Mr. Clynton Nauman reports
ALEXCO UPDATES BERMINGHAM MINERAL RESOURCE
Alexco Resource Corp. has released an updated and expanded mineral resource estimate for the Bermingham deposit, located within the Keno Hill silver district (KHSD) in Canada's
Yukon.
Summary
As a result of exploration work conducted in 2017 and 2018, the Bermingham indicated mineral resources have expanded from 17.3 million ounces to 33.3 million ounces of contained silver at an average silver grade of 628 grams per tonne (g/t), while inferred mineral resources have increased from 5.5 million ounces to 10.4 million ounces of contained silver at an average silver grade of 526 g/t. The updated mineral resource estimate was prepared by SRK Consulting (Canada) Inc. and a comparison with the prior mineral resource estimate is outlined in the associated table.
BERMINGHAM MINERAL RESOURCE ESTIMATE -- SEPT. 17,
2018, COMPARED WITH JAN. 3, 2017
Resource estimates
Category Sept. 17, 2018 Jan. 3, 2017
Indicated tonnes (t) 1,651,500 858,000
Indicated silver grade (g/t) 628 g/t 628 g/t
Total indicated silver (ounces) 33,350,300 17,324,000
Inferred tonnes (t) 616,550 220,000
Inferred silver grade (g/t) 526 g/t 770 g/t
Total inferred silver (ounces) 10,438,700 ounces 5,446,000 ounces
With the addition to the silver mineral resource at Bermingham, Alexco's district-wide indicated mineral resources at Keno Hill increased by approximately 24 per cent from 67.9 million ounces to 84.0 million ounces of contained silver. Similarly, district-wide inferred mineral resources increased by 28 per cent to 23.0 million ounces of contained silver.
Background
The Bermingham deposit comprises a closely spaced series of subparallel steeply southeast-dipping vein sets -- identified (hangingwall to footwall) as the Bermingham, Bermingham footwall and Bear veins that can be traced over a northeasterly strike distance exceeding 850 metres in four zones identified (from southwest to northeast) as the Etta, Arctic, Bear and Northeast zones that are separated by postmineral faults. In addition, a small resource is contained in a conjugate set of related west-dipping veins. Recent detailed underground and surface drilling work has focused on the Arctic and Bear zones where the vein sets are connected either laterally or vertically within the wider Bermingham vein fault structural corridor. Mineralization extends from between 90 m to 160 m below surface to a depth of approximately 450 m where veining remains open.
A detailed mineral resource estimate by vein and zone was prepared by SRK and is summarized in the associated table.
Mineral
resource Average Average Average Average
category Volume Tonnes Total Ag Total Au Total Pb Total Zn grade Ag grade Au grade Pb Grade Zn
(m3) (oz) (oz) (lb) (lb) (g/t) (g/t) (%) (%)
Indicated
Arctic
Bear 19,000 54,750 592,400 100 800,500 559,700 336 0.05 0.7 0.5
Bermingham Main 142,600 428,400 7,656,300 1,500 9,484,400 13,045,700 556 0.11 1 1.4
Footwall 87,500 277,700 6,046,100 1,200 11,543,900 7,210,600 677 0.14 1.9 1.2
West Dipper 8,000 24,600 666,600 90 769,800 653,800 843 0.11 1.4 1.2
Bear
Bear 59,100 189,450 8,442,200 1,130 15,665,400 5,352,350 1,386 0.18 3.8 1.3
Bermingham Main 22,500 70,200 1,186,500 280 1,206,400 1,888,400 525 0.12 0.8 1.2
Footwall 71,700 217,400 3,835,800 900 6,136,300 5,884,300 549 0.13 1.3 1.2
Etta
Bermingham Main 43,000 133,600 2,065,800 300 6,054,700 5,143,000 481 0.07 2.1 1.7
Footwall 57,100 168,600 1,713,700 350 4,508,800 6,588,300 316 0.06 1.2 1.8
Northeast
Bear 9,900 29,700 601,000 120 947,550 1,666,750 629 0.12 1.4 2.5
Bermingham Main 19,850 57,100 543,900 150 773,650 697,300 297 0.08 0.6 0.6
Total
indicated 540,250 1,651,500 33,350,300 6,120 57,891,400 48,690,200 628 0.12 1.6 1.3
Inferred
Arctic
Bear 19,800 59,000 676,450 130 1,413,750 805,900 357 0.07 1.1 0.6
Bermingham Main 20,360 62,000 1,117,200 300 1,012,900 2,267,800 560 0.15 0.7 1.7
Footwall 60,400 190,900 2,827,400 800 4,240,300 1,324,200 461 0.13 1 0.3
West Dipper 800 2,350 33,250 5 26,900 22,800 441 0.07 0.5 0.4
Bear
Bear 38,050 120,900 3,167,000 500 4,179,950 1,582,200 815 0.13 1.6 0.6
Bermingham Main 950 3,000 19,100 5 15,600 107,600 197 0.06 0.2 1.6
Footwall 7,100 22,100 195,850 75 484,850 254,550 276 0.11 1 0.5
Etta
Bermingham Main 290 850 6,100 0 7,400 15,700 221 0.05 0.4 0.8
Footwall 27,100 78,000 686,900 175 792,850 2,741,100 274 0.07 0.5 1.6
North East
Bear 23,750 72,350 1,673,750 300 2,178,350 2,428,200 720 0.13 1.4 1.5
Bermingham Main 1,800 5,100 35,700 10 61,050 67,950 217 0.07 0.5 0.6
Total
inferred 200,400 616,550 10,438,700 2,300 14,413,900 11,618,000 526 0.12 1.1 0.9
Notes
(1) The effective date of this mineral resource estimate is Sept. 17, 2018.
(2) Mineral resources are not mineral reserves and do not have demonstrated economic viability. All numbers have been
rounded to reflect the relative accuracy of the estimates.
(3) Reported at a contained metal value cut-off grade of $185.00/t (80 U.S. cents/$1) using consensus long-term metal
prices (U.S. dollars) and recoveries (silver $20.80 (U.S.)/ounce, recovery 96 per cent; lead $1.10 (U.S.)/pound,
recovery 97 per cent; zinc $1.20 (U.S.)/pound, recovery 88 per cent; gold $1,450 (U.S.)/ounce, recovery 72 per cent).
(4) Ag grades capped at 4,200 g/t; Zn capped at 6.5 per cent; Pb capped at 6.0 per cent for the Bermingham vein.
(5) Ag grades capped at 13,000 g/t, Zn capped at 12 per cent and Pb capped at 33 per cent for the Bear vein.
(6) Ag grades capped at 3,500 g/t, Zn capped at 8.5 per cent and Pb capped at 13 per cent for the Bermingham footwall
vein.
(7) Ag grades capped at 3,600 g/t, Zn capped at 5.0 per cent and Pb capped at 7.5 per cent for the West Dipper vein.
(8) Table numbers may not add up due to rounding.
Alexco chairman and chief executive officer Clynt Nauman said: "The majority of the tonnage in the Bermingham deposit resides in the Arctic and Bear zones where approximately 28 million of the 33 million indicated ounces of silver are located at an average grade of approximately 700 g/t silver. Looked at in total, the Bermingham deposit is now emerging as one of the larger discoveries in the Keno Hill district, characterized by more than 1.6 million tonnes of indicated mineralization with an average silver grade approximately 25 per cent higher than our Flame and Moth deposit. This new resource will be taken into consideration during the prefeasibility mine planning work scheduled for completion in October, 2018. Both the completed resource update and the prefeasibility study represent the next steps in moving the Keno Hill district back toward production."
Bermingham deposit
Alexco has conducted surface diamond drilling programs at Bermingham between 2009 and 2018 and underground drilling from the exploration decline in 2018. The database at Bermingham currently includes 203 drill holes for a total of 62,541 m of HQ core. The resource estimation presented here incorporates the results from 405 vein intervals from 151 holes compared with those from 93 holes that were used in the January, 2017, estimation.
Recent drilling has focused on obtaining reduced resource definition intercept spacings, particularly on the upper part of the high-grade Bear vein that overall ranges in true width up to 6.4 m at 182 ounces per tonne silver (K-14-0537) and in grade up to 240 ounces/ton silver over 5.0 m true width (K-15-0580). This mineralization has been traced over a down-plunge extent of 300 m (over a vertical range of 230 m) with a plunge width of up to approximately 130 m, and the top of the deposit in this vicinity being approximately 130 m below surface. In addition, the recent drilling has increased coverage of the Bermingham and Bermingham footwall veins where a significant amount of the new resource has been defined.
Interpretation of the consolidated drilling results has confirmed the presence of the three mineralized veins that splay and change orientation along strike within the north-northeast-striking and moderately to steeply southeast-dipping Bermingham vein fault structural corridor. This structural corridor is primarily divided into the Etta zone that lies in the hangingwall of the postmineral Mastiff fault exposed at the western end of the historic Bermingham open pit and the extended Artic zone in its footwall below the open pit. The main throughgoing Bermingham and Bermingham footwall veins occur in both the Etta and the extended Arctic zones, while the Bear vein and associated West Dipper vein set occur only within the extended Arctic zone at positions controlled by a flexure in the Bermingham vein fault.
The Bermingham deposit veins typically occur in structurally complex zones as discrete veins 0.5 m to more than five m wide with a five- to 10-metre-wide structurally damaged vein margin. The discrete veins exhibit heavily disseminated to massive mineralization while mineralization in the vein margins is commonly more stringer like. The higher-grade Bermingham mineralization is generally characterized by the presence of a complex silver-bearing mineral assemblage including pyrargyrite (ruby silver), freibergite, argentiferous galena, stephanite, polybasite and wire silver in a dominantly sideritic gangue.
Metallurgical testwork has demonstrated that silver and lead recoveries from Bermingham are expected to be in the range of 94 per cent to 96 per cent, while producing a lead concentrate grading 55 per cent to 60 per cent lead and up to 30,000 g/t silver. Zinc recovery is predicted to be in the range of 70 per cent to 75 per cent to a zinc concentrate grading in excess of 50 per cent zinc.
The Bermingham mineral resource was estimated using 3-D Maptek Vulcan block modelling software in multiple passes in nine-by-three-by-six-metre blocks by ordinary kriging. Grade estimates were based on capped one-metre composited assay data. Capping levels were set to 4,200 g/t for silver for the Bermingham vein, 13,000 g/t for the Bear vein, 3,500 g/t for the Bermingham footwall vein and 3,600 g/t for the West Dipper vein; lead was capped at 6.0 per cent for the Bermingham vein, 33.0 per cent for the Bear vein, 13.0 per cent for the Bermingham footwall vein and 7.5 per cent for the West Dipper vein; and zinc was capped at 6.5 per cent for the Bermingham vein, 12.0 per cent for the Bear vein, 8.5 per cent for the Bermingham footwall vein and 5.0 per cent for the West Dipper vein. Blocks were classified as indicated mineral resources provided the blocks were estimated within the first pass search ellipse using multiple drill holes and a minimum of five composites. All other interpolated blocks were classified as inferred mineral resources.
Qualified persons
SRK prepared the updated mineral resource estimate for the Bermingham deposit and is independent of Alexco for purposes of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. The Bermingham mineral resource estimate was completed by Cliff Revering, PEng, principal consultant (geological engineering) with SRK. Mr. Revering is a qualified persons as defined by NI 43-101 and has reviewed, verified and approved the contents of this news release relating to the mineral resource estimate for the Bermingham deposit. All mineral resources are classified following the CIM (Canadian Institute of Mining, Metallurgy and Petroleum) Definition Standards for Mineral Resources and Mineral Reserves (May, 2014), in accordance with the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines and with NI 43-101 guidelines.
The metallurgical testing information in this news release has been reviewed and verified by Jeffrey B. Austin, PEng, president of International Metallurgical and Environmental Inc. and a qualified person as defined by NI 43-101.
The disclosure of all other scientific and technical information in this news release regarding projects on Alexco's mineral properties has been reviewed and approved by Alan McOnie, FAusIMM, Alexco's vice-president, exploration, and a qualified person as defined by NI 43-101.
The drill data and sampling protocols have been reviewed, verified and compiled by Alexco's geologic staff since 2011 under the supervision of Alan McOnie, vice-president, exploration, for Alexco and a qualified person as defined by National Instrument 43-101. A rigorous quality control and quality assurance protocol is used on the project, including blank, duplicate and standard reference samples in each batch of 20 samples delivered to the assay lab. Drill core samples included in the updated resource estimation were direct shipped to ALS Minerals Labs at Whitehorse, Yukon, for preparation, with fire assay, multielement ICP analyses and ore-grade overlimits completed at the ALS Minerals facility in North Vancouver, B.C.
About Alexco Resource Corp.
Alexco Resource owns the high-grade Keno Hill silver district in Canada's Yukon Territory. Alexco published an updated preliminary economic assessment in March, 2017, which anticipates the sequential development of four high-grade silver deposits over an eight-year mine life producing more than one million tonnes with an average grade of 843 grams per tonne silver, 3.3 per cent lead and 4.6 per cent zinc. Silver production is anticipated to be approximately 3.5 million ounces per year.
Summary of resources
The associated table sets forth the estimated mineral resources for Alexco's mineral properties within the Keno Hill silver district.
Category Property Tonnes Ag Au Pb Zn Contained Ag
(1) (2) (9) (g/t) (g/t) (%) (%) (oz)
Indicated Bellekeno deposit (3) (4) 262,000 585 n/a 3.5% 5.3% 4,927,000
Lucky Queen deposit (3) (5) 132,300 1,167 0.2 2.4% 1.6% 4,964,000
Flame and Moth deposit (3) (5) 1,679,000 498 0.4 1.9% 5.3% 26,883,000
Onek (3) (5) 700,200 191 0.6 1.2% 11.9% 4,300,000
Bermingham (3) (6) 1,651,500 628 0.1 1.6% 1.3% 33,350,300
total indicated -- subsurface 4,425,000 523 0.3 1.8% 4.7% 74,424,300
Elsa tailings (7) 2,490,000 119 0.1 1.0% 0.7% 9,527,000
total indicated -- all deposits 6,915,000 378 0.2 1.5% 3.3% 83,952,300
Inferred Bellekeno deposit (3) (4) 243,000 428 n/a 4.1% 5.1% 3,344,000
Lucky Queen deposit (3) (5) 257,900 473 0.1 1.0% 0.8% 3,922,000
Flame and Moth deposit (3) (5) 365,200 356 0.3 0.5% 4.3% 4,180,000
Onek (3) (5) 285,100 118 0.4 1.2% 8.3% 1,082,000
Bermingham (3) (6) 616,550 526 0.1 1.1% 0.9% 10,438,700
total inferred 1,767,750 404 0.2 1.4% 3.4% 22,966,700
Historical Silver King (8)
resources proven, probable and indicated 99,000 1,354 n/a 1.6% 0.1% 4,310,000
inferred 22,500 1,456 n/a 0.1% n/a 1,057,000
Notes
(1) All mineral resources are classified following the CIM Definition Standards for Mineral
Resources and Mineral Reserves (May. 2014), in accordance with the CIM Estimation of
Mineral Resources and Mineral Reserves Best Practice Guidelines and the guidelines of
NI 43-101.
(2) Mineral resources are not mineral reserves and do not have demonstrated economic
viability. All numbers have been rounded to reflect the relative accuracy of the estimates.
(3) The Keno Hill silver district comprises five deposits: Bellekeno, Lucky Queen, and
Flame and Moth, Onek and Bermingham, of which Bellekeno, Lucky Queen, Flame and Moth, and
Bermingham are incorporated into the current mine plan outlined in the technical report
filed on SEDAR dated March 29, 2017, entitled "Preliminary Economic Assessment of the Keno
Hill Silver District Project, Yukon, Canada." The mineral resource estimates for the
project are supported by disclosure in the news release dated March 29, 2017, entitled
"Alexco and Silver Wheaton Amend Silver Purchase Agreement and Alexco Announces Positive
Preliminary Economic Assessment for Expanded Silver Production at Keno Hill." The mineral
resource estimate for Bermingham has been updated by disclosure in note 6.
(4) The resource estimates for the Bellekeno deposit are based on a geologic resource
estimate having an effective date of Sept. 30, 2012. The Bellekeno indicated mineral
resources are as at Sept. 30, 2013, and reflect the geologic resource less estimated
subsequent depletion from mine production.
(5) The resource estimates for the Lucky Queen, Flame and Moth, Onek, and Bermingham
deposits have an effective date of Jan. 3, 2017.
(6) The resource estimates for the Bermingham deposit has an effective date of Sept. 17,
2018, and is supported by disclosure in the news release dated Sept. 20, 2018, entitled
"Alexco Updates Bermingham Mineral Resource."
(7) The resource estimate for the Elsa tailings has an effective date of April 22, 2010,
and is supported by the technical report dated June 16, 2010, entitled "Mineral Resource
Estimation, Elsa Tailings Project, Yukon, Canada."
(8) Historical resources for Silver King are supported by disclosure in the news release
dated March 29, 2017, entitled "Alexco and Silver Wheaton Amend Silver Purchase Agreement
and Alexco Announces Positive Preliminary Economic Assessment for Expanded Silver
Production at Keno Hill."
(9) The disclosure regarding the summary of estimated resources for Alexco's mineral
properties within the Keno Hill district has been reviewed and approved by Neil Chambers,
PEng, mine superintendent and a qualified person as defined by NI 43-101.
We seek Safe Harbor.
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