Orla Mining Ltd. — Interim / Quarterly Report 2020

May 13, 2020

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Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019

Presented in United States dollars

ORLA MINING LTD.

Consolidated Balance Sheets (Unaudited – Thousands of United States dollars)

		March 31		December 31		January 1
As at		2020		2019		2019
				(restated,		(restated,
			notes 3 and 22)		notes	3 and 22)
ASSETS
Current assets
Cash and cash equivalents	$	15,422	$	23,106	$	12,234
Accounts receivable		66		94		282
Prepaid expenses		37		53		151
		15,525		23,253		12,667
Restricted funds		509		509		150
VAT recoverable (note 7)		1,217		1,340		622
Equipment (note 6)		602		284		252
Exploration and evaluation assets (note 5(d))		117,573		125,643		124,099
TOTAL ASSETS	$	135,426	$	151,029	$	137,790
LIABILITIES
Current liabilities
Trade and other payables (note 8)	$	895	$	802	$	1,278
Accrued liabilities		2,805		1,578		1,405
		3,700		2,380		2,683
Lease obligations		339		44		—
Camino Rojo project loan (note 9)		13,996		12,961		—
Newmont loan (note 10)		7,785		9,647		4,475
Accrued liabilities – long term		375		261		—
Site closureprovisions(note 11)		558		575		626
TOTAL LIABILITIES		26,753		25,868		7,784
SHAREHOLDERS' EQUITY
Share capital (note 13)		159,629		159,230		153,852
Reserves		30,524		30,061		19,931
Accumulated other comprehensive income (loss)		(8,188)		(1,027)		(3,393)
Accumulated deficit		(73,292)		(63,103)		(40,384)
TOTAL SHAREHOLDERS' EQUITY		108,673		125,161		130,006
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	135,426	$	151,029	$	137,790

Events after the reporting period (note 21)

Authorized by the Board of Directors on May 12, 2020, for issuance.

/s/ Elizabeth McGregor

Elizabeth McGregor, Director

/s/ Jason Simpson

Jason Simpson, Director

The accompanying notes are an integral part of these consolidated financial statements.

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ORLA MINING LTD.

Consolidated Statements of Loss and Comprehensive Loss (Unaudited – Thousands of United States dollars, except per-share amounts)

		Three months ended March 31
		2020 2019 (restated note 3)
EXPLORATION AND EVALUATION EXPENSES(note 5) Assays and analysis Drilling Geological Engineering Environmental Community and government Land and water use, claims and concessions Project management Project review Site activities Site administration Recognition of site closureprovisions GENERAL AND ADMINISTRATIVE EXPENSES Office and administrative Professional fees Regulatory and transfer agent Salaries and benefits OTHER EXPENSES (INCOME) Depreciation (note 6) Share based payments (note 14) Interest income and finance costs (note 12) Foreign exchange loss (gain)		$ 15 $ 83 — 514 215 637 278 684 75 144 2,450 185 3,228 2,306 — 33 6 42 348 584 746 430 15 —
		7,376 5,642
		185 201 176 94 82 31 264 383
		707 709
		243 22 772 942 612 221 479 13
		2,106 1,198
LOSS FOR THE PERIOD OTHER COMPREHENSIVE LOSS (INCOME) Items that may in future periods be reclassified to profit or loss: Foreign currencydifferences arisingon translation of foreign operations		$ 10,189 $ 7,549 7,161 (800)
TOTAL COMPREHENSIVE LOSS		$ 17,350 $ 6,749
Weighted average number of common shares outstanding (millions) Loss per share - basic and diluted		187.2 179.5 $ 0.05 $ 0.04

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Cash Flows (Unaudited – Thousands of United States dollars)

ORLA MINING LTD.

Cash flows provided by (used in):	Three months ended March 31
	2020 2019 (restated note 3)
OPERATING ACTIVITIES Loss for the period Adjustments for items not affecting cash: Depreciation Share based compensation Changes in site closure provisions charged to exploration expense Newmont loan proceeds received in excess of fair value (note 10) Accretion of the Newmont loan (note 10) Amortization of project loan transaction costs (note 9) Changes in non-cash working capital: Accounts receivable Prepaid expenses Trade and other payables Accrued liabilities	$ (10,189) $ (7,549) 243 22 772 942 15 — — (715) 65 268 20 — 17 115 9 32 4 (521) 1,831 (267)
Cash used in operatingactivities	(7,213) (7,673)
FINANCING ACTIVITIES Proceeds – stock options exercised Advances received on the Newmont loan	91 — — 2,674
Cashprovided byfinancingactivities	91 2,674
INVESTING ACTIVITIES Purchase of equipment Expenditures on exploration and evaluation assets Restricted cash funded Value added taxespaid, not immediatelyrecoverable	(47) — (537) — (4) (246) (169) (155)
Cash used in investingactivities	(757) (401)
Effects of exchange rate changes on cash	195 449
Net decrease in cash Cash, beginningofperiod	(7,684) (4,951) 23,106 12,184
CASH, END OF PERIOD	$ 15,422 $ 7,233
Cash consist of: Bank current accounts and cash on hand	$ 15,422 $ 7,233

Supplemental cash flow information (note 16)

The accompanying notes are an integral part of these consolidated financial statements.

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ORLA MINING LTD.

Consolidated Statements of Changes in Equity (Unaudited – Thousands of United States dollars)

	Common shares Number of shares (thousands) Amount 179,315 $ 153,852 59 48 120 113 — — — — — — 179,494 $ 154,013 187,102 $ 159,230 90 176 283 223 — — — — — — 187,475 $ 159,629	Reserves Share based payments reserve Warrants reserve Total $ 6,867 $ 13,064 $ 19,931 — — — (113) — (113) 942 — 942 — — — — — — $ 7,696 $ 13,064 $ 20,760 $ 8,159 $ 21,902 $ 30,061 (86) — (86) (223) — (223) 772 — 772 — — — — — — $ 8,622 $ 21,902 $ 30,524	Accumulated Other Comprehensive Income $ (3,393) — — — — 800 $ (2,593) $ (1,027) — — — — (7,161) $ (8,181)	Retained earnings (deficit) $ (40,384) — — — (7,549) — $ (47,933) $ (63,103) — — — (10,189) — $ (73,292)	Total
Balance at January 1, 2019 (restated, note 3) Shares issued for property payments RSUs redeemed Share based payments Loss for the period Other comprehensive loss					$ 130,006 48 — 942 (7,549) 800
Balance at March 31, 2019					$ 124,247
Balance at January 1, 2020 Options exercised RSUs redeemed Share based payments Loss for the period Other comprehensive loss					$ 125,161 90 — 772 (10,189) (7,161)
Balance at March 31, 2020					$ 108,673

The accompanying notes are an integral part of these consolidated financial statements.

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Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated). All currency figures in tables are in thousands, except per-share amounts)

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ORLA MINING LTD.

1. CORPORATE INFORMATION AND NATURE OF OPERATIONS

Orla Mining Ltd. was incorporated in Alberta in 2007 and was continued into British Columbia in 2010 and subsequently into Ontario under the Business Corporations Act (Ontario) in 2014. The “Company”, “Orla”, “we”, and “our” refer to Orla Mining Ltd. and its subsidiaries. The registered office of the Company is located at Suite 202, 595 Howe Street, Vancouver, Canada.

The Company is engaged in the acquisition, exploration, and development of mineral properties, and holds the Camino Rojo gold and silver project in Zacatecas State, Mexico, and the Cerro Quema gold project in Panama.

These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at March 31, 2020, the Company had not advanced any of its properties to commercial production and was not able to fund day-to-day activities through operating activities. The Company has received $25 million of a $125 million project loan facility in respect of the Camino Rojo project. Subsequent to the reporting date, the Company completed a C$75 million ($53 million) equity financing.

The Company’s continuation as a going concern is dependent upon successful results from our mineral exploration and development activities and our ability to attain profitable operations and generate cash or raise equity capital or borrowings sufficient to meet current and future obligations and strategic objectives. We expect to fund operating costs of the Company over the next twelve months with cash on hand and with further loan advances.

2. BASIS OF PREPARATION

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 «Interim Financial Reporting» and do not include all the information required for full annual financial statements.

The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

These condensed interim consolidated financial statements are presented in United States dollars and include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated upon consolidation.

On May 12, 2020, the Board of Directors approved these consolidated financial statements for issuance.

3. CHANGE OF PRESENTATION CURRENCY

As a result of the continued advancement of the Camino Rojo Project, the Company decided to change its presentation currency from Canadian dollars to United States dollars. The change in the financial statement presentation currency is considered an accounting policy change and has been accounted for retrospectively. The balance sheets for each period presented have been translated from the related subsidiary’s functional currency to the new US dollar presentation currency at the rate of exchange prevailing at the respective balance sheet date except for equity items, which have been translated at accumulated historical rates from the related subsidiary’s date of incorporation. The statements of income and comprehensive income were translated at the average exchange rates for the reporting period, or at the exchange rate prevailing at the date of transactions. Exchange differences arising in 2018 on translation from the related subsidiary’s functional currency to the United States dollar presentation currency have been recognized in other comprehensive income and accumulated as a separate component of equity.

In prior reporting periods, the translation of the Company’s subsidiaries that had a United States dollar or Mexican peso functional currency into the Company’s presentation currency of the Canadian dollar gave rise to a translation adjustment which was recorded as an adjustment to accumulated other comprehensive income (“AOCI”), a separate component of shareholders’ equity. With the retrospective application of the change in presentation currency from the Canadian dollar to the US dollar, the AOCI related to the translation of US dollar functional currency subsidiaries was eliminated. However, with the retrospective application of the change in presentation currency to the US dollar, the Company’s corporate office, which

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ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

has a Canadian dollar functional currency, resulted in an AOCI balance. The AOCI balance generated by the Mexican peso entities has been adjusted since it now reflects the translation into the new US dollar presentation currency.

(a) Adjustment to previously reported financial information due to change in presentation currency

For comparative purposes, the consolidated balance sheets as at December 31, 2019 and January 1, 2019 include adjustments to reflect the change in the presentation currency to the US dollar, which is a change in accounting policy. The exchange rates used to translate the amounts previously reported into US dollars at December 31, 2019 were 1.2988 CAD/USD and 18.87 MXN/USD, and at January 1, 2019 were 1.3642 CAD/USD and 19.65 MXN/USD. Refer to note 22(a) for the effects of the translation.

For comparative purposes, the consolidated statement of loss and comprehensive loss for the three months ended March 31, 2019 includes adjustments to reflect the change in the presentation currency to the US dollar, which is a change in accounting policy. The exchange rates used to translate the amounts previously reported into US dollars for the three months ended March 31, 2019 were 1.3296 CAD/USD and 19.21 MXN/USD, which were the average exchange rates for the period. Refer to note 22(b) for the effects of the translation.

(b) Functional currency

The functional currencies of the Company and its subsidiaries, all of which are wholly owned, remained unchanged and were as follows for periods presented.

Orla Mining Ltd. ...................................................................... Canadian dollars Minerometalúrgica San Miguel S de RL de CV ..................... Mexican pesos Minera Camino Rojo SA de CV ................................................ Mexican pesos Minera Cerro Quema SA ........................................................ United States dollars Monitor Gold Corporation ..................................................... United States dollars

4. SIGNIFICANT ACCOUNTING POLICIES

We applied the same accounting policies in these condensed interim consolidated financial statements as those applied in the Company’s annual audited consolidated financial statements as at and for the year ended December 31, 2019.

In preparing these condensed interim consolidated financial statements, the significant judgements we made in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual consolidated financial statements as at and for the year ended December 31, 2019.

You should read these condensed interim consolidated financial statements in conjunction with the Company’s annual audited consolidated financial statements as at and for the years ended December 31, 2019 and 2018.

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Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

ORLA MINING LTD.

5. EXPLORATION AND EVALUATION

The Company’s exploration and evaluation projects consist of the Camino Rojo Project, the Cerro Quema Project, and the Monitor Gold Project.

(a) Camino Rojo Project

The Camino Rojo Project lies 190 km NE of the city of Zacatecas, 48 km S-SW of the town of Concepcion del Oro, and 54 km S- SE of Newmont Corporation’s (“Newmont”) Peñasquito Mine. In November 2017, we acquired the Camino Rojo Project, a gold and silver oxide heap leach project located in Zacatecas State, Mexico, from Goldcorp Inc. (now called Newmont Corporation). Consideration consisted of:

• 31,860,141 common shares of Orla,

• a 2% net smelter royalty (the “Royalty”) in favor of Newmont on the sale of all metal production from Camino Rojo, and

• Mexican value-added taxes, of approximately 74 million pesos.

In addition, the Company and Newmont entered into an option agreement regarding the potential development of sulphide operations at Camino Rojo. Pursuant to the option agreement, Newmont will, subject to the applicable sulphide project meeting certain thresholds, have an option to acquire a 60% or 70% interest in the applicable sulphide project. The Royalty excludes revenue on the sale of metals produced from a sulphide project where Newmont has exercised its Sulphide Option.

We maintain a right of first refusal on the sale if Newmont elects to sell the Royalty, in whole or in part.

(b) Cerro Quema Project

The Cerro Quema Project is located on the Azuero Peninsula in Los Santos Province, Panama. The project is at the exploration and development stage for a proposed open pit mine with process by heap leaching.

In December 2016, we acquired 100% of the Cerro Quema Project by acquiring Pershimco Resources Inc. through the issuance of a combination of Orla common shares and warrants, and the assumption of Pershimco’s long term debt, which we subsequently paid off. We own the mineral rights as well as the surface rights over the current mineral resource areas, proposed mine development areas, and priority drill target areas.

The original 20-year terms for these concessions expired in February and March of 2017. The Company has applied for the prescribed ten year extension to these concessions as it is entitled to under Panamanian mineral law. In March 2017, the Ministry of Commerce and Industry provided written confirmation to the Company that the extension applications had been received and that exploration work could continue while the Company awaits renewal of the concessions. As of the date of these financial statements, final concession renewals have not been received; however, we continue to receive ongoing drilling, water use, environmental and other permits, and have paid concession taxes, in the normal course.

(c) Monitor Gold Project

The Monitor Gold Project consists of three separate option agreements consisting of 422 claims covering 3,416 hectares in Nye County, Nevada, USA.

To maintain the options, minimum payments and work commitments are required for each year to 2038. In 2019, these consisted of $50,000 in share issuances, a $20,000 in advance royalty payments, and $30,000 in work commitments, all of which requirements were met by the Company. For 2020, these consist of $40,000 in advance royalty payments, and $75,000 in work commitments.

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ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

(d) Exploration and evaluation assets

		Camino		Cerro		Monitor
		Rojo		Quema		Gold		Total
Acquisition costs at historical rates
At December 31, 2019	$	42,615	$	82,429	$	314	$	125,358
Additions		537		—		—		537
At December March 31, 2020	$	43,152	$	82,429	$	314	$	125,895
Accumulated foreign exchange on translation
At December 31, 2019		285		—		—		285
Due to changes in exchange rates		(8,607)		—		—		(8,607)
At March 31, 2020	$	(8,322)	$	—	$	—	$	(8,322)
Acquisition costs
At December 31, 2019	$	42,900	$	82,429	$	314	$	125,643
At March 31, 2020	$	34,830	$	82,429	$	314	$	117,573

(e) Exploration and evaluation expense

Three months ended March 31, 2020		Camino		Cerro		Monitor
		Rojo		Quema		Gold		Other		Total
Assays and analysis	$	14	$	—	$	1	$	—	$	15
Drilling		—		—		—		—		—
Geological		184		31		—		—		215
Engineering		244		34		—		—		278
Environmental		58		17		—		—		75
Community and government		2,370		80		—		—		2,450
Land, water use, and claims		3,188		—		40		—		3,228
Project management		—		—		—		—		—
Project review		—		—		—		6		—
Site activities		148		200		—		—		348
Site administration		474		272		—		—		746
Recognition of reclamation obligation		15		—		—		—		15
	$	6,695	$	634	$	41	$	6	$	7,376

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ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

Three months ended March 31, 2019		Camino		Cerro		Monitor
		Rojo		Quema		Gold		Other		Total
Assays and analysis	$	60	$	23	$	—	$	—	$	83
Drilling		514		—		—		—		514
Geological		278		278		4		77		637
Engineering		684		—		—		—		684
Environmental		144		—		—		—		144
Community and government		89		96		—		—		185
Land, water use, and claims		2,228		1		77		—		2,306
Project management		33		—		—		—		33
Project review		—		—		—		42		42
Site activities		232		352		—		—		584
Site administration		163		266		1		—		430
	$	4,425	$	1,016	$	82	$	119	$	5,642

6. EQUIPMENT

EQUIPMENT
			Cost				Accumulated			depreciation			Net book		value
		Changes						Changes
			during						during
	Begin of		the	Effect of		End of	Begin of		the	Effect of End of				Begin		End of
	year		period		FX	period	year		period		FX period		ofyear		period
Machinery and equipment	$ 324	$	4	$	(22)	$ 306	$ 205	$	8	$	(3) $	210	$	119	$	96
Office equipment	36		—		(4)	32	15		1		(1)	15		21		17
Computer eqpt and software	150		5		(13)	142	96		6		(5)	97		54		45
Vehicles	21		—		—	21	2		—		—	2		19		19
Land – leases	—		11		(2)	9	—		1		—	1		—		8
Buildings – leases	89		303		(55)	337	18		176		(29)	165		71		172
Road vehicles – leases	—		341		(53)	288	—		51		(8)	43		—		245
Total	$ 620	$	664	$	(149)	$ 1,135	$ 336	$	243	$	(46) $	533	$	284	$	602

7. VALUE ADDED TAXES (“VAT”) RECOVERABLE

Our Mexican entities pay value-added taxes (called “IVA” in Mexico) on certain goods and services we purchase.

We also paid 74 million Mexican pesos (approximately $3,860,000) of IVA on the initial acquisition of the Camino Rojo project, which is classified within exploration and evaluation assets as part of acquisition cost (note 5(a) and 5(d)).

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Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019

ORLA MINING LTD.

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

8. TRADE AND OTHER PAYABLES

TRADE AND OTHER PAYABLES
		March 31,		December 31,
		2020		2019
Trade payables	$	458	$	492
Payroll related liabilities		241		208
Lease obligations – current		196		23
Interestpayable on Camino Rojoproject loan		—		79
	$	895	$	802

9. CAMINO ROJO PROJECT LOAN

CAMINO ROJO PROJECT LOAN
		Three months		Year
		ended		ended
		March 31, 2020	December	31, 2019
Balance, beginning of period	$	12,961	$	—
Amounts drawn down during the period		—		25,000
Cash transaction costs		—		(3,158)
Warrants issued to the lenders		—		(8,968)
Amortization of the transaction costs		20		86
Foreign exchange		1,015		1
Balance, end ofperiod	$	13,996	$	12,961

10. NEWMONT LOAN

As part of the Company’s acquisition of the Camino Rojo project from Newmont (then, Goldcorp Inc.), Newmont agreed to provide interest-free loans to the Company for all the annual landholding costs on the Camino Rojo project from November 7, 2017 until December 31, 2019. The loans are to be repaid upon declaration of commencement of commercial production of a heap leach operation at the Camino Rojo Project. To the date of these financial statements, 219,446,000 pesos had been advanced by Newmont under this agreement. No further advances in respect of this loan are expected.

The original agreement provided that the Company may, at its option, repay any amounts owing to Newmont, prior to maturity, in the form of (a) a lump sum cash payment, (b) the issuance of additional common shares of the Company, or (c) a combination of cash and shares (subject to certain maximum ownership limits). Subsequent to the reporting period, the Company agreed with Newmont that the repayment would be in cash.

Because the loan is non-interest bearing, for accounting purposes at date of each advance, we discount the expected payments using a risk-adjusted discount rate and estimated repayment date. Amounts received in excess of fair value on the date of the advances were credited to exploration expense.

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ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

	Mexican pesos (thousands) Mexican pesos (thousands) US dollars (thousands)
	Undiscounted Discounted
At January 1, 2019 Advances received Accretion during the period Foreign exchange	121,865 87,917 $ 4,475 97,601 72,897 3,676 — 21,886 1,104 — — 392
At December 31, 2019 Accretion during the period Foreign exchange	219,466 182,700 $ 9,647 — 6,542 65 — — (1,927)
At March 31, 2020	219,466 189,242 $ 7,785

11. SITE CLOSURE PROVISIONS

SITE CLOSURE PROVISIONS
	Camino Rojo		Cerro	Quema
		Project		Project		Total
At December 31, 2019	$	232	$	343	$	575
At March 31, 2020	$	215	$	343	$	558

12. INTEREST INCOME AND FINANCE COSTS

	Three months ended March 31
	2020 2019
Interest on Camino Rojo project loan (note 9) Amortization of Camino Rojo project loan costs (note 9) Accretion on Newmont loan (note 10) Interest expense on leases Interest income	$ 581 $ — 20 — 65 264 7 — (61) (43)

13. SHARE CAPITAL

(a) Issued share capital

During the three months ended March 31, 2020, we issued 90,000 common shares (year ended December 31, 2019 – 1,358,491) upon the exercise of stock options, for gross proceeds of $90,000 (year ended December 31, 2019 – $1,191,000).

During the three months ended March 31, 2020, we issued 283,000 common shares (year ended December 31, 2019 – 202,667) upon the vesting of RSUs (note 14(b)).

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ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

(b) Warrants

The following summarizes information about the number of warrants outstanding during the period.

	Exercise	Exercise	December 31	December 31						March 31
Expirydate	price			2019		Issued		Exercised		2020
February 15, 2021	$	2.35		8,790,600		—		—		8,790,600
July 8, 2021	$	0.62		570,000		—		—		570,000
June 12, 2022	$	1.65		5,842,500		—		—		5,842,500
November 7, 2022	$	1.40		3,000,000		—		—		3,000,000
December 18, 2026	$	3.00		32,500,000		—		—		32,500,000
Total number of warrants				50,703,000		—		—		50,703,000
Weighted average exerciseprice			$	2.61	$	—	$	—	$	2.61

Subsequent to the reporting period, 700,000 warrants were exercised, for gross proceeds to the Company of $822,000.

14. SHARE-BASED PAYMENTS

The Company has four different forms of share-based payments for eligible recipients – stock options, restricted share units (“RSUs”), deferred share units (“DSUs”), and bonus shares.

	Three months ended March 31
	2020 2019
Stock options Restricted share units Deferred share units Bonus shares	$ 374 $ 589 122 38 221 191 55 124
Share basedpayments expense	$ 772 $ 942

(a) Stock options

Stock options outstanding		Weighted	Weighted
			average
	Number	exerciseprice
As at January 1, 2019	9,124,005	C$	1.23
Granted	2,199,322		1.08
Exercised	(1,358,491)		1.16
Expired or cancelled	(47,500)		1.48
As at December 31, 2019	9,917,336		1.20
Granted	1,033,438		2.21
Exercised	(90,000)		1.35
As at March 31, 2020	10,860,774	C$	1.30
Vested, December 31, 2019	7,229,622	C$	1.22
Vested, March 31, 2020	8,143,655	C$	1.24

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ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

The options granted during the three months ended March 31, 2020 had an aggregate grant date fair value of $672,000 (C$903,000) which was determined using a Black Scholes option pricing model with the following weighted average assumptions:

• expected volatility 45%, expected life 5 years, Canadian dollar risk free interest rate 0.7%, dividends nil.

The options granted during the three months ended March 31, 2019 had an aggregate grant date fair value of $737,000 (C$932,000) which was determined using a Black Scholes option pricing model with the following weighted average assumptions:

• expected volatility 50%, expected life 5 years, Canadian dollar risk free interest rate 1.5%, dividends nil.

Subsequent to the reporting period, 140,000 stock options were exercised, for gross proceeds to the Company of $67,000.

(b) Restricted Share Units

Number of RSUs outstanding: Total Outstanding, December 31, 2019 1,014,972 Awarded during the period 320,450 Vested and settled duringtheperiod (283,215) Outstanding, March 31, 2020 1,052,207	Number vestingin theyear
	2020 2021 2022 2023
	365,882 365,880 283,210 — — 106,819 106,816 106,815 (283,215) — — —
	82,667 472,699 390,026 106,815

RSUs are valued based on the closing price of the Company’s common shares immediately prior to award.

(c)

Deferred Share Units

DSUs outstanding:
	Number
Outstanding, December 31, 2019	508,780
Awarded	135,745
Outstanding, March 31, 2020	644,525

DSUs are valued based on the closing price of the Company’s common shares immediately prior to award.

(d) Bonus shares

‐ During 2017, the Board of Directors awarded 500,000 common shares to the non executive Chairman of the Company as bonus shares. The bonus shares are subject to a vesting period from June 19, 2017 to June 18, 2020 (the “Eligibility Period”). If the non ‐ executive Chairman ceases to be the director of the Company before the Eligibility Period ends, the bonus shares will be forfeited. The bonus shares will become issuable (1) after the Eligibility Period on the date that the non ‐ executive Chairman ceases to act as a director of the Company, or (2) upon a change of control of the Company.

We estimated the fair value of the bonus shares ($1.31 each) based on the market price of the common shares at the date of the grant. Accordingly, the amount of $655,000 is being recognized on a straight line basis over the Eligibility Period.

On November 13, 2018, the Board of Directors awarded 1,000,000 bonus shares to an officer of the Company. The bonus shares vest in four tranches of 250,000 bonus shares each, issuable upon the achievement of certain share price thresholds particular to each tranche. Upon initial recognition we estimated the dates that each of these market condition tranches would vest, such dates ranging from December 2019 to March 2022. Consequently, the award date fair value ($537,000, or $0.537

Page 14

ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

per bonus share) is being recognized over these four periods. Subsequent to the reporting period, the first tranche of these bonus shares, consisting of 250,000 common shares, was issued.

15. RELATED PARTY TRANSACTIONS

The Company’s related parties include:

Related party Nature of the relationship Key management personnel Key management personnel are the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, and members of the Board of Directors of the Company.

(a) Key Management Personnel

Compensation to key management personnel was as follows:

	Three months ended March 31
	2020 2019
Short term incentive plans Salaries Directors’ fees Share basedpayments	$ 136 $ 173 43 31
	179 204 630 755
Total	$ 809 $ 959

(b) Transactions

The Company had no other material transactions with related parties, other than with key management personnel as described above, during the three months ended March 31, 2020, or during the year ended December 31, 2019.

(c) Outstanding balances at the Reporting Date

At March 31, 2020, estimated accrued short term incentive compensation to key management personnel totaled $480,000 and was included in accrued liabilities (December 31, 2019 – $540,000).

Page 15

ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

16. SUPPLEMENTAL CASH FLOW INFORMATION

The non-cash investing and financing activities of the Company include the following:

	Three months ended March 31
	2020 2019
Financing activities Stock options exercised, credited to share capital with an offset to reserves Common shares issued on maturity of RSUs, credited to share capital with an offset to reserves Investing activities Initial recognition of right of use assets with an offset to lease obligation	85 — 223 112 617 —

17. SEGMENT INFORMATION

(a) Reportable segments

The operating segments of the Company are based on the reports which are reviewed by the chief operating decision maker (“CODM”) in making strategic resource allocation decisions. These operating segments are the Panamanian projects, the Mexican projects, and the corporate office. The projects are each managed by a dedicated General Manager and management team. Additionally, the corporate office oversees the plans and activities of early stage exploration projects, such as the Monitor Gold project.

None of these segments yet generate revenue from external customers, and each of the projects are focused on the exploration and evaluation of mineral properties.

(b)

Geographic segments

We conduct our activities in four geographic areas: Mexico, Panama, the United States, and Canada.

		Mexico		Panama		USA		Canada		Total
At March 31, 2020
Equipment	$	482	$	41	$	—	$	79	$	602
Exploration and evaluation assets		34,830		82,429		314		—		117,573

Mexico	Panama	USA	Canada Total
At December 31, 2019 Equipment $ 140 Exploration and evaluation assets 42,900	$ 48 82,429	$ — 314	$ 96 $ 284 — 125,643

18. CAPITAL MANAGEMENT

Our objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration, evaluation, and development of our mineral properties and to maintain a flexible capital structure. In the management of capital, we include long term loans and share capital.

Page 16

ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

There were no changes to our policy for capital management during the year.

We manage our capital structure and adjust it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the Company’s capital structure, we may issue new shares, take on additional debt, acquire or dispose of assets, or adjust the amount of cash and short-term investments. To maximize ongoing development efforts, we do not currently pay dividends.

At the end of 2019, we entered into a Project Finance Facility (note 9) pursuant to which we have drawn $25 million of a total available $125 million. The Project Finance Facility requires us to maintain a minimum working capital of $5 million.

Our investment policy is to invest the Company’s excess cash in low risk financial instruments such as term deposits and higher yield savings accounts with major Canadian banks. By using this strategy, the Company preserves its cash resources and is able to marginally increase these resources through the yields on these investments. Our financial instruments are exposed to certain financial risks, which include currency risk, credit risk, liquidity risk and interest rate risk.

Our ability to carry out our long-range strategic objectives in future years depends on our ability to raise financing from lenders, shareholders, and other investors. We continue to regularly review and consider financing alternatives to fund the Company’s ongoing exploration and development activities.

19. FINANCIAL INSTRUMENTS

(a) Fair value hierarchy

To provide an indication of the reliability of the inputs used in determining fair value, we classify our financial instruments into the three levels prescribed by the accounting standards.

Level 1 The fair value of financial instruments traded in active markets (such as publicly traded equity securities) is based on quoted (unadjusted) market prices as at the reporting date. The quoted market price used for financial assets held by the Company is the closing trading price on the reporting date. Such instruments are included in Level 1.

Level 2 The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, we include that instrument in Level 2.

Level 3 If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. We have no financial assets or liabilities included in Level 3 of the hierarchy.

Page 17

ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

At March 31, 2020, the carrying values and fair values of our financial instruments by category were as follows:

Classification	Carrying value			Fair value
		Quoted prices in active market for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3) Approximate fair value due to short term nature of the instrument Fair value
Financial assets Cash and cash equivalents FVTPL Accounts receivable Amortized cost Restricted funds Amortized cost	$ 15,422 34 509	$ 15,422 — —	$ — — 509	$ — $ — $ 15,422 — 34 34 — — 509
	$ 15,965	15,422	$ 509	$ — $ 34 $ 15,965
Financial liabilities Trade payables Amortized cost Lease obligation Amortized cost Camino Rojo project loan Amortized cost Newmont loan Amortized cost	$ 458 535 13,996 7,785	$ — — — —	$ — — 13,996 7,785	$ — $ 458 $ 458 — 535 535 — — 13,996 — — 7,785
	$ 22,774	$ —	$ 21,781	$ — $ 993 $ 22,774

At December 31, 2019, the carrying values and fair values of our financial instruments by category were as follows:

	Carrying value	Carrying value	Carrying value	Carrying value
		Quoted prices in active market for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3) Approximate fair value due to short term nature of the instrument Fair value
Financial assets Cash and cash equivalents FVTPL Accounts receivable Amortized cost Restricted funds Amortized cost	$ 23,106 18 509	$ 23,106 — —	$ — — 509	$ — $ — $ 23,106 — 18 18 — — 509
	$ 23,633	23,106	$ 509	$ — $ 18 $ 23,633
Financial liabilities Trade payables Amortized cost Lease obligation Amortized cost Camino Rojo project loan Amortized cost Newmont loan Amortized cost	$ 802 67 12,961 9,647	$ — — — —	$ — — 12,961 9,647	$ — $ 802 $ 802 — 67 67 — — 12,961 — — 9,647
	$ 23,477	$ —	$ 22,608	$ — $ 869 $ 23,477

Our policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

Page 18

ORLA MINING LTD.

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

20. COMMITMENTS AND CONTINGENCIES

(a) Commitments

During the period ended March 31, 2020, the Company issued purchase orders for long lead equipment necessary for the construction of the Camino Rojo mine. At March 31, 2020, these outstanding purchase orders totaled $20,878,000 (December 31, 2019 – $2,483,000), which we expect will be filled in the next 12 months. Of this amount, $5,663,000 was paid in April 2020.

In the event of a change in control, the Company is committed to severance payments amounting to approximately $2,550,000 (December 31, 2019 – $2,020,000) to certain officers and management. No amounts have been recorded in these consolidated financial statements to reflect such severance payments.

(b) Litigation

We may, from time to time, be a party to legal proceedings, which arise in the ordinary course of our business. We are not aware of any pending or threatened litigation that, if resolved against us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

21. EVENTS AFTER THE REPORTING PERIOD

(a) Equity financing

On April 3, 2020, subsequent to the reporting period, the Company closed an equity financing of 36,600,000 common shares at a price of C$2.05 per common share for aggregate gross proceeds to the Company of C$75,030,000 ($52,916,000).

(b) Global health emergency

Near the end of the reporting period, there was a global outbreak of the novel coronavirus (“COVID-19”), which has had a significant impact on businesses through the restrictions put in place by the governments in the various jurisdictions where the Company conducts its activities. Our activities are restricted by government orders related to, among others, travel, business operations, and stay-at-home orders. As of the date of these financial statements, it is not possible to determine the extent of the impact that this global health emergency will have on the Company’s activities, because the impacts will depend on future developments which themselves are highly uncertain and cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, the duration of the outbreak, and possible government, societal, and individual responses to the situation. We continue to monitor our activities, in particular with regard to the safety of our personnel and the communities where we conduct our activities.

(c) Other share issuances

Subsequent to the reporting period, there were exercises of warrants (see note 13(b)), stock options (see note 14(a)), and the issuance of bonus shares (see note 14(d)).

Page 19

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019 (Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

ORLA MINING LTD.

22. EFFECT OF THE CHANGE IN PRESENTATION CURRENCY

The effects of the change in presentation currency discussed in note 3 above were as follows.

(a) Effect on the consolidated balance sheets as at December 31, 2019 and January 1, 2019

	December 31, 2019 USD CAD	December 31, 2019 USD CAD	January1, 2019
	USD		USD CAD
ASSETS Current assets Cash and cash equivalents Accounts receivable Prepaid expenses	US$ 23,106 94 53	C$ 30,009 122 64 30,195 662 1,747 370 163,383 C$ 196,357 C$ 1,042 2,049 3,091 57 16,833 12,573 338 748 33,640 208,186 39,348 (1,036) (83,781) 162,717 C$ 196,357	US$ 12,234 C$ 16,686 282 385 151 206
Restricted funds Value added taxes recoverable Equipment Exploration and evaluation assets	23,253 509 1,340 284 125,643		12,667 17,277 150 205 622 849 252 344 124,099 169,282
TOTAL ASSETS	US$ 151,029		US$ 137,790 C$ 187,957
LIABILITIES Current liabilities Trade and other payables Accrued liabilities	US$ 802 1,578		US$ 1,278 C$ 1,743 1,405 1,916
Lease obligations Camino Rojo project loan Newmont loan Accrued liabilities – long term Site closureprovisions	2,380 44 12,961 9,647 261 575		2,683 3,659 — — — — 4,475 6,103 — — 626 745
TOTAL LIABILITIES	25,868		7,784 10,507
SHAREHOLDERS' EQUITY Share capital Reserves Accumulated other comprehensive income (loss) Accumulated deficit	159,230 30,061 (1,027) (63,103)		153,852 201,077 19,931 25,960 (3,393) 4,797 (40,384) (54,384)
TOTAL SHAREHOLDERS' EQUITY	125,161		130,006 177,450
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	US$ 151,029		US$ 137,790 C$ 187,957

Page 20

Notes to the Condensed Consolidated Interim Financial Statements Three months ended March 31, 2020 and 2019

ORLA MINING LTD.

(Unaudited – United States dollars, unless otherwise stated. All currency figures in tables are in thousands, except per-share amounts)

(b) Effect on the consolidated statement of loss and comprehensive loss for the three months ended March 31, 2019

		Three months ended March 31, 2019
		USD CAD
EXPLORATION AND EVALUATION EXPENSES Assays and analysis Drilling Geological Engineering Environmental Community and government Land and water use, claims and concessions Project management Project review Site activities Site administration GENERAL AND ADMINISTRATIVE EXPENSES Office and administrative Professional fees Regulatory and transfer agent Salaries and benefits OTHER EXPENSES (INCOME) Depreciation Share based payments Interest and finance costs Foreign exchange loss (gain)		US$ 83 C$ 111 514 683 637 847 684 909 144 192 185 245 2,306 3,067 33 44 42 56 584 777 430 572
		5,642 7,503
		201 217 94 125 31 41 383 550
		709 933
		22 39 942 1,253 221 295 13 17
		1,198 1,604
LOSS FOR THE YEAR OTHER COMPREHENSIVE LOSS (INCOME) Items that may in future periods be reclassified to profit or loss: Foreign currencydifferences arisingon translation of foreign operations		US$ 7,549 C$ 10,040 (800) 2,511
TOTAL COMPREHENSIVE LOSS		US$ 6,749 C$ 12,551
Weighted average number of common shares outstanding (millions) Loss per share - basic and diluted		179.5 179.5 US$ 0.04 C$ 0.06

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