Q2 2024 Orla Mining Ltd Earnings Call
Operator: St. John Cormier, Andrew Cormier, John Sclodnick, Andrew Cormier, John Sclodnick Good morning, ladies and gentlemen, and welcome to Orla Mining's conference call for the second quarter 2024 results. My name is Kayla, and I will be your conference operator today. All lines have been placed on mute to prevent any background noise [inaudible] After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.
Speaker Change: Good morning, ladies and gentlemen, and welcome to Orla Mining's conference call for the second quarter 2024 results.
Kayla: My name is Kayla and I will be your conference operator today. All lines have been placed on mute to prevent any background noise.
Speaker Change: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press the star and 1.
Operator: If you would like to withdraw your question, again, press the star and one (inaudible). Please be advised that this call is being recorded. I would like to turn the meeting over to Andrew Bradbury, Vice President of Investor Relations and Corporate Development. Please go ahead, Mr. Bradbury.
Speaker Change: Please be advised that this call is being recorded. I would like to turn the meeting over to Andrew Bradbury, Vice President of Investor Relations and Corporate Development. Please go ahead, Mr. Bradbury.
Andrew Bradbury: Thank you, Operator, and welcome to Orla's second quarter 2024 results conference call. We will be making forward-looking statements during today's call, and I direct you to the first and second slides of the presentation, which contain important cautionary notes regarding these forward-looking statements. All dollar amounts discussed today will refer to U.S. dollars unless otherwise indicated. The Orla executive team is on the call this morning, and I'll pass the call to Jason Simpson, President and CEO. Thanks, Andrew.
Andrew Bradbury: Thank you, Operator, and welcome to ORLA's second quarter 2024 results conference call.
Andrew Bradbury: We will be making forward-looking statements during today's call, and I direct you to the first and second slides of the presentation, which contains important cautionary notes regarding these forward-looking statements.
Speaker Change: All dollar amounts discussed today will refer to U.S. dollars unless otherwise indicated. The ORLA executive team is on the call this morning, and I'll pass the call to Jason Simpson, President and CEO.
Jason Simpson: During the second quarter, Commodore Rojo continued to produce higher than planned ounces at a low cost, all the while maintaining the health and safety of our workforce and being considerate of our local environment. Our low-cost production, combined with higher gold prices, is driving increased margins and cash flow, which is being used to pay down debt and invest in our growth. Some of that growth includes the communal rojo-sulfide extension, with recent drilling showing impressive high grades and strong initial metallurgical results.
Jason Simpson: Thanks, Andrew. During the second quarter, Camino Rojo continued to produce higher than planned ounces at low costs, all the while maintaining the health and safety of our workforce and considerate of our local environment.
Speaker Change: Our low-cost production, combined with higher gold prices, is driving increased margins and cash flow, which is being used to pay down debt and invest in our growth.
Speaker Change: Some of that growth includes the Camino Rojo sulfide extensions.
Speaker Change: with recent drilling showing impressive high grades and strong initial metallurgical results.
Jason Simpson: We have the executive team on the call to provide specific updates in various areas. The year-to-date outperformance at Camino Rojo enables us to increase our full-year production guidance to 120 to 130,000 ounces and decrease our all-in sustaining cost guidance to $800 to $900 per ounce of gold sold. I am very proud of our team's efforts in delivering consistent execution quarter over quarter. Now over to Andrew Cormier, our Chief Operating Officer, to discuss more this operating performance. Thank you, Jason.
Speaker Change: We have the executive team on the call to provide specific updates in various areas.
Speaker Change: The year-to-date outperformance at Camino Rojo enables us to increase our full-year production guidance to 120,000 to 130,000 ounces
Speaker Change: and decreasing our all-in sustaining cost guidance to $800 to $900 per ounce gold sold.
Speaker Change: I am very proud of our team's efforts in delivering the consistent execution quarter over quarter.
Andrew Cormier: Now over to Andrew Cormier, our Chief Operating Officer, to discuss more on this operating performance.
Andrew Cormier: As mentioned, our operating team in Mexico delivered another strong quarter. It is imperative for Orla that we maintain a safety-first culture and always consider the impact of our actions on our safety. During the quarter, we mined over 1.9 million tons of ore at a strip ratio of 1.08. In the second half of the year, we plan to continue to increase the race movement to a strip ratio of 1.5. As we previously indicated, we'll be mining at least 90% of the material planned for the year. The average gold grade of our process during the second quarter was 0.87 grams per ton.
Andrew Cormier: Thank you, Jason.
Andrew Cormier: As mentioned, our operating team in Mexico delivered another strong quarter.
Andrew Cormier: It is imperative to ORLA that we maintain a safety-first culture and always consider the impact of our actions on our stakeholders.
Speaker Change: During the quarter, we mined over 1.9 million tons of ore at a strip ratio of 1.08.
Speaker Change: In the second half of the year, we plan to continue to increase the race movement to a strip ratio of 1.5.
Speaker Change: As we previously indicated, we'll be mining at least 90% of the material planned for the year.
Speaker Change: The average gold grade of our process during the second quarter was 0.87 grams per ton.
Andrew Cormier: We also achieved an average stacking rate of 19,717 tons of ore per day. I would like to provide an update on the Recovery Improvement Program we started in August 2023. The objective of the program was to increase gold recovery by reducing the crusher product size while maintaining the daily throughput. The program has resulted in an increased gold recovery between 3-5%, and we will continue with the testing in 2020. With the continued strong mining and operating performance in the second quarter, we produced over 33,000 ounces of gold.
Speaker Change: We also achieved an average stacking rate of 19,717 tons of ore per day.
Speaker Change: I would like to provide an update on the Recovery Improvement Program we started in August 2023.
Speaker Change: The objective of the program was to increase the gold recovery by reducing the crusher product size while maintaining the daily throughput.
Speaker Change: The program has resulted in an increased gold recovery between 3-5%.
Speaker Change: And we will continue with the testing in 2024.
Speaker Change: With the continued strong mining and operating performance in the second quarter, we produced over 33,000 ounces of gold.
Andrew Cormier: And year-to-date, we have outperformed on tons, grade, and recovery for both gold and silver. With the continued operational execution and performance, we are increasing our production guidance for the full year to 120,000 to 130,000 ounces of gold. The increased production guidance for 2024 is a result of the increased total stacked material and improved recovery. Overall grades for the year will remain in line with plan. It is worth noting that we are continuing our permitting efforts to expand the mine in Mexico and have the flexibility of the current mine plan.
Speaker Change: And year-to-date, we have outperformed on tons, grade, and recovery for both gold and silver.
Speaker Change: With the continued operational execution and performance, we are increasing our production guidance for the full year to 120 to 130,000 ounces of gold.
Speaker Change: The increased production guidance for 2024 is a result of the increased total stock material and improved recoveries.
Speaker Change: Overall grades for the year will remain in line with plan.
Speaker Change: It is worth noting that we are continuing our permitting efforts to expand the mine in Mexico and have the flexibility of the current mine plan.
Andrew Cormier: Primary Process also continues in Nevada. We are working through the federal pervening process with the Bureau of Land Management, the lead agency for the permitting. All 19 Supplemental Environmental Reports have been submitted for review, of which 13 reviews have been completed.
Speaker Change: The permitting process also continues in Nevada.
Speaker Change: We are working through the federal permitting process with the Bureau of Land Management.
Speaker Change: The lead agency for the permitting.
Speaker Change: All 19 Supplemental Environmental Reports have been submitted for review, of which 13 reviews have been completed.
Etienne Morin: We anticipate permitting will continue through this year and next year in advance of the target construction start in 2026. And with that, I'll pass the call to Etienne Morin, our Chief Financial Officer, to discuss the financial results for the court. Thank you, Andrew.
Speaker Change: We anticipate permitting will continue through this year and next year in advance of the target construction start in 2026.
Etienne Morin: And with that, I'll pass the call to Etienne Morin, our Chief Financial Officer, to discuss the financial results for the quarter.
Etienne Morin: During the quarter, we sold 35,000 ounces at a realized gold price of $2,332 per ounce, resulting in a record $85 million in revenue for the period. Rawling's sustaining cost for the second quarter was $782 per ounce, lower in part due to higher gold production and improved silver recovery. With strong goal production and cost management, we're reducing our 2024 all-in sustaining cost guidance to a range of $800 to $900 per ounce of gold sold, down from our initial guidance of $875 to $975 per ounce.
Etienne Morin: Thank you, Andrew. During the quarter, we sold 35,000 ounces at a realized gold price of $2,332 per ounce, resulting in a record $85 million in revenue for the period.
Speaker Change: We're all in sustaining costs for the second quarter with $782 per ounce, lower in part due to higher gold production and improved silver recoveries.
Speaker Change: With a strong gold production and cost management, we're reducing our 2024 all-in sustaining cost guidance to a range of $800 to $900 per ounce of gold sold, down from our initial guidance of $875 to $975 per ounce.
Etienne Morin: This low-cost production coupled with the higher gold prices is driving strong earnings and casual generation. Our earnings for the quarter were $24.3 million, or $0.08 per share, and after adjusting for unrealized foreign exchange gains and other small items, adjusted net earnings were $23 million, or $0.07 per share. These strong earnings are reflected in peer-leading operating margins of 64% and record free cash flow generation. During the quarter, exploration and project costs were $9.7 million, of which approximately two-thirds, or $6.6 million, was expensed, and $3.1 million was capitalized.
Speaker Change: This low-cost production coupled with the higher gold prices are driving strong earning in cash flow generation.
Speaker Change: Our earnings for the quarter was $24.3 million or $0.08 per share. And after adjusting for unrealized foreign exchange gains and other small items, adjusted net earnings was $23 million or $0.07 per share.
Speaker Change: These strong earnings are reflected in peer-leading operating margins of 64% in record free cash flow generation.
Speaker Change: During the quarter, exploration and project costs were $9.7 million, of which approximately two-thirds, or $6.6 million, was expensed and $3.1 million was capitalized.
Etienne Morin: Cash flow from operating activities before changes in non-cash working capital was $53.2 million, or $0.17 per share for the quarter. Meanwhile, we generated a record $44 million in free cash flow of $0.14 per share. As per our plan, sustaining capital costs will ramp down in the second half of the year as the phase two expansion of the heap leach pad is completed in early Q3. Total capital expenditures in the second quarter were $7.9 million, of which $4.9 million was sustaining capital and $3 million was non-sustaining and related to capitalized exploration in Mexico.
Speaker Change: Cash flow from operating activities before changes in non-cash working capital was $53.2 million, or $0.17 per share for the quarter.
Speaker Change: Meanwhile, we generated a record $44 million in free cash flow of $0.14 per share.
Speaker Change: As per our plan, sustaining capital costs will ramp down in the second half of the year as the Phase 2 expansion of the heap leach pad was completed in early Q3.
Speaker Change: The total capital expenditures in the second quarter was 7.9 million dollars of which 4.9 million was sustaining capital and 3 million was non-sustaining and related to capitalized exploration in Mexico.
Etienne Morin: So here on this graph we've shown, we actually showed this chart in the previous quarter, but it's worth reiterating our commitment to pay down our debt as we continue to generate strong cash flows. During a quarter, we repaid $10 million towards a credit facility, and we ended Q2 with $154 million in cash, $78 million in debt, and a $76 million net cash position. In July and subsequent to quarter end, we repaid an additional $20 million towards a revolving credit facility, bringing down the current balance outstanding to $58.4 million.
Speaker Change: So here on this graph we've shown, we've actually shown this chart in previous quarter, but it's worth reiterating our commitment to pay down our debt as we continue to generate strong cash flows.
Speaker Change: During the quarter, we repaid $10 million towards a credit facility, and we ended Q2 with $154 million in cash, $78 million in debt, and resulting in a $76 million net cash position.
Speaker Change: In July, in subsequent to quarter end, we repaid an additional $20 million towards a revolving credit facility, bringing down the current balance outstanding to $58.4 million.
Etienne Morin: We'll continue to evaluate opportunities to reduce debt and reduce interest charges while maintaining our financial flexibility to fund our internal project pipeline, including our exploration program. And with that, I'll pass the call over to Sylvain Guerard, or to the Senior Vice President. Thanks, Etienne. In the second quarter, we continued to advance our 2024 exploration program with ongoing drilling at Camino Rojo in Mexico and the commencement of our 2024 exploration program at South Riddle, the Pineda Vada. Throughout the quarter, we drilled over 10,000 meters, with approximately 7,800 meters on the Camino Rojo sulfide extension and 2,300 meters at South Railroad.
Speaker Change: We'll continue to evaluate opportunities to reduce debt, to reduce interest charges while maintaining our financial flexibility to fund our internal project pipeline, including our exploration programs.
Sylvain Guerard: And with that, I'll pass the call over to Sylvain Guerard, our Senior Vice President, Exploration.
Sylvain Guerard: Thanks, Etienne. In the second quarter, we continue to advance our 2024 Exploration Program with ongoing drilling at Camino Rojo in Mexico and the commencement of our 2024 Exploration Program at South Railroad in Nevada.
Sylvain Guerard: Throughout the quarter, we drilled over 10,000 meters with approximately 7,800 meters on the Camino Rojo Sulphide Extension and 2,300 meters at South Railroad.
Sylvain Guerard: We issued a press release in late June highlighting positive drilling intersection and meteorological results from Camino Rojo extension in the first half of 2024. Additional news releases providing results from our Camino Rojo and South Railroad drill programs are planned for late 2024. As part of the near mine exploration of Keminorohu, we are focusing our 24 efforts on the promising Keminorohu extension. We have designed a 30,000 meter drill program aimed at testing and expanding the potential of the still open organization at the extensive Camino Rojo Depart. The program targets polymetallic replacement-style sulfides and SCARN-type mineralization beyond the current resource boundary.
Sylvain Guerard: We issued a press release in late June highlighting positive drilling intersections and meteorological results from Camino Rojo extension in the first half of 2024.
Sylvain Guerard: Additional news releases providing results from our Camino Rojo and South Railroad drill programs are planned for late 2024.
Sylvain Guerard: As part of the Near Mine Exploration at Camino Rojo, we are focusing our 24 efforts on the promising Camino Rojo extensions.
Sylvain Guerard: We have designed a 30,000 meter drill program aimed at testing and expanding the potential of the still-open realization at the extensive Camino Rojo deposit.
Sylvain Guerard: The program targets polymetallic replacement-style sulfides and SCARN-type mineralization beyond the current resource boundaries.
Sylvain Guerard: At the end of the quarter, we had drilled over 18,000 meters and 23 holes with assay and metallurgical testing and programs. The drill results indicate potential expansion of the Camino Rojo sulfide resources at depth, extending beyond the current mineral resource, downplunged by at least 500 meters. The remainder of the current exploration program will focus on extending the resolution from half to one kilometer down plunge of the current limit of the mineral resources along the dike structure. This reading is expected to test the open mineralized strands to assess the broader potential of the growing Cabernet Rojo deposit.
Sylvain Guerard: At the end of the quarter, we have drilled over 18,000 meters and 23 holes with assay and metallurgical testing in progress.
Sylvain Guerard: The drill results indicate potential expansion of the Camino Rojo sulfide resources at depth, extending beyond the current mineral resource, down plunge by at least 500 meters.
Sylvain Guerard: The remainder of the current exploration program will focus on extending mineralization from half to one kilometer down plunge of the current limit of the mineral resources along the dike structure.
Sylvain Guerard: This drilling is expected to test the pulp and mineralized strands to assess the broader potential of the growing Cabinot Gorgon deposit.
Sylvain Guerard: The initial metallurgical results have been quite positive and are consistent with the results of last year's gold recoveries of 81% to 96% for ball roll and 85% to 88% for rougher flotation, highlighting the potential for compatibility of this new mineralized style with both standard cyanide processing and flotation metals. As part of the Camino Rojo sulfide project planning, we are advancing an initial on-the-ground resource estimate but will not yet include any of the extension drilling, which remains ongoing. Mittouzich called Studies on the Risk Resent Phase is also ongoing.
Sylvain Guerard: The initial methodological results have been quite positive and are consistent with the results of last year.
Speaker Change: goal recoveries of 81% to 96% for ball roll and 85% to 88% for rougher flotation.
Speaker Change: highlighting the potential for compatibility of this new mineralized style with both standard cyanide processing and the flotation method.
Speaker Change: As part of the Camino Rojo sulfide project planning, we are advancing an initial on-the-ground resource estimate.
Speaker Change: but will not yet include any of the extension drilling, which remains ongoing. Methodological studies on the recent phase is also ongoing.
Sylvain Guerard: In Nevada, along the calling train, we have an exciting drill program underway. With the acquisition of Contact Goal, we increased our 2024 Exposition Basit by 3 million. We started our drilling in 2024 in late May and by the end of the second quarter, we had drilled more than 2,000 meters and completed nine RC holes, testing extension of non-deposit areas with assay results pending. The 2024 Exploration Program will continue to test potential extension of mineralized zones, including targets on the edge of the pinion and dark star deposit, while also testing new exploration targets across the Salter & Work project.
Speaker Change: In Nevada, along the current trend, we have an exciting program underway. With the acquisition of the CONTACT goal, we increased our 2024 exploration budget by $3 million. For more information, visit www.contacted.va.gov
Speaker Change: We started our drilling in 2024 in late May, and by the end of the second quarter had drilled more than 2,000 m and completed 9 RC holes, testing extension of non-deposit with assay results pending.
Speaker Change: The 2024 Exploration Program will continue to test potential extension of non-mineralized zones, including targets on the edge of the Pinion and Dark Star Deposits.
Speaker Change: while also test new exploration targets across the South Railroad project.
Sylvain Guerard: Our 2024 exploration program is progressing well, with drilling operations underway in Mexico and in Nevada. We look forward to providing updates on our progress and results as we advance. I will now pass the call to Chafika Eddine. Thank you, Sylvain.
Speaker Change: Our 2024 exploration program is progressing well with drilling operations underway in Mexico and in Nevada. We look forward to providing updates on our progress and results as we advance.
Chafika Eddine: On the sustainability front, we keep advancing our Towards 2030 Sustainability Strategy to produce a net positive benefit for our stakeholders, where we can add more than we extract from society, the environment, and the economy. Our second sustainability report will be released shortly, and I would invite you to have a look to learn about the targets and key performance indicators that measure our progress. We have many reasons to be proud of our sustainability efforts.
Speaker Change: I will now pass the call to Chafika Eddine.
Chafika Eddine: Thank you, Sylvain.
Speaker Change: On the sustainability front, we keep advancing our Towards 2030 Sustainability Strategy to produce a net positive benefit for our stakeholders.
Chafika Eddine: where we can add more than we extract into society, the environment, and the economy.
Chafika Eddine: Our second sustainability report will be released shortly and I would invite you to have a look to learn about the targets and key performance indicators that measure our progress.
Chafika Eddine: We have many reasons to be proud of our sustainability efforts.
Chafika Eddine: This includes how we are collaborating to protect and restore ecosystems and the low carbon intensity index from our Camino Rojo mine, which remains consistent with our 2022 levels. This performance continues to position our Camino Rojo mine among the lowest global emitters in the gold sector. Embedding the sustainability strategy into the business and into the business targets means creating actions that are economically feasible and operationally achievable and that can create superior outcomes for the company and its stakeholders.
Chafika Eddine: This includes how we are collaborating to protect and restore ecosystems,
Chafika Eddine: and the Low Carbon Intensity Index.
Chafika Eddine: from our Camino Rojo mine, which remains consistent with our 2022 level.
Chafika Eddine: This performance continues to position our Camino Rojo mine among the lowest global emitters in the gold sector.
Chafika Eddine: Embedding the sustainability strategy into the business and to the business targets.
Chafika Eddine: means creating actions that are economically feasible and operationally achievable, and that can create superior outcomes for the company and its stakeholders.
Chafika Eddine: We strive to foster a fair, safe, and healthy working environment where everyone genuinely wants the company to succeed. We also keep engaging with all stakeholders to listen to their concerns and aspirations and to develop partnerships to maximize benefits. Openness is critical to build trust and achieve positive relationships.
Chafika Eddine: We strive to foster a fair, safe and healthy working environment where everyone genuinely wants the company to succeed.
Chafika Eddine: We also keep engaging with all stakeholders to listen to their concerns and aspirations and to develop partnerships to maximize benefits.
Chafika Eddine: Openness is critical to build trust and achieve positive relationships.
Jason Simpson: This is the way we are cementing Orla's reputation and culture for our company to remain recognized as a desirable place to work for and to work with. I'll now pass the call back to Jason. Thank you, Chafika. Our execution and delivery at Camino Rojo continue to underpin Orla's success.
Chafika Eddine: This is the way we are cementing Orla's reputation and culture for our company to remain recognized as a desired place to work for and to work with.
Chafika Eddine: I'll now pass the call back to Jason.
Speaker Change: Thank you, Shafika.
Jason Simpson: Our execution and delivery at Camino Rojo continue to underpin Orla's success.
Jason Simpson: We are holding our costs and seeing margins expand in this very healthy gold price environment, which is strengthening the business. Thank you to our team in every country where we operate, who remain committed to their areas in this business. Is it their collective efforts that drive us forward towards our vision of becoming the gold producer of choice?
Jason Simpson: We are holding our costs and seeing margins expand in this very healthy gold price environment, which is strengthening the business.
Jason Simpson: Thank you to our team in every country where we operate who remain committed to their area and this business. It is their collective efforts that drive us forward towards our vision of becoming the gold producer of choice.
Operator: And at this point, I'd like to open the call to questions and hand the call back to the operator. At this time, I would like to remind everyone, in order to ask a question, press the star and then the number 1 on your telephone keypad. We'll pause for just a moment to compile the roster, and our first question comes from John Sclodnick with Deidre Darnas. Your line is open.
Speaker Change: And at this point, I'd like to open the call to questions and hand the call back to the operator.
Speaker Change: At this time, I would like to remind everyone, in order to ask a question, press the star, then the number 1, on your telephone keypad. We'll pause for just a moment to compile the roster.
Speaker Change: John Sclodnick, John Sclodnick
Speaker Change: And our first question comes from John Skolondik with Deidre Darnas. Your line is open.
Jason Simpson: Yeah, thanks for taking my question, guys, and congrats on a great quarter and another year of increasing guidance. Just on the recovery improvements, just wondering when you'd expect to start increasing that crush size and to the finer grind, and just on the impact of processing costs if you have a step-up. Yeah, certainly. Thanks, John. And good to hear from you and appreciate the acknowledgement.
John Skolondik: Yeah, thanks for taking my question, guys, and congrats on a great quarter and another year of increase in guidance. Just on the recovery improvements, just wondering when you'd expect to start increasing that crush size and to the finer grind, and just on the impact of processing costs, if you have a sense of that at this point.
John Skolondik: Yeah, certainly. Thanks, John, and good to hear from you, and appreciate the acknowledgment.
Jason Simpson: On terms of the reduced crush size, and we began that in August of last year, so that's been underway for over a year now. And as time has progressed, and we understand the kinetic effect in the leach pad, we are now able to communicate to the market the percentage increase in recovery that we're seeing. And of course, as you would expect, that increased recovery is part of the reason that we've been able to increase our production guidance in addition to throughput in grades in the first half.
Speaker Change: In terms of the reduced crush size, we began that in August of last year, so that's been underway for over a year now.
Speaker Change: As time has progressed and we understand the kinetic effect in the leach pad, we are now able to communicate to the market the percentage increase in recovery that we're seeing.
Jason Simpson: But also, we're lowering our all-in standing cost guidance this year, which also considers the effects of that improved recovery. So as we conducted that process beginning in August of last year, we were watching two things. One was, could we achieve the reduced particle size and maintain our stacking throughput?
Speaker Change: And of course, as you would expect, that increased recovery is part of the reason that we've been able to increase our production guidance.
Speaker Change: in addition to throughput in grades in the first half. But also, we're lowering our all-insteading cost guidance this year, which also considers the effects of improved recovery.
Speaker Change: So...
Speaker Change: As we conducted that process beginning in August of last year, we were watching two things.
Speaker Change: One is, could we achieve the reduced particle size and maintain our stacking throughput? The answer to that is yes. And secondarily to your question, could we do so and still keep our costs within budget and guidance? And the answer to that is also yes.
Jason Simpson: And I guess last one for me, just on the second half of the year, just trying to get a sense of the kind of gold grades. You know, we've seen elevated levels in the first half. I'd assume you'd expect a bit of a decline, but just wondering if you can give, you know, a bit of a sense of to what degree in the second half and then kind of the same idea for strip ratio on the opposite end. I guess I'd expect that to tick higher. Just wondering if any kind of the 1.5 range is suitable or if you see it coming higher or lower.
Speaker Change: Okay, great. I appreciate that color there.
Speaker Change: And I guess last one for me, just on the second half of the year, just trying to get a sense on kind of gold grades, you know, we've seen elevated levels first half, I'd assume you'd expect a bit of a decline, but just wondering if you can give, you know, a bit of a sense on to what degree in the second half, and then kind of same idea for first trip ratio on the opposite end, I guess I'd expect.
Speaker Change: I'm just wondering if the 1.5 range is suitable or if you see it coming higher or lower than that.
Jason Simpson: Yeah, let's start with grade. One of the contributors to our over-achievement in the first half has been grade, in addition to throughput and recovery that we just discussed. For the second half of the year, recoveries and throughput will continue to be contributors, but the grades will, in fact, begin to level out. So, based upon our latest forecast, they will be in line with our planned grades. If we can continue our first half performance, we'll expect to continue to over-produce and stack, and we are now carrying through the recovery benefits that we described.
Speaker Change: Yeah, let's start with the grade. One of the contributors to our overachievement in the first half has been grade, in addition to throughput and recovery that we just discussed.
Speaker Change: For the second half of the year, recoveries and throughput will continue to be contributors, but the grades will, in fact, begin to level out. So we expect, based upon our latest forecast, to be in line with our planned grades.
Speaker Change: If we can continue our first-half performance, we'll expect to...
Speaker Change: continue to overproduce and stacking.
Speaker Change: and we are now carrying through the recovery benefits that we described. So, you're quite right, and as we communicated to the market today, we're expecting the overall year-end grades to be in line with plan. The benefits of the increased production guidance will be a function of recovery and stacking rate.
Jason Simpson: Now in terms of the waste, you've also correctly picked up that we have increased our stripping ratio beginning in quarter two. As we previously communicated, we needed to make adjustments to the mind plan to enable us to strip the amount of waste planned for this year. And that will, as you've noticed, be second half weighted.
Speaker Change: Now, in terms of the waste, you also, uh...
Speaker Change: correctly picked up that we have increased our stripping ratio beginning in quarter two. As we previously communicated, we needed to make adjustments to the mine plan to enable us to
Speaker Change: strip the amount of waste planned for this year, and that will, as you've noticed, will be second half weighted. I think 1.5 that you cited is a reasonable number to expect in the second half of this year, such that by the end of the year, given the under-stripping in quarter one, will result to within about 90% of our waste stripping planned for the year.
Speaker Change: The benefits of that, of course, are that we are not going to upset the cost profiles for the years to come, having been able to adjust the mine plan and achieve the stripping ratio that we originally intended in 2024.
Speaker Change: Okay, that's great. I appreciate those details. Thanks, and again, congrats on a great quarter and year so far.
Speaker Change: Thanks, Sean. Love your headline.
Speaker Change: And as a reminder, if you would like to ask a question, please press star and the number one on your telephone keypad. Our next question comes from the line of Bryce Adams with CIBC Capital Markets. Your line is open.
Operator: And as a reminder, if you would like to ask a question, please press star and the number one on your telephone keypad. Our next question comes from the line of Bryce Adams with CIBC Capital Markets. Your line is open. Good morning all, thanks for the presentation. Just one question, and it's probably for Etienne, but maybe Jason started to touch on her there. For the accelerated stripping in the second half, how will those costs be classified? Assume they are capitalised, but will they be inside or outside of all the standing costs?
Bryce Adams: Good morning all. Thanks for the presentation.
Bryce Adams: Just one question, and it's probably for Etienne, but maybe Jason started to touch on it there. For the accelerated stripping in the second half, how will those costs be classified? Assume capitalised, but will they be inside or outside of all-in sustaining costs?
Etienne Morin: Go ahead, Etienne. Yeah, thanks for the question, Bryce. No, it'll all be an expense, so it'll be part of, it'll flow through inventory and be part of the cost of sales, so we don't do capitalized stripping at this point anyway.
Etienne Morin: Go ahead, Etienne. Yeah, thanks for the question, Bryce. No, it'll all be expense, so it'll be part of, it'll flow through inventory and be part of cost of sales, so we don't do capitalized stripping.
Operator: That's very clear. Thank you. And at this time, there are no further questions. I will now turn the call back over to CEO Jason Simpson. Thank you, operator. Since there are no further questions, I'd like to take the opportunity to thank you for your time and remind you that you can always reach out to Orla should you have any follow-up questions. Our management team is fully available. Thank you for tuning in. And this concludes today's conference call. You may now disconnect. [music]
Bryce Adams: at this point, anyway.
Bryce Adams: That's very clear. Thank you.
Bryce Adams: And at this time, there are no further questions. I will now turn the call back over to CEO Jason Simpson.
Jason Simpson: Thank you, operator. Since there are no further questions, I'd like to take the opportunity to thank you for your time and remind you that you can always reach out to ORLA should you have any follow-up questions. Our management team is fully available.
Speaker Change: Thank you for tuning in.
Speaker Change: And this concludes today's conference call. You may now disconnect.
Speaker Change: Thank you for watching Don't forget to leave a comment
Jason Simpson: I think 1.5 that you cited is a reasonable number to expect for the second half of this year, such that by the end of the year, given the under-stripping in quarter one, will result within about 90% of our waste stripping plan for the year. The benefits of that, of course, are that we are not going to upset the cost profiles for the years to come, having been able to adjust the master plan and achieve the stripping ratio that we originally intended in 2024. Okay, that's great. I appreciate those details. Thanks. And again, congrats on a great quarter and year so far. Thanks, John. I love your headline.
Jason Simpson: So you're quite right, and as we communicated it to the market today, we're expecting the overall year-end grades to be in line with plan. The benefits of the increased production guidance will be a function of recovery and stacking rates.
Jason Simpson: And the answer to that is yes. And secondarily, to your question, could we do so and still keep our costs within budget and guidance? And the answer to that is also yes. Okay, great. No, I appreciate that color there.