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PRNewswire 13-Aug-2019 7:31 PM
(All amounts in CDN$ unless otherwise indicated)
VANCOUVER, Aug. 13, 2019 /PRNewswire/ - Alexco Resource Corp. (NYSE-American: AXU) (TSX:AXU) ("Alexco" or the "Company") today reports financial results for the quarter ended June 30, 2019. For the second quarter of 2019 ("Q2 2019") Alexco recorded a net loss of $1.5 million ("M") or ($0.01) per share. Alexco Environmental Group ("AEG"), a wholly owned subsidiary of Alexco, recognized revenues of $8.7 M with a gross profit of $2.0 M.
Q2 2019 Highlights
CORPORATE
MINE OPERATIONS AND EXPLORATION
ALEXCO ENVIRONMENTAL GROUP
Alexco's Chairman and Chief Executive Officer, Clynt Nauman, commented, "Our annual surface exploration campaign, which aims to test deeper targets in the vicinity of the Bermingham deposit and test other targets identified in 2018, is progressing as planned. Initial results will be available in the fourth quarter, 2019. Concurrently, we are advancing construction of key surface infrastructure required to restart mining operations. The key to a production decision at Keno Hill is an amended Water Use License, which we now expect to be granted in the fourth quarter. Our environmental business, AEG performed as expected in the second quarter generating strong revenues and gross margins while also growing its business support and management team toward our primary objective of a standalone business."
Keno Hill Development and Exploration
Exploration
For 2019, the Company has commenced a 7,500 m, $2.2 M surface exploration diamond drilling program whereby:
As of the date of this news release, the Company has completed eight holes for a total of 4,937 m.
The Company is also focused on other surface exploration, shallow RAB drilling and trenching to follow up on testing of blind mineralized structures, with signatures similar to that of Bermingham that extend under shallow cover also as identified by the detailed aerial geophysical survey conducted in late 2018.
Permitting
Alexco has the requisite permits and authorizations for future ore production from the Bellekeno, Flame & Moth, Lucky Queen, and Onek deposits. Permitting for production from the Bermingham deposit is ongoing with a positive Decision Document issued by the Yukon Government on July 27, 2018. The Decision Document outlines a number of standard terms and conditions for development and mine production from the Bermingham deposit.
With the issuance of the Decision Document, Alexco submitted a water licence renewal application to the Yukon Water Board for processing and milling ore and discharging treated water from the Bermingham mine, as well as renewing all other permitted deposits in the District for a further 17 years.
Completion of the amendments to Alexco's quartz mining licence ("QML") is expected in Q3 2019, and a renewal of the WUL is expected in Q4 2019. The WUL application completed the Technical Adequacy phase in July 2019 and a 30-day public comment period was subsequently advertised.
Alexco Environmental Group
AEG recognized revenues of $8.7 M in Q2 2019 for a gross profit of $2.0 M, achieving a gross margin of 23% compared to revenues of $3.5 M for a gross profit of $1.4 M, achieving a gross margin of 39% in Q2 2018. The increase in gross profit during the 2019 period was primarily due to the completion of the water treatment plant at a project in Ontario, Canada and commencement of plant operations. Furthermore, continued work was performed on the Schwartzwalder Mine and the former Cañon City Uranium Mill reclamation and cleanup projects in Colorado. The operating earnings decreased during the quarter as AEG continued to invest into its senior executive team, while also incurring significant up-front costs on the Mount Nansen project, which will not commence receiving revenues until the first quarter of 2020.
Financial
At June 30, 2019 the Company had cash and cash equivalents of $11.8 M, and net working capital of $15.5 M and faces no known liquidity issues or is aware of any significant credit risks in any of its financial assets. In addition, the Company's restricted cash and deposits at June 30, 2019 totaled $2.8 M.
Financial Report and Conference Call for Second Quarter 2019 Results
Full details of the financial and operating results for the second quarter of 2019 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 www.alexcoresource.com and on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.
Alexco is holding an audio webcast conference call to discuss these results at 12:30 p.m. Eastern (9:30 a.m. Pacific) on Wednesday, August 14, 2019. To participate in the live call, please use one of the following methods:
Dial toll free from Canada or the US: |
1-800-319-4610 |
Dial from outside Canada or the US: |
1-604-638-5340 |
Conference ID#: |
Ask to join the Alexco conference call |
Live audio webcast: |
Participants should connect five to ten minutes before the call. The conference call will be recorded and an archived audio webcast will be available at www.alexcoresource.com.
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 Neil Chambers, P.Eng., Mine Superintendent, both of whom are Qualified Persons as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101").
About Alexco
Alexco owns the majority of the historic high-grade Keno Hill Silver District in Canada's Yukon Territory. Alexco also operates a wholly-owned subsidiary business, Alexco Environmental Group, that provides mine-related environmental services, remediation technologies and reclamation and mine closure services to both government and industry clients in North America and elsewhere.
Some statements ("forward-looking statements") in this news release contain forward-looking information concerning Alexco's anticipated results and developments in Alexco's operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future, made as of the date of this news release. Forward-looking statements may include, but are not limited to, statements with respect to the future remediation and reclamation activities, future mineral exploration, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, future mine construction and development activities, future mine operation and production, the timing of activities and reports, the amount of estimated revenues and expenses, the success of exploration activities, permitting time lines, requirements for additional capital and sources and uses of funds. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors, which could cause actual events or results to differ from those expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results and timing of exploration and development activities; actual results and timing of mining activities; actual results and timing of environmental services activities; actual results and timing of remediation and reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of silver, gold, lead, zinc and other commodities; possible variations in mineable resources, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; First Nation rights and title; continued capitalization and commercial viability; global economic conditions; competition; and delays in obtaining governmental approvals or financing or in the completion of development activities. Forward-looking statements are based on certain assumptions that management believes are reasonable at the time they are made. In making the forward-looking statements included in this news release, Alexco has applied several material assumptions, including, but not limited to, the assumption that Alexco will be able to raise additional capital as necessary, that the proposed exploration and development will proceed as planned, and that market fundamentals will result in sustained silver, gold, lead and zinc demand and prices. There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Alexco expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as otherwise required by applicable securities legislation.
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SOURCE Alexco Resource Corp.