Orla Mining (TSX: OLA) announced today that the results of a Pre-Feasibility Study (“PFS”) and mineral resource and mineral reserve estimates on its Cerro Quema Oxide gold project located in the Azuero Peninsula, Los Santos Province, Panama, demonstrate the possibility of a low cost, high return heap leach project.
The company said that estimated project after-tax net present value (5% discount rate) is $176 million with an after-tax internal rate of return of 38% at a gold price of US$1,600 per ounce.
The PFS continues to support an open pit mine and heap leach operation. The main notable physical changes from the 2014 PFS include improved water management infrastructure including active and passive water treatment plants for the waste rock facilities and heap leach facilities, a more detailed design for a larger heap leach pad with increased capacity, a three-phase heap leach facility, redesign of the two-phase waste rock facilities, and an update of all costs.
The new mineral reserve estimate at Cerro Quema includes proven and probable mineral reserves of 21.7 million tonnes at a gold grade of 0.80 grams per tonne (“g/t”) and a silver grade of 2.18 g/t, for total mineral reserves of 0.56 million ounces of gold and 1.53 million ounces of silver. This compares to 19.7 million tonnes at a gold grade of 0.77 g/t for a mineral reserve estimate of 0.49 million ounces in the 2014 PFS, representing an increase of approximately 15% in contained ounces.
“We believe that our assets in Panama represent an opportunity for organic growth in our business,” stated president and CEO Jason Simpson. “The results of the PFS suggest that Cerro Quema can be another low-risk, high margin oxide project for Orla. The completion of the PFS provides a pathway towards continued engineering, project advancement, and a future construction decision. We also believe there is significant opportunity for project optimization and mineral resource expansion in Panama and work is just beginning.”
Orla is developing the Camino Rojo Oxide gold project, an advanced gold and silver open-pit and heap leach project, located in Zacatecas State, Central Mexico. The project is 100% owned by Orla and covers over 160,000 hectares. Orla also owns 100% of the Cerro Quema project located in Panama which includes a near-term gold production scenario and various exploration targets. The Cerro Quema project is a proposed open pit mine and gold heap leach operation.