The Business Year

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Mitchell J. Krebs

President & CEO, Coeur Mining

Jason Simpson

CEO, Orla Mining

Mining companies continue to view Mexico as a highly viable investment destination for mining despite local taxes, security risks, and bureaucracy,

Why is Chihuahua a good state for mining investment?

MITCHELL J. KREBS Chihuahua is a great place to do business and enjoys firm relationships with the mining industry, both at the state and federal level. Since 2009, when our Palmarejo mine started up, we have worked to contribute to the long-term economic viability of the communities surrounding Palmarejo. This effort includes partnering with local stakeholders and government officials to contribute to the long-term prosperity of these communities. Our team in Mexico has organized various meetings with the state and we seek to continue to interact with state and federal authorities with transparency and ongoing outreach to communicate the high standards we use to conduct our business and our community involvement efforts. We have taken the opportunity with the new Chihuahua state administration that has been in place since September 2021 to introduce our business to those with direct responsibilities in mining sector, including the Secretary of Innovation and Economic Development.

What is your perspective of the Mexican mining industry, and what trends are impacting your operations in the country?

JASON SIMPSON: It is important to recognize the benefits of Mexico’s strong mining culture, which is why we operate in Mexico, and those benefits outweigh any of the challenges that we might talk about. We are about to extract gold from the second mine that my teams have been involved with in the past decade. Many communities in Mexico welcome the benefits that mines can bring, and we have everything that we need in the nation to conduct our business. Mexico has a mining code and permitting process that is well established, and it is open to foreign investment for the benefits that it can bring to society. Those are benefits that are not always found around the world. There are challenges like in any nation, such as the security risk, corruption, or increases in taxes. These are things we have to be mindful of as a business and maintain our competitiveness from a global perspective.

What are your company’s investment plans for this year?

MJK Investing in exploration is part of our overall strategy to deliver resource and reserve growth to further extend mine lives and generate new potential growth opportunities. Exploration success from these elevated levels of investment may result in lower costs, sustainable free cash flows, and solid returns over longer mine lives. We anticipate investing USD70 million in exploration this year, with approximately USD14 million invested in our Palmarejo mine, approximately 30% more than in 2020. Exploration is a unique opportunity for mining companies to create value. This requires a focus on exploration around areas where you already are operating, and where you have already invested money and effort to establish the processing infrastructure and workforce, obtain permits and establish community relationships. Having a presence in Canada, the US, and Mexico, we have ample locations in which to invest in exploration. Our investment is among the larger programs within our industry this year, and we’ve seen our reserves and resources grow notably over the past few years in light of our elevated investment. To Coeur, investing in exploration is similar to investing in R&D for other industries.

What factors are behind Orla Mining’s ability to position itself consistently in the TSX 30 top-performing stocks ranking?

JS In 2020, we were welcomed onto the top 30 list at number 14, and we were able to improve our performance and reach eighth place in 2021. It certainly starts with an excellent commodity backdrop. Gold has performed reasonably well over the past five years, which is helpful when it is our primary product. That attracts investors, though you need to do more than that. We want to position ourselves as an investment choice where someone who is interested in investing in gold through mining companies or equities finds in Orla a company that knows how to find, build, and operate gold mines. That is what we can bring to the investment community as a company of industry veterans with know-how about permits; engineering, constructing, and operating mines; keeping people safe, working well with communities, and having excellent relationships with the government officials in various nations. Our experience in all these is the reason why we have performed well, as represented by our position on the Toronto Stock Exchange.



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