This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Coeur D’Alene Mines Corporation Makes Proposal To Acquire Orko Silver Corp. For Cad$2.70 Per Share In Cash And Stock

Stocks in this article: CDECDM

Based on the closing prices of the shares of each of Coeur, Orko and First Majestic as of February 12, 2013, Coeur’s Proposal implies a value of CAD$2.70 per Orko share, which represents a premium of approximately 71% to the unaffected Orko share price on December 14, 2012, the last trading day prior to the announcement of Orko’s agreement with First Majestic, and a premium of approximately 25% to the implied value of the consideration offered pursuant to the First Majestic arrangement agreement.

“We are pleased that Orko’s Board of Directors unanimously determined that our proposal is superior to the First Majestic offer,” said Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “Based upon the substantial cash component of the proposal and the liquidity of Coeur’s common shares, we believe our proposal provides Orko shareholders with an attractive premium, superior value certainty, and the opportunity to share in the significant upside potential of the combined entity. We have 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 with Orko will deliver enhanced asset and geographic portfolio diversification and robust growth prospects for our combined shareholder base. We are committed to this strategic combination and look forward to expeditiously executing the proposed agreement.”

Strategic Rationale of the Transaction

  • Continued Participation in the La Preciosa Project . Orko shareholders, through their ownership of Coeur Shares and Coeur Warrants, would receive a significant premium to the current Orko share price and would 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 Bartolomé mine in Bolivia (US$238 million capital cost, start-up in 2008), the Palmarejo mine in Mexico (US$353 million capital cost, start-up in 2009) and the Kensington mine in Alaska (US$435 million capital cost, start-up in 2010) and as such Coeur believes it is better equipped than its peers to develop and operate La Preciosa.
  • Participation in a Company with Geographically Diverse Projects and Robust Growth Prospects . Orko shareholders would also 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 would 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 would have an attractive portfolio of open-pit and underground operations and a robust growth profile. The commodity exposure of the combined entity would be approximately 75% silver and 25% gold.
  • 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. During the trailing twelve month period ended September 30, 2012, Coeur’s Adjusted EBITDA was US$406 million 1. (Net income was $22.5 million for the equivalent period.) In addition, Coeur produced 18.0 million ounces of silver and an all-time high 226,491 ounces of gold for the full year ended December 31, 2012.
  • Increased Market Capitalization of Coeur and Liquidity. 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. Coeur’s Board of Directors and management are confident that Orko shareholders would effectively view Coeur’s share consideration as an equivalent to cash as it would take just seven days to trade the entire share consideration under the proposed transaction.

Coeur’s Proposal has been approved by the Coeur Board of Directors and no further corporate or shareholder approvals are required by Coeur to complete the transaction. Coeur’s Proposal is not conditional on any financing.

2 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs