Ladies and gentlemen, good morning, and welcome to the Orla Mining's Conference Call for The Second Quarter 2022. My name is Cheryl and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star one. 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. Mr. Bradbury.
Welcome to Orla's second quarter 2022 results conference call. During today's call, we will be making forward-looking statements. I would direct you to the first and second important cautionary notes regarding these forward-looking statements. All dollar amounts discussed today will refer to U.S. dollars unless otherwise indicated. A team including President and Chief Executive Officer, Jason Simpson. Jason, over to you.
I'd like to always begin with a refresh. A combination of team and partners. Today, the Orla team will walk through these results. This formula has generated tremendous value for all of our stakeholders, and thus far, we continue to be a company that. The second quarter was marked with some excitement. We safely made the transition from gold developer to producer with the declaration of commercial production, and the second quarter was our first official period as a producer. Operations have been ramping up, which you will see in the mining, processing, and production metrics. We are well on our way to meeting the 2020.
Operating costs remain on track, and as a low-cost producer with robust margins, we generated strong cash flows during the quarter. These cash flows, in addition to the recent debt refinancing, puts us in a very strong and flexible financial position, providing the foundation. We're also on track to meet annual cost guidance. During the quarter, we were excited to announce the acquisition of Gold Standard Ventures, the owner of the South Railroad Heap Leach Project, located in the prolific Carlin Trend. This low capital intensity, high return project will diversify and strengthen Orla's portfolio of assets, and we are pleased to step into Nevada, a highly attractive jurisdiction.
The Gold Standard Ventures later this morning with closing of the transaction expected by the end of the week. I'll now pass the call to Etienne Morin, Orla's Chief Financial Officer, to discuss the financial results for the quarter.
Thanks, Jason. During 6,000 ounces of gold and sold just over 25,000 ounces at a net realized price of $1,872 per ounce. Year to date, production at June 30th was nearly 49,000 ounces, and we remain confident in achieving our annual 90,000-100,000 ounces. Cash cost for the quarter was $430. All-in sustaining cost was $601 per ounce sold at current gold prices.
I'd like to mention that while we have seen some unit cost inflation on key consumables, these prices, these price increases of about 5% have been offset by lower consumption rates, mainly cyanide, electricity, and diesel. We continue to maintain our all-in sustaining cost guidance of $600-$700 per ounce. Cash flow from operating activities before non-cash working capital was for the quarter. Meanwhile, cash flow generation was free cash flow generation was $28.7 million, supported by VAT or value added tax refunds received during the quarter. Adjusted earnings for the quarter was at $11 million.
The key adjusting items were non-cash expense created with the unamortized portion of the transaction cost of the Camino Rojo project loan, mainly related to the cost of the warrants issued in connection with that facility. We also adjusted for premium paid on the early repayment of that facility. Lastly, we adjusted for $1.6 million of unrealized foreign exchange gain during the quarter. As we previously announced in April, we successfully refinanced our initial project finance facility with the new credit facility offering a lower cost of capital. As a result of the strong cash
As a result of the strong cash flow generation, our cash balance at June 30th was approximately $67 million. The strong cash flow generated in the quarter also included the exercise of warrants and options for approximately six million. We also received $10 million of value-added tax refunds, and to date, we've received over $22 million of VAT refunds. I'll now hand the call over to Andrew Cormier, our Chief Operating Officer, who will provide an operating and development update.
Thanks, Etienne. Our positive culture at site towards health, safety, and environment continued throughout the quarter. We have gone 232 days without a lost time injury, and over 99% of the workforce has received at least one dose of the COVID-19 vaccine. During the quarter, site activities were focused on ramping up mine and plant operations. In the second quarter, we mined 2 million tons of ore at an average grade of 0.71 grams per ton. We stacked 1.7 million tons at 0.8 grams per ton at an average daily stacking rate of 18,245 tons per day for the second quarter, which is above the nameplate capacity of 18,000 tons per day.
Achieving nameplate capacity was a tremendous achievement, and they will look to stabilize a consistent stacking rate and continue to optimize the operation. In fact, on July 27,700 tons in a 24-hour period. Mine ore grade and tons are reconciling well to the block model, and process recoveries to date are in line with the metallurgical recovery model. Earlier in the quarter, we released a summary of the phase I metallurgical results on our Camino Rojo sulfides project. The phase I metallurgical program has greatly increased our understanding of the metallurgical characteristics of Camino Rojo sulfides, with multiple processing options for the Camino Rojo sulfides compared to the previous work. The results.
The results also confirmed potential for a standalone Camino Rojo sulfides, and we will continue to work towards determining the optimal development plan. The metallurgical recoveries and the geometallurgical zones are being used to determine new cut-off grades for open pit in the respective mine designs will be used to support an updated sulfide mineral resource estimate, which is currently in progress and will form the project targeted for the end of 2022. To support project advancement, we're completing an 8,250-meter phase II. The objective of the program is to reinforce the geologic model of wide zones of higher grade gold mineralization.
Five drill holes have been completed, and the results are expected to be reported in the second half of the year. We are working to finalize the process design criteria and developing the financial model for the selected mining and processing options. A resource update is also in progress. We have also ramped up exploration this quarter as we continue to build cash. Exploration spending for 2022 is expected in Mexico and Panama.
At Camino Rojo in Mexico, near-mine and regional exploration in 2022 is focused on increasing oxide reserves, sulfide deposit development scenarios, and testing priority targets defined in 2021 in an effort to make new satellite. In the second quarter of 2022, drilling at Cerro Quema in Panama was completed at the La Prieta and La Pelona targets. Downhole drilling at Cerro Quema in 2022, with drills moving to metallurgical infill and expansion drilling at Caballito, Peñita and Pelona. The drill results are being finalized.
In total, approximately 10,000 meters of drilling planned for Panama in 2020. I'll pass the call back to Jason.
Thank you, Andrew. In June, we were pleased to announce our expansion into Nevada with the acquisition of Gold Standard Ventures. Our building and operating experience, and we'll look to build South Railroad, another low capital intensity, high margin, open pit heap leach project. This acquisition follows our strategy of creating stakeholder value by creating cash-generating mines in prospective jurisdictions with superior geology. Both Orla and GSV have expressed great support for the special meeting of GSV shareholders will be taking place.
We expect will lead to a closing before the end of the week. Gold Standard's South Railroad project is very similar to Camino Rojo, a low complexity heap leach project with attractive economics. Key project highlights, as outlined in the February 2022 feasibility study include average annual gold production of 152,000 ounces over the first four years and 40,000 ounces over the mine life. Life of mine average all-in sustaining cost of $1,020 per ounce. $890 million in initial capital.
Average annual free cash flow of $98 million over the first four years, and $315 million after-tax net present value at a 5% discount rate. That results in 44% after-tax. Reserves ounces at 0.77 grams per ton, and measured and indicated resources of 1.8 million gold ounces at 0.74 grams per ton. South Railroad starts with an eight-year mine life and production levels that will support our growth ambitions of 500,000 ounces per year. The project is progressing towards a Record of Decision from the U.S. Bureau of Land Management. Permitting process continues. We will look at opportunities to gold recoveries.
We expect South Railroad will be foundational in building our business along with Camino Rojo and Cerro Quema. These projects have similar characteristics, low capital intensity, high return with quick payback periods. We will leverage our core competencies of building and operating gold mines with strong margins. With our strong balance sheet, improved credit facility, and free cash flow generation, we have the financial resources to build our next project. South Railroad is situated within a prospective 21,000-hectare land package that provides expansion, conversion, and the discovery of new deposits. The second-largest contiguous land package on the Carlin Trend.
It is a target-rich environment in oxide and sulfide, including wide high-grade intersections. Sylvain and his team have already begun determining how to best explore an opportunity for resource expansion, target definition. Gold Standard also owns the Lewis Project, which is strategically located within the boundary of the Nevada Gold Mines' Phoenix Operations Plan. The Lewis Project has an inferred mineral resource of 206,000 ounces of gold at 0.83 grams per ton. Have the potential to expand the resource base there.
Building on this year's production guidance at Camino Rojo of 90,000-100,000 ounces of Cerro Quema oxides and South Railroad oxides, we can increase production by 300% in the medium term. Of course, this will require the necessary financing and construction steps to get into production, but this is our strength. Just the high-margin heap leach projects in Mexico, Panama, and now Nevada will provide the next leg of production growth. Orla's pipeline includes three oxide heap leach projects, three sulfide resources for the future, three large exploration land packages, 500,000 ounces of annual production. Beyond the resources already discovered, we have almost 200,000 hectares of exploration land within prolific mining districts.
This provides the opportunity for shareholder value through discovery and will feed our future production profile. Our geologists are very excited with the current opportunities and additional targets and prospects in Nevada. This quarter was emblematic of the company we strive to be year-over-year, producing gold, generating cash, and pursuing growth. We remain steadfast in our strategy of creating stakeholder value through exploring, developing, and operating high-quality assets with the support of our key partners and stakeholders who support us. I would like to express my personal and sincere gratitude for the hard work they have all undertaken to achieve and communicate the results you're seeing today. At this point, I'd like to pass the call back to the op-
To ask a question, please press star one. Your first question is from Bryce Adams of CIBC Capital Markets, please go ahead. Your line Capital Markets, please go ahead. Your line is open.
Good morning, Jason and team. Thanks for taking my questions. I wanted to touch on operating costs and CapEx in Mexico. So firstly, on operating and mining costs per ton of rock, as well as processed ore. If you have those metrics available, that would be very useful. The second question is on CapEx. Guidance calls for $5 million in sustaining and $20 million in non-sustaining. It looks to me like year to date, your burn rate on those items is tracking, you know, below guidance. Do you expect us to still spend the full CapEx outlined in the guidance?
Thanks for the question, Bryce. I'll start with the answer that you were looking for. Let's start with the CapEx. So, in terms of the sustaining, that money is primarily for water diversion, putting a dome over the stockpile that you saw when you were on site. So that work is still scheduled to continue. In fact, we're selecting the contractor now for that dust control work. In terms of the non-sustaining, a lot of that had to do with the sustaining.
We do not, as we've previously communicated, intend to spend all of that money because we were under budget on the construction. Including the installation of the power line, which was out of scope. About $8 million, just over $8 million. That'll be reduced from that $20 million non-sustaining capital spend.
To the OpEx.
Maybe he can give you some color around that.
My year-to-date mining unit cost at Camino Rojo is $1.67 per ton. Process cost is $2.45 per ton, and the G&A year to date is $1.53 per ton. $0.53 per ton.
$1.53 G&A?
Yes.
Perfect. Positively against the technical report, is there anything in the next 12-18 months you think that could drive a, you know, a step change?
In terms of what we're seeing in costs, and Etienne touched on it in his. Again, we talked about this on site in previous quarters. You know, we're not immune to inflation increases across key consumables that we use in mining. But what that's been offset by, as Etienne pointed out again is lower consumption. Specific to that feasibility that you cited, Bryce, in doing that feasibility, we presumed that that engineering work would represent. The fact of the matter is we're consuming less power and cyanide in the process and still achieving so to date.
That's what we've seen to date, heading in different directions that essentially offset. I think it's too early to say whether we could cut future years of life of mine when we get into the fourth quarter. We'll start to consider what we have under our belt, what we might want to build into our mining costs and processing costs for 2023. I think we wouldn't offer that we're going to plan any reductions.
Okay. Thanks a lot. Much appreciated. It does look like very good work on the cost control. Congratulations and thanks for taking the questions.
Thanks, Bryce.
There are no further questions at this time. I will now turn to the CEO for closing remarks.
Thanks. Since there's no further questions, I'd like to thank our team for their continued efforts on projects and creating stakeholder value. Or should you have any follow-up questions, we are always available. I'd like to thank everybody for their time in tuning into our conference call this morning.
This concludes today's call. You may now disconnect.