Alexco Resource Corp. has negotiated a new deal with Canada on their reclamation work in Keno.
The amended agreement will result in the federal government taking on more of the costs associated with cleanup activities.
When Alexco purchased assets of the Keno Hill mining district in 2006, it pledged $10 million towards cleaning up the area from past mining activity.
That money is funneled through its subsidiary, Elsa Reclamation and Development Company.
But the work has been more complicated and expensive than previously anticipated, according to last week’s press release.
Under the amended agreement, the company will contribute five per cent of the costs for developing the reclamation plan, compared with the 35 per cent previously agreed upon.
Alexco will also recoup about $2 million already spent in excess of the now agreed upon five per cent share.
Costs shared for ongoing environmental care and maintenance work have also been adjusted.
The 2006 agreement stated that the company would pay 15 per cent of those costs in the first year, with that share going up an additional 15 per cent each year until the share reaches 100 per cent.
Under that formula, Alexco would now be paying all of those ongoing costs.
Under the amended agreement, those costs will be shared 50/50 between the company and the federal government.
Additionally, if closure work is completed and Alexco has not spent all of the $10 million, it will be entitled to recoup the balance.
Alexco recently announced that it will shut down the Bellekeno mine for the winter in response to low silver prices.
The company hopes that the economic situation will change and allow for a reopening in 2014.
The environmental cleanup is currently in the planning phase. Reclamation work is expected to begin in 2016 and last five years.