Orla Mining (OLA) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Musselwhite transforms Orla into a multi-asset, intermediate gold producer with a strong North American presence and portfolio diversification.

• Musselwhite is a high-quality, long-life producing mine with 1.5 Moz reserves, a history of nearly 6 Moz produced, and significant exploration upside for mine life extension.

• The deal provides immediate scale, more than doubling gold production and positioning Orla for future growth to 500 koz annual production.

• Entry into a premier mining jurisdiction with a skilled workforce and strong stakeholder and First Nations support.

• Enhances leverage to gold prices, increases net asset value per share, and aligns with Orla's growth and value creation strategy.

Financial terms and conditions

• Orla to acquire Musselwhite from Newmont for $810 million in cash plus up to $40 million in gold price-linked contingent payments.

• Contingent payments: $20 million if gold averages over $2,900/oz in year one post-closing, and $20 million if over $3,000/oz in year two.

• No upfront equity dilution; financing includes $350M gold prepay, $150M revolving credit, $100M term loan, $200M convertible notes, and $10M cash on hand.

• Convertible notes: 4.5% coupon, 5-year maturity, conversion price CAD $7.90/share, with warrants at CAD $11.50/share, fully subscribed by existing shareholders.

• Musselwhite's net asset value is $760 million at $2,150/oz gold and $1 billion at $2,500/oz gold.

Synergies and expected cost savings

• Combined annual gold production increases by 140% to over 300 koz at an all-in cost of about $1,080–$1,100 per ounce.

• Musselwhite expected to generate over $150 million in average annual free cash flow over the next five to six years.

• Transaction is materially accretive to operating and free cash flow, gold production, and reserves/resources per share.

• Operational improvements and resource growth opportunities identified, including optimizing underground haulage and process plant productivity.

• Potential for expansion to fill mill capacity and reduce costs through engineered improvements to material handling.