Alexco Reports Fourth Quarter and Year End 2016 Results

VANCOUVER, March 29, 2017

2016 Highlights

• Improving and strong unrestricted cash position with cash and cash equivalents at December 31, 2016 of $20.4 M and net working capital of $23.4 M compared to $8.2 M and $12.6 M, respectively, at December 31, 2015.
  
  
• The Corporation completed its 2016 Bermingham diamond drill program at Keno Hill with 50 holes for a total of 17,371 meters ("m"). Drill results extended the previously defined Arctic Zone of silver mineralization and outlined a new zone of high grade silver mineralization beginning approximately 160m from surface and extending at least 270m down plunge.
  
  
• On May 17, 2016, the Corporation closed a non-brokered private placement of units of the Corporation ("Units") at a price of $1.20 per Unit pursuant to which the Corporation issued 10,839,972 Units for aggregate gross proceeds of $13,007,966.
  
  
• 4,364,575 warrants were exercised for proceeds of $6.2 M.
  
  
• Investments in marketable securities were disposed of for proceeds of $1.8 M and a pre-tax realized gain of $1.5 M. In addition, warrants held as an investment had a pre-tax fair value measurement adjustment increase of $1.2 M.
  
  
• AEG, recognized revenues of $11.4 M in 2016 for a gross profit of $2.9 M and a gross margin of 25.2%.
  
  
• A performance bond was released to Alexco in the amount of $3.8 M (US$2.9 M) related to the AEG's Globeville Smelter Project in Denver Colorado.

Highlights Subsequent to 2016

• The Corporation announced an updated mineral resource estimate for the Bermingham deposit, expanding the indicated mineral resources from 5.2 M ounces to 17.3 M ounces while inferred mineral resources increased from approximately 0.7 M ounces to 5.5 M ounces of contained silver.
  
  
• Alexco released an updated National Instrument 43-101 compliant Preliminary Economic Assessment ("PEA") for its 100% owned Keno Hill Silver District in Canada's Yukon Territory ("KHSD PEA") and announced an amended silver purchase agreement (the "Amended SPA") with Silver Wheaton Corp. ("Silver Wheaton") (see news release dated March 29, 2017 entitled "Alexco and Silver Wheaton Amend Silver Purchase Agreement and Alexco Announces Positive Preliminary Economic Assessment for Expanded Silver Production at Keno Hill").
  
  
• Investments in marketable securities were disposed of for proceeds of $2.0 M and a pre-tax realized gain of $1.8 M.
  
  
• Alexco entered into a non-binding Letter Agreement with Banyan Gold Corp. ("Banyan") to option up to 100% of Alexco's McQuesten property located in the KHSD. In three stages, Banyan may earn up to 100% of the McQuesten property, by incurring a minimum of $2.6 M in exploration expenditures, issue 1.6 M shares, pay a total of $2.6 M in cash or shares and grant Alexco a 6% Net smelter return ("NSR") royalty with buybacks totalling $7 M to reduce to a 1% NSR royalty on gold and 3% NSR royalty on silver.

Alexco's President and Chief Executive Officer Clynt Nauman said, "A lot was accomplished by Alexco in 2016, nothing more important than our exploration success at Bermingham along with raising additional capital, establishing the portal for our Flame & Moth underground access and commencing an updated Keno Hill Preliminary Economic Assessment subsequently completed in March 2017.  With the March 29, 2017 announcement of a Silver Wheaton amended silver purchase agreement, Alexco launches into 2017 squarely focused on moving forward with additional surface exploration, underground exploration and development, mill upgrades, and preparation of a prefeasibility level study, all necessary steps on the way to a final production decision."

Summary Financial Results and Information

(expressed in thousands of dollars, except per share amounts)	Three Months Ended ARIVA.DE Börsen-Geflüster Kurse Alexco Resource -   0,00% December 31			Year Ended December 31
	2016	2015		2016	2015
Environmental services revenue	2,939	4,128		11,361	14,662
Gross profit from environmental services	881	611		2,866	3,251
Loss before taxes	(1,579)	(1,765)		(3,967)	(6,616)
Net loss	(1,761)	(1,502)		(4,359)	(5,509)
Total comprehensive loss	(1,893)	(1,539)		(4,111)	(6,037)
Loss per share – basic and diluted	($0.02)	($0.02)		($0.05)	($0.08)
Cash flows consumed from operating activities	(1,156)	(905)		(4,608)	(4,391)

Keno Hill Silver District PEA

On March 29, 2017, Alexco announced the release of an independent technical report with an effective date of January 3, 2017 prepared by Roscoe Postle Associates Inc. ("RPA") entitled "Preliminary Economic Assessment of the Keno Hill Silver District Project, Yukon, Canada" (the "PEA").

Highlights of the revised PEA include:

• Alexco's project pre-tax and after-tax net present value ("NPV") is $104.3 M and $79.4 M (at a 5% discount rate), respectively, and pre-tax and after-tax internal rate of return ("IRR") is 89% and 75%, respectively, at assumed silver prices of US$18.60/oz in 2018 and US$19.35/oz in 2019 through 2025.
  
  
• At current spot metal prices and US/Cdn foreign exchange rate (as of March 27, 2017), the project has a pre-tax and after-tax NPV of $121.1 M and $90.5 M (at a 5% discount rate), respectively, and a pre-tax and after-tax IRR of 92% and 78%, respectively.
  
  
• Average annualized mill throughput is 143,000 tonnes per year over an eight year period at an average feed grade of 843 grams per tonne ("g/t") silver ("Ag"), 3.3% lead ("Pb"), 4.6% zinc ("Zn") and 0.39 g/t gold ("Au").
  
  
• Payable production is anticipated to be a total of approximately 25.1 M ounces of silver, 77.3 M pounds ("lbs") of zinc, 67 M lbs of lead and 4,870 ounces of Au over an eight (8) year mine life. Average annualized payable silver production is 3.5 M ounces per year, with the initial three years of annualized payable silver production averaging 4.1 M ounces per year.
  
  
• Initial capital costs of $27 M are estimated to achieve production and positive cash flow with less than one year payback.

In addition, upon achieving commercial production, Alexco has calculated all-in sustaining costs ("AISC") (contained silver, by-product basis) over LOM to be US$13.51/oz of silver (including direct operating costs, sustaining capital, the Silver Wheaton stream, corporate general and administrative and ongoing surface exploration costs), and AISC over the first full three (3) years of production to be US$12.18/oz of silver.

Amended Silver Purchase Agreement with Silver Wheaton

On March 29, 2017 the Corporation and certain of its subsidiaries and Silver Wheaton entered into an amendment agreement to the Silver Purchase Agreement (the "Amended SPA") pursuant to which, among other things, the following amendments were made to the Silver Purchase Agreement:

• Silver Wheaton will continue to receive 25% of the life of mine payable silver from the KHSD. The production payment (originally US$3.90 per ounce) will be based on monthly silver head grade and monthly silver price.
  
  
• The actual monthly production payment will fall within a defined grade and pricing range governed by upper and lower numeric criteria (ceiling grade/price and floor grade/price) pursuant to the following formula:

• The date for completion of the 400 tonne per day mine and mill completion test date was extended to December 31, 2019;
  
  
• The Silver Wheaton area of interest remains one (1) km around existing Alexco holdings in the KHSD.

In consideration of the foregoing amendments, the Corporation has agreed, subject to TSX and NYSE-MKT approval, to issue 3,000,000 shares to Silver Wheaton with a fair value of US$4,934,948.

Keno Hill Exploration and Development

2017 Exploration Program
The Corporation has planned a surface exploration program of approximately 12,000m surface diamond drilling budgeted to cost $3.2 M primarily to further explore structural targets in the immediate vicinity of the Bermingham area. The bulk of the surface exploration will be conducted in the summer with results expected to be released no later than the fourth quarter of 2017.

The Corporation is also planning an underground exploration program at the Bermingham prospect. Subject to permitting, an exploration decline will be driven 600m and approximately 5,000m of infill and confirmation drilling will be completed for a total estimated cost of $8.7 M (including underground equipment rebuilds and purchase). The timeline and costs incorporate management's estimates for the necessary permits required to carry out the development of the Bermingham exploration decline; permitting uncertainty and delays may cause timelines and costs to increase.

2016 Exploration Program
The Corporation completed an exploration program totalling 50 holes for 17,371m of surface diamond drilling to follow up on prior identification of high grade silver results at the Bermingham prospect. A total of $3.4 million was invested in an expanded exploration program, the majority funded by way of a $3 million flow-through financing in December 2015. The Corporation expended an additional $300,000 to gather geotechnical and hydrogeological information, as well as undertake a preliminary metallurgical program to test the Bermingham mineralization. Interim drill results on 18 holes were released on September 13, 2016 (see September 13, 2016 press release entitled "Alexco Confirms, Expands High Grade Silver Zone at Bermingham Deposit; Drilling Continues") with the final results of the final 32 of 50 drill holes released on December 8, 2016 (see December 8, 2016 press release entitled "Alexco expands Bermingham Silver Deposit, Initial Tests Confirm Excellent Metallurgical Performance").

Other Development
In October the Company completed installation of the underground portal and infrastructure at the Flame & Moth deposit and drove the first 20m of the production ramp. This will allow resumption of development activities to begin at full scale in the future. This ramp will ultimately be driven to the upper production levels of the Flame & Moth silver deposit.

The Corporation also completed a mill maintenance program in 2016. Additionally, a mechanical assessment and maintenance of equipment was part of the routine process of maintaining operating assets in a condition where resumption of processing operations could be completed.

Permitting

As a result of the Company filing an updated Reclamation and Closure Plan for its current operations and the future development of the Flame & Moth deposit, the Quartz Mining License ("QML") required that Alexco increase its posted security from $4.2 M to $6.3 M. On July 26, 2016 the Corporation posted the additional $2.1 M in cash for security and is currently working with the Yukon Government to substitute a portion of the cash posted in exchange for a pledge of assets.

The Company expects a Water Use License amendment hearing to occur in the second quarter of 2017, which is the final remaining permit required to commence mining operations at the Flame & Moth deposit.

The Corporation plans to drive an underground exploration decline 600m at the Bermingham deposit, which will require an amendment to its Class IV permit. This is expected to be received by the end of the second quarter of 2017 although delays can occur in the Yukon permitting process as a result of changing laws, regulations and policies in the environmental assessment process.

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