North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Alexco Resource Corp. is pulling all the pieces together to resume production at its Keno Hill Silver District mine in the Yukon by the end of the year.

Alexco produced silver at Keno Hill from 2011 to 2013 but made the choice to idle down operations due to weak silver prices and uncertain market conditions at the time. Over the ensuing years, the company steadily expanded silver resources with continued exploration and completed other work in anticipation of resuming operations there.

With silver selling for roughly US$27 per ounce, the highest level in eight years, the restart of Keno Hill operations is well-timed.

"We remain diligent and systematic in the execution of our plan to transition to production and are clearly pleased with the strength of the silver markets," said Alexco Resource CEO Clynt Nauman.

A prefeasibility study completed last year details plans for a 430-metric-ton-per-day operation at Keno Hill that is expected to produce a total of 27.2 million oz of silver, 67.2 million pounds of zinc and 65.4 million lb of lead over an eight-year mine life.

These payable metals will be recovered from 1.18 million metric tons of probable mineral reserves averaging 805 grams per metric ton silver, 4.13% zinc, 2.98% lead and 0.34 g/t gold.

Since the completion of this financially robust PFS, the company has made steady progress on advancing the operation outlined in it, including upgrades to the mill; securing long lead time orders for mine equipment; additional underground development; drilling at high-grade silver resource expansion targets; and the recruitment of key personnel and senior site management.

In a Sept. 15 update, Alexco reported continued progress on all these fronts.

To handle increased mill capacity, a new tailings filter press and second ball mill are now 95% and 75% installed, respectively. Other mill improvement projects underway include the construction of a crusher enclosure and ventilation system, installation of two concentrate regrind mills, modification of the fine ore feeder system, and upgrade of the employee dry and office facilities.

Alexco says rehabilitation and underground development remains on schedule at three mines that host the bulk of the Keno Hill reserves – Bellekeno, Flame & Moth, and Bermingham. The current primary focus is on Bellekeno, which will provide ore to be used for commissioning the mill later this year.

New underground mine equipment recently delivered to Keno Hill is helping to carry out this work.

This new fleet includes two CAT R1300 3.5-yard loaders; two CAT AD22 20-metric-ton haul trucks; two Atlas Copco 282 twin boom jumbo; and two MacLean SSB bolters.

Alexco says underground development has already reached ore at the 680 level of Bellekeno Mine and crews are advancing a 270-meter primary ramp at Flame & Moth.

At Bermingham Mine, construction of the water treatment plant is underway, which is required prior to resuming ramp development.

While crews prepare to begin mining the already outlined Keno Hill reserves, Alexco's surface exploration drill program is testing for extensions of very high grade silver mineralization previously discovered roughly 200 meters below the NE Zone of Bermingham, a high-grade deposit that hosts 1.1 million metric tons of indicated resource averaging 930 g/t (32.9 million oz) silver. One 2019 hole cut 8.15 meters averaging 1,414 g/t (45.5 oz/t) silver at this Bermingham Deep target.

The company has completed 3,500 meters of drilling at Bermingham Deep, which is more than 80% of the originally planned program. Alexco, however, has added a second drill and extended the program to 7,500 to 8,000 meters of drilling in at least 12 holes slated for completion by mid-November.

"On the exploration front, in 2020 we are drilling much deeper holes (averaging 650 meters) at our Bermingham 'deep' target exploration program so progress is relatively slow, nevertheless the decision to extend the drilling program is based on recognition of a prospective zone which we believe may have a structural framework similar to that which hosts the Bermingham reserve and resource identified at shallower levels," said Nauman.

Initial assay results are anticipated to be available around the end of the year.

Alexco also continues to build its executive and operations teams, including the addition of Paul Jones as the company's senior vice president of corporate development.

Jones brings nearly 20 years of mining experience to his role at Alexco. This includes corporate development, financial planning, investor relations, and mergers and acquisitions.

"Paul's extensive experience in corporate development and investment banking will be a significant benefit as we continue to grow our company," Nauman said.

Alexco Resource Corp.

A fleet of new underground mining equipment was recently delivered to Keno Hill, including the CAT AD22 20-metric-ton haul truck pictured above.

At the mine itself, Alexco said all managers, site supervisors, and mine engineering staff are in place. The company, however, is still filling underground miner, maintenance specialist, and mill operator positions. Alexco has hired 110 of the planned 170 employees that will be needed at Keno Hill by the end of 2020.

With a focus on Yukon and western Canada recruitment, more than 90% of the Alexco employees currently hired are from Yukon and British Columbia, including citizens of the First Nation of Na-Cho Nyak Dun.

Camp expansion to accommodate the larger crew at Keno Hill is 75% complete with the addition of two new camp accommodation units.

With the significant increase in underground and district wide operating activities, Alexco said the safety performance of the expanding crew of employees and contractors remains excellent. The more than 7.5 years that has passed without a lost time accident exemplifies the culture of safety excellence instilled at Keno Hill.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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