VANCOUVER, BC, June 22,
2022 /PRNewswire/ - Alexco Resource Corp.
(NYSE American: AXU) (TSX: AXU) ("Alexco" or the
"Company") today provides the following update on operations
and exploration at the Company's wholly owned Keno Hill Silver
District ("Keno Hill") in Yukon
Territory, Canada.
Ramp-up of mining activity at Keno Hill continued to
progress in May with sustained underground development performance
aided by improved equipment availability at both the Flame &
Moth and Bermingham mines. Similarly, the district mill saw
improved throughput and metallurgical performance in the same
period. Underground advance at Bermingham reached the 1120 level,
where the upper portion of the high-grade Bear Zone has been
cross-cut with two ore faces and predictive block model grades of
1,900 – 2,000 grams per tonne ("g/t") silver ("Ag")
appearing to be well supported or exceeded in mine based rib and
face assays. Additionally, in May, the Company milled
approximately 5,750 tonnes of ore, representing an approximate 19%
increase over April. The mill operated for 16 days in May, nine of
those days operating at throughput above the nameplate capacity of
400 tonnes per day ("tpd"). The metallurgical performance
continued to be robust, with over 93% total silver recoveries to
concentrate and in excess of 16,300 g/t Ag in the lead concentrate.
While the underground performance improvements are notable, and
the demonstrated supply of 150-250 tpd of ore to the mill has been
important, it is also apparent from results to date that the rate
of improvement in the advance of underground development remains
insufficient to achieve the necessary number of production headings
to sustain 400 tpd feed to the mill before the end of 2022. To
rectify this imbalance, the Company has elected to temporarily
suspend milling operations for five to six months and to focus all
efforts on advancing underground development. After this
development period is complete, the Company anticipates accessing,
cross-cutting, and having available a total of approximately
120,000 tonnes of ore inventory grading 1,050 g/t Ag at the
Bermingham and Flame & Moth mines by year end 2022. Ore
extraction and milling operations will be restarted in January 2023, and with our anticipated
production, cash self-sufficiency should be achieved within the
first quarter of 2023. The Company estimates that more than four
million ounces of silver will be delivered as ore feed to the
district mill in 2023.
"As previously indicated in May, our operations ramp-up plan is
running well behind schedule," said Clynton
Nauman Chairman and CEO of Alexco, "and at this juncture we
have enough information to determine that the rate of improvement
in underground performance is not sufficient to reach a sustainable
400 tpd and cash self sufficiency in 2022. We need to get further
ahead with underground development, and that requires five to six
months of focused underground advance to ensure we have available,
and can maintain, two to three levels of development ahead of
primary production levels in each mine. This refocussing of
operations is the right decision and it is unquestionably in the
best interest of the mine and the Company as a whole. The
alternative of continuing to operate under the status quo with
slowly improving ore deliveries to the mill for the balance of
2022, only serves to diminish the benefit of extremely high-grade
ore, instead of using that benefit to generate free cash flow and
hence returns for our shareholders early in 2023."
With transition of operations activities to an interim
development focused plan, additional financing will be required. As
of the date of this press release, the cash position of Alexco is
approximately $14 million with
negative working capital of approximately $4.5 million. The final scope, cost, and timing
of the interim development-only plan and the subsequent transition
back to full mill operations with concentrate shipments in
January 2023 remains under review and
will be communicated once completed. Additionally, the Company will
continue to evaluate all financing and strategic options available
to enhance the value of Keno
Hill.
In other activities at Keno Hill, surface exploration began with
two drills in May with focus in the vicinity of the historic Silver
King mine and the Coral Wigwam area, approximately 800 meters
along structural trend from the Bermingham Mine. Early indications
from shallow geology-defining drill holes in the Coral Wigwam area
have identified a structural geology framework potentially similar
to that which hosts the Bermingham deposit. The next phase of this
work will focus on deeper drilling of the targeted structure(s)
within permissive stratigraphy, areas which proved highly
productive in the adjacent Bermingham deposit.
Qualified Person
The disclosure of all other scientific and technical information
in this news release regarding mine development and operations has
been reviewed and approved by Sebastien D.
Tolgyesi, P.Eng., P.Geo. (Keno Hill Operations Manager,
Alexco), who is are Qualified Persons as defined by National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
About Alexco
Alexco is a Canadian primary silver company that owns and
operates the majority of the historic Keno Hill Silver District, in
Canada's Yukon Territory, one of the highest-grade
silver mines in the world. Alexco started concentrate production
and shipments in 2021 and is currently advancing Keno Hill toward
steady state production. Upon reaching commercial production, Keno
Hill is expected to produce an average of approximately 4.4 million
ounces of silver per year contained in high quality lead/silver and
zinc concentrates. Keno Hill retains significant potential to grow
and Alexco has a long history of expanding the operation's mineral
resources through successful exploration.
Website: www.alexcoresource.com
Forward-Looking
Statements
Some statements ("forward-looking statements") in this news
release contain forward-looking information concerning Alexco's
anticipated results and developments in Alexco's operations in
future periods, planned exploration and development of its
properties, plans related to its business and other matters that
may occur in the future, made as of the date of this news
release. Forward-looking statements may include, but are not
limited to, statements with respect to the future remediation and
reclamation activities, future mineral exploration, the estimation
of mineral reserves and mineral resources, the realization of
mineral reserve and mineral resource estimates, future mine
construction and development activities, future mine operation and
production, the timing of activities and reports, the timing and
results of development activity, the timing and amount of estimated
revenues and expenses, the success of exploration activities,
permitting time lines, requirements for additional capital and
sources and uses of funds. Forward-looking statements are subject
to a variety of known and unknown risks, uncertainties and other
factors, which could cause actual events or results to differ from
those expressed or implied by the forward-looking statements. Such
factors include, among others, risks related to actual results and
timing of exploration and development activities; actual results
and timing of mining activities; actual results and timing of
environmental services activities; actual results and timing of
remediation and reclamation activities; conclusions of economic
evaluations; changes in project parameters as plans continue to be
refined; future prices of silver, gold, lead, zinc and other
commodities; possible variations in mineable resources, grade or
recovery rates; failure of plant, equipment or processes to operate
as anticipated; accidents, labour disputes and other risks of the
mining industry; First Nation rights and title; continued
capitalization and commercial viability; global economic
conditions; competition; and delays in obtaining governmental
approvals or financing or in the completion of development
activities. Forward-looking statements are based on certain
assumptions that management believes are reasonable at the time
they are made. In making the forward-looking statements included in
this news release, Alexco has applied several material assumptions,
including, but not limited to, the assumption that Alexco will be
able to raise additional capital as necessary, that the proposed
exploration and development will proceed as planned, and that
market fundamentals will result in sustained silver, gold, lead and
zinc demand and prices. There can be no assurance that
forward-looking statements will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such statements. Alexco expressly disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as otherwise required by applicable securities
legislation.
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SOURCE Alexco Resource Corp.