Since the start of commissioning in December, Alexco Resource Corp. has been steadily ramping up toward commercial production at its Keno Hill silver mining operation in Canada's Yukon.

During the second quarter, the mill at Keno Hill produced 227,683 ounces of silver, 1.8 million pounds of lead, and 647,780 lb of zinc from 10,896 metric tons of ore averaging 703 grams per metric ton silver, 9.3% lead, and 3.1% zinc. This is compared to 100,984 oz of silver, 854,346 lb of lead, and 86,494 lb of zinc from 3,850 metric tons of ore averaging 985 g/t silver, 11.9% lead, and 3.3% zinc during the first quarter.

Mill throughput during the second quarter averaged 176 metric tons per day, a 65% increase over the 107 tpd throughput rate for the roughly 36 days the mill operated during the first quarter. The mill throughput is being scaled at a pace to match mining rates and is expected to top 400 tpd when scaled to full capacity.

In May, Alexco reported that the four mines at Keno Hill – Bellekeno, Bermingham, Flame and Moth, and Lucky Queen – host 1.44 million metric tons of probable reserve averaging 804 g/t (37.2 million oz) silver, 3.84% (122 million lb) zinc, and 2.64% (84 million lb) lead.

This marks a 22% increased expansion in reserve tonnage.

Based on these expanded reserves, the Keno Hill mine is forecast to produce more than 35.5 million oz of silver over the next eight years, or nearly 4.5 million oz per year.

"During the second quarter, we made good progress at Keno Hill, increasing mine reserves by 22% and ramping up mill throughput by 65% over Q1 2021, while maintaining strong metallurgical performance, both from a recovery and payability perspective," said Alexco Resource Chairman and CEO Clynt Nauman.

So far, all the ore fed into the mill has come from Bellekeno. Crews are expected to reach ore at Bermingham before the end of September, which will provide a second source of high-grade ore for ramping up the mill throughput rate.

"We continue to be extremely focused on increasing our underground development rates, and we remain on track to reach Bermingham and Flame & Moth ore in the second half of 2021," Nauman added. "We do caution investors however that the longer-term continuation or increased COVID-19 related workplace restrictions, slower than forecasted development advance rates or recruitment of underground miners and maintenance technicians, may have the effect of extending our scale-up period."

The company says it has contracted additional underground miners and maintenance technicians to supplement internal staffing and resources and to increase mine advancement rates.

At Flame and Moth, the main underground ramp has reached the first ore access level. With the development of a crosscut currently underway, Alexco anticipates the first ore from this mine before the end of the year.

On the exploration front, Alexco has completed roughly 11,500 meters of directional drilling this year, targeting Bermingham Northeast Deep, a high-grade silver zone even by Keno Hill standards.

This zone lying below the current Bermingham resource was discovered in 2018 and was drilled with several holes last year.

Highlights from the 2020 Bermingham Deep drilling include:

• 6.12 meters averaging 1,560 g/t (50.16 oz/t) silver in hole K-20-0761.

• 8.76 meters averaging 3,583 g/t (115.2 oz/t) silver in K-20-0769.

• 7.46 meters averaging 1,381 g/t (44.4 oz/t) silver in K-20-0770.

• 5.3 meters averaging 2,070 g/t (66.55 oz/t) silver in K-20-0773.

Alexco Resource Corp.

This core from 2018 drilling shows the very high-grade mineralization often encountered at Alexco's Keno Hill project.

With the use of directional drill technology, Alexco is targeting 50 intercepts of the high-grade silver mineralization at Bermingham Northeast Deep this year. Assays are pending.

"The directional drilling campaign at the Bermingham Northeast Deep zone has given us a significant amount of high-quality information and we are looking forward to sharing those initial results with the market in late August, once assay results are available," said Nauman.

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Shane Lasley, Publisher

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