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Study values Orla Mining's Camino Rojo gold-silver project at US$121M

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Study values Orla Mining's Camino Rojo gold-silver project at US$121M

A preliminary economic assessment on Orla Mining Ltd.'s Camino Rojo gold-silver property in Zacatecas, Mexico, defined a net present value of US$121 million, using a 5% discount rate, with a 24.5% internal rate of return, both after taxes.

Annual free cash flow is expected to average US$43 million after taxes. The study is based on near-surface oxide and transitional material, and studies on sulfide material will be undertaken along with an ongoing regional exploration program.

The company, which acquired the property in November 2017, said May 29 that it will kick off feasibility-stage work, targeting a production decision in the second quarter of 2019. Environmental assessment studies are underway.

The open pit, heap leach operation is expected to produce 97,472 ounces of gold and 415,981 ounces of silver per year over a 6.6-year mine life, with all-in sustaining costs of US$555/oz of gold.

Initial CapEx is estimated at US$125.1 million, with sustaining capital and working capital pegged at US$14.9 million and US$13.8 million, respectively, with a 3.3-year payback period.

The analysis includes a resource update, with measured and indicated resources containing about 9.6 million ounces of gold, 102.4 million ounces of silver, 857.8 million pounds of lead and 2.27 billion pounds of zinc within 354.9 million tonnes of ore grading 0.845 g/t of gold, 8.97 g/t of silver, 0.11% lead and 0.29% zinc.

Inferred resources are estimated to contain 1.8 million ounces of gold, 16.2 million ounces of silver, 75.2 million pounds of lead and 336.8 million pounds of zinc within 65.2 million tonnes of ore grading 0.867 g/t of gold, 7.73 g/t of silver, 0.05% lead and 0.23% zinc.

The resource estimate uses net smelter return cutoffs of US$5.06/tonne for oxidized and transitional material and US$13.72/tonne for sulfide material.