YUKON ALEXCO RESOURCE CORP. and SILVER WHEATON, both of Vancouver, have entered into an agreement whereby Silver Wheaton will purchase 25% of all the silver produced from Alexco’s proposed Keno Hill project near Elsa.
Alexco will receive an up-front deposit payment from Silver Wheaton of US$50 million, plus a further payment of the lesser of US$3.90 per ounce (increasing by 1% per annum after the third year of full production) and the prevailing market price for silver delivered.
The Keno Hill project includes at least 35 former mines that together produced over 217 million oz of silver from 1921 to 1988. Initial silver deliveries are to come from the Bellekeno mine, perhaps in early 2010. The preliminary economic assessment calculated it will take $61.2 million to reopen the underground mine and refurbish the conventional flotation mill. The mine is expected to produce 95,860 tonnes of lead-silver concentrate and 102,795 tonnes of zinc concentrate annually over five years. The inferred resource is 537,400 tonnes grading 1,016 g/t Ag, 13.%% Pb, 10.7% Zn and 0.4 g/t Au.
Visit www.AlexcoResource.com to read the Bellekeno preliminary economic assessment released in June 2008.