F-10: Orla Mining Files Shelf Prospectus, Details Camino Rojo Update

Orla Mining Ltd. has filed a base shelf prospectus for future securities offerings and provided updates on its Camino Rojo project, including a recent pit wall event and resource estimates.

Summary

• Orla Mining Ltd. has filed a short form base shelf prospectus to offer common shares, warrants, subscription receipts, units, and debt securities from time to time over a 25-month period.
• The company qualifies as a well-known seasoned issuer (WKSI) under Canadian blanket orders, which reduces regulatory burden for future offerings.
• The Camino Rojo Project's Mineral Resource estimate, effective March 31, 2025, includes Measured + Indicated resources of 89,625 kt at 1.74 g/t AuEq (5,304 koz AuEq) and Inferred resources of 7,612 kt at 2.03 g/t AuEq (497 koz AuEq).
• Camino Rojo's Mineral Reserve estimate, effective March 31, 2025, totals 37,895 kt at 0.70 g/t gold and 14.0 g/t silver, containing 854 koz gold and 17,060 koz silver.
• An uncontrolled material movement event occurred on the pit wall at Camino Rojo on July 23, 2025, along the temporary north wall, causing temporary suspension of mining activities for geotechnical assessment.
• As a result of the pit wall event, a 50 to 80 meter pushback of the north wall is planned, with approximately 9.0 Mt of predominantly oxidized material expected to be removed and then crushed and stacked on the heap leach.
• The company announced updated annual guidance on August 5, 2025, due to the pit wall event.
• The U.S. Department of the Interior Bureau of Land Management (BLM) published the Notice of Intent (NOI) for the South Railroad Project on August 13, 2025, formally initiating the federal permitting process.
• The Mexican government's extraordinary mining duty (royalty) increased from 0.5% to 1% starting in 2025, which was not reflected in the current Camino Rojo Mineral Resource and Reserve estimates but will be in future updates.
• Overall metallurgical recoveries for gold at Camino Rojo averaged 63% and silver averaged 7% from the start of operations through March 2025.
• Gold and silver inventories in solution and in-heap are estimated at 19,000 oz for gold and 500,000 oz for silver.
• Deloitte LLP was appointed as the company's auditor on March 26, 2025, replacing Ernst & Young LLP.
• Tim Haldane did not stand for re-election as a director at the June 24, 2025 annual general and special meeting, and his term expired.

Sentiment

Score: 5

Explanation: The filing presents a mixed outlook. While the shelf prospectus provides financial flexibility and the South Railroad project is advancing, the pit wall event at Camino Rojo and the subsequent updated guidance introduce operational challenges and uncertainty. The increase in Mexican royalty also adds a cost pressure. The detailed resource and reserve estimates are positive, but the operational disruption and lower-than-expected silver recoveries temper overall sentiment.

Positives

• Qualification as a well-known seasoned issuer (WKSI) reduces regulatory burden for future offerings, providing financial flexibility.
• Initial underground Mineral Resource estimate for Camino Rojo announced, indicating potential for future development and resource expansion.
• Publication of Notice of Intent (NOI) for the South Railroad Project by the BLM is a major milestone in advancing the federal permitting process.
• Camino Rojo's pit monitoring systems detected the material movement early, preventing injuries or equipment damage.
• No environmental damage resulted from the Camino Rojo pit wall event.
• Realized gold recoveries at Camino Rojo are in close agreement with predicted recoveries.
• Silver production at Camino Rojo has been improving significantly since 2023, suggesting potential for increased recovery over time.
• The company has a comprehensive Environment, Sustainability, Health and Safety Policy and a 'Towards 2030 Sustainability Strategy' in place.

Negatives

• An uncontrolled material movement event occurred on the pit wall at Camino Rojo on July 23, 2025, leading to a temporary suspension of mining activities.
• The pit wall event at Camino Rojo necessitated a 50 to 80 meter pushback of the north wall and resulted in updated annual guidance, implying a negative revision to previous expectations.
• Silver recoveries at Camino Rojo (7% overall through March 2025) have been consistently lower than anticipated, although recent improvements are noted.
• The increase in the Mexican government's extraordinary mining duty to 1% from 0.5% starting in 2025 was not reflected in current Mineral Resource and Reserve estimates, which could impact future project economics.
• Any potential development of Camino Rojo underground resources is dependent on entering into an additional agreement with Fresnillo, introducing a dependency risk.
• The current resource model for silver at Camino Rojo may be overly restrictive, suggesting potential issues with estimation or underestimation of silver distribution.

Risks

• Uncertainty and variations in the estimation of Mineral Resources and Mineral Reserves.
• Risks related to the company's indebtedness and gold prepay.
• Risks related to exploration, development, and operation activities.
• Foreign country and political risks, including risks relating to foreign operations and expropriation or nationalization of mining operations.
• Tailings risks and reclamation costs.
• Delays in obtaining or failure to obtain governmental permits, or non-compliance with permits.
• Environmental and other regulatory requirements.
• Loss of, delays in, or failure to get access from surface rights owners.
• Uncertainties related to title to mineral properties and water rights.
• Risks related to natural disasters, terrorist acts, health crises, and other disruptions and dislocations.
• Financing risks and access to additional capital.
• Risks related to guidance estimates and uncertainties inherent in the preparation of feasibility studies.
• Uncertainty in estimates of production, capital, and operating costs and potential production and cost overruns.
• The fluctuating price of gold and silver.
• Risks related to Cerro Quema and unknown liabilities in connection with acquisitions.
• Global financial conditions and uninsured risks.
• Climate change risks and competition from other companies and individuals.
• Conflicts of interest and risks related to compliance with anti-corruption laws.
• Volatility in the market price of the company's securities and assessments by taxation authorities in multiple jurisdictions.
• Foreign currency fluctuations and litigation risks.
• The company's ability to identify, complete, and successfully integrate acquisitions.
• Intervention by non-governmental organizations and outside contractor risks.
• Risks related to historical data and the company not having paid a dividend.
• Risks related to the company's foreign subsidiaries, accounting policies, and internal controls.
• The company's ability to satisfy the requirements of the Sarbanes-Oxley Act of 2002 and 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 risks.
• Risks related to the company's significant shareholders and gold industry concentration.
• Shareholder activism and risks associated with executing the company's objectives and strategies.
• Broad discretion in the use of proceeds of an Offering of Securities.
• No assurance of a sufficient liquid trading market for the company's Common Shares in the future.
• Debt Securities will be unsecured and rank equally with other unsecured debt, effectively subordinated to secured debt.
• No existing market through which the Securities, other than Common Shares, may be sold.

Future Outlook

The company plans a 15,000 m drill program to upgrade and expand the upper part of the Zone 22 resource at Camino Rojo by the end of 2025. Onsite construction for the South Railroad Project can commence following the receipt of all required state and federal permits. Future updates to Camino Rojo Mineral Resource and Reserve estimates will incorporate the new 3% NSR royalty, and the company will continue to monitor silver recoveries and production at Camino Rojo.

Management Comments

• Orla's corporate strategy is to acquire, explore, develop, and operate mineral properties where its expertise can substantially increase stakeholder value.
• Orla has launched a Towards 2030 Sustainability Strategy to ratify its commitment to being a responsible, sustainability-driven company.

Industry Context

The filing reflects the typical operational and financial reporting landscape for a publicly traded precious metals mining company with international operations. The use of both Canadian (NI 43-101) and U.S. (SEC) disclosure requirements, alongside IFRS accounting standards, highlights its cross-border compliance. The operational challenges at Camino Rojo, such as the pit wall event, are inherent risks in open-pit mining, while the permitting progress for South Railroad is a standard development milestone in the industry. The increase in Mexican mining royalties is a common regulatory change impacting mining economics in resource-rich jurisdictions.

Comparison to Industry Standards

• The company's financial statements are prepared in accordance with IFRS Accounting Standards, which may not be directly comparable to financial statements of U.S. companies that adhere to U.S. GAAP.
• Mineral Resource and Reserve estimates are prepared in accordance with Canadian National Instrument 43-101 (NI 43-101) and CIM Definition Standards, which differ in material respects from the disclosure requirements of the SEC for domestic U.S. issuers (Regulation S-K Subpart 1300).
• The company qualifies as a well-known seasoned issuer (WKSI) under Canadian blanket orders, a status that provides similar regulatory relief and flexibility for large, established issuers as the WKSI designation in the U.S. market.

Management Changes

Corporate Governance

Related Party Transactions

• The Layback Agreement with Fresnillo plc (and its Mexican subsidiary companies) grants Orla the right to expand the Camino Rojo oxide pit onto a portion of Fresnillo's mineral concession.
• Newmont Corporation (formerly Goldcorp Inc.) holds a 2% net smelter return (NSR) royalty on all metal production from the Camino Rojo Project, except for metals produced under the sulphide joint venture. Newmont also retains an option to enter into a joint venture for a sulphide project under specific development scenarios.

Stakeholder Impact

• Shareholders: Potential for dilution from future securities offerings, impact on share price from operational issues (Camino Rojo pit wall event) and positive developments (South Railroad permitting, resource updates).
• Employees: Temporary suspension of mining activities at Camino Rojo could impact work schedules, but no injuries were reported. The company maintains health and safety programs.
• Customers: No direct impact mentioned, but operational disruptions could affect production targets and delivery schedules.
• Suppliers: Mining contractor services are used at Camino Rojo; potential impact on contract terms or volumes due to operational changes and remediation efforts.
• Creditors: Debt securities are unsecured and rank equally with other unsecured debt, but are effectively subordinated to secured debt, posing a higher risk in case of insolvency.
• Local Communities (Mazapil and Concepcion del Oro Municipalities): Increased expectations for employment, local contracting, and community benefits due to mine activities; concerns about water quality/quantity, noise, dust, and air pollution. The company aims to build relationships and contribute to sustainable development.
• Regulatory Authorities: Ongoing engagement for permits and compliance, particularly for Camino Rojo expansion and transition to underground mining, and for the South Railroad Project's federal permitting process.

Next Steps

• Complete geotechnical assessments and remediation for the Camino Rojo pit wall event to ensure safe operating conditions.
• Resume mining activities at Camino Rojo following the resolution of the pit wall event.
• Execute the planned 50 to 80 meter pushback of the Camino Rojo north wall, removing and processing approximately 9.0 Mt of oxidized material.
• Continue the 2025 exploration drilling program at Musselwhite.
• Advance a 15,000 m drill program at Camino Rojo with the goal of upgrading and expanding the upper part of the Zone 22 resource by the end of 2025.
• Complete the National Environmental Policy Act review and preparation of an Environmental Impact Statement by the BLM for the South Railroad Project.
• Obtain all required state and federal permits for the South Railroad Project to begin onsite construction.
• Apply the new 3% NSR royalty in subsequent updates to Camino Rojo Mineral Resource and Reserve estimates.
• Continue diamond drilling perpendicular to mineralized zones at Camino Rojo to better define vein geometry and increase confidence in resource classification.
• Continue exploration drilling in the 300 series and 500 series high-grade mineralization domains at Camino Rojo to prove additional resources at depth.
• Investigate the mineralization chronology and metal associations at Camino Rojo and consider extending gold-only wireframes at depth.
• Create separate wireframes for silver and zinc at Camino Rojo to better capture significant grades.
• Revise sample preparation procedures at Camino Rojo to better account for coarse gold.
• Establish routine check assays with an independent accredited laboratory and develop deposit-specific CRMs for Camino Rojo.
• Review sample intervals with anomalous density values at Camino Rojo to ensure accurate volumetric and tonnage estimates.
• Reassess the silver estimation approach in future Camino Rojo resource model updates to better reflect distribution and continuity.
• Regularly assess contractor performance regarding reconciliation and dilution control at Camino Rojo.
• Examine opportunities to further optimize the Camino Rojo pit and mining schedules as economic conditions dictate.
• Closely monitor silver recoveries and production at Camino Rojo to determine if a write-down of silver inventory is warranted.
• Consider using monthly composite column leach tests results for production and inventory calculations at Camino Rojo.
• Conduct additional metallurgical test work for the Camino Rojo Sulphide deposit, including cyanide variability, flotation, cyanidation on Zone 22, and further POX evaluations.
• Obtain authorizations necessary to operate another water supply well at Camino Rojo to provide an additional 25 L/s of water supply.
• Maintain aging infrastructure and conduct regular maintenance and assessments.
• Ensure additional environmental approvals (including land use change) required for the planned transition to underground mining at Camino Rojo are obtained.
• Ensure the Unique Environmental Licence for Camino Rojo is up to date and considers planned changes in facilities.
• Allow sufficient time for planning and completion of environmental studies required for the transition to underground at Camino Rojo.
• Complete a permitting schedule linked to the Project Execution Schedule for Camino Rojo.
• Continue engaging with regulators to obtain formal permits for domestic wastewater discharges at Camino Rojo.
• Regularly review and update existing environmental policies, standards, procedures, management, and monitoring plans.
• Undertake water supply/water recycling studies to determine alternative options for water supply as a contingency measure.
• Monitor the release of the management plan for the Semi-desierto Zacatecano protected area by the government.
• Develop a grievance mechanism procedure specific to Camino Rojo and link the environmental and social risk register with the Stakeholder Engagement Plan.
• Continually monitor actual spending, comparing to budgets, and optimize capital and operating costs where possible.

Key Dates

Recommendation

The filing presents a mixed outlook. The base shelf prospectus provides flexibility for future capital raises, which is a positive for long-term growth and strategic initiatives like the South Railroad Project's permitting progress. However, the recent pit wall event at Camino Rojo, leading to temporary operational suspension and revised guidance, introduces near-term uncertainty and operational risk. While the company is addressing the issue and has strong resource estimates, the immediate impact on production and costs, coupled with the increase in Mexican royalties, suggests a cautious approach. Investors should hold to monitor the resolution of the Camino Rojo operational issues and the progress of the South Railroad Project's permitting and development.

Keywords

Gold mining, Orla Mining, Camino Rojo, South Railroad, Musselwhite Mine, SEC filing, F-10, shelf prospectus, mineral resources, mineral reserves, exploration, corporate governance, risk management, Zacatecas, Mexico, Nevada, USA, Ontario, Canada