Agnico Eagle Exercises Top-Up Right
VANCOUVER, BC, May 11, 2023
/CNW/ - Orla Mining Ltd. (TSX: OLA) (NYSE: ORLA) ("Orla" or
the "Company") today announces the results for the first quarter
ended March 31, 2023 as well as the
partial exercise by Agnico Eagle Mines Limited ("Agnico Eagle") of
its top-up right.
(All amounts expressed
in U.S. dollars unless otherwise stated)
|
First Quarter 2023 Highlights:
- During the first quarter, gold production was 25,910 ounces and
gold sold was 26,859 ounces (pre-released, April 14,
2023). The Company remains on track to meet 2023 annual gold
production guidance of 100,000 to 110,000 ounces.
- All-in sustaining costs ("AISC")1 of $693 per ounce of gold sold during the first
quarter 2023. The Company remains on track to meet 2023 annual AISC
guidance of $750 to $850 /oz sold.
- Adjusted earnings1 for the first quarter was
$11.4 million or $0.04 per share.
- Net income for the first quarter was $13.2 million or $0.04 per share which included $6.9 million in expensed exploration and
development costs.
- Cash flow from operating activities before changes in non-cash
working capital during the first quarter was $nil after the Company
made its first planned income tax payment (including the Special
Mining Duty) in Mexico of
$26.5 million related to the 2022
fiscal year.
- Cash balance of $83.8 million and
net debt1 of $56.6 million
at March 31, 2023.
- Subsequent to quarter end, Agnico Eagle partially exercised its
top-up right.
"The Company transitioned seamlessly into 2023 with another
consistent operating quarter with strong cash margins," said
Jason Simpson, President and Chief
Executive Officer of Orla. "We remain committed to all our
stakeholders including our local communities and host
governments."
_______________________
|
1 Cash
cost, AISC, adjusted earnings and net debt are non-GAAP measures.
See the "Non-GAAP Measures" section of this news release for
additional information.
|
Financial and Operations Update
Table 1: Financial
and Operating Highlights
|
|
Q1
2023
|
Q1
2022
|
Operating
|
|
|
|
Gold
Produced
|
oz
|
25,910
|
23,031
|
Gold Sold
|
oz
|
26,859
|
20,884
|
Average Realized Gold
Price1
|
$/oz
|
$1,888
|
$1,888
|
Cost of Sales –
Operating Cost
|
$M
|
$11.8
|
$9.4
|
Cash Cost per
Ounce1,2
|
$/oz
|
$472
|
NA
|
All-in Sustaining Cost
per Ounce1,2
|
$/oz
|
$693
|
NA
|
|
|
|
|
Financial
|
|
|
|
Revenue
|
$M
|
$51.1
|
$39.6
|
Net
Income
|
$M
|
$13.2
|
$18.8
|
Adjusted
Earnings1
|
$M
|
$11.4
|
$19.8
|
Earnings per Share –
basic
|
$/sh
|
$0.04
|
$0.08
|
Adjusted Earnings per
Share – basic1
|
$/sh
|
$0.04
|
$0.08
|
|
|
|
|
Cash Flow from
Operating Activities before Changes in Non-Cash Working
Capital
|
$M
|
Nil
|
$22.0
|
Free Cash
Flow1
|
$M
|
$(5.5)
|
$16.3
|
|
|
|
|
Financial
Position
|
|
Mar 31,
2023
|
Dec 31,
2022
|
Cash and cash
equivalents
|
$M
|
$83.8
|
$96.3
|
Net debt
|
$M
|
$56.6
|
$49.5
|
1.
|
"Average Realized Gold
Price", "Cash Cost per Ounce", "All-in Sustaining Cost per Ounce",
"Adjusted Earnings", "Adjusted Earnings per Share – basic", "Free
Cash Flow", and "Net Debt" are non-GAAP measures. See the
"Non-GAAP Measures" section of this news release for
additional information.
|
2.
|
The Company declared
commercial production at Camino Rojo effective April 1, 2022.
Consequently, the comparative figures for cash cost per ounce and
all-in sustaining cost per ounce are not applicable.
|
Financial and Operations Summary
The Company declared commercial production at Camino Rojo on
April 1, 2022 following sixteen
months of construction which began in December 2020. Camino Rojo produced 25,910 ounces
of gold in the first quarter of 2023 at an average ore stacking
rate of 18,902 tonnes per day. The average mining rate during the
first quarter was 34,804 tonnes per day with a strip ratio of
0.61. The average grade of ore processed during the first
quarter was 0.80 g/t gold, in line with our plan.
Gold sold during the first quarter totaled 26,859 ounces.
First quarter cash costs and AISC totaled $472 and $693 per
ounce of gold sold, respectively. The key contributors to the AISC
being at the lower end of the guidance range are attributable to
mining less waste tonnes, lower blasting costs, lower maintenance
costs and lower reagent costs. Lower waste tonnes mined during
the quarter was due to limited access to certain areas of the pit
as the Company waits for permit amendments from the Secretariat of
Environment and Natural Resources. Mined waste tonnes are expected
to remain below average during the second quarter and increase
during the second half of 2023, thus contributing to lower mining
cost in the first half of the year.
Mined ore tonnes are reconciling well to the block model and
process recoveries to date are in line with the metallurgical
recovery model.
Sustaining capital during the first quarter of 2023 was
$1.1 million. Sustaining capital
covered items such as the construction of a dome over the ore
stockpile for dust control, the construction of water wells and IT
network infrastructure. During the first quarter, the Company made
its first income tax payment (including the Special Mining Duty) in
Mexico of approximately
$26.5 million, related to fiscal 2022
taxable income. Cash flow from operating activities before changes
in non-cash working capital and cash flow per share were impacted
accordingly. Beginning in May 2023,
the Company expects to make monthly tax installments.
Exploration Update
Additional exploration details related to 2022 results and 2023
plans on individual country exploration programs were provided in
press releases dated January 31,
2023, February 8, 2023, and
February 16, 2023. In 2023,
exploration spending will be increased to $35 million. In the first quarter, $8.5 million was spent in exploration with a
focus on drilling near-mine Sulphides and regional targets at
Camino Rojo in Mexico and regional
targets in Panama.
Camino Rojo Sulphide Project and Regional Exploration Update
(Mexico)
A 34,000-metre, 57-hole follow-up drill program to infill the
Camino Rojo Sulphides is planned for 2023 (20% of the holes will
extend to test the deep potential of the deposit). During the first
quarter, about 25% of the Sulphide infill program was completed.
Initial results are positive and will be released as the program is
advanced further.
In addition to the Sulphide infill program, 6,500 metres will be
drilled on the extensions of the Camino Rojo oxide deposit to
update and expand resources and reserves. This program is planned
to begin in the second quarter.
Confirmatory resource drilling on the Camino Rojo Oxide Layback
Area is expected to begin early in the second quarter and 2,500
metres is planned.
On the regional exploration program, the Company continued to
drill-test the Guanamero target area, approximately 7 km northeast
of the Camino Rojo Deposit, during the first quarter. This recent
drilling is following-up on encouraging results (previously
reported) from the first diamond drill hole completed by Orla
outside of the Camino Rojo Deposit in 2022. Through the remainder
of the year, regional exploration will consist of drill testing
multiple targets outside the Camino Rojo Deposit along the
northeast-southwest mine trend.
For additional detail, please see the news release dated
January 31, 2023, Orla Mining
Continues to Intersect Wide, Higher-Grade Sulphide Zones and Expose
Deeper Potential at Camino Rojo, Mexico.
South Railroad Project and Exploration Update (Nevada, US)
Drilling at South Railroad is expected to commence in the second
quarter. The exploration objectives are to upgrade and grow
resources at satellite deposits and drill test multiple targets for
new discovery. For additional detail, please see the news release
dated February 8, 2023, Orla
Mining Drills Significant Gold Intersections at Multiple Oxide
Targets upon Reactivation of Exploration at South Railroad Project,
Nevada.
Cerro Quema Exploration Update (Panama)
The 2023 exploration program has been following up on
encouraging results generated at La Pelona and La Prieta regional targets in 2022.
Exploration activities at Cerro Quema will be concentrated in the
first half of 2023. Exploration and operational activities will be
reduced in Panama in the second
half of 2023.
Agnico-Eagle Exercises Top-Up Right
Further to the amended and restated investor rights agreement
dated December 17, 2019 (the
"Investor Rights Agreement") between Agnico Eagle and the Company,
Agnico Eagle partially exercised its top-up right and has
subscribed for 3,987,241 common shares of the Company (the "Common
Shares") at a price of C$6.27 per
Common Share, for total gross proceeds of C$25 million (the "Investment").
In accordance with the Investor Rights Agreement, Agnico Eagle's
top-up right was triggered as a result of its percentage ownership
in the Company's Common Shares being diluted by at least 1% due to
the exercise or settlement of convertible securities of the
Company. The top-up right gave Agnico Eagle the right to increase
its ownership up to 15%. The subscription price of
C$6.27 per Common Share was
calculated in accordance with the Investor Rights Agreement and is
equal to the five-day volume weighted average price of the Common
Shares on the Toronto Stock Exchange on April 17, 2023, being the date the Company
advised Agnico Eagle that its top-up right had been triggered. The
Investment increases Agnico Eagle's ownership in the Company from
7.65% to 8.82% on a non-diluted basis, and from 10.65% to 11.76% on
a partially diluted basis.
Financial Statements
Orla's unaudited financial statements and management's
discussion and analysis for the quarter ended March 31, 2023, will be available on the
Company's website at www.orlamining.com, and under the Company's
profiles on SEDAR and EDGAR.
Qualified Persons Statement
The scientific and technical information in this news release
was reviewed and approved by Mr. J. Andrew
Cormier, P. Eng., Chief Operating Officer of the Company,
and Mr. Sylvain Guerard, P.
Geo., Senior Vice President, Exploration of the Company, who
are the Qualified Persons as defined under NI 43-101 - Standards
of Disclosure for Mineral Projects.
First Quarter 2023 Conference Call
Orla will host a conference call on Friday, May 12, 2023, at 10:00 AM, Eastern Time, to provide a corporate
update following the release of its financial and operating results
for the first quarter 2023:
Dial-In Numbers / Webcast:
Conference ID:
5844017
Toll
Free:
1 (888) 550-5302
Toll:
1 (646) 960-0685
Webcast:
https://orlamining.com/investors/presentations-and-events/
About Orla Mining Ltd.
Orla's corporate strategy is to acquire, develop, and operate
mineral properties where the Company's expertise can substantially
increase stakeholder value. The Company has three material gold
projects: (1) Camino Rojo, located in Zacatecas State, Mexico, (2) South Railroad, located in
Nevada, United States, and (3) Cerro Quema, located in
Los Santos Province, Panama. Orla is operating the Camino Rojo
Oxide Gold Mine, a gold and silver open-pit and heap leach mine.
The property is 100% owned by Orla and covers over 160,000 hectares
which contains a large oxide and sulphide mineral resource. Orla
also owns 100% of the South Railroad Project, a feasibility-stage,
open pit, heap leach gold project located on the Carlin trend in Nevada. Orla also owns 100% of Cerro Quema
located in Panama which includes a
pre-feasibility-stage, open-pit, heap leach gold project, a
copper-gold sulphide resource, and various exploration targets. The
technical reports for the Company's material projects are available
on Orla's website at www.orlamining.com, and on SEDAR and EDGAR
under the Company's profile at www.sedar.com and www.sec.gov,
respectively.
Non-GAAP Measures
The Company has included certain performance measures in this
news release which are not specified, defined, or determined under
generally accepted accounting principles (in the Company's case,
International Financial Reporting Standards ("IFRS"")). These are
common performance measures in the gold mining industry, but
because they do not have any mandated standardized definitions,
they may not be comparable to similar measures presented by other
issuers. Accordingly, the Company uses such measures to provide
additional information and you should not consider them in
isolation or as a substitute for measures of performance prepared
in accordance with generally accepted accounting principles
("GAAP").
In this section, all currency figures in tables are in
thousands, except per-share and per-ounce amounts.
Average Realized Gold Price
Average realized gold price per ounce sold is calculated by
dividing gold sales proceeds received by the Company for the
relevant period by the ounces of gold sold. The Company
believes the measure is useful in understanding the gold price
realized by the Company throughout the period.
AVERAGE REALIZED
GOLD PRICE
|
Q1 2023
|
Q1 2022
|
Revenue
|
$
51,131
|
$
39,645
|
Silver sales
|
(424)
|
(219)
|
Gold sales
|
50,707
|
39,426
|
Ounces of gold
sold
|
26,859
|
20,884
|
AVERAGE REALIZED GOLD
PRICE PER OUNCE SOLD
|
$
1,888
|
$
1,888
|
|
|
|
Net Debt
Net debt is calculated as total debt adjusted for unamortized
deferred financing charges less cash and cash equivalents and
short-term investments at the end of the reporting period.
This measure is used by management to measure the Company's debt
leverage. The Company believes that in addition to
conventional measures prepared in accordance with IFRS, net debt is
useful to evaluate the Company's leverage and is also a key metric
in determining the cost of debt.
NET
DEBT
|
Mar 31, 2023
|
Dec 31 2022
|
Current portion of long
term debt
|
$
45,000
|
$
45,000
|
Long term
debt
|
95,390
|
100,795
|
Less: Cash and cash
equivalents
|
(83,809)
|
(96,278)
|
NET DEBT
|
$
56,581
|
$
49,517
|
|
|
|
Adjusted Earnings (Loss) and Adjusted Earnings (Loss) per
share
Adjusted earnings (loss) excludes deferred taxes, unrealized
foreign exchange, changes in fair values of financial instruments,
impairments and reversals due to net realizable values,
restructuring and severance, and other items which are significant
but not reflective of the underlying operational performance of the
Company. We believe these measures are useful to market
participants because they are important indicators of the strength
of our operations and the performance of our core
business.
ADJUSTED
EARNINGS
|
Q1 2023
|
Q1 2022
|
Net income (loss) for
the period
|
$
13,235
|
$
18,782
|
Unrealized foreign
exchange
|
(1,803)
|
1,013
|
Loss on early
settlement of project loan
|
—
|
—
|
ADJUSTED EARNINGS
(LOSS)
|
$
11,432
|
$
19,795
|
|
|
|
Millions of shares
outstanding – basic
|
306.3
|
247.8
|
Adjusted earnings
(loss) per share – basic
|
$
0.04
|
$
0.08
|
|
|
|
Companies may choose to expense or capitalize their exploration
expenditures. We generally expenses our exploration costs
based on our accounting policy. To assist the reader in
comparing against those companies which capitalize their
exploration costs, we note that included within Orla's net income
(loss) for each period are exploration costs which were expensed,
as follows:
|
Q1 2023
|
Q1 2022
|
Exploration &
evaluation expense
|
$
6,866
|
$
2,466
|
|
|
|
Free Cash Flow
The Company believes market participants use Free Cash Flow to
evaluate the Company's operating cash flow capacity to meet
non-discretionary outflows of cash. Free Cash Flow is not
meant to be a substitute for the cash flow information presented in
accordance with IFRS. Free Cash Flow is calculated as the sum
of cash flow from operating activities and cash flow from investing
activities, excluding certain unusual transactions.
FREE CASH
FLOW
|
Q1 2023
|
Q1 2022
|
Cash flow from
operating activities
|
$
(4,922)
|
$
20,493
|
Cash flow from
investing activities
|
(592)
|
(4,151)
|
FREE CASH
FLOW
|
$
(5,514)
|
$
16,342
|
|
|
|
Millions of shares
outstanding – basic
|
306.3
|
247.8
|
Free cash flow per
share – basic
|
$
(0.02)
|
$
0.07
|
|
|
|
Cash Costs and All-In Sustaining Costs
The Company calculates cash cost per ounce by dividing the sum
of operating costs and royalty costs, net of by-product silver
credits, by ounces of gold sold. Management believes that
this measure is useful to market participants in assessing
operating performance.
The Company has provided an AISC performance measure that
reflects all the expenditures that are required to produce an ounce
of gold from operations. While there is no standardized
meaning of the measure across the industry, the Company's
definition conforms to the all-in sustaining cost definition as set
out by the World Gold Council in its guidance dated November 14, 2018. Orla believes that this
measure is useful to market participants in assessing operating
performance and the Company's ability to generate free cash flow
from current operations.
Figures are presented only from April 1,
2022, as the Camino Rojo Oxide Gold Mine commenced
commercial production on that date.
CASH
COST
|
Q1 2023
|
Q1 2022
|
Cost of sales –
operating costs
|
$
11,792
|
$
—
|
Royalties
|
1,306
|
—
|
Silver sales
|
(424)
|
—
|
CASH COST
|
$
12,674
|
$
—
|
|
|
|
Ounces sold
|
26,859
|
—
|
Cash cost per ounce
sold
|
$
472
|
$
n/a
|
|
|
|
ALL-IN SUSTAINING
COST
|
Q1 2023
|
Q1 2022
|
Cash cost, as
above
|
$
12,674
|
$
—
|
General and
administrative
|
3,265
|
—
|
Share based
payments
|
1,107
|
—
|
Accretion of site
closure provision
|
144
|
—
|
Amortization of site
closure provision
|
125
|
—
|
Sustaining
capital
|
1,145
|
—
|
Lease
payments
|
162
|
—
|
ALL-IN SUSTAINING
COST
|
$
18,622
|
$
—
|
|
|
|
Ounces sold
|
26,859
|
—
|
All-in sustaining cost
per ounce sold
|
$
693
|
$
n/a
|
|
|
|
Forward-looking Statements
This news release contains certain "forward-looking
information" and "forward-looking statements" within the meaning of
Canadian securities legislation and within the meaning of Section
27A of the United States Securities Act of 1933, as amended,
Section 21E of the United States Exchange Act of 1934, as amended,
the United States Private Securities Litigation Reform Act of 1995,
or in releases made by the United States Securities and Exchange
Commission, all as may be amended from time to time, including,
without limitation, statements regarding the Company's 2023
guidance, including production, operating costs and capital costs;
and the Company's exploration plans, including timing, expenditures
and the goals and results thereof. Forward-looking statements are
statements that are not historical facts which address events,
results, outcomes or developments that the Company expects to
occur. Forward-looking statements are based on the beliefs,
estimates and opinions of the Company's management on the date the
statements are made and they involve a number of risks and
uncertainties. Certain material assumptions regarding such
forward-looking statements were made, including without limitation,
assumptions regarding: the future price of gold, silver, and
copper; anticipated costs and the Company's ability to fund its
programs; the Company's ability to carry on exploration,
development, and mining activities; tonnage of ore to be mined and
processed; ore grades and recoveries; decommissioning and
reclamation estimates; the Company's ability to secure and to meet
obligations under property agreements, including the layback
agreement with Fresnillo plc; that
all conditions of the Company's credit facility will be met; the
timing and results of drilling programs; mineral reserve and
mineral resource estimates and the assumptions on which they are
based; the discovery of mineral resources and mineral reserves on
the Company's mineral properties; that political and legal
developments will be consistent with current expectations; the
timely receipt of required approvals and permits, including those
approvals and permits required for successful project permitting,
construction, and operation of projects; the timing of cash flows;
the costs of operating and exploration expenditures; the Company's
ability to operate in a safe, efficient, and effective manner; the
Company's ability to obtain financing as and when required and on
reasonable terms; the impact of the COVID-19 pandemic on the
Company's operations; that the Company's activities will be in
accordance with the Company's public statements and stated goals;
and that there will be no material adverse change or disruptions
affecting the Company or its properties. Consequently, there can be
no assurances that such statements will prove to be accurate and
actual results and future events could differ materially from those
anticipated in such statements. Forward-looking statements involve
significant known and unknown risks and uncertainties, which could
cause actual results to differ materially from those anticipated.
These risks include, but are not limited to: uncertainty and
variations in the estimation of mineral resources and mineral
reserves; the Company's dependence on the Camino Rojo oxide mine;
risks related to the Company's indebtedness; risks related to
exploration, development, and operation activities; risks related
to natural disasters, terrorist acts, health crises, and other
disruptions and dislocations, including the COVID-19 pandemic;
foreign country and political risks, including risks relating to
foreign operations and expropriation or nationalization of mining
operations; concession risks at the Cerro Quema project; the
receipt of a Category III EIA for Cerro Quema; delays in obtaining
or failure to obtain governmental permits, or non-compliance with
permits; environmental and other regulatory requirements; delays in
or failures to enter into a subsequent agreement with Fresnillo plc with respect to accessing
certain additional portions of the mineral resource at the Camino
Rojo project and to obtain the necessary regulatory approvals
related thereto; the mineral resource estimations for the Camino
Rojo project being only estimates and relying on certain
assumptions; loss of, delays in, or failure to get access from
surface rights owners; uncertainties related to title to mineral
properties; water rights; financing risks and access to additional
capital; risks related to guidance estimates and uncertainties
inherent in the preparation of feasibility and pre-feasibility
studies; uncertainty in estimates of production, capital, and
operating costs and potential production and cost overruns; the
fluctuating price of gold, silver, and copper; unknown labilities
in connection with acquisitions; global financial conditions;
uninsured risks; climate change risks; competition from other
companies and individuals; conflicts of interest; risks related to
compliance with anti-corruption laws; volatility in the market
price of the Company's securities; assessments by taxation
authorities in multiple jurisdictions; foreign currency
fluctuations; the Company's limited operating history; litigation
risks; the Company's ability to identify, complete, and
successfully integrate acquisitions; intervention by
non-governmental organizations; outside contractor risks; risks
related to historical data; the Company not having paid a dividend;
risks related to the Company's foreign subsidiaries; risks related
to the Company's accounting policies and internal controls; the
Company's ability to satisfy the requirements of Sarbanes-Oxley Act
of 2002; enforcement of civil liabilities; the Company's status as
a passive foreign investment company for U.S. federal income tax
purposes; information and cyber security; gold industry
concentration; shareholder activism; and risks associated with
executing the Company's objectives and strategies; as well as those
risk factors discussed in the Company's most recently filed
management's discussion and analysis, as well as its annual
information form dated March 20,
2023,, which are available on www.sedar.com and www.sec.gov.
Except as required by the securities disclosure laws and
regulations applicable to the Company, the Company undertakes no
obligation to update these forward-looking statements if
management's beliefs, estimates or opinions, or other factors,
should change.
Cautionary Note to U.S. Readers
This news release has been prepared in accordance with
Canadian standards for the reporting of mineral resource and
mineral reserve estimates, which differ from the previous and
current standards of the United
States securities laws. In particular, and without limiting
the generality of the foregoing, the terms "mineral reserve",
"proven mineral reserve", "probable mineral reserve", "inferred
mineral resources", "indicated mineral resources", "measured
mineral resources" and "mineral resources" used or referenced in
this news release are Canadian mineral disclosure terms as defined
in accordance with Canadian National Instrument 43-101 – Standards
of Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM") – CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the "CIM Definition
Standards").
For United States reporting
purposes, the United States Securities and Exchange Commission
("SEC") has adopted amendments to its disclosure rules (the "SEC
Modernization Rules") to modernize the mining property disclosure
requirements for issuers whose securities are registered with the
SEC under the Securities Exchange Act of 1934, as amended. The SEC
Modernization Rules more closely align the SEC's disclosure
requirements and policies for mining properties with current
industry and global regulatory practices and standards, including
NI 43-101, and replace the historical property disclosure
requirements for mining registrants that were included in Industry
Guide 7 under the U.S. Securities Act. As a foreign private issuer
that is eligible to file reports with the SEC pursuant to the
multijurisdictional disclosure system, the Company is not required
to provide disclosure on its mineral properties under the SEC
Modernization Rules and provides disclosure under NI 43-101 and the
CIM Definition Standards. Accordingly, mineral reserve and mineral
resource information contained in this news release may not be
comparable to similar information disclosed by United States companies.
As a result of the adoption of the SEC Modernization Rules,
the SEC now recognizes estimates of "measured mineral resources",
"indicated mineral resources" and "inferred mineral resources." In
addition, the SEC has amended its definitions of "proven mineral
reserves" and "probable mineral reserves" to be "substantially
similar" to the corresponding CIM Definition Standards that are
required under NI 43-101. While the above terms are "substantially
similar" to CIM Definition Standards, there are differences in the
definitions under the SEC Modernization Rules and the CIM
Definition Standards. There is no assurance any mineral reserves or
mineral resources that the Company may report as "proven mineral
reserves", "probable mineral reserves", "measured mineral
resources", "indicated mineral resources" and "inferred mineral
resources" under NI 43-101 would be the same had the Company
prepared the reserve or resource estimates under the standards
adopted under the SEC Modernization Rules or under the prior
standards of Industry Guide 7. Accordingly, information contained
in this news release may not be comparable to similar information
made public by U.S. companies subject to the reporting and
disclosure requirements under the United
States federal securities laws and the rules and regulations
thereunder.
MI 61-101
Agnico Eagle is related party of the Company and,
accordingly, the Investment constitutes a related party transaction
for the purposes of Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions ("MI 61-101").
The Investment does not result in a material change to Agnico
Eagle's shareholding of the Company. The Investment, including the
participation of Agnico Eagle and the issuance of Common Shares to
Agnico Eagle in connection therewith, was considered, and
ultimately approved by the board of directors of the Company. Mr.
Jean Robitaille, a director of the
Company, declared an interest with respect to the approval of the
Investment, as a result of his role as an officer of Agnico Eagle,
and abstained from approving the Investment. The Company is relying
on the exemption from the formal valuation and minority approval
requirements set out in sections 5.5(a) and 5.7(a) of MI 61-101 as
the fair market value insofar as it relates to interested parties
is not more than 25% of Orla's market capitalization. As the
Investment does not result in a material change for the Company, no
material change report was filed more than 21 days prior to the
closing of the Investment and no material change report will be
filed in connection with the closing of the Investment.
SOURCE Orla Mining Ltd.