(All amounts in CDN$ unless otherwise
indicated)
VANCOUVER, BC, Nov. 12, 2020 /PRNewswire/ - Alexco
Resource Corp. (NYSE American: AXU) (TSX:
AXU) ("Alexco" or the "Company") today reports
financial results for the three month period ended September 30, 2020 ("Q3 2020") and provides
comments on capital development progress at Keno Hill in
anticipation of initial silver ("Ag") concentrate production in Q4
2020. For Q3 2020, Alexco reported an operating loss of
$5.4 million ("M"), or $0.04 per share. Aa at September 30, 2020, the Company had $39.8 M in cash and cash equivalents, and net
working capital of $38.0 M.
Key Financial Metrics
(Expressed in
000's of Canadian dollars,
except per share and share amounts)
|
For the Three
Month Period
Ended September 30,
|
For the Nine Month
Period
Ended September 30,
|
|
|
2020
|
2019
|
|
2020
|
2019
|
|
|
|
Revenues -
Reclamation Management Revenue
|
$
|
795
|
555
|
$
|
2,233
|
1,703
|
Operating
Loss
|
$
|
(5,356)
|
(1,947)
|
$
|
(10,728)
|
(7,330)
|
Adjusted Loss Before
Taxes1
|
$
|
(5,514)
|
(1,975)
|
$
|
(10,683)
|
(7,758)
|
Cash and cash
equivalents
|
$
|
39,751
|
10,551
|
$
|
39,751
|
10,551
|
Net Working
Capital1
|
$
|
37,998
|
10,090
|
$
|
37,998
|
10,090
|
Adjusted Net Loss
from Continued Operations1
|
$
|
(3,265)
|
(2,043)
|
$
|
(7,295)
|
(8,435)
|
Net Loss from
Continued Operations2
|
$
|
(15,241)
|
(2,234)
|
$
|
(22,753)
|
(2,139)
|
|
|
|
|
|
|
|
Shareholders
|
|
|
|
|
|
|
Basic and Diluted Net
Loss from Continued Operations per Common Share
|
$
|
(0.11)
|
(0.02)
|
$
|
(0.18)
|
(0.02)
|
Adjusted Basic and
Diluted Net Loss from Continued Operations per Common
Share1
|
$
|
(0.02)
|
(0.02)
|
$
|
(0.06)
|
(0.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
See Non-GAAP
measures on page 14 of the MD&A for the three and nine
month periods ended September 30, 2020.
|
2.
|
Net loss includes
non-cash adjustments related to an embedded
derivative.
|
Q3 2020 Highlights
Corporate
- The Corporation's cash and cash equivalents as at September 30, 2020 totaled $39.8 M compared to $6.8
M as at December 31, 2019,
while net working capital totaled $38.0
M compared to $10.1 M as at
December 31, 2019. The Corporation's
restricted cash and deposits as at September
30, 2020 totaled $2.9 M
compared to $2.8 M as at December 31, 2019.
- Alexco reported an operating loss of $5.5 M for Q3 2020, compared to a loss of
$1.9 M for Q3 2019. The increase in
operating loss is primarily a result of an increase in mine site
rehabilitation and dewatering work at the Bellekeno mine in
preparation for initial ore production in Q4 2020 and expensed
refurbishment work at the Keno Hill mill in preparation for mill
commissioning in Q4 2020.
- On July 7, 2020 the Corporation
completed an equity financing and issued 10,994,000 common shares
at a price of $2.73 per share for
aggregate gross proceeds of $30
M.
- On August 5, 2020 Alexco entered
into an amended and restated agreement with Wheaton with respect to
the streaming agreement between the two companies (see press
release dated June 24, 2020, entitled
"Alexco Moves Forward to Production at Keno Hill").
Mine Operations and Exploration
- On July 23, 2020, the Company
received the final amended and renewed water use license ("WUL")
for the Keno Hill Silver District ("Keno Hill" or the "District")
from the Yukon Water Board. The WUL authorizes Alexco to source and
use water, as well as deposit designated waste streams into
approved facilities in and around planned production centers at the
Bellekeno, Flame & Moth and Bermingham mines, and the mill
facility.
- Progress on site-wide capital projects including mill
modifications and infrastructure improvements continues to be on
pace for completion with mill commissioning and production of
silver ("Ag") concentrate in Q4 2020. A concentrate off-take
provider has been selected and agreements are being finalized.
- The Company's 2020 surface exploration program that commenced
on July 17, 2020 has been extended to
include a total of approximately 7,500 meters ("m") core drilling
in at least 12 holes, exclusively testing for deeper mineralization
in the Bermingham mine area. Drilling will continue until late
November.
Clynt Nauman, Alexco's Chairman
and Chief Executive Officer, commented, "During the third quarter
we made significant progress at Keno Hill. I am pleased to report
that we are already placing ore from the Bellekeno mine on the
coarse ore pad in anticipation of mill commissioning in the very
near future. Separately, underground development at the Flame &
Moth and Bermingham mines continues to advance and remain on track
to provide development ore in Q1 2021. Upgrades to surface
infrastructure and the District Mill are nearing completion, and
mill circuits have been successfully wet-tested. We are continuing
with our mine optimization studies with respect to underground
development efficiencies and improved NSR values for ore both
within the PFS mine plan as well as adjacent mineralization. We
expect to complete and report on this work in the first half of
2021." Mr. Nauman continued, "Our exploration program at the
Bermingham 'deep' target will be wrapping up this month and we look
forward to sharing the results when they become available".
Capital Development and Operations
On June 24, 2020, the Company
announced that it is moving forward to finalize development of its
mines at Keno Hill, with a goal of mill commissioning and Ag
concentrate production in Q4 2020. The Company is making steady
progress towards its initial production goal with mine site
development activities, recruitment of key personnel, delivery of
mine equipment, refurbishment of the mill, and completion of
surface infrastructure projects continuing into Q4 2020.
In the mill, installation of cyclones, the addition of a new
tailings filter press and modification to the fine ore feeder is
complete. Other mill improvement projects underway include
installation of a second ball mill, construction of a crusher
enclosure and ventilation system and installation of two
concentrate regrind mills. Other surface construction activities
nearing final completion include the expansion of the camp
accommodation complex including two new bunkhouse units, an
upgraded administration complex, and employee dry and wash
facilities.
Underground refurbishment projects at the Flame & Moth and
Bermingham mines are complete and primary ramp development
continues at both mines. Delivery and commissioning of the major
pieces of new underground mine equipment is largely complete. The
new fleet includes four (4) CAT R1300 3.5 yard scoops, two (2) CAT
AD22 20 tonne haul trucks, two (2) Atlas Copco 282 twin boom
jumbos, two (2) MacLean SSB bolters and other support gear.
Development and long-hole extraction of ore from two underground
levels continues at the Bellekeno mine with ore from these
activities being delivered to the mill coarse ore pad. At the Flame
& Moth mine, advance of the primary ramp is continuing with
approximately 140 m of primary ramp
required to reach the first level access point on the 835 level
followed by 100 m of level access to
cross cut the ore. At the Bermingham mine, development of the vent
raise access level is underway prior to mobilization of the
contract raise development crew within the next month.
Elsewhere, the Company continues to successfully recruit and
onboard the mine operations team. Key managers, site supervisors
and mine engineering staff are all in place and the current focus
continues to be the onboarding of geologists, underground miners,
and maintenance specialists. The current head count at Keno Hill is
approximately 125 employees. Over 90% of the Alexco employees
currently hired are from the Yukon
and British Columbia including
citizens of the First Nation of Na-Cho Nyak
Dun.
With the significant increase in underground and district-wide
operating activities at Keno Hill, the safety performance of all
employees and contractors remains excellent and exemplifies the
culture of safety excellence instilled at Keno Hill. The Company's
safety record has now exceeded over 7.5 years without a Lost Time
Accident.
The Company's strict COVID-19 management protocols and operating
practices remain in place and are continuously reviewed to comply
with the guidelines of the Yukon
Chief Medical Officer.
Financial Report
Full details of the financial and operating results for Q3 2020
are described in Alexco's interim condensed consolidated financial
statements for the three and nine month periods ended September 30, 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 Q3 2020 Results
Alexco is hosting an audio webcast conference call to discuss
these results at 11:00 a.m. Eastern
(8:00 am Pacific) on Friday, November 13, 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/investors/events-webcasts/
|
|
Participants should
connect five to ten minutes before the call. The conference call
will be recorded and an archived audio webcast will be available on
the Company's website 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., 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 and
operates the majority of the historic Keno Hill Silver District, in
Canada's Yukon Territory, one of the highest-grade
silver deposits in the world. Alexco is currently advancing Keno
Hill to production and expects to start concentrate production and
shipments in Q4 2020. As per Alexco's 2020 pre-feasibility study,
Keno Hill is expected to produce an average of approximately 4
million ounces of silver per year contained in high quality
lead/silver and zinc concentrates. Total production over an 8-year
mine life is estimated at 1.18 million tonnes of ore at an average
rate of 430 tonnes per day at an average grade of 805 grams per
tonne. Keno Hill retains significant potential to grow and Alexco
has a long history of expanding the operation's Mineral Resources
through successful exploration.
Some statements ("forward-looking statements") in this news
release contain forward-looking information plans related to
Alexco's business and other matters that may occur in the future,
made as of the date of this news release. 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 risks and uncertainties relating to the COVID-19
pandemic including but not limited to business closures, travel
restrictions, quarantines and a general reduction in consumer
activity; actual results and timing of exploration and development,
mining, environmental services and remediation and reclamation
activities; future prices of silver, gold, lead, zinc and other
commodities; possible variations in mineral 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 circumstances surrounding the
COVID-19 pandemic, although evolving, will stabilize or at least
not worsen; that the extent to which COVID-19 may impact the
Company, including without limitation disruptions to the mobility
of Company personnel, costs associated with implementation of
health and safety protocols, increased labour and transportation
costs, and other related impacts, will not change in a materially
adverse manner; Alexco will be able to raise additional capital as
necessary, that the proposed exploration and development activities
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.