Revenue, Profits & Share PriceThe following is just my opinion, nothing more, nothing less.
I recently read "taking inflation into account, the price would have to rise to almost $60 to equal the previous high back in 1980. (read below)" Of course that was then and this is today. A lot can and has changed in Keno Hill, but some fundamentals are still revenue and profit.
Taking into consideration some cost would have been higher in company owned town (cook shack (feeding 250+)), bunkhouses, heat, hydro, entertainment facilties) and all the other sundry costs that to go with it. Are modern costs of recovery less than now? Maybe, but other costs could be more such as managment, environmental, labour, shipping, promotion, offices, etc.
Alexco will be getting into another winter and that's just going to ramp up costs (historically IMHO) and should Alexco request another round of financing it could show up in reduced share price, especially if there there is a loss per share declared.
I averaged out of this play a long time ago as I didn't like the way things were going and some of the history of Alexco has been a lot of promotion, exploration and stating how much is in the ground. No one ever denied this and in fact there are some big numbers coming out of Mt. Haldane but it's all still in the ground. Alexco is mining, concentrating and shipping but when will there be revenue along with profit. To me it sounded way to familiar and just so much all over again.
This is taken from R.J. Cathro 2006
Geoscience Canada article (IMHO if you invest it's must read)
THE FUTURE
Although the Keno Hill Camp refuses to die, its future remains uncertain. As long as the federal and territorial governments are willing to fund a large part of the reclamation and remediation liabilities from the UKHM (Falconbridge) era, then the risk for a new investor will be significantly reduced. On the positive side, Ag prices have risen substantially in 2006, although the recent spike from $9.30 to 15.20 and back to 9.60 within six months suggests that the price is currently driven by speculation rather than market fundamentals. As shown in Figure 5, the price stayed near its long-term, inflation-adjusted, trend line between 1990 and the end of 2005, ending close to the level at which UKHM was forced to close down. Taking inflation into account, the price would have to rise to almost $60 to equal the previous high back in 1980.
On the negative side, labour and power costs are now much higher than when mining ended in January 1989 and the old mill and notoriously unstable mine workings have been sitting idle for 17 years. The former supply of European immigrants willing to work underground is a thing of the past and it is unlikely that many former employees familiar with the operation could be enticed back. A serious shortage of experienced miners throughout the major industrialized nations, in the midst of a global mining boom, will be a major challenge.
There is no argument that rich Ag-Pb vein mineralization remains in the Keno Hill Camp. All of the important mines either bottomed in good mineralization or in a strong vein that warranted deeper exploration. Who can say whether or not exploration a hundred m or more beneath the relatively shallow Sadie-Ladue, Lucky Queen, Silver King or Husky mines wouldn't encounter the Ag-rich top of another oreshoot, just at it did at the Hector-Calumet and Keno mines?
The challenge is finding a way to explore and mine economically at those depths. The economics of narrow underground vein mining in weak wall rocks that require expensive ground support currently discourages such an approach. The Keno Hill Camp has presented enormous development challenges throughout its history and will require the same bold and imaginative solutions if it is to have a future."
My original investment in Alexco was because of the environmental cleanup being performed in the area (personal interest) and Alexco has long term contracts. I still like Alexco for that, perhaps I will buy back in but not at current levels.