Mr. Clynt Nauman reports

ALEXCO REPORTS FIRST QUARTER 2018 RESULTS

Alexco Resource Corp. has released its financial results for the first quarter ended March 31, 2018. For the first quarter of 2018 Alexco recorded a net loss of $3.3-million or three cents per share, which included $2-million in depreciation, share-based compensation expense and other non-cash costs. Alexco Environmental Group (AEG), Alexco's environmental consulting business, recognized revenues of $2.8-million with a gross profit of $830,000. Alexco's working capital position as of March 31, 2018, was $18.4-million.

First quarter highlights:

• The company's cash and cash equivalents at March 31, 2018, totalled $13.2-million compared with $17.9-million at Dec. 31, 2017, while net working capital totalled $18.4-million compared with $18.4-million at Dec. 31, 2017. In addition, the company's restricted cash and deposits at March 31, 2018, totalled $7.1-million compared with $7.1-million at Dec. 31, 2017. Of the restricted cash $6.3-million was related to Keno Hill reclamation security, subsequently restructured.
• Alexco Environmental Group (AEG) recognized revenues of $2.8-million in the first quarter of 2018 and a gross profit of $830,000 achieving a gross margin of 30 per cent compared with revenues of $1.9-million in the 2017 period for a gross profit of $549,000 achieving a gross margin of 28 per cent.
• On Feb. 23, 2018, the company established a credit facility for up to $15-million (U.S.) with Sprott Private Resource Lending (Collector) LP. As of the date of this press release, no amounts have been drawn down on the credit facility.

Highlights subsequent to the first quarter:

• Alexco announced completion of the Bermingham underground exploration decline and the commencement of 5,000 metres of infill and exploration drilling in and around the upper portion of the Bermingham high-grade silver deposit.
• Of cash posted as security for its Keno Hill property $6.3-million was replaced with a surety bond. The surety instrument is collateralized with $2.3-million of cash, the balance of $4-million being reclassified to unrestricted cash. In addition, security posted in cash in the amount of $513,000 ($398,000 (U.S.)) has also been released to the company on issuance of a State of Colorado "no further active remediation" filing which represents the final step in the successful completion of the Globeville smelter project.
• Alexco's wholly owned U.S. subsidiary, Alexco Water and Environment Inc. (AWE), entered into a master services agreement with Colorado Legacy Land LLC to become the operator of responsible charge for the Schwartzwalder mine and the former Canon City uranium mill reclamation and cleanup projects. These long-term arrangements are expected to take more than 10 years to complete and are expected to generate revenue in excess of $20-million (U.S.) for AWE.

Alexco's chairman and chief executive officer Clynt Nauman said: "As we move through the second quarter of 2018, the pace of our Keno Hill work has intensified with accelerated work to complete the Bermingham decline, initiation of a prefeasibility study, and continued mill refurbishment and modifications in addition to planning the upcoming field season. With the Bermingham decline completed, we are positioning two underground drills to complete 5,000 m of infill and extension drilling of the high-grade Bermingham silver deposit. Concurrently our mining crews will relocate to Flame and Moth where an additional 530 m of decline ultimately needs to be driven to access the Flame and Moth deposit. As we move through the second quarter we will be very focused on market conditions, prevailing commercial terms and final permitting progress as part of our disciplined approach toward a final production decision."

Keno Hill exploration and development

Alexco's current focus is to restart mining operations at Keno Hill, subject to several considerations including commodity prices, commercial arrangements and market conditions. Alexco has the requisite permits and authorizations for future ore production from the Bellekeno, Flame and Moth, Lucky Queen, and Onek deposits. In November, 2017, a project proposal for environmental assessment was submitted to Yukon Environmental and Socio-economic Assessment Board (YESAB) for future production and processing of ore from the Bermingham deposit. With respect to the required Bermingham authorizations, Alexco is seeing materially increasing timelines for environmental assessment and authorization processes in the Yukon and therefore anticipates a delay in the issuance of the required amendments to Alexco's water use licence (WUL) into the first quarter of 2019.

2018 surface exploration program

On May 7, 2018, the company commenced an expanded 15,000 m, $4-million surface exploration diamond drilling program that will comprise at least 45 holes and start with two drills with a third to be added midsummer.

Following very successful exploration achievements in the 2013 to 2017 period, the company in 2018 is slightly changing its exploration strategy to identify new areas likely to host apparent higher-level silver-rich deposits (typified by the Bermingham discovery), as well as initiating a new program targeting apparent deeper-level silver- and base-metal-rich deposits (typified by the historic Hector-Calumet deposit) containing upward of 50 million ounces of silver. The historic Hector-Calumet mine located approximately one kilometre northeast of Bermingham produced approximately 96 million ounces of silver at a reported grade of 1,090 grams per tonne silver. The surface exploration program will extend through to October, 2018, with results expected to be finalized in the fourth quarter of 2018.

2018 underground exploration program

On May 1, 2018, the company commenced installation of two diamond drill stations and mobilization of underground drilling equipment and crews to complete an initial 5,000 m of infill and exploration drilling at approximate 10 m centres for anticipated mining blocks in and around the upper portion of the high-grade Bermingham silver deposit. The targeted infill area contains an estimated 110,000 tonnes of potentially minable ore with an estimated head grade of 1,560 g/t silver, 4.2 per cent lead and 2.2 per cent zinc comprising the anticipated first two years of production.

The majority of the targeted zone is in the newly discovered Bear vein, a steeply plunging approximately three m thick and 50 m wide zone of high-grade silver mineralization which tops out approximately 160 m below surface and extends 230 m downdip where it remains open to depth. Some holes will extend through the Bear vein into the Bermingham footwall vein which is similarly mineralized.

The proposed drilling program is scheduled to be completed in July. Results from the 2018 underground drilling and the 2017 surface exploration drilling will be incorporated in a new Bermingham resource calculation to be included in the prefeasibility study targeted for completion late in the third quarter of 2018.

Financial

Alexco's cash and cash equivalents at March 31, 2018, totalled $13.2-million compared with $17.9-million at Dec. 31, 2017, while net working capital totalled $18.4-million compared with $18.4-million at Dec. 31, 2017. Included in working capital is $4.5-million which was reclassified to unrestricted cash subsequent to quarter-end.

During the quarter, the company established a credit facility for $15-million (U.S.) with Sprott. The key terms include:

• Term of three years, maturity date -- Feb. 23, 2021;
• Interest rate on funds drawn down:
  • The greater of 7 per cent plus U.S.-dollar three-month LIBOR (London interbank offered rate);
  • 8 per cent per annum, payable monthly;
• Repayable in quarterly instalments from Oct. 31, 2019, through to the maturity date;
• Upon drawdown of funds a 3-per-cent charge of the drawdown is charged;
• One million share purchase warrants were issued to Sprott with a five-year term, an exercise price of $2.25 per share and a right by the company to accelerate the expiry date to 30 days following the closing price of the shares exceeding $5.63 for more than 20 consecutive trading days;
• Repayable in whole or in part, without penalty, provided not less than 12 months of interest has been paid on any outstanding amount;
• The company has the option to extend the availability period of drawdown from 12 to 18 months by issuing to Sprott 171,480 Alexco common shares.

With its cash resources and net working capital on hand at March 31, 2018, 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 the next 12 months.

Alexco Environmental Group and ERDC

In the first quarter of 2018 AEG recorded revenues of $2.8-million and a gross profit of $830,000 for a gross margin of 30 per cent, compared with revenue of $1.9-million and a gross profit of $549,000 for a gross margin of 28 per cent in the first quarter of 2017. The increase in 2018 revenue was mainly attributed to the AEG initiating transition work at the Schwartzwalder mine and the former Canon City uranium mill.

Under the contract with the government of Canada on the historical cleanup at Keno Hill, Elsa Reclamation and Development Company Ltd. (ERDC) completed the Keno Hill reclamation and closure plan and is preparing to submit the document for environmental assessment as the first step in the regulatory process leading to the final cleanup.

Alexco continues to pursue opportunities to expand its environmental services business while ensuring that it limits Alexco's balance sheet exposure to this actively growing business.

Financial report and conference call for first quarter 2018 results

Full details of the financial and operating results for the first quarter ended March 31, 2018, 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 at and on SEDAR and on EDGAR.

Alexco is holding an audio webcast conference call to discuss these results at 12:30 p.m. Eastern Time (9:30 a.m. Pacific Time) on Monday, May 14, 2018. To participate in the live call, please use one of the following methods:

Dial toll-free from Canada or the United States:  1-800-319-4610

Dial from outside Canada or the U.S.:  1-604-638-5340

Conference ID:  ask to join the Alexco conference call

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.

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, 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 Resource 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 through the Alexco Environmental Group, its wholly owned environmental services division.

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