Orla Mining (TSX: OLA) has approved the start of construction spending at the Camino Rojo oxide gold project in Mexico after completing a $125 million credit facility with a syndicate of lenders led by Agnico Eagle Mines, Franco-Nevada chairman Pierre Lassonde and Trinity Capital.
Orla has also obtained approval from the Mexican federal government’s environment department for one of the two key permits required to develop the Camino Rojo project.
Both the credit facility and the permit would allow the company to maintain its schedule for advancing Camino Rojo toward production in mid-2021, said president and CEO Jason Simpson.
Construction of Camino Rojo is expected to start during the first half of 2020, upon receipt of all required permits.
A feasibility study released this summer showed that Camino Rojo is expected to produce 97,000 ounces of gold and 511,000 ounces of silver per year over 6.8 years. Initial capital expenditure for the project is estimated at $123 million.
Shares of Orla Mining rose 2.5% on Thursday morning, with trading volume reaching 2.15 million shares — nearly 10 times the daily average. The Vancouver-based miner has a C$322 million market capitalization.