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VANCOUVER,
BRITISH COLUMBIA--(Marketwire - May 10, 2010) - Alexco Resource Corp. (TSX:AXR)(NYSE
Amex:AXU) ("Alexco" or the "Company") is pleased to
provide an update on its 100% owned Bellekeno Mine construction project
currently underway in the Keno Hill Silver District, Yukon. Since
initiating construction activity in November 2009 and through the end
of April 2010, Alexco has incurred approximately C$12.8 million, or
31%, of the C$41.6 million of construction and development capital
estimated to achieve commercial production under the original
Development Plan. Prior to November 2009, approximately C$17 million
was invested in pre-development activity at the Bellekeno mine
including establishment of decline access and rehabilitation and
definition drilling of the Bellekeno silver deposit, as well as
completion of the concrete foundation and pad for the new Bellekeno
conventional flotation mill. On a physical basis, mine development,
including underground mine services and mine-related surface
infrastructure, is approximately 45% complete while mill construction
is approximately 30% complete, and the overall project remains on
schedule and on budget for completion and commissioning in the third
quarter of calendar 2010 (see news release dated November 11, 2009
entitled "Alexco Completes Positive Bellekeno Mine Development
Plan, Silver Wheaton Concurs - Initiation of Construction
Approved").
Bellekeno Mine and Mill Construction Highlights
-- Total actual construction and development capital to achieve production is currently forecasted by Alexco to be C$41.96 million, a variance of less than 1% from the original Development Plan. Approximately C$12.8 million of these capital costs were incurred in the six months prior to the end of April, and remaining capital costs to achieve production are forecasted to be approximately C$29.16 million. -- Monthly construction-phase draw-down of the Silver Wheaton deposit funds has commenced. Construction-phase funds of US$4.9 million have been received from Silver Wheaton to date, with US$30.1 million remaining to be advanced through construction on a monthly draw-down basis. An additional US$15 million had been received from Silver Wheaton prior to November 2009 to fund pre development activity as described above. -- Underground mine development completed to date totals 1,236 meters, with an additional 660 meters required to complete pre-production development. Underground rehabilitation of prior established workings is approximately 93% complete, with just 128 meters remaining to be completed. Underground ramp development is averaging 5.5 meters per day, approximately 37.5% improved from plan and budget. -- In the mine, four of the planned six ore access cross cuts are "stubbed in" to within 15 to 50 meters of the ore. The current mine plan will have three stopes operational in the third quarter of calendar 2010, and two more operational in the fourth quarter. -- Mill construction is 30% complete, with the mill building erected and more than 85% of the purchasing and contracting packages awarded. The ball mill, flotation cells and thickeners are expected to arrive on site during the next three weeks. -- Approximately 42% of the estimated cost at completion for the mill and surface infrastructure are now committed costs, reducing the pricing risk in the project accordingly.
Bellekeno Engineering And Procurement
Nearing Completion
Final phase construction activity for the Bellekeno mine was initiated
in November 2009, with the acceptance of the Development Plan by Silver
Wheaton. The scope of the construction project includes re-development
of the historical Bellekeno Mine workings, construction of a new
flotation mill with a design capacity of 408 tonnes per day
approximately 4.5 kilometers from the Bellekeno East portal, and all
associated infrastructure.
The engineering and procurement contract for the mill and plant was
awarded to Wardrop Engineering Inc., and detailed design engineering is
currently 80% complete with procurement more than 85% complete. A total
of 28 out of a planned 32 purchasing and contract packages for the mill
have been awarded. The mill building was mobilized to site in mid
February and erection was completed by mid April, and installation of
mill equipment commenced in May.
As announced in March 2010, the mining services contract for
development and production mining at Bellekeno has been awarded to the
NNDDC/Procon Joint Venture, a joint venture between Procon Mining and
Tunnelling Ltd. and the Nacho Nyak Dun Development Corp. As of the end
of April 2010, mine development, including underground mine services
and mine-related surface infrastructure, is 45% complete.
Permitting work is proceeding on schedule. As previously announced, a
positive recommendation was received from the Yukon Environmental and
Socioeconomic Advisory Board in June 2009, and a positive Decision
Document confirming the recommendation was issued by the Yukon
Government in July 2009 leading to issuance of a Quartz Mining Licence
in November 2009. Alexco's application for a Type A Water Use Licence
has been declared adequate by the Yukon Water Board, and the
application hearing is scheduled for mid June 2010. Issuance of the
Type A Water Use Licence is the last major step in the permitting
process for operation of the Bellekeno mill, and is expected to be
completed on schedule and prior to commissioning and start-up of the
mill in the third quarter of calendar 2010.
Consistent with the Development Plan, the Alexco operations team has
been expanded with recruitment of staff for the positions of Mine
Manager, Chief Mine Engineer, Mine Geologists and Civil Project
Manager, as well as purchasing and warehousing staff, equipment
operators and administrative personnel. The number of construction
project personnel currently on site is approximately 50 with an
anticipated peak construction population of approximately 90 personnel
expected in the next one to two months.
In conjunction with the Yukon Mine Training Association, Alexco
recently graduated eight students from Yukon First Nations in an
intensive eight week underground mine training program. This training
program was coordinated with the Bellekeno mine development project,
and represents a solid advance in developing a qualified
local-community labour force for future mining operations.
Projected Mine Operations
As disclosed in the news release of November 11, 2009, the Bellekeno
silver deposit contains an indicated resource estimated at 401,000
tonnes grading 921 grams per tonne silver, 9.4% lead and 6.5% zinc, of
which 321,941 tonnes containing an estimated 871 grams per tonne silver,
9.5% lead and 5.6% zinc on a payable metals basis are included in the
initial mine plan. The deposit remains open down dip and down plunge,
and underground definition and exploration drilling to expand the
mineable resource is currently underway in parallel with mine
development activities.
Once complete, the Bellekeno mine will operate at 250 tonnes per day
supplying feed to a conventional flotation mill, producing up to 12,000
tonnes of lead-silver concentrate per year and 8,400 tonnes of zinc
concentrate annually and generating up to 2.8 million ounces of silver
per year. Initial silver grades in 2010 and 2011 are expected to be
approximately 1,000 grams per tonne. The mine and mill operations will
employ approximately 120 people and are expected to directly invest
more than $25 million annually for labour, materials and supplies in
the Yukon. Once operational, the Bellekeno Mine will be Canada's only
primary silver mine and will be one of the highest grade silver
operations in the world.
Silver Wheaton Agreement
In October 2008, Alexco entered into an agreement under which Silver
Wheaton Corp. (TSX:SLW)(NYSE:SLW) will purchase 25% of future Keno Hill
District silver production at a cost of US$3.90 per ounce of silver
delivered, plus up-front deposit payments to Alexco totaling US$50
million. An initial US$15 million deposit payment was received from
Silver Wheaton in December 2008, with the remaining US$35 million to be
provided for the construction and development of the Bellekeno Mine on
a monthly draw-down basis subject to certain conditions including
Alexco having sufficient committed funds available to complete
construction and achieve production within specified time frames. The
monthly draw-downs have commenced, and US$4.9 million has been received
from Silver Wheaton to date.
Qualified Person
The scientific and technical information about the Bellekeno Mine
project contained in this news release has been reviewed and verified
by Stan Dodd, Vice President, Exploration for Alexco and a Qualified
Person as defined by National Instrument 43-101.
Keno Hill Silver District History
Between 1921 and 1988, the Keno Hill Silver District produced more than
217 million ounces of silver with average grades of 40.5 ounces per ton
silver, 5.6% lead and 3.1% zinc (Yukon Government's Minfile database). The
historical production grades would rank Keno Hill in the top 3% by
grade of today's global silver producers. The Keno Hill district is the
second-largest historical silver producer in Canada.
About Alexco
Alexco's business is to unlock value and manage risk at mature, closed
or abandoned mine sites through integration and implementation of the
Company's core competencies which include management of environmental
services, execution of mine reclamation and closure operations and if
appropriate, rejuvenation of exploration and development of new mining
opportunities.
Some statements in this news release contain forward-looking
information concerning the Company's anticipated results and
developments in the Company'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 press release. Forward-looking statements may include, but
are not limited to, statements with respect to 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, the timing of activities and
the 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 of remediation and reclamation activities;
actual results of exploration activities; conclusions of economic
evaluations; changes in project parameters as plans continue to be
refined; future prices of gold, silver and other commodities; possible
variations in ore bodies, grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents, labour
disputes and other risks of the mining industry; and delays in
obtaining governmental approvals or financing or in the completion of
development activities.
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