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Alexco Resource shares fall on 35% drop in Q1 silver production

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Shares in Alexco Resource Corp. (TSE:AXR)(NYSE MKT:AXU) tumbled Friday, after it reported a 35-per-cent drop in silver production in its first quarter at its Bellekeno silver mine in Yukon.

The company said that silver production of 379,616 ounces was lower than the 581,808 ounces produced a year earlier, due to sequencing of mining through lower-grade areas of the southwest (SW) zone of the property. 

Average silver head grade of 636 grams per tonne (g/t) fell 29 per cent from 899 g/t in the year-ago period.

Alexco noted that mining in the comparative quarter of 2012 focused on higher grade central areas of the southwest and 99 zones at Bellekeno, which are also the general areas scheduled for mining later in 2013. 

"During the first quarter, we have been mining areas that are peripheral to the main SW and 99 resource at Bellekeno; although lower grade, these areas remain economic and would otherwise be sterilized by future mining interior to the deposit,” said president and CEO Clynt Nauman in a statement Friday.

“Accordingly, as we progress through the second and third quarters we will be sequencing back into higher grade areas of the mine. We continue to expect to produce approximately 1.9 to 2.1 million ounces from the Bellekeno mine in 2013.” 

Nauman added that the average Bellekeno silver head grade for the full year is expected to average about 700 g/t, but with quarter to quarter variations. 

Although silver ounces produced in the first quarter decreased due to the lower grade, mill throughput remained solid at an average 223 tonnes per day for the quarter, essentially matching mine production, Alexco said.

Meanwhile, lead production fell to just over 3 million pounds from 4.9 million pounds a year earlier, while zinc production declined to 1.02 million pounds from 1.5 million pounds.

Alexco said it expects silver production in 2013 will be sourced from three mines: Bellekeno, Onek and later in the year, Lucky Queen. 

A quartz mining license authorizing mining at both Onek and Lucky Queen was issued in January this year. Potential initial production from the Onek mine is targeted for the second quarter of 2013, while Lucky Queen production is anticipated in the second half of the year.

Financial results for the first quarter of 2013 are expected to be released after market close on May 8. 

Shares of the company were lower by 9.2 per cent as at about 1:30 p.m. EDT, trading at $2.37.

 

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TSX:AXR
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