be employed directly by the project and approximately 140 people will be employed by the contract miner.  The PEA includes costs for a 250-person camp, but it is anticipated that a significant portion of the employees will be hired from the local area.  The Company is initiating programs intended to facilitate local employment.

Environmental Assessment studies are underway with no significant issues noted to date.  Initial mine waste rock studies indicate that acid rock drainage and metal leaching will not be a problem.   The Camino Rojo heap leach system is designed as a zero-discharge facility. 

PEA Economics

Mine operating costs were estimated by Independent Mining Consultants (“IMC”) and are based on contract mining at $1.81 per tonne of material moved.  The relatively low cost reflects the very short hauls to both the crusher and waste facility. 

Process operating costs were estimated from first principles.  Labor costs were estimated using project specific staffing, salary and wage and benefit requirements.  Unit consumptions of materials, supplies, power, water and delivered supply costs were also estimated.

Life of Mine Operating Cost Summary
(per tonne material processed)

Description
LOM Cost (US$/t)
Mine
$3.05
Process & Support Services
$3.20
Site General & Administration
$1.77
Total
$8.02

The capital costs are based upon the ownership of all process production equipment and site facilities.  Costs include surface support equipment, but mining equipment will be supplied by the mine contractor.   Estimated capital costs include a 28% contingency on process and infrastructure direct costs.

Capital Cost Summary

Description
Cost (US$)
Pre-Production Capital
$120.2M
Mining Contractor Mobilization & Preproduction
$4.9M
Total Initial Capital
$125.1M
Sustaining Capital – Mine & Process
$14.9M
Working Capital & Initial Fills (recovered)
$ 13.8M

The economic evaluation incorporates the following inputs:

  • Period of Analysis of 9 years (includes one year of pre-production, 7 years of production and one year for reclamation and closure)
  • 3-year trailing average gold price of $1,250/oz and silver price of $17/oz
  • Gold and silver recoveries based on metallurgical domain – average of 67% and 15% respectively
  • Electric power will be provided by line power to all elements of the process
  • 2% NSR royalty to Goldcorp Inc.
  • 0.5% NSR Extraordinary Mining duty to Mexican Government
  • 7.5% Special Mining Tax to Mexican Government
  • 30% Income Tax to Mexican Government

PEA Economics

Economic Analysis (US$)
 
IRR (Pre-Tax)
38.1
%
IRR (After-Tax)
24.5
%
Average Annual Free Cashflow (Pre-Tax)
$60
Million
          NPV @ 5% (Pre-Tax)
$231
Million
Average Annual Free Cashflow (After-Tax)
$43
Million
          NPV @ 5% (After-Tax)
$121
Million
Gold Price Assumption
$1,250
/Ounce
Silver Price Assumption
$17
/Ounce
Pay-Back Period (Years based on After-Tax)
3.3
Years
 
 
 
Capital Costs (Excluding VAT)
 
 
Initial Capital
$125
Million
Working Capital & Initial Fills
$14
Million
LOM Sustaining Capital
$15
Million
 
  
Operating Costs (Average LOM)
  
Mining
$3.05
/Tonne processed
Processing & Support
$3.20
/Tonne processed
General & Administration
$1.77
/Tonne processed
          Total Operating Cost
$8.02
/Tonne processed
Total By-Product Cash Cost1
$499
/Ounce Au
All-in Sustaining Cost1
$555
/Ounce Au
 
 
Production Data
  
Life of Mine
6.6
Years
Total Tonnes to Crusher
42,477,000
Tonnes
Grade Au
0.71
g/t
Grade Ag
13.56
g/t
Contained Au oz
966,000
Ounces
Contained Ag oz
18,517,000
Ounces
Mine Throughput per day
18,000
Tonne/day
Mine throughput per year
6,570,000
Tonne/year
Metallurgical Recovery Au (Overall)
67
%
Metallurgical Recovery Ag (Overall)
15
%
Average Annual Gold Production
97,472
Ounces
Average Annual Silver Production
415,981
Ounces
Total Gold Produced
642,382
Ounces
Total Silver Produced
2,741,485
Ounces
LOM Strip Ratio
0.58
 

1 includes royalties payable

The following tables illustrate the after-tax sensitivity of the project economics to changes in operating and capital costs and to changes in gold price: 

 
 
 
NPV
 
Variation
IRR
0%
5%
Gold Price
 
 
 
 
 
 
 
 
 
75%
$938
8.9%
$58,516,467
$21,406,028
90%
$1,125
18.6%
$134,018,397
$81,065,797
100%
$1,250
24.5%
$184,353,016
$120,834,790
110%
$1,375
29.9%
$233,731,543
$159,927,785
125%
$1,563
37.5%
$306,847,950
$217,846,352
 
 
 
 
 
Capital Costs
 
 
 
 
 
 
 
 
 
75%
$126,305,947
33.4%
$206,009,548
$143,923,225
90%
$145,237,065
27.6%
$193,262,389
$130,237,181
100%
$157,857,811
24.5%
$184,353,016
$120,834,790
110%
$170,478,556
21.8%
$175,244,883
$111,297,870
125%
$189,409,674
18.3%
$161,582,683
$96,992,490
 
 
 
 
 
Operating Costs
 
 
 
 
 
 
 
 
 
75%
$255,687,582
30.6%
$239,000,813
$164,121,828
90%
$306,825,099
27.0%
$206,592,687
$138,437,976
100%
$340,916,776
24.5%
$184,353,016
$120,834,790
110%
$375,008,454
21.9%
$161,675,682
$102,899,076
125%
$426,145,971
17.8%
$127,659,682
$75,995,504

Project Opportunities

Opportunities for further improvement of the project include:

  • Successfully negotiating an agreement with the owner of the concession north of Orla’s property

    The PEA open pit is constrained by the north boundary of Orla’s concessions. A pit model based on the mineral resource disclosed herein and unconstrained by the property boundary was assessed using the same recoveries and similar operating costs as the PEA. The objective was to understand the benefit of getting an agreement with the owner of the mineral concession located directly north of the Orla concession.  This exercise indicated that approximately 32 million additional tonnes of the existing measured and indicated mineral resource at 0.70 g/t Au and 14.7 g/t Ag could be included in the pit model in a case where there was no boundary restriction.  By definition, all resources are located on Orla’s claim.  The additional resources included as part of the unconstrained pit model are because the pit wall continues onto the adjoining claim, allowing deeper access to resources below the PEA mine model. 
  • The potential to steepen the north pit wall slope angle. This would increase the amount of resource at depth that would be included in the pit.
  • The potential to reduce capital and operating costs by employing larger crush size as test work to date shows only minor or no recovery decrease with larger crush size.
  • Potential increase in silver recoveries

Additional Project Upside Opportunities
Studies to investigate opportunities within the existing 7.3 million gold ounces of sulphide (mill) measured and indicated resources will be conducted over the coming months. In addition, a C$2 million regional exploration program including mapping and ground geophysics is ongoing. 

Mineral Resources
Mineral resources were estimated by IMC based on a geological and oxidation model developed by Orla geologists.  The model has domains based on stratigraphic units; Caracol and Indidura.  The Caracol is the uppermost unit throughout the deposit and the primary host rock.  It was further divided by alteration intensity (Kp for pervasive alteration and Ki for incipient alteration) and between an upper zone (NE) with more flat lying mineralization and a lower zone (SW) with steeper mineralization.  Lithological and alteration contacts were put as hard boundaries in estimation.  The NE/SW boundary was not. 

Oxidation levels were superimposed onto the block model after resource estimation.  Oxidation is divided by levels; oxide (+90% oxidized), Transition high (60 to 90% oxidized), transition low (30 to 60% oxidized).  Any material less than 30% oxidized was considered sulphide.  Oxidized and transition material is reported as leach mineral resources and sulphide material is reported as mill mineral resources.

The resource estimate was completed by IMC of Tucson, AZ. The mineral resource estimate was prepared as of April 27, 2018.

 
Gold
Silver
Lead
Zinc
Gold
Silver
Lead
Zinc
Resource Type
Kt
(g/t)
(g/t)
(%)
(%)
(koz)
(koz)
(mlb)
(mlb)
Leach Resource:
 
 
 
 
 
 
 
 
 
     Measured Mineral Resource
16,147
0.794
15.44
0.26
0.39
412.1
8,014
92.1
140.6
     Indicated Mineral Resource
84,692
0.723
12.15
0.19
0.36
1,969.3
33,076
363.7
674.3
     Meas./Ind. Mineral Resource
100,839
0.734
12.67
0.21
0.37
2,381.3
41,091
455.8
814.8
     Inferred Mineral Resource
4,858
0.772
5.60
0.07
0.24
120.6
874
7.0
25.9
Mill Resource:
 
 
 
 
 
 
 
 
 
      Measured Mineral Resource
9,818
0.864
7.45
0.08
0.28
272.6
2,352
16.4
60.1
      Indicated Mineral Resource
244,251
0.890
7.50
0.07
0.26
6,992.2
58,934
385.6
1,398.2
      Meas./Ind. Mineral Resource
254,069
0.889
7.50
0.07
0.26
7,264.8
61,286
402.0
1,458.3
      Inferred Mineral Resource
60,342
0.875
7.90
0.05
0.23
1,696.9
15,334
68.1
310.8
Total Mineral Resource
 
 
 
 
 
 
 
 
 
      Measured Mineral Resource
25,965
0.820
12.42
0.19
0.35
684.6
10,367
108.5
200.7
      Indicated Mineral Resource
328,943
0.847
8.70
0.10
0.29
8,961.5
92,010
749.3
2,072.5
      Meas./Ind. Mineral Resource
354,908
0.845
8.97
0.11
0.29
9,646.1
102,377
857.8
2,273.2
      Inferred Mineral Resource
65,200
0.867
7.73
0.05
0.23
1,817.5
16,208
75.2
336.8

Notes:

(1) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
(2) Numbers may not add up due to rounding.
(3) The NSR cutoff grade for leach resource is US$ 5.06 per tonne. The NSR cutoff grade for mill resource is US$ 13.72 per tonne
(4) Prepared by IMC of Tucson, AZ, under the direction of Michael G. Hester, FAusIMM, a Qualified Person.
(5) The quantity and grade of reported inferred mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred mineral resources as indicated or measured mineral resources.

A total of 87,152 assays located in interpreted mineral zones were used in the estimation from 407 core and 493 reverse circulation holes.  Gold and silver grades were capped, with capping levels dependent upon domains.  Because of the large number of assays used in the estimate, the grades assays were capped to be around the 99.8 to 99.9 percentile of the grade distributions.  Assays were composited into 5 meter lengths for estimation.

IMC estimated grades for gold, silver, lead, and zinc using inverse distance with a power weight of 2 (ID2) into 10 x 10 x 10 meter blocks.  For Kp and Ki in the NW zone, a maximum of 15 composites, a minimum of three and a maximum of three composites per hole were used.  In the SW zone, a maximum of 24 composites, a minimum of four and a maximum of eight composites per hole were used.  Indidura was estimated with the same parameters as the SW domain. 

Blocks with an average distance to four holes less than or equal to 25 meters were assigned as measured mineral resource.  Blocks with an average distance to the nearest three holes with less than 45 meters, but greater than 25 meters from the nearest four holes, were assigned as indicated mineral resource.  Blocks with an average distance to three holes greater than 45m were assigned to inferred mineral resource. 

The average specific gravity from 10,000 specific gravity tests was reduced 2% to obtain an estimate of bulk density.    

The mineral resources are contained within a floating cone pit shell to demonstrate “reasonable prospects for eventual economic extraction” as required by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").  Measured, indicated, and inferred mineral resources were allowed to contribute to the economics for the mineral resource cone shell.

The main economic inputs used in the floating cone are summarized in the table below.  Note that these inputs are based on limited test work and order-of-magnitude cost estimates.  They are used only to demonstrate reasonable prospects for eventual economic extraction.  No inference is made that the mineral resources are economic.

Economic Parameters for Mineral Resource Estimate

Material Type
Units
Kp Oxide
Ki Oxide
Tran-Hi
Tran-Low
Tran-S
Sulfide
Waste
Commodity Prices
 
 
 
 
 
 
 
 
     Gold Price Per Ounce
(US$)
1400
1400
1400
1400
1400
1400
 
     Silver Price Per Ounce
(US$)
20.00
20.00
20.00
20.00
20.00
20.00
 
     Lead Price Per Pound
(US$)
1.05
1.05
1.05
1.05
1.05
1.05
 
     Zinc Price Per Pound
(US$)
1.25
1.25
1.25
1.25
1.25
1.25
 
Plant Production Rate
(ktpy)
6,570
6,570
6,570
6,570
9,125
9,125
 
Mining Cost Per Tonne
 
 
 
 
 
 
 
 
     Total Mining Cost
(US$)
1.65
1.65
1.65
1.65
1.65
1.65
1.65
Process and G&A Cost Per Tonne Processed
 
 
 
 
 
 
 
 
     Processing
(US$)
3.377
3.377
3.377
3.377
12.50
12.50
 
     G&A
(US$)
1.687
1.687
1.687
1.687
1.215
1.215
 
     Total Process and G&A
(US$)
5.064
5.064
5.064
5.064
13.72
13.72
 
Plant Recovery
 
 
 
 
 
 
 
 
     Gold
(%)
70%
58%
60%
49%
86%
86%
 
     Silver
(%)
13%
20%
17%
20%
76%
76%
 
     Lead 
(%)
0%
0%
0%
0%
60%
60%
 
     Zinc 
(%)
0%
0%
0%
0%
64%
64%
 
Smelting/Refining Payables and Costs
 
 
 
 
 
 
 
 
     Gold Refinery Payable
(%)
100%
100%
100%
100%
95%
95%
 
     Silver Refinery Payable
(%)
100%
100%
100%
100%
95%
95%
 
     Lead Smelter Payable
(%)
0%
0%
0%
0%
95%
95%
 
     Zinc Smelter Payable
(%)
0%
0%
0%
0%
85%
85%
 
     Gold Refining Per Ounce
(US$)
5.00
5.00
5.00
5.00
1.00
1.00
 
     Silver Refining Per Ounce
(US$)
0.50
0.50
0.50
0.50
1.50
1.50
 
     Lead Treatment Per Pound
(US$)
0.00
0.00
0.00
0.00
0.194
0.194
 
     Zinc Treatment Per Pound
(US$)
0.00
0.00
0.00
0.00
0.219
0.219
 
Royalties
 
 
 
 
 
 
 
 
     Royalty
(%)
2%
2%
2%
2%
0%
0%
 
NSR Factors
 
 
 
 
 
 
 
 
     Gold NSR Factor
($/g)
30.768
25.493
26.372
21.537
36.748
36.748
 
     Silver NSR Factor
($/g)
0.0799
0.1229
0.1044
0.1229
0.4294
0.4294
 
     Lead NSR Factor
($/%)
0.00
0.00
0.00
0.00
10.753
10.753
 
     Zinc NSR Factor
($/%)
0.00
0.00
0.00
0.00
12.369
12.369
 
NSR Cutoff Grades
 
 
 
 
 
 
 
 
     Breakeven NSR Cutoff Grade
($/t)
6.71
6.71
6.71
6.71
15.37
15.37
 
     Internal NSR Cutoff Grade
($/t)
5.06
5.06
5.06
5.06
13.72
13.72
 
Gold Equivalent Cutoff Grades
 
 
 
 
 
 
 
 
     Breakeven Cutoff Grade
(g/t)
0.22
0.26
0.25
0.31
0.42
0.42
 
     Internal Cutoff Grade
(g/t)
0.16
0.20
0.19
0.24
0.37
0.37
 

Mineral resources are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") "CIM Definition Standards - For Mineral Resources and Mineral Reserves" adopted by the CIM Council (as amended, the "CIM Definition Standards") in accordance with the requirements of NI 43-101.  Mineral reserve and mineral resource estimates reflect the reasonable expectation that all necessary permits and approvals will be obtained and maintained.

There is no guarantee that any of the mineral resources will be converted to mineral reserve.  There is also no guarantee that any of the inferred mineral resources will be upgraded to measured or indicated mineral resources or to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

The project is subject to the normal risks that mining projects face including changes to metal prices, changes to government regulations, social risks, uncertainty in mineral resource and recovery estimates, permitting risks and financing risks. 

The Company is not aware of any factors which would prevent a project similar to that modelled in the PEA from being carried out.

Data Verification:

The sampling data used for the mineral resource estimate was verified by IMC.  A substantial portion of the database was compared with original assay certificates. There were no limitations on the verification process. IMC is of the opinion that the database is acceptable for the purpose of the mineral resource estimation.

KCA checked the metallurgical test procedures and results to ensure they met industry standards and checked metallurgical sample locations to ensure that there was material from throughout the resource area and that samples were representative.  KCA also reviewed material handling characteristics of the different material types by inspection of core to ensure that the selected processing method was appropriate.

Qualified Persons

The mineral resource estimate was conducted by IMC of Tucson, AZ, under the direction of Michael G. Hester, FAusIMM.  The PEA was overseen by KCA of Reno, NV.  Michael G. Hester, FAusIMM of IMC was also responsible for the mining components of the PEA.  KCA, under the direction of Carl Defilippi, RM SME was responsible for the metallurgy, process, general and administration and economic components of the PEA.  Matthew Gray, Ph.D., C.P.G., of Resource Geosciences Incorporated of Rio Rico, AZ was responsible for the property, geology and environmental components of the PEA.  Each of Messrs. Hester, Defilippi and Gray is a Qualified Person for their respective sections of the PEA and each of whom is Independent of Orla under the definitions of NI43-101.  An independent technical report prepared in accordance with the requirements of NI 43-101 will be available on SEDAR within 45 days of this news release.

The technical information in this news release has been reviewed and approved by Michael G. Hester, FAusIMM, Carl Defilippi, RM SME and Matthew Gray, Ph.D., C.P.G, each of whom is an Independent Qualified Person under NI 43-101 standards.

Conference Call

Orla will host a conference call on May 29, 2018 at 9:30 a.m. eastern time, to discuss the results of the PEA:

Toll-free dial-in number (Canada/US):   1-800-806-5484
Local dial-in number: 416-406-0743
Passcode:  8332434#
Instant replay:
Toll-free dial-in number (Canada/US):  1-800-408-3053
Local dial-in number: 905-694-9451
Passcode:  5695914#
Expiry date:  June 29, 2018

On behalf of the Board of Directors,

Marc Prefontaine, M.Sc., P.Geo.,
President & Chief Executive Officer

About Orla Mining Ltd.
The 100% owned Cerro Quema project in Panama includes a near-term gold production scenario and significant exploration upside. Cerro Quema's 14,800 Ha concession boasts paved road access, a supportive local population and private land ownership. The Cerro Quema project is currently in the last stage of the permitting process for a proposed open pit mine and gold heap leach operation. Please refer to the Cerro Quema Project - Pre-feasibility Study on the La Pava and Quemita Oxide Gold Deposits dated August 22, 2014, which is available on SEDAR. Camino Rojo is an advanced gold and silver project located in Zacatecas State, Central Mexico. The project is 100% owned and covers over 200,000 hectares. Access and infrastructure are excellent with a paved highway and powerline nearby. A NI 43-101 Technical Report on Camino Rojo will be available on SEDAR under the Company’s profile within 45 days of this news release.

Forward-looking and Cautionary Statements
This news release contains certain “forward-looking statements” within the meaning of Canadian and United States securities legislation, including, without limitation, statements with respect to the results of the preliminary economic assessment, including but not limited to the mineral resource estimation, mine plan and operations, internal rate of return, sensitivities, taxes, net present value, potential recoveries, design parameters, operating costs, capital costs, production data and economic potential; the timing and costs for production decisions; permitting timelines and requirements; requirements for additional land; exploration and planned exploration programs, the potential for discovery of additional mineral resources; upside opportunities, including the upside case, pit wall angles, larger crush size and increase in the silver recoveries; timing for completion of a feasibility study; timing for first gold production; and the Company's objectives and strategies. Forward-looking statements are statements that are not historical facts which address events, results, outcomes or developments that the Company expects to occur. Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Certain material assumptions regarding such forward-looking statements are discussed in this news release, including without limitation, assumptions regarding the price of gold and silver; the accuracy of mineral resource estimations; that there will be no material adverse change affecting the Company or its properties; that all required permits and approvals will be obtained; that no social or environmental issues exist; and that there will be no significant disruptions affecting the Company or its properties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements involve significant known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to: risks related to uncertainties inherent in the preparation of preliminary economic assessments, drill results and the estimation of mineral resources, including changes in the economic parameters; risks relating to not securing agreements with third parties or not received required permits; risks associated with executing the Company’s objectives and strategies, including costs and expenses, as well as those risk factors discussed in the Company’s most recently filed management’s discussion and analysis, as well as its annual information form dated January 26, 2018, available on www.sedar.com. Except as required by the securities disclosure laws and regulations applicable to the Company, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Non-IFRS Measures

The Company has included certain non-IFRS performance measures as detailed below. In the gold mining industry, these are common performance measures but may not be comparable to similar measures presented by other issuers and the non-IFRS measures do not have any standardized meaning. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Cash Costs per Ounce – the Company calculated cash costs per ounce by dividing the sum of operating costs, royalty costs, production taxes, refining and shipping costs, net of by-product silver credits, by payable gold ounces. While there is no standardized meaning of the measure across the industry, the Company believes that this measure will be useful to external users in assessing operating performance.

All-In Sustaining Costs (“AISC”) – the Company has disclosed an AISC performance measure that reflects all of the expenditures that are required to produce an ounce of gold from operations. While there is no standardized meaning of the measure across the industry, the Company's definition conforms to the all-in sustaining cost definition as set out by the World Gold Council in its guidance dated June 27, 2013. The Company believes that this measure will be useful to external users in assessing operating performance and the ability to generate free cash flow from current operations.

For further information, please contact:

Marc Prefontaine
President & Chief Executive Officer

www.orlamining.com
This email address is being protected from spambots. You need JavaScript enabled to view it.

All amounts in US$ unless otherwise noted.