Mr. Clynton Nauman reports

ALEXCO REPORTS SECOND QUARTER 2017 RESULTS

Alexco Resource Corp. has released financial results for the second quarter ended June 30, 2017. For the second quarter of 2017 Alexco recorded a net loss of $2,695,000, or three cents per share, including $500,000 in share-based compensation expense, $400,000 in depreciation and $500,000 in non-cash advisory fees. Alexco Environmental Group (AEG), a wholly owned subsidiary of Alexco, recognized revenues of $2.5-million with a gross profit of $900,000.

Second quarter highlights

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.

In June, 2017, the corporation commenced a surface exploration program of approximately 12,000 metres of surface diamond drilling to further explore potentially mineralized structural targets in the immediate vicinity of the Bermingham deposit. Utilizing three drills, the program is budgeted to cost $3.2-million, with results expected to be released in the fourth quarter of 2017.

The June 30, 2017, unrestricted cash and cash equivalent position of $26.5-million and net working capital of $26.8-million compared with $20.4-million and $23.4-million, respectively, at Dec. 31, 2016.

AEG recognized revenues of $2.5-million for a gross profit of $900,000.

Alexco's chairman and chief executive officer, Clynt Nauman, said: "Alexco is fully engaged on site operations and a plan to move steadily forward in preparation for a final production decision at Keno Hill. More specifically, the company is systematically ramping up on-site resources to execute and support phased underground exploration and development campaigns, initially at Bermingham and subsequently Flame & Moth. In addition, we have completed approximately half of the 12,000-metre surface exploration program in the Bermingham vicinity and expect to have the program completed on schedule in late September. Advancement of the 600-metre underground decline and subsequent underground drill program at the Bermingham deposit will begin shortly, pending amendment approval of the Class IV permit."

Keno Hill exploration and development

In early June, the corporation commenced a surface exploration program of approximately 12,000 metres of surface diamond drilling to further explore potentially mineralized structural targets in the immediate vicinity of the Bermingham deposit. Utilizing three drills, the program is budgeted to cost $3.2-million, with results expected to be released in the fourth quarter of 2017. As at Aug. 10, 2017, Alexco had completed 27 holes for a total of 7,100 metres, with the program expected to be completed during early October.

The corporation is also planning an underground exploration program at the Bermingham prospect, where, subject to permitting, an exploration decline will be driven approximately 600 metres to drill stations to provide access for approximately 5,000 metres of underground infill and confirmation drilling of the high-grade indicated resource zone. The objective of the program is to upgrade the existing inferred resources to indicated resources and to upgrade existing indicated resources to measured resource status through completion of closer-spaced drilling that will also increase the confidence in the geological model. The total estimated cost of $8.7-million includes a combination of purchase and rebuilds of underground equipment.

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

                                                          Three months ended June 30,      Six months ended June 30,
                                                                     2017       2016              2017         2016

Environmental services revenue                                      2,504      2,831             4,439        5,179
Gross profit from environmental services                              913        710             1,462        1,275
(Loss) before taxes                                                (2,591)      (124)           (3,652)      (2,142)
Net income (loss)                                                  (2,695)       152            (3,627)      (1,958)
Total comprehensive income (loss)                                  (2,709)     1,504            (3,561)        (399)
Income (loss) per share -- basic and diluted                       ($0.03)     $0.00            ($0.04)      ($0.02)
Cash flows (consumed) from operating activities                    (1,166)    (1,877)           (2,381)      (2,960)
   

Permitting detail

To drive the planned 600-metre underground exploration decline at the Bermingham deposit followed by approximately 5,000 metres of underground exploration definition drilling requires an amendment to Alexco's Class IV mining land-use authorization. Alexco is well advanced in this process and expects the amendment by mid-August, 2017. Upon completion of this amendment of the Class IV permit, a further amendment to Alexco's quartz mining licence and water use licence will be required for future production and processing of ore from Bermingham. The environmental assessment for the Bermingham mine operations phase of permitting is expected to begin concurrent with the delivery of the initial amendment. The entire permitting process for Bermingham production is anticipated to be complete in the last half of 2018.

The Flame & Moth deposit is permitted to be developed under the quartz mining licence. Prior to processing ore or discharging water from the Flame & Moth mine, an amendment to the water use licence is required, which is granted through the Yukon Water Board. A public hearing for the water use licence amendment was held in late May, 2017, and an amended water use licence is expected to be granted in the third quarter of 2017. The guidance above on permitting is consistent with the schedules and timing disclosed in the Keno Hill silver district preliminary economic assessment, which targets production to commence in the fourth quarter of 2018.

Financial

Alexco's cash and cash equivalents at June 30, 2017, totalled $26.5-million, compared with $20.4-million at Dec. 31, 2016, while net working capital totalled $26.8-million, compared with $23.4-million for the same dates. With its cash resources and net working capital on hand at June 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 2017 and into 2018.

Alexco Environmental Group

In the second quarter of 2017, AEG recorded revenues of $2.5-million and a gross profit of $900,000 for a gross margin of 36 per cent, compared with revenue of $2.8-million and a gross profit of $700,000 for a gross margin of 25 per cent in the second quarter of 2016. AEG continues to be in the review stages of its Keno Hill reclamation plan and permitting submission.

AEG is successfully operating two major water treatment facilities in the United States (the Gold King and Schwartzwalder plants) as well as four smaller water treatment facilities at Keno Hill in Canada. AEG was recently awarded a contract to conduct hydraulic sludge removal and dewatering at the Gilt Edge mine, which is located in Lawrence county, South Dakota.

Alexco is considering its options to optimize its environmental services business to enhance the opportunities of AEG while reducing Alexco's balance sheet exposure to this actively growing business.

Financial report and conference call for Q2 2017

Full details of the financial and operating results for the second quarter ended June 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 and on SEDAR and on EDGAR.

Alexco is holding an audio webcast conference call to discuss these results at 10 a.m. Eastern Time (7 a.m. Pacific Time) on Friday, Aug. 11, 2017. To participate in the live call, please use one of the following methods.

Dial toll-free from Canada or the United States:  1-888-504-7961

Dial from outside Canada or the United States:   1-647-792-1278

Conference ID No.:   4868207

Live audio webcast:  on the Alexco Resource 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 on the company's website.

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.

About Alexco Resource Corp.

Alexco holds the historical high-grade Keno Hill silver district located in Yukon. 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 Alexco Environmental Group, its wholly owned environmental services division.

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