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"Shareholders have been struggling to understand the thinking of our Board in proposing a merger with a company with serious issues at its new generation mines in Alaska and Bolivia, when start-up production from Palmarejo is so close."

Comment:

I can understand the thinking of the Board.

For starters, if Coeur "merges" with both BSG and PJO it will issue 261 million shares compared to its current issued capital of 278 million shares.

This values the Mexican project as nearly equal to ALL Coeur's other assets - producing, emerging producers and exploration upside.

In 2006, Coeur produced 13.6 million ounces of silver and more than 116,000 ounces of gold.

That is WITHOUT any production from Bolivia and Alaska.

I have little doubt that both Coeur's Kensington mine in Alaska and silver mine in Bolivia will go ahead, substantially adding to Coeur's gold and silver production and profitability.

In addition Coeur has plenty more upside, such as at its Cerro Bayo mine in Chile which produced approximately 2.3 million ounces of silver and nearly 41,000 ounces of gold last year.

There is huge exploration and development upside here, where more than 100 veins have been discovered in Coeur's large land package.

While still undecided, the more I read about Coeur and understand the company, the more I see it as so ridiculously oversold and the more I am starting to warm to the merger.

Where is the BSG premium?

One could argue the premium is in using BSG shares to obtain Coeur shares which are trading at a far greater discount to fair value than BSG shares.