VANCOUVER, Aug. 10, 2017 /PRNewswire/ - Alexco Resource
Corp. (NYSE‑MKT:AXU, TSX:AXR) ("Alexco" or the "Corporation")
today reports financial results for the second quarter ended
June 30, 2017. All figures are
expressed in Canadian dollars unless otherwise stated. For
the second quarter of 2017 Alexco recorded a net loss of
$2,695,000 or $0.03 per share, including $0.5 million ("M") in share-based compensation
expense, $0.4 M in depreciation and
$0.5 M in non-cash advisory fees.
Alexco Environmental Group ("AEG"), a wholly owned subsidiary of
Alexco, recognized revenues of $2.5 M
with a gross profit of $0.9
M.
Second Quarter Highlights
- On May 30, 2017, the Corporation
closed a flow-through private placement whereby the Corporation
issued 4,205,820 flow-through shares at a price of $2.15 per share for aggregate gross proceeds of
$9,042,513.
- In June 2017 the Corporation
commenced a surface exploration program of approximately 12,000
meters ("m") surface diamond drilling to further explore
potentially mineralized structural targets in the immediate
vicinity of the Bermingham deposit. Utilizing three drills, the
program is budgeted to cost $3.2 M
with results expected to be released in the fourth quarter of
2017.
- The June 30, 2017 unrestricted
cash and cash equivalent position of $26.5
M and net working capital of $26.8
M compared to $20.4 M and
$23.4 M, respectively, at
December 31, 2016.
- AEG recognized revenues of $2.5 M
for a gross profit of $0.9M.
Alexco's Chairman and Chief Executive Officer Clynt Nauman said, "Alexco is fully engaged on
site operations and a plan to move steadily forward in preparation
for a final production decision at Keno Hill. More specifically,
the Company is systematically ramping up on-site resources to
execute and support phased underground exploration and development
campaigns, initially at Bermingham and subsequently Flame &
Moth. In addition we have completed approximately half of the
12,000 meter surface exploration program in the Bermingham vicinity
and expect to have the program completed on schedule in late
September. Advancement of the 600 meter underground decline
and subsequent underground drill program at the Bermingham deposit
will begin shortly, pending amendment approval of the Class IV
permit.
Keno Hill Exploration and Development
In early June the Corporation commenced a surface exploration
program of approximately 12,000m surface diamond drilling to
further explore potentially mineralized structural targets in the
immediate vicinity of the Bermingham deposit. Utilizing three
drills, the program is budgeted to cost $3.2
M with results expected to be released in the fourth quarter
of 2017. As at August 10, 2017,
Alexco had completed 27 holes for a total of 7,100 meters with the
program expected to be completed during early October.
The Corporation is also planning an underground exploration
program at the Bermingham prospect, where subject to permitting, an
exploration decline will be driven approximately 600m to drill
stations to provide access for approximately 5,000m of underground
infill and confirmation drilling of the high grade indicated
resource zone. The objective of the program is to upgrade the
existing inferred resources to indicated resources and to upgrade
existing indicated resources to measured resource status through
completion of closer spaced drilling that will also increase the
confidence in the geological model. The total estimated cost of
$8.7 M, includes a combination of
purchase and rebuilds of underground equipment.
Summary Financial Results and Information
|
|
|
|
(expressed in
thousands of dollars
except per share amounts)
|
Three Months Ended
June 30
|
|
Six Months Ended
June 30
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Environmental
services revenue
|
2,504
|
2,831
|
|
4,439
|
5,179
|
|
|
|
|
|
|
Gross profit from
environmental services
|
913
|
710
|
|
1,462
|
1,275
|
|
|
|
|
|
|
Loss before
taxes
|
(2,591)
|
(124)
|
|
(3,652)
|
(2,142)
|
Net income
(loss)
|
(2,695)
|
152
|
|
(3,627)
|
(1,958)
|
Total
comprehensive income (loss)
|
(2,709)
|
1,504
|
|
(3,561)
|
(399)
|
Income (loss) per
share – basic and diluted
|
($0.03)
|
$0.00
|
|
($0.04)
|
($0.02)
|
Cash flows
(consumed) from operating activities
|
(1,166)
|
(1,877)
|
|
(2,381)
|
(2,960)
|
Permitting Detail
To drive the planned 600m underground exploration decline at the
Bermingham deposit followed by approximately 5,000m of underground
exploration definition drilling, requires an amendment to Alexco's
Class IV mining land use authorization. Alexco is well advanced in
this process and expects the amendment by mid-August of 2017.
Upon completion of this amendment of the Class IV permit, a further
amendment to Alexco's Quartz Mining Licence ("QML") and Water Use
Licence ("WUL") will be required for future production and
processing of ore from Bermingham. The environmental
assessment for the Bermingham mine operations phase of permitting
is expected to begin concurrent with the delivery of the initial
amendment. The entire permitting process for Bermingham production
is anticipated to be complete in the last half of 2018.
The Flame & Moth deposit is permitted to be developed under
the QML. Prior to processing ore or discharging water from
the Flame and Moth mine, an amendment to the WUL is required, which
is granted through the Yukon Water Board. A public hearing for the
WUL amendment was held in late May
2017 and an amended WUL is expected to be granted in the
third quarter of 2017. The guidance above on permitting is
consistent with the schedules and timing disclosed in the KHSD PEA,
which targets production to commence in the fourth quarter of
2018.
Financial
Alexco's cash and cash equivalents at June 30, 2017 totaled $26.5 M compared to $20.4
M at December 31, 2016, while
net working capital totaled $26.8 M
compared to $23.4 M for the same
dates. With its cash resources and net working capital on
hand at June 30, 2017, Alexco
anticipates it will have sufficient capital resources to carry out
all of its currently-anticipated exploration programs and service
the working capital requirements of its exploration activity,
environmental services business and corporate offices and
administration as planned for 2017 and into 2018.
Alexco Environmental Group
In the second quarter of 2017 AEG recorded revenues of
$2.5 M and a gross profit of
$0.9 M for a gross margin of 36%,
compared to revenue of $2.8 M and a
gross profit of $0.7 M for a gross
margin of 25% in the second quarter of 2016. AEG continues to
be in the review stages of its Keno Hill Reclamation Plan and
permitting submission.
AEG is successfully operating two major water treatment
facilities in the US, the Gold King and Schwartzwalder plants, as
well as four smaller water treatment facilities at Keno Hill in
Canada. AEG was recently
awarded a contract to conduct Hydraulic Sludge Removal and
Dewatering at the Gilt Edge Mine, which is located in Lawrence County, South Dakota.
Alexco is considering its options to optimize its environmental
services business to enhance the opportunities of AEG while
reducing Alexco's balance sheet exposure to this actively growing
business.
Financial Report and Conference Call for Second Quarter
2017
Full details of the financial and operating results for the
first quarter ended June 30, 2017 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 10:00a.m. Eastern
(7:00 a.m. Pacific) on Friday, August 11, 2017. To participate in
the live call, please use one of the following methods:
Dial toll free from
Canada or the US:
|
1-888-504-7961
|
Dial from outside
Canada or the US:
|
1-647-792-1278
|
Conference
ID#:
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4868207
|
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 Scott
Smith, P.Eng., former Bellekeno Mine Manager, both of whom
are Qualified Persons as defined by National Instrument 43-101 ‑
Standards of Disclosure for Mineral Projects.
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.
Please visit the Alexco website at www.alexcoresource.com
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.
SOURCE Alexco Resource Corp.