Orla Mining Ltd. [OLA-TSX] said it plans to spend $14 million this year on exploration at its South Railroad property which is located in the heart of the Carlin trend in Nevada.
The announcement coincides with the completion of Orla’s previously announced acquisition of Contact Gold Corp. [C-TSXV, CGOL-OTCQB]. Under the terms of the transaction, Contact shareholders received 0.0063 of an Orla common share for each Contact share held. The Contact shares will be delisted from the TSX Venture Exchange.
Orla shares eased 0.73% or $0.04 to $5.46. The shares trade in a 52-week range of $6.52 and $3.53.
Contact’s key asset is the 100%-owned Pony Creek property, a 4,500-hectare exploration land package strategically located adjacent to Orla’s South Railway property, a feasibility-stage, open-pit, heap leach gold project with 1.6 million ounces of proven and probable gold reserves.
A 2022 feasibility study envisages average annual production of 124,000 ounces of gold annually for eight years.
Contact Gold’s other key asset is its Green Springs gold project. Green Springs is located near the southern end of the Cortez Trend of Carlin-type gold deposits in White Pine County.
Green Springs is an early-stage exploration property covering 18.5 square kilometres, and encompassing shallow past-producing open pits and numerous targets that were not mined.
The project is subject to an earn-in right held by Centerra Gold Inc. [CG-TSX, CGAU-OTC], which can earn a 70% stake in the project by completing a four-year, $10 million exploration program.
Orla has begun integrating Pony Creek into the company’s exploration activities and intends to increase the exploration budget by $3 million to enhance the continued exploration efforts of the company. With an expanded 2024 exploration program planned, the company aims to drill over 22,000 metres with the goal of unlocking further value from the project.
“Since our acquisition of the South Railroad project in August, 2022, we’ve made tremendous progress in our exploration efforts on the South Carlin Trend,” said Sylvain Guerard, Orla’s Senior Vice-President, Exploration.
“Recent positive drill results beyond the projected oxide open pits at Pinion and Dark Star deposits reveal significant potential for resource expansion,” he said. “These new drill results, ongoing target definition efforts, and the forthcoming acquisition of the Pony Creek project, scheduled to close in the second quarter, underscore our commitment to exploration and discovery in the region.”
Orla has three key gold projects, including the producing Camino Rojo mine, the South Rail heap leach gold project in Nevada, and the Cerro Quema heap leach gold project in Panama. Cerro Quema also includes a copper-gold sulphide resource, and various exploration targes.
Camino Rojo consists of a near-surface oxide gold-silver deposit with a large deeper gold-silver-zinc-lead- sulphide zone. It reached the commercial production stage in April, 2022.
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