Orla cuts output target after Mexico wall slide

[Redator]

Orla Mining (TSX: OLA; NYSE: ORLA) said it will produce about 5% less gold than planned this year at higher costs after deferring some production following last month’s pit-wall failure at the Camino Rojo oxide mine in central Mexico.

Consolidated gold output is now expected to hit 265,000-285,000 oz. this year at an all-in sustaining cost (AISC) of $1,350-$1,550 per oz., Vancouver-based Orla said Tuesday in a statement. It had previously forecast total 2025 production of 280,000-300,000 oz. at an AISC of $1,300-$1,500.

Heavy rains triggered the July 23 pit‑wall slide along the temporary north wall of Camino Rojo’s open pit. About 390,000 tonnes of material – representing about seven days’ worth of mining – fell into the pit, Orla has said. No one was injured in the incident, no equipment was damaged, no ore was lost and there were no environmental impacts.

While the guidance cut was likely less severe than initially feared by investors, “the effects on 2026 and 2027 production remain uncertain due to the interim layback,” Ovais Habib, a Scotia Capital mining analyst in Toronto, said Tuesday in a note. He has an “sector outperform” rating on the stock.

Orla shares fell about 1.2% to C$12.96 Tuesday morning in Toronto. That gave the company a market value of about C$4.2 billion.

Costs rise

Camino Rojo is now expected to churn out between 95,000 and 105,000 oz. of gold this year, about 13% less than the previous target of 110,000-120,000 ounces, Orla also said. AISC should reach about $850-900 per oz., about 20% more than the company’s previous $700-$800 per oz. range.

A geotechnical analysis identified the cause of the movement as increased pore pressure due to heavy rainfall coupled with the steep interwall angle, Orla said. The movement occurred between two faults, which acted as release features.

Work at Camino Rojo is now under way to stabilize the area by removing material from the north wall and lowering the slope angle.

Crews have continued to crush and stack stockpiled material since the incident at a daily rate of about 20,000 tonnes to mitigate the short-term impact on production.

Orla’s restart plan calls for pushing back the pit wall by up to 80 metres. This will result in about 9 million tonnes of ore being crushed and stacked on the leach pad in the next few months.

Oxidized material removed from the section will probably have a gold grade of 0.74 gram gold per tonne with a strip ratio of 0.9 to 1, Orla said.

Two producers

The property 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 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 17.1 million oz. silver and 278 million lb. zinc, the company said June 5.

The resource is based on more than 400,000 metres of drilling under the producing oxide open pit at Camino Rojo. The mine sits in Zacatecas state, about 620 km northwest of Mexico City.