VANCOUVER, March 14, 2018 /PRNewswire/ - Alexco Resource
Corp. (NYSE‑American: AXU, TSX: AXR) ("Alexco" or the
"Corporation") today reports financial results for the fourth
quarter and year ended December 31,
2017. All figures are expressed in Canadian dollars unless
otherwise stated. For the fourth quarter of 2017 Alexco
recorded a net loss of $1.7 million
("M") or $0.02 per share. Alexco
Environmental Group ("AEG"), a wholly owned subsidiary of Alexco,
recognized revenues of $2.5 M with a
gross profit of $993,000. For the
full year 2017 Alexco recorded a net loss of $7.6 M or $0.08 per
share, including $4.5 M in
depreciation, share-based compensation expense and other non-cash
costs. The working capital position at year end was $18.4 M.
2017 Highlights
- The Corporation's cash and cash equivalents at December 31, 2017 totaled $17,906,000 compared to $20,382,000 at December
31, 2016, while net working capital totaled $18,414,000 compared to $23,443,000 at December
31, 2016. In addition, the Corporation's restricted cash and
deposits at December 31, 2017
totalled $7,092,000 compared to
$6,948,000 at December 31, 2016.
- Alexco Environmental Group ("AEG"), recognized revenues
of $10,732,000 in 2017 for a gross
profit of $4,000,000 and a gross
margin of 37% compared to revenues of $11,361,000 in 2016 for a gross profit of
$2,866,000 and a gross margin of
25%.
- On March 29, 2017 the Corporation
announced the release of an independent technical report dated
March 29, 2017 with an effective date
of January 3, 2017 entitled
"Preliminary Economic Assessment of the Keno Hill Silver District
Project, Yukon, Canada" (the
"PEA") and announced the Amended SPA with Wheaton (see news release
dated March 29, 2017 entitled "Alexco
and Silver Wheaton Amend Silver Purchase Agreement and Alexco
Announces Positive Preliminary Economic Assessment for Expanded
Silver Production at Keno Hill").
- On March 29, 2017 the Corporation
announced an updated mineral resource estimate for the Bermingham
deposit, expanding the indicated mineral resources from 5.2 million
ounces to 17.3 million ounces while inferred mineral resources
increased from approximately 0.7 million ounces to 5.5 million
ounces of contained silver.
- The Corporation received an 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.
- 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 430 m of the ramp and
decline with completion expected in April of 2018.
- On November 7, 2017 the
Corporation announced comprehensive results from its 2017 surface
diamond drilling exploration program, drilling a total of
13,832 m in the immediate vicinity of
the Bermingham deposit at a cost of approximately $3,600,000.
- On May 30, 2017, the Corporation
closed a flow-through private placement whereby the Corporation
issued 4,205,820 flow-through shares at a price of $2.15 per share for aggregate gross proceeds of
$9,042,513.
- The Corporation disposed of investments in marketable
securities for proceeds of $2,003,000
and a pre-tax realized gain of $1,204,000.
Highlight Subsequent to 2017
- Subsequent to year end, the Corporation entered into a
definitive credit agreement with Sprott Private Resource Lending
(Collector), L.P. to provide a US$15,000,000 credit facility.
Alexco's Chairman and Chief Executive Officer Clynt Nauman said, "2017 was a pivotal year in
which we started the transition from explorer – developer to
developer – producer. This evolution began in September 2017 at the Bermingham deposit with
initiation of a 580 m underground
exploration decline which is now approximately 75% complete.
Following completion of mining work, two underground
drills will be positioned to complete 5,000 meters of infill
and extension drilling of the high grade Bermingham silver deposit.
Concurrently our mining crews will relocate to Flame & Moth
where an additional 965 m of decline
ultimately needs to be driven to access the Flame & Moth
deposit. Optimization of development and mine plans, new resource
calculations and expanded metallurgical testing will be ongoing in
anticipation of a prefeasibility study to be complete in Q3, 2018.
As we move through Q2 we will be very focused on market conditions,
commercial terms and final permitting progress as part of our
disciplined progress toward a final production decision."
Keno Hill Exploration and Development
Alexco's current focus is to re-start mining operations at Keno
Hill, subject to several considerations including commodity prices
and market conditions. Alexco has the requisite permits and
authorizations for future ore production from the Bellekeno, Flame
& Moth, Lucky Queen, and Onek
deposits, as well as the necessary authorization to drive the
Bermingham decline, currently ongoing. In November 2017 a project proposal for
environmental assessment was submitted to Yukon Environmental and
Socio-economic Assessment Board ("YESAB") for future production and
processing of ore from the Bermingham deposit. It is anticipated
that this application process, including completion of the
amendments to Alexco's Quartz Mining Licence ("QML") and WUL will
be completed by the end of 2018 or early 2019.
In December 2017 the Company
received an amendment to its WUL from the Yukon Water Board for the
development and operation (and eventual closure) of the Flame &
Moth deposit.
2017 Exploration Program
In early June, the Corporation commenced a surface diamond
drilling exploration program to further explore potentially
mineralized structural targets in the immediate vicinity of the
Bermingham deposit. In September 2017
the Corporation completed its 2017 exploration program as planned,
drilling a total of 13,832 m. Program
costs were $3,600,000. Comprehensive
drill results were released on November 7,
2017 (see September 7, 2017
press release entitled "Alexco Completes 2017 Surface Exploration
Program, Expands Bermingham Silver Deposit, Advances Underground
Development").
The Corporation also commenced an underground exploration
program at the high grade Bermingham silver deposit. In
August 2017, the Corporation received
the required amended Class IV permit allowing the Corporation to
commence the 580 m underground
exploration decline. As of the date of this MD&A the
Corporation has completed 430 m of
the ramp and decline with completion expected in April 2018. Subsequent to completion of the
Bermingham decline, a 5,000 m
underground drill program will be initiated to tighten up spacing
to upgrade the existing inferred resources to indicated resources
and to upgrade existing indicated resources to measured resource
while also increasing the confidence in the geological model. The
total estimated cost of the underground exploration development and
drilling project is $8,700,000, which
includes capital purchases related to underground equipment.
Financial
Alexco's cash and cash equivalents at December 31, 2017 totaled $17.9 M compared to $20.4
M at December 31, 2016, while
net working capital totaled $18.4 M
compared to $23.4 M for the same
dates. With its cash resources and net working capital on
hand at December 31, 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.
SELECTED ANNUAL INFORMATION
|
|
|
As at and for the
year ended December 31
|
(expressed in
thousands of Canadian dollars, except per share amounts)
|
2017
|
2016
|
2015
|
|
|
|
|
Revenue from
environmental services
|
10,732
|
11,361
|
14,662
|
Gross profit from
environmental services
|
4,000
|
2,866
|
3,251
|
|
|
|
|
Revenue from all
operations
|
10,732
|
11,361
|
14,662
|
Gross profit from all
operations
|
4,000
|
2,866
|
3,251
|
|
|
|
|
Net loss
|
(7,648)
|
(4,359)
|
(5,509)
|
Loss per
share:
|
|
|
|
|
Basic
|
($0.08)
|
($0.05)
|
($0.08)
|
|
Diluted
|
($0.08)
|
($0.05)
|
($0.08)
|
Total
assets
|
123,836
|
117,632
|
102,542
|
Total long-term
liabilities
|
19,787
|
24,839
|
24,496
|
Dividends
declared
|
Nil
|
Nil
|
Nil
|
Alexco Environmental Group
In the fourth quarter of 2017 AEG recorded revenues of
$2.5 M and a gross profit of
$993,000 for a gross margin of 40%,
compared to revenue of $2.9 M and a
gross profit of $881,000 for a gross
margin of 30% in the fourth quarter of 2016. The increase in
2016 revenue was attributed to the AEG completion of the expansion
of an interim water treatment plant at the Gold King
Project.
Alexco continues to pursue opportunities to expand its
environmental services business while ensuring that it limits
Alexco's balance sheet exposure to this actively growing
business.
Financial Report and Conference Call for Fourth Quarter and
Year End 2017 Results
Full details of the financial and operating results for the
fourth quarter and year ended December 31,
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 11:30 a.m. Eastern
(8:30 a.m. Pacific) on Thursday, March 15, 2018. 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 Scott
Smith, P.Eng., Mine Manager, both who of who are Qualified
Persons 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.