VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 15, 2011) -  Alexco Resource Corp. (News - Market indicators)(NYSE Amex:AXU) today announced dramatically improved revenue, gross profit, earnings and production for its fiscal year ended June 30, 2011, as result of the first six months of commercial production at its Bellekeno mine in the Keno Hill Silver District, Yukon. All dollar figures are expressed in Canadian dollars unless otherwise stated.

2011 Fiscal Year Highlights

• Net income for year of $3.5 million ($0.06 basic and diluted earnings per share) and pre-tax income of $4.1 million on combined mining and environmental services revenue of $45.1 million
• Cash flows from operating activities of $10.7 million
• Bellekeno mine revenue of $38.3 million and gross profit of $15.8 million over its first six months of commercial production, on sales of 7,956 tonnes of lead-silver and zinc concentrate
• Production of 911,848 ounces silver, 7,756,426 pounds lead and 3,104,303 pounds zinc
• Realized metal prices averaged US$37.45 per ounce silver, US$1.16 per pound lead and US$1.02 per pound zinc
• Cash costs of production¹ over Bellekeno's first six months of operation of $7.57 per ounce of payable silver produced, net of by-product credits, and $6.30 per ounce in the fourth fiscal quarter (second quarter calendar 2011)
• Bellekeno ramp up continues to progress, with production for calendar year 2011 estimated to be 2.2 million to 2.5 million ounces silver, 14 million to 16 million pounds lead and 6 million to 7 million pounds zinc

Alexco President and CEO Clynt Nauman said, "During the second full quarter of commercial production our Bellekeno mining operation continued to make steady progress on all fronts including mill throughput, ore tonnes mined, improved recoveries and increased overall metal production. These improvements are reflected in our financial performance with increased cash from operations and a greater than 25% reduction in silver production cost to $6.30 per ounce of silver net of by-product credits. With our steadily increasing silver production, an expanding resource base and additional mine development in the district, Alexco is well positioned to take advantage of the continued buoyancy in the silver markets."

Summary Financial Results and Information

Bellekeno Mine Operations

The 2011 fiscal year saw Alexco's transition from mine developer to producer, with commercial production at its new Bellekeno silver-lead-zinc underground mine and ore processing complex having commenced January 1, 2011. Located in the Keno Hill Silver District in Canada's Yukon Territory, through its first six months of commercial operation the Bellekeno mine produced 7,847 tonnes of concentrate comprising 5,059 tonnes of lead-silver concentrate and 2,788 tonnes of zinc concentrate, recognized revenue of $38,269,000 on sales of 7,956 tonnes of concentrate and yielded a gross profit of $15,845,000. Metal prices for revenue recognized in that period, weighted by dollar of revenue recognized, averaged US$37.45 per ounce for silver, US$1.16 per pound for lead and US$1.02 per pound for zinc. Ramp up of mine and mill operations to full optimized levels is continuing, with production from Bellekeno for the full calendar year of 2011 currently forecast to be between 2.2 million and 2.5 million ounces of silver, 14 million to 16 million pounds of lead and 6 million to 7 million pounds of zinc.

Operations at Bellekeno during the first six months of commercial production reflect the typical initial ramp up phase following a mine start-up, coupled with the normal challenges of ramping up a new ore processing facility during a winter period. Mine operations in this period generally maintained pace with processing activity, but with significant inventoried ore from the pre-production phase locally impeding ore production in the mine, Alexco used the opportunity to undertake additional mine development at Bellekeno, particularly in the initial months of operation. The majority of this was ramp-up phase primary development, but some was in preparation for a trial of local mechanized long-hole stoping, a more efficient mining method not historically used within the Keno Hill District.

Mill ramp up activities during the first six months of operations have included optimization of pumping, piping and screening circuits and the grinding and classification balance and improvements to feed systems, as well as process refinements to improve zinc recoveries. As of August, the mill was achieving a sustained average daily throughput rate in excess of 250 (tpd). Average mill throughput during the first three months of operations was 201 tonnes per day tpd, with daily throughputs as high as 320 tpd and average mill availability at greater than 90% by quarter end. Production during the following quarter was hampered by a series of grid power outages in June. Nine separate outages resulted in a 15% reduction of mill throughput for the month, as well as a disruption in progress through the ramp up phase. During the second three months of operations, average mill throughput was 208 tpd, though still with daily throughput highs in excess of 300 tpd. The frequency of power outages subsequent to June has reduced significantly, with an accompanying increase in the rate of throughput. Alexco is currently conducting engineering and economic studies to determine whether construction of an alternate form of secondary power is merited.

Operating statistics for Bellekeno since the commencement of commercial production on January 1, 2011 are summarized as follows:

Keno Hill Exploration

Alexco wrapped up the 2010 field exploration program at its Keno Hill properties by mid December, completing approximately 25,000 meters of surface drilling for calendar year 2010 in addition to 4,900 meters of underground Diamond drilling at Bellekeno. Major areas of focus for the 2010 surface exploration program included the historical mine areas of Lucky Queen, Onek, Silver King and Flame & Moth, as well as "new" target areas including the McQuesten Valley and a mineralized structural zone near the historical Bermingham mine, and all results from the 2010 program have been fully released. The 2011 surface exploration program was initiated during March, and is expected to complete drilling of approximately 15,000 meters of Diamond drilling at a number of targets across the District with surface exploration expenditures anticipated to be approximately $8 million. Approximately 10,300 meters drilled have been drilled to date, and the program is expected to continue through at least October. As announced in the news release of September 7, 2011, with the successful results at Flame & Moth an additional exploration drill rig has been mobilized as of early September to help accelerate work elsewhere in the District, especially at the Bermingham property, while enabling drilling at Flame & Moth to continue.

Initial resource estimates for the Lucky Queen and Onek properties were completed and announced in the news release of July 27, 2011, and metallurgical testing and preliminary mine planning and engineering studies have been initiated at both properties. Rehabilitation of the historical Lucky Queen workings has been commenced, and plans to access the historical Onek workings are nearing completion, both with the objective of enabling advanced exploration drilling from underground to support mine planning and development decisions. This work, which also commenced in March and is currently estimated to cost approximately $10 million, is expected to include approximately 1,500 meters of surface definition drilling in the vicinity of the historical Onek mine; approximately 1,500 meters of underground rehabilitation and development work at the historical Lucky Queen mine, in advance of approximately 2,500 meters of underground definition drilling; and a review of underground ore definition and mining options at the historical Silver King mine. This advanced exploration program is being planned and conducted with the objective of enabling Alexco to make production decisions for each property sometime in calendar 2012.

In addition, engineering and feasibility related work is continuing on Alexco's Elsa tailings project, where approximately 9.5 million ounces of silver have been defined within approximately 2.5 million tonnes of historical Elsa tailings as reported in the news release dated May 6, 2010 entitled "Alexco Announces Initial Elsa Tailings Resource Estimate, Keno Hill".

Alexco Environmental Group

Separately, the Corporation's environmental services business, the Alexco Environmental Group (AEG), recognized revenues of $6,833,000 during fiscal 2011 compared to $4,641,000 in fiscal 2010. AEG recorded a gross loss for fiscal 2011 of $64,000 compared to a gross profit in fiscal 2010 of $1,771,000, which included a loss of $1,486,000 in fiscal 2011 and a gain of $237,000 in fiscal 2010 resulting from re-assessments of the estimated environmental services contract loss provision. Excluding the impact of these provision re-assessments, AEG recorded a gross profit for fiscal 2011 of $1,422,000 for a margin of 20.8%, compared to $1,534,000 and 33.1% in fiscal 2010. The increase in revenues over the prior year is attributed primarily to increased services provided to Government within the Keno Hill District, particularly accelerated closure reclamation activities and increased closure reclamation plan development activities, as well as to growth in the level of services provided to AEG's private sector clients not only in the Yukon but in the US market as well. The reduced margins in fiscal 2011 are due primarily to relatively high third-party costs incurred on Keno Hill District reclamation plan development activities which were only partially recoverable; a relatively higher level of such reclamation plan development activity, which further averages down overall margins; plus significant up-front costs incurred on the inception of certain new AEG private sector contracts.

Financial Position

Alexco's cash and cash equivalents at June 30, 2011 totaled $50,443,000 compared to $27,615,000, including current restricted cash and deposits, at June 30, 2010, while net working capital totaled $52,957,000 compared to $20,669,000 for the same dates respectively. The increases in cash and net working capital primarily reflect net cash proceeds of $38.9 million received from a bought deal equity financing completed in December 2010 plus the results of operations from the Bellekeno mine since the commencement of commercial production. These increases were partially offset by expenditures on the calendar 2010 and 2011 exploration programs within the Keno Hill District, as well as expenditures made by Alexco pertaining to the development, construction and commissioning of Bellekeno in excess of amounts funded through deposit amounts received from Silver Wheaton Corp.

Full 2011 Fiscal Year Financial Report and Conference Call

Full details of Alexco's 2011 fiscal year financial and operating results are described in the June 30, 2011 audited consolidated financial statements with accompanying notes and related Management's Discussion and Analysis. These documents and additional information on Alexco are available on the Company's website at www.alexcoresource.com and on SEDAR at www.sedar.com.

Alexco is holding an audio webcast conference call to discuss these results at 11 a.m. Eastern (8 a.m. Pacific) on Thursday, September 15, 2011. To participate in the live call, please use one of the following methods:

Participants should connect five to ten minutes before the call.

The conference call will be recorded, and an archived audio webcast will be available at www.alexcoresource.com. Through September 20, 2011, a replay of the call will be available by telephone at the following:

Qualified Persons

The disclosure in this news release of scientific and technical information regarding exploration projects on Alexco's mineral properties has been reviewed and approved by Alan McOnie, FAusIMM, Vice President, Exploration with Alexco, while that regarding mine development and operations has been reviewed and approved by Thomas Fudge, P.E., Senior Vice President, Engineering and Corporate Development for Alexco, both of whom are Qualified Persons as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

About Alexco

Alexco Resource Corp. owns and operates the Bellekeno silver mine, one of several mineral properties held by Alexco which encompass substantially all of the historical Keno Hill Silver District located in Canada's Yukon Territory. Bellekeno, which commenced commercial production at the beginning of calendar year 2011, is Canada's only operating primary silver mine. Alexco's primary near-term exploration objective is to unlock value in the silver-rich Keno Hill District, and is focused on growth by advancing its promising District properties to development decisions. The Company's goal is to produce 7 million to 10 million ounces of silver annually within the next decade. Employing a unique business model, Alexco also provides mine-related environmental services, remediation technologies and reclamation and mine closure services to both government and industry clients through the Alexco Environmental Group, its wholly-owned environmental services division.

Keno Hill Silver District History

Between 1921 and 1988, the Keno Hill Silver District was a world-class silver producer, with more than 217 million ounces of silver produced at average grades of 40.5 ounces per ton silver, 5.6% lead and 3.1% zinc (Yukon Government's Minfile database). These historical production grades would rank Keno Hill in the top 3% by grade of today's global silver producers.

Please visit the Alexco website at www.alexcoresource.com.

Some statements ("forward-looking 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 news 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, future mine construction and development activities, future mine operation and production, the timing of activities and reports, 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 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, the Company has applied several material assumptions, including, but not limited to, the assumption 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. The Company 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.