Orla Mining Reports Second Quarter 2024 Financial Results and Improves Annual Production and Cost Guidance
Robust Margin Expansion Driving Record Free Cash Flow
(All amounts expressed in
Second Quarter 2024 Highlights
- Second quarter gold production was 33,206 ounces and gold sold was 34,875 ounces (pre-released). Year to date,
Camino Rojo has been performing better than plan and, as a result, the Company is increasing full year gold production guidance to 120,000 to 130,000 ounces from its initial guidance of 110,000 to 120,000 ounces. - Second quarter 2024 all-in sustaining cost1 ("AISC") was
$782 per ounce of gold sold, while year to date AISC is$843 per ounce of gold sold. AISC guidance for the full year 2024 has been improved to a range of$800 to$900 per ounce of gold sold from the original guidance of$875 to$975 per ounce. - Adjusted earnings1 for the second quarter were
$23.0 million or$0.07 per share. - Net income for the second quarter was
$24.3 million or$0.08 per share. - Second quarter operating profit margin2 of 64%, and net profit margin3 of 29%.
- Cash flow from operating activities before changes in non-cash working capital during the second quarter was
$53.2 million . - Exploration and project expenditure1 was
$9.7 million during the quarter, of which$3.1 million was capitalized and$6.6 million was expensed. - As at
June 30, 2024 , Orla's cash balance was$154.3 million , an increase of$36.2 million over the previous quarter. Net cash1 at the end of the quarter was$76.0 million . - During the quarter, the Company repaid
$10.0 million on its revolving credit facility. Subsequent to quarter end, the Company made a further$20.0 million re-payment reducing the outstanding balance drawn to$58.4 million .
"The combination of
- Jason Simpson, President and Chief Executive Officer of Orla
_________________________________________________ |
1 Non-GAAP measure. Refer to the "Non-GAAP Measures" section of this press release. |
2 Defined as revenue minus cost of sales, divided by revenue. |
3 Defined as net income divided by revenue. |
Financial and Operations Update
Table 1: Financial and Operating Highlights |
|
Q2 2024 |
YTD 2024 |
Operating |
|
|
|
Gold Produced |
oz |
33,206 |
66,429 |
Gold Sold |
oz |
34,875 |
66,921 |
Average Realized Gold Price1 |
$/oz |
|
|
Cost of Sales – Operating Cost |
$m |
|
|
Cash Cost per Ounce1 |
$/oz |
|
|
All-in Sustaining Cost per Ounce1 |
$/oz |
|
|
|
|
|
|
Financial |
|
|
|
Revenue |
$m |
|
|
Net Income (Loss) |
$m |
|
|
Adjusted Earnings1 |
$m |
|
|
Earnings per Share – basic |
$/sh |
|
|
Adjusted Earnings per Share – basic1 |
$/sh |
|
|
|
|
|
|
Cash Flow from Operating Activities |
$m |
|
|
Free Cash Flow1 |
$m |
|
|
|
|
|
|
Financial Position |
|
|
|
Cash and Cash Equivalents |
$m |
|
|
|
$m |
|
|
1 Non-GAAP measure. Refer to the "Non-GAAP Measures" section of this news release. |
Second Quarter 2024 Financial and Operations Summary
Sustaining capital during the second quarter of 2024 totaled
During the second half of 2023, the Company initiated a program to test the impact of reduced crushed size from P80 28mm to P80 23mm. The initial results of this test program were positive and resulted in higher gold recovery from the heap leach in the range of 3-5%. The testing will continue in 2024, as will testing of reduced crush size on other ore types.
Exploration and Projects Update
In the second quarter, exploration efforts were primarily concentrated on drilling activities at Camino Rojo in
As part of the near-mine exploration at Camino Rojo, the focus in the second quarter was on the promising
Camino Rojo Sulphides Project Planning (
The Company plans on completing a preliminary underground resource estimate on the Camino Rojo Sulphides. A metallurgical study of the most recent phase of Camino Rojo Sulphide infill drilling is expected to continue throughout 2024.
South Railroad Exploration (
The 2024 Exploration program at
South Railroad Project Permitting (
The Company continues baseline environmental data collection to facilitate the environmental studies required to support development of the Environmental Impact Statement ("EIS"), and the overall National Environmental Policy Act ("NEPA") permitting process. Orla is currently expanding on this work to allow flexibility in project planning when working with the
Contact Gold Acquisition
During the second quarter, on
For further details, please see the Company's news releases dated
Panama Update
In
Although the Company intends to vigorously pursue these legal remedies, the Company's preference is a constructive resolution with the Government of
2024 Guidance – Q2 Update
During the second quarter, the Company spent a total of
The Company provides the following improved 2024 production and cost guidance which will be driven by higher stacked ore tonnes and improved metal recoveries of both gold and silver.
The Company is increasing full year gold production guidance to a range of 120,000 to 130,000 ounces from its initial guidance range of 100,000 to 110,000 ounces. The Company is also reducing AISC guidance for the full year 2024 to a range of
|
|
Original 2024 Guidance |
Updated 2024 Guidance |
YTD Q2 2024 |
Gold Production |
Oz |
110,000 - 120,000 |
120,000 - 130,0000 |
66,249 |
Total Cash Cost (net of by-product)1 |
$/oz au sold |
|
|
|
AISC1 |
$/oz au sold |
|
|
|
Capital Expenditures |
$m |
|
No change |
|
Sustaining capital expenditures |
$m |
|
|
|
Non-sustaining capital expenditures |
$m |
|
|
|
Exploration Expenses & |
$m |
|
|
|
1. Total Cash Cost and AISC are not non-GAAP measures. See the "Non-GAAP Measures" section of this news release for additional information. |
2. Exchange rates used to forecast cost metrics include MXN/USD of 18.0 and CAD/USD of 1.33. A +/-1.0 change to the MXN/USD exchange rate would have an impact of +/ |
3. The initial FY 2024 expensed exploration guidance of |
Financial Statements
Orla's unaudited financial statements and management's discussion and analysis for the quarter ended
Qualified Persons Statement
The scientific and technical information in this news release was reviewed and approved by Mr.
Second Quarter 2024 Conference Call
Orla will host a conference call on
Dial-In Numbers / Webcast: |
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Conference ID: |
5844017 |
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Toll Free: |
1 (888) 550-5302 |
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Toll: |
1 (646) 960-0685 |
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Webcast: |
About
Orla's corporate strategy is to acquire, develop, and operate mineral properties where the Company's expertise can substantially increase stakeholder value. The Company has two material gold projects: (1)
Non-GAAP Measures
The Company has included certain performance measures in this news release which are not specified, defined, or determined under generally accepted accounting principles (in the Company's case, International Financial Reporting Standards ("IFRS"")). These are common performance measures in the gold mining industry, but because they do not have any mandated standardized definitions, they may not be comparable to similar measures presented by other issuers. Accordingly, the Company uses such measures to provide additional information and you should not consider them in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles ("GAAP"). In this section, all currency figures in tables are in thousands, except per-share and per-ounce amounts.
Average Realized Gold Price
Average realized gold price per ounce sold is calculated by dividing gold sales proceeds received by the Company for the relevant period by the ounces of gold sold. The Company believes the measure is useful in understanding the gold price realized by the Company throughout the period.
AVERAGE REALIZED GOLD PRICE |
Q2 2024 |
Q2 2023 |
|
YTD Q2 2024 |
YTD Q2 2023 |
Revenue |
$ 84,570 |
$ 59,272 |
|
$ 151,848 |
$ 110,403 |
Silver sales |
(3,256) |
(475) |
|
(4,566) |
(899) |
Gold sales |
81,314 |
58,797 |
|
147,282 |
109,504 |
Ounces of gold sold |
34,875 |
29,773 |
|
66,921 |
56,632 |
AVERAGE REALIZED GOLD PRICE |
$ 2,332 |
$ 1,975 |
|
$ 2,201 |
$ 1,934 |
|
|
|
|
|
|
Net cash is calculated as cash and cash equivalents and short-term investments less total debt adjusted for unamortized deferred financing charges at the end of the reporting period. This measure is used by management to measure the Company's debt leverage. The Company believes that in addition to conventional measures prepared in accordance with IFRS, net debt is useful to evaluate the Company's leverage and is also a key metric in determining the cost of debt.
|
|
|
Cash and cash equivalents |
$ 154,302 |
$ 96,632 |
Less: Long term debt |
(78,350) |
(88,350) |
|
$ 75,952 |
$ 8,282 |
|
|
|
Adjusted Earnings and Adjusted Earnings per share
Adjusted earnings excludes deferred taxes, unrealized foreign exchange, changes in fair values of financial instruments, impairments and reversals due to net realizable values, restructuring and severance, and other items which are significant but not reflective of the underlying operational performance of the Company. The Company believes these measures are useful to market participants because they are important indicators of the strength of operations and the performance of the core business. With the addition of performance share units ("PSUs") at the end of Q1 2023, the Company expects greater volatility in share-based payments expense going forward. Accordingly, the effect of these PSUs in the calculation of adjusted earnings was excluded.
ADJUSTED EARNINGS |
Q2 2024 |
Q2 2023 |
|
YTD Q2 2024 |
YTD Q2 2023 |
Net income for the period |
$ 24,265 |
$ 12,827 |
|
$ 41,750 |
$ 26,062 |
Unrealized foreign exchange |
(1,520) |
1,097 |
|
(2,431) |
(706) |
Accretion of deferred revenue |
122 |
— |
|
244 |
— |
Share based compensation related to PSUs |
167 |
92 |
|
291 |
92 |
ADJUSTED EARNINGS |
$ 23,034 |
$ 14,016 |
|
$ 39,854 |
$ 25,448 |
|
|
|
|
|
|
Millions of shares outstanding – basic |
318.0 |
311.2 |
|
316.6 |
308.8 |
Adjusted earnings per share – basic |
$ 0.07 |
$ 0.05 |
|
$ 0.13 |
$ 0.08 |
|
|
|
|
|
|
Companies may choose to expense or capitalize their exploration expenditures. The Company expenses exploration costs based on its accounting policy. To assist the reader in comparing against those companies which capitalize their exploration costs, please note that included within Orla's net income (loss) for each period are exploration costs which were expensed, as follows:
|
Q2 2024 |
Q2 2023 |
|
YTD Q2 2024 |
YTD Q2 2023 |
Exploration & evaluation expense |
$ 6,649 |
$ 7,201 |
|
$ 11,393 |
$ 14,067 |
|
|
|
|
|
|
Free Cash Flow
The Company believes market participants use Free Cash Flow to evaluate the Company's operating cash flow capacity to meet non-discretionary outflows of cash. Free Cash Flow is not meant to be a substitute for the cash flow information presented in accordance with IFRS. Free Cash Flow is calculated as the sum of cash flow from operating activities and cash flow from investing activities, excluding certain unusual transactions.
FREE CASH FLOW |
Q2 2024 |
Q2 2023 |
|
YTD Q2 2024 |
YTD Q2 2023 |
Cash flow from operating activities |
$ 48,969 |
$ 23,296 |
|
$ 77,119 |
$ 18,374 |
Cash flow from investing activities |
(4,906) |
(4,844) |
|
(9,130) |
(5,436) |
FREE CASH FLOW |
$ 44,063 |
$ 18,452 |
|
$ 67,989 |
$ 12,938 |
|
|
|
|
|
|
Millions of shares outstanding – basic |
318.0 |
311.2 |
|
316.6 |
308.8 |
Free cash flow per share – basic |
$ 0.14 |
$ 0.06 |
|
$ 0.21 |
$ 0.04 |
|
|
|
|
|
|
Cash Costs and All-In Sustaining Costs
The Company calculates cash cost per ounce by dividing the sum of operating costs and royalty costs, net of by-product silver credits, by ounces of gold sold. Management believes that this measure is useful to market participants in assessing operating performance.
The Company has provided an AISC performance measure that reflects all 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
Figures are presented only from
CASH COST |
Q2 2024 |
Q2 2023 |
|
YTD Q2 2024 |
YTD Q2 2023 |
Cost of sales – operating costs |
$ 18,524 |
$ 13,458 |
|
$ 36,633 |
$ 25,250 |
Royalties |
2,098 |
1,448 |
|
3,766 |
2,754 |
Silver sales |
(3,256) |
(475) |
|
(4,566) |
(899) |
CASH COST |
$ 17,366 |
$ 14,431 |
|
$ 35,833 |
$ 27,105 |
|
|
|
|
|
|
Ounces sold |
34,875 |
29,773 |
|
66,921 |
56,632 |
Cash cost per ounce sold |
$ 498 |
$ 485 |
|
$ 535 |
$ 479 |
|
|
|
|
|
|
ALL-IN SUSTAINING COST |
Q2 2024 |
Q2 2023 |
|
YTD Q2 2024 |
YTD Q2 2023 |
Cash cost, as above |
$ 17,366 |
$ 14,431 |
|
$ 35,833 |
$ 27,105 |
General and administrative expenses |
3,878 |
3,107 |
|
7,747 |
6,372 |
Share based payments |
715 |
620 |
|
2,046 |
1,727 |
Accretion of site closure provisions |
131 |
113 |
|
243 |
257 |
Amortization of site closure provisions |
137 |
136 |
|
253 |
261 |
Sustaining capital |
4,755 |
1,443 |
|
9,369 |
2,588 |
Sustaining capitalized exploration expenses |
128 |
696 |
|
541 |
696 |
Lease payments |
175 |
222 |
|
374 |
384 |
ALL-IN SUSTAINING COST |
$ 27,285 |
$ 20,768 |
|
$ 56,406 |
$ 39,390 |
|
|
|
|
|
|
Ounces sold |
34,875 |
29,773 |
|
66,921 |
56,632 |
All-in sustaining cost per ounce sold |
$ 782 |
$ 698 |
|
$ 843 |
$ 696 |
|
|
|
|
|
|
Exploration and Project Development Costs
Exploration and project development costs are calculated as the sum of these costs, some of which have been expensed and some of which have been capitalized. The Company believes this measure provides a more fulsome understanding to readers of the level of expenditures incurred on such activities during the period.
EXPLORATION AND PROJECT DEVELOPMENT COSTS |
Q2 2024 |
Q2 2023 |
|
YTD Q2 2024 |
YTD Q2 2023 |
Exploration and evaluation expense |
$ 6,649 |
$ 7,201 |
|
$ 11,393 |
$ 14,067 |
Expenditures on mineral properties capitalized |
3,103 |
3,284 |
|
6,979 |
4,873 |
EXPLORATION AND PROJECT DEVELOPMENT |
$ 9,752 |
$ 10,485 |
|
$ 18,372 |
$ 18,940 |
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Forward-looking Statements
This news release contains certain "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities legislation and within the meaning of Section 27A of the United States Securities Act of 1933, as amended, Section 21E of the United States Exchange Act of 1934, as amended, the United States Private Securities Litigation Reform Act of 1995, or in releases made by the
SOURCE