Sergio Sáenz
Camino Rojo Increases Gold Reserves by Over 50 Percent
Q: How has Orla Mining responded to the pandemic?
A: 2020 was certainly a difficult year, and 2021 does not seem to be much different so far, with COVID-19 and all the prevention measures, protocols and regulations put in place by governments, companies and other organizations put since the beginning of the pandemic. Nevertheless, we were able to bring our project to the construction phase. This is still a difficult time and having gotten this far is a great accomplishment, especially if we consider the mandatory shutdowns and restrictions placed on all economic activities. Even today, we are faced with limited interaction with government agencies, mostly due to the limitations put in place to limit the number of government employees working from their offices, as well as limited working days and hours. Regardless, we never stopped working, maintained a wellcoordinated home office program, and implemented very strict protocols to protect our employees, their families and the communities. These protocols and measures included strict enforcement of hygiene and sanitary measures, use of personal protective equipment, use of disinfectants, social distancing, constant cleaning and disinfecting of tools, equipment, contact points, as well as the implementation of physical barriers in offices, lunchrooms, etc.
Q: The company has increased its gold mineral reserves at Camino Rojo by 54 percent. How is this project progressing?
A: We knew we had the additional mineral resources in our property but needed to reach an agreement with our neighbor to the north in order to have access to their property and reach the deeper mineral within our concession. This was a long and slow process, but we were able to reach an agreement that benefited both companies, and we are now working on the environmental and regulatory aspects to expand our operation into the new property. The great news is that we were able to extend the life of the mine by four years while maintaining the same production rates. It is important to note that the additional mineral is located within our original resources, but we are now able to reach them by stepping out into the neighbor’s property. The additional life added to the current oxide mine plan also gives us additional time to conduct the studies necessary to explore and test the options to mine the large sulphide mineral resource underneath our current oxides pit footprint, which hosts 7.3 million ounces of gold in measured and indicated resource categories.
Q: How has the process with COFECE developed?
A: We did not expect any difficulties obtaining the approval by COFECE, but the details of the business transaction were submitted for their review in order to comply with antimonopoly regulations, so we expect to have the final review and approval from them. Just a normal business transaction between two mining companies reaching an agreement that benefit both parties.
Q: What are your production targets and strategy for Camino Rojo?
A: Our average annual production for the life of the mine will be 94,000 ounces of gold and 597,000 ounces of silver
General Manager | Minera Camino Rojo
during 10.4 years of production as opposed to 6.8 years of mine life of the previous scenario. This additional four years will also give us more flexibility to develop other projects, like the sulphide resource at Camino Rojo, the Cerro Quema in Panama, as well as continuing our exploration programs in both countries. The timeline for the construction of Camino Rojo did not change, but there were some delays in permitting, which we mostly attribute to the COVID-19 pandemic. We expect to have the first pour in the later part of 2021 and complete the ramp up and fine tuning of the operation in the first quarter of 2022.
Q: How is the social responsibility strategy coming along for 2021?
A: Our social responsibility strategy is based in the conviction that we are part of the communities where we operate, therefore we strive to make these communities feel part of the process of building a mine and benefit from it, be it through direct employment or providing goods or services. They cannot be merely spectators watching us go to work, bring outside people to do the work and reap the benefits. We have implanted a very good community relations program, based in open and honest communication between them and the company. As part of the initiatives, we are incorporating members of the communities into our workforce or as providers of goods and services. In fact, during the construction phase, we have not had to hire or bring in any construction type dump trucks from outside, all trucks are owned by locals and contracted by the construction companies participating in the construction of the project at competitive rates. Again, providing honest information in a timely manner, receiving feedback and acting on it is key to our relationship with our neighbors.
Q: This year, Zacatecas will see a change in government. How might this impact Camino Rojo?
A: I do not think it will have an impact in our project, we conduct our business in an institutional manner and with respect to laws and regulations. I have worked in countries where you really expect a 180 degree turn after every election, but that is not the case in Mexico at all, with mature institutions and democracy. We, at Orla are committed to working with all levels of government regardless of political affiliations.
Q: What are you most proud of in 2021?
A: I would say that I am most proud of the quality of people we were able to attract to our team at Camino Rojo. There is a saying that great projects attract great people, and this has certainly been the case for us. Whatever it takes, our team will go to any length to get the job done, whether is working 12 or more hours per day, driving long distances or working from home. I am very proud of each one of them. Despite 2020 being a very difficult year in general, I believe we succeeded in reaching our goals, obtained the necessary permits and commenced the construction of Camino Rojo. This was only possible because we had a team of dedicated people willing to go the extra mile to achieve our objectives. We are now working on our next goal, which is to build a mine and produce the first metal this year.
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New Financing to Boost Orla Mining’s Flagship Assets
Orla Mining has announced a new financing of US$35million that will be used to further develop and explore its Camino Rojo Oxide Gold Project in Zacatecas, Mexico and Cerro Quema Oxide Gold Project in Los Santos, Panama.
Orla Mining has entered to a non-brokered prospectus financing that consists in 9,085,263 common shares at a price of C$4.75 per share totaling gross income of US$35 million. The offer has been accepted by a large unidentified institutional investor, Pierre Lassonde, Agnico Eagle Mines Limited and Trinity Capital Partners Corporation. The company explained that it signed a binding commitment letter with these investors, in which they agreed to purchase the common shares.
“We are pleased to add another large, reputable institution as an Orla shareholder, and we believe this placement reflects on our growing reputation as a company that delivers value,” said Jason Simpson, President and CEO of Orla Mining.
The company explained that the net proceeds will be used for the development of the Camino Rojo Gold Oxide Project and the Cerro Quema Gold Oxide Project, exploration activities, additional studies on the Camino Rojo Sulphide Project and for corporate purposes.
The company expects to close the offering on July 14. The deal is still subject to certain conditions, such as receiving all necessary approvals and listings, including approval from the Toronto Stock Exchange and NYSE American.
Recently, the company announced that the engineering work at Camino Rojo is 95 percent complete, and its construction is at 22 percent. The average annual production for the life of the mine will be 94,000oz of gold and 597,000oz of silver during 10.4 years of production as opposed to 6.8 years of mine life of the previous scenario, said Sergio Sáenz, General Manager of Minera Camino to MBN. “This additional four years will also give us more flexibility to develop other projects, like the sulphide resource at Camino Rojo, the Cerro Quema in Panama, as well as continuing our exploration programs in both countries. We expect to have the first pour in the later part of 2021 and complete the ramp up and fine tuning of the operation in the first quarter of 2022.”
Orla Mining’s Results Confirm Higher Grade Gold Zones
Orla Mining has released their results from the oriented in-fill core drilling program on its Camino Rojo sulphide deposit located in Zacatecas, Mexico. The drill results confirm the presence of wide, higher-grade gold zones within the sulphide mineral resource, and the company intends to further explore the potential for open pit or underground bulk mining methods. An updated resource estimate for the sulphide portion of the deposit will be undertaken which will form the basis of a Preliminary Economic Assessment.
The program consisted of close-spaced drilling on three sections of the sulphide zone focusing on the extension of the Camino Rojo deposit down plunge of the planned open pit. The objective was to test the continuity of higher-grade mineralization within the 7.3 million ounces of gold in the sulphide measured and indicated mineral resource estimate (259 million tonnes at 0.88 g/t Au) lying directly below the open pit currently being developed on the oxide mineral reserves. The fourteen holes completed across the sulphide zone yielded 27 significant mineralized drill intercepts with a grade-by-thickness factor greater than 50 g/t by metre Au (g/t*m Au), as reported by the company’s press release.
At the time Orla acquired the Camino Rojo project, the company’s technical team believed, based on its geological evaluation of the existing data, that additional drilling had the potential to outline and better define continuous zones with grades appreciably higher than the average sulphide mineralized measured and indicated mineral resource grade of 0.88 g/t gold. Orla’s 2020-2021 program of southerly directed drill holes was specifically designed to be a step in that process.
Jason Simpson, President and Chief Executive Officer of Orla Mining, said “We are encouraged with the results from the Camino Rojo Sulphides drill program. While the geological setting is already well understood, this new information will be meaningful as we refine the geological model and move to focus on possible development approaches. We are pleased that this drilling has reinforced the structural controls predicted by our geologists, and we will likely require more drilling across the orebody, ideally at this more optimal drill orientation.”
At the moment, 50 percent of the construction is complete and is expected to be finished by early 2022. Meanwhile, the process plant and main facilities will be ready in 4Q21. If everything goes according to plan, Camino Rojo will produce its first doré bar in December, while a more constant production will be achieved until the first months of 2022, as reported by MBN. The project is expected to have an annual production of 94,000oz for 10.5 years. The company recently extended the mine life by four years and increased its reserves by 54 percent due to its Layback Agreement with Fresnillo. The agreement allows Orla to expand its Camino Rojo oxide pit within the Fresnillo mineral concession to better target its minerals.