Orla Mining has finalised a definitive agreement to acquire the Musselwhite Gold Mine in Ontario from Newmont for $810m (C$1.14bn) in upfront cash and another $40m contingent on the gold price.

This acquisition is set to significantly expand Orla's gold production capabilities and enhance its free cash flow.

It will be financed through a blend of cash reserves, undrawn debt facilities, new borrowing, a gold pre-pay arrangement and convertible notes.

Orla's portfolio will be notably strengthened by the addition of Musselwhite, complementing its existing Camino Rojo oxide operation.

This move is expected to more than double the company's annual gold output to over 300,000oz, with projections indicating a further increase to over 500,000oz once the South Railroad Project starts production in 2027.

The Musselwhite mine, an underground gold mine on the shore of Opapimiskan Lake in north-western Ontario, has a production history spanning more than 25 years.

To date, it has yielded nearly six million ounces of gold and has demonstrated consistent resource growth and conversion. The mine is forecast to produce an average yearly free cash flow exceeding $150m over the next six years.

Orla's exploration plans for the expansive 65,000-hectare concession include following up on historical drilling, which indicates the potential for an additional 2–3km of mineralised strike beyond the current reserves.

Orla president and CEO Jason Simpson said: “This acquisition is a significant milestone for Orla Mining. It more than doubles our annual production, while providing us with a presence in Ontario, Canada, one of the premier mining jurisdictions in the world and where I began my career.

“We intend to not only continue to operate Musselwhite, but to seek optimisation opportunities and to invest in its future, grow its reserves and resources, and extend its mine life.

“The mine has a proven history of successful production, cash generation and reserve replacement, having consistently added to mine life.”