on recently released La Preciosa Preliminary Economic
We are pleased to provide some additional
commentary to the recent joint Pan American Silver Corp ./ Orko
Silver Corp. press release to aid and enhance the interpretation of the results
with particular focus on the impact to Orko Silver
While the PEA results were very favourable for Orko, we believe
that investors and analysts should also consider the following points:
- Orko is fully-carried to commercial production.
the construction and up to the point at which the project achieves �first pour�
of Dore, Pan American is required per the terms of the joint venture agreement
to cover all capital costs ( estimated to aggregate $270 million ) with no
claw-back to Orko�s interest.
PEA provides a very conservative base case with additional substantial
contingencies included in both capital and operating cost categories over this
conservative estimates in the PEA relating to mining methods and resources
provide upside potential as questions and answers to these are refined.
PEA also includes approximately $64 million in management fees.
the terms of the joint venture agreement, no hostile bid is permitted.
The above factors enhance the performance of
the economics for Orko and ensure a security of its
investment in the property for investors.
For additional details on the PEA, please refer
to the joint press release dated August 11, 2011.