Vancouver’s Orla Mining is delivering as originally advertised when it comes to investing and rebuilding in its latest catch at the Musselwhite Mine.
The upstart mid-tier gold company is investing $115 million into the remote northwestern Ontario underground operation to plunk into mine development, procure new equipment, and launch an aggressive round of exploration drilling this year.
In a May 12 webcall of its first-quarter results, company president-CEO Jason Simpson said they believe this expenditure is what it takes to drive Musselwhite to the “next level” by way of future production and to extend the mine’s operating life.
The fly-in, fly-out mine is roughly 500 kilometres north of Thunder Bay. Musselwhite has been operating for more than 25 years, producing close to 6 million ounces of gold in that span.
When Orla announced last November it was acquiring Musselwhite from Newmont, management promised it would invest in upgrading the mine and would keep its operations team together. The $850-million deal was finally closed Feb. 28.
The bulk of the money earmarked for Musselwhite — $90 million — is designated for underground lateral development to better access ore, and to mine and move it more efficiently. Some of that spending is earmarked for purchasing new underground mobile equipment, like new scooptrams, which is arriving on site.
Last year, after performing its pre-acquisition due diligence of Musselwhite, Orla executives talked up the area’s great geological potential that could extend mine life and more than double its production.
To that end, Orla is committing $25 million to exploration to bank more future ounces in the reserve and resource categories. Musselwhite only has enough gold in the ground to keep mining until 2030.
This year’s campaign involves drilling targets near the mine and chasing new mineralization a few kilometres out, and deeper down, with an eye on eventually expanding the mine. It’ll be the first surface drill program on the property since 2020.
Underground exploration began in early March and will continue throughout the balance of the year. Come second quarter, a surface drilling program starts, aimed at verifying a deep plunging extension of a mine trend. The results will be folded into technical studies to make the case for future mine expansion.
Orla’s exploration efforts will also include testing some targets to open up the possibility of carving out a shallow open-pit mine to feed the mill.
In the webcall with analysts, Simpson said to expect a similar sized exploration investment in 2026. Their exploration outlook is really a 24-month objective of surface and underground drilling to get a better idea of the geological picture. That will give them answers by the third year on what’s needed in capital expenditure to expand the operation.
With only one month of production under Orla’s belt, Musselwhite delivered 17,780 ounces of gold produced in March with a mill head grade of 5.5 grams per tonne of gold. That’s enough to set a company quarterly record.
Orla’s other mine is Camino Rojo, a gold and silver open-pit mine in Mexico. They have another gold property in Nevada, dubbed South Railroad, that’s in the permitting stage for an open-pit mine along that state’s Carlin trend.
Orla management is setting Musselwhite’s gold production target for 2025 — known in mining vernacular as guidance — at between 170,000 and 180,000 ounces.
Musselwhite sits on the traditional land of North Caribou Lake First Nation and was one of the first mines in Canada to enter into a comprehensive agreement with nearby Indigenous communities providing mutually beneficial environmental and cultural heritage protections, workforce training and employment opportunities, and local business spinoffs.
