VANCOUVER, March 13, 2019 /CNW/ - Alexco Resource Corp.
(NYSE American: AXU, TSX: AXR) ("Alexco" or the "Corporation")
today reports financial results for the fourth quarter and year
ended December 31, 2018. All
figures are expressed in Canadian dollars unless otherwise
stated. For the fourth quarter of 2018 Alexco recorded a net
loss of $1.8 million ("M") or
$0.02 per share. Alexco Environmental
Group ("AEG"), a wholly owned subsidiary of Alexco, recognized
revenues of $8.9 M with a gross
profit of $2.2 M. For the full year
2018 Alexco recorded a net loss of $8.5
M or $0.08 per share,
including net non-cash costs totaling $2.6
M. The net working capital position at December 31, 2018 was $10.2 M.
2018 Highlights
- The Corporation's cash and cash equivalents at December 31, 2018 totaled $8.6 M compared to $17.9
M at December 31, 2017, while
net working capital totaled $10.2 M
compared to $18.7 M at December 31, 2017. The Corporation's restricted
cash and deposits at December 31,
2018 totalled $2.7 M compared
to $7.1 M at December 31, 2017.
- Alexco Environmental Group ("AEG"), recognized revenues of
$19.9 M for the year ended
December 31, 2018 for a gross profit
of $6.1 M achieving a gross margin of
30% compared to revenues of $10.7 M
for the year ended December 31, 2017
for a gross profit of $4.0 M
achieving a gross margin of 37%.
- On February 23, 2018 Alexco
entered into a definitive credit agreement with Sprott Private
Resource Lending (Collector), L.P. ("Sprott") to provide a
US$15 M credit facility (the "Credit
Facility"), which remains undrawn.
- On April 30, 2018 Alexco replaced
$6.3 M of cash placed as security for
its Keno Hill property with a surety bond. The surety instrument is
collateralized with $2.4 M of cash
with the resulting $3.9 M plus
accrued interest being reclassified to unrestricted cash.
- On June 14, 2018, the Corporation
completed a bought deal public offering and issued 4,703,000
flow-through common shares (the "Flow-Through Shares") at a blended
price of $1.92 per share for
aggregate gross proceeds of $9.0
M.
- During the year 1,167,351 warrants were exercised for proceeds
to Alexco of $2.0 M.
- On April 12, 2018 Alexco
announced the appointment of Karen
McMaster to the Board of Directors. Ms. McMaster's extensive
history in the mining industry has been primarily focused on legal
counsel for environmental matters as well as exploration and mine
development.
MINE OPERATIONS AND EXPLORATION
- On May 2, 2018, Alexco announced
completion of 550 meters ("m") on the Bermingham underground
advanced exploration decline, initially collared in August 2017, and subsequently completed a
4,230m underground exploration drill
program from the decline. Results from this drilling program were
released on August 9, 2018 and
September 17, 2018.
- Following completion of underground advanced exploration work
at Bermingham, Alexco commenced the underground ramping system at
the Flame & Moth deposit. Alexco completed the targeted Flame
& Moth underground development program for 2018 with
452 m driven in total, comprising
371 m of linear decline advance and
81 m included in support
infrastructure.
- During 2018, the Corporation completed a total of 15,314 m of surface exploration drilling in 55
completed holes including 7,687 m in
26 drill holes in a new reconnaissance program, and 3,756 m in 11 holes in the Bermingham in-fill
drilling program, as well as 1,179 m
in ten holes at Flame & Moth for metallurgical and geotechnical
purposes. A further 2,692 m was
drilled on third party properties within the district complex.
Results from the surface drilling programs were released on
August 9, 2018, September 17, 2018 and January 29, 2019.
- On September 20, 2018 Alexco
announced an updated and expanded mineral resource estimate for the
Bermingham deposit (see news release dated September 20, 2018, entitled "Alexco Updates
Bermingham Resource"). The indicated mineral resources expanded
from 17.3 M ounces to 33.3 M ounces of contained silver at an average
silver grade of 628 grams per tonne ("g/t"), while inferred mineral
resources increased from 5.4 M ounces
to 10.4 M ounces of contained silver
at an average silver grade of 526 g/t.
- In the fourth quarter of 2018 the Corporation determined that
the likely timeline to renew the currently active Water Use Licence
("WUL") (which includes authorization for water use and waste
deposition related to development and processing of Bermingham
ores) would be near the end of the second quarter of 2019. With
this information in hand and the announcement of an expanded
mineral resource at Bermingham (above), the Corporation elected to
extend the pre-feasibility study ("PFS") completion timeline to the
end Q1 2019. With respect to the outstanding renewal of the WUL
originally expected in Q2 2019, the Corporation believes it prudent
to guide towards a third quarter issuance of this final WUL, due to
continued backlog pressure in the Yukon Water Board process.
- On December 6, 2018 the
Association for Mineral Exploration ("AME") announced the
recipients of their 2018 Celebration of Excellence Award winners.
Alexco's Al McOnie (VP,
Exploration), Seymour Iles (District
Exploration Manager) and Jared
Chipman (Sr. Geologist) were honored with the H.H. 'Spud'
Huestis Award for Excellence in Prospecting and Mineral
Exploration. This award is a result of their work on the
recent discovery and delineation of more than 60 million ounces of
silver in the Flame & Moth and Bermingham deposits in the Keno
Hill Silver District.
ALEXCO ENVIRONMENTAL GROUP
- Alexco Environmental Group ("AEG"), recognized revenues of
$19.9 M for the year ended
December 31, 2018 for a gross profit
of $6.0 M achieving a gross margin of
30% compared to revenues of $10.7 M
for the year ended December 31, 2017
for a gross profit of $4.0 M
achieving a gross margin of 37%. AEG operating income before taxes
for 2018 was $1.5 M excluding
non-cash costs of $165,000.
- On April 3, 2018 Alexco's wholly
owned US subsidiary, Alexco Water and Environment Inc. ("AWE"),
entered into a Master Services Agreement ("MSA") with Colorado
Legacy Land LLC ("CLL") to become the Operator of Responsible
Charge for the Schwartzwalder Mine and the former Cañon City
Uranium Mill reclamation and cleanup projects. These long-term
arrangements are expected to take more than ten years to complete
and are expected to generate revenue in excess of US$20 M for AWE.
- On June 15, 2018 AEG acquired
Contango Strategies Ltd. ("Contango"), a private company based in
Saskatoon, Saskatchewan, for
consideration of $1.4 M comprising
$971,600 in cash and
237,999 common shares of Alexco at a value of $416,400. Settlement of the consideration is in
two tranches with $1.0 M (comprising
$601,600 in cash and $416,400 in Alexco common shares) paid on closing
with the remaining $370,000 cash
payment to be made on the first anniversary of the closing of the
transaction. The acquisition includes all of Contango's operations
including $450,000 in working
capital, and property, plant and equipment.
Alexco's Chairman and Chief Executive Officer Clynt Nauman said, "From a mining perspective
2018 was a transitional year for Alexco – steadily progressing from
explorer – developer to developer – producer at Keno Hill. As a
result of exploration work conducted in 2017 and 2018, the
Bermingham indicated mineral resources were expanded from
17.3 M ounces to 33.3 M ounces of contained silver at an average
silver grade of 628 g/t, this resource now underpinning a new PFS
study due to be published at the end of this month. As we move
into the second quarter of 2019 we are very focused on market
conditions, commercial terms and final permitting progress as part
of our disciplined progress toward a final production decision.
Along with progress on the mining side of the Company, we have
overseen a significant expansion of our environmental business,
AEG, which now employs more than 80 professionals in six offices
across the US and Canada and
posted a record $20 million in
revenue in 2018".
Financial
Alexco's cash and cash equivalents at December 31, 2018 totaled $8.6 M compared to $17.9
M at December 31, 2017, while
net working capital totaled $10.2 M
compared to $18.7 M for the same
dates. With its cash resources and net working capital on
hand at December 31, 2018, Alexco
anticipates it will have sufficient capital resources to service
the working capital requirements of its mine site care and
maintenance, exploration activities, environmental services
business and corporate offices and administration as planned for
the next twelve months.
SELECTED ANNUAL
CONSOLIDATED CORPORATE INFORMATION
|
|
|
|
|
As at and for the
year ended December 31
|
(expressed in
thousands of Canadian dollars,
except per share amounts)
|
2018
|
2017
|
2016
|
|
|
|
|
Revenue
|
19,880
|
10,732
|
11,361
|
Gross
profit
|
6,052
|
4,000
|
2,866
|
|
|
|
|
Net loss
|
(8,501)
|
(7,813)
|
(4,524)
|
Loss per
share:
|
|
|
|
Basic
|
($0.08)
|
($0.09)
|
($0.05)
|
Diluted
|
($0.08)
|
($0.09)
|
($0.05)
|
Total
assets
|
133,018
|
122,324
|
109,686
|
Total long-term
liabilities
|
8,384
|
5,669
|
4,332
|
Dividends
declared
|
Nil
|
Nil
|
Nil
|
Financial Report and Conference Call for Fourth Quarter and
Year End 2018 Results
Full details of the financial and operating results for the
fourth quarter and year ended December 31,
2018 are described in Alexco's interim condensed
consolidated financial statements with accompanying notes and
related Management's Discussion and Analysis. These documents
and additional information on Alexco, including its annual
information form, are available on Alexco's website at
www.alexcoresource.com and on SEDAR at www.sedar.com and
on EDGAR at www.sec.gov/edgar.shtml.
Alexco is holding an audio webcast conference call to discuss
these results at 12:30 a.m. Eastern
(9:30 a.m. Pacific) on Thursday, March 14, 2019. To participate in
the live call, please use one of the following methods:
Dial toll free from
Canada or the US:
|
1-800-319-4610
|
Dial from outside
Canada or the US:
|
1-604-638-5340
|
Conference
ID#:
|
Ask to join the
Alexco conference call
|
Live audio
webcast:
|
www.alexcoresource.com
|
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.
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, while that regarding mine development and operations
has been reviewed and approved by Neil
Chambers, P.Eng., Mine Superintendent, both who of whom are
Qualified Persons as defined by National Instrument 43-101 ‑
Standards of Disclosure for Mineral Projects.
About Alexco
Alexco owns the majority of the historic high-grade Keno Hill
Silver District in Canada's
Yukon Territory as detailed in its
preliminary economic assessment (the "PEA") entitled "Preliminary
Economic Assessment of the Keno Hill Silver District Project,
Yukon, Canada", which is dated
March 29, 2017, with an effective
date of January 3, 2017, and anticipates the sequential
development of four high grade silver deposits over an eight year
mine life producing more than one million tonnes with an average
grade of 843 g/t silver, 3.3% lead and 4.6% zinc. Silver
production is anticipated to be approximately 3.5 million ounces
per year. The PEA is preliminary in nature and includes inferred
mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that the PEA will be realized. Mineral resources that are
not mineral reserves do not have demonstrated economic
viability.
Alexco also operates a wholly-owned subsidiary business, Alexco
Environmental Group, that provides mine-related environmental
services, remediation technologies and reclamation and mine closure
services to both government and industry clients in North America and elsewhere.
Please visit the Alexco website at www.alexcoresource.com
To receive, free of charge, printed copies of Alexco's
financial statements, management's discussion and analysis, annual
information form and Form 40-F for any reporting period,
shareholders may contact Alexco's Corporate Office
directly.
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 the 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 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.
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SOURCE Alexco Resource Corp.