Orla Mining Q2 2025 slides: financial rebound after challenging Q1

Introduction & Market Context

Orla Mining Ltd (TSX:OLA) released its second quarter 2025 update on August 12, showcasing a significant financial turnaround following a disappointing first quarter. The company’s stock closed at $14.18 before the presentation, down 6.84% on the day, reflecting ongoing market volatility despite improved operational performance. This quarter marks the first full reporting period including the Musselwhite mine, which has substantially boosted production volumes and cash flow.

The gold producer, which operates assets in Mexico and Canada, has rebounded from a $70 million net loss in Q1 to post a $48.2 million profit in Q2, demonstrating resilience despite operational challenges at its Camino Rojo mine in Mexico.

Quarterly Performance Highlights

Orla Mining reported strong operational results for Q2 2025, with total gold production reaching 77,811 ounces, more than double the 33,206 ounces produced in the same period last year. This substantial increase reflects the contribution of 53,000 ounces from the Musselwhite mine, while Camino Rojo contributed 25,000 ounces.

The company’s financial performance showed marked improvement, with net income of $48.2 million ($0.15 per share) and adjusted earnings of $64.2 million ($0.20 per share). Operating cash flow reached an impressive $102.7 million ($0.32 per share), enabling the company to strengthen its balance sheet.

As shown in the following financial performance summary:

This robust cash generation allowed Orla to repay $30 million toward its revolving credit facility while maintaining a strong cash position of $215.4 million. The company’s net debt position stood at $204.6 million at quarter-end, a significant improvement from the $266 million reported after Q1 2025.

Operational Challenges and Updated Guidance

Despite the strong financial performance, Orla Mining faced operational challenges during the quarter. The company reported a pit wall event at its Camino Rojo Oxide Mine, which temporarily suspended open pit mining operations. While the company emphasized that there were no injuries, equipment damage, or environmental impacts, the incident has necessitated a revision to the 2025 production guidance.

The updated plan involves mining from surface downwards with predominantly oxidized material at a 1:0.9 stripping ratio and an anticipated gold grade of 0.74 g/t. The material will be crushed and stacked on the heap leach pad.

As illustrated in the following updated guidance:

Orla has revised its 2025 consolidated guidance, with gold production now expected to be 265-285 thousand ounces, down from the previous range. Camino Rojo’s contribution is projected at 95-105 thousand ounces, while Musselwhite is expected to produce 170-180 thousand ounces. The company also updated its cost projections, with total cash costs of $900-$1,100 per ounce and all-in sustaining costs (AISC) of $1,350-$1,550 per ounce.

A more detailed breakdown of the updated guidance shows:

Exploration and Growth Strategy

Orla Mining continues to invest aggressively in exploration and development, with a focus on extending mine life and defining new resources. The company highlighted progress at the Camino Rojo Sulphide deposit, which currently has a measured and indicated resource of 4.2 million gold equivalent ounces.

The company’s drilling program at Zone 22 has yielded promising results, with high-grade mineralization intersected outside current resource panels. Notable intercepts include 142.0 g/t gold equivalent over 1.4 meters and 9.8 g/t gold equivalent over 9.4 meters. A Preliminary Economic Assessment (PEA) for the underground project is expected in 2026.

The following image illustrates the Zone 22 drilling results:

For 2025, Orla has outlined capital expenditures of $130 million, with $95 million allocated to sustaining capital and $35 million to non-sustaining capital and capitalized exploration. Additionally, the company plans to spend $43 million on exploration and project development expenses across its portfolio.

The breakdown of planned capital expenditures demonstrates the company’s commitment to growth:

Financial Position and Outlook

Orla Mining’s Q2 2025 results represent a significant improvement from the previous quarter, when the company missed both earnings and revenue expectations. The integration of the Musselwhite mine appears to be progressing well, contributing substantially to production and cash flow.

The company’s operating highlights for the quarter show the impact of the Musselwhite acquisition:

Despite the operational setback at Camino Rojo, Orla maintains a strong financial position with $215.4 million in cash and improving debt metrics. The company continues to invest in its future, with significant allocations to exploration and development across its asset portfolio.

For the remainder of 2025, Orla will focus on completing the geotechnical assessment at Camino Rojo, advancing exploration at Zone 22, and continuing the integration of Musselwhite. The company also plans to progress permitting for the South Railroad project in Nevada and advance toward an updated feasibility study.

While challenges remain, including the need to address the pit wall issue at Camino Rojo and manage the higher cost structure at Musselwhite, Orla’s Q2 2025 presentation suggests a company that has stabilized its operations and is positioned for sustainable growth.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.