Alexco Resources (NYSEMKT:AXU) had its buy rating and $1.40 price target reiterated Tuesday by analysts at H.C. Wainwright, which cited expanded silver production from the company's preliminary economic assessment update on the Keno Hill project in the Yukon.
The updated mine plan includes the impact of the revised Silver Wheaton streaming agreement, and adds to overall anticipated silver production from the area.
"Although the affect of the updated Silver Wheaton agreement has been included, updated resource estimates for Flame & Moth and Bermingham have not yet been included in the mine plan," said analyst Heiko F. Ihle.
"We remain optimistic that in addition to increasing resources at Flame & Moth, Alexco could continue to expand overall resources in the Keno Hill District through continued exploratory activities through 2015."
The newest report outlined a 398 tonne per day operation over a six-year mine life, with production expected to reach a total of 17.1 million ounces of silver, 5,900 ounces of gold, 38.2 million pounds of zinc lead and 35.2 million pounds of zinc.
Ihle said he continues to believe the Keno Hill District could be brought back online, with "relatively little capital cost" as the updated PEA outlines initial capital of $45 million, including the $20 million Silver Wheaton payment.
About half of the remaining capital spend after drawing the payment to Silver Wheaton will focus on driving decline development as well as underground infrastructure at Flame & Moth, HCW said.
Updated resources at Flame & Moth and Bermingham are due out sometime next year, with the former expected to remain a focus for Alexco moving forward.
"In our opinion, the area could contribute meaningfully to overall production in the future as Flame & Moth accounts for approximately 72% of the mill feed during the approximate six year mine life outlined in the updated PEA," said HCW's Ihle.
"We believe the updated PEA represents a strong step in the right direction towards bringing the Keno Hill District back into production, and note that the potential for resource expansion at Flame & Moth could pave the way for continued mine plan optimization through 2015.
Shares of Alexco rose 4.4 percent to 48 cents in New York. The stock has dropped nearly 62 percent since the beginning of the year.