Orla Mining Ltd

Good morning, ladies and gentlemen, and welcome to Orla Mining's conference call for the fourth quarter and year end 2024 results. My name is Abby and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Please be advised that this call is being recorded, and I would like to turn the meeting over to Andrew Bradbury, Vice President, Investor Relations and Corporate Development. Please go ahead, Mr. Bradbury.

Thank you, operator, and welcome to ORLA's fourth quarter and year-end 2024 results conference call. We will be making forward-looking statements during today's call, and I would direct you to the second and third slides of the presentation, which contains important cautionary notes regarding these forward-looking statements. All dollar amounts discussed today will refer to U.S. dollars unless otherwise indicated. The oral executive team is on the call this morning, and I will now pass the call to Jason Simpson, President and CEO. Thanks, Andrew. During the fourth quarter, Camino Rojo had continued strong production at low costs. This production strength and low costs in a record gold price environment drove strong margins and cash flows. Notably, we announced the transformational acquisition of the Mussel White Mine in Ontario that will more than double Orla's production profile. We continue to advance our exploration and development portfolio in Mexico, Nevada, and now Canada. Part of our growth investment we'll discuss today is the construction planning for our growth at the South Railroad project and exploration in Nevada on the broader South Carlin complex. We have the executive team on the call to provide specific updates. Stepping out from the quarter and looking back at the full year, 2024 was a transformational period for the company. As Camino Rojo achieved record production and we expanded into northern Ontario with the acquisition of the Musselwhite mine. By every measure, 2024 was a tremendous success for Orla, and we will build on this momentum as we advance the South Railroad project in Nevada and the sulfide project at Camino Rojo in Mexico. We expect 2025 to be a catalyst-rich year for the company with the integration of Muscle White, an initial underground resource for the Camino Rojo sulfides, and an updated resource for South Railroad. Our preliminary guidance for 2025 at Camino Rojo is 110 to 120,000 ounces of gold produced at an all-in sustaining cost of $875 to $975 per ounce gold sold. We intend to provide updated guidance inclusive of Muscle White in the second quarter. Our Chief Operating Officer, Andrew Cormier, will now discuss our operating performance. Thank you, Jason. As mentioned, our operating team in Mexico delivered another impressive quarter while remaining committed to the health and safety of all of our employees. During the quarter, we mined over 1.8 million tons of ore at a strip ratio of 1.54. The increased trip ratio in the second half is in line with the mine sequence plan for the year. The average load grade of ore process during the fourth quarter was 0.94 grams per ton in line with our plan. We also achieved an average stacking rate of 18,487 tons of ore per day. With the continued strong mining and operating performance in the fourth quarter, we produced nearly 27,000 ounces of gold. As a result, we produced a record 137,000 ounces of gold for the year, meeting the increased 2024 production guidance range of 130,000 to 140,000 ounces. As Jason mentioned, our preliminary gold production guidance for Camino Rojo in 2025 is 110 to 120,000 ounces. Permitting of our expansion in Mexico continues as we resubmitted the permit applications to the federal government in November with the full endorsement of the state government. Following productive discussions with the new administration in the fourth quarter and early this year, we anticipate the new administration will be prepared to respond to our permit application this year. In Nevada, permitting for the South Railroad project continues to progress and we're anticipating the posting of the Notice of Intent by mid-year. The supplemental environmental reports have been submitted to the Bureau of Land Management, BLM, and are under review with the local office in Elko. Once finalized, the Notice of Intent will be reviewed by the state and then the federal BLM offices in advance of the final Notice of Intent publishing, expected mid-2025. With the targeted Record of Decision, the final permitting decision by mid-2026. Following this approval, Earthworks and the South Barrow Road project would commence in the first wall production anticipated in the second half of 2027. The EPCM contract was awarded to M3 Engineering and Technology in the first quarter, with basic and detailed engineering proceeding this year and into 2026 to align with construction following the Record of Decisions. Long-lead equipment will be identified and purchase orders will potentially be placed in 2025. Now, over to our Chief Financial Officer, Etienne Morin, to discuss the financial results for the quarter.

Thanks, Andrew. During the quarter, we sold 33,000 ounces of gold at a realized price of $2,669 per ounce, resulting in $93 million in revenue for the quarter. All-in sustaining cost for the fourth quarter was $826 per ounce, lower in part due to the higher gold sales and higher silver byproduct credits. For the full year, all-in sustaining cost was $805 per ounce, and this makes Camino Rojo one of the lowest cost gold mines globally. Our low-cost production coupled with the higher gold prices are driving strong earnings and cash flow generation. Our net earnings for the quarter were $26.1 million, or $0.08 per share. And after adjusting for the gain related to the change in fair value of the gold forwards outstanding at year-end related to the gold prepaid facility on the Musselwhite acquisition and a few other items, including unrealized foreign exchange gains, adjusted net earnings were $22 million, or $0.07 per share. These strong earnings are reflected in a robust operating margin of 64%. During the quarter, exploration and project costs were $12.2 million, of which $2.6 was capitalized and $9.6 million was expensed. Four-year exploration project costs totaled $47.9 million, of which $13.3 million was capitalized and $34.6 was expensed, in line with our 2024 guidance of $34 million. Cash flow from operating activities before changes in non-cash working capital was $46 million or 14 cents per share for the quarter. Meanwhile, we generated $39 million in free cash flow or 12 cents per share. During the fourth quarter, total capitalized expenditures was $5.2 million of which $2.8 million was non-sustaining related to capitalized exploration in Mexico and 2.4 million was sustaining. During the fourth quarter, we fully repaid our outstanding balance on the revolving credit facility to achieve a debt-free status. As a result, we were able to take advantage of our strong balance sheet and financial flexibility to fund the purchase of the Musselwhite mine while mitigating any needs for upfront equity dilution to shareholders. The $810 million in upfront consideration for the Musselwhite acquisition was funded from $250 million of bank debt, $200 million in senior unsecured convertible notes led by Orla's Cornerstone shareholders, and a $360 million prepay facility. The gold prepay is a three-year obligation to deliver a total of approximately 145,000 ounces in equal monthly deliveries starting this month. The facilities is based on the gold forward prices averaging $2,834 per ounce over that three-year period. As a result of the acquisition, the company's current outstanding balance is, debt outstanding balance is $450 million with net debt of approximately $260 million. We intend to use our strong cash generation from our operation to de-lever over the next three years while we also prepared to fund the construction of South Railroad. Our cash balance at the end of February was closer to $190 million. And with that, I will pass it over to our Senior Vice President of Exploration, Sylvain Guérin, which will provide you a short update on the exploration activities. Thank you, Etienne.