(All amounts in CDN$ unless otherwise
indicated)
VANCOUVER, May 13, 2020 /PRNewswire/ - Alexco Resource
Corp. (NYSE American/TSX: AXU) ("Alexco" or the "Company")
today reports financial results for the quarter ended March 31, 2020 ("Q1 2020"). For Q1 2020 Alexco
reported net income of $12.1 million
("M"), or $0.10 per share.
Q1 2020 Highlights
CORPORATE
- Alexco reported net income of $12.1
M, or $0.10 per share for Q1
2020 compared to net income of $1.2 M
for the quarter ended March 31, 2019
("Q1 2019"). The net income for Q1 2020 included a gain on the sale
of Alexco Environmental Group ("AEG") in the amount of $8.0 M and a non-cash fair value gain of
$8.1 M on the embedded derivative
offset by corporate overhead costs and mine-site care and
maintenance costs. The net income for Q1 2019 included a non-cash
fair value gain of $5.5 M on the
embedded derivative offset by corporate overhead costs and
mine-site care and maintenance costs.
- The Company's cash and cash equivalents as at March 31, 2020 totaled $22.3 M, while net working capital totaled
$23.2 M. The Company's restricted
cash and deposits at March 31, 2020
totaled $3.1 M.
- On February 14, 2020 the Company
entered into a share purchase agreement (the "AEG Sale Agreement")
for the sale of AEG, to AEG's executive management ("AEG
Management"). Under the terms of the AEG Sale Agreement, AEG
Management purchased all of the shares of AEG in consideration for
payment to Alexco of $13.3 M. On
closing of the transaction, AEG Management paid $12.1 M in cash, with the balance of $1.25 M payable pursuant to a promissory note
that matures on February 14,
2021.
- As part of the sale of AEG, Alexco retained ownership of its
subsidiary, Elsa Reclamation & Development Company Ltd.
("ERDC"), and will continue to execute the clean-up of historical
mines in the Keno Hill Silver District under its existing
contractual arrangement with the Federal Government of Canada. In Q1 2020, the clean-up project
continued in the permitting phase in Yukon.
- On March 27, 2020, the Company
completed a public offering and issued 4,662,675 common shares at a
price of $1.85 per share for
aggregate gross proceeds of $8.6 M
for net cash proceeds of $7.8 M.
MINE OPERATIONS AND EXPLORATION
- On March 30, 2020 Alexco
announced the implementation of a COVID-19 response and management
plan to protect the health and safety of its employees and
contractors as well as the local communities in which it operates
(see press release dated March 30,
2020 entitled "Alexco Provides Corporate Update"). The
Company suspended underground mine development activities while
continuing to maintain all areas at the Keno Hill site. Mill
improvement and refurbishment projects were continued by
Yukon-based employees while
non-essential Keno Hill site-based employees transitioned to
working remotely on a number of engineering and project planning
assignments.
- During the quarter the Company made steady progress on scale-up
mine site activities including recruitment of key personnel and
senior site management, securing long lead time orders for mine
equipment and advancing capital infrastructure projects at the mill
and across the project site.
- The Company's 2020 surface exploration program, originally
planned to include approximately 11,500 meters ("m") of surface
drilling beginning in May, was deferred as a result of the COVID-19
restrictions. The revised surface exploration drilling program is
expected at a minimum to include 4,200
m of surface drilling beginning in mid to late summer and
will focus on the Bermingham "deep target", where exploration
drilling in 2019 successfully confirmed the presence of wide,
high-grade mineralization developed at depth below the Bermingham
high grade silver resource.
2020 OUTLOOK
The Corporation's development strategy continues to be a two
phased approach moving towards mine and mill operations. Phase 1
work commenced in June 2019 and
focused on surface and mill capital improvements, along with
operations planning and permitting, while Phase 2 will commence
only once the Company makes a positive production decision, which
is subject to granting of the pending Water Use License ("WUL") and
market conditions. Phase 2 work will focus on underground
development in preparation for initial production from the
Bellekeno and Flame & Moth deposits, mill commissioning and
final underground development and ore production of the Bermingham
deposit.
Alexco is in the final steps of amending and renewing the
primary WUL for mine-related activity in the District. A public
hearing was held in February 2020 and
the Company expects the granting of the WUL renewal in the second
quarter of 2020. Once renewed, the WUL will authorize the use of
water and deposition of waste from mining and milling operations at
the Bermingham, Flame & Moth, Bellekeno and Lucky Queen (and
Onek) deposits for a period of 15
years.
During Q1 2020, the Company continued exploration activities
completing a planned extension (from 2018) of the district-wide
detailed airborne geophysical program. The interpretation of
results from these surveys has proved important in targeting
mineralized structures in areas of cover and will be especially
important for target generation and ranking for longer term
exploration planning at Keno Hill.
Clynt Nauman, Alexco's Chairman
and Chief Executive Officer, commented, "The first quarter 2020 was
very much one of adapting to the unprecedented conditions and
restrictions resulting from the COVID-19 pandemic. Above all, we
have focused on preserving the well-being of our teams and our
communities. At the same time we cautiously moved forward with some
planned mill refurbishment and surface capital projects. We remain
confident that the Yukon Water Board will deliver a decision on our
renewed and expanded WUL this quarter thereby clearing the way for
a final production decision." Added Mr. Nauman, "In the meantime,
we expect to launch a reduced scale surface exploration program in
mid to late summer to focus on the Bermingham deep target, which
returned exceptionally encouraging silver intercepts last year.
Finally, we are hopeful that by the end of the second quarter the
path forward at Keno Hill will be much clearer; at that point we
should have our renewed WUL in hand, and our path toward production
well outlined in context with appropriate health related protocols
and market conditions."
Financial Report
Full details of the financial and operating results for Q1 2020
are described in Alexco's interim condensed consolidated financial
statements for the three months ended March
31, 2020 with accompanying notes and related management's
discussion and analysis. These documents and additional information
about 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.
Conference Call for Q1 2020 Results
Alexco is holding an audio webcast conference call to discuss
these results at 3:00 p.m. Eastern
(Noon Pacific) on Thursday, May 14,
2020. 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:
|
https://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
https://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., Chief Mine Engineer, 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 is a Canadian primary silver company that owns the
majority of the historic high-grade Keno Hill Silver District (the
"District") in Canada's
Yukon Territory. Alexco has a long
history of expanding Keno Hill's mineral resources through
successful exploration and is currently advancing a development
plan for the District. In 2019, the Company published a positive
pre-feasibility study that estimates production of 1.12
million tonnes of ore at an average rate of 430 tonnes per day at
an average grade of 805 grams per tonne silver over an 8-year mine
life from the Flame & Moth, Bermingham, Bellekeno and Lucky
Queen deposits.
www.alexcoresource.com
Some statements ("forward-looking statements") in this news
release contain forward-looking information concerning
Alexco. Forward-looking statements include, but are not
limited to, statements with respect to payment to Alexco of future
consideration for the sale, future mine construction and
development activities. 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 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, those matters
identified in is continuous disclosure filings. 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.