Good signs for Keno Hill Silver Mine

Alexco Resource Corp. May 2 reported the completion of the Bermingham underground exploration decline and is preparing for an initial 5,000 meters of infill and exploration drilling in and around the upper portion of this very high-grade silver deposit at its Keno Hill Silver District project in the Yukon.

This upper portion being targeted with infill drilling contains an estimated 110,000 metric tons of potentially mineable ore with an estimated head grade of 1,560 grams per metric ton silver, 4.2 percent lead and 2.2 percent zinc comprising the anticipated first two years of production.

The majority of the targeted zone is in the newly discovered Bear Vein, a steeply plunging zone of high-grade mineralization that is roughly three meters thick and 50 meters wide zone. The top of this zone is about 160 meters below surface and has been traced 230 meters down-dip where it remains open to depth.

The proposed drilling program is scheduled to be completed in July. Results from this underground drilling and surface drilling completed last year will be incorporated in a new Bermingham resource calculation to be included in a pre-feasibility study on the resumption of operations at Keno Hill.

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 lb of lead and 4,870 oz of gold over eight years. This PEA centered on Flame & Moth – the deposit with the largest resource – but includes ore from the Bermingham, Bellekeno, Lucky Queen and Onek deposits.

The prefeasibility study, targeted for completion late in the third quarter of this year, is expected to include mining more of the high-grade silver at Bermingham early in the plan.

Clynt Nauman, Alexco CEO and Chairman commented, "With the finalization of the Bermingham decline we will have completed approximately 40 percent of the underground development work required for future production at Keno Hill," said Alexco CEO and Chairman Clynt Nauman. "Once complete at Bermingham, mining crews will relocate to Flame & Moth where an approximate 520-meter ramp remains to be driven."

While crews work underground, two surface rigs will complete at least 15,000 meters of exploration drilling to test a number of relatively shallow silver targets in the vicinity of the Bermingham deposit as well as begin a deeper exploration program to test structural zones with the potential to host large Hector-Calumet-style silver deposits.

The historic Hector-Calumet Mine, which is about 1,000 meters northeast of Bermingham, produced approximately 96 million oz of silver at a reported grade of 1,090 g/t silver.

This C$4 million surface exploration program is slated to begin this week and be completed in October.

Alexco expects to have the permits in place for mining at Bermingham shortly after the completion of the prefeasibility study, a good sign for the potential resumption of operations at Keno Hill in 2019.

"On the permitting front, we remain in the environmental assessment process in anticipation of a Water Licence amendment to allow extraction and processing of Bermingham ore; we expect to receive this final permit amendment either late 2018 or early 2019," said Nauman.

–SHANE LASLEY