Potential for Standalone Phased Processing
Option
VANCOUVER, BC, May 8, 2022
/CNW/ - Orla Mining Ltd. (TSX: OLA) (NYSE: ORLA) ("Orla" or
the "Company") is pleased to provide a summary of Phase 1
metallurgical test results on its Camino Rojo sulphide deposit (the
"Sulphide Project" or "Camino Rojo Sulphides"), located in
Zacatecas, Mexico.
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)[1].
- 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.
"These metallurgical results provide options for processing the
Camino Rojo Sulphides", said Jason
Simpson, President and Chief Executive Officer of Orla. "We
are furthering our understanding of the deposit, the potential
development pathway, and the value it may generate for
stakeholders."
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1
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See "Scientific and
Technical Information" below for additional
information.
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METALLURGICAL RESULTS
In 2021, the Company completed a directional drill core program
into the Camino Rojo Sulphides. The main objectives of the program
were to generate additional geological and analytical information
regarding the continuity and geometry of the higher-grade gold
mineralization (>2 g/t Au), obtain geotechnical information
required to evaluate potential underground mining scenarios, and
provide new material for metallurgical studies. The drill program
was successful, and the drill results confirmed the presence of
wide, higher-grade gold zones within the sulphide mineral resource
(please see August 3, 2021, News
Release).
"The metallurgy of the Camino Rojo Sulphide Project required
evaluation of all processing options," said Andrew Cormier, Orla's Chief Operating Officer.
"Building a CIL plant first could be used to process transition and
low carbon zones and at a later stage add a flotation circuit to
process the remaining geometallurgical zones
sequentially."
The Phase 1 directional drill program in combination with Orla's
geological model and data from previous metallurgical evaluations
were used to develop a geometallurgical model that identified five,
spatially distinct, physically continuous zones: two zones show
amenability to conventional CIL and three zones where selective
flotation may be used to produce a gold concentrate. Work continues
to establish the size of each geometallurgical zones as part of
activities for the PEA.
While the CIL gold recovery varied across the deposit, it was
observed that some of the samples were amenable to conventional
cyanidation with gold recoveries over 80%. CIL tests that did not
perform as well were identified as having elevated levels of
arsenopyrite and organic carbon.
The flotation tests included selective gold flotation,
arsenopyrite/pyrite separation, and carbon pre-flotation. Flotation
tests results produced a combined gold/sulphide concentrate with
gold recoveries between 80-85%. Preliminary pressure oxidation
processing tests on the sulphide concentrate indicate potential for
high gold recovery, and additional testing is ongoing. Zinc
flotation tests were conducted, and it was determined that a zinc
concentrate containing over 54% zinc and recoveries of greater than
65% are achievable.
CAMINO ROJO SULPHIDE PROJECT
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.
Qualified Persons Statement
The scientific and technical information related to Camino Rojo
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., SVP Exploration of the
Company, each of whom is a Qualified Person as defined under NI
43-101 standards. In order to verify the information relating to
the Phase 1 metallurgical program, both Mr. Cormier and Mr. Guerard
visited the property in the past year. Mr. Guerard also oversaw the
selection of metallurgical samples. Mr. Cormier discussed the
selection of the metallurgical samples with Mr. Guerard and
responsible staff, designed the test work program, and reviewed the
test results with the metallurgical laboratory, Blue Coast
Metallurgy & Research ("Blue Coast").
Scientific and Technical
Information
The mineral resource estimate for the Sulphide Project at Camino
Rojo consists of 74 koz of measured resource (3.358 million tonnnes
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. If the Sulphide Project
is defined through a positive pre-feasibility study outlining one
of the development scenarios A or B below, Newmont may, at its
option, enter into a joint venture for the purpose of future
exploration, advancement, construction, and exploitation of the
Sulphide Project.
- Scenario A: A Sulphide Project where material from the project
is processed using the existing infrastructure of the Peñasquito
mine, mill, and concentrator facilities. In such a circumstance,
the sulphide project would be operated by Newmont, who would earn a
70% interest in the Sulphide Project, with Orla owning 30%.
- Scenario B: A standalone Sulphide Project with a mine plan
containing at least 500 million tonnes of proven and probable
mineral reserves using standalone facilities not associated with
the Peñasquito mine. Under this scenario, the Sulphide Project
would be operated by Newmont, who would earn a 60% interest in the
Sulphide Project, with Orla owning 40%.
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 Phase 1 metallurgical program testing was completed by Blue
Coast. Blue Coast is independent of the Company and employs an
internal quality assurance-quality control program consistent with
NI 43-101 and industry best practice.
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.
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
results of the Phase 1 metallurgical program and the potential
benefits thereof, potential development scenarios for the Sulphide
Project, and exploration and study work planned at the Sulphide
Project for 2022. 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 metallurgical
results; the 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 and the documents incorporated by reference
herein, as applicable, have 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 Corporation 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.