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Enter Symbol
or Name
USA
CA



Alexco Resource Corp
Symbol AXR
Shares Issued 101,244,040
Close 2017-12-28 C$ 1.95
Market Cap C$ 197,425,878
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Alexco amends water use licence for Flame & Moth

2017-12-28 03:05 ET - News Release

Mr. Clynton Nauman reports

ALEXCO ANNOUNCES AMENDMENT OF WATER USE LICENCE AT KENO HILL AND OTHER DEVELOPMENTS

Alexco Resource Corp. has received an amendment to its water use licence from the Yukon Water Board for the development and operation (and eventual closure) of the Flame & Moth mine. The Flame & Moth underground mine, located adjacent to the existing Keno Hill district mill, comprises a potentially minable 683,000 tonnes of 666 grams per tonne (g/t) silver and is anticipated to be the primary production source for mine operations in the Keno Hill silver district (RPA, 2017 (1)).

Clynt Nauman, Alexco chief executive officer and chairman, commented: "The receipt of the Flame & Moth water use licence amendment is the final permit and regulatory authorization required for production from the Flame & Moth mine. Receipt of this licence amendment is a milestone in our journey toward mine operations and has involved the co-operation and support of our many stakeholders and partners, including the first nation of Nacho Nyak Dun."

In addition to Flame & Moth, the Bellekeno, Lucky Queen and Onek mines are also fully permitted for operations in the Keno Hill silver district. In November, 2017, the company submitted a further project proposal to the Yukon Environmental Socioeconomic Assessment Board for environmental assessment of the development, operations and eventual closure for the Bermingham mine. Bermingham is anticipated to contribute approximately 220,000 tonnes of 1,276 g/t silver toward the approximately one-million-tonne and more-than-27-million-silver-ounce mine production stream outlined over eight years in the PEA (preliminary economic assessment) mine plan (1). Approximately 5,000 metres of underground exploration and infill drilling of the Bermingham deposit will commence later in first quarter 2018 upon completion of the currently active 580-metre Bermingham exploration decline. Results of the drilling, along with other work, will contribute to a prefeasibility study anticipated to be completed in third quarter 2018.

In other business, Alexco announces that it has restructured its U.S. environmental division. In this restructuring, Alexco's wholly owned subsidiary, Alexco Environmental Group Inc. (AEG Canada), has entered into a share purchase agreement with Arete Property Holdings LLC for the purchase by Arete of all of the issued shares of Alexco Environmental Group (U.S.) Inc. (AEG U.S.) and its wholly owned subsidiary, Alexco Financial Guaranty Corp., for nominal consideration. Arete is wholly owned by James Harrington, senior vice-president and chief technical officer of AEG Canada.

As a result of this transaction, a new Colorado affiliate of AEG Canada, Alexco Water and Environment Inc. will seamlessly continue current and future environmental work in the United States. AEG U.S. Group, together with initial financing provided by AEG Canada required for continuing administrative and corporate responsibilities, will become subsidiaries of, and will be directly managed by, Arete to pursue certain property negotiation rights and further capital opportunities.

Mr. Nauman commented, "The restructuring of Alexco's U.S. environmental division is merely an initial step in facilitating AEG's ability to pursue significant opportunities for new brownfields-related environmental work and revenue while also prudently managing the parent company balance sheet."

The participation of Mr. Harrington (through his ownership of Arete) in the proposed sale of the AEG U.S. Group from AEG Canada causes the proposed transaction to be considered to be a related-party transaction as defined under Multilateral Instrument 61-101. However, the proposed transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the assets acquired by, or the consideration paid by, the related party, Mr. Harrington, will exceed 25 per cent of the company's market capitalization. The proposed transaction has been reviewed and approved by a special committee of the board of directors of the company and the board of directors of the company.

(1) "Technical report, preliminary economic assessment of the Keno Hill silver district project, Yukon Territory, Canada," National Instrument 43-101 report, RPA, March 29, 2017.

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, who is a qualified person 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 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.

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