To: hubris33 who wrote (11607) | 1/3/2013 7:05:36 AM | From: TheSlowLane | | | Nice list. I can offer some comments on Alexco. I think the company has good prospects here as an emerging silver producer. The company has been running Belle Keno for a couple of years and while there have been the "learning experiences" and growing pains that are commonly associated with going into production, my sense is that they have done a good job of identifying problem areas and addressing them. That has been their stated focus and the numbers are starting to reflect it.
In addition to Belle Keno they have two mines that are in the permitting process and are expected to get permits in 2013 that will enable production to increase further. Tons of exploration upside on the property as the work they are doing on Flame & Moth and Bermingham is showing.
Operating in the Yukon is not without its challenges. The infrastructure is going to make it challenging for anyone hoping to build a mine there (there is only grid power for one or possibly two more mines) and from what I understand at least some of the skilled personnel required to run mine and mill operations are commuting from eastern Canada (2 weeks on/2 weeks off). The good news is that Alexco is already in operation so they have the power they need and are developing the workforce over time.
Clynt N., the CEO, seems like just the kind of guy you want to see running a mining company, imo. He's down to earth, non-promotional and tightly focused on the task at hand. He has had to deal with a number of hurdles bringing the company to this point but it is a CEO's capability for dealing with issues rather than being able to avoid them altogether (impossible) which is of interest to me. The stock has gotten creamed due to, I suspect, frustration over the production issues. Assuming that it is true that production issues are successfully addressed and margins improve, then the price at this level may represent an attractive opportunity.
Here are some photos I took this summer:
Entrance to the Belle Keno mine:

The view from the Lucky Queen mine portal area:

Drilling at Flame & Moth:

Alexco's core shack:
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To: TheSlowLane who wrote (11614) | 1/3/2013 12:40:42 PM | From: hubris33 | | | Hey TSL, nice DD and explanation! Thanks for the pics too! I appreciate what you added - good information - THANKS!
So you visited the mine and met the people?
What is your take on the upgrade of the Mill and their ability to keep production levels up? I wasn't able to tell where the bottleneck is in the process [EVERY plant has a bottleneck of sorts], weather milling or mining, nor which one was key to higher rates of production. Do you think they have plans to increase from the current 37K opy to a much higher opy - say 60-100? Or is this about what they expect from the operation over the long-term?
Also, I noted that it seemed like Alexco came into the Bellekeno Mine to do a clear up - they were and environmental company, if memory serves, but stayed to restart mining. Your comments about the CEO meeting the challenges is a good observation. Wondered if there were material skill set differences between environmental and mining that could be in play? You get any feel for that?
Oh and one thing that should be pointed out is that the mine area has some very nice grades [16.9gpt AuEQ] - exceeds my 7.5 gpt level to generate interest. |
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To: hubris33 who wrote (11615) | 1/3/2013 2:49:13 PM | From: TheSlowLane | | | Hi h33 - I think they have had their set of challenges with both the mine and the mill although I think it is the latter that has required more attention. In fact, some of the things that they have had to address are covered in the current presentation:

My understanding from recent comments is that throughput at the mill his improved to the point where it is now running ahead of mine production which will enable them to make continued improvements to the mill without negatively impacting output. I believe the goal is to get to 5MM ounces of silver production per year within a few years and I think that is achievable.
I have not spent a lot of time looking at the environmental side of the business but yes, it is still very much an active component of the company. They are still working on the clean up there and doing the job is going to yield a large number of ounces (don't know specifics off the top of my head). But the real upside potential is in exploration and production growth, imo. Yes, grades are eye-popping at Keno, that helps a lot.
Of course, not everyone is equally enthusiastic about our frozen friends in the Yukon. Mr. Shorty Pants has been hard at work trying to club my little baby seal of a mining company into a bloody pulp...
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To: hubris33 who wrote (11617) | 1/4/2013 9:42:21 AM | From: TheSlowLane | | | I am disappointed to see that the selfish longs are doing nothing to help out the AXU shorts this morning. Instead of abandoning ship without their life vests, they continue to sit around in their lounge chairs on the upper deck acting as if nothing was happening. If all remaining longs could please now head screaming for the exits in a completely disorderly fashion that would be deeply appreciated by Team Shorty Pants. Thank you. |
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From: ames | 1/4/2013 10:28:09 AM | | | | FWIW, Endeavour's absorbed Avion, had a 50Koz quarter, & figures 300K oz for 1012. Not bad for two bucks and change per.
TGA's recent acquisitions now assimilated, forecast for 29% prod increase this year.
HUI @ 428 (!) Gold has passed out at the bar but at least hasn't fallen off the stool. |
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To: ames who wrote (11619) | 1/4/2013 11:12:18 AM | From: Zincman | | | <<HUI @ 428 (!) Gold has passed out at the bar but at least hasn't fallen off the stool>>
Finally, a gold analogy I can totally relate to.. tx.. ;) |
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