Orla Mining makes $850m move to acquire Musselwhite gold mine in Ontario

Orla Mining Ltd., a Vancouver-based gold miner, has unveiled plans to acquire the Musselwhite Gold Mine in Ontario from Newmont Corporation in a deal valued at up to $850 million. The acquisition underscores Orla’s ambitions to expand its presence in Canada and bolster its position as a leading gold producer in North America.

The agreement involves an initial cash payment of $810 million, along with a potential $40 million contingent on future gold prices. Orla will finance the deal through a combination of existing cash reserves, undrawn credit facilities, new debt instruments, and a gold prepay facility. Notably, the financing strategy avoids any immediate equity dilution for shareholders, a point emphasized by the company as it seeks to maintain investor confidence.

Strategic acquisition reshapes Orla’s growth outlook

The Musselwhite Gold Mine, situated on the shores of Opapimiskan Lake in Northwestern Ontario, is a long-established asset with over 25 years of continuous operation. The mine has produced close to six million ounces of gold since inception, with proven and probable reserves currently estimated at 1.5 million ounces. Measured and indicated resources bring the total to 1.8 million ounces, highlighting the mine’s potential to remain productive for years to come.

An independent technical report commissioned by Orla suggests that the mine has a production life through 2030 based on existing reserves, with an average annual output of 202,000 ounces of gold at an all-in sustaining cost of $1,269 per ounce. These projections provide Orla with a stable foundation for revenue generation and operational efficiency as it integrates the mine into its portfolio.

CEO outlines bold vision for integration and growth

Jason Simpson, Orla Mining’s President and CEO, described the acquisition as a pivotal moment for the company, stating it significantly enhances Orla’s production profile while establishing a strong foothold in a top-tier mining jurisdiction. Simpson outlined plans to optimize Musselwhite’s operations, ramp up exploration, and invest in extending the mine’s productive life.

Industry analysts have lauded the move, noting that the deal transforms Orla from a single-asset producer into a diversified intermediate gold miner. By adding Musselwhite to its portfolio, Orla’s annual production will rise to over 300,000 ounces, with further increases expected upon the commencement of operations at the South Railroad Project in Nevada by 2027.

Investors react positively to the acquisition

Following the announcement, Orla Mining’s shares climbed nearly 10%, closing at 6.10 Canadian dollars ($4.33) in trading. The sharp rise reflects strong market confidence in the strategic merits of the acquisition and its potential to deliver long-term shareholder value.

Unlocking Musselwhite’s untapped potential

In addition to its proven reserves, Musselwhite offers extensive exploration opportunities. The mine spans a 65,000-hectare concession, with historical drilling data indicating mineralized zones that could significantly expand resources. The mine’s processing facility, with a nameplate capacity of 1.5 million tonnes per annum, is currently underutilized, processing approximately 1.0 million tonnes per annum. Orla plans to capitalize on this gap by increasing throughput as it identifies additional resources.

Maintaining strong relationships with local stakeholders remains a priority for Orla. The company has pledged to honor existing agreements with First Nations communities, suppliers, and contractors, ensuring continuity in operations and preserving established partnerships.

Positioning for a dynamic future

This acquisition aligns with Orla Mining’s corporate strategy of acquiring, developing, and operating high-value assets where it can maximize efficiency and profitability. The addition of Musselwhite not only diversifies Orla’s portfolio but also positions the company to achieve near-term growth, with projected annual gold production exceeding 500,000 ounces by 2027.

As the deal moves toward completion, anticipated in the first quarter of 2025, Orla will focus on seamless integration and leveraging operational synergies to drive further value creation. The acquisition of the Musselwhite Gold Mine represents a defining moment in Orla Mining’s evolution, setting the stage for a dynamic and sustainable future in the gold mining sector.