Orla Mining (TSX: OLA) delivered a softer first quarter relative to the fourth quarter, with lower production and higher unit costs partly offset by a stronger realized gold price.
Net income came in at $75.4 million, or $0.22 per share, down from $79.2 million, or $0.23 per share, in the fourth quarter of 2025. Adjusted earnings totalled $134.7 million, or $0.39 per share, compared with $143.1 million, or $0.42 per share, in the prior quarter.
Revenue was essentially flat at $378.9 million versus $378.5 million in the fourth quarter, as a higher average realized gold price of $4,575 per ounce, up from $4,025, offset lower volumes.
Cash flow performance moderated meaningfully. Operating cash flow before working capital changes was $103.5 million, down from $165.4 million in the fourth quarter, while free cash flow totalled $62.9 million compared with the company’s record $133.4 million in the prior period. The step down reflects a heavier cash outflow quarter that included roughly $93.0 million in income tax payments tied to 2025, a $20.0 million contingent payment to Newmont triggered after gold prices cleared the $2,900 per ounce threshold from the Musselwhite acquisition, and a $35.0 million loan repayment.
Orla closed the quarter with $427.3 million in cash against $331.3 million in debt, leaving a net cash position of $96.0 million and total liquidity of $517.3 million. That marks an improvement from $35.8 million in net cash at year end 2025, despite the quarter’s heavy outflows.
Gold production reached 81,206 ounces, with sales of 81,540 ounces. Both figures were down from the fourth quarter’s 95,405 ounces produced and 92,889 ounces sold, with output keeping Orla inside its full year 2026 guidance of 340,000 to 360,000 ounces following 2025 production of 300,620 ounces.
Musselwhite produced 62,985 ounces at a mill head grade of 6.29 grams per tonne, down from 75,818 ounces at 6.77 grams per tonne in the fourth quarter. The mine continued to perform well operationally, with development rates climbing roughly 20% from 2025, and earlier mine plan resequencing pulled higher grade ore into the first quarter ahead of plan.
The Camino Rojo oxide mine in Mexico meanwhile contributed 18,221 ounces, modestly lower than the 19,587 ounces it produced in the fourth quarter as stacking grades held at 0.59 grams per tonne compared with 0.47 grams per tonne previously.
Unit costs ticked higher. Consolidated cash costs came in at $1,251 per ounce sold versus $1,093 in the fourth quarter, while all in sustaining costs rose to $1,668 per ounce from $1,536. Costing remains within the company’s 2026 AISC guidance band of $1,550 to $1,750, with management noting front half weighting in its cost profile. The company also flagged a roughly $3 per ounce headwind to AISC from a 6% rise in diesel prices tied to Middle East tensions, while reporting no fuel availability issues.
On the project front, the South Railroad heap leach project in Nevada is moving toward a mid-2026 construction start, with detailed engineering 41% complete and long-lead orders placed for the ADR plant, crushers, and LNG generators. An updated feasibility study released in January pegged net present value at $1.7 billion and IRR at 95% at $4,500 gold, against an initial capital cost estimate of $395 million.
In Mexico, Orla received the federal environmental permit needed to expand the Camino Rojo open pit and begin an underground exploration decline, with a contract award expected early in the third quarter and completion targeted for 2028. A preliminary economic assessment released in February laid out the case for a standalone underground sulphide operation beneath the existing pit, with a pre-feasibility study targeted for 2027.
Orla Mining last traded at $20.53 on the TSX.
Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
