Mining company wants to work with Keno

Mining company wants to work with Keno Residents of Keno City have recently expressed concerns about the location of the milling facility associated with our proposed Bellekeno silver mine, suggesting that it should be more logically situated in Elsa.

Residents of Keno City have recently expressed concerns about the location of the milling facility associated with our proposed Bellekeno silver mine, suggesting that it should be more logically situated in Elsa.

We care very much about the quality of life of our neighbours in Keno City and we remain committed to working with them to address their concerns. Please allow us to explain our position on the mill location and our vision of redevelopment of the Keno Hill Silver District.

First, we’d like to point out that the historical Elsa mill and tailings site carries with it significant economic ramifications that would jeopardize the viability of our proposed mine.

It has been suggested that the tailings from our new milling operations be deposited with the historic tailings at Elsa. Locating our mill and tailings in Elsa would attract millions of dollars in environmental liability from past operations – exactly what killed attempts to restart mining in the district by three other companies in recent years.

Second, it has been implied that it may be possible to negotiate our way out of the liability issue with the federal government. This is not the case.

We have a contractual agreement with the federal and Yukon governments and, fundamental to this agreement, is our assumption of historic water-related environmental liability in all areas directly affected by our future operations.

Preliminary estimates to clean up the historic Elsa mill tailings are in the tens of millions. This is why it is essential to the viability of our project to keep its environmental footprint small enough to allow for cost-effective cleanup at the end of the mine’s life, paid for by profits from this mine, in accordance with modern Yukon government regulations and policies.

As previously noted, it is well known that the failure to successfully address the issue of environmental liability from past mining at Keno Hill has thwarted previous attempts to restart the Bellekeno and other mines.

Location of a mill and use of the historic Elsa tailings site would also attract significant additional capital and operating costs, as well as safety risks associated with trucking ore along the Silver Trail. Major highway upgrades are required, additional costs and risks that will compromise efficiency, safety and sustainability of the project.

Alexco has been meeting with residents of Keno City for the past three years to discuss the revitalization and cleanup of the Keno Hill Silver Mining District. Alexco completed its technical evaluation of the current proposed mill site in January, 2009. Later that month, we met with the Keno City Advisory Committee and the community to explain our decision and develop plans to mitigate impacts.

Following these meetings we modified our project proposal to address community concerns and included a number of additional mitigation measures within our project proposal.

We see it as our obligation to ensure that any mine we build and run is sustainable, becomes a benefit to citizens of Nacho Nyak Dun, residents of Mayo, the Keno City community, and the entire Yukon.

With longtime Yukoners in senior management of the company, Alexco has a deep appreciation for local issues and a solid commitment to do the right thing for the Yukon.

Finally, we at Alexco Resource Corp. understand our responsibility toward sustainable redevelopment of the Keno Hill Silver District.

We have contributed $10 million towards the cost of cleaning up the site.

We will in the near future be submitting to the Yukon Environmental and Socio-economic Assessment Board a proposal for extensive environmental clean up of the entire district, including mine adits and waste rock dumps immediately in and around Keno City.

However, this cleanup will be of relatively short duration and will only partially achieve a sustainable basis for future economic and social development.

A meaningful, comprehensive and sustainable plan for prosperity in the Mayo – Keno City area will be integration of the environmental cleanup, the developing tourist industry, and the responsible and efficient redevelopment of resources in the Keno Hill Silver District.

This means that Alexco must plan to the extent possible, efficient and sustainable mineral production to avoid the boom and bust cycles experienced in the past.

We encourage everyone to view the factual information contained in our project proposal on the Yukon Environmental and Socio-economic Assessment Board public registry, which includes the complete description of our project, as well as the Keno City socio-economic mitigation plan.

We look forward to comments received during the Yukon Environmental and Socio-economic Assessment Act process, and we look forward to continuing productive engagement with the citizens of Nacho Nyak Dun, and residents of Mayo and Keno City.

Clynt Nauman, president and CEO

Alexco Resource Corporation

Vancouver

See more letters page 8.

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