Orko Silver
Provides an Update of Activities
at La Preciosa
VANCOUVER, British Columbia - Orko Silver Corp. (TSX.V: - OK) We are
pleased to provide an
update on the activities at
our La Preciosa silver-gold deposit and to
comment on expected developments
for the upcoming months.
On August 11, 2011, we, along
with our joint venture partner Pan
American Silver Corp. (TSX:PAA), released
a Preliminary Economic Assessment (�PEA�) for the La Preciosa
project. The results of the
PEA were very favourable for the project, showing an after-tax net present value at a 5% discount
rate of US$315 million (assuming prices
of US$25/oz silver and US$1,250/oz gold). The project generates a 24.3% IRR assuming the above metal prices.
The preliminary economic assessment is preliminary
in nature and it includes inferred mineral resources that are considered too speculative geologically to have
the economic considerations
applied to them that would enable
them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.
The PEA reports conventional surface and underground mining of 18 variably-oriented
distinct vein structures by a 5,000-tonnes-per-day conventional mill and cyanide leaching plant producing a silver-gold dor� with an estimated average annual production of 6.8
million ounces of silver
and 11,800 ounces of gold at
a cash cost of $11.84 per ounce
of silver, net of by-product
credits and a mine life of 12 years.
For additional details on
the PEA, please refer to
the joint press release dated
August 11, 2011.
Our joint venture with Pan
American dated effective April 13, 2009 (�the joint venture agreement�) provides
that Orko is fully-carried to commercial
production. If a decision is
made to build a mine at La Preciosa, 100% of the
construction costs will be funded by Pan American whereas operating costs and
profits will be split between the joint venture partners, with Orko receiving 45% of the
profits. Under the terms of the joint
venture agreement, Pan American must deliver a
NI 43-101 compliant feasibility
study before April 13,
2012, with the possibility
of a one-time, three month
extension to July 13, 2012 if there are extenuating circumstances which prevent Pan American from meeting their original
deadline. The feasibility study
will include a schedule for building the mine.
If Pan American does not deliver
a feasibility study, it will lose
the right to earn a 55% interest
in La Preciosa.
Orko believes the PEA provides a base case with substantial contingencies included in both capital and
operating cost categories based on the approach taken, and the estimates in the
PEA relating to mining methods, and mineral resources provide upside potential as questions and
answers to these methods and estimates are refined.
In December 2010, Orko retained the services of AMEC Americas
Limited (�AMEC�) to provide an independent
technical review of the Pan
American work. While AMEC�s work has not yet been completed, their review of the PEA to date suggests that there
could be opportunities to improve the project economics. As a consequence, Orko has contracted AMEC to complete a new
independent Preliminary Economic Assessment (�New PEA�),
to be delivered in
mid-2012.
The New PEA will include an
updated resource estimate currently being prepared by Mining Plus, an international mining consulting firm, and will be an integral
component of the New PEA. The new resource estimate is scheduled
to be completed before March 31, 2012. AMEC and Mining
Plus personnel have been to the La Preciosa site as
part of the ongoing studies.
Pan American continues to be active in advancing the La Preciosa project; the Environmental Impact
Study being completed by Clifton Associates is
ongoing and nearing finalization. This study will be submitted
to the Mexican government
for approval, as required
in order to obtain
construction and operating permits for La Preciosa.
In addition, Pan American is completing
a series of auger drill holes, test pits and diamond drill holes at La Preciosa in accordance with an AMEC (Denver) recommended
and supervised geotechnical
program. Completion of this
work will help determine the optimum location of the proposed
tailings site, as well as
the best location for the mill and mining infrastructure.
Mr. Gary Cope, President
and CEO of Orko commented:
"We believe the new resource estimate and the results of the studies in progress will provide
Orko with valuable information to support the strengths
of our La Preciosa project and we are looking forward to sharing these results with
our shareholders as soon as they become
available."
Pan American, Orko, and the various
consulting firms mentioned above, are working together to develop technically superior solutions to
enhance and streamline pre-production design parameters at La Preciosa.
George Cavey, P.Geo., is the Qualified Person for Orko Silver Corp. and takes responsibility for the technical disclosure in this news release.
About Orko Silver
Corp.
Orko Silver Corp. is developing one of the world�s largest primary silver deposits, La Preciosa, located near the city of Durango,
in the State of Durango, Mexico.
ON BEHALF OF THE BOARD OF DIRECTORS
Gary Cope
President
For further information, contact Orko
Silver Corp. at (604)
687-6310 or via our website
on line at www.orkosilver.com
This News Release may contain
forward-looking statements including but not limited to comments regarding the timing and
content of upcoming work
programs, geological interpretations,
receipt of property titles, 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.
*Cautionary Note to U.S. Investors
� The United States Securities and Exchange Commission permits
U.S. Mining companies, in their filings with
the SEC, to disclose only those mineral deposits
that a company can economically and legally extract or produce. We use certain terms in this press
release, such as �measured�,
�indicated�, and �inferred�
resources, which the SEC
guidelines strictly prohibit
U.S. registered companies from including in their filings with
the SEC.
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.
.