Orla Mining (TSX: OLA, NYSE: ORLA) said operations at its Camino Rojo gold mine in Mexico are set to resume in the next few hours as the company works to end the illegal blockade that halted production earlier this week. The stock rose.
Vancouver-based Orla said Thursday that talks with union representatives and labor authorities have progressed after a meeting with Mexico’s federal labor conciliation department. statement. Orla said that all parties agreed that “the blockade is illegal and falls outside the scope of the collective bargaining framework.”
The disruption, which began on Monday, forced Orla to suspend operations at its main mine in Mexico while maintaining essential activities required to protect workers, equipment and the environment. This comes at a time when Orla is working to raise $18.5 billion ($25.5 billion CAD). merger With Equinox Gold (TSX, NYSE: EQX).
Orla said that the union leadership is informing the group of union employees of the necessity of lifting the blockade and resuming safe and normal operations by Thursday evening. If the blockade is not lifted, Orla pledged to “pursue additional steps to resume operations in coordination with the labor authorities,” without going into details.
Orla shares rose 3.5% to $16.09 Thursday morning in Toronto, valuing the company at about C$5.5 billion ($4 billion). The stock has traded between C$12.76 and C$29.99 in the past year. It fell nearly 8% on Monday when news of the shutdown was revealed.
Bonus talks
The turmoil stems from a dispute over two separate payments: a worker productivity bonus and a legal profit-sharing entitlement. Orla said this week that it successfully negotiated a productivity bonus with union representatives, but workers objected to the amount distributed under the profit-sharing program and launched a blockade that the company said did not follow procedures required under Mexican law.
Orla said on Thursday that negotiations on productivity bonus payments would resume once normal mine operations were restored. She added that the administration is “committed to finding a solution to the productivity bonus discussions.”
“We welcome this move to return to normal operation at Camino Rojo so we can welcome all of our employees back to work,” CEO Jason Simpson said in the statement.
“We are also committed to resuming discussions in good faith with the union regarding productivity bonuses within the parameters of this framework, and we are optimistic that a mutually beneficial agreement can be reached.”
Open mine
Located in the state of Zacatecas, Camino Rojo is one of Mexico’s newest gold mines. The operation consists of an open pit mine and a leach processing facility that achieved commercial production in 2022.
Production at Camino Rojo is expected to range between 110,000 and 120,000 ounces. Gold this year, about a third of the company’s total production. The operation produced 96,764 ounces. Of gold last year.
Orla pledged on Monday to “assess any potential impact of the work stoppage on Camino Rojo’s full-year production guidance.” The company added that the update will be provided in due course.
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