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Preliminary Economic Assessment For Alexco's EKHSD Project

In 2012, Alexco Resource Corp. (Alexco) commissioned SRK to assist in completing an updated NI 43-101-compliant Preliminary Economic Assessment for their Eastern Keno Hill Silver District project. Located in a historic silver mining district in the Yukon Territory, Canada, there are approximately 30 known polymetallic silver-lead-zinc deposits in the area, many of which have been subject to-small scale mining operations over the last century.

In order to realise Alexco’s objective of unlocking the value of the silverrich district, SRK undertook complete economic assessments for the operating Bellekeno mine and three of Alexco’s advanced exploration projects, all located within 10km of the Keno District Mill. Each assessment included a complete life of mine plan, schedule, operating and capital cost estimates.

This allowed the team to explore many scenarios to optimise the strategic business plan for the district, and focus on growth by advancing Alexco’s promising district properties to development decisions. The final result of these strategic planning exercises was used to create the combined Life of Mine plan for the Preliminary Economic Evaluation.

A number of challenges and opportunities were explored through the course of the assignment:

  • The Keno Hill Silver District is well known for the challenging conditions experienced underground – many of the deposits feature graphitic and sericite schist packages at or near the contacts. Historically, the deposits were mined using square set stoping, shrinkage mining, or cut and fill mining methods. In the last two years the Bellekeno mine has successfully implemented small-scale longhole mining and started moving away from the mechanised cut and fill methods. The small size, challenging ground conditions and the tendency for veins to be saturated when new levels are exposed, limits the productive capacity of individual deposits, thereby requiring several deposits to be operational in order to ensure the district mill is operating at capacity;
  • Consideration was also given to the drop in the spot price for silver during the course of the assignment and the tight capital markets, making it difficult for junior mining companies such as Alexco to raise the funds to put a new mine into production; and,
  • With Alexco temporarily suspending production at the Bellekeno mine, a number of opportunities to restructure the operating costs, including shifting from contractor to a company mining workforce and establishing an owner operated equipment fleet, were incorporated into the PEA.

The completed Technical Report entitled “Updated Preliminary Economic Assessment for the Eastern Keno Hill Silver District Project – Phase 2, Yukon, Canada” is now available on Sedar.

Stephen Taylor:

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