Orla Mining(ORLA) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2025, the company sold just under 93,000 ounces of gold at a realized price of $4,025 per ounce, resulting in $378 million in revenue for the quarter [15] - Consolidated cash costs and all-in sustaining costs for Q4 totaled $1,093 and $1,536 per ounce of gold sold, respectively [16] - The company recorded net income of $79 million or $0.23 per share, with adjusted earnings of $143 million or $0.42 per share [16] - Cash flow from operating activities before changes in non-cash working capital was $165 million, with free cash flow for the quarter of $133 million [16] Business Line Data and Key Metrics Changes - Musselwhite mine produced nearly 76,000 ounces of gold in Q4, with a mill grade of 6.77 grams per ton and gold recovery of 95.65% [6] - Camino Rojo oxide mine produced 19,587 ounces of gold in Q4, with a higher strip ratio of 1.52 due to a pit wall event [7] Market Data and Key Metrics Changes - The company expects annual production to exceed 220,000 ounces over the first 10 years, effectively doubling current output [10] - The average output for the South Railroad project is projected at 103,000 ounces of gold annually over the first five years at an all-in sustaining cost of approximately $1,485 per ounce [11] Company Strategy and Development Direction - The company is focused on expanding production capacity and diversifying its operations, with significant investments in the South Railroad and Camino Rojo projects [5][12] - The approval of the environmental impact statement at Camino Rojo allows for further development, including underground exploration [10][11] - The company aims to maintain a disciplined capital allocation approach, balancing growth initiatives and returning capital to shareholders [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another record-breaking year in 2026, forecasting production of 340,000-360,000 ounces at an all-in sustaining cost of $1,550-$1,750 per ounce [30] - The company highlighted operational resilience and advancements in growing the business throughout 2025 [30] Other Important Information - The company has a strong cash position of $421 million at the end of December 2025, positioning it well to fund development projects [17] - A $6.6 million partnership with Newmont and First Nations LP was announced to support local workforce development [26] Q&A Session Summary Question: Changes to the mine plan at Camino Rojo in response to the latest permit - Management clarified that the mine plan for 2026 will not change due to the permit, as guidance already accounted for its receipt [33][34] Question: Key development milestones for South Railroad - Management discussed ongoing engineering procurement and preparations for field mobilization, with updates expected throughout the year [35][36] Question: Capital expenditure budget for 2026 and its contingencies - Management indicated that the $200 million budget for South Railroad is contingent on the receipt of the Record of Decision, with potential adjustments based on timing [41] Question: Cost of mining in deeper areas at Musselwhite and horizontal drilling - Management acknowledged increased costs for deeper mining but emphasized plans to improve material handling systems to mitigate these costs [42][43]