VANCOUVER, Feb. 26, 2018 /CNW/ - Alexco Resource Corp.
(NYSE American: AXU, TSX: AXR) ("Alexco" or the
"Company") is pleased to announce that it has entered into a
definitive credit agreement with Sprott Private Resource Lending
(Collector), L.P. ("Sprott") to provide a US$15 million ("M") credit facility (the "Credit
Facility") to be used for the development of the Keno Hill Silver
projects ("Project") located in Yukon,
Canada.
Clynt Nauman, Alexco CEO and
Chairman commented, "With the Credit Facility established, Alexco
continues underground development of the Bermingham and Flame &
Moth deposits as well as refurbishment of the district mill at Keno
Hill, confident that funds are available to fulfill our goal of
near-term production. The Credit Facility carries a total interest
charge of approximately 8.5% on funds drawn down, has no minimum
drawdown requirement and does not carry a stand-by charge. The
Credit Facility is essentially a back-stop allowing the Company to
manage project risk while minimizing dilution to our
shareholders."
Narinder Nagra, Managing Partner
of Sprott, commented, "As one of the largest investors dedicated to
the natural resource sector, Sprott is excited to partner with
Alexco on the restart of the Project. Our partnership with the
Alexco team is consistent with our strategy of providing innovative
and flexible capital to maximize the value of exceptional
projects."
Key Terms of the Credit Facility
- Term of 3 years, Maturity Date – February 23, 2021
- US$15 million
- Interest rate on funds drawn down: the greater of
-
- 7% plus US Dollar 3 month LIBOR
and
- 8% per annum, payable monthly
- Repayable in quarterly installments from October 31, 2019 through to the Maturity
Date
- Upon draw down of funds a 3% charge of the draw down is
charged
- 1,000,000 share purchase warrants were issued to Sprott with a
five-year term, an exercise price of Cdn$2.25 per share and a right by the Company to
accelerate the expiry date to 30 days following the closing price
of the shares exceeding Cdn$5.63 for
more than 20 consecutive trading days
- Repayable in whole or in part, without penalty, provided not
less than twelve (12) months of interest has been paid on any
outstanding amount
- The Company has the option to extend the availability period of
draw down from twelve (12) to eighteen (18) months by issuing to
Sprott 171,480 Alexco common shares
About Alexco
Alexco owns 100% of the high-grade Keno Hill Silver District
("KHSD") in Canada's Yukon. Alexco published an updated Preliminary
Economic Assessment in March 2017
which anticipates the sequential development of four high grade
silver deposits over an eight year mine life to produce more than a
million tonnes with an average grade of 843 grams per tonne, 3.3%
lead and 4.6% zinc. Silver production is anticipated to be
approximately 3.5 million ounces per year. (Please see the news
release dated March 29, 2017 entitled
"Alexco and silver Wheaton Amend Silver Purchase Agreement and
Alexco Announces Positive Preliminary Economic Assessment for
Expanded Silver Production at Keno Hill.")
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.
Please visit the Alexco website at www.alexcoresource.com
This news release does not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any sale of any
of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful, including in the United
States. The securities referenced herein have not been and
will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") or any securities laws
of any state of the United States
and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S.
persons (as defined in Regulation S under the U.S. Securities Act)
unless registered under the U.S. Securities Act and applicable
state securities laws or pursuant to an exemption from such
registration requirements.
Some statements ("forward-looking statements") in this news
release contain forward-looking information concerning Alexco's
anticipated results and developments in Alexco'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, Alexco has applied several material
assumptions, including, but not limited to, the assumption that
Alexco will be able to implement the restructuring without negative
consequences, Alexco will be able to raise additional capital as
necessary, that the proposed exploration and development will
proceed as planned, and 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. Alexco
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.
SOURCE Alexco Resource Corp.