Alexco digs toward Keno Hill mine restart

Alexco Resource Corp. April 14 provided an update on its progress towards the resumption of mining the high-grade deposits at its Keno Hill Silver District project in the Yukon.

Alexco began commercial production at Keno Hill early in 2011 but suspended operations in 2013 due to the weakness in silver prices.

Since shutting down production, the Vancouver, B.C.-based company has continued exploration of the high-grade silver deposits on its property, which blankets a district with nearly a century of high-grade silver mining history.

Early in 2017, Alexco published a preliminary economic assessment that outlines plans for an operation that would produce 25.1 million ounces of silver, 77.3 million pounds of zinc, 67 million lbs. of lead and 4,870 oz of gold over eight years. This PEA is centered on Flame & Moth – the deposit with the largest resource – but includes ore from the Bermingham, Bellekeno, Lucky Queen and Onek deposits.

Following the PEA, the company made significant headway towards executing its plan to resume its title of Yukon silver producer.

"2017 was a pivotal year in which we started the transition from explorer-developer to developer-producer. This evolution began in September 2017 at the Bermingham deposit with initiation of a 580-meter underground exploration decline which is now approximately 75 percent complete," said Alexco Chairman and CEO Clynt Nauman.

According to a resource calculation in March of last year, Bermingham hosts 868,000 metric tons of indicated resource averaging 628 grams per metric tons (17.3 million oz) silver; and 220,000 metric tons of inferred resource averaging 770 g/t (5.5 million oz) silver.

Last summer, Alexco completed 13,832 meters of surface drilling to further explore potentially mineralized structural targets in the immediate vicinity of the Bermingham deposit.

"Two important conclusions come from our 2017 exploration work. First, we can be pretty confident that the Bermingham silver resource will be expanded; and second, the deposit is clearly open at depth where strong structures and related mineralization project into increasingly favorable stratigraphy," Nauman said in November.

The company expects to complete the exploration decline to Bermingham in April and begin a 5,000-meter underground drill program aimed at upgrading the resource there and further bolstering the confidence in the geological model.

Once mining crews have reached their destination at Bermingham, they will move over to Flame & Moth, where an additional 965 meters of underground development is needed for the resumption of mining operations at Keno Hill.

Alexco is currently planning to complete a prefeasibility study for this restart in the third quarter and will likely make the decision on production around that time.

"As we move through Q2 (second quarter) we will be very focused on market conditions, commercial terms and final permitting progress as part of our disciplined progress toward a final production decision," Nauman said.

Alexco ended 2017 with C$17.9 million in cash and cash equivalents and has since entered into a definitive credit agreement with Sprott Private Resource Lending to provide a US$15 million loan to help the company get closer to production at its high-grade silver mine in the Yukon.

–SHANE LASLEY