Alexco Announces 22% Increase to Silver Reserves; Updated Technical Report Demonstrates Robust Economics at Keno Hill PR NewswireVANCOUVER, BC
VANCOUVER, BC, May 26, 2021 /PRNewswire/ - Alexco Resource Corp. (NYSE American: AXU) (TSX: AXU) ("Alexco" or the "Company") today announces the filing of an updated technical report (the "Technical Report") for its Keno Hill operations in Yukon, Canada ("Keno Hill"), expanding the Mineral Reserve by 22% to 1.44 million tonnes, grading an average 804 grams per tonne ("g/t") silver ("Ag"), 3.84% zinc ("Zn"), 2.64% lead ("Pb"), and 0.31 g/t gold ("Au"), or approximately 1,035 g/t silver equivalent ("AgEq"). The updated reserve mine plan is projected to produce over 35.5 million ounces of Ag over the next 8 years. HIGHLIGHTS
- Updated life of mine plan. Average annual production from Keno Hill of 4.4 million ounces of Ag at an average all-in sustaining cost ("AISC"), including corporate costs and working capital, of US$11.59/ounce ("oz").
- Robust economics at consensus silver prices with significant leverage. Life of mine after-tax free cash flows of approximately $189.7 million using analyst consensus metal prices, which equates to approximately $277.3 million at current Ag prices1.
- High grade Reserve growth of 22% for contained Ag. Mineral Reserves increased to 1.44 million tonnes, versus the previous estimate of 1.17 million tonnes, while maintaining Keno Hill's unique high-grade Ag grades of over 800 g/t (on average).
- Organic growth inherent in Keno Hill. After ramping up operations through 2021, the Technical Report contemplates a mill expansion in year three of operations from approximately 400 tonnes per day ("tpd") to approximately 550 tpd, helping to grow payable Ag production to over 5.0 million oz in 2024.
- Further growth ahead for Keno Hill. The Technical Report and updated Mineral Reserve estimate are based upon all drilling completed at Keno Hill prior to 2019. Alexco plans to update the property-wide mineral resource estimate by year end 2021 and will incorporate the results from the ongoing 25,000 meter drill program focused on the infill and extension of the Bermingham Northeast Deep zone as well as the results of the successful drilling campaigns of 2019 and 2020.
Clynt Nauman, Alexco's Chairman and CEO said, "Today's updated Technical Report further demonstrates that Keno Hill is a district capable of generating significant financial returns from very high-grade Reserves over a growing mine life in a tier-one jurisdiction. Our 2021 exploration drilling program continues to advance and will form the basis for an updated mineral resource by the end of the year. We anticipate that this work will confirm our long-held thesis that production from Keno Hill should continue for many years to come, and that its best days are ahead."
| 1. Based upon the +20% Ag price sensitivity scenario, which approximates the current Ag price |
MINERAL RESERVE ESTIMATE
The Mineral Reserves (shown below) show the total Mineral Reserves for Keno Hill; all Mineral Reserves are Probable Mineral Reserves. External dilution and mineable recovery have been applied to the Mineral Reserves. Please note that rounding of tonnes, average grades, and contained metal may result in apparent discrepancies with rounded totals.
Mineral Reserves
| Deposit | Category | Tonnes | Ag
(g/t) | Pb
(%) | Zn
(%) | Au
(g/t) | Contained
Metal
(000 oz Ag) | Contained
Metal
(000 oz Au) | Contained
Metal
(M Ibs Pb) | Contained
Metal
(M Ibs Zn) |
| Bellekeno | Proven | - | - | - | - | - | - | - | - | - |
| Probable | 12,809 | 936 | 13.00 | 7.30 | 0.00 | 385 | 0 | 4 | 2 |
| Bellekeno
Surface
Stockpile | Proven | - | - | - | - | - | - | - | - | - |
| Probable | 3,397 | 1150 | 21.70 | 4.50 | 0.00 | 126 | 0 | 2 | 0 |
| Lucky Queen | Proven | - | - | - | - | - | - | - | - | - |
| Probable | 70,648 | 1269 | 2.71 | 1.56 | 0.13 | 2883 | 0 | 4 | 2 |
| Flame and Moth | Proven | - | - | - | - | - | - | - | - | - |
| Probable | 721,322 | 672 | 2.69 | 6.21 | 0.49 | 15,590 | 11 | 43 | 99 |
| Bermingham | Proven | - | - | - | - | - | - | - | - | - |
| | Probable | 630,173 | 899 | 2.26 | 1.30 | 0.13 | 18,209 | 3 | 31 | 18 |
| Total | Proven | - | - | - | - | - | - | - | - | - |
| | Probable | 1,438,349 | 804 | 2.64 | 3.84 | 0.31 | 37,193 | 14 | 84 | 122 |
| Notes: | |
| 1. | Mineral Reserves are reported herein based on an NSR cutoff value using estimated metallurgical recoveries, assumed metal prices and smelter terms, which include payable factors, treatment charges, penalties, and refining charges. |
| 2. | Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounces. |
| 3. | The Bellekeno, Lucky Queen, Flame & Moth and Bermingham deposits are incorporated into the current mine plan supported by disclosure in the news release dated May 26, 2021 entitled "Alexco Announces 22% Increase to Silver Reserves; Updated Technical Report Demonstrates Robust Economics at Keno Hill". |
| 4. | Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content. |
LIFE OF MINE PLAN
| | TOTAL | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 |
| MILL TONNES | 1,438,349 | 62,057 | 137,120 | 166,380 | 199,980 | 199,980 | 199,980 | 199,980 | 199,980 | 72,892 |
| Calculated Average Grade |
| Ag (g/t) | 804 | 947 | 1077 | 909 | 863 | 721 | 777 | 678 | 730 | 623 |
| Au (g/t) | 0.31 | 0.16 | 0.29 | 0.27 | 0.34 | 0.33 | 0.32 | 0.31 | 0.33 | 0.28 |
| Pb (%) | 2.64% | 5.93% | 2.93% | 2.92% | 3.41% | 2.55% | 2.23% | 2.08% | 1.93% | 1.41% |
| Zn (%) | 3.84% | 4.85% | 4.63% | 3.24% | 2.85% | 3.52% | 3.35% | 3.46% | 5.02% | 5.52% |
| Payable Metal Production |
| Ag (Oz) | 33,510,354 | 1,686,763 | 4,308,807 | 4,398,913 | 5,018,716 | 4,168,804 | 4,501,660 | 3,914,647 | 4,209,621 | 1,302,423 |
| Au (Oz) | 5,082 | 81 | 419 | 450 | 691 | 779 | 787 | 758 | 844 | 273 |
| Pb (lbs) | 69.8 | 6.8 | 7.4 | 9.0 | 12.8 | 9.4 | 8.1 | 7.5 | 7.0 | 1.8 |
| Zn (lbs) | 75.8 | 4.2 | 8.9 | 7.2 | 7.6 | 9.6 | 9.1 | 9.4 | 14.2 | 5.7 |
NATIONAL INSTRUMENT 43-101
The Technical Report, titled "NI 43-101 Technical Report on Updated Mineral Resource and Reserve Estimate of the Keno Hill Silver District" with an effective date of April 1, 2021 and dated May 26, 2021 has been filed on SEDAR.
Readers are cautioned that the conclusions, projections, and estimates set out in this news release are subject to important qualifications, assumptions, and exclusions, all of which are detailed in the Technical Report. To fully understand the summary information set out above, the Technical Report filed on SEDAR at www.sedar.com should be read in its entirety.
Qualified Persons
The Technical Report was compiled by Mining Plus with contributions from a team of Qualified Persons as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") as follows:
- Zach Allwright, P.Eng. of Mining Plus
- Gilles Arseneau, Ph.D., P.Geo. of SRK Canada Inc.
- Hassan Ghaffari, P.Eng of Tetra Tech
- Paul Hughes, Ph.D., P.Eng. of Mining Plus
- Cliff Revering, P.Eng., of SRK Canada Inc.
- Kourosh Tarighi, M.Sc, P.Eng. of Mining Plus
All Mineral Resources and Mineral Reserves are classified following the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014), in accordance with the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines and NI 43-101.
See "Cautionary Note to Investors regarding Mineral Resource and Mineral Reserve Estimates" below.
The technical information in this news release regarding the Technical Report and the contents thereof was reviewed by Zach Allwright, P.Eng., Paul Hughes Ph.D., P.Eng. and Kourosh Tarighi, M.Sc., P.Eng. each of Mining Plus, Gilles Arseneau, Ph.D., P.Geo. and Cliff Revering, P.Eng, both of SRK Canada Inc. and Hassan Ghaffari, P.Eng. of Tetra Tech, each of whom is a Qualified Person and has approved the disclosure herein.