Alexco transforms the Keno Hill Silver District with environmental technologies

1 of 2The Bellekeno Mine area and broader Keno Hill Silver District hold decades of potential, Alexco officials believe. — Photo courtesy Alexco Resource Corporation

2 of 2An exploration core drill rig operates within the Keno Hill Silver District. — Photo courtesy Alexco Resource Corporation

Last year, two executives of Alexco Resource Corporation received one of the most prestigious awards handed out annually by the Association for Mineral Exploration British Columbia (AME BC). Alexco president and CEO Clynton Nauman and environmental vice-president and COO Bradley Thrall were the recipients of the 2011 E. A. Scholz Award for excellence in mine development.

The award recognized the two men—both with extensive experience in mine reclamation, remediation and development—for the work they've done to successfully reopen the Bellekeno Mine and revive Yukon's Keno Hill Silver District through an innovative strategy that includes managing environmental liabilities generated from more than 75 years of mining. Bellekeno achieved commercial production in January 2011 and is presently Canada's only primary silver mine.

What's special about junior producer Alexco Resource Corp. is its stand-alone environmental consulting division, Alexco Environmental Group. Thrall said he's had experience in this area for almost 15 years and Nauman brings almost 20 years of knowledge and experience.

"Alexco has a fairly unique business model whereby we look for somewhat distressed, environmentally impaired assets within the resource sector that still have resource upside but have some impairment on the environmental side," said Thrall. "So we have a unique skill set on the environmental and reclamation and remediation side, as well as mine operations and development. We're able to work at some of these properties and solve the environmental challenges and at the same time look to see if we can unlock the resource potential."

Alexco owns six patents and has additional U.S. patents allowed and pending for the use of nutrients in earthen materials. Alexco's technologies provide in-situ encapsulation, whereby soluble toxic metals—including arsenic, zinc, selenium and nitrate—are geochemically encapsulated by more benign minerals within the groundwater aquifer or within and down-gradient of sources of contamination—such as within a pit lake, tailings impoundment, heap leach pad or waste storage area.

Alexco is the industry leader for pit lake and underground mine pool treatment and its professionals have successfully treated billion-gallon pit lakes for contaminants including selenium, zinc, uranium and nitrate.

"We operate four water treatment plants within the Keno district itself," said Thrall. "We recently constructed a bioreactor that is more a passive biological treatment approach and that is treating Bellekeno. The amount of technology that we've brought forward demonstrates within the district that if you can manage some of these environmental contamination issues and water management approaches, you can manage some of these things in a more passive biological approach in trying to reduce yourself off of more chemical water treatment."

Thrall said some of the technology that Alexco has implemented at Keno Hill works to eventually reduce taxpayer liability for what's been left behind after more than 70 years of environmental contamination.

"It is a $50- to $60-million cleanup project that the federal government is responsible for—and therefore, the taxpayer is ultimately responsible for," said Thrall. "So we're certainly focused in on how our technologies can reduce that long-term liability to the taxpayer."

When Alexco arrived at the Keno Hill Silver District, the company focused on care and maintenance activities and on improving the environmental facilities within the district. At the same time, it focused on the Bellekeno Mine.

"In 2007 we quickly expanded the historic resource there," said Thrall. "But really, the story there was bringing the environmental consulting and remediation sides together. We were able to permit, build and put this mine into production within about three years from when we first started working on it. So that's obviously a testament to the operating team we had developed, but it's also a testament to the business model and the environmental expertise that we brought in."

Alexco owns 100 per cent of the historic Keno Hill Silver District. The Bellekeno Mine in the district produced 2.02 million ounces of silver during 2011. Alexco is rapidly exploring other promising high-grade silver prospects throughout its Keno Hill holdings. Two more mines are in development, with production targeted to commence by the end of 2012. For the 2012 exploration season, the company will invest $12 million on a 29,000-metre surface and underground drilling program. Alexco's goal is to identify 100 million ounces of silver resources in this prospective district and ramp up to more than seven million ounces of annual silver production within the next decade.

With all of this success and the promise of more success on the way, the E.A. Scholz Award meant a lot to the two men who have worked so hard to achieve development and environmental success.

"I'm certainly pretty proud of the recognition from our peers and the industry itself for some of the work that we've done in the district," Thrall said. "The award also recognizes the employees and contractors and their dedication. There were more than just two people involved with the success there, so I think the recognition from peers means a lot."

Thrall said the Keno Hill Silver District was in operation for decades but was shut down because of low silver prices and environmental challenges in meeting modern permit requirements.

"So we certainly think the district has decades left in it in the future and that's our focus," said Thrall. "(Our aim is) to be there for the long term and unlock what we think is some significant resource opportunities still left in the district."