Alexco Reports Year End and Fourth Quarter 2013 Results

March 25, 2014 – Alexco Resource Corp. (NYSE MKT:AXU, TSX:AXR) today reports financial results for its 2013 year end and 2013 fourth quarter. All figures are expressed in Canadian dollars unless otherwise stated. For the year ended December 31, 2013, Alexco recorded an adjusted net loss1 of $4.3 million or $0.07 per share. The consolidated net loss for the year was $50.5 million, including the impact of non-cash asset write downs recorded in the second quarter primarily due to the effect of significantly lower silver prices in 2013. For the fourth quarter of 2013, Alexco recorded a net loss of $1.1 million or $0.01 per share primarily related to care and maintenance costs at the Keno Hill Silver District, Yukon, where silver production was suspended for the winter. Alexco Environmental Group (“AEG”), a wholly owned subsidiary of Alexco, posted record financial performance in 2013, nearly tripling gross profit to $8.8 million and more than doubling revenues to $16.3 million compared to 2012.

Highlights of 2013 Year

• Contained metal production of 1.4 million ounces silver, 10.3 million pounds lead and 3.4 million pounds zinc in a shortened operating year comprising 245 operational days. Gross operating results from the Bellekeno Mine were essentially break-even on approximately $43 million of revenue, reflecting a more than 23% decline in silver prices over the course of 2013.
• An interim suspension of mine and mill operations was completed in September as previously announced. The current focus is on permitting and restructuring Keno Hill operations to accommodate the Flame & Moth deposit for future production.
• In December 2013, the Eastern Keno Hill Silver District preliminary economic assessment (“PEA”) outlined a revised production plan focused on Flame & Moth and incorporating supplemental production from Bellekeno and Lucky Queen, yielding an after-tax 38% internal rate of return over the development and operating period through 2020.
• During the year exploration drilling extended the Flame & Moth mineralized strike length to more than 900 meters, and identified a significant mineralized structure at the new (2012) Flame & Moth West discovery approximately one-half kilometer west of Flame & Moth. Exploration will continue to focus on further potential resource expansion in 2014.
• AEG full year gross profit of $8.8 million on revenues of $16.3 million, up strongly over the 2012 gross profit of $2.9 million on revenues of $8.0 million. Included in gross profit was approximately $2.8 million in gains related to the announced Amended and Restated Environmental Subsidiary Agreement with Canada in July, 2013.
• Cash and cash equivalents at December 31, 2013 of $8.6 million and net working capital of $15.3 million compared to $7.9 million and $15.4 million, respectively, at September 30, 2013.

1 Adjusted net loss excludes amounts recorded with respect to impairment charges, and is a non-IFRS measure with no standardized meaning prescribed under IFRS. See page 17 of Alexco’s December 31, 2013 MD&A for explanation and reconciliation.

Alexco’s President and Chief Operating Officer Clynt Nauman said, “The business decision to suspend mining operations at Keno Hill in the face of declining silver prices and shrinking margins has proven to be correct, especially in light of the increasing significance of the larger Flame & Moth deposit which has the potential to underpin production at Keno Hill beyond 2020. Flame & Moth has an estimated indicated silver resource of 22.9 million ounces of silver and is currently calculated to contain 1.4 million tonnes of 516 grams per tonne (gpt) silver, 0.4 gpt gold and approximately 7.4% combined zinc and lead. Furthermore, the deposit is shallow, adjacent to existing infrastructure, remains open and potentially opens the way for sustained higher throughput of 400 tonnes per day (tpd) at lower fixed costs on a unit basis going forward. We are using this interim winter period to review and restructure both the underlying cost framework at Keno Hill and our third party contracts and obligations. Upon achieving those goals and assuming conducive market and other conditions, our objective is to restart capital development work at Flame & Moth. Meanwhile, we’re pleased to announce that in ongoing dialogue with Silver Wheaton, the deadline included in our silver streaming agreement for achieving production throughput of 400 tpd over a 30-day period has been extended to June 30, 2015.”

Read more: http://www.alexcoresource.com/s/news.asp?ReportID=644040

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