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Alexco estimates C$79.4M NPV, 75% IRR at Keno Hill silver project

Alexco Resource Corp.'s preliminary economic assessment at its Keno Hill silver project in Canada's Yukon estimated a posttax net present value, discounted at 5%, of C$79.4 million, and a 75% internal rate of return.

The study assumed silver prices of US$18.60 per ounce in 2018 and US$19.35 per ounce in 2019 through 2025, according to the March 29 release.

Total payable production from the mine is estimated at about 25.1 million ounces of silver, 77.3 million pounds of zinc, 67 million pounds of lead, and 4,870 ounces of gold over the eight-year mine life.

The project is expected to achieve production and positive cash flow with less than one-year payback on the initial capital costs of C$27 million.

Upon achieving commercial production, all-in sustaining costs over the life of mine are estimated at US$13.51 per ounce of silver.

The average annualized mill throughput is estimated at 143,000 tonnes per year over eight years.

The company expects net smelter returns of C$565 per tonne of ore, following the amendment of its silver purchase agreement with Silver Wheaton Corp.

Production cost, including mining, milling, and general and administrative expenses, is estimated at C$325 per tonne of ore.

Under the amendment of the silver purchase agreement, the production payment on streamed silver will change from US$3.90 per ounce of silver to a variable percentage of the spot silver price.

As compensation for the amendment, Alexco will issue 3 million common shares to Silver Wheaton.