"Orko Gold: It’s a Silver Story"

A Silver Story for the 21st Century

Orko has five characteristics that makes it interesting or, rather, potentially interesting for the stock market.

We have to put this exploration story into a stock market perspective. $2 value at 35 million shares is equivalent to $70 million market capitalization. This company, a few months ago, raised a few million shares at 20 cents, raising about $2 million. But we are saying that this exploration company, by identifying and proving 100 million ounces of silver reserve, could have a market cap of $70 million, as opposed to the current market cap of $9 million.

These are not only big numbers, but it converts Orko into a different company. A $70 million company can raise maybe $10 million through a public offering. It can attract a third-party investor for selling 10, 20% of the company and become a silver merchant banker. In other words, it becomes a corporate entity with monetary value in the stock market, as opposed to being nothing but an all-out speculation.

The company, of course, is basically on lease from GoldCorp, the fourth-largest gold company in the Northern Hemisphere. GoldCorp has a right to invest 1.5 million more money into Orko and has 60% interest in the La Preciosa deposit or acquire 100% of the company, either for cash or GoldCorp shares.

As we mentioned earlier, the company so far as identified 880 meters of silver deposit and, in the next month, it may go further to up to five kilometers. At any one time after August 31st, GoldCorp can negotiate for a full acquisition of Orko and, if the transaction happens to be for GoldCorp shares, valued, let’s say, at $20, the $70 million market cap would represent 1/10 of GoldCorp for every share of Orko. Since Orko’s selling at 25 cents and 1/10 of $20 is $2, the capital gain is meaningful.

Now, after the arithmetic, we have to go back a little bit to silver with silver story.
Silver attracted attention of many people as a substitute for gold or another gold or another metal or another storage of value or simply silver itself. The celebrated monetary storyteller, Paul Erdman, first became famous with his book, The Crash of ‘79. Actually, prior to the book, he published The Silver Bears, which became a successful movie with Michael Caine, picturing the late Sir James Goldsmith as the man who controlled the world’s silver.

When the Hunt Brothers came on the scene, inflation was rampant. Interest rates were approaching 20%. The country was in horrible shape. Intelligent people, in 1980, were willing to sell their businesses and settle to some years of withdrawal in case Jimmy Carter is reelected as persistent. We had political and monetary crisis. Mortgages were nonexistent. The danger of the dollar losing its value and the banks getting illiquid were very real.

The Hunt Brothers tried to hedge in burgeoning commodities. In 1980, they lost money. They were thirty years ahead of their time. However, since 1980, Mick Caine, the Hunt Brothers and I added 25 years—and silver did not hit $10 for per ounce. However, we are all around. Perhaps, when silver hits $10—for every share of Orko which is currently selling at 25 cents a share
Commodity players are often labeled negatively as speculators. But we cannot forget that H.L. Hunt risked everything for drilling for oil, so did Paul Getty. And developer like Trump or the late William Zeckendorf are risking everything for creating something which did not exist.

The commodity boom of the 21st Century in base metals has created tremendous wealth, like Mr. Mittals, the steel baron covering the world with his steel plants in billions of values.
So far, there was only one gold hero who is my personal fan, Robert McEwen, chairman of GoldCorp, who created a large gold company in the last ten years.

Silver today, in 2005, has no father. The real heroes are probably the successful exploration companies like Orko.

However, when I compare the rising fees of iron ore, copper, steel with silver, I see a major opportunity.

I wait and I expect a word from the Hunt family, who sustained the family business in the last thirty years, who led the family actually into greater success and led quietly that the family ever had.

When it comes to silver, I have to think back to the days in 1979 and 1980 when I was a principal player in Sunshine Mining and the silver game.

Silver is going to recover now—at least, this is my opinion—and, in fact, it may get greater recognition than it ever has.

Actually, the country owes a deep apology to the Hunt Brothers. They foresaw the commodity boom and they foresaw that paper money may not be permanently the only avenue for exchanging currencies for good. They were thirty years ahead of their time.

One day, I believe that Herbert Hunt will make public statement and he refrained to make any for thirty years:

(Article 4 - posted August 18, 2005)

e-mail: mlikar@aol.com

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