The Keno Hill Silver District (“KHSD”) has a rich history as one of the world’s highest-grade silver districts. Located 350 kilometers north of Whitehorse, in Canada’s Yukon Territory, within the traditional territory of the First Nation of Na-Cho Nyak Dun (“FNNND”) and comprises 233 square kilometers characterized by numerous mineral occurrences and more than 35 mine sites with a history of production. Year-round access to the property is via highway from Whitehorse to Mayo. KHSD is connected to the national power grid.
According to the Yukon government’s Minfile database, between 1913 and 1989 the Keno Hill Silver District produced in excess of 200 million ounces of silver from over 5.3 million tons of ore with average grades of 44 ounces of silver per tonne, making it the second-largest historical silver producer in Canada. In 1989, with falling metal prices and increased environmental standards, the former owners of the Keno Hill Silver District, United Keno Hill Mines Limited, terminated its mining activities in the District.
Today, the Keno Hill Silver District is owned by Alexco and it continues to boast significant mineral resources at grades far higher than most of the world’s primary silver producers.
Alexco’s Bellekeno silver mine, one of the world’s highest-grade silver mines with a production grade of up to 1,000 g/t silver, commenced commercial production at the beginning of 2011 and was Canada’s only operating primary silver mine from 2011 to 2013. The opening of Bellekeno marked the rebirth and rejuvenation of one of Canada’s most famous and prolific historic mining districts.
Following suspension of operations at Bellekeno in 2013 and subsequent discovery of two new high-grade silver deposits, Alexco published a Pre-feasibility Study (“PFS”), the results of which were announced in March 2019.
The PFS anticipates sequential production from four high-grade silver deposits (Bermingham, Flame & Moth, Bellekeno and Lucky Queen) over an eight-year mine life producing 1.18 million tonnes of ore with an average silver grade of 805 g/t, 2.98% lead and 4.13% zinc. Silver production is anticipated to be approximately 4 million ounces per year.
Alexco is focused on moving KHSD back toward production. The Company has the requisite permits and authorizations for future ore production from the Bellekeno, Flame & Moth, Lucky Queen, and Onek. Permitting for production from the Bermingham deposit is ongoing. Alexco submitted a water licence renewal application to the Yukon Water Board for processing and milling ore and discharging treated water from the Bermingham mine, as well as renewing all other permitted deposits in the District for a further 15 years.
Completion of the amendments to Alexco’s Quartz Mining Licence is expected in Q3 2019 and renewal of the Water Use Licence (“WUL”) is expected in Q4 2019. The WUL application completed the Technical Adequacy phase in July 2019 and a 30-day public comment period was subsequently advertised.
The Company maintains a disciplined approach to moving KHSD back into production and continues to systematically advance development of Keno Hill while awaiting the final permits for Bermingham. In the meantime, the Company is carrying out a surface exploration program of approximately 7,500 meters to expand the Bermingham deposit at depth and test other targets identified during the 2018 exploration campaign.