Explorer Orla adds oxide ore project to portfolio

VANCOUVER (miningweekly.com) – Vancouver-based major Goldcorp has agreed to sell its Camino Rojo project, in Zacatecas, Mexico, to fellow Vancouver-based junior explorer Orla Mining, adding an advanced oxide heap leach project with significant gold reserves and resources in a favourable mining jurisdiction to Orla’s portfolio.

The project holds historic reserves of 1.7-million ounces of gold and historic resources of four-million ounces of gold.

Under the terms of the transaction, Goldcorp will receive 31.9-million Orla shares – a 19.9% stake in Orla – a 2% net smelter return royalty on output from the project (except for metal produced under a joint venture with Goldcorp over the sulphide ore portion of the mines resources), and an option to acquire up to 70% of future sulphide projects.

Goldcorp will also have the right to nominate a director to Orla’s board, as long as it holds more than 10% of the company’s equity.

Camino Rojo has access to road transportation and power and as it lies in an historic mining region, skilled labour and contractors are readily available. Camino Rojo comprises a near-surface oxide gold and silver deposit and a deeper sulphide zone containing gold, silver, zinc and lead mineralisation.

Orla also holds the Cerro Quema gold project, in Panama.

“Orla now owns two high-quality capital projects in Cerro Quema and Camino Rojo and we are confident that our focus on low capital intensity heap leach projects is the right formula for success. We are strong financially, with a cash balance of about C$27-million including 'in-the-money' proceeds and we are well funded to advance both projects to their next stages,” Orla CEO Marc Prefontaine said in a statement.

The transaction is subject to customary closing conditions and is expected to close in the second half of this year.