Alexco Resource Corp. reports that it has entered into a silver purchase agreement with Silver Wheaton Corp.

Alexco will receive an up-front deposit payment from Silver Wheaton of US$50 million, plus a further payment of the lesser of US $3.90 (increasing by 1% per annum after the third year of full production) and the prevailing market price for each ounce of silver delivered. US$15 million of the up-front payment will be made in two tranches within the next 30 to 90 days as certain conditions are completed. The US$15 million will fund ongoing underground development, definition drilling and continued exploration of the Bellekeno resource as well as other work required to refine and complete engineering studies. The remaining US$35 million will be paid on a monthly draw-down basis to build out the Bellekeno mine infrastructure and processing facility, commencing once Alexco has made a positive development decision and subject to certain other conditions including Alexco having sufficient committed funds available to complete construction and achieve production within specified time frames.

Clynt Nauman, President and CEO of Alexco says:

“Alexco is excited to have Silver Wheaton as a partner in the resumption of mine development activity in the historic Keno Hill Silver District.”  “This agreement provides Alexco the capital to develop the Bellekeno deposit while continuing district wide exploration, and to do so without diluting shareholder equity. The silver stream delivered to Silver Wheaton under this agreement represents less than 15% of the potential revenue stream from the Bellekeno deposit, which we believe will be the first of several silver rich deposits to be explored and developed in this district. To have completed this agreement with Silver Wheaton in a time of unprecedented turbulence in the financial markets is especially important to the continued growth and development of Alexco.”

For full details of this press release, click this link. Silver Investing News researchers discovered Alexco’s silver purchase agreement described on their website. Follow developments in silver mining and exploration for free. Sign on to the Silver Investing Newsletter.