(All amounts in CDN$ unless otherwise
indicated)
VANCOUVER, Nov. 14, 2019 /PRNewswire/ - Alexco
Resource Corp. (NYSE‑American: AXU) (TSX: AXU) ("Alexco" or the
"Company") today reports financial results for the quarter ended
September 30, 2019 ("Q3
2019"). For Q3 2019 Alexco recorded a net loss of $2.3 million ("M") or ($0.02) per share. Alexco Environmental Group
("AEG"), a wholly owned subsidiary of Alexco, recognized revenues
of $7.2 M with a gross profit of
$1.4 M.
Q3 2019 Highlights
CORPORATE
- Overall, Alexco reported a net loss of $2,308,000, or $(0.02) per share for Q3 2019 and a loss before
tax expense of $2,240,000 including
net non-cash cost adjustments of $906,000. In the same period for 2018 the Company
incurred a loss before taxes of $1,548,000, including non-cash income adjustments
of $714,000. The operating loss for
both periods was similar, with offsetting differences to the net
loss related to non-cash adjustments resulting from the treatment
of the embedded derivative on the Wheaton Precious Metals stream
and deferred income tax expense.
- The Company's cash and cash equivalents at September 30, 2019 totaled $10,551,000 compared to $8,576,000 at December 31,
2018, while net working capital totaled $13,853,000 compared to $10,188,000 at December
31, 2018. The Company's restricted cash and deposits at
September 30, 2019 totaled
$2,774,000 compared to $2,725,000 at December 31,
2018.
EXPLORATION
- During Q3 2019 the Company completed an 8,333 meter ("m"),
29-hole surface exploration diamond drilling program:
-
- The program commenced in June
2019 with two drills sited in the vicinity of the Bermingham
deposit, where 5,140 m were drilled
in 10 holes targeting extensions of the shallower Northeast Zone
reserve and resource, as well as testing the continuity and tenor
of the high grade Bermingham mineralization at depth;
- The remaining 19 holes and 3,193
m of drilling were assisted by results from the 2018
geophysical survey flown over the Galena Hill area and targeted
signatures exhibiting a similar structural and stratigraphic
framework to the Bermingham deposit;
- On September 10, 2019 the Company
announced initial results from the 2019 Bermingham "deep target"
drilling program (see news release dated September 10, 2019, entitled "Alexco Intersects
8.1 Meters (True Width) at Composite Grade of 1,414 Grams per Tonne
(45.5 oz/t) Silver at 'Bermingham Deep' Target") indicating this
target is completely open and will require follow-up; and
- The drilling program was completed in mid-October; assay
results are pending for the balance of the 2019 surface drilling
campaign and are expected to be available in December 2019.
MINE OPERATIONS, DEVELOPMENT AND PERMITTING
- The Company completed the planned surface capital construction
activities at the Bermingham deposit consistent with work outlined
in the recently published pre-feasibility study, including
installation of the underground production-related portal,
construction of a lined treatment pond, initial construction of a
coarse ore storage pad, and upgrading of existing haul roads.
- Alexco has the requisite permits and authorizations for
development and future ore production from the Bellekeno, Flame
& Moth, Lucky Queen, and Onek
deposits. Amendment of the Company's Quartz Mining Licence is
expected to be complete in the fourth quarter of 2019, which will
allow Alexco to resume and complete the remaining underground
development at Bermingham and begin ore production.
- The Company is in the final steps of renewing the Water Use
Licence ("WUL") with a Technical Pre-Hearing Conference scheduled
for early December 2019. Following
this process step, the final issuance of the WUL renewal will be
subject to consideration by the Yukon Water Board and will likely
extend into Q1 2020.
ALEXCO ENVIRONMENTAL GROUP
- AEG recognized revenues of $7,200,000 in Q3 2019 for a gross profit of
$1,420,000 achieving a gross margin
of 20% compared to revenues of $4,669,000 for a gross profit of $1,702,000 and a gross margin of 36% in the third
quarter of 2018. The decrease in gross profit margin during the
2019 period was primarily related to use of third party contractors
to complete construction of a larger water treatment system complex
in Ontario as well as two new
longer-term projects coming online that incurred higher up-front
costs.
- During the quarter, under the contract with Canada for the remediation of legacy
environmental conditions at Keno Hill, the Company completed the
Evaluation Process for the ESM Reclamation Plan and a final
Evaluation Report by the Yukon Environmental and Socio-economic
Assessment Board is expected to be issued in December 2019. In addition, the Company continued
with detailed engineering related to the final closure plan.
- During the quarter, the Company entered into an agreement with
the Yukon Government to provide water treatment services at the
Wolverine mine site located in the Yukon,
Canada.
- From a strategic perspective, Alexco continues to evaluate
options to unlock value from AEG for the benefit of Alexco
shareholders.
Alexco's Chairman and Chief Executive Officer, Clynt Nauman, commented, "Alexco continues to
move steadily forward toward resumption of mining operations at
Keno Hill, having completed in Q3 a number of surface capital
projects related to future production from the Bermingham mine as
well as completing another successful season of surface
exploration. Indications from all of our recent work, whether it be
"right sizing" our future production plans to achieve a
low-capital, high return project with capacity to produce
approximately four million ounces of silver per year for seven to
eight years, or whether it be our exploration focus to increase the
total silver endowment of the District, consistently points to a
project that is demonstrating significant upside in terms of
capacity and longevity once production is re-established. On the
permitting front, we are actively working to expedite the final
stages of the Water Use Licencing process and remain confident that
appropriate Quartz Mining Licence authorizations will be in place
before year-end, enabling us to continue with underground
development of the Flame & Moth and Bermingham deposits once
the final production decision is made."
Financial Report
Full details of the financial and operating results for the
third 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.
Conference Call for Third Quarter 2019 Results
Alexco is holding an audio webcast conference call to discuss
these results at 11:00 a.m. Eastern
(8:00 a.m. Pacific) on Friday, November 15, 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 owns the majority of the historic high-grade Keno Hill
Silver District in Canada's
Yukon Territory. 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.
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.