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ALEXCOCORP. RESOURCES

http://www.alexcoresource.com

opportunities Sparkling

For decades, the Keno Hill silver district in Canada’s Yukon Territory was a hot spot for precious metal, with mining companies taking some 217 million ounces of silver from the region between 1921 and 1988. Nearly 40 mines populated the territory, which stretches over an area of almost 100 square miles.

As prices dropped and those resources became harder to reach, many of the mining companies operating in the region went bankrupt, leaving behind environmental liabilities as well as abundant unexploited resources.

Vancouver, BC-based Alexco Resource Corp. saw the situation as a sparkling opportunity. Under a unique agreement with the Canadian government, Alexco secured the rights to conduct additional exploration, and eventually mining, at abandoned properties while also working to help clean the environmental contamination left behind two decades ago.

What makes the arrangement feasible for Alexco is that it also operates Alexco Environmental Services, a consulting division that provides environmental services such as clean-up planning and management. The agreement calls for that division to conduct cleanup work over the next several years, addressing

opportunities Sparkling

Alexco Resource Corp. is a precious metals exploration company with a growing environmental services

division. Its first active mining project, the Bellekeno Mine, is gearing up for commercial production

Alexco Resource Corp.

www.gisborne.com

producing silver/lead and zinc concentrates. The current focus of mill operations is to optimize lead/silver/zinc recovery and to increase efficiency of the milling equipment. “It is notable that from the initiation of Bellekeno’s mine development and mill construction, production has been achieved in less than a year. This success is a testament to the skill and dedication of Alexco’s people and partners,” commented Clynton Nauman, president and chief executive officer of Alexco.

The Bellekeno mine will operate initially at 250 tonnes per day supplying feed to a conventional flotation mill, producing up to 12,000 tonnes of lead-silver concentrate and 8,400 tonnes of zinc concentrate annually and generating up to 2.8 million ounces of silver per year. Initial silver grades in calendar 2010 and 2011 are expected to be approximately 1,000 grams per tonne. The mine and mill operations will employ approximately 120 people and are expected to directly invest more than $25 million annually for labor, materials and supplies in the Yukon.

The Keno Hill district lies within the traditional lands of the First Nation of Na-Cho Nyak Dun, who support the work because it points to a clean-up while also producing employment and business development opportunities for their nation. At the same time, government can show progress on its obligation to effect long-term clean-up. A Comprehensive Cooperation and Benefits Agreement was signed between the two parties in June 2010, to build on the accord that was reached in 2008.

At the Bellekeno Mine, as elsewhere in the district, Alexco believes resources have previously been overlooked in several areas. “They typically stopped mining in areas when they would hit water or where the rock geology made it difficult for them to mine and we have methods that will enable us to revisit those areas,” said chief financial officer David Whittle. “Today’s prices for precious metals also help make mining more economically feasible. Most importantly, Keno Hill is a very high grade mining district. With average historical production grades of 40 ounces of silver per ton, the district would rank in the top three percent by grade of today’s global silver producers.”

Alexco has therefore undertaken this year a large exploration program in the Keno Hill District, with approximately 30,000 meters of diamond drilling comprising 25,000 meters of surface drilling

Alexco Resource Corp.

As a general contractor, Gisborne has earned a

reputation for self-performing most of the labour

associated with its projects. Familiar with all

aspects of project construction, Gisborne regularly

participates in pre-construction, with constructability

reports, preliminary budgets and scheduling.

During the construction phase, Gisborne

constructs building and machinery foundations,

erects structural steel, installs precision mechanical

components, including large diameter SAG and ball

mills. Every type of piping requirement, including

design/build fire protection falls under its expertise.

With careful attention to safety, quality, budget and

timeline, Gisborne is quickly becoming the prime

contractor of choice with our world class clients.

Gisborne

the environmental liabilities left behind when the region went quiet. Alexco will only inherit direct liability for the mines it reactivates.

Alexco’s environmental wing also provides services beyond the Yukon, and that diversity has helped the company weather the recent economic turmoil and fare better than some competitors. An office was opened in Denver, Colorado in 2007 as Alexco Resource US Corp, where clients include not only the mining industry but industrial clients that turn to it for its patented technology used to treat in-situ metal contamination in water sources.

Alexco went public in 2006 and raised an additional $50 million in 2008 through a contract with Silver Wheaton, under which the latter agreed to purchase 25 percent of the silver mined going forward.

Its first mining venture in the region is the Bellekeno Mine, where mine and mill construction was completed in September this year. Ancillary facilities are complete, including the installation of a new bridge and haul road, and all permits and licenses are in place to enable commencement of commercial production. Construction of the 400 tonne per day conventional flotation concentrator and preproduction development of the underground mine was completed on schedule and within 3 percent of budget.

Mill commissioning is now under way, with the concentrator running at design capacity and

“They typically stopped mining in areas when they would hit water or where the rock geology made it difficult for them to mine, and we

have methods that will enable us to revisit those areas”

Alexco Resource Corp.

throughout the district plus an additional 5,000 meters of underground drilling. The aim of the expanded exploration program is to define new and additional high grade minable resources at a number of sites within the district, including the historical Silver King mine, as well as the Lucky Queen mine where drilling in 2009 identified a new high grade zone of mineralization down-plunge of the historical Lucky Queen workings.

Underground and surface exploration continues at Bellekeno, and is expected to extend into the first quarter of calendar 2011 with at least 2,000 meters of an expanded drilling program yet to be completed. Exploration drilling at the adjacent Onek zinc-silver deposit is substantially complete, and results are pending. New resource calculations for the Bellekeno and Onek deposits are scheduled to be completed in the second quarter of calendar 2011. http://www.alexcoresource.com

ALEXCOCORP. RESOURCES

http://www.alexcoresource.com