Alexco Resource Corp.
Q2 2016 Earnings Call Transcript

Published: 11 Aug 2016

[Operator:]

Good day, ladies and gentlemen. Welcome to the Alexco Resource Corp. 2016 Q2 Conference Call. Today's conference is being recorded. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] It is now my pleasure to introduce your host Mike Clark. Please go ahead sir.

[Michael Clark:]

Thank you. Good morning. Today is Thursday, August 11, 2016, and I'd like to welcome you to Alexco Resource Corp. June 30, 2016 second quarter conference call. This conference call is being webcast live and can be accessed at the company's website at www.alexcoresource.com. You may sign up on the Alexco website to receive further news releases and other event updates as they are issued. Also on Alexco's website, you will find Alexco’s news release with quarterly financial results there and recording of this conference call. Giving presentation on today's call will be Clynt Nauman, President and Chief Executive Officer of Alexco; and myself Mike Clark, Alexco's Chief Financial Officer. We’ll have an opportunity for a question-and-answer period after our presentations. Before we get started, I need to remind you that some statements made today by us may contain forward-looking information, our business involves a number of risks that could cause results to differ from projections, and investors are urged to consider those disclosures and discussions pertaining to risks that can be found in Alexco's SEDAR filings. It should also be noted that past performance discussed in this conference call is not indicative of future results. So now, I'd like to turn the call over to Clynt Nauman.

[Clynton Nauman:]

Thank you, Mike and good morning to everybody. Thanks for joining us today as we review our 2016 second quarter. We released financial results yesterday outlining a net income of $152,000 and we included some of the highlights during the quarter which include firstly commencement of circuits exploration, diamond drilling at Bermingham deposit in the Keno Hill District in the Yukon Territory, and we have subsequently expanded that program as we will discuss in a minute. We also initiated a mill assessment and maintenance program and commenced work repaired for the installation of Flame & Moth underground portal at Keno Hill. With our environmental business AEG, it’s second quarter improved with revenues of $2.8 million and a gross profit of $700,000 achieving a gross margin of 25%. On May 17, the company closed non-brokered private placement primarily with Sprott Wealth Management with gross proceeds of just over $13 million. And during the second quarter, 770,000 warrants were exercised with proceeds over $1 million and subsequent to the quarter end and further $2.4 million warrants were exercised for additional proceeds of $3.4 million further improving the company’s cash position. As we all know, in the last several months there has been a moderate increase in the silver price and quite a response in the silver mining sectors the apparent improving conditions. Alexco share price has reasoned from the $1.25 per share at the beginning of the second quarter, to close the quarter at $2.10 per share and as of today it’s trading around $3 a share. I’m confident that in the silver markets we are building a base here and we’ll continue and hoping that we’ll continue to see improving strength in the sector in 2016. And in light of these changes, we are deliberately moving forward at Keno Hill to position ourselves for future development decision. At the end of the second quarter, we had little over $18 million in unrestricted cash and $26 million in working capital. Our total cash position however $26.5 million includes $8.5 million restricted cash of which $4.2 million is attached to performance bonds which we expect will be retired for the most part in the next 60 to 90 days. Given all this, we believe Alexco is in a unique position, we have a project that can be moved to production at modest capital cost, we have a robust silver resource inventory and we have plans in hand to move forward market conditions prevailing. With the flow through proceeds of $3 million from the December 2015 financing, we are now in the middle of a service exploration program at the Bermingham deposit in the Keno Hill District. The corporation originally planned exploration program of 8,000 meters and we’ve now increased that exploration program to approximately 14,000 meters at additional cost of approximately $700,000. The expanded exploration program is now budgeted to cost approximately $3.3 million. We initiated the program in June with two drills and as a result of this expansion have expanded to three drills and we’re hoping to get this entire program complete by the end of September or early October. The corporation also expanded additional funds to gather important geotechnical and hydrological information as well as undertake preliminary meteorological test program related to the Bermingham mineralization. As of today, Alexco has drilled 25 holes for a total of 7,700 meters of Bermingham. Drill results for the complete program are expected by the end of October 2016 and we may very well also have interim due results available in the middle of September. The drill objectives at firstly to increase confidence, in fill and expand the previously identified high grade zone of mineralization around on what we call the [indiscernible], and to do so with sufficient drill down to permit a resource estimation. The second objective here is to explore up and down punch of this high grade zone for possible extensions of the mineralization, especially into other favorable structural and stratigraphic positions in which traditional mineral deposition may have occurred. We’re running on mineral system is opened not only to test but also significantly long strike to the Northeast where we have a financial linkage to the Hector-Calumet mine and also to the Southwest where it remains with at least a kilometer perspective ground between the Bermingham – the original Bermingham deposit the [indiscernible] prospect. Notwithstanding the interest surrounding the Bermingham discovery is wise to keep in mind that that’s what it is, a discovery, valued from a defined resource. In the interim and importantly, we’ve initiated a mill assessment of maintenance program at the Keno Hill Mill. A mechanical assessment and maintenance of equipment is part of the routine process and maintaining the crushing and milling equipment. The assets in a condition where resumption of processing operations can be completed if necessary. Furthermore, in July we commenced developing an underground portal interims for the Flame & Moth deposit along with an established and necessary surface infrastructure that complex to drive the first 20 meters of the production ramp. This will allow resumption of development activities begin a full scale at our discretion in the future. This ramp will be arguably be driven about 750 or 800 meters to reach the upper production levels of the Flame & Moth over deposit. We continue to work on reengineering and optimizing the mine plan for Flame & Moth and Lucky Queen, incorporating expanded mineral resources from April 2015 as well as updating and optimizing the mine plans based on geotechnical information and the Flame & Moth and Lucky Queen economic models along with using revised current consensus pricing at updated estimated costing. Once results from this work are complete, the study will move to develop and optimize multi model. We plan to provide an updated PEA in the fourth quarter 2016 which will incorporate the reengineering and optimization of the mine plan along with an updated mineral resource estimate for Bermingham. I want to make clear that the Flame & Moth deposit remains at cornerstone mining asset in the Keno Hill District, and I have every expectation that when the optimization of this project is complete, we’ll be looking at a further improved result with the longer mine life in the five or six years anticipated under the prior or current mine plan. On the environmental permitting front we received amended course mining license for the Flame & Moth deposit in February 2016 and we’re continuing to process with the Yukon Water Board on the water license amended application and we expect a public hearing to occur for this authorization in the fourth quarter of this year. This is the last authorization needed for Flame & Moth and although it’s well behind our original schedule, we’re pleased with the results and do not expect any adverse impacts as a result of the slow arrival of these licenses and permit. As a result of the course mining license process, we have filed an updated reclamation and closure plans for the Bellekeno deposit which resulted in security increasing of the security provided by Yukon government increasing from $4.2 million to $6.3 million. In July 2016, we purchased the additional $2.1 million increase and we’re currently working with the Yukon government to substitute a portion of that cash security for a pledge of asset. With respect to the Silver Wheaton, we’re continuing to have ongoing discussions to restructure the existing streaming agreement. And one thing I can assure shareholders is that Silver Wheaton’s interest is the same as ours, to get Keno Hill back into production and both parties continue to focus on that. Regarding AEG, it had revenues of $2.8 million for a gross profit of $710,000 during the second quarter of 2016. Our fee for service business in Canada continues a steady trend of profitability. Additionally, project and turnkey work in the U.S. increased in the second quarter and anticipated and we expect increasing contributions from the U.S. business over the balance of 2016. Some of the highlights during the quarter at AEG include Beardsley, the U.S. Environmental Protection Agencies EPA, authorized and interim extension of our operations contract with the Gold King site in Colorado to the end of September 2016 as well as authorized an interim expansion of the water treatment plant to approximately double the capacity of the plant to more than 1,500 gallons per minute. A construction and modifications there that are now complete. On the global smelter project, a completion report with documents the work completed at the site in the monitoring results was submitted to the State of Colorado in July. The completion report supports the release of a portion of the restricted cash to reduce the majority of the $4.2 million held unmet in Alexco. Management anticipates the release of approximately $3.8 million of these funds in the next 60 to 90 days. It’s not worthy to remind you that AEG remains committed to the ongoing environmental care maintenance program, reclamation – the reclamation enclosure projects at Keno Hill under its long-term contract with the government of Canada. AEG is making significant progress as the development of an existing state-of-the-mine reclamation enclosure plan for the historic Keno Hill District liability. Once this plan is permitted, implementation of the plan represents an approximate 20 year project with AEG as the prime contractor. The arrangement with Canada will underpin future growth of our AEG business. At this point, I’m going to turn it over to Mike Clark to review the financial numbers and then we’ll take any questions that maybe out there. Mike?

[Michael Clark:]

Thanks, Clynt. This financial report is for Alexco's second quarter ended June 30, 2016. Note that we’re reporting Canadian dollars so all of dollar amounts we talked about today will be in Canadian dollars unless stated otherwise. For the second quarter of 2016 we saw overall revenue of $2.3 million and a net loss of $152,000 or income of $0.00 per share. These results include non-cash cost totaling $854,000 which is mostly depreciation and share based compensation expense, offset by an unrealized gain of $1.5 million on warrants held on those investments. This compares to the second quarter of 2015 revenue of $2.6 million and the net loss of $1.9 million for a loss of $0.03 per share. The increase in net income from the loss in 2015 period is mainly due to an unrealized gain of 41.5 million on a Golden Predator Mining Corp warrants held by the company in addition to improved AEG gross profit. Total comprehensive income for the second quarter of 2016 was $1.5 million compared to a total comprehensive loss of $2 million in the second quarter of 2015. The increase in total comprehensive income from the other comprehensive loss in 2015 is due to a $1.3 million gain on shares held in Golden Predator. It’s worth noting that in March 2016, Alexco exchanged 50,000 share of capital with an approximate value of $200,000 for 1.875 million units of Golden Predator. Each Golden Predator unit contains one common share and one warrant exercisable at a price of $0.15 for two years. The Golden Predator shares at the time of the transaction traded at above $0.15 a share and as of June 30, these same share were trading at $0.94. The AEG profit for the second quarter of 2016 was $710,000 for a margin of 25% to a gross profit of $579,000 for a margin of 22% in the second quarter of 2015. The increase in gross margin from the prior year period is mainly attributed to the use of less third parties which have lower margin. Corporate general and administrative expenses for the second quarter of 2016 totaled $1,224,000 including non-cash cost of about $320,000 compared to the second quarter of 2015 G&A expenses of $1 million which included $131,000 of non-cash costs. The increase in G&A mainly relates to a non-cash share based compensation expense increase in this 2016 period. For the second quarter of 2016 AEG G&A totaled $700,000 compared to second quarter of 2015 AEG G&A of $884,000. The reduction in cost is mainly attributed to improved employee utilization in the fee for service business. Mine site care and maintenance costs in the second quarter of 2016 were $477,000 compared to $575,000 in the second quarter of 2015. The decrease in cost is mainly due to a lesser depreciation charge and lower overheads in the 2016 period. Mine site care and maintenance cost is largely comprised of depreciation expense which was $405,000 for second quarter of 2016 and $428,000 for second quarter of 2015. Exploration expenditures incurred during the second quarter of 2016 totaled $1,84,000 compared to $756,000 in the second quarter of 2015. The majority of the 2016 and 2015 expenditures related to the surface drilling exploration programs at Bermingham. On May 17, 2016, Alexco closed the non-brokered private placement of units of the corporation at a price of $1.20 per unit, pursuing to which Alexco issued 10.4 million units for gross proceeds of $13 million. Each unit consisted of one common share and one half non-transferable warrant at a price of a $1.75 exercisable for a period of 24 months. The warrants include an acceleration cost whereby it’s beginning on or after September 18, 2016, the closing price of Alexco’s shares is higher than 250 for a period of 10 consecutive trading days and the company has the option to accelerate the expiry of those options to 10 days. On July 29, 2016 Alexco filed a short form base shelf perspective and Form F10 which will allow the company to make an offering of up to $50 million for a period of up to 25 months. Alexco’s unrestricted cash position at June 30, 2016 was $18.1 million compared to $8.2 million at December 31, 2015 while networking capital was $26 million compared to $12.6 million at December 31, 2015. The increase in unrestricted cash and cash equivalents in the 2016 period is mainly attributed to the non-brokered private placement for gross proceeds with $13 million and a $1 million proceeds from the exercise of warrant. In addition, Alexco has a restricted cash balance at June 30, 2016 of $8.5 million of which approximately $4.2 million relates to the decommissioning obligations at Keno Hill and $4.2 million relates to the AEG global smelter project performance bonds of which approximately $3.8 million is expected to be released in the next 60 to 90 days. Subsequent to June 30, a further $2.4 million warrants were exercised for proceeds of $3.4 million further improving Alexco’s cash position. That completes the financial portion of this conference call. Now the operator will provide instructions for the Q&A session.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from Mike Kozak of Cantor Fitzgerald. Please go ahead.

[Mike Kozak:]

Yeah, good morning guys. Thanks for taking my call. When you make a decision to go at Flame & Moth, how long do you expect it’ll take to complete that 750 meter ramp?

[Clynton Nauman:]

The – yeah, thanks for the question, Mike. The ramp – the actual physical ramp itself will probably only take six months, maybe seven. And then the additional infrastructure level development is raised and needs to go and that’s probably another month or two. So I mean we sort of rule of thumb for us, we assumed eight to nine months for the entire process.

[Mike Kozak:]

Okay. And then what do you expect the – your best estimate on costs for the underground development there at the ramp and just restarting the mill?

[Clynton Nauman:]

We’re currently working up – we’re, obviously redoing our cost models. I mean the cost – the unit costs are somewhat different than they were couple of years ago. We believe that that ramp itself is probably in the $6.5 million to $8 million range. The rest of the infrastructure that’s required to Flame & Moth for the underground development is probably $1 million to $2 million something in that type of range. And the mill, the mill is in pretty good shape and I don’t anticipate it’s going be more than a million bucks to – and probably substantially we’ve asked to put that mill back into production.

[Mike Kozak:]

Okay, great. Thanks very much.

[Operator:]

The next question comes from Mike Niehueser of Scarsdale Equities. Please go ahead.

[Mike Niehueser:]

Hi Clynton, it’s Mike Niehueser. It looks like you’re about half way through the drill program if your goal is 14,000 is that right?

[Clynton Nauman:]

That’s correct, yeah.

[Mike Niehueser:]

And you want to come up with a resource, could you give some information about where you’re targeting, whether it’s on the mineralized zone that you’ve already identified or is it towards surface or at debt, because it looks like you have three opportunities and I’m just wondering what your focus is?

[Clynton Nauman:]

Yeah, so – yeah thanks, Mike. So what we’ve done to date is focused on sort of three categories here. The first is the areas above this high grades are as you know we identified this zone last year and its extended to little bit of 150 – excuse me, 150 or 160 meters to the surface. And so we’ve drilled I think 10 holes above that to the present time, just to test the extension of that zone towards the surface, so there is a couple of thousand meters has gone into that work. Additional couple of thousand meters has gone into drilling around the periphery of the zone that we had identified, and there is also about 2,500 or 3,000 meters is more or less – I guess I’d pull out infill I mean it’s not necessarily drill between prior holes but just trying to get a better idea of the geology and definition of this particular deposit. There is a significant amount of additional work that needs to be done around this particular high grade zone as it was identified in 2015. And obviously at some point we need to start looking down ponds or down dip. So the fourth is expansion from 8,000 to 14,000 meters is to look at all those things plus the fact that we are somewhat curious that there might be other mineralized structures in here which are not dipping in the same direction as the original discovery at Bermingham, that would not be an usual circumstance in the Keno Hill District, it would be the first time that we’ve come across what we’ve been doing. So, the intensity of drilling is it’s important to keep in mind that it is much to get a really tight geological handle on what’s going on here as well as determine what kind of a resource that might be, if in fact there is a resource of this very, very high grade material.

[Mike Niehueser:]

You’re silent on anything with assets and that type of thing in the release but can you tell us if the drill core that comes up if it looks similar to what you’ve seen already at Bermingham?

[Clynton Nauman:]

Well, that invites a blue sky statement. Yeah, the mineralization – this obviously people are aware that this multi kilogram per tonne type mineralization is pretty easily identifiable in 2015 as it comes out a whole. And I would have to say that during 2016 especially for holes that we’re drilling infill type holes, obviously we’re seeing mineralization. Whether or not it’s the same as we saw last year we have to wait for the assets, I mean this does can be kind of tricky in terms of mineral identification in some cases. So we do need to wait for those assets before we can satisfy ourselves so we actually have something here.

[Mike Niehueser:]

Okay. So that answers that question. On the metrological front, I think you said before that the rock at Bermingham resembled Hector-Calumet so that you have a good historic based work off of from the operations there?

[Clynton Nauman:]

Yeah, this is – I mean the Bermingham mineralization if we’re trying to draw or any kind of analogy with Hector-Calumet you’d have to say that the Bermingham mineralization represents a suite of silver minerals and metals that are – that were similar to the type of minerals and metals that existed in the upper part of the Hector-Calumet deposit. So, the Hector-Calumet deposit extended all the way from the service to about 330 or 350 meters in debt, and we are really only looking at something that’s 100 meters from the surface here. So I’m trying to characterize the geology and with the geotechnical aspects of it compared to Hector-Calumet is a little difficult because of the difference in scale. But I would sort of underpin the idea that that suite of minerals that we encountered here in 2015 is very similar to the upper portions of Hector-Calumet.

[Mike Niehueser:]

The fact that you’re doing the work at the portal and going in 20 meters and I think with the current permit you could actually go down to your body, you just can’t mine it. Isn’t that pretty close to making a statement that you are going to be moving back into production with these silver prices?

[Clynton Nauman:]

No, and it might – I’m quite encouraged by the fact of the market seems to be but silver market seems to be building some kind of a base here. And I really am trying hard to position this district, so we have maximum optionality in terms of moving forward. So yes, it is true, we’re getting that portal in place and so that in the event that we drive the rest of that declaim we’re not out in the weather, we decided to do it in the winter and clearly we’re making our ways systematically through the mill, preserving assets, preserving ISS for sure and also going systematically through our mining fleet. So, I think there are prudent things to do, they’re not necessarily expensive at this point in time but it does position a company well in the event that we start looking at development options at some point in the future.

[Mike Niehueser:]

And the last question on AEG with what you’ve done at Gold King is really amazing coming in, beating the weather, being has to stick around longer than originally intended and then doubling the size of the project. What are the chances that you might be asked to stay beyond the fall of 2016 with that project or if that’s the end, how are you going to build on that because it’d be a terrible thing to waste if something didn’t follow that?

[Clynton Nauman:]

Yeah, there is a lot of political sensitivity around the Gold King project and you might have seen here recently that there was a criminal investigation launched within the EPA and the contractor type group to try and preserve this – try and get the source of the original blow out of problem. And there is also politically there is quite a strong movement to move that entire area to a super fun type of a status, EPA super fun type status. And it currently is operating and we are operating under “emergency” category. Once that moved to a super fun category there is a complete reevaluation of the entire district, not only Gold King but other issues that might arise in that district. And a restructuring of the way EPA would go about dealing with the super fun side. So, we’re just watching closely to see what happens there, in terms of building off of Gold King it is true that EPA and other agencies have contacted us from time to time based on what we’ve been able to do a Gold King. So, yeah I think it’s a great project, it’s a feather in our cap, it’s certainly a success and I’m confident that there’ll be additional work that follows it.

[Mike Niehueser:]

Great. Thank you.

[Operator:]

Thank you. The next question comes from Bruce Greenspan of Greenspan Investment. Please go ahead.

[Bruce Greenspan:]

Good morning, gentlemen. I’d like to complement you on improving fundamentals at your various projects up in Keno District. Good portion of my questions have been answered, I’d like to maybe follow-up a little bit. Couple of quarters ago you gave us a – I’m going to refer to it as a price line, an idea of where you considered probable and where you considered possible as to reopening the district. And I’m wondering if you have any updates to those as far as the price is with silver, what they need to be and where your decisions would fall and what type of ranges price wise?

[Clynton Nauman:]

Yeah, thanks for that Bruce. I mean that’s a very reasonable question. There is no – in my mind, absent of course, conclusions from all these optimization studies that are currently underway. And a plus $20 silver market with the Canadian dollar trading in its current ranges, there is no question that the Flame & Moth deposit, Lucky Queen and whatnot would be serious contenders for a development decision. However, the one thing that I’ve always said is that we would not make, and I don’t think – and I think it’s prudent that we would not make a development decision here until we know what’s happening at Bermingham because of the very high grades that we have discovered there. If there is any substance to that discovery then it can have a material impact on the way that we go about developing this district. And obviously if there is a resource at Bermingham it would enhance the economics of what we’re doing. So that’s sort of where we’re sitting at the present time. I’m quite bullish, this is a blue sky statement of course, and a $20 silver market with the Forex, with the foreign exchange markets sitting where it is, with our existing mineralization I just think that we need to wait until we have this Bermingham results and can sort of distil lows into our thought pattern before we pull the trigger on here.

[Bruce Greenspan:]

Very good. Most of my questions on the EPA down at Silverton Colorado in the United States has been answered but maybe you could just give a very brief additional – has there been any communications at all over and above what you’ve mentioned before the company and the EPA as to possible timeline for possibly extension into a super fun site, there is tons and tons of gold properties around there that eventually they’re looking to the probability of remediation and Alexco would be an obvious go to. Is there anything additional at all that you might wish to say or that you could say?

[Clynton Nauman:]

Yeah Bruce, I mean that’s also a good question. And you might appreciate that from my perspective, it’s very difficult to answer. We clearly believe that we did a pretty good job for the most spot, for EPA at Silverton. There is a much larger district that requires remediation. We believe that we have the technology and the application skills to be able to mitigate some of the issues related to some of those old mines in the same area. And clearly we’d like to participate going forward. That being said, our current contract is with the EPA contractor and it only involves water treatment from the Gold King mines but it is true, I think that there is value that we can bring here on the environmental side and we’re certainly interested in pursuing that and keeping our finger on the pulse of what’s happening in that part of Colorado. In terms of the timing of moving into super fun side, I’m not particularly familiar with these processes, I understand they’re generally a pretty protracted. But there seems to be some fairly – there is a fairly unified effort between various state and federal agencies, communities and whatnot there to move this district to super fun site. So it may need to go a little faster, I’m not sure and in the back of my mind, I always think in the first quarter of next year, last quarter of this year it might become a little clear as to how that’s going to unfold.

[Bruce Greenspan:]

Right. Now the foreign exchange rates were touched upon – and I’m just wondering if could give maybe a little bit further clarification as to the Canadian dollar because obviously you have six series in Canada and in United States and various possibilities in both countries. And could you give us any kind of a range where you feel the exchange rate needs to be or the Canadian dollar needs to be that would be beneficial to Alexco?

[Clynton Nauman:]

Well, I mean for all the Canadian operators it’s simply a matter of fact that in the resource business most people are producing metal in the Canadian economy and selling it in U.S. dollars and there is a benefit to that, to the extent that the Canadian dollar is in the interim is weaker. The only thing I would point to here is that – couple of things, one is that, the relationship – the exchange rate, the foreign exchange can be managed through the market generally to the extent that represents any kind of a threat. And the other thing is that if it goes the other way as it had in the past if the Canadian dollars’ worth more than the U.S. dollar and suddenly a $20 product is worth less than 20 bucks. And so that has a fairly material impact on the economics of these projects. So we have looked at – we originated our studies and on $0.89 or $0.90 Canadian dollar range, currently I don’t know what the exchange rates are today but they’re in the $0.78, $0.80 type range, and that makes a significant difference in these projects. So, one would look fairly carefully at being able to manage that relationship in the event that you pull the trigger and put this thing in production, at least in the short-term.

[Bruce Greenspan:]

And you feel that if necessary that you would be able to hedge that foreign exchange exposure?

[Clynton Nauman:]

Yeah, that’s sort of outside of my area of expertise but yeah, I mean being managing currency hedges is not uncommon in the business.

[Bruce Greenspan:]

Okay. And my last question, excluding Sprott are there any lock holders that have become known to you that you could give us an update on, of the stock?

[Clynton Nauman:]

Mike, do you want to take a shot of that?

[Michael Clark:]

Yeah. Well, we’re waiting for the institutional numbers to come out August 15 which will shed more light on it. There has been a lot of volume traders in the last couple of months, we don’t know entirely who is buying it all but there was a larger U.S. retail buying in the last couple of months, and so just a lot of private investors for the most part, so Sprott as far as we know is the largest institutional holder.

[Bruce Greenspan:]

All right. Well thank you very much gentlemen. I appreciate your help.

[Michael Clark:]

Thank you.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from Chris Potter of Northern Border Investments. Please go ahead.

[Chris Potter:]

Hey Clynt, Mike covered what I wanted to ask but maybe if you could just say when you plan on releasing the results from Bermingham or when you might have enough information from the current drilling program to – let us know what you’re seeing or you’re planning on waiting till it’s complete to release everything?

[Clynton Nauman:]

Yeah, we’ve got maybe 25 or more holes out of the present time. And I would anticipate we’ll have good swath of those results back in the middle of September, but the drilling itself will continue on to the end of October - end of September into October. So we will not have a complete set of drilling results in our absolute I guess concrete model here, probably until the end of October but that being said, I would anticipate that we’ll have enough information at the middle of September to be able to start talking about some of these results.

[Chris Potter:]

Great. Thanks Clynt.

[Clynton Nauman:]

Thank you.

[Operator:]

Thank you. There are no further questions at this time. I’ll pass the conference back to Mr. Nauman.

[Clynton Nauman:]

Well, once again thank you for joining us today. We’re currently focused on our Bermingham drilling, advancing activities at Keno Hill including the mill assessment and maintenance program and installation of Flame & Moth underground portal. Clearly we’re encouraged by the continuing strength of the silver markets and pending results from our Bermingham drill program will be positioned to consider redevelopment options at Keno Hill. As always, we appreciate your continued support and interest in Alexco. And with that, I’ll turn it back to Mike to close the call .

[Michael Clark:]

Thanks, Clint. You've been listening to the Alexco Resource Corp. June 30, 2016 second quarter conference call. We encourage investors to visit Alexco's website for further information at www.alexcoresource.com. If you have further questions, please call 604-633-4888, or email us at [e-mail]. This concludes today's call. Thank you for joining us, and have a good day.

[Operator:]

Ladies and gentlemen, this does conclude the conference call for today. You may now disconnect your lines. And have a great day.