Silver price drop prompts Alexco layoffs

“While there are some that believe precious metals prices will rebound in the near term, we believe it is only prudent to do what we can to weather this period of lower prices,” said Clynt Nauman, Alexco’s president and CEO, in a press release.

Alexco Resource Corp. has announced layoffs at the Bellekeno mine in response to low prices for silver, zinc and lead.

“While there are some that believe precious metals prices will rebound in the near term, we believe it is only prudent to do what we can to weather this period of lower prices,” said Clynt Nauman, Alexco’s president and CEO, in a press release.

“These measures are very painful to implement, as they will impact the lives of all our employees in one way or another, but hard as it is, I believe it is the only appropriate action to take given current conditions.”

The price of silver has dropped to around 23 U.S. dollars per ounce today, from around 33 U.S. dollars per ounce six months ago.

Bellekeno, located in the Keno Hill silver district north of Mayo, is Canada’s only operating mine that primarily produces silver. Production began in 2011.

About 15 positions from the company’s Yukon staff have been lost. An equal number of jobs have been eliminated that were vacant prior to the layoffs. In all, these cutbacks reduce the company’s Yukon workforce by 25 per cent.

“The great majority of the people that we had to lay off here were not Yukon residents,” said Nauman in an interview. “So we’ve made a very conscious effort, and we’re very sensitive to the fact that the Yukon portion of our workforce is an

important component. Given our choice, we would like to be 100 per cent, but there’s just not that capacity in the Yukon.”

In addition, four positions have been cut from Alexco’s Vancouver staff.

Three company executives and seven board members have reduced their take-home pay by 20 per cent.

And the re-opening of the Onek and Lucky Queen mines has been delayed.

Both historic mines were set to go back into production this year.

Alexco was granted an amended quartz mining licence in January, which permitted the expansion of operations.

The new mine sites were set to supplement but not increase total ore production.

But that has been delayed until silver prices rebound.

“In the present environment I think that we’re just going to continue operating with the one mine, the Bellekeno mine,” said Nauman.

Production at Bellekeno is expected to continue at current levels.

The company’s exploration plans for the area remain largely unchanged, with a focus on the Flame & Moth property, “which continues to show increasing importance.”

Contact Jacqueline Ronson at jronson@yukon-news.com

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