VANCOUVER, BC, May 12, 2022
/CNW/ - Orla Mining Ltd. (TSX: OLA) (NYSE: ORLA) ("Orla" or
the "Company") today announces the results for the first quarter
ended March 31, 2022.
(All amounts are in U.S. dollars unless otherwise
stated)
HIGHLIGHTS:
- Net income of $18.8 million or
$0.08 per share for the first quarter
of 2022.
- Camino Rojo gold production totalled 23,031 ounces in the first
quarter. Gold production guidance for the full year 2022 is
maintained at 90,000 to 100,000 ounces at all-in sustaining costs
("AISC") of $600 to $700 per ounce of gold sold1.
- Commercial production was declared at the Camino Rojo Oxide
Mine ("Camino Rojo"), effective April 1,
2022.
- Camino Rojo achieved record monthly processing throughput in
March 2022. The average daily
stacking throughput for the month was 17,444 tonnes per day or 97%
of nameplate capacity of 18,000 tonnes per day. Daily stacking
throughput for the first quarter of 2022 averaged 15,917 tonnes per
day. Nameplate capacity is expected to be achieved during the
second quarter.
- Construction at Camino Rojo is complete. Final cost is expected
to be $125.5 million, $8.6 million below the total project capital
estimate of $134.1 million.
- Cash balance of $35.0 million at
March 31, 2022.
- During the first quarter, the Company filed an updated
technical report on Cerro Quema to include the initial resource
estimate on the Caballito copper-gold deposit in Panama.
- Exploration and evaluation expenditures totaled $2.5 million for the quarter as preparations
began for the 2022 drill and exploration program. The Company
anticipates spending $15 million in
2022 on exploration activities in an effort to expand resources on
existing deposits and make new discoveries.
- Subsequent to quarter end, the Company announced a refinancing
of its project finance facility with a new $150 million secured credit facility composed of
a $100 million term facility and a
$50 million revolving facility. The
refinancing significantly lowers the Company's cost of capital and
provides additional flexibility through increased liquidity.
"During an important transitional quarter, the Company hit all
key milestones including declaring commercial production and
ramping up throughput rates," said Jason
Simpson, President and Chief Executive Officer of Orla. "We
are looking towards achieving design capacity at Camino Rojo during
the second quarter and advancing our exciting growth
portfolio."
________________________________
|
1 AISC is a
non-GAAP measure and will be reported on from Q2 2022 onward
following the declaration of commercial production at Camino Rojo.
See the "Non-GAAP Measures" section of this news release for
additional information.
|
FINANCIAL AND OPERATIONS UPDATE
Table 1: Financial
and Operating Highlights
|
|
Q1 -
2022
|
|
Operating
|
|
|
Gold
Produced
|
oz
|
23,031
|
Gold Sold
|
oz
|
20,884
|
Average Realized Gold
Price1
|
$/oz
|
1,888
|
|
|
|
Financial
|
|
|
Revenue
|
$m
|
39.4
|
Net Income
|
$m
|
18.8
|
Adjusted Net
Income1
|
$m
|
19.8
|
Earnings per Share –
basic
|
$/sh
|
0.08
|
Adjusted Earnings per
Share – basic1
|
$/sh
|
0.08
|
|
|
|
Cash and Cash
Equivalents
|
$m
|
35.0
|
Net
Debt1
|
$m
|
138.7
|
Cash Flow from
Operating Activities before changes in non-cash working
capital
|
$m
|
19.8
|
1.
|
Average Realized Gold
Price", "Adjusted Net Income", "Adjusted Earnings per Share –
basis", and "Net Debt" are non-GAAP
measures. See the "Non-GAAP Measures" section of this news
release for additional information.
|
Table 2: 2022
Operational Guidance and Outlook1
|
|
|
Gold
Production
|
oz
|
90,000 -
100,000
|
All-in Sustaining
Costs ("AISC")2,3
|
$/oz Au
sold
|
$600 -
$700
|
Capital
Expenditures3
|
|
|
Sustaining
Capital Expenditures
|
$m
|
$5
|
Non-Sustaining Capital Expenditures
|
$m
|
$20
|
Total
Capital Expenditures
|
$m
|
$25
|
Exploration3
|
|
|
Mexico
|
$m
|
$10
|
Panama
|
$m
|
$5
|
Total
Exploration
|
$m
|
$15
|
1.
|
The outlook includes
full-year 2022 figures except for AISC which is calculated from
Q2-Q4 2022.
|
2.
|
AISC is a non-GAAP
measure. See the "Non-GAAP Measures" section of this news
release for additional information.
|
3.
|
Exchange rates used to
forecast cost metrics include MXN/USD of 20.0 and CAD/USD of
1.25
|
CAMINO ROJO OXIDE OPERATIONS
UPDATE
During the quarter, site activities were focused on
commissioning and ramp up of mining and processing activities to
sustained throughput levels. Commercial production at the Camino
Rojo Oxide Mine was declared effective April
1, 2022. During the quarter, construction activities
included installation of heap leach liner in cell two and event
pond, placement of overliner material on cell two of the heap
leach, commissioning of the third and final overland conveyor,
construction of the airstrip, and completion of the rainwater
runoff diversion.
Camino Rojo achieved record monthly processing throughput in
March 2022. The average daily
stacking throughput for the month was 17,444 tonnes per day or 97%
of nameplate capacity of 18,000 tonnes per day. Daily stacking
throughput for the first quarter of 2022 averaged 15,917 tonnes per
day. Achieving nameplate capacity is expected during the second
quarter. Mined ore tonnes are reconciling well to the block model
and process recoveries to date are in line with the metallurgical
recovery model.
Capital expenditures for Camino Rojo were $122.3 million at March
31, 2022, against the current project estimate, consistent
with the total project capital expenditure estimate of $134.1 million. Remaining project spend of
$3.2 million is expected to occur in
the second quarter of the year.
CAMINO ROJO SULPHIDE PROJECT
UPDATE
On May 9, 2022, the Company
provided a summary of Phase 1 metallurgical test results on its
Camino Rojo sulphide deposit (the "Sulphide Project" or "Camino
Rojo Sulphides"), located in Zacatecas,
Mexico2.
The Phase 1 metallurgical program has greatly increased Orla's
understanding of metallurgical characteristics of Camino Rojo
Sulphides, and appears to open up multiple processing options for
the Camino Rojo Sulphides relative to what was suggested by
previous work. The Phase 1 metallurgical program included tests on
grinding characteristics, amenability to cyanidation, selective
flotation, and pressure oxidation. In addition to the Phase 1
tests, a geometallurgical model was developed using new and
historical metallurgical test results. Geometallurgical modelling
integrates geological, geochemical, mineralogical, and recovery
data to characterize zones of metallurgical response. It supports
mine planning, flowsheet design, and connects mine and process
planning as part of the optimization of mine-to-mill production and
economic analysis. Highlights of Phase 1 metallurgical program
include the following:
- The geometallurgical model recognized five, spatially distinct,
physically continuous geometallurgical zones within the
7.3-million-ounce sulphide gold deposit (measured and indicated
mineral resource estimate of 259 million tonnes at 0.88 g/t Au, 7.4
g/t Ag, 0.07% Pb,0 0.26% Zn)3.
- Two geometallurgical zones of the Camino Rojo Sulphide
mineralization appear to be amenable to conventional
carbon-in-leach ("CIL") processing.
- Selective flotation may be used to produce a gold
concentrate.
- Selective flotation may be used to produce a concentrate that
can be treated using pressure oxidation.
- There is potential to produce a zinc concentrate.
These positive results confirm potential for a standalone
processing option for the Camino Rojo Sulphides. The Company will
continue to work towards determining the optimal development plan
with the goal of generating the greatest value for stakeholders.
The metallurgical recoveries and geometallurgical zones will be
used to determine new cut-off grades for open pit and underground
mine designs. The respective mine designs will be used to support
an updated sulphide mineral resource estimate, which is currently
in progress, and will form the basis of a Preliminary Economic
Assessment (the "PEA") on the Sulphide Project targeted for end of
year 2022.
________________________________
|
2 See the
Company's press release dated May 9, 2022 titled "Orla Mining
Announces Positive Initial Metallurgical Results on Camino Rojo
Sulphide Project".
3 The mineral resource estimate for the Sulphide Project
at Camino Rojo consists of 74 koz of measured resource (3.358
million tonnes at 0.69 g/t gold) and 7,221 koz of indicated
resources (255.445 million tonnes at 0.88 g/t gold) and has an
effective date of June 7, 2019. Additional information can be found
in the Camino Rojo Technical Report entitled "Unconstrained
Feasibility Study NI 43-101 Technical Report on the Camino Rojo
Gold Project – Municipality of Mazapil, Zacatecas, Mexico" and
dated January 11, 2021.
|
The development scenarios being considered to potentially form
the basis of a PEA currently include: (1) an underground mining
option with phased processing at a to-be-constructed CIL and
flotation facility at Camino Rojo, or (2) an open pit mining option
with phased processing at a to-be-constructed CIL and flotation
facility at Camino Rojo, or (3) an open pit mining option with
processing at Newmont Corporation's ("Newmont") Peñasquito
facility. Work planned in 2022 includes the following:
- Completion of 8,250-metre, Phase 2 Sulphide Project drill
program to reinforce the geologic model and to continue to confirm
the continuity of wide zones of higher-grade gold mineralization.
The program has commenced on the first of 15 diamond drill holes
and results are expected in the second half of 2022
- Update of resource estimate for the Camino Rojo Sulphides.
- Completion of Phase 1 metallurgical test program, finalize the
process design criteria, and develop the financial model for the
selected mining and processing options as part of the PEA.
- Completion of PEA in the fourth quarter 2022.
CABALLITO COPPER-GOLD PROJECT
UPDATE
During the quarter, Orla filed an updated technical report for
the Company's Cerro Quema project, inclusive of the initial mineral
resource estimate for the Caballito copper-gold deposit. The
technical report was prepared in accordance with the disclosure
standards under National Instrument 43-101 ("NI 43-101") and titled
"Project Pre-Feasibility Updated NI 43-101 Technical
Report on the Cerro Quema Project, Province of Los Santos, Panama" dated January 18, 2022. The
updated technical report includes the previously disclosed
July 2021 pre-feasibility study on
the Cerro Quema project, as well as the mineral resource estimate
for the Caballito copper-gold deposit, which consists of the
following:
Table 3: Caballito
Sulphides
|
|
|
|
|
|
|
|
Class
|
Tonnes
|
CuEq
|
Cu
|
Au
|
Ag
|
CuEq
|
Cu
|
Au
|
Ag
|
(000s)
|
(%)
|
(%)
|
(g/t)
|
(g/t)
|
(Mlbs)
|
(Mlbs)
|
(koz)
|
(koz)
|
Indicated
|
31,952
|
0.96
|
0.83
|
0.31
|
2.2
|
676
|
585
|
315
|
2,260
|
Inferred
|
22,569
|
0.85
|
0.77
|
0.21
|
1.2
|
425
|
381
|
155
|
856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPLORATION PROGRAM
Exploration activities in the first quarter were focused on
preparation for the 2022 drill campaigns which commenced in April.
Exploration spending for 2022 is expected to total $15 million, with $10
million allocated to activities in Mexico and $5
million allocated to activities in Panama.
At Camino Rojo in Mexico,
near-mine and regional exploration in 2022 will be focused on
increasing oxide reserves, supporting advancement of the sulphide
deposit development scenario options, and testing priority targets
defined in 2021 in an effort to make new satellite discoveries.
More specifically, this work is expected to include oxide resource
drilling on the Fresnillo layback
area, a Phase 2 infill drill program on the Sulphides deposit to
support an updated resource estimate, and reverse circulation
drilling and continued target definition activities on the regional
exploration program.
The 2022 Cerro Quema exploration program will consist of infill,
metallurgical, and expansion (step-out) drilling of known deposits,
drill testing exploration targets defined by recent geochemical
soil sampling, geophysical Induced Polarization (IP) surveys,
bedrock mapping and prospecting, and in some cases, historical
drilling. In total, 11,700m of
drilling is planned in 2022 for Panama.
Exploration target drill testing is planned to the north of the
Quemita deposit to follow-up on hole CQDH-17-112 which intersected
significant Cu & Au mineralization, and drilling at the La
Pelona target, which has a similar geophysical signature and
geological context to La Pava and Quemita. South of the regional
Joaquin Fault, La Prieta target
will also be drill tested. La
Prieta is defined by a large IP chargeability anomaly with
coincident Au, Cu, and Mo in-soil and in-rock geochemical
anomalies, which may be indicative of porphyry-style
mineralization.
CONSOLIDATED FINANCIAL
STATEMENTS
Orla's unaudited interim consolidated financial statements and
management's discussion and analysis for the three months ended
March 31, 2022, are available on the
Company's website at www.orlamining.com, and under the Company's
profiles on SEDAR and EDGAR.
Qualified Persons Statement
The scientific and technical information related to Camino Rojo
and Cerro Quema in this news release was reviewed and approved by
Mr. J. Andrew Cormier, P. Eng.,
Chief Operating Officer of the Company, and Mr. Sylvain Guerard, P. Geo., Senior Vice
President, Exploration of the Company, who are the Qualified
Persons as defined under NI 43-101 standards.
FIRST QUARTER 2022 Conference
Call
Orla will host a conference call on Friday, May 13, 2022, at 10:00 AM, Eastern Time, to provide a corporate
update following the release of its financial and operating results
for the first quarter 2022:
Dial-In
Numbers:
|
|
Conference
ID:
|
5844017
|
|
|
Toll Free:
|
1 (888)
550-5302
|
|
|
International:
|
1 (646)
960-0685
|
|
|
Webcast:
|
https://orlamining.com/investors/presentations-and-events/
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About Orla Mining Ltd.
Orla is operating the Camino Rojo Oxide Gold Mine, a gold and
silver open-pit and heap leach mine, located in Zacatecas State,
Central Mexico. The property is
100% owned by Orla and covers over 160,000 hectares. The technical
report for the 2021 Feasibility Study on the Camino Rojo oxide gold
project entitled "Unconstrained Feasibility Study NI 43-101
Technical Report on the Camino Rojo Gold Project – Municipality of
Mazapil, Zacatecas, Mexico"
dated January 11, 2021, is available
on SEDAR and EDGAR under the Company's profile at
www.sedar.com and www.sec.gov, respectively. The technical
report is also available on Orla's website at www.orlamining.com.
Orla also owns 100% of Cerro Quema located in Panama which includes a near-term gold
production scenario and various exploration targets. Cerro Quema is
a proposed open pit mine and gold heap leach operation. The
technical report for the Pre-Feasibility Study on the Cerro Quema
oxide gold project entitled "Project Pre-Feasibility
Updated NI 43-101 Technical Report on the Cerro Quema
Project, Province of Los Santos,
Panama" dated January 18, 2022, is available on SEDAR and EDGAR
under the Company's profile at www.sedar.com and www.sec.gov,
respectively. The technical report is also available on Orla's
website at www.orlamining.com.
Non-GAAP Measures
The Company has included certain performance measures in this
press 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.
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 a non-GAAP measure
and does not constitute a measure recognized by IFRS and does not
have a standardized meaning defined by IFRS. 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. It may not be comparable to information in other gold
producers' reports and filings. The Company believes the measure is
useful in understanding the gold price realized by the Company
throughout the period.
AVERAGE REALIZED GOLD PRICE
|
2022-Q1
|
2021-Q1
|
Gold sales
|
$
39,426
|
N/A
|
Ounces of gold
sold
|
20,884
|
N/A
|
Average Realized Gold
Price per Ounce Sold
|
$
1,888
|
N/A
|
|
|
|
ADJUSTED NET INCOME (LOSS) AND
ADJUSTED NET INCOME (LOSS) PER SHARE
Adjusted net income (loss) is a non-GAAP measure which does not
constitute a measure recognized by IFRS and does not have a
standardized meaning defined by IFRS. It may not be
comparable to information in other gold producers' reports and
filings.
Adjusted net income (loss) 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.
Management believes these measures are useful to investors
because they are important indicators of the strength of our
operations and the performance of our core business.
ADJUSTED NET INCOME
|
2022-Q1
|
2021-Q1
|
Net income (loss) for
the period
|
$
18,782
|
(10,807)
|
Unrealized foreign
exchange
|
1,013
|
2,974
|
Adjusted Net Income
(Loss)
|
$
19,795
|
(7,833)
|
|
|
|
Millions of common
shares outstanding – basic
|
247.8
|
234.0
|
Adjusted net income
(loss) per share – basic
|
$
0.08
|
$
(0.03)
|
NET DEBT
Net debt is a non-GAAP measure which does not constitute a
measure recognized by IFRS and does not have a standardized meaning
defined by IFRS. It may not be comparable to information in
other gold producers' reports and filings.
Net debt is calculated as total debt adjusted for unamortized
deferred financing charges less cash and cash equivalents and
short-term investments 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 performance.
NET DEBT
|
2022-Q1
|
2021-Q1
|
Project loan
|
$
113,944
|
60,989
|
Unamortized transaction
costs
|
11,056
|
14,011
|
Newmont loan
|
10,976
|
9,246
|
Fresnillo
obligations
|
37,800
|
37,885
|
Less: Cash and cash
equivalents
|
(35,038)
|
(31,207)
|
Net Debt
|
$
138,738
|
90,924
|
ALL-IN SUSTAINING COSTS
(AISC)
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 World
Gold Council in its guidance dated November
14, 2018. Orla believes that this measure is useful to
external users in assessing operating performance and the Company's
ability to generate free cash flow from current operations. Upon
commencing commercial production and reporting actual AISC, we will
provide a reconciliation to IFRS figures then presented.
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 United States Securities and Exchange
Commission, all as may be amended from time to time, including,
without limitation, statements regarding the Company's 2022
guidance, including production, operating
costs and capital costs, the achievement of
nameplate capacity at the Camino Rojo mine, the results of the
Phase 1 metallurgical program and the potential benefits thereof,
potential development scenarios for the Sulphide Project,
exploration and study work planned at the Sulphide Project for
2022, the Company's exploration plans, including timing,
expenditures and the goals thereof, and the Company's upcoming
milestones. 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 were
made, including without limitation, assumptions regarding the
timing of reaching nameplate capacity at Camino Rojo; price of
gold, silver, and copper; the accuracy of mineral resource and
mineral reserve estimations; that there will be no material adverse
change affecting the Company or its properties; that all required
approvals will be obtained, including concession renewals and
permitting; that political and legal developments will be
consistent with current expectations; that currency and exchange
rates will be consistent with current levels; 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: uncertainty and variations in the
estimation of mineral resources and mineral reserves, including
risks that the interpreted drill results may not accurately
represent the actual continuity of geology or grade of the deposit,
bulk density measurements may not be representative, interpreted
and modelled metallurgical domains may not be representative, and
metallurgical recoveries may not be representative; the Company's
reliance on Camino Rojo and risks associated with its start-up
phase; financing risks and access to additional capital; risks
related to natural disasters, terrorist acts, health crises and
other disruptions and dislocations, including by the COVID-19
pandemic; risks related to the Company's indebtedness; success of
exploration, development, and operation activities; foreign country
and political risks, including risks relating to foreign operations
and expropriation or nationalization of mining operations;
concession risks; permitting risks; environmental and other
regulatory requirements; delays in or failures to enter into a
subsequent agreement with Fresnillo Plc with respect to accessing
certain additional portions of the mineral resource at Camino Rojo
and to obtain the necessary regulatory approvals related thereto;
the mineral resource estimations for Camino Rojo being only
estimates and relying on certain assumptions; the Layback Agreement
with Fresnillo Plc remaining subject to the transfer of surface
rights; delays in or failure to get access from surface rights
owners; risks related to guidance estimates and uncertainties
inherent in the preparation of feasibility and pre-feasibility
studies, including but not limited to, assumptions underlying the
production estimates not being realized, changes to the cost of
production, variations in quantity of mineralized material, grade
or recovery rates, geotechnical or hydrogeological considerations
during mining differing from what has been assumed, failure of
plant, equipment or processes, changes to availability of power or
the power rates, ability to maintain social license, changes to
exchange, interest or tax rates, cost of labour, supplies, fuel and
equipment rising, changes in project parameters, delays, and costs
inherent to consulting and accommodating rights of local
communities; uncertainty in estimates of production, capital, and
operating costs and potential production and cost overruns; the
fluctuating price of gold, silver, and copper; global financial
conditions; uninsured risks; competition from other companies and
individuals; uncertainties related to title to mineral properties;
conflicts of interest; risks related to compliance with
anti-corruption laws; volatility in the market price of the
Company's securities; assessments by taxation authorities in
multiple jurisdictions; foreign currency fluctuations; the
Company's limited operating history; risks related to the Company's
history of negative operating cash flow; litigation risks;
intervention by non-governmental organizations; outside contractor
risks; risks related to historical data; unknown labilities in
connection with acquisitions; the Company's ability to identify,
complete, and successfully integrate acquisitions; dividend risks;
risks related to the Company's foreign subsidiaries; risks related
to the Company's accounting policies and internal controls; the
Company's ability to satisfy the requirements of the Sarbanes-Oxley
Act of 2002; enforcement of civil liabilities; the Company's status
as a passive foreign investment company for U.S. federal income tax
purposes; information and cyber security; gold industry
concentration; shareholder activism; risks associated with
executing the Company's objectives and strategies, 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 March 18,
2022, to be available on www.sedar.com and www.sec.gov.
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.
Cautionary Note to U.S. Readers
This news release has been prepared in accordance with
Canadian standards for the reporting of mineral resource and
mineral reserve estimates, which differ from the previous and
current standards of the United
States securities laws. In particular, and without limiting
the generality of the foregoing, the terms "mineral reserve",
"proven mineral reserve", "probable mineral reserve", "inferred
mineral resources,", "indicated mineral resources," "measured
mineral resources" and "mineral resources" used or referenced
herein and the documents incorporated by reference herein, as
applicable, are Canadian mineral disclosure terms as defined in
accordance with Canadian National Instrument 43-101 — Standards of
Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM") — CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the "CIM Definition
Standards").
For United States reporting
purposes, the United States Securities and Exchange Commission (the
"SEC") has adopted amendments to its disclosure rules (the "SEC
Modernization Rules") to modernize the mining property disclosure
requirements for issuers whose securities are registered with the
SEC under the Exchange Act, which became effective February 25, 2019. The SEC Modernization Rules
more closely align the SEC's disclosure requirements and policies
for mining properties with current industry and global regulatory
practices and standards, including NI 43-101, and replace the
historical property disclosure requirements for mining registrants
that were included in SEC Industry Guide 7. Issuers were required
to comply with the SEC Modernization Rules in their first fiscal
year beginning on or after January 1,
2021. As a foreign private issuer that is eligible to file
reports with the SEC pursuant to the multi-jurisdictional
disclosure system, the Company is not required to provide
disclosure on its mineral properties under the SEC Modernization
Rules and will continue to provide disclosure under NI 43-101 and
the CIM Definition Standards. Accordingly, mineral reserve and
mineral resource information contained or incorporated by reference
herein may not be comparable to similar information disclosed by
United States companies subject to
the United States federal
securities laws and the rules and regulations thereunder.
As a result of the adoption of the SEC Modernization Rules,
the SEC now recognizes estimates of "measured mineral resources",
"indicated mineral resources" and "inferred mineral resources." In
addition, the SEC has amended its definitions of "proven mineral
reserves" and "probable mineral reserves" to be "substantially
similar" to the corresponding CIM Definition Standards that are
required under NI 43-101. While the SEC will now recognize
"measured mineral resources", "indicated mineral resources" and
"inferred mineral resources", U.S. investors should not assume that
all or any part of the mineralization in these categories will be
converted into a higher category of mineral resources or into
mineral reserves without further work and analysis. Mineralization
described using these terms has a greater amount of uncertainty as
to its existence and feasibility than mineralization that has been
characterized as reserves. Accordingly, U.S. investors are
cautioned not to assume that all or any measured mineral resources,
indicated mineral resources, or inferred mineral resources that the
Company reports are or will be economically or legally mineable
without further work and analysis. Further, "inferred mineral
resources" have a greater amount of uncertainty and as to whether
they can be mined legally or economically. Therefore, U.S.
investors are also cautioned not to assume that all or any part of
inferred mineral resources will be upgraded to a higher category
without further work and analysis. Under Canadian securities laws,
estimates of "inferred mineral resources" may not form the basis of
feasibility or pre-feasibility studies, except in rare cases. While
the above terms are "substantially similar" to CIM Definitions,
there are differences in the definitions under the SEC
Modernization Rules and the CIM Definition Standards. Accordingly,
there is no assurance any mineral reserves or mineral resources
that the Company may report as "proven mineral reserves", "probable
mineral reserves", "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" under NI 43-101 would
be the same had the Company prepared the reserve or resource
estimates under the standards adopted under the SEC Modernization
Rules or under the prior standards of SEC Industry Guide 7.
SOURCE Orla Mining Ltd.