Orla tumbles on Mexico mine halt

[Redator]

Orla Mining (TSX: OLA)(NYSE: ORLA) stopped pit‑mining activities at its Camino Rojo oxide mine in central Mexico after heavy rains triggered a pit‑wall slide. The stock plunged.

The incident took place early Thursday along the temporary north wall of the open pit, which included ore material expected to be mined as part of the ultimate open pit, Orla said in a statement. There were no injuries or equipment damage due the material movement, which was detected early by site monitoring systems. 

Vancouver-based Orla is assessing the impact of the incident on full-year production targets. Camino Rojo had been expected to churn out 110,000–120,000 oz. of gold this year after producing 55,100 oz. in the first six months of 2025, including 25,100 oz. in the second quarter.

The full-year production forecast could be revised depending on the duration of the mining shutdown, Desjardins Securities mining analyst Allison Carson said. Scotia Capital said stockpiles would support output but reduced its full-year estimate by 5%.  

“The mining suspension and reduction in pit access means the company must rely more heavily on stockpile processing throughout the third quarter to support gold production,” Scotia Capital mining analyst Ovais Habib said in a note. “Although the tonnage of material involved in the event was not reported at this time, we expect that the existing stockpiles are adequate to support operations until mining can resume, but reduced grade and additional cost/capital for rehabilitation could negatively impact 2025 production and all-in sustaining costs.”

Forecast output

Orla shares tumbled 14% to C$13.83 apiece in Thursday morning trading in Toronto, giving the company a market value of about C$4.5 billion. The stock has traded between C$4.60 and C$17.45 in the past year.

Habib cut his to 270,500 oz. due to lower stacked grades at Camino Rojo for the rest of the year. Orla’s 2025 guidance calls for total output to reach 280,000-300,000 ounces.

Camino Rojo represents 34% of Scotia Capital’s 2025 production estimate for Orla and 38% of the company’s net asset value estimate.

Authorities in Mexico have been notified to ensure safe operations, which the company said remains its top priority. A “comprehensive analysis” is being carried out to ensure the stability of mining operations, Orla said. 

Pit access has been restricted to the necessary technical and operating personnel during the temporary mining halt, Orla also said. This will support the appropriate geotechnical assessments required for remediation and the safe resumption of activities. 

Subsidence

While there’s been no impact on the environment, Orla said it will need to re-establish rain diversion channels to prevent further material subsidence in the pit.

Exploration work at Camino Rojo is likely to be undisrupted as most of the drilling on the underground sulphides is conducted from surface, outside the pit, Habib also said.

Camino Rojo is one of Orla’s two producing assets, along with the Musselwhite underground mine in Ontario. The company is also advancing the development‑stage South Railroad project in Nevada.

Orla’s initial resource for Camino Rojo, released last month, outlined 3.9 million contained gold oz. grading 2.45 grams gold per tonne.

The underground deposit hosts 50.1 million measured and indicated tonnes at 10.6 grams silver and 0.25% zinc for 17.05 million oz. silver and 278 million lb. zinc, Orla said June 5. The resource is based on more than 400,000 metres of drilling under the producing oxide open pit at Camino Rojo, which is located in Zacatecas state about 620 km northwest of Mexico City.