Vancouver — Alexco Resource (AXR-T, AXU-X) is proving the Yukon’s historic Keno Hill district still holds silver, not to mention some high-grade zinc and lead.
Keno Hill encompasses more than 35 mines that produced over 200 million oz. silver, with significant byproduct lead and zinc, between 1913 and 1989. It sat abandoned since being forced into bankruptcy by failing silver prices in the 1980s until Alexco purchased the property in April 2006.
The 2007 drill program was focused on validating and extending historical resources at the Bellekeno mine area and exploring the 2 km-long Silver King-Husky corridor, where a new area of silver-dominated, gold-bearing, base metal-depleted mineralization was identified in 2006.
New drilling at Bellekeno has extended the high-grade mineralization 250 metres down-plunge. Hole 92 hit 3.3 metres of 33.41% zinc, 452 grams silver, 0.66 gram gold and 3.15% lead from 331 metres down-hole, and hole 95 returned 43.4% zinc, 79 grams silver, 0.818 gram gold and 0.22% lead over 1.6 metres from 399 metres depth.
Earlier results from Bellekeno included a 1.51-metre section grading 3,100 grams silver, 0.57 gram gold, 19.63% lead and 15.89% zinc starting at 145 metres depth in hole 66. An updated resource estimate for Bellekeno is expected shortly.
The Onek zone, 1.5 km northwest of Bellekeno, returned good zinc-silver grades. Hole 69 cut 6 metres grading 29.5% zinc, 0.84 gram gold, 85.4 grams silver and 0.14% lead, while hole 74 returned 1.3 metres of 26.9% zinc, 0.34 gram gold, 166.5 grams silver and 0.54% lead. The initial drilling tested 100 metres of the 300-metre strike length. Onek may be included as an additional feed source in the Bellekeno base case scoping study.
At Silver King, recent drill results showed strong silver grades over narrow intervals. Hole 112 cut 0.8 metre grading 10,500 grams silver, 2.15 grams gold, 6.61% lead and 0.72% zinc. Hole 88 returned 1,800 grams silver, 0.31 gram gold, 3.95% lead and 2.5% zinc over 1.9 metres. The results show mineralization extends beyond historic mining areas.
Drilling in the Husky zone, roughly 1 km east of the high-grade Silver King 2006 discovery, intersected good silver grades that extended the historic zone 100 metres downdip. Hole 52 cut a 2.1-metre interval grading 1,586 grams silver, 0.96 gram gold, 5.5% lead and 0.04% zinc from 191 metres down-hole. Hole 59 returned 1,040 grams silver, 0.74 gram gold, 11% lead and 0.02% zinc over 0.41 metre from 318 metres.
The recent results from Bellekeno and Silver King, out in late September, pushed Alexco’s stock up 72 or 19% in three days, to close at $4.65. The stock has a 52-week trading range of $2.60-$7.10, and Alexco has 34.1 million shares issued.
The Keno Hill region of high-grade silver veins is roughly 23 km long and 10 km wide. Mineralization is related to mid-Cretaceous-aged tombstone intrusions associated with veins characterized by massive galena and sphalerite, abundant silver and lead sulfosalts, and sometimes native silver. Veins range from 1 to 10 metres in width.
Alexco purchased Keno Hill through its subsidiary Else Reclamation and Development (ERD) in April 2006 from PricewaterhouseCoopers, the court-appointed interim receiver of the property. Under the Keno Hill subsidiary agreement, ERD is protected against historical liability and will be reimbursed for future environmental reclamation activities — estimated at more than $50 million — while contributing $10 million to clean up the Keno Hill district.
Alexco’s water licence application is in progress; the company hopes to have the licence, which includes title to surface and subsurface claims, in late 2007.
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