Alexco Resource Corp. plans to open two additional mines in the Yukon’s Keno Hill district by the end of 2012.
The company started producing silver from its Bellekeno underground mine in late 2010. But that’s just part of a complex of 22 historic mines controlled by Alexco in the Keno Hill district.
“There’s significant business risk operating a company mine on the back of one mine. So I need to mitigate that risk and expand the production profile,” said president and CEO Clynton Nauman in an interview.
The two new mines it plans to open this year are the Onek and the Lucky Queen. With these mines feeding the existing mill, throughput should see a modest boost, said Nauman.
The 70,000 tonnes processed in 2011 is expected to increase to between 100,000 and 120,000 tonnes in 2012.
“They will be a slight increase in the workforce, but it won’t be significant,” said Nauman. “Those mines will be at a low capacity – perhaps 50 or 100 tonnes per day, per mine, which would only translate into one or two trucks of ore per day.”
Bellekeno has between 60 to 90 workers on site over the winter, he said. That goes up to 150 workers, including contractors, in the summer.
The two new mines are being separately permitted. The Yukon Environmental and Socio-economic Assessment Board is expected to solicit public comments for both projects “in the next month or so,” said Nauman.
In 2011, Bellekeno produced approximately two million ounces of silver. That’s slightly less than anticipated.
It’s taken longer than expected to fine-tune the mill, said Nauman.
Sporadic power outages from the electrical grid also took a toll, he said.
“We got hit really hard by the power outages in the summer. That was a major issue to overcome,” he said.
One upside to the lower production in 2011 is that Bellekeno’s lifespan has grown. Earlier predictions would have the mine shutter within two years. Now “we probably have three or four years left of production,” said Nauman.
And with a big exploration program planned for 2012, Bellekeno’s resources may continue to grow. “Hopefully we’ll be able to replace resources as they’re mined through exploration,” he said.
Drilling is planned for Bellekeno and Lucky Queen in March.
Alexco also aims to firm up resources at its Flame and Moth deposit. In all, it intends to spend more than $10 million on exploration this year.
“We’ll be doing maybe twice as much as in 2011,” said Nauman. “We’ll have at least four drills on the surface and one or two drills underground.”
Alexco got its foot in the door of the historic silver district by securing the federal contract to clean up the mess left by previous, bankrupt mining companies. That work continues.
Last month, it was announced the Onek mine may be discharging water containing dangerous amounts of cadmium and zinc.
While this isn’t believed to be mixing with the drinking well water used by Keno City residents, both the company and the territorial government are planning to conduct regular monitoring.
Alexco also owns the historic gold mine at Brewery Creek. That property is being developed in a joint venture with Golden Predator Corp.
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