Coeur d'Alene/Orko

Overview

All the 142.1M shares of Orko, which is a B.C. company listed on the TSX-V and holding a Mexican subsidiary, are to be acquired under a B.C. plan of arrangement by Subco, which is a B.C. wholly-owned subsidiary of Coeur, which is an Idaho corporation listed on the NYSE and TSX. The consideration for each Orko share is (i) cash of $2.60 per share plus 0.01118 of a cashless exercise warrant (a "Warrant"), with a term of four years, and representing an entitlement to receive an amount based on a strike of US$30 per Coeur share, and with such value paid in Coeur shares (collectively, the "Cash Consideration"), or (ii) 0.1118 of a Coeur share and 0.01118 of a Warrant (collectively, the "Share Consideration"), or (iii) $0.70 in cash, 0.0815 of a Coeur share and 0.01118 of a Warrant (collectively, the "Cash and Share Consideration"). This consideration represents a premium of 71% to the Orko share price before the previous First Majestic offer. Although Orko shareholders will be able to elect between consideration alternatives, the total cash and share consideration will be limited to $100,000,000 and 11,584,187 Coeur shares. The acquisition of Orko is to be followed by its merger (as part of the Plan of Arrangement) with a B.C. subsidiary of Coeur, with Orko as the surviving entity. (For another example of a "survivor style" Canadian merger, see the Chesapeake Gold Corporation acquisition of American Gold Capital ca. 2007.)

First Majestic offer

The Orko board recommends approval of this offer (i.e., over the First Majestic offer).

U.S. Securities law

Orko is a foreign private issuer, so that the solicitation of proxies pursuant to the circular is not subject to the requirements of s. 14(a) of the U.S. Exchange Act. The Coeur shares and Warrants will be issued in reliance on the s. 3(a)(10) exemption. The s. 3(a)(10) exemption would not be available on the issuance of Coeur shares on the exercise of Warrants – hence the cashless exercise feature.

Break fee

Coeur has agreed to fund a $11.5M break fee payable to First Majestic.

Plan of Arrangement.

Under the Plan of Arrangement:

• The Orko shareholder rights plan will be cancelled
• Orko shares of dissenters will be transferred to Subco for their fair value
• each outstanding Orko share will be transferred to Subco for the Cash, Share, or Cash and Share, consideration, at the election of the Orko shareholder, but subject to proration in light of the maximum cash and share consideration
• the stated capital of the Orko shares will be reduced in aggregate to $1.00
• Orko and Subco then "shall merge to form one corporate entity ("Amalco") with the same effect as if they had amalgamated under Section 269 of the Business Corporations Act, except that the legal existence of Orko shall not cease and Orko shall survive the merger as Amalco…[and] the separate legal existence of Subco shall cease…and Orko and Subco shall continue as one company…."

These transactions would result in the number of issued and outstanding Coeur shares increasing to 101.5M.

Canadian tax consequences

Taxable exchange for Canadian residents. Taxable Canadian property disclosure for non-residents (including re Coeur shares and Warrants).

U.S. tax consequences

Exchange. A US holder will recognize gain or loss in an amount equal to the difference between the fair market value of the consideration received and the US holder's adjusted tax basis in the Orko shares surrendered.

PFIC rules

Orko believes that it and its subsidiaries have been and are PFICs. Discussion of consequences (e.g., gains recognized under the Arrangement may be taxable to US holders at ordinary-income rates with the tax so determined subject to an interest charge).

Warrants

The cashless exercise of the Warrants is expected to be tax-free.

Non-USRPC status

Coeur does not believe that it is (or has been within the last five years) a US real property holding company. Discussion of 5%-publicly traded exemption if this is not the case.