(Corrects paragraph 6 to say Stuart McDougall is an analyst with Casimir Capital, not Cormark Securities)
* Coeur offers C$2.70/share for Orko, topping First Majestic offer
* Orko says Coeur's partly cash offer is superior
* First Majestic has till Feb. 19 to match, better offer
By Bhaswati Mukhopadhyay and Swetha Gopinath
Feb 13 (Reuters) - Coeur d'Alene Mines Corp offered to buy Orko Silver Corp, topping a bid from First Majestic Silver Corp and opening a race for control of one of the world's largest undeveloped silver deposits.
The prize is Orko's La Preciosa project in Mexico, which Coeur estimates holds 99 million ounces of indicated silver resources.
Coeur's cash-and-shares offer values Orko at C$384 million ($383 million), or C$2.70 a share, about 25 percent more than First Majestic's stock-based offer, based on Tuesday's closing share prices.
Orko shares jumped 17 percent to C$2.51, still well below Coeur's offer. Shares of Coeur fell 7.7 percent while those of First Majestic rose 3 percent.
Both Coeur and First Majestic own silver mines in northern Mexico. Coeur owns the Palmarejo silver and gold mine while First Majestic owns two mines close to La Preciosa -- La Parrilla and Del Torro. La Preciosa, in Mexico's Durango state, is Orko's only mine project.
Orko's board said it backed the Coeur's more cash-rich offer as superior to that from First Majestic but analyst Stuart McDougall of Casimir Capital said there was a reasonable chance of a counter offer.
"First Majestic has a strategic interest in maintaining a strong position in Durango," he said. "Having a rival coming into the state has got to be weighing on the mind of the board."
Coeur is offering cash of 70 Canadian cents per Orko share, compared with cash of just C$0.0001 per share from First Majestic.
First Majestic and Orko did not immediately return calls seeking comment.
Coeur, the biggest U.S. silver miner, said it was best equipped to develop La Preciosa, one of the world's largest undeveloped primary silver projects.
"The La Preciosa project has long-life mine potential and could produce about 7 to 9 million ounces of silver annually," Coeur Chief Executive Mitchell Krebs said on a conference call.
Coeur, which owns the San Bartolomé silver mine in Bolivia, the Rochester silver-gold mine in Nevada and the Kensington gold mine in Alaska, expects to produce 18.0 million to 19.5 million ounces of silver this year.
Vancouver-based First Majestic's offer for Orko was worth C$2.72 per share when it was made on Dec. 16 but has dropped to C$2.16 as First Majestic's shares have fallen in value.
Coeur said First Majestic had until Feb. 19 to match its proposal.
The deal is expected to close in the second quarter and will add to net asset value and total mineral resources per share, Coeur said.
Coeur's offer represents a 26 percent premium to Orko's closing share price of C$2.14 on the Toronto Venture Exchange on Tuesday.
Shares in Coeur fell to $21.64 on the New York Stock Exchange while shares in First Majestic rose to C$18.53 on early trade on the Toronto Stock Exchange.
Coeur had a market value of $2.10 billion as of Tuesday's close, nearly the same as that of First Majestic.
The proposed agreement with Coeur includes a termination fee of C$11.6 million, the same as that payable to First Majestic.
J.P. Morgan is financial adviser to Coeur, while Fasken Martineau DuMoulin LLP and Gibson, Dunn & Crutcher LLP are the legal advisers.
BMO Capital Markets and GMP Securities LP are Orko's financial advisers. Stikeman Elliott LLP is the legal adviser. ($1 = 1.0025 Canadian dollars) (Editing by Rodney Joyce)