Alexco Resources

Alexco Resources Corp

Website: www.alexcoresource.com
Primary ticker: TSX:AXU; NYSE:AXU
Stage of development: Development
Commodity: Lead, Silver, Zinc
Project to promote: Keno Hill Silver District
Project Location: Canada

Live financials

Cash: CAD$17.8M (at June 30, 2020)
Debt: /

Major shareholders:
Van Eck – 5.2%
Merian Global Investors – 5.1%
Wheaton Precious Metals – 3.9%
Private Investor – 3%
SSI Wealth Management – 2.0%
Management Ownership – 4.8%

Alexco Resource Corp. 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.

Management Profile

Clynt Nauman, Chairman & CEO

Mr. Nauman brings over 35 years of diversified experience in the mineral industry, ranging from exploration and business development to operations and business management in the precious metals, base metals and coal sectors. Mr. Nauman is also currently the CEO of Asset Liability Management Group, and was General Manager of Kennecott Minerals from 1993-1998 and the President and CEO of Viceroy Resource Corporation from 1998-2002. Mr. Nauman holds a B.Sc. in geology.


What is your rationale for attending 121 Mining Investment?

Alexco is on track to become the only primary silver producer in Canada in Q4 2020. We are looking to meet with strong institutional and large hnw investors who are interested in gaining exposure to silver in one of the safest geopolitical jurisdictions with vast geological potential. We would like to increase our share of institutional and “strong” shareholders ownership.


What recent news would you like to highlight to investors attending?

We made a production decision in June 2020, raised $30 million in gross proceeds in July to take us to production. We are on track to put Keno Hill back into production by the end of 2020. We have recently renegotiated the Wheaton Precious Metals silver purchase agreement to further de-risk the project and protect against lower silver prices while at the same time increasing our participation in silver’s future price appreciation.


What are your key goals for the next 3, 6 and 12 months?

3 Months:

Restart production at the Bellekeno mine

6 Months:

Complete underground development at the new Flame & Moth and Bermingham mines, complete the upgrades and restart the Keno Hill District mill and start silver-rich lead concentrate, and zinc concentrate production, and start concentrate sales and shipments.

12 Months:

Continue exploring the newly discovered Inca vein and start exploring new targets in the District generated through aerial surveys conducted in 2018 and early 2020; reach commercial production in 2021 and launch an optimization study to determine the potential for a future expansion of the operation through operational efficiencies and exploration success.


What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

Operational challenges mainly relate to the current COVID-19 restrictions, which we are mitigating through a management plan we implemented in Q1 2020 and are constantly updating based on government directives; Alexco offers one of the highest beta to silver in the primary silver space. We have built a robust plan and have further de-risked our project by renegotiating the Wheaton silver purchase agreement, which provides protection to the downside and participation in silver’s increasing prices, especially during the first two years of the project that are the most capital intensive.


What do you think makes your company such a compelling investment?

We have a de-risked project, on track to become the only Canadian primary silver producer by year-end. We are financed to production and have significant upside through exploration and operational improvements.


Analyst Insight – provided by Independent Investment Research

Alexco Resources is a TSX and NYSE-listed primary silver explorer, developer and mine operator, with assets in Canada.

The company 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 – having produced more than 214 million ounces of silver at an average grade of approximately 1,373 grams per tonne (g/t) silver (44 ounces per tonne (oz/t)) during the early and mid-1900’s.

Alexco is currently advancing Keno Hill to production and expects to start concentrate production and shipments during Q4 2020. Along with the production decision, in June 2020 the company announced amendments to its silver streaming agreement with Wheaton Precious Metals Corp, wherein the production payment made by Wheaton to Alexco on the 25% silver stream will increase by approximately 70% in the first two years of silver production and more than 27% in the longer-term.

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.

Over the last ten years, Alexco has been rewarded with discovery and documentation of 30 Moz silver in Probable Mineral Reserves, 74 Moz silver in Indicated Mineral Resources (inclusive of Probable Mineral Reserves) and a further 24 Moz silver in Inferred Mineral Resources. Notably, in the last six years Alexco geologists have added more than 58 Moz silver in Indicated Mineral Resources to the company’s Mineral Resource base at an average silver grade in excess of 800 g/t (26 oz/t) and a discovery cost of under $0.55 per ounce.