Alexco Resource Corp. (NYSE American: AXU) (TSX: AXU) reports financial results for the quarter ended September 30, 2021. The Company also provides an update on capital development projects, scale up of mining operations, and exploration activities at Keno Hill.
Highlights
Key Performance Metrics
Operations | Q3 2021 | Q2 2021 | Q1 2021 | ∆-Q3 vs Q2 | YTD 2021 |
Ore tonnes mined | 11,101 | 6,464 | 4,427 | 72% | 21,992 |
Ore tonnes milled | 7,275 | 10,896 | 3,850 | (33%) | 22,021 |
Mill throughput (tpd)1 | 162 | 176 | 107 | (8%) | 154 |
Ore tonnes stockpiled | 3,809 | 635 | 5,067 | 3,174 | 3,809 |
Underground development meters | 288 | 228 | 172 | 26% | 688 |
Head grade | |||||
Silver (g/t) | 778 | 703 | 985 | 11% | 775 |
Lead | 11.3% | 9.3% | 11.9% | 22% | 10.3% |
Zinc | 6.5% | 3.1% | 3.3% | 110% | 4.3% |
Recoveries | |||||
Silver | 95% | 93% | 83% | 2% | 92% |
Lead in lead concentrate | 93% | 83% | 85% | 12% | 87% |
Zinc in zinc concentrate | 65% | 85% | 31% | (24%) | 68% |
Concentrate production and grades | |||||
Lead concentrate produced (tonnes) | 1,039 | 1,174 | 539 | (11%) | 2,752 |
Silver grade (g/t) | 5,089 | 5,729 | 5,664 | (11%) | 5,463 |
Lead grade | 74% | 70% | 72% | 6% | 72% |
Zinc concentrate produced (tonnes) | 588 | 635 | 105 | (7%) | 1,328 |
Silver grade (g/t) | 203 | 715 | 775 | (72%) | 445 |
Zinc grade | 52% | 53% | 37% | (2%) | 48% |
Contained metal in concentrate produced | |||||
Silver (ounces) | 173,757 | 227,683 | 100,984 | (24%) | 502,424 |
Lead (pounds) | 1,683,571 | 1,799,959 | 854,346 | (6%) | 4,337,876 |
Zinc (pounds) | 671,606 | 637,780 | 86,494 | 5% | 1,395,880 |
Exploration | |||||
Meters drilled (m) | 7,209 | 8,403 | 507 | 16,119 | |
Exploration expenditures incurred ($) | 3,811,000 | 4,696,000 | 1,233,000 | 9,740,000 | |
Financials
(expressed in thousands of Canadian dollars, |
Q3 2021 | Q3 2020 |
YTD 2021 |
||
Revenues – Mining operations | 5,959 | – | 16,193 | ||
Revenues – Reclamation management | 524 | 795 | 2,042 | ||
Operating Loss | (3,232) | (5,356) | (8,775) | ||
Cash and cash equivalents | 22,204 | 39,751 | 22,204 | ||
Net Working Capital2 | 15,872 | 37,998 | 15,872 | ||
Adjusted Net Loss2 | (4,232) | (3,265) | (5,629) | ||
Net Income (Loss)3 | 4,511 | (15,241) | 5,923 | ||
Shareholders | |||||
Basic and diluted net income (loss) per common share3 |
0.03 |
(0.11) | 0.04 | ||
Adjusted basic and diluted net loss per common share2 |
(0.03) |
(0.02) | (0.04) | ||
Total assets4 | 220,314 | 183,198 | 220,314 | ||
Total liabilities5 | 28,538 | 24,384 | 28,538 | ||
1. | Mill throughput (tpd) is based on the number of days that the mill was operational during the period. The mill was operational for 45 days, 62 days and 36 days during Q3 2021, Q2 2021 and Q1 2021, respectively. | ||||
2. | See “Non-GAAP Measures” in Section 11 of the Q3 2021 MD&A. | ||||
3. | Net income for Q3 2021 includes a non-cash fair value gain relating to the embedded derivative asset totaling $8,743,000 (2020 – loss of $11,976,000). Net income for YTD 2021 includes a non-cash fair value gain relating to the embedded derivative asset totaling $11,552,000 (2020 – loss of $15,458,000). | ||||
4. | Total assets increased primarily due to increases in mineral properties, plant, and equipment. | ||||
5. | Total liabilities increased primarily due to increases in deferred income tax liabilities. |
Outlook
“This quarter was a major turning point for us at Keno Hill,” remarked Clynt Nauman, Chairman and CEO. “With ore extraction completed at Bellekeno, and our team now completely focused on our two new mines (Bermingham and Flame & Moth), we are rapidly moving closer to ‘full production’ and planning for cash flow self-sufficiency at Keno Hill. All major PPE expenditures for the site are complete and our Q4 focus is on completing underground development to achieve concurrent ore production from the Bermingham and Flame & Moth mines. Early development ore from the 1150 level at Bermingham was stockpiled in September and is now moving through the District mill and producing a high grade silver concentrate as anticipated. Underground advance rates this quarter were up approximately 26% over Q2 2021, which has allowed us to reach the first two ore access levels at Flame & Moth, with initial ore production anticipated in late Q4 2021. Once the Flame & Moth Alimak raise is completed in early 2022 we will be able to fill the mill and sustainably reach our targeted production levels. This quarter also saw us complete drilling on the Bermingham Northeast Deep exploration target, which has returned some exceptional interim results with composite assays to 1,681 g/t Ag over 20.37 meters true width. We are currently advancing the work required to develop a new Mineral Resource estimate for the Bermingham deposit to include the Northeast Deep zone, to be completed later this year.”
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, and Liana Stammers, P.Geo., Senior Exploration Geologist, while that regarding mine development and operations has been reviewed and approved by Neil Chambers, P.Eng., Chief Mine Engineer, all of whom are Qualified Persons as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
About Alexco
Alexco is a Canadian primary silver company that owns and operates the majority of the historic Keno Hill Silver District, in Canada’s Yukon Territory, one of the highest-grade silver deposits in the world. Alexco is currently advancing Keno Hill to production and commenced concentrate production and shipments in Q1 2021. Keno Hill is expected to produce an average of approximately 4.4 million ounces of silver per year contained in high quality lead/silver and zinc concentrates. Keno Hill retains significant potential to grow and Alexco has a long history of expanding the operation’s mineral resources through successful exploration.
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