Alexco Resources Corp. (AXR-TSX, AXU-NYSE) said Wednesday it has reached a major turning point as the company moves to full production at its flagship Keno Hill silver mine in the Canadian Yukon.
Alexco is also planning for cash flow self-sufficiency, the company said in an operational update that accompanies its results for the third quarter of 2021.
Alexco recently said it has commissioned the mill and launched initial production of lead-silver and zinc concentrates at Keno Hill. The 100%-owned United Keno Hill Mine ranks as Canada’s second largest producer of silver, behind Cobalt, Ontario.
The initial ore source for mill commissioning is the Bellekeno underground mine.
However, Alexco has continued to work on the ramp up and underground development programs at the Bermingham and Flame and Moth operations, which were scheduled to sequentially replace Bellekeno ore feed over the course of the first half of 2021.
A pre-feasibility study 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).
“With ore extraction completed at Bellekeno and our team now completely focused on our two new mines (Bermingham and Flame & Moth), we are rapidly moving closer to full production and planning for cash flow self-sufficiency at Keno Hill,’’ said Alexco Chairman and CEO Clynt Nauman.
Nauman said the focus on the fourth quarter is on completing underground development to achieve concurrent ore production from the Bermingham and Flame & Moth mines.
“Early development ore from the 1150 level at Bermingham was stockpiled in September and is now moving through the district mill and producing high grade silver concentrates as anticipated,’’ he said.
Work crews have reached the first two ore access levels at Flame & Moth, with initial ore production anticipated in the late fourth quarter of 2021.
“Once the Flame & Moth Alimak raise is completed in early 2022, we will be able to fill the mill and sustainably reach our targeted production levels,’’ Nauman said.
Meanwhile, the company has completed drilling on the Bermingham Northeast Deep zone at Keno Hill.
Bermingham Northeast Deep is situated approximately 150 metres below the existing mineral resource that is currently in development. Drilling highlights include 1,681 g/t silver over 20.37 metres true width. “We are currently advancing the work required to develop a new mineral resource estimate for the Bermingham deposit to include the Northeast Deep zone, to be completed later this year.’’
On November 9, 2021, Alexco shares closed at $2.48 and trade in a 52-week range of $4.38 and $1.81.