Feasibility Study complete
Type of Mine
Open pit heap leach
1.0 Moz Total Proven and Probable *
9.5 Moz Total M&I *
Estimated Avg. Annual Production
97,000 oz Au, 511,000 oz Ag
District Scale Exploration Potential
206,000 Ha Land package
Simple Oxide Heap Leach Project with Large Sulphide Resource Below
The Camino Rojo Project is a high quality, advanced oxide heap leach project in a low risk jurisdiction. This type of project leverages management’s and the board’s extensive exploration, development and operating experience in Mexico.
- Near-surface oxide gold-silver deposit with a large deeper gold-silver-zinc-lead sulphide zone
- Located 50km SE of Penasquito Mine in the State of Zacatecas
- Eight mineral concessions covering approximately 206,000 hectares
- Ejido agreements in place; strong community relationships
- Water concessions granted;
- Excellent regional infrastructure
- Proven and Probable Mineral Reserves of 1.0 million oz. of gold and 20 million oz. of silver (44.0 Mt @ 0.73 g/t gold and 14.2 g/t silver) *
- Measured and Indicated Mineral Resources of 9.5 million oz gold and 100 million oz of silver (353,443,000 tonnes @ 0.83 g/t gold and 8.8 g/t silver)*
The Camino Rojo Feasibility Study considers open pit mining of 44.0 million tonnes of oxide and transitional ore grading 0.73 g/t gold and 14.2 g/t silver at a throughput rate of 18,000 tonnes per day. Ore from the pit will be crushed to 80% passing 28 mm, conveyor stacked onto a heap leach pad and leached using a low concentration sodium cyanide solution. Pregnant solution from the heap leach will be processed in a Merrill-Crowe recovery plant where gold and silver will be precipitated and doré will be produced.
The project offers low capital and operating costs, rapid payback, and strong financial performance. The site’s proximity to infrastructure, low stripping ratio, compact footprint and flat pad location all contribute to project simplicity and relatively low estimated AISC of $576 per ounce of gold.
The Feasibility Study was conducted using $1,250/oz gold and $17/oz silver and is expressed in U.S. dollars unless otherwise noted.
The Feasibility Study was prepared by a team of independent industry experts led by Kappes Cassiday and Associates (“KCA”) and supported by Independent Mining Consultants (“IMC”), Resource Geosciences Incorporated (“RGI”), Barranca Group LLC, Piteau Associates Engineering Ltd. and HydroGeoLogica Inc (HGL).
The Feasibility Study incorporates geological, assay, engineering, metallurgical, geotechnical, environmental and hydrogeological information collected by Orla and previous owners since 2007, including 370,566 metres of drilling in 911 holes. Predicted average gold recoveries of 64% are based on results from 85 column tests.
Operating costs are based on contract mining with all other mine components being owned and operated by Orla. Capital costs were estimated primarily using budgetary supplier quotes for all major and most minor equipment as well as contractor quotes for major construction contracts.
|2019 Feasibility Study Highlights|
|Throughput Rate per Day||18,000 tonnes|
|Total Ore to Leach Pad||44.0 M tonnes|
|Average Grade Au / Ag (g/t)||0.73 / 14.2|
|Contained Gold / Silver Ounces||1,031,000 / 20,093,000|
|Average Recovery Au / Ag||64% / 17%|
|Average Annual Gold Production||97,000 ounces|
|Strip Ratio (waste : ore)||0.54|
|Initial Capex||$123 million|
|Avg. LOM Operating costs (per tonne of ore processed)||$8.43|
|Total By-Product Cash Cost1 ($/oz Au)||$515|
|All-In Sustaining Cost (“AISC”)1 ($/oz Au)||$576|
|Pre -Tax - Net Present Value (5%)||$227 million|
|Pre-Tax Internal Rate of Return||38.6%|
|After-Tax - Net Present Value (5%)||$142 million|
|After-Tax Internal Rate of Return||28.7%|
1 Includes royalties payable, by-product cash cost and AISC are non-IFRS measures.
Environmental assessment activities required for permitting have been undertaken and with the Feasibility Study now complete, permit applications can be finalized and will be submitted in the third quarter of 2019. Construction-level engineering and procurement activities will be initiated in the third quarter of 2019 to meet the goal of starting construction in the first half of 2020
Orla has an active Community and Social Responsibility (CSR) program and has maintained good relationships with local communities. These efforts will continue through the life of the project.
Exploration work to evaluate previously identified targets and develop new targets for gold and silver mineralization on the large property continues in 2019. Overburden cover hinders exploration, but as the mineralization previously discovered on the property demonstrates, shallow cover can mask extensive near-surface mineralization. Various exploration techniques are being used; Induced Polarization (“IP”) geophysics appears to be the most useful tool.
|MINERAL RESERVE ESTIMATE|
|MINERAL RESOURCE ESTIMATE|
|Gold & Silver||Tonnes||Gold||Silver||Gold||Silver|
|Lead & Zinc||Tonnes||Lead||Zinc||Lead||Zinc|
|000's||(%)||(%)||(M lbs)||(M lbs)|
Mineral Reserves Notes:
- The Mineral Reserve estimate has an effective date of June 24, 2019. Mineral reserves are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards – For Mineral Resources and Mineral Reserves, adopted by the CIM Council (as amended) in accordance with the disclosure requirement of NI 43-101.
- Columns may not sum exactly due to rounding.
- Mineral Reserves are based on prices of $1,250/oz gold, $17/oz silver, USD/MXN exchange rate of 19.3.
- Mineral Reserves are based on net smelter return cut-off that vary by time period to balance mine and plant production capacities. They range from a low of $4.73/t to a high of $9.00/t.
- Operating costs - mining $1.94/t mined; process $3.41/t processed; G&A $1.32/t processed, includes a 2% royalty.
- Recoveries for gold – Kp 70%, Ki 56%, Transition Hi 60%; Transition Lo 40%; Recoveries for silver - Kp 11%, Ki 15%, TrHi 27%, TrLo 34%.
- Gold and silver 100% payable; Refining cost per ounce – Au $5.00; Ag $0.50/oz.
Mineral Resource Notes:
- The Mineral Resource has an effective date of June 7, 2019. The mineral resources are classified in accordance with the CIM Definition Standards in accordance with the disclosure requirement of NI 43-101
- Columns may not sum exactly due to rounding.
- Mineral Resources that are not mineral reserves do not have demonstrated economic viability.
- Mineral Resources for leach material are based on prices of $1,400/oz gold and $20/oz silver.
- Mineral Resources for mill material are based on prices of $1,400/oz gold, $20/oz silver, $1.05/lb lead, and $1.20/lb zinc.
- Mineral Resources are based on net smelter return cut-off of $4.73/t for leach material and $13.71/t for mill material.
- Includes 2% royalty and an USD:MXN exchange rate of 19.3.
- Operating costs for Leach resource - mining $1.65/t mined; process $3.41/t processed; G&A $1.32/t processed; Operating costs for Mill resource - mining $1.65/t mined; process $12.50/t processed; G&A $1.20/t processed
- Leach resource payable – Au 100%; Ag 100%; Mill resource payable – Au 95%, Ag 95%, Pb 95%, Zn 85%
- Leach resource refining costs - Au $5.00/oz; Ag $0.50/oz; Mill resource refining costs - Au $1.00/oz; Ag $1.50/oz; Pb $0.194/lb; Zn $0.219/lb
- The Mineral Resource estimate assumes that the floating pit cone used to demonstrate reasonable prospects for eventual economic extraction extends onto land held by the adjacent owner. Any potential development of the Camino Rojo Project that includes an open pit encompassing the entire mineral resource estimate would be dependent on obtaining an agreement with the adjacent owner.
- Mineral Resources are inclusive of Mineral Reserves.
- An Inferred Mineral Resource has a lower level of confidence than that applying to an indicated mineral resource and must not be converted to a mineral reserve. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration.