Orla Mining (TSX: OLA) shares fell sharply after Mexican President Claudia Sheinbaum confirmed her administration is investigating allegations tied to the company’s Camino Rojo mine in Zacatecas, where workers were allegedly threatened by organized crime figures during a union dispute.
Sheinbaum reportedly said the case involving Camino Rojo is under investigation. Asked whether the alleged conduct would be illegal, she said it would be, while adding that sanctions or criminal action would depend on the facts being established.
She also said Mexico’s security cabinet would address the matter and that she would speak with Labor Secretary Marath Bolaños to get the full context.
Toronto-listed shares plummeted over 9% to close at $22.20.
The allegations center on Camino Rojo, Orla’s gold and silver mine in Mazapil, Zacatecas. A CUSMA Rapid Response Labor Mechanism panel, whose determination was made public on March 26, found a “severe” denial of labor rights at the facility, which is owned by the Canada-based mining firm.
The panel found that Camino Rojo interfered in workers’ union activity by favoring the Minas Union over Los Mineros, the incumbent union at the mine. It said the interference was aggravated by coercion and intimidation intended to push workers away from Los Mineros and toward Minas, and characterized Camino Rojo as the “main promoter” in the denial of rights.
They further found threats, violence, arbitrary dismissals linked to union preferences, and a climate of fear among workers. It also said Orla Mining and Camino Rojo’s awareness of organized crime in the area increased their responsibility to protect workers’ rights.
The case has been moving through trade enforcement channels since June 24, 2024, when Los Mineros filed a petition with the US Department of Labor alleging denial of freedom of association and collective bargaining rights at Minera Camino Rojo. The US requested Mexico’s review on August 29, 2024, Mexico issued its report on October 11, 2024, and the US requested a panel on December 12, 2024. The panel conducted verification on December 16 and 17, 2025, held a hearing in Mexico City on December 18 and 19, 2025, and issued its final determination dated February 13, 2026.
The USTR said possible remedies include a public apology, neutrality measures in union treatment, management commitments to protect labor rights, reinstatements, indemnifications, compensation, security measures, training, and steps allowing Los Mineros access to the mine and communication with management.
The labor controversy lands as Camino Rojo remains central to Orla’s Mexico story. In Q1 2026, Camino Rojo stacked 1.828 million tonnes of ore at an average grade of 0.59 grams per tonne gold, producing 18,221 ounces and selling 17,436 ounces. Across all operations, Orla produced 81,206 ounces and sold 81,540 ounces of gold in the quarter.
The company also recently secured Mexico’s environmental permit from SEMARNAT for Camino Rojo, giving it the approvals needed to mine the remainder of the oxide open pit, including the layback area. Orla said the permit, together with a Change of Land Use authorization, also supports an underground exploration decline tied to the Camino Rojo underground project.
Orla said in February 2026 that the Camino Rojo underground preliminary economic assessment outlined a pathway to a larger, long-life underground operation in Zacatecas.
The company ended 2025 with $1.06 billion in revenue, $106.9 million in net income, $318.9 million in adjusted earnings, $680.8 million in free cash flow, and $420.8 million in cash and cash equivalents.
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