Orla Mining Ltd (TSE: OLA) (NYSEAMERICAN: ORLA) has finalized the acquisition of Ontario’s Musselwhite Mine, thereby increasing its gold production well over twofold. Musselwhite will yield about 202,000 ounces annually.
Orla originally agreed to purchase the asset from Newmont Corporation (TSE: NGT) (NYSE: NEM) in November for US$850 million. It has been in production for decades, producing nearly 6 million ounces since the late 1990s.
“A new era has begun at the Musselwhite Mine,” mine worker Ken Cyrette said in a social media post. He is one of about 1,000 workers at the fly-in fly-out site. Orla is currently looking for new site employees too, including a financial analyst, asset planner and Chief Rock Mechanic Engineer.
Aside from the newly acquired project, Orla is focused on its flagship Camino Rojo mine in Mexico. Meanwhile, the company’s South Railroad project in Nevada, currently in the feasibility stage, should start production by 2027.
Orla will be capable of producing 300,000 ounces per year from its Mexican and Canadian mines over the next couple of years before South Railroad potentially enables the company to become a half-a-million-ounce-per-annum operator.
Musselwhite will produce gold from its primary deposits until the end of the decade when resources are depleted.
However, Orla says there is significant potential for mine life extension through delineating adjacent resources, which the company plans to “aggressively” pursue.
$ORLA – Orla Mining is doing something right.
What a base……
Market Cap ~1.9B pic.twitter.com/YL0VDIMUTj
— Larry Thompson, CMT CPA (@HostileCharts) January 6, 2025
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BMO raises its share target substantially
The major acquisition and massive increase in production prompted the Bank of Montreal (TSE: BMO) (NYSE: BMO) to boost its Orla stock price target by C$4.50 to C$12.50 earlier this month.
This Canadian financial institution sees the company’s expansion into Canada as a smart strategic choice.
The Canadian Imperial Bank of Commerce (TSE: CM) (NYSE: US) (FRA: CAI) shares the same sentiment, though not quite as much as BMO. It raised its target price for Orla by C$0.50 at the end of February.
Additionally, analysts from the Bank of Nova Scotia (TSE: BNS) (NYSE: BNS) (FRA: BKN) upped their target by C$1.00 to C$8.75 in January.
Stifel Financial Corp (NYSE: SF) (FRA: 2SI) predicted a C$1.75 increase in December.
rowan@mugglehead.com
