Orla Mining Ltd. (TSX: OLA) (NYSE: ORLA) 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 of $600 to $700 per ounce of gold sold¹.
• Commercial production was declared at the Camino Rojo Oxide Mine, 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.”

FINANCIAL AND OPERATIONS UPDATE

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 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 on the Sulphide Project targeted for end of year 2022.

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  an open pit mining option with processing at Newmont Corporation’s 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 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:

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 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.

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.

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.

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.

 ALL-IN SUSTAINING COSTS

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.