First Majestic withdraws from battle for Orko Silver

Tue Feb 19, 2013 6:01pm EST
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Feb 19 (Reuters) - First Majestic Silver Corp said it would not match a rival offer made by Coeur d'Alene Mines Corp for Orko Silver Corp.

First Majestic, which had been competing with the largest U.S. silver miner to gain control of Orko's Mexico-based La Preciosa project, had to match the offer by Tuesday.

Orko has to pay C$11.6 million termination fee to First Majestic.

"By increasing the offer beyond our previous bid, the economics of the La Preciosa project drop below our minimum requirements for a rate of return and financial payback to our shareholders," First Majestic Chief executive Keith Neumeyer said.

Coeur offered to buy Orko for C$2.70 per share in cash and stock last week, topping First Majestic's bid. First Majestic's all-stock offer was worth C$2.72 per share when it was made on Dec. 16.

Orko's board said it backed Coeur's more cash-rich offer as superior to that from First Majestic.

La Preciosa in Mexico's Durango state is Orko's only mine. First Majestic owns two mines close to La Preciosa.