Toronto-listed Orla Mining on Monday announced the C$242-million acquisition of fellow-listed Gold Standard Ventures, which would see the company expand into Nevada.

Gold Standard’s key asset is the South Railroad project, a feasibility-stage, openpit heap-leach project located on the prolific Carlin trend. The company also owns the Lewis project, a strategically located prospective land package on the Battle Mountain trend in Nevada.

The $190-million South Railroad project is analogous to Orla’s recently completed Camino Rojo mine, in Mexico, Orla CEO Jason Simpson said in a statement.

“We have the team, partners and financial resources to develop this quality asset and we are ready to go.”

South Railroad, combined with the Camino Rojo and Orla’s organic growth pipeline in Mexico and Panama, created a path towards 500 000 oz/y at industry-leading all-in cost margins, Simpson said.

The acquisition would provide Orla an entry into Nevada with extensive and highly prospective land positions in the Carlin and Battle Mountain trends to underpin a long-term base of operations.

Orla’s proven and probable reserve base would increase to 3.8-million gold ounces and its measured and indicated mineral resources to 12.3-million gold ounces.

Under the terms of the transaction, Gold Standard shareholders would receive, in exchange for each Gold Standard common share held, 0.1193 of a common share of Orla and C$0.0001. The consideration implies a purchase price of C$0.655 a Gold Standard share, or gross consideration of C$242-million, and represents a 35% premium based on the close of Gold Standard's and Orla's share price on the TSX on Friday.

Existing shareholders of Orla and Gold Standard would own about 87% and 13% of the pro forma company, respectively, following the close of the transaction.

Gold Standard CEO Jason Attew said that a combination with Orla would create a “leading gold producer with the potential to have multiple low-cost, low-complexity, openpit, heap leach operations in the near future”.

“This transaction provides Gold Standard shareholders with an immediate upfront premium, exposure to a well-financed gold producer, and strong upside potential as Orla delivers and derisks the combined asset portfolio. Based on their recent success in constructing the Camino Rojo Oxide mine on schedule and under budget, we believe that Orla is an ideal partner to bring South Railroad into production,” said Attew.

According to the February 2022 feasibility study, South Railroad would produce an average of 152 000 oz/y over the first four years and 124 000 oz/y over the mine life at an all-in sustaining cost of $1 020/oz.

Over eight years, the mine would produce a total of one-million ounces.

Permitting of South Railroad is currently progressing towards a record of decision from the US Bureau of Land Management.

South Railroad is situated within a prospective 21 000-ha land package that provides future opportunities for resource expansion and conversion and the discovery of new deposits. Key oxide and sulphide exploration targets include Pinion SB, Jasperoid Wash, Dixie, LT, POD / Sweet Hollow, and North Bullion.

The Lewis project is strategically located adjacent to the north and within the plan of operations boundary of Nevada Gold Mines’ Phoenix operation. The project has an inferred mineral resource of 206 000 oz of gold at 0.83 g/t and several additional prospective targets that have the potential to expand the resource base.