AXU - Earnings call transcript Q1 2021

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Alexco Resource Corporation Q1 2021 Conference Call.

As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. now Director turn of would to conference I Cordero, Kettina Investor Instructions] like the to over [Operator Relations. Please, go ahead.

Kettina Cordero

today. Good be XXXX our alexcoresource.com. of and through the Alexco Thursday, website webcast live March at you is and available be This is call Quarter the the accessed can Call. First Resource morning. to archive XXXX Webcasts being An Conference call Events later audio and I will Today's welcome Results XX, section of

website most quarter our Brad March mentioned Our our our financial statements available laws. in Investors of to forward-looking constitute risk and involves found dollars XX, Nauman amounts may Chairman recent today could disclosures of made and Mike several our future most contains CFO, are news releases differ Today, Canadian will also period. risks will not recent cause All our securities information otherwise the discussed in results Clark results; for business during from ended today Clynton indicated. recent that I our the and now the meaning website our pertaining be unless today is most to be indicative the with encouraged regulatory be discuss statements are XXXX. and can our some Thrall; reminded projections. Clint that question-and-answer our he CEO, President, Please Nauman. and joined [ph]. by that to filings will on results you applicable Past review within leave performance

Clynton Nauman

today. thank you, joining for and us Kettina, Thank you, everybody,

we continued during made Keno up ramp good first the Hill Our quarter operations at and progress. of

as under soon up Moth, mining still in essentially having XXX us our is the have well-being safe. With staffs upgrades ongoing as have is intricacies pace and these underground Bellekeno the of and as pre-commercial January, been as busy COVID-XX production navigating updates. we crews the shipping Flame days. the we everyone following exploration underground day in and XXXX. priority absolute design tonnes to we're very concentrates workforce & protocols to while mill and capacity reach are are our usual Keno operating extremely availability down, of and development line protocols Bermingham sales the objective the that report at is district These restarted the and but initial per operations, first supply well at communities. and continue of Hill complete, With our slowing of successfully we now [ph] delays. our satisfied keeping three possible, The of highlights And months our picking financial

surface by zinc at production silver during the the per silver produced X,XXX a has averaging of of district On the mill operating the X,XXX today block trend days reporting the At tonnes advanced At of predicted scheduled grade the and as silver with Bermingham, we serve rates. resources ventilation of which recoveries tonnes production and initial up concentrate. operating. tonnes and XXX and to now XX We focused the was quarter The are construction that schedule of In the mining few over we're to now XXX day processed contractor lead concentrate on in resumed lead increase mill XXX the concentrate underground complete. Bermingham & the meters at we per ramp mill, tonnes match reaching the quarter underground about phase. continues improve Flame ore, secondary from which a of within escape and grams their the ore exceeds mill. performance of next breakthrough support ore head At silver, the grades to ore second development Moth, We're about continue anticipating tonnes has third fine-tuning days. first to This quarter. of and added Bellekeno mill rays modified model. the this XX% ore we averaged XXX-meter XX% in and front, of improve metallurgical into late development extraction in mined extended April, is in modifications, Bellekeno are the on-plan essentially to four and delivery is tonne on XXX been year. on to Silver now of been

this will per and XXX rates of we throughout tonnes until quarter. We commercial to continue expected production expected the reach fourth quarter underground development day improve in

training conditions underground while safety operation and on adjusting times the at new remains underground cycle new Our the same equipment, mining standards. of crews improving time industry-leading and ground focus to maintaining

are Bermingham started the March a providing On of well program drilling and that and directional intercepts for efficiencies and about method of we utilizing perspective. drilling drilling four technology. new front, preliminary the The Hill drilled timing with drilling Keno Deep in target will zone end that improve very we've directional a Northeast the surface of the exploration five exploration from going method directional this drilling indications drastically new about meters, at drilling April, cost X,XXX us, are [ph] rigs is

Bermingham than this XXXX resource the more fourth holes to will into objective just XX entire in this or And Bermingham a Deep Our XX clear, program meters be comprise XX,XXX minimum and complete estimate area. to update existing quarter. Northeast of mineral is the in

and to $X royalty project we million $X.X revenues sale million On $X.X comprising March XX, the on income capacity during million. management and [indiscernible] incurred of mining capital ramp reaching million cash from the the soil first a plus services. We of up of an asset to and gain reported reclamation move mill. finished and gross sales concentrate from We reported working driven mainly of the is with related million, ended for towards and precious million derivative, of $XX.X $X.X corporate equivalents contribution small mining financial due Predator's sales. quarter of quarter million $X.X activities We on the concentrate where as embedded total costs and million in cash the metals rates Golden of amount of which of the Creek $X.X operating a primarily nameplate Brewery loss $X.X reported million front from the [ph] loss NSR million we an $X.X net by net higher $XX.X

million We cash and also bonds. with ended the quarter deposits in $X to restricted surety our related

million, January, in a development. program the a surface $XX.X Finally, portion is we equity and funding of meters gross the of through drill completed for financing flow proceeds XX,XXX which underground

an been finalizing and month. we've working working expect While file on on updated Hills PFS, later we this reserve been ramp to up, we're we've currently mineral also and Keno which

mineralization the the You'll XXXX, mineral repaired since and price remember when different PFS Hill's important attractive we of demonstrate for in This, Northeast the and Bermingham an update change lower Hill, that highly become current the the in and district. Deep at has quarter combined with portion significantly different should of Keno resource include mineral to the significant the upside we and outlook could the expected pricing this Bermingham resource existing in fourth deck the environment. value used creation Keno

officials. COVID our to-date, thank who our the thank through Yukon and Through the has to of officials health continues been support rigorous approximately health our again work want government protocols also of Yukon operating XX% to workforce workforce and we government Finally vaccinated.

longer XX. as the isolation will place, protocols government While required strict that May recently of be mandatory Yukon announced no fully-vaccinated health in for individuals remain

business, its We some however, a at expect possible as to improve more on allow the site, restrictive to and thank COVID-XX It production that and foremost protocols we measures keeping get closer working recruitment which our effect reimposition to commercial us shareholders that their on have and will on negative effect one this forward I note I the to productivity. team. modify and [ph] and should would have of our effect remains conditions results. a to important positive confidence risks look on in our for process our our continued updated you support of significant is

with ask call to questions. the So to I'd that, open the for operator like

Operator

Thank you.

the will Alliance [Operator question-and-answer Please, begin session. from Partners. from first comes go Instructions] We Our Global ahead. Jake Sekelsky now question

Jacob Sekelsky

questions. taking Thanks for team. and Clint my Hey,

Clynton Nauman

Hi Jake.

Jacob Sekelsky

get gradual the XXX tonnes I'm there would quarter? be fourth color to into trying quarter. second a are third to we on going the throughput for ramp I guess, helpful. per day Any see the a of handle to rates and more

Clynton Nauman

Brad Yes. is lifting heavy that doing the site I know at here.

the So, extended you mill the I'm going general, the to that yes, to to ahead? go cycles. answer why that main systematically don't the your Brad, let is questions but will that, him be through these time talk of is length operating

Bradley Thrall

It's Jake. faces, here. quarter-by-quarter Hi, continuing up more all Yes. open to about

and that been the here open we in week then you a the up, on schedule only these development gradually anticipate continue ore So, mill to Bellekeno Bermingham, and throughput. off operating Flame has in we milling has to second and week in increase the open continue quarter two on to Bermingham, mill ore. as advance to we, Again, been faces. more being start faces will our And ore up as will at to continue two again,

those it's Clint to ups will downs, line. not will linear a but a necessarily reach said, and the just there quarter like into targets. gradual fourth some be So, Expect it be process

Jacob Sekelsky

in you plan exploration, how think helpful. update just coming obviously, can this to forefront case? the think if now. year mine the XXXX you is event? see is right later to half that's a kind going the market type the then on something Is Bermingham resource And Okay, we first Deep And the of Do quickly trigger that's that update?

Clynton Nauman

can this time directional beginning into going August, we're be this point Nominally, of round which on your in off it's reasonable those that Yes, about six more have weeks to going a that intercepts knock would we program essays. assumption. sort to technology present that at delays through still the complete at that we're take curve quickly, at confident we after trip the are lab. this account the pretty with learning to drill say I

about quarter is talking And a course, it be mine assuming, hopeful, Not successful. able I'd that and to we'd reserve first anything on be But that hanging of this intend a new do we're plan exploration been that with plant to within especially hang publish, so resource to convert would the do to on hard-pressed This that as about a we to we've XXXX. the currently of the in fourth in work doing, that resource. we're XXXX. new be mine to quarter, through that would we is

Jacob Sekelsky

Okay, on end. very all Thanks, good. That's guys.

Operator

from from Please, Equities. comes go Scarsdale question next ahead. Niehueser Our Mike

Clynton Nauman

Hello?

Operator

Please, question Mike from Equities. Scarsdale ahead. next Niehueser comes Our from go

Our from next from Please, Management. ahead. go Chen Lin question comes Asset Lin

Chen Lin

the Actually, question Most up. was been having about has ramp also answered. I

next by tonnes the So XXX general do end for a it's your the the you year? ramp successfully. level Supposedly just production to, of run What question. see like year you

kind of for what - flow So, Again, of year? can you're next what master kind expecting cash just how maybe you you [ph]? the

Clynton Nauman

see. Let's

I us this the be think and handle year million way, is tonne be are easiest $XX, to going that fourth per day we're type in sustaining year the rate per going that Chen, costs $XX puts point type quarter the all-in to XXX $XX, the at our ballpark ounces range. the that and of X in at to in of

So, year, linear you next the be [ph] process. a May is can to be because a put in May do the number to from up there. just going what I'd that to loath meaning don't know ramp from, arithmetic we out not there

with are because there consistent two range a be all-in to So, type publications. in attractive with we that the fourth we sources is going of our lot flows simply pretty that ore number mines. be that And are X what know from to quarter, will operating by but be costs cash million just previous per ounce will sustaining don't going online the year be,

the think safest that's give. answer I I So, that can

Chen Lin

Okay, great.

going that your well. drilling mentioned You is

So, have drill you are QX the to your you in update some planning results, existing underneath is you high infrastructure? the on still more release which time found frame? grade Those your to or

Clynton Nauman

be around reduced to those to be well basis. we'll drill them July, us, are - at at And it and very hopefully, wouldn't We I to put turn hole. given least to the or have it takes out July be turnaround hole-by-hole anything intersections I We goes. lab batches. results coming we've won't a why Yes, in time the a probably out that how would the August, which doing and before would given putting think. and certainly see going it would anticipate It rate could in we been

guess at best So, be that my would present time. the

Chen Lin

Okay, you. Thank great.

Operator

from Our question Scarsdale next Niehueser Mike comes Equities. go Please, from ahead.

Mike Niehueser

Clint. Hi,

Clynton Nauman

Hi, Mike.

Mike Niehueser

the at Thanks the get XX from about you directional my for When colored that drilling taking colored a could holes call. goal, hole? XX XX drill surface? single talk as is you deeper to with maybe XX Or are to a several results those where

Clynton Nauman

that's all what about. Yes, this directional drilling is exactly

maybe I or talking as only present the than XX those a to target more holes of holes, each call six holes, mineralization or more five, holes. four be or drilled the or we're time, zones So, will 'mother Through or which from at as seven holes, from from few and would there's at holes' anywhere the be we elevation. six think, them, daughter those pilot various going drilled but be what mother

So, of high-grade over so. XXX and that expression of you distance a relatively sort this a a is type know thick of It's linear, meters mineralization. of horizontal or

which going only drilling apart, be and indicated the much used in measured that apart. and consistent holes these So, what down could the have XX XX as past But XX, resources. we're vertical up on be is meters fences we are meters the as with XX to plane for or

So, it's of to for The holes we far four compared are that they're up sort obtained of the there working fences on from picture that be of to you, series if a apart, it. each intercepts relatively drills And a if drilled. have do know paints I are don't going mother the fences. vertical but

So, we're pretty hard. hitting it

we'd to anxious sooner going pretty lot bigger originally than deposit had Bermingham are to rather We a than understand. anticipated, ore This we later. it about know is be

Mike Niehueser

actual at to So, are targeted XX we're zone. mineralized holes really deep the that crossing looking XX directional

that look done in or goal, XX the meters over results you If you've you're looking or with the great speak. that know, you you've so those meters, XXX over? really going So makes to you already below this are like between on you drilling at really got targeting could all XX every When shots say XXX to above are sense. or you

Clynton Nauman

we we we take be that is. intersections, this I and that of you printed posted imagine XXXX, horizontal of mean, that intersections, take easiest those that sort those are are don't or that can if each from that you up that control you type drilling were to that, you mineralization, what we in, way have, pretty we is, elevation know Mike down view So, on the if know, to we going confident dip a each of there's in

each the because of next know, a would down tried depth. move dip continuity distance horizontal out those starting XX, you drilling, And bigger the So isn't with What a make prior XX, know between intersections and to XX intersections and we that the or I've fences. mineralization. that up there there's meters same to vertical from fences, then is the we vertical targets, this there's primarily to

and So define we're of just down and depth thickness to it up intersections. prior tenor the trying from

Mike Niehueser

I go right? these like fairly the Am you're much able sounds it lower? holes. in question putting is, words And real infill confident Is you'll between does and how higher it Oh, that be mouth? how to your much and

Clynton Nauman

the some of No, this fences. accurate and is

the between between are if meter. are fences XXX XXX there's initial those holes, there intersections. Right now, meters the fact, In you like

targets we just and within I up, halfway to down variations. if see meters Kino dip, going fence this well. a to and out, I works. drill you fact a can can geology at of plant pretty I And nail are see yes, of a the just that the mean, how guys say able expectation. I have to we'll I Hill. these starting you're But dip and that's behaving, mean, is that matter few So tell

prior be mean, work we pretty So, defined well. the architecture to interpolated have holding from that I or up seems

Mike Niehueser

explanation. an excellent That's

drilling? and it decline I both has at in to an this and the this that closer terminus of area the? toward end was that starting fat Are as line the The other for this directional end that area important, been in higher of of got grades plan to has south, to Birmingham with with are mine the silver. is the you're is moving Is drill you higher that you lead, which question grades coincidentally, that the in to of the starting I close designed think zone, where had the is proximity

Clynton Nauman

a got But Yes, couple up do drills of drills four we have there. operating that it. we've remember, at end of

spread to the are are of minus particular plus closest early meters at out to the or that the certainly we present So that's XXX be a time, design decline entire couple fences over in but that going currently Birmingham.

Mike Niehueser

you Yes, just and would proximity just lot appears of. the type that but part that grade from of most mean, it desiring to war that interesting have to and I me be would be really the a

Clynton Nauman

Right. as infrastructure. close projected And to it's Yes. as

to start to district said, this as related So yes, how need being I to also overall but the before, in we thinking sense it we've think, that influence it future. said makes could know metrics because as to this develops there

Mike Niehueser

good. means drilled and interesting that But that say I'm provide you what from that intercepts and off out interested grade. the that's hearing XXXX look to five the the wall, most When it's and But carrying said had Well, be you foot figure like what exactly. is the would intercepts, you wall wall. so looks you you distinctly that drill to different material it as meters, actually, the hanging that those

hearing So hitting that having and target those what feeling is. some the it actually is success that looks, I'm seeing you're you're are, what

Clynton Nauman

we'd have the be efficiency is on we're diameter, we're fact, whole to information whole some a so in split Well, further core, of going which area, be as drill we're improve sampling in the very than to program campaign, I slightly using whole. going and controlled to we're smaller reaching sampling this rocks. basis, ore, a rather target. we're protocol the rod. a to And is core targeting we're minutiae a just certain mean, wait that that And sampling And going until

predict eventuate, to So as to thing going just I'm things but at see much going what going is present are we'll initial the wait well, to expected. we the pretty pretty not and have time

Mike Niehueser

to just you Yes, I what the us appropriate; release. well, understand in wanted that's were telling

put Just question, have in out, see ore you and an which all the way kind broken one that use the that mill. flaming to Belle commission rolling last to the is or then that the Kino. that's get this you or the runs main show. to loss this I that's is been out really of providing native, as Birmingham opportunity into But through mill And

that that into to get you this within that PA say a once you it operations. to just of way we're and of So see the good float that's reflection was doesn't ore would to Belle all operations, continuation long is and or want that, of make And sense? future is in so seeing early going a the when start oxidized and number it years the ore like if really doesn't a or curious were recoveries ago, Birmingham, what ore look Kino to does the from prior that as compared I'm of question a well, broken, winded

Clynton Nauman

And is well that. answer positioned a good question. to Brad, That

Bradley Thrall

Mike, guess my Yes. metallurgy. on I comment

know, a little for in say a starts mill reasons would of one ideal on, off week schedule two I a not and variable stops. that You is been week is and the it's bit with two operating on

for and well operating lead. in seeing right we now know, You recoveries are silver of excess and XX%

stokes all of the we the any most here. a is that been might this extracted oxidation haven't all been all hole So, [indiscernible]. bit fresh have fresh, for long recoveries issues have historical seen part, But from down of no,

Mike Niehueser

fourth, see the have be I early my like it. just of they're of my the that well the really sense to good. quarter batch that's exciting call. Really time, some going actually. a hope best of for the drill taking that's appreciate that's late the Okay, can for those remarkable. the And deep on in third And to I those And just because company, area results Thanks closest that an you But early time if I available. or opinion. I Northeast probably infrastructure, all

Bradley Thrall

Mike. Thanks,

Operator

question go from Our ahead. Kozak comes next from Fitzgerald. Cantor Mike Please

Mike Kozak

good, for Thanks team. must Hill, on hosting call. the Clinton again, Keno the Hi, feel concentrates revenue congratulations pretty comes especially at when in. selling And Yes.

me, left. that moth for trying underground with to given for like working a call I ramp left for spent the it development to mid up feeling capital think number Like the restart the restart Birmingham but capital think ramp of here. of be at how and in of included Just I'm to and recall flaming a you've cap, that get the you're already. spend and one might mill maybe that presumably question initial have mode I day, you upgrades some a I much XXX whole million $XX tons if range lot up was the in that

get So how to what's your to day in a best QX? XXX left have estimate to to spend you as much

Clynton Nauman

the are it's Yes, arithmetic you complicated sort complicated a of is But Mike. straightforward question, producing it's know a because revenue. somewhat because you

still have do million you're original great that of probably something so outstanding. and equipment, money that or million, $XX I million, for there's a $XX you the has $XX So offsets, million was that right, of number million cash majority think plant been like $XX $X spent, that's property, except was

would that million the we continue per on going XXX about it's we with be to going the from be know, capital probably that, achieving. get by the I melt as number advancing And for capital. level, the working to proportional that is looking all at the ore I range, number something if at a the which $X $XX [ph]. guess and to tons in that some directly back balance $XX revenues day, sheet. expecting offset are that capital are rates nominally fact, that's mill million that that highest can't underground to in like you're million To interpreted coming be the at is rate So we're working

that that in mentioned qualifiers language. Harbor the I I terms with a, So, appropriate all Safe is mean, of

Mike Kozak

what that including the sales, number, concentrate from is pre they that's your Got best that? commercial estimate be, excludes will it, your revenues okay. And or

Clynton Nauman

sort net that's be, a Yes, that of would number.

Mike Kozak

me. the call. Thanks, it. All right. for That's got for everyone hosting Okay, it

Operator

back would Nauman like conference I closing to Clynton to turn any session. remarks. question-and-answer for the the over concludes This

Clynton Nauman

you, operator. Thank

June next everyone's COVID-XX context order proceedings shareholders in XX, our on or be the the to in join Time. the XX:XX AGM the at asked by a and update Pacific advance call. webcast at we meeting of Our conference In vote of well-being pandemic, will to the to and preserve

join can call of investors wish You for good website. to meeting thank the you. of instructions health. in all section our then, your the find the Thank and Until materials you support including I you continued

Operator

This concludes today's call. conference

your You have you may disconnect day. pleasant for lines. and a Thank participating

Alexco Resource (AXU) 13 May 212021 Q1 Earnings call transcript