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Good morning ladies and gentlemen. And welcome to Orla Mining's Conference Call for the First Quarter 2023 results. My name is Emma and I will be your conference operator today. [Operator Instructions]. Please be advised that this call is being recorded.
I would like to turn the meeting over to Andrew Bradbury, Vice President of Investor Relations and Corporate Development for Orla Mining. Please go ahead, Mr. Bradbury.
Thank you, operator. And welcome everyone to Orla’s first quarter 2023 results conference call. We will be making forward-looking statements during today's call and I direct you to the first and second slides in the presentation which contains important cautionary notes regarding these forward-looking statements. All dollar amounts discussed today will refer to U.S. dollars, unless otherwise indicated. On the call this morning is Orla’s full executive team.
I'll now pass the call over to President and Chief Executive Officer Jason Simpson.
Thanks Andrew. Our first quarter was highlighted by first, our efforts in sustainability which underpins all of our activities. This includes strong health and safety performance, sound environmental management and creating value for our stakeholders. We had another consistent operating quarter at Camino Rojo processing above nameplate capacity. With one quarter completed, we are on track to meet gold production and all in sustaining costs guidance for 2023.
Also, our balance sheet continues to strengthen and was improved even further in May when Agnico Eagle exercised their top upright with a CAD25 million Canadian dollar investment in Orla. Thank you to Agnico who continue to support our company. Andrew Cormier our Chief Operating Officer will provide a summary of the quarterly operating results. And as Etienne Morin, our Chief Financial Officer will provide an update on the financial details.
Over to you Andrew.
As always we lead with safety and Camino Rojo has maintained a strong safety culture as we enter our second full year of operations. During the quarter site activities continue to focus on optimizing the money crushing, stacking and process plant operation. For example, our maintenance teams have been building up our preventative maintenance program to identify opportunities to further reduce our operating costs and increase our equipment operating time.
1.9 million tonnes of ore were mined at a strip ratio of 0.61 and an average grade of 0.72 grams per tonne of gold. Mined waste tons were lower during the quarter as we, as access was limited in certain areas of the pit. As we await the necessary permit amendment. We expect to mine lower waste tons in the second quarter, but still mined the plant waste tons in the second half of the year. This will be reflected in our costs as we expect higher strip ratio in the second half of the year.
The 2023 strip ratio is expected to be about one. The average grade of ore processed during the first quarter was 0.8 grams per tonne of gold. An average tracking rate of 18,902 tonnes per day was achieved. Again, above nameplate capacity. Mined or tonnes and grades are reconciling well to the block model and process recoveries to date are in line with the metallurgical recovery model. The consistent delivery of the Camino Rojo mine production and costs gives us confidence to grow our growth plans.
I'll now turn the call over to Etienne Morin, our Chief Financial Officer to discuss the financial results of the quarter. Etienne?
Thanks Andrew. During the quarter we sold nearly 27,000 ounces of gold at a net realized price of $1,888 per ounce, resulting in $51 million in revenue for the period. Net income for the quarter was $13.2 million or $0.04 per share. After adjusting for unrealized foreign exchange gain adjusted earnings were $11.4 million or $0.04 per share also. Should be noted that during the quarter we expensed $6.9 million in exploration and development cost as we continue to advance our growth pipeline. Cash costs for the first quarter was $472 per ounce, while all-in sustaining costs was $693 per ounce. And as Andrew mentioned, the lower waste tonne mined during the quarter benefited all-in sustaining cost. And we expect this figure to tick upwards in the second half of the year.
We remain on track to meet both our annual production guidance of 100,000 to 110,000 ounces of gold, in our all-in sustaining costs guidance of $750 to $850 per ounce. As we've previously indicated, we made our first income tax payment of $26.5 million in Mexico during the quarter that was related to the 2022 fiscal year.
This amount included both the income tax and the Mexican special mining duty. Cash flow from operating activities before changes in non-cash working capital and cash flow per share were impacted accordingly during the quarter. Beginning in May, we expect to make monthly tax installments as prescribed by the Tax Authority, and the May payment will cover January to April 2023. And we will continue to make payments on a monthly basis thereafter. We are also pleased to receive a $25 million investments from Agnico post quarter end.
It's also worth mentioning that we repaid $5.6 million in principle towards our credit facility in Q1. At the end of the quarter we had $118 million in debt outstanding between the term and a revolving credit facility.
For the annual tax payment in the first quarter cash bounce declined to $83.8 million in Q1. But with today's investment from Agnico our pro forma cash and net debt is now approximately $100 million and $38 million respectively.
As you can see by this graph outlining the evolution of our net debt over the past year since the commencement of commercial production, we've made large strides in strengthening our balance sheet which positions us well for future growth. The obvious question is how do we intend to allocate our cash while we have a meaningful exploration program for 2023 with $35 million allocated between Mexico, Nevada and Panama.
And with this additional cash from Agnico, we expect to repay a portion of our revolving credit facility. This would have no impact on liquidity and would allow us to reduce financing costs overall.
With high gold prices and Camino Rojo’s strong operating margins, it will allow us to continue being disciplined with our cash and look at ways to further invest in our growth portfolio across our properties in Mexico, Nevada and Panama. And to also continue to strengthen our balance sheet.
With that I’ll pass it back to Jason.
Thank you, Etienne. As he indicated we are investing $35 million in exploration in 2023 as we seek to add resources and make new discoveries. Approximately $3 million of the exploration budget is allocated to Panama, $10 million to Nevada, and $22 million to Mexico. We issued a series of press releases in the first quarter listing our 2022 highlights and outlining our 2023 exploration plans.
In Panama, the 2023 exploration program at Cerro Quema has been following up on the encouraging drill results generated at the La Paloma and La Prieta regional targets from 2022. The exploration program is scheduled to end with the end of the dry season this quarter. In Nevada, drilling is planned to begin at South Railroad in late May and will continue until year end. In 2023 our exploration objectives for South Railroad include upgrading and increasing resources at satellite deposits, and drill testing multiple targets for new discoveries.
Drilling at South Railroad will be at the North Bullion target, which already hosts an inferred resource, the Pinion, SB and Dark Star extensions, as well as multiple other targets on our large Carlin Trend land position. In Mexico at Camino Rojo a full exploration program is advancing with a 34-kilometer infill drill program in the Sulphides, which is now 25% complete.
The Q1 sulphide drilling continued to intercept higher grade mineralization, with the results to be released in the next few months. Below the sulfide resource drilling completed in 2022, as well as historical drilling indicated potential for gold mineralization below the Caracal formation, which is the main host rock of the currently defined Camino Rojo deposit. To test this extension 20% of the sulphide infill drill program is designed to continue into this deeper potential below the deposit.
During the quarter, in addition to our sulphide and deep extension programs continuing, we are currently drilling the laid back of the oxide deposit which will add reserves. Regionally in Mexico during Q1 we continued to drill test the Guanamero target area which is approximately 7 kilometers northeast of the Camino Rojo deposit. And for the remainder of the year, regional exploration will consist of testing multiple targets outside the Camino Rojo deposit predominantly along the northeast, southwest mine trend, including follow-up at Guanamero.
To reiterate, we are only one quarter into the year, but we are on track toward achieving our 2023 production and cost guidance. Camino Rojo has been a tremendous first asset for Orla and we continue to advance permitting in Panama and Nevada where we anticipate building on our success from Mexico. This depth of growth assets is an important differentiator for Orla.
Orla has proven our formula for value creation. Our strategy is underpinned by a consistent delivery and execution. In addition to consistent cash generation, we must strive to keep our teams safe and healthy, while ensuring the protection of our local environment.
We thank all of our stakeholders who enable our efforts. And at this point, I'd like to pass the call back to the operator and open for questions.
[Operator Instructions] Your first question comes from a line Arun Lamba with TD Securities. Your line is open.
Hey, morning guys. Congrats on a good quarter. Just a small one for me. You mentioned the lower waste tonnes mine in the quarter to do the limited access at areas of the pit. Can you just give some more color on how long you're expected to wait for the permits amendments? And if there's any delay, would that potentially change the mine plan later in the year next year?
Thanks, Arun. As you recall, when we achieved the agreement with Fresnillo we were able to outline an unconstrained pit at Camino Rojo oxide mine. And we needed to apply for the necessary permit amendments for that now larger pit. We applied for the first set of those amendments early last year. And typically, [indiscernible] amendment would take three to six months. But we still have not received that amendment. So, we've made adjustments to our mine sequencing for 2023. And we can continue to make those adjustments with no impact to gold in either 2023 or 2024. But we're certainly hopeful that we'll receive those amendments long before that which will enable us to begin the stripping at the outer sections of the Camino Rojo oxide mine related to the Fresnillo layback agreement that we achieved a number of years ago.
Okay, great. Thanks a lot for that Jason. And then good to see Agnico top up. Does anyone have the other major shareholders have top up rights? I think it was just Agnico, but maybe you can just remind us anyone else does?
I can answer that Aurn. So, Agnico is the only one who has a top up, right. But Newmont also has a participation right for future offerings.
Okay, perfect. That's it for me. Thanks a lot, guys.
Your next question comes from the line of Andrew Mikitchook with BMO. Your line is open.
Good morning, team Orla. Well done and very comprehensive call as usual. Just one quick question. Can you give us any commentary insight on what you're seeing in terms of costs, unit costs, maybe inflation or just overall costs performance in Q1 and then extending into Q2? Obviously, you were slightly below or markedly below annual guidance in Q1. Is there any guidance you can give us for the balance of the year?
Yes, I’ll start with that, then I'll hand the call over to Etienne, Andrew. So, the one thing we wanted to point out is, is the stripping result of Q1, impacted our costs. And we expect that to tick upwards in the second half of the year, which, Etienne will explain, I think your question is more to the other elements of our cost profile. We have seen some relief in some areas of cost. And so some of the good performance we've had on an already low cost base is a result of cost benefits on a number of consumables.
And some of that cost benefit is through consumption, and some of it is through unit price lowering. We have continued that into our forecast for the second half of the year. And as we talked about, we believe in the combination of increased waste stripping in the second half, any benefits of the costs that we've seen in the first quarter, we should be a well within our cost guidance for a year. Anything to add Etienne?
The only thing I would add is yeah, the unit cost is flattening. It's -- whereas through 2022, we saw a pretty steady increase quarter-over-quarter, now we've seen sort of a flattening of some of these input costs.
Good one, that's -- thanks very much, and I'll let others ask questions. Congratulations on the strong quarter.
Thanks, Andrew.
[Operator Instructions] We'll pause for a moment for any final questions. There are no more questions at this time, Jason Simpson, I turn the call back over to you.
I thank everybody who called in today and since there are no further questions, I'd like to thank our team for their continued efforts in managing our operations and advancing our projects. Never hesitate to reach out to Orla if you do have any follow-up questions? We're always available. We thank you for your time.
This concludes today's conference. Thank you for attending. You may now disconnect.