ORLA MINING FINALIZES US$125 MILLION CREDIT AGREEMENT, RECEIVES
APPROVAL OF A KEY PERMIT AND THE BOARD APPROVES CONSTRUCTION
SPENDING
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VANCOUVER, Dec. 18, 2019 /CNW/ - Orla Mining Ltd. (TSX: OLA)
("Orla" or the "Company") is pleased to announce that the Company
has entered into a loan agreement with Trinity Capital Partners
Corporation ("Trinity Capital") and certain other lenders with
respect to its previously announced US$125
million project finance facility ("Credit Facility") for the
development of the Camino Rojo Oxide Gold Project ("Camino Rojo")
located in Zacatecas, Mexico. The
Credit Facility was arranged by Trinity Capital and includes a
syndicate of lenders led by Agnico Eagle Mines Limited,
Pierre Lassonde and Trinity Capital,
creating key alignment between debt and equity holders who will
support the Company's development going forward.
Concurrent with the closing of the Credit Facility, the Board of
Directors of Orla has approved the start of construction spending
at Camino Rojo, allowing the continuation of detailed engineering
and the ordering of long lead items, such as the crushing system.
Commencement of project construction has also been approved,
subject to receipt of all required permits.
Orla is also pleased to report that the Company has received
notification from the Mexican federal government environment
department known as SEMARNAT, granting approval of the Change of
Land Use permit (Cambio de Uso de
Suelo or CUS/ETJ), one of the two key permits required for
the development of Camino Rojo.
"Securing this US$125 million
Credit Facility and one of the key permits marks two more critical milestones in the
evolution of Orla, allowing us to maintain our schedule for
advancing Camino Rojo toward production in mid-2021. We have
accomplished a great deal to get to this point in just two years
since the acquisition of the project. With the continued support of
local communities, various levels of government, shareholders and
now lenders, we can advance toward production by initiating
construction in the coming months once the final permit is
received," stated Jason Simpson,
President and Chief Executive Officer.
Credit Facility
The Credit Facility provides Orla with US$125 million comprised of three tranches; an
initial tranche of US$25 million,
which Orla has requested to be drawn on closing, and two subsequent
tranches of US$50 million each,
available for drawdown after satisfaction of certain conditions
precedent, including the receipt of key permits required for the
development of Camino Rojo. The term of the Credit Facility is five
years and will bear interest at 8.8% per annum.
In connection with the closing of the Credit Facility, Orla has
issued 32.5 million common share purchase warrants to the lenders,
with a seven year term and an exercise price of C$3.00 per warrant, representing a 97% premium to
the closing price of Orla on October 18,
2019, the day prior to announcement of the Credit
Facility.
The balance of the terms of the Credit Facility are as
previously disclosed in the news release dated October 21, 2019 and the commitment letter dated
October 20, 2019, which was filed on
SEDAR on October 29, 2019.
Cutfield Freeman & Co. provided independent advisory
services to Orla in connection with the Credit Facility with
Cassels Brock & Blackwell LLP
acting as legal counsel.
Permitting Update
The other key permit required prior to the start of construction
is the Environmental Impact Statement (Manifesto de Impacto
Ambiental or MIA). Review of the MIA application by SEMARNAT is
ongoing. The construction of Camino Rojo is expected to start
during the first half of 2020, upon receipt of all required
permits.
Qualified Persons
Hans Smit, P.Geo., Chief
Operating Officer of Orla, has reviewed and verified all technical
and scientific information contained in this news release and is a
Qualified Person within the meaning of NI 43-101.
About Orla Mining Ltd.
Orla is developing the Camino Rojo Oxide Gold Project, an
advanced gold and silver open-pit and heap leach project, located
in Zacatecas State, Central
Mexico. The project is 100% owned by Orla and covers over
200,000 hectares. Estimated Mineral Reserves as of June 24, 2019 are 44.0 million tonnes at a gold
grade of 0.73 grams per tonne ("g/t") and a silver grade of 14.2
g/t, for total mineral reserves of 1.03 million ounces of gold and
20.1 million ounces of silver. (Comprised of Proven Mineral
Reserves of 14,595,000 tonnes at 0.79 g/t gold and 15.1 g/t silver
and Probable Mineral Reserves of 29,424,000 tonnes at 0.70 g/t gold
and 13.7 g/t silver). The technical report entitled "Feasibility
Study, NI 43-101 Technical Report on the Camino Rojo Gold Project —
Municipality of Mazapil, Zacatecas,
Mexico" dated June 25, 2019 is
available on SEDAR under the Company's profile as well as on Orla's
website at www.orlamining.com. Orla also owns 100% of the Cerro
Quema Project located in Panama
which includes a near-term gold production scenario and various
exploration targets. The Cerro Quema Project is a proposed open pit
mine and gold heap leach operation. Please refer to the "Cerro
Quema Project - Pre-feasibility Study on the La Pava and Quemita
Oxide Gold Deposits" dated August 15,
2014, which is available on SEDAR.
Multilateral Instrument 61-101
Mr. Chuck Jeannes, Ms.
Elizabeth McGregor and Mr.
David Stephens are directors of the
Company, and Mr. Lassonde has beneficial ownership of, control or
direction over, directly or indirectly, more than 10% of the issued
and outstanding common shares of the Company, and each are lenders
under the Credit Facility. Accordingly, the Credit Facility and the
issuance of the warrants insofar as they involve such insiders
constitute related party transactions for the purposes of
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions ("MI 61-101"). The Company is
not required to obtain a formal valuation for the Credit Facility
by virtue of section 5.4 of MI 61-101. In addition, the Company is
relying on the exemption from the formal valuation and minority
approval requirements of MI 61-101 set out in section 5.5(a) and
section 5.7(a) of MI 61-101 as the fair market value of the Credit
Facility and the warrants insofar as it relates to interested
parties is not more than 25% of market capitalization.
Disclaimer
The securities offered (and any underlying securities) have
not been, and will not be, registered under the U.S. Securities Act
of 1933, as amended (the "U.S. Securities Act") or any U.S. state
securities laws, and may not be offered or sold in the United States or to, or for the account or
benefit of, United States persons
absent registration or any applicable exemption from the
registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy securities
in the United States, nor shall
there be any sale of these securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful.
Forward-looking and Cautionary Statements
This news release contains certain "forward-looking statements"
within the meaning of Canadian and United
States securities legislation, including, without
limitation, statements with respect to the Credit Facility,
including the expected use of proceeds; timeline for commencing
construction; results of the feasibility study, including but not
limited to the mineral resource and mineral reserve estimation,
mine plan and operations, internal rate of return, sensitivities,
taxes, net present value, potential recoveries, design parameters,
operating costs, capital costs, production data and economic
potential; the timing and costs for production decisions; financing
timelines and requirements; permitting timelines and requirements;
requirements for additional land; exploration and planned
exploration programs, the potential for discovery of additional
mineral resources; upside opportunities including pit wall angles,
land agreements, the development of the sulphide mineral resource
and exploration potential; timing for start of engineering work,
construction, and receipt of permits; timing for first gold
production; and the Company's objectives and strategies.
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 are discussed in this news release,
including without limitation, assumptions regarding price of gold
and silver; 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 permits
and approvals will be obtained; that social or environmental issues
might exist, are well understood and will be properly managed; 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: failing to enter into a definitive
agreement with respect to Engineering, Procurement and Construction
Management; failing to receive the balance of the Credit Facility;
risks related to uncertainties inherent in the preparation of
feasibility studies, drill results and the estimation of mineral
resources and mineral reserves, including changes in the economic
parameters; risks relating to not securing agreements with third
parties or not receiving required permits; risks associated with
executing the Company's objectives and strategies, including costs
and expenses, 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 28, 2019, available on www.sedar.com.
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.
SOURCE Orla Mining Ltd.