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Orla Mining Ltd (ORV), a mining company with a market capitalization of $3.1 billion and an impressive year-to-date return of 78%, reported its second-quarter 2025 earnings, revealing a mixed financial performance. The company recorded a revenue of $264 million, surpassing forecasts of $253.4 million, continuing its strong growth trajectory with a 67% year-over-year revenue increase. However, earnings per share (EPS) came in at $0.20, missing the expected $0.2243, resulting in a 10.83% surprise. Following the announcement, Orla Mining’s stock price fell by 7.83% in after-hours trading, reflecting investor concerns over the earnings miss despite the revenue beat. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations.
Key Takeaways
- Orla Mining achieved record revenue, exceeding projections by 4.06%.
- The company missed EPS forecasts by 10.83%, impacting stock performance.
- Operational challenges at Camino Rojo contributed to adjusted annual guidance.
- Musselwhite’s production metrics were strong, with high gold recovery rates.
- The stock price dropped 7.83% in after-hours trading due to EPS concerns.
Company Performance
Orla Mining’s second-quarter performance highlighted its ability to generate substantial revenue, driven by robust gold sales and effective operations at its key sites. The company sold 79,000 ounces of gold at an average price of $3,251 per ounce. With an EBITDA of $223.7 million and a strong gross profit margin of 72%, the company demonstrates solid operational efficiency. Despite this, the EPS miss and operational issues at Camino Rojo overshadowed the positive revenue results. InvestingPro data reveals 15+ additional insights about Orla’s financial health, which currently rates as GREAT with a score of 3.25.
Financial Highlights
- Revenue: $264 million, up from forecasted $253.4 million.
- Earnings per share: $0.20, below the expected $0.2243.
- Net income: $48 million, translating to $0.15 per share.
- Adjusted net earnings: $64 million, or $0.20 per share.
- Cash flow from operations: $103 million.
- Cash balance: $215 million.
Earnings vs. Forecast
Orla Mining’s actual EPS of $0.20 fell short of the $0.2243 forecast, marking a 10.83% surprise. In contrast, revenue exceeded expectations by 4.06%, indicating strong sales performance despite the earnings miss.
Market Reaction
The stock price of Orla Mining fell by 7.83% in after-hours trading, reflecting investor concerns about the EPS miss. This decline is significant given the stock’s proximity to its 52-week high of $17.45, indicating a shift in sentiment. However, analysts maintain a bullish outlook with a consensus "Buy" rating, and InvestingPro identifies strong fundamentals, including expected net income growth and robust cash flows. For detailed analysis and valuation metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Outlook & Guidance
The company revised its annual gold production guidance, now expecting to produce between 265,000 and 285,000 ounces. Cash costs are projected to range from $900 to $1,100 per ounce, with all-in sustaining costs between $13.50 and $15.50 per ounce. Upcoming milestones include permitting for the South Railroad project and further exploration results.
Executive Commentary
Jason Simpson, President and CEO, stated, "We continue to execute on our proven strategy to generate value to the benefit of all of our stakeholders." He acknowledged the pit wall movement at Camino Rojo as a temporary setback, emphasizing the importance of technical planning and risk management.
Risks and Challenges
- Operational risks at Camino Rojo due to the pit wall movement.
- Potential cost increases affecting production margins.
- Market volatility impacting gold prices and revenue.
- Regulatory challenges in permitting processes in Mexico and Nevada.
Q&A
During the Q&A session, analysts inquired about the pit wall movement at Camino Rojo and its implications for future operations. The company addressed concerns about revised guidance and the permitting process, providing assurances about ongoing risk management efforts.
Full transcript - Orla Mining Ltd (OLA) Q2 2025:
Eric, Conference Operator: Good morning, ladies and gentlemen, and welcome to the Orla Mining’s Conference Call for the Second Quarter twenty twenty five Results. My name is Eric, and I’ll be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. Please be advised that this call is being recorded.
I would like to turn the meeting over to Andrew Bradbury, Vice President, Investor Relations and Corporate Development. Please go ahead, Mr. Bradbury.
Andrew Bradbury, Vice President, Investor Relations and Corporate Development, Orla Mining: Thank you, operator, and welcome to Orlys’ second quarter twenty twenty five results conference call. We will be making forward looking statements during today’s call, and
Jason Simpson, President and CEO, Orla Mining: I direct you to the second and third slides of
Andrew Bradbury, Vice President, Investor Relations and Corporate Development, Orla Mining: the presentation, which contains important cautionary notes regarding these forward looking statements. All dollar amounts discussed today will refer to U. S. Dollars unless otherwise indicated. The oral executive team is on the call this morning, I’ll now pass the call to Jason Simpson, President and CEO.
Jason Simpson, President and CEO, Orla Mining: Thanks, Andrew. Let me start by listing the Q2 highlights. The second quarter marked the first full quarter of production from Musselwhite following the closing of the acquisition at the February. This broader production base drove strong earnings and cash flow in our business. We also released the initial underground resource update for the next phase of Camino Rojo underground and continue to explore the exciting Zone 22 discovery, which we hope will expand the resource and extend mine life.
We also continue to advance our exploration programs in Canada, United States and across our broader land package in Mexico. More recently, we experienced a setback in the uncontrolled material movement event at Camino Rojo on July 23. The event occurred along a temporary north wall of the north section of the open pit and involved approximately 390,000 tonnes of material. Most importantly, no one was injured, in part because of the early detection by the pit monitoring systems and critical decision making by our site team based on that information. No equipment was damaged nor was there any environmental impact from the event.
However, we did need to temporarily pause in pit mining as we completed a geotechnical assessment with our external consultants and established an action plan for safe restart. We have also adjusted the standard operating procedures within the pit to ensure ongoing safety. The material movement was bounded by two faults acting as release features from increased port pressure due to rainfall and the steepness of the interwall angle. The current action plan includes mining from surface downwards to push back 50 meters at the toe and 80 meters at the crest of the entire north wall to create a shallower pit wall angle and reestablish safe working conditions on the north side of the pit from the top down. The material from the north wall is predominantly oxidized, with an order waste strip ratio of one to 0.9 and an anticipated average gold grade of 0.74 grams per tonne.
This ore material will be crushed and stacked on the heap leach. Total ore tonnes to be removed is about 9,000,000 tonnes or approximately 250,000 ounces. This layback is allowable under Mexican provisions for emergency remediation measures. To be clear, no material was lost or sterilized from this event, but rather deferred later in pit resequencing to ensure safe operations. As a result of this deferral of production, we have revised our guidance at Camino Rojo for the year to 95,000 to 105,000 ounces of gold production at cash costs of $800 to $900 per ounce sold and all in sustaining cost of $850 to $950 per ounce sold.
This compares to initial guidance of 110,000 to 120,000 ounces of gold at cash cost of $625 to $725 and all in sustaining cost of $700 to $800 per ounce sold. Based on the current action plan and Camino’s Rojo’s updated pit sequencing, combined with the unchanged Musselwhite guidance, our 2025 consolidated guidance is now expected to be in the range of 265,000 to 285,000 ounces of gold at cash costs of $900 to $1,100 per ounce sold and all in sustaining costs of $13.50 dollars to $15.50 dollars per ounce sold. This compares to previous guidance of two and eighty thousand to 300,000 ounces of gold at cash cost of $8.50 to $10.50 dollars per ounce sold and all in sustaining cost of $1,300 to $1,500 per ounce sold. While this has been an unfortunate incident in what has been an otherwise seamless operation, I am very proud of the tools we had in place to prevent injury and also the way in which our team reacted to assess the situation, establish a safe restart plan, incorporating this learning and into the operation going forward, which is back in production. Andrew Cormier, our Chief Operating Officer, will now discuss our operating performance.
Andrew Cormier, Chief Operating Officer, Orla Mining: Thank you, Jason. During the quarter, Camino Rojo mined nearly 2,000,000 tonnes of ore and 2,600,000 tonnes of waste for an implied strip ratio of 1.33. A total of 1,700,000 tonnes of ore was stacked at an average grade of 0.71 grams per tonne gold, equating to an average daily stacking rate of approximately 18,500 tonnes. In addition, 900,000 tonnes of low grade ore were re handled and placed on the leach pad at an average grade of 0.32 gram per tonne gold. In total, 2,600,000 tonnes of ore at an average grade of 0.57 grams per tonne gold were placed on the heap leach pad during the quarter.
Rehandling of low grade stockpile was to offset the impact of mine resequencing to maintain the yearly plan. Total quarterly production for Camino Rojo was 25,145 ounces of gold. The Camino Rojo team has started the site work to address the uncontrolled material movement on the North Wall that occurred on July 23. I’d like to thank the entire team and our consultants for working extremely hard over the past three weeks. At Musselwhite, we recorded our first full quarter of production.
Musselwhite mined 303,000 tonnes of ore and milled 295,000 tonnes at a mill head grade of 5.52 grams per tonne gold. Gold recovery rates of 96.5% resulted in gold production of nearly 53,000 ounces of gold. In all, the second quarter was a record period of production for the company. On to our project pipeline and upcoming milestones. Orna continues to engage with local, state and federal stakeholders to sustain momentum in the permitting process in The United States.
We expect the publishing of the Notice of Intent for our South Railroad project in the coming weeks. Following the receipt of the Notice of Intent, we expect the Record of Decision in the 2026 that allow construction to start with commissioning in Q4 twenty twenty seven and gold production in early twenty twenty eight. Our project team continues to work with M3 on the engineering for the project, potentially leading to procurement in the 2025 to be prepared for on-site construction starting next year. Etienne Morin, our Chief Financial Officer, will now discuss financial results for the quarter.
Etienne Morin, Chief Financial Officer, Orla Mining: Thanks, Andrew. During the quarter, we sold a record 79,000 ounces of gold at a realized price of $3,251 per ounce, and that’s including the impact of the gold prepay and resulting in approximately $264,000,000 in revenue for the quarter. Consolidated cash costs and all in sustaining costs for the second quarter totaled $10.65 dollars and $14.21 dollars per ounce of gold sold, respectively. We recorded net income for the quarter of $48,000,000 or $0.15 per share. And on an adjusted basis, we had adjusted net earnings of $64,000,000 or $0.20 per share.
Cash flow from operating activities before changes in noncash working capital was $103,000,000 or $0.32 per share for the quarter. Our total capital expenditure, including capitalized exploration, was $25,500,000 of which $6,400,000 was non sustaining and related to capitalized exploration in both Mexico and Canada and also included basic and detailed engineering in Nevada. We had $19,100,000 of sustaining capital, the majority of which related to mine development, PQ Deep extension and equipment purchases at Musselwhite. During the quarter, we repaid $30,000,000 towards our revolving credit facility, which was well ahead of schedule, and that reduces our net debt to approximately $2.00 $5,000,000 And at June 30, our cash balance was $215,000,000 So we intend to use our strong cash positions, continue to delever in the near term and while also preparing to finance the construction of the South Vail Road project in the medium term. Now I’ll pass it over to our Senior Vice President of Exploration, Sylvain Garrard, who will now provide you with an update on the exploration activities.
Sylvain Garrard, Senior Vice President of Exploration, Orla Mining: Thanks, Etienne. During the quarter, the company released an initial underground resource estimate for the Caminojo deposit, incorporating mineralization hosted in the Caminojo sulfides and the underlying Zone 22. We are very satisfied with the resource, which includes 4,200,000 gold equivalent ounces in the measured and indicated category and 420,000 gold equivalent ounces in the Enfur category. Zone 22 represents the vertical and down tranche continuation of the Caminovogel sulfide mineralization and remains a significant source of upside as Zone 22 extends for another 1.2 kilometer, remains open, but currently only account for 7% of the current underground indicated resource and 19 of the underground inferred resource. An initial project PEA is planned for 2026.
A 15,000 meter infill drill program started at early twenty twenty five, targeting the upper part of Zone 22, was completed on July 18, with positive results released last week. Drilling has consistently returned high grade intersections of gold, silver, zinc mineralization. Given the success to date, we are planning to expand the program by an additional 5,000 meter in 2025, continuing further infill and extension down plunge. The infill drill results will support an updated underground resource estimate for the Caminojo deposit, which is expected to feed into the planned 2026 PEA. We continue to advance our exploration programs across our portfolio with future updates to come in the 2025.
In Canada, underground and surface exploration programs were active throughout the second quarter. Four underground exploration drill rigs and four surface drill rigs will continue drilling throughout the rest of
Etienne Morin, Chief Financial Officer, Orla Mining: the year. A portion of
Sylvain Garrard, Senior Vice President of Exploration, Orla Mining: the assay results from the underground drill program have started to arrive and are currently being reviewed and interpreted, while results from the surface program are expected in the 2025 and early twenty twenty six. In Nevada, three drill rigs were turning during the quarter, testing extensions of non deposit and new targets, with four expected to be drilling across multiple targets in the second half of the year. In Mexico, original exploration was initiated in Q2 and will continue through the rest of the year. Silvana Costa, our Chief Sustainability Officer, will now provide an update.
Silvana Costa, Chief Sustainability Officer, Orla Mining: Thank you, Sylvain. I’m glad to share that we are about to publish our 2024 sustainability report in alignment with the Sustainability Accounting Standards Board and the Task Force on Climate Related Financial Disclosures Standards. We are highlighting another year of meaningful progress in embedding sustainability across Orla’s business. Please look for this report on our website in the days ahead. You will learn that we deepened our climate efforts with our first Scope three emissions assessment and continue to deliver strong environmental performance at Camino Rojo, including low emissions and water use, as well as the introduction of four new environmental standards to strengthen how we manage water, biodiversity, air and hazardous materials.
We also advanced our work with local communities, expanded hiring from surrounding areas, and supported innovative projects like a community poultry farm that promotes food self sufficiency and technical training. We remain focused on aligning business growth with responsible practices that benefit the people and the ecosystems around us. This year’s report is another step forward in building a culture of accountability, learning, transparency and long term value. During the second quarter, we maintained community engagement and strategic community investment initiatives at Camino Rocco, Masawite and South Railroad, while maintaining a focus on environmental performance, fulfilling our social commitments and advancing permitting processes in both Mexico and Nevada. This last quarter was particularly active in engaging with regulators and other key stakeholders about permitting.
In Mexico, we continued transparent and constructive dialogue with relevant state and federal level agencies and have the opportunity to meet face to face with key members of the environmental regulator about our current permit application and are now working on responses to additional questions we received from them. Based on this dialogue and regulator timelines, we expect a positive resolution late this year. In Nevada, beyond active engagement with regulators, as we are as we prepare for a public scoping period, we have continued to engage with a variety of stakeholders to consolidate support for the project, understand and address questions and concerns, and widely share information about the South Railroad project. At Massawaite, a special ceremony took place in June, including the annual blessing of the water by representatives of our indigenous partners. The ceremony is unique to Massawaite and acknowledges the intangible cultural heritage of our neighboring First Nations.
On the people front, in the second quarter, we continue to prioritize a smooth transition for the Awaite mine. As we grow, we welcomed over 100 new team members at Massawaite alone and continue to advance our bespoke leadership training program across the three jurisdictions. With that, I’ll hand the call back to Jason.
Jason Simpson, President and CEO, Orla Mining: Thank you, Silvana. Before we close, I want to directly note some comments included in our quarterly disclosure. While addressing labor practices at the Camino Mexico, we are also reviewing potential criminal activity and looking into the regional security risks affecting the mine and neighboring communities. We have voluntarily contacted relevant authorities and are cooperating. And although we don’t have further details to share at this stage, the review has not affected the operation of Camino Rojo mine.
To recap, in the second quarter, Orla recorded its first full production from quarter of production from Musselwhite, resulting in a record quarter of production. We released the initial underground resource for the Camilo Rojo sulfides as well as additional exploration results from the prospective Zone 22 discovery and continue to make progress across our exploration programs. While the pit wall event at Camino Rojo was a temporary setback, it has reinforced the importance of our technical planning, risk management and operational discipline. The team acted quickly to implement a comprehensive action plan that prioritized safety, reinforces slope stability and allows for the continued ore recovery during the pushback. Looking forward to the remainder of 2025, we have several upcoming catalysts for Orla, including continued integration of Musselwhite and initial assays from the 2025 exploration program permitting milestones in both Mexico and Nevada a resource update for the South Carlin complex and an updated feasibility study for our South Railroad project as well as construction planning information.
We continue to execute on our proven strategy to generate value to the benefit of all of our stakeholders. Thank you to our teams in the countries where we operate, whose commitment and delivery are driving this business forward. And at this point, I’d like to open the call to questions and hand it back to the operator.
Eric, Conference Operator: Your first question comes from the line of Wayne Lam with TD Securities. Please go ahead.
Wayne Lam, Analyst, TD Securities: Yes, thanks. Good morning, guys. Maybe just at Camino Rojo, could you give us a bit more detail on what drove the larger amount of stockpile drawdown in Q2? And I guess, the pit wall event, as you continue to operate without the permit for the layback, can you speak to some of the modifications to the mine plan that need to be made? And do you continue to anticipate an elevated level of stockpile drawdown until you receive the permit?
Jason Simpson, President and CEO, Orla Mining: Yes. Thanks, Wayne, for the question. So to try and work through your sequence of inquiries there, we do I’ll start from the last one. We do anticipate continuing to stack the low grade stockpile for the remainder of the year as an additional source of gold production that’s available to us and doesn’t require crushing. The crusher, of course, will be fully optimized and utilized.
Most of the material being fed into that crusher will come from the material movement on the North Wall, and that will continue throughout this year and into next as we mine down through that material that I described in the call. And as we outlined, all of that computation of the usage of the stockpile combined with the mine tons from the North Wall are what have guided our updated information on guidance for Camino Rojo. Maybe you can help me with any parts that I missed.
Wayne Lam, Analyst, TD Securities: No, that’s great. Thank you. And then maybe just on the action plan that’s been outlined, obviously good to see that come together pretty quickly with no injuries from the event. So just to confirm that 9,000,000 tons that will be removed, that’s able to be placed onto the pad immediately even though it falls outside the permit? And then I guess just in terms of the revision in the guidance, what would be the timeline to restart use of the basis for that?
And does that also account for the commentary on the revised permitting timeline now to expecting a positive decision late this year?
Jason Simpson, President and CEO, Orla Mining: Yes. I’m going to separate the two matters. Let’s talk about the material movement in the 9,000,000 tonnes that you described. And so that action plan that we outlined in our guidance update last week is already underway. The mechanics of it, of course, are reestablishing diversion channels, establishing the ramp into the North Wall and mining from the top down in a safe manner And obviously, at a cadence of about 19,000 tonnes per day, we’ll crush and stack that material onto the pad.
As it relates to the permitting, it’s allowable under Mexican legislation because we need to prepare that area and destabilize it. And so that’s why we’re permitted to do that. Separate from that is the larger layback that we’ve had in the permitting process for some time. And the updated timing that we’re communicating about that is based upon active conversations with the labor authority. And again, there are two separate processes.
The work that we’re doing as a result of the pit wall movement is separate from the work that we’re doing with the federal authorities on the larger layback permit. So speaking to the larger layback permit, including myself, our CSO and our COO, have been on various conversations with both federal economy agents as well as Semenet. As we talked to as Silvana talked about in the call, those good dialogues have resulted in us being on track as normal part of the Semernav process. They have asked questions for additional clarification on issues. We’re answering those questions.
Once we’ve wholesomely and fully answered all of their questions, they’ll be in a position to give us a positive resolution. So I’m very optimistic that we’re moving forward in Mexico with the larger laid back. And in the meantime, we’ll be mining this year and next.
Wayne Lam, Analyst, TD Securities: Okay, great. And so, yes, just to follow-up on the revised guidance, what does that like what was the basis in terms of the timeline used to getting there?
Jason Simpson, President and CEO, Orla Mining: Yes. So we obviously had to temporarily suspend operations. So that had to be considered at the point that we and the time we did that, so that we were suspended, we were stacking low grade stockpile, not the same grade as in pit material. And so that had to be considered in the updated guidance. And then differently, the mine sequencing that we would have been doing has had to be changed because we have material to move to stabilize that North Wall, and that needs to come first.
And so the difference and the update to guidance is considered of all that, us restabilizing that North Wall first. It’s for material, so that will be crushed and stacked, but we’ll defer the benching deeper in the mine likely sometime next year. And so that’s what we use to update the guidance is substitution of the bench material originally in the plan with the new material on the North Wall that’s in the updated revised plan. And all of those ounces over the coming years will be extracted.
Wayne Lam, Analyst, TD Securities: Okay, great. Thanks. And then maybe just last one, just at Musselwhite. Just wondering if you can maybe comment on the cost and the grade profile there. Should we be expecting kind of a sequential improvement on the operating costs as you continue to as you get operating into the mine?
And then just on the grade profile, the lower grades over the past two quarters just a function of sequencing and the ramp up in tonnage outside of the PQ deeps? And just looking at the mine plan next year, with the uplift in grades towards 6.9 gram a tonne, is that still a reasonable expectation? Or should we continue to see a bit more tonnage offset by slightly lower grades?
Jason Simpson, President and CEO, Orla Mining: So first on the cost, think I would characterize it the same way as you just have is we’ll be making improvements over time on the cost profile at Musselwhite starting with fully severing from Newmont and some of the costs that are associated with that. And then moving into more of an Ola organized mine and the kind of cost that we can have demonstrated and can have at Musselwhite. And finally, as normal in any operation, for cost saving measures in 2026 that can bring our costs down at Musselwhite. Between $1,300 and $1,500 an ounce is where we would be striving for on a consistent basis. When combined with Camino Rojo, of course, that takes us even lower into the first quartile of global gold producers, which is where we want to be.
As it relates to grade, we have no concern over the annual nor life of mine grade in the mine plan for Musselwhite. But we do have quarter over quarter fluctuations of plus or minus 5%. And on an annualized basis, are confident that we have the appropriate grade scheduled and profile. The effects, as most people appreciate in an underground mine, are entirely contributing to whether you’re mining higher grade development headings or more average grade stoping, the particular grades, the sequence of stopes in different parts of the ore body. And then finally, making sure that you’re containing and restraining any dilution that has a negative effect on grade.
So that’s our team at Musselwhite needs to manage that to deliver the grades on an annual basis on plan. And we are fully acknowledging that and comfortable with fluctuations month over month, quarter over quarter. We are very confident in the grade of Musselwhite, and we look forward to providing some additional information based on the exploration work that Sylvain and the Musselwhite team had done at site that he described, which will reinforce our thesis of the benefits of grade at Musselwhite.
Wayne Lam, Analyst, TD Securities: Okay. Perfect. Looking forward to those exploration results. Thanks for taking my questions.
Andrew Cormier, Chief Operating Officer, Orla Mining: Thanks.
Eric, Conference Operator: Your next question comes from the line of Andrew Mikichuk with BMO Capital Markets. Please go ahead. Andrew, you there? There are no further questions at this time. I would like to turn the call back over to Jason Simpson, President and CEO, for closing remarks.
Please go ahead.
Jason Simpson, President and CEO, Orla Mining: Thank you for the questions, and I would like to thank everyone for their time on the call today. Never hesitate to reach out to Orla should you have any follow-up questions. We are available. Thank you.
Eric, Conference Operator: Ladies and gentlemen, this concludes today’s call. Thank you all for joining. You may now disconnect.
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