The deal gives Orla Mining ownership of the South Railroad heap leach project and the Lewis project, both located in Nevada
Gold Standard Ventures to be acquired by Orla Mining. (Credit: swm/Freeimages)
Canada-based Orla Mining has agreed to acquire Gold Standard Ventures, the owner of the South Railroad project in Nevada, US, in a deal valued at C$242m ($187.22m).
South Railroad is an open pit, heap leach project, which is located on the prolific Carlin trend. Currently, it is in feasibility-stage and its permitting activities are in progress.
Th project is estimated to involve an initial capital of $190m. Over an eight-year mine life, the South Railroad project is expected to yield one million ounces of gold.
Based in Canada, Gold Standard Ventures is also the owner of the Lewis project, a land package on the Battle Mountain trend in Nevada.
The Lewis project’s inferred mineral resource is 206,000 ounces of gold at 0.83 g/t. It also has various other prospective targets that can possibly expand the resource base.
Orla Mining owns the operating Camino Rojo oxide gold mine in Mexico, which achieved its first gold pour in December 2021. The company also owns the Cerro Quema project in Panama, which includes a near-term gold production scenario and multiple exploration targets.
Orla Mining CEO Jason Simpson said: “This acquisition advances our strategy of creating stakeholder value through responsibly building and operating a portfolio of high-margin, cash-generating assets with superior geological prospectivity.
“The South Railroad Project is analogous to our recently completed Camino Rojo mine – a low capital intensity, open pit, heap leach project in a desirable location with exploration upside. We have the team, partners, and financial resources to develop this quality asset and we are ready to go.”
As per the terms of the deal, Gold Standard Ventures’ shareholders will exchange each of their shares in the company for 0.1193 of Orla Mining’s shares and C$0.0001 ($0.000077).
The deal values each share of Gold Standard Ventures at C$0.655 ($0.51).
In the enlarged company, Gold Standard Ventures’ shareholders will get a stake of around 13%, while the remaining 87% will be held by shareholders of Orla Mining.
The acquisition will be done through a court-approved plan of arrangement.
Gold Standard Ventures CEO Jason Attew said: “This transaction provides Gold Standard shareholders with an immediate upfront premium, exposure to a well-financed gold producer, and strong upside potential as Orla delivers and de-risks the combined asset portfolio.
“Based on their recent success in constructing the Camino Rojo Oxide Mine on schedule and under budget, we believe that Orla is an ideal partner to bring South Railroad into production.”
The deal, which is subject to Gold Standard Ventures’ shareholders’ approval, court and regulatory approvals, and other conditions, is expected to close in August 2022.