UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form 6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2019. |
Commission File
Number 001-33621 |
ALEXCO RESOURCE
CORP.
(Translation
of registrant's name into English)
Suite 1225,
Two Bentall Centre
555 Burrard
Street, Box 216
Vancouver,
BC V7X 1M9 Canada
(Address of principal executive office)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
SUBMITTED
HEREWITH
SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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ALEXCO RESOURCE CORP. |
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(Registrant) |
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By: |
/s/ Mike Clark |
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Date: May 8, 2019 |
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Mike Clark
Chief Financial Officer |
Exhibit 99.1
Alexco Reports First Quarter 2019 Results
VANCOUVER, May 8, 2019 /CNW/ - Alexco
Resource Corp. (NYSE-American: AXU, TSX: AXR) ("Alexco" or the "Company") today reports financial results
for the quarter ended March 31, 2019. All figures are expressed in Canadian dollars unless otherwise stated. For the first quarter
of 2019 ("Q1 2019") Alexco recorded net income of $1.2 million ("M") or $0.01 per share. Alexco Environmental
Group ("AEG"), a wholly owned subsidiary of Alexco, recognized revenues of $7.2 M with a gross profit of $1.5 M.
Q1 2019 Highlights
CORPORATE
- Overall, Alexco reported
net income of $1.2 M ($0.01 per share) for Q1 2019 and income before tax expense of $1.8 M including net non-cash adjustments of
$3.5 M. In the same period for 2018 the Company incurred a loss of $3.6 M (including non-cash costs of $2.0 M) before taxes. The
increase in net income in the 2019 period compared to the 2018 period was mainly attributed to non-cash fair value gain of $5.5
M on the embedded derivative related to the Wheaton Precious Metals Corp. ("Wheaton") streaming agreement.
- The Company's cash and
cash equivalents at March 31, 2019 totaled $6.4 M compared to $8.6 M at December 31, 2018, while net working capital totaled $7.1
M compared to $10.1 M at December 31, 2018.
- Subsequent to quarter
end, Alexco completed a private placement, on a bought deal basis, of 1,842,200 flow-through common shares at a price of $1.90
per share for gross proceeds of $3.5 M. The flow-through common shares comprise: (i) 1,579,000 flow-through shares with respect
to "Canadian exploration expenses" (the "CEE Shares") priced at $1.90 per CEE Share; and (ii) 263,200 flow-through
shares with respect to "Canadian development expenses" (the "CDE Shares") priced at $1.90 per CDE Share.
- On February 14, 2019 Alexco extended the availability period
of draw-down on its credit facility (the "Credit Facility") with Sprott Private Resource Lending (Collector), L.P. ("Sprott")
to August 23, 2019 from February 23, 2019 by issuing to Sprott 171,480 common shares of Alexco.
MINE OPERATIONS AND EXPLORATION
- The Company announced
the results of an independent pre-feasibility study ("PFS") on its 100% owned Keno Hill Silver project (see press release
dated March 28, 2019 entitled "Alexco Announces Positive Pre-Feasibility Study for Expanded Silver Production at Keno Hill
Silver District") and on May 8, 2019 the Company released an independent technical report.
- Assay results were announced from the 2018 reconnaissance
drill program at Husky, No Cash, Townsite, Eagle, Bellekeno South and Black Cap comprising 26 holes for 7,687 meters (see news
release dated January 21, 2019, entitled "Alexco 2018 Reconnaissance Drilling Confirms Continuation of Bermingham Mineralization
at Depth and Identifies an Offset Extension, Identifies New Gold Targets").
ALEXCO ENVIRONMENTAL GROUP
- AEG recognized revenues
of $7.2 M for Q1 2019 for a gross profit of $1.5 M achieving a gross margin of 20%, compared to revenues of $2,764,000 for the
three month period ended March 31, 2018 for a gross profit of $830,000 achieving a gross margin of 30%. AEG incurred an operating
loss before taxes for Q1 2019 of $52,000 excluding non-cash costs of $136,000 (see Note 21 in the financial statements for the
three month period ended March 31, 2019).
- Subsequent to quarter
end, AEG and JDS Energy and Mining Inc. ("JDS") formed a joint venture to enter into an agreement to acquire the abandoned
Mount Nansen Mine site ("Mount Nansen") from the Federal Government of Canada ("Canada") whereby Canada will
pay AEG and JDS to remediate environmental contamination from previous mining activities at Mount Nansen.
- Subsequent to quarter end, AEG entered into an agreement
with the Bank of Montreal ("BMO") for a revolving line of credit ("LOC") for up to $4 M. The LOC has an interest
rate of approximately 5.7% on drawn funds, is secured against AEG assets, and has customary covenants in place. AEG utilized the
LOC capacity to post a $1,000,000 letter of credit for Mount Nansen.
Alexco's Chairman and Chief Executive Officer
Clynt Nauman said, "With the release of the positive PFS for Keno Hill we have reached an important milestone on our way to
becoming Canada's only primary silver producer. We have focused on a plan which has very low capital intensity, high returns and
can generate cash in today's silver pricing environment while retaining significant optionality for the future. Going forward,
we will take a disciplined approach to surface related capital construction work while we wait for clarity on the amendment/renewal
of the water use licence for Bermingham before making a final production decision. We are also focused on our exploration strategy,
which remains unchanged this year as we look to continue expanding Bermingham at depth and explore other high target areas in the
Keno Hill Silver District. On the environmental consulting side of the business, AEG continues to generate strong revenues and
future value by expanding its client base and contractual pipeline".
Keno Hill Development and Exploration
Development Strategy
The Company is moving towards production in
a two (2) phased approach while also mitigating risk of further delay for the renewal of the water use licence ("WUL")
for Bermingham. Phase 1 work will commence in May 2019 and will focus on surface and mill capital improvements, while Phase 2 will
commence only when the timing and certainty of the Bermingham WUL is established. Phase 2 work will focus on underground development
in preparation for production from the Bellekeno and Flame & Moth deposits, mill commissioning and final underground development
of the Bermingham deposit.
Permitting
Alexco has the requisite permits and authorizations
for future ore production from the Bellekeno, Flame & Moth, Lucky Queen, and Onek deposits. Permitting for production from
the Bermingham deposit is ongoing with a positive Decision Document issued by the Yukon Government on July 27, 2018. The Decision
Document outlines a number of standard terms and conditions for development and mine production from the Bermingham deposit. With
the issuance of the Decision Document, Alexco submitted a water licence renewal application to the Yukon Water Board for processing
and milling ore and discharging treated water from the Bermingham mine. Completion of the amendments to Alexco's Quartz Mining
Licence is expected in Q2 2019, and a renewal of the WUL is expected in Q3 2019.
2019 Surface Drilling Program
For 2019, the Company has planned a 7,500 m,
$3 M surface exploration diamond drilling program that will focus on potential reserve/resource expansion, deeper targets in the
vicinity of the Bermingham deposit and following up on reconnaissance drilling from the 2018 program. The surface exploration program
will commence in June and operate through September 2019 with results expected to be finalized in the fourth quarter of 2019.
Alexco Environmental Group
AEG recognized revenues of $7.2 M in Q1 2019
for a gross profit of $1.5 M achieving a gross margin of 20% compared to revenues of $2.8 M for a gross profit of $830 K achieving
a gross margin of 30% in the first quarter of 2018. AEG incurred an operating loss before taxes for Q1 2019 of $52 K excluding
non-cash costs of $136 K. The increase in gross profit during the 2019 period was primarily due to worked performed on the Schwartzwalder
Mine and the former Canon City Uranium Mill reclamation and cleanup projects as well as construction work continuing on a water
treatment plant in Ontario, Canada. The gross margin percentage reduced during the quarter as the Company increased the use of
third party services, most notably relating to projects with significant construction work during the quarter.
On May 6, 2019 AEG and a joint venture partner,
JDS, entered into agreement to acquire the abandoned Mount Nansen Mine site from Canada. AEG and JDS formed a limited partnership
called Mount Nansen Remediation Limited Partnership ("MNR") to enter into the agreement with Canada whereby Canada will
pay MNR to remediate contamination from previous mining activities at Mount Nansen. AEG and JDS each own 50% in MNR as well as
a newly formed general partnership and will be jointly responsible for Mount Nansen project remediation work and will share equally
in the project's profitability. Working alongside Canada, the Yukon Government and Little Salmon/Carmacks First Nations, AEG will
be primarily responsible for permitting, design and care and maintenance while JDS will be responsible for the construction aspect
of the Mount Nansen project. This long-term project is expected to take up to 10 years to complete.
Financial
At March 31, 2019 the Company had cash and
cash equivalents of $6.4 M, and net working capital of $7.1 M compared to cash and cash equivalents of $8.6 M and net working capital
of $10.1 M at December 31, 2018. The Company faces no known liquidity issues or is aware of any significant credit risks in any
of its financial assets. In addition, the Company's restricted cash and deposits at March 31, 2019 totaled $2.7 M compared to $2.7
M at December 31, 2018.
Subsequent to quarter end, the Company completed
a private placement of 1,842,200 flow-through common shares for gross proceeds of $3.5 M.
Financial Report and Conference Call for
First Quarter 2019 Results
Full details of the financial and operating
results for the first quarter of 2019 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, May 9, 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 of whom are Qualified Persons as defined by National Instrument 43-101 –
Standards of Disclosure for Mineral Projects ("NI 43-101").
About Alexco
Alexco Resource Corp. holds the historical
high grade Keno Hill Silver District located in Canada's Yukon Territory. 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.
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.
View
original content:http://www.prnewswire.com/news-releases/alexco-reports-first-quarter-2019-results-300846904.html
SOURCE Alexco Resource Corp.
View original content: http://www.newswire.ca/en/releases/archive/May2019/08/c5760.html
%CIK: 0001364128
For further information: Clynton R. Nauman, Chairman and Chief
Executive Office; Kettina Cordero, Director of Investor Relations, Phone: (778) 945-6577, Email: kcordero@alexcoresource.com, www.alexcoresource.com
CO: Alexco Resource Corp.
CNW 21:45e 08-MAY-19
This regulatory filing also includes additional resources:
ex991.pdf
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