VANCOUVER — The first half of the year was rough for shareholders of Yukon-focused silver producer Alexco Resource (TSX: AXR; NYSE-MKT: AXU) and its underground Bellekeno mine, 50 km northeast of the town of Mayo.
Falling silver prices and rising operating costs had depressed the company’s share price to a 52-week low of 94¢ per share in late June, but there looks to be some light at the end of the tunnel. Silver prices have stabilized above US$20 per oz., and on Sept. 18 Alexco announced drill results from a program at its Flame & Moth prospect that show potential in the 234 sq. km Keno Hill silver district.
Alexco’s surface-drilling program at Keno Hill included 13 drill holes over 2,830 metres on its Flame & Moth deposit.
Three diamond drill holes over 1,260 metres were collared on the southwest extension of Alexco’s Lightning zone, with results showing silver mineralization extending 220 metres along strike and more than 290 metres down-plunge from the nearest drill hole.
Lightning’s strike length exceeds 900 metres, connecting to the known extent of the mineralization in the Flame vein. The deposit is open down-plunge to the southwest while the controlling structure is open to the northeast at depth.
Highlights from Lightning include: 987 grams silver per tonne and 0.38 gram gold per tonne over a true width of 5.6 metres in hole 13-0504; 436 grams silver over 4.3 metres true width in hole 13-0506; and 150 grams silver and 0.2 gram gold over 6.4 metres true width in hole 13-0505.
“There is no doubt that the Flame & Moth deposit is one of the best discoveries in the Keno Hill district in the last 50 years,” president and CEO Clynt Nauman says, noting that the mineralization has true widths ranging from 0.5 metre to more than 11 metres, with grades running from 400 grams silver to more than 1,400 grams silver, depending on the cut-off grade.
“It is a potential game-changer for Alexco and will materially influence the way this district is developed in the future,” he continues. “The 2013 drilling indicates another opportunity to increase the resource base in this robust deposit. Although Flame & Moth was originally a blind discovery from the surface, the silver-lead-zinc-gold deposit — and associated mineralized structure — can now be traced for almost a kilometre along strike.”
Alexco collared another five holes over 1,000 metres at its nearby Bulldozer prospect, located 1.5 km west of Flame & Moth.
Results were highlighted by hole 13-0494, which cut 985 grams silver and 0.36 gram gold over 0.9 metre true width.
All five holes intercepted a new structure, and showed the vein has an orientation similar to the Flame vein.
The company says that the Bulldozer discovery shows a locally mineralized, northeast- to southwest-trending corridor that’s prospective over 2 km in the Christal Lake area, and extends another 6 km northeast to the Sadie Ladue deposit.
Alexco traded 224,000 shares during the two days after its announcement. Over the period shares jumped 24%, or 37¢, and briefly hit an intraday high of $2.15 on Sept. 19, before closing at $1.93 per share at press time.
Alexco has 63 million shares outstanding for a $121-million market capitalization, and trades an average of 70,000 shares per day. Shares have moved within a 52-week range of 94¢ to $4.71.
© 1915 - 2015 The Northern Miner. All Rights Reserved.