VANCOUVER, Nov. 2, 2017 /CNW/ - Alexco Resource Corp.
(NYSE‑American: AXU, TSX: AXR) ("Alexco" or the "Corporation")
today reports financial results for the third quarter ended
September 30, 2017. All figures
are expressed in Canadian dollars unless otherwise stated.
For the third quarter of 2017 Alexco recorded a net loss of
$2.3 million ("M") or $0.02 per share, including $0.4 M in share-based compensation expense and
$0.4 M in depreciation. Alexco
Environmental Group ("AEG"), a wholly owned subsidiary of Alexco,
recognized revenues of $3.8 M with a
gross profit of $1.5 M.
Third Quarter Highlights
- In August 2017, the Corporation
received an amended Class IV permit allowing the Corporation to
commence a 580 meter ("m") underground exploration decline into the
high grade Bermingham silver deposit. To date the Corporation has
completed 125 m of the ramp and decline with completion expected in
the first quarter of 2018.
- The Corporation has received a draft amended Type A Water Use
Licence ("WUL") from the Yukon Water Board authorizing, subject to
certain conditions, the use and discharge of treated water and
deposition of dry stacked tailings from the Flame & Moth
deposit. A final amended WUL is expected prior to year end. This
amendment is the final required authorization for ore production
from the Flame & Moth silver deposit.
- In September 2017 the Corporation
completed its 2017 surface diamond drilling exploration program as
planned, drilling a total of 13,800 m in the immediate vicinity of
the Bermingham deposit. Program costs were $3.1 M with comprehensive results expected to be
available in the second week of November.
- The September 30, 2017
unrestricted cash and cash equivalent position is $21.4 M and net working capital of $22.9 M compared to $20.4
M and $23.4 M, respectively,
at December 31, 2016.
- AEG recognized revenues of $3.8 M
in the third quarter, recording a gross profit of $1.5 M, approximately twice the gross profit for
the same period in 2016.
Alexco's Chairman and Chief Executive Officer Clynt Nauman said, "Our site operations are
scaling up as planned with increasing underground activity related
to the Bermingham ramp, the scheduled wind-down of surface
exploration activity, and routine completion of numerous
winterization projects. Installation of portal facilities and
subsequent underground work to drive the 580 m Bermingham
exploration decline was delayed approximately 45 days over summer
awaiting final permit authorization. The first quarter of 2018
remains our target completion date for this important first phase
of our re-start program. Subsequent to completion of the Bermingham
decline, a 5,000 m underground drill program will be initiated to
tighten up spacing and confidence in our mine design for this very
high grade silver deposit. The underground drill program will also
include further exploration drill holes proximal to planned mining
areas. Finally, we expect that in Q1 2018 we will make key
decisions regarding the commencement of the Flame & Moth
decline which is expected to take approximately eight months to
complete at a cost of $10.6 M. As we
move through these processes we will upload our data into a
pre-feasibility study, which is expected to be completed in the
third quarter of 2018."
Keno Hill Exploration and Development
In early June the Corporation commenced a surface exploration
diamond drill program to further explore potentially mineralized
structural targets in the immediate vicinity of the Bermingham
deposit. Utilizing three drills, the 13,800 m drill program was
completed at a cost $3.1 M with
results expected to be available in the second week of
November.
Underground activity related to establishment and driving of the
Bermingham exploration decline began in September following receipt
of an amended Class IV permit. Approximately 125 m of the 580 m
decline have been completed to date. Nearing completion of this
decline (expected in Q1 2018), underground drill stations will be
established to allow an approximate 5,000 m infill and exploration
drill program to be executed with information from this work to be
used to increase definition of existing resources as well as refine
mine design for the anticipated early production periods. Total
cost of the Bermingham project is estimated to be $8.7 M including direct mining and underground
exploration costs, rebuilds and purchase of underground equipment
and installation of necessary surface facilities to support
underground activity.
Summary Financial Results and Information
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|
|
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(expressed in
thousands of dollars,
except per share amounts)
|
Three Months Ended
September 30
|
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Nine Months Ended
September 30
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
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Environmental
services revenue
|
3,786
|
3,243
|
|
8,225
|
8,422
|
|
|
|
|
|
|
Gross profit from
environmental services
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1,545
|
710
|
|
3,007
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1,985
|
|
|
|
|
|
|
Loss before
taxes
|
(1,684)
|
(246)
|
|
(5,336)
|
(2,388)
|
Net
loss
|
(2,272)
|
(640)
|
|
(5,899)
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(2,598)
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Total
comprehensive loss
|
(2,288)
|
(1,819)
|
|
(5,849)
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(2,218)
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Loss per share –
basic and diluted
|
($0.02)
|
($0.01)
|
|
($0.06)
|
($0.03)
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Cash flows
(consumed) from operating activities
|
(2,151)
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(492)
|
|
(4,532)
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(3,452)
|
|
|
|
|
|
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Permitting Detail
An amendment to Alexco's Quartz Mining Licence ("QML") and WUL
will be required for future production and processing of ore from
Bermingham. The environmental assessment for the Bermingham
mine operations phase of permitting will begin in November 2017 and the entire permitting process
for Bermingham production is anticipated to be complete by the end
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, a draft of the amended WUL is in hand, and an amended
final WUL is expected to be granted in the fourth quarter of
2017.
Financial
Alexco's cash and cash equivalents at September 30, 2017 totaled $21.4 M compared to $20.4
M at December 31, 2016, while
net working capital totaled $22.9 M
compared to $23.4 M for the same
dates. With its cash resources and net working capital on
hand at September 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 the next twelve months.
Alexco Environmental Group
In the third quarter of 2017 AEG recorded revenues of
$3.8 M and a gross profit of
$1.5 M for a gross margin of 41%,
compared to revenue of $3.2 M and a
gross profit of $0.7 M for a gross
margin of 22% in the third quarter of 2016. The increase in
revenues and gross profits relates to increased contract work at
AEG's US operations and also increased activity on the Keno Hill
contract with the Federal Government.
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.
Alexco continues to review options to optimize its environmental
services business with the aim of enhancing the business
opportunities of AEG while at the same time reducing Alexco's
balance sheet exposure to this actively growing business.
Financial Report and Conference Call for Third Quarter
2017
Full details of the financial and operating results for the
third quarter ended September 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 12:00p.m. Eastern
(9:00 a.m. Pacific) on Friday, November 3, 2017. To participate in
the live call, please use one of the following methods:
|
Dial toll free from
Canada or the US:
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1-833-297-9918
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Dial from outside
Canada or the US:
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1-647-689-4525
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Conference
ID#:
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3997146
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Live audio
webcast:
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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 who is a Qualified Person 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.