Alexco Resource Corp. (AXU: AMEX) has received the mining and land use permit that it needs to start redeveloping the historic Bellekeno Mine in Yukon. By the end of this year, Alexco plans to pull out bulk samples from the silver/lead-rich southwest zone. Then Alexco will rehabilitate the workings in preparation for a production decision in early 2009.
The Bellekeno Mine contains an inferred resource of 537,000 tons containing 1,016 grams per ton of silver. That’s about 19.2 million ounces of silver. Plus, there’s an estimated 13.5% lead, and 10.7% zinc. Really, some of the ore is just astonishing in quality. From what I have seen of it, it’s like the “specimen ore” that we used to use in mineralogy class at Harvard. It’s what ore ought to look like.
The underground resource appears to continue “open” to the west and down plunge, far deeper than the existing mine works. In other words, there is more ore. We just don’t know how much more there is beyond the “safe” engineering estimates.
Alexco’s contractor is on site and has been performing prep work since April. Soon, Alexco will commence digging a 2,000-foot “decline” to access the former workings. This decline will take approximately four months to drive. It will intersect the former mine workings in the area between the southwest zone and the zinc/silver-rich east zone.
Alexco expects to perform underground definition and exploration drilling, beginning in fall 2008. The bulk samples of ore and other mineralization will confirm the
metallurgical properties of the ore, as well as general mining conditions. Alexco’s goal is to obtain results sufficient to make a commercial development decision on the Bellekeno Mine in early 2009.
And if things are as good as they appear at this stage, Alexco should instantly become takeover bait for a larger mining company that wants to beef up its reserve position with a high-grade deposit.
High-grade ores are good because they usually have lower costs of production. You have to process less ore to get the same recovery. This has become a critical issue in the mining business. We are now in an era in which capital and operating costs are soaring in the mining industry.