Mr. Clynton Nauman reports

ALEXCO REPORTS SECOND QUARTER 2014 FINANCIAL RESULTS

Alexco Resource Corp. has released its financial results for the second quarter of 2014. All figures are expressed in Canadian dollars unless otherwise stated.

Second quarter highlights:

• Net loss of $1.7-million, or three cents per share; loss before deferred taxes was $1.8-million, including non-cash costs of $800,000 for depreciation and $200,000 for share-based compensation;
• Cash and cash equivalents at June 30, 2014, of $6.3-million and net working capital of $11.7-million;
• A total of $2.1-million incurred on exploration with 6,800 metres drilled through June 30 on a total 2014 exploration program budgeted at $5-million, which remains continuing;
• Achieved a favourable amended silver streaming agreement adopting a variable production payment basis linked to the spot price of silver;
• In July, announced a bought-deal financing for $7-million, closing on Aug. 21, 2014.

Alexco's president and chief operating officer, Clynt Nauman, said: "The second quarter and beginning of the third quarter has seen us reach some significant milestones on our path toward resuming production at the Keno Hill silver district in Canada's Yukon Territory. Of note is the amended silver streaming agreement with Silver Wheaton, which provides downside protection in softer silver markets while also retaining upside leverage in stronger markets, thus setting in place a basis on which we can achieve our objective of sustained silver production during normal commodity cycles. Implementation of the amended silver streaming agreement is subject to Alexco paying Silver Wheaton $20-million (U.S.), of which $5-million (U.S.) will be contributed by Silver Wheaton through participation in a primary financing to raise this capital. More recently, we announced a bought-deal offering of units, which will protect the business in the medium term, while also increasing our flexibility to continue exploration and initiate development of the Flame & Moth deposit. We've made solid progress since last fall toward our goal of restoring our position as Canada's only primary silver producer, and I'm excited to have the company positioned to restart mine development following completion of the bought-deal offering. In the meantime, our 2014 exploration program has focused primarily on expanding mineralization in the Flame & Moth deposit area, as well as further testing on the Bermingham deposit. Finally, as anticipated, our Alexco Environmental Group continues to perform well with net revenues from the business offsetting approximately half of Alexco's combined overhead and mine site care and maintenance costs."

                 SUMMARY FINANCIAL RESULTS AND INFORMATION
     (expressed in thousands of dollars, except per-share amounts)    

                                     Three months ended    Six months ended 
                                            June 30,             June 30,
                                         2014      2013      2014      2013 
                                                                            
Revenue from environmental services    $3,064    $3,258    $6,135    $5,465 
Gross profit from environmental                                             
services                                  812     1,435     1,793     2,242 
Revenue from mining operations            105    10,903       361    25,411 
Gross profit (loss) from mining                                             
operations                                105    (2,363)      361    (2,331)
Revenue from all operations             3,169    14,161     6,496    30,876 
Gross profit (loss) from all                                                
operations                                917      (928)    2,154       (89)
Loss before taxes                       1,769    61,299     3,668    64,654 
Net loss                                1,661    49,205     3,080    51,538 
Adjusted net loss                       1,661     3,068     3,080     5,401 
Total comprehensive loss                2,041    48,893     2,893    51,647 
Loss per share -- basic and diluted  $   0.03  $   0.81  $   0.05  $   0.85 

Silver streaming amendment

In June, Alexco announced it had come to an agreement with Silver Wheaton to amend the silver streaming agreement originally dated Oct. 2, 2008, such that the fixed $3.90-(U.S.)-per-ounce silver streaming production payment is replaced with a variable production payment based on the spot price of silver, with significant positive implications for Alexco and the Keno Hill silver district in general (see news release dated June 16, 2014, entitled, "Alexco announces amended silver streaming agreement for Keno Hill"). The silver stream is preserved at 25 per cent, but reflects a new variable production payment curve based on the spot price of silver, with a maximum payment to Alexco of $18 (U.S.) per ounce of silver delivered when spot silver prices are $19.45 (U.S.) and a payment floor of $3.90 (U.S.) per ounce at $35 (U.S.) spot silver price and higher. The amendment is subject to the payment of $20-million (U.S.) by Alexco to Silver Wheaton.

Mr. Nauman said: "This agreement gives us a new financial operating basis with a significantly improved underlying fixed-cost structure, and has a longer-term impact for expansion of exploration and development opportunities in the district as a whole. This is a high-grade and prolific silver district in one of the world's safest mining jurisdictions, and this amended agreement is a big step toward resumption of sustainable silver production under almost any market condition."

Bought-deal financing

On July 29, 2014, Alexco announced that it had entered into an agreement with an underwriter for a bought deal of 4.35 million units at a price of $1.15 per unit for gross proceeds of $5,002,500. Each unit consists of one common share of Alexco and one-half of one common share purchase warrant, each full warrant exercisable into one common share of Alexco for a period of 24 months from the closing date at an exercise price of $1.40. Subsequently, Alexco announced that in connection with the offering it entered into an amended agreement with the underwriter to increase the offering from $5,002,500 to $7,015,000. Alexco has granted the underwriter an option to purchase additional units or additional warrants, to a maximum number of securities not exceeding 15 per cent of the underwritten offering, for a period of 30 days after the closing date to cover overallotments. If the maximum number of additional units is exercised under the overallotment option, the total gross proceeds from the offering will be $8,067,250, with a total of 7,015,000 shares issued. The net proceeds from the offering are expected to be used by Alexco to further exploration and development activities in the Eastern Keno Hill silver district, particularly at the Flame & Moth deposit, and for general working capital purposes. Closing of the offering is anticipated to occur on or around Aug. 21, 2014, and is subject to customary conditions.

Alexco Environmental Group

Alexco Environmental Group recorded revenues of $3,064,000 in the second quarter of 2014 for a gross profit of $812,000 and a gross margin of 26.5 per cent, compared with revenues of $3,258,000 in the second quarter of 2013 for a gross profit of $1,435,000 and a gross margin of 44.0 per cent. The decline in gross margin is due primarily to a transition to lower-margin phases of a significant project in the United States, and to an increase in lower-margin components of the closure reclamation plan work being carried out in the Keno Hill district.

Mr. Nauman said, "AEG has become an increasingly important and profitable business unit, which is contributing cash and lowering our burn rate, as we progress into the development stage for Flame & Moth."

Mining operations

Mining segment revenues recognized in the second quarter of 2014 totalled $105,000 with nil cost of sales, reflecting the effect of final assay determinations between initial revenue recognition and final settlement of concentrate sales. Bellekeno mining and milling operations were suspended in early September, 2013, in light of the reduced silver price environment. The last concentrate shipments were delivered in October, 2013, and the last final settlements of concentrate sales were completed in April, 2014.

Keno Hill exploration

Alexco's surface exploration plans for 2014 are currently budgeted at approximately $5-million, of which approximately $2.1-million has been incurred through June 30, 2014. The original plans entailed approximately 10,500 metres of surface drilling, primarily at the Flame & Moth deposit and the nearby Flame & Moth West discovery, as well as at Bermingham, and at a limited number of targets elsewhere in the Keno Hill silver district. However, drilling has progressed with greater-than-expected efficiency, such that approximately 6,800 metres had been drilled through June 30, and approximately 9,700 metres through the end of July. It is expected that the total surface exploration drilling for the 2014 season will be increased from 10,500 to approximately 14,000 metres as a result, with the total expenditure for the season remaining unchanged at approximately $5-million. The primary focus for the rest of the 2014 season is expected to be the Flame & Moth southwest area, with drilling expected to continue through the end of September.

The Flame & Moth deposit occurs in two zones separated by a fault, and while the current potentially minable portion has a strike length of about 600 metres, results from drilling in 2013 show the mineralization extends for at least 900 metres. The deposit averages four to five metres in thickness, with some areas up to 11 metres thick. Drilling results released last year included 28 ounces per ton of silver over 5.6-metre true thickness at the southwest extent of the deposit (see news release dated Sept. 18, 2013, entitled, "Alexco extends Flame & Moth to more than 900 meters in strike length; silver grades to 28.8 ounces per ton over 5.6 meters). The Flame & Moth deposit remains open, and just as important, the general area around the deposit remains open for satellitic discoveries, such as Flame West, where there have been intercepts of up to 28.7 ounces per ton silver over a true thickness of 0.85 metre.

Financial position

Alexco's cash and cash equivalents at June 30, 2014, totalled $6.3-million compared with $8.6-million at Dec. 31, 2013, while net working capital totalled $11.7-million compared with $15.3-million for the same dates, respectively. The decline in the quarter was due primarily to expenditures on exploration activity, with roughly half of general and administrative and mine site care and maintenance costs offset by cash generated from AEG operating activities.

With its cash resources and net working capital on hand at June 30, 2014, 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, for at least the current 12-month period, although triggering the amendment to the Silver Wheaton agreement will require additional capital, as will a restart of mining operations and new mine development.

Financial report and conference call for second quarter 2014

Full details of the financial and operating results for the second quarter of 2014 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 are available on the company's website, on SEDAR and on EDGAR.

Alexco is holding an audio webcast conference call to discuss these results at 11 a.m. Eastern Time (8 a.m. Pacific Time) on Aug. 15, 2014. To participate in the live call, please use one of the following methods:

Dial toll-free from Canada or the United States:  1-877-407-8031

Dial from outside Canada or the U.S.:  1-201-689-8031

Live audio webcast:  At the Alexco website

Participants should connect five to 10 minutes before the call.

The conference call will be recorded, and an archived audio webcast will be available at the company's website. Through Sept. 15, 2014, a replay of the call will be available by telephone at the following:

Dial toll-free from Canada or the U.S.:  1-877-660-6853

Dial from outside Canada or the U.S.:  1-201-612-7415

Replay passcodes:  Conference ID No. 13588104

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, PEng, former Bellekeno mine manager, both of whom are qualified persons as defined by National Instrument 43-101 (standards of disclosure for mineral projects).

Keno Hill silver district history

Between 1921 and 1988, the Keno Hill silver district was a world-class silver producer, with more than 217 million ounces of silver produced at average grades of 40.5 ounces per ton silver, 5.6 per cent lead and 3.1 per cent zinc (Yukon government's Minfile database). These historical production grades would rank Keno Hill in the top 3 per cent by grade of today's global silver producers.

We seek Safe Harbor.