Alexco kick-starts Yukon silver mine

Alexco Resources Corp. [AXR-TSX; AXU-NYSE] said it has commissioned the mill and launched initial production of lead-silver and zinc concentrates at its flagship Keno Hill silver project in the Canadian Yukon.

“The initial ore source for mill commissioning is the Bellekeno underground mine where drilling, blasting and extraction of ore from long hole stopes continues,” the company said in a press release that was issued after the close of trading on November 24, 2020. Alexco shares advanced on the news, rising 3.2% or 10 cents to $3.20.

“Initial commissioning of our mill is a significant milestone on our journey toward establishing Alexco as Canada’s only primary silver producer,” said Alexco Chairman and CEO Clynt Nauman.

“There is still a lot of work ahead in our ramp up and underground development programs at the Bermingham and Flame and Moth operations, which are scheduled to sequentially replace Bellekeno ore feed over the course of the first half of 2021,” Nauman said.

During an illustrious history, the mine produced 217 million oz silver. On March 28, 2019, Alexco released results of an independent pre-feasibility study (PFS), which put the Keno Hill Project “on a clear path to production,” the company said.

The PFS contemplated production of approximately 1.2 million tonnes at an average grade of approximately 805 g/t silver, 2.98% lead, and 1.13% zinc from four deposits (Bellekeno, Flame & Moth, Bermingham and Lucky Queen).

Average processing rate during the proposed 8-year mine life was estimated at 430 tpd and Keno Hill was expected to produce approximately 4.0 million oz silver annually, contained in lead and zinc concentrates.

The company plans to conduct a $3.5 million exploration campaign to complete 11,500 metres of surface drilling at the Bermingham Deep, the Inca Vein and other targets in the district.

The PFS was based on total probable reserves of 30.4 million oz silver, of which roughly half is hosted by Flame & Moth. Bermingham is estimated to host 11.3 million ounces. Of the balance, Lucky Queen has 2.8 million ounces and Bellekeno has approximately one million ounces.

The PFS estimated initial capital costs at $23.2 million, consisting of $17.9 million on surface and underground development costs to reach mill commissioning, plus an additional $5.3 million of net working capital for two months of mill operations ramp-up prior to positive cash flow.