Orko Announces Agreement With Coeur D'Alene

Orko Announces Agreement With Coeur D'Alene 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/19/13 -- Orko
Silver Corp. ("Orko") (TSX
VENTURE:OK)(PINKSHEETS:OKOFF)(FRANKFURT:OG3) announces that First
Majestic Silver Corp. ("First Majestic") has not exercised its right
to match pursuant to the arrangement agreement executed by Orko and
First Majestic on December 16, 2012 (the "First Majestic Agreement")
and Orko is in the process of terminating the First Majestic
Agreement and concurrently entering into an arrangement agreement
with Coeur d'Alene Mines Corporation ("Coeur"), based on the terms of
Coeur's superior proposal which was announced on February 13, 2013
(the "Coeur Agreement").  
Orko and Coeur will also enter into a convertible loan agreement
pursuant to which Coeur has agreed to lend Orko C$11.6 million in
order to pay the termination fee to First Majestic. The loan is
convertible at the option of Orko into common shares of Orko at a
price per share of C$2.25 under certain circumstances. If converted,
the hold period on the underlying shares would expire on June 21,
2013. 
As a result, Orko has cancelled the meeting of Orko shareholders and
optionholders that was scheduled for 10:00 a.m. (Vancouver time) on
February 20, 2013 to consider the First Majestic Agreement. Orko will
advise of a new date for a meeting of Orko shareholders to consider
the Coeur Agreement once that date has been set. 
Under the terms of the Coeur Agreement, Orko shareholders may elect
to receive, in exchange for each common share of Orko (an "Orko
Share"): 


 
--  0.0815 common shares of Coeur ("Coeur Shares"), C$0.70 cash and 0.01118
    warrants to purchase Coeur Shares ("Coeur Warrants"); 
--  0.1118 Coeur Shares and 0.01118 Coeur Warrants, subject to proration as
    to the number of Coeur Shares if the total number of Coeur Shares
    elected by Orko shareholders exceeds approximately 11.6 million; or 
--  C$2.60 in cash and 0.01118 Coeur Warrants, subject to proration as to
    the amount of cash if the total cash elected by Orko shareholders
    exceeds C$100 million. 

 
If all Orko shareholders were to elect either the all cash (and Coeur
Warrants) or the all share (and Coeur Warrants) alternative, each
Orko shareholder would receive 0.0815 Coeur Shares, C$0.70 in cash,
and 0.01118 Coeur Warrants, for each Orko Share. Each whole Coeur
Warrant will be exercisable for one Coeur Share for a period of four
years at an exercise price of US$30.00, all subject to adjustment in
accordance with the terms of the Coeur Warrants. 
Based on the closing price of Coeur Shares on the New York Stock
Exchange on February 12, 2013 (and an estimated $0.08 of warrant
value per Orko Share), the transaction implies a value of C$2.70 per
Orko Share. The value implied by the transaction represents a premium
of approximately 26% to the Orko share price as of February 12, 2013,
and a premium of 71% to the unaffected Orko share price as of
December 14, 2012.  
Gary Cope, President & CEO of Orko, said: "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." 
Following the completion of the transaction, the current shareholders
of Orko will hold approximately 11% of the issued and outstanding
shares of Coeur, excluding the impact of the Coeur Warrants. The
transaction will be carried out by way of a court-approved plan of
arrangement and will require the approval of at least 66 2/3% of the
votes cast by the shareholders of Orko at a special meeting expected
to take place in April 2013 (the "Meeting"). In addition to
shareholder and court approvals, the transaction is subject to
applicable regulatory approvals and the satisfaction of certain other
closing conditions customary in transactions of this nature.  
The Coeur Agreement includes customary provisions, including
non-solicitation, right to match and fiduciary-out provisions. In
addition, Orko has agreed to pay a termination fee to Coeur of C$11.6
million upon the occurrence of certain events. Coeur and Orko have
each agreed to reimburse the other for certain expenses upon the
occurrence of certain other events.
The Orko Board of Directors has unanimously approved the Coeur
Agreement and will provide a written recommendation to the
shareholders of Orko to vote in favour of the Coeur Agreement, which
will be included in the management information circular to be mailed
to shareholders in connection with the Meeting. Each of the directors
and officers of Orko, who hold in the aggregate approximately 7.75%
of the issued and outstanding Orko Shares, have entered into lock-up
agreements with respect to the transaction pursuant to which, among
other things, they have agreed to vote in favour of the transaction
at the Meeting. 
Strategic Rationale for the Transaction 


 
--  Continued Participation in the La Preciosa Project. Orko shareholders,
    through their ownership of Coeur Shares and Coeur Warrants, will receive
    a significant premium to the current Orko share price and will also have
    the opportunity to continue to participate in any future value increases
    associated with the development and operation of the La Preciosa
    project, which ranks as one of the world's largest undeveloped primary
    silver projects.
 
--  Access to the Capabilities of Coeur. With its 80-year operating track
    record and demonstrated success in developing, commissioning and
    operating large-scale projects, Coeur has the necessary financial
    strength, and development and operating experience to bring the La
    Preciosa project into production. Coeur has successfully built and now
    operates the San Bartolome mine in Bolivia, the Palmarejo mine in Mexico
    and the Kensington mine in Alaska. 
 
--  Participation in a Company with Geographically Diverse Projects and
    Robust Growth Prospects. Orko shareholders will benefit from having an
    equity position in a company with greater geographic diversity. At
    present, Coeur has interests in mining properties located in Mexico,
    Bolivia, Alaska, Nevada, Australia and Argentina and operates mines in
    Alaska, Nevada, Mexico and Bolivia. The combination will improve the
    overall profile of the combined business by further diversifying Coeur's
    asset mix and by adding a world-class development asset to its
    portfolio. After closing the proposed transaction, the combined company
    will have an attractive portfolio of open-pit and underground operations
    and a robust growth profile.
 
--  Availability of Capital, Strong Cash Flow, and Substantial Production
    Profile. Coeur has over US$500 million in available liquidity to support
    mine development and further growth initiatives. In addition, Coeur
    generates substantial cash flow from its existing portfolio of mines.
 
--  Increased Market Capitalization and Liquidity of Coeur. Coeur is listed
    on both the New York Stock Exchange and Toronto Stock Exchange and has a
    market capitalization of more than US$2 billion. Coeur's shares are
    highly liquid with an average daily trading volume of 1.6 million
    shares, representing US$38 million on a daily basis over the last twelve
    months. It would take approximately seven days to trade the entire share
    consideration under the proposed transaction. 

 
Additional Transaction Details  
While Coeur will use commercially reasonable efforts to register the
Coeur Shares issuable on exercise of the Coeur Warrants under
applicable United States securities laws and have the Coeur Warrants
listed and posted for trading on the Toronto Stock Exchange and New
York Stock Exchange, the completion of such registration and listing
will not be a condition of closing.  
In addition, Coeur will use commercially reasonable efforts, subject
to compliance with certain Coeur contractual obligations, to make any
necessary amendments to permit Orko shareholders who are residents of
Canada for purposes of the Income Tax Act (Canada) (other than such
Orko shareholders who are exempt from tax thereunder), and who would
otherwise receive Coeur Shares under the transaction, to receive
instead shares of a Canadian-incorporated subsidiary of Coeur (the
"Exchangeable Shares") that are exchangeable into Coeur Shares to
allow such Orko shareholders to receive a tax-deferred roll-over
under the Income Tax Act (Canada) to the extent that the non-share
consideration received does not exceed the shareholder's cost base
for Canadian tax purposes. While Coeur will use commercially
reasonable efforts to register the Coeur Shares issuable on exchange
of the Exchangeable Shares under applicable United States securities
laws, the completion of such registration will not be a condition of
closing of the transaction.  
Full details of the Coeur Agreement will be included in a management
information circular to be filed with the regulatory authorities and
mailed to Orko shareholders in accordance with applicable securities
laws. Orko expects to mail the management information circular in
March 2013. 
Advisors and Counsel 
BMO Capital Markets and GMP Securities L.P. are acting as financial
advisors to Orko. Stikeman Elliott LLP is acting as legal advisor to
Orko. BMO Capital Markets and GMP Securities L.P. have each provided
an opinion to the Board of Directors of Orko to the effect that,
based upon and subject to the assumptions, limitations, and
qualifications in such opinions, the consideration to be received
pursuant to the Coeur Agreement is fair, from a financial point of
view, to Orko shareholders. 
ABOUT ORKO 
Orko Silver Corp. is developing one of the world's largest
undeveloped primary silver deposits, La Preciosa, located near the
city of Durango, in the State of Durango, Mexico. 
ABOUT COEUR 
Coeur d'Alene Mines Corporation is the largest U.S.-based primary
silver producer and a growing gold producer. Coeur has four precious
metals mines in the Americas generating strong production, sales and
cash flow in continued robust metals markets. Coeur produces from its
wholly owned operations: the Palmarejo silver-gold mine in Mexico,
the San Bartolome silver mine in Bolivia, the Rochester silver-gold
mine in Nevada and the Kensington gold mine in Alaska. Coeur also
owns a non-operating interest in a low-cost mine in Australia, and
conducts ongoing exploration activities in Mexico, Argentina, Nevada,
Alaska and Bolivia. 
ON BEHALF OF THE BOARD OF ORKO SILVER CORP. 
Gary Cope, President & CEO 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 
This News Release may contain forward-looking statements, including
but not limited to comments regarding the completion of the
transactions contemplated herein and the various steps thereto,
including filing and mailing of shareholder documents and holding
shareholder meetings, the value of Orko shares, the value or
liquidity of First Majestic shares and Coeur Shares, future growth
potential for Orko and its business, future mine development plans,
the price of silver and other metals, the accuracy of mineral
resource estimates, reasonable prospects of economic extraction of a
mineral resource, timing and content of upcoming work programs,
geological interpretations, receipt of property title, potential
mineral recovery processes, etc. Forward-looking statements address
future events and conditions and therefore involve inherent risks and
uncertainties. Actual results may differ materially from those
currently anticipated in such statements and Orko undertakes no
obligation to update such statements, except as required by law.
Orko's resource estimate is based on a geological model based on
interpretations of multiple veins in wide spaced drill holes. There
is risk that the interpreted continuity and orientation of the veins
could change with additional drilling. The sample values in the drill
core may not be representative of those portions of the deposit as
precious metal deposits are subject to nugget effect and rapid
changes to grade over relatively short distances. Sampling gaps in
the modelled veins may allow higher grade samples to be projected
into unsampled lower grade areas of the model. This could cause
overestimation of tonnes and grade. The converse is also true.
Density values of the blocks are based on a model that may not be
accurate and may cause local biases in tonnage estimates.  
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 
Contacts:
Orko Silver Corp.
Gary Cope
President & CEO
604.687.6310
www.orkosilver.com