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Orko Silver (OTC:OKOFF) has been developing the La Preciosa silver deposit near Durango, Mexico since 2006. The defined resource of this project currently stands at 110M oz (indicated) and 154M oz (inferred). The relatively flat lying Martha vein represents the most significant portion of the deposit. It has a known lateral extent of over four kilometers and varies in down-dip widths between 200 meters to 1.7 kilometers. The deposit has been described as one of the largest known undeveloped silver projects.

Last December First Majestic Silver (AG) made a friendly takeover bid for Orko Silver. This was followed last week by a competing proposal from Coeur D'Alene Silver (CDE) which was deemed to constitute a Superior Proposal by the Orko Silver board. First Majestic Silver had the right to modify its bid within five working days. Yesterday, First Majestic Silver announced that it will not increase its original proposal. Assuming approval by shareholders, Orko Silver will therefore be taken over by Coeur D'Alene Silver. Orko Silver will pay a $11.6M break fee to First Majestic silver. Coeur D'Alene Silver is providing a loan for Orko Silver to facilitate this payment. The details of Coeur D'Alene Silver's offer have been described in detail in this article.

Gary Cope, President & CEO of Orko Silver commented:

"The offer by Coeur represents a substantial increase in the consideration to Orko shareholders. The ability for shareholders to elect cash or share consideration, or a combination of the two, provides additional flexibility. Coeur has a demonstrated track record of developing, commissioning and operating large-scale precious metals assets as well as the financial resources necessary to bring Orko's La Preciosa project into production. The combination will provide Orko's shareholders with exposure to a more diversified operating portfolio while retaining upside related to La Preciosa."

Coeur D'Alene Silver operates five mines in Alaska, Nevada, Mexico, Bolivia and Australia. The La Preciosa project will increase Coeur D'Alene Silver's current indicated silver resource by 36% and the current inferred resource by 168%. Coeur D'Alene Silver has indicated that it intends to develop La Preciosa as an open pit mine. It has been noted that the La Preciosa project has similarities with Coeur D'Alene Silver's Bolivian San Bartolome mine. Experience gained by Coeur D'Alene Silver in Bolivia will certainly be advantageous in developing La Preciosa.

As for First Majestic Silver, the break fee will serve as some consolation. Considering the current weakness in share price of most silver miners, there should be plenty of opportunities to deploy the war chest in some other fashion in the interest of company growth. However, some shareholders will be hoping for the board to consider paying a dividend as another way to provide ongoing value in the future.

Source: A Mexican Silver Conclusion