Alexco Resource Corp.

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Alexco Resource Corp.'s business is to unlock value and manage risk at mature, closed or abandoned minesites through integration and implementation of our core competencies and skills which include management of environmental services, execution of mine reclamation and closure operations and if appropriate, rejuvenation of exploration and development activity.

Alexco to Focus on Cash Flow and Production at Keno Hill

We recently had the opportunity to present on the competitiveness of Yukon from the capital market’s perspective at the Yukon Mining Summit in Whitehorse, the capital of Yukon. The summit followed Alexco Resource Corp.’s (TSX: AXR, AMEX: AXU) third quarter earnings release, coincidental with the territory’s legislative session, and at the commencement of the 2012 Annual Geoscience Forum & Trade Show put on by the Yukon Chamber of Mines. The purpose of the Mining Summit was to help government officials gain an appreciation for how Yukon is perceived by the investment community outside Yukon. The combination of these events provided us an opportunity to gain a perspective of the territory uniquely from both a Yukon and non-Yukon point of view.

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Alexco Improves Operations and Recoveries at its Bellekeno Mill

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) reported operating results for the third quarter of 2012. The company mined and processed a record amount of ore in the quarter. In addition, efforts to focus on mill efficiency led to recoveries of both silver and lead which match the best performance to date. (Recoveries of zinc continue to be a problem but silver primarily reports to the lead concentrate). The mill operated on a record level of 270 tpd and throughput is approaching the level of ore mined, which may allow for needed training, maintenance and winter preparation.

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Alexco Reiterates Guidance for Silver Production in 2012

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) reported a net loss of $2.7 million, or a loss of $0.04 per share in 2Q12, compared to net income of $837,000, or profit of $0.01 per share in 2Q11. Alexco also reported the cost of production per ounce of silver of $15.53 in 2Q12, which was significantly higher than $6.30 in 2Q11. The combination these two figures introduced uncertainty for meeting guidance or resuming profitability, taking the company’s stock down to the lowest level in two years.

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Alexco’s Initial Flame & Moth Resource a Priority for Expansion

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) reported initial resource estimates for both its Flame & Moth and Bermingham targets at its Keno Hill silver district. The results were notable for a number of reasons, but most importantly, for achieveing a milestone on their way to meeting their goal of increasing production to seven to ten million ounces annually within a decade. Keno Hill is located in one of the most stable and friendly mining jurisdictions. With a growing production profile and profitable at current metal prices, and solid capital structure with cash in the bank, Alexco is becoming increasingly well positioned relative to its peers in the mining industry.

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Alexco to Expand Production and Silver Resources at Keno Hill in 2012

Alexco Resource Corp. (AMEX: AXU, TSX: AXR) completed its first full year of commercial production as of the end of calendar year 2011. Alexco recently reported six month financial results for the second half of calendar 2011, and is moving its fiscal year-end from June to December in order to align its fiscal year with the calendar year. This should simplify tracking the company’s production and financial progress. As the price of Alexco’s common stock price is well off its 52-week high of about one year ago, now moving into warmer months, we believe production levels and operations may improve, and with drills turning at its Flame & Moth target, we suspect that this may represent the best opportunity for investors in 2012.

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Alexco Adding Bermingham to Development Pipeline at Keno Hill

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) announced final drill results from its 2011 drill program at its recent “blind” discovered Bermingham target. These drill results resemble the style of mineralization, and are along trend with the past producing Hector-Calumet mine at Keno Hill, having produced about 96 million ounces of silver over twenty years. Defining additional silver mineralization at Bermingham is important as Alexco is working to bring the Lucky Queen and Onek mines into production in 2012, and possibly Flame & Moth in 2013, in addition to current production from the Bellekeno mine, providing ore to the Keno Hill mill for production growth beyond the immediate near-term.

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Alexco to Accelerate Exploration at Flame & Moth at Keno Hill

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) announced final drill results from its 2011 drill program at its recent “blind” discovered Flame & Moth target. These drill results are recognized by management as having a “continuity, style and thickness which may be unique for Keno Hill” that may move Flame & Moth up as a priority for a mine decision in early 2013 with potential for production soon thereafter. This is important as Alexco is working to bring the Lucky Queen and Onek mines into production in 2012, in order to supplement the producing Bellekeno mine, and a potential mine operation at the Flame & Moth target would provide additional growth beyond the immediate near-term.

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Alexco Meets Revised Guidance for Initial Production at Keno Hill

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) reported production of 608,093 ounces of silver in the fourth quarter of calendar year 2011, and 2,020,695 ounces of silver (plus about 16.5 million pounds of lead and 7.2 million pounds of zinc) in its first full year of commercial production at Keno Hill in the Yukon. This was within the current guidance range for 2011 of 2.0 to 2.2 million ounces of silver, which was revised downward from earlier revised guidance of 2.2 to 2.5 million ounces of silver, and initial guidance of 2.5 to 2.8 million ounces of silver. Alexco also offered 2012 guidance of 2.2 to 2.5 million ounces of silver (plus 19 million pounds of lead and 7.5 million pounds of zinc), which we have a high level of confidence that they will meet and possibly exceed. Production in 2011, with conservative guidance for 2012, is in-line with their long-term goal of annual silver production of seven to ten million ounces of silver in ten years.

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Alexco Receives Award by AME for Opening Bellekeno Mine

The Association for Mineral Exploration British Columbia announced the 2011 recipients of its annual awards presented to individuals or teams for significant contributions to the mineral exploration industry in British Columbia and Western Canada.  Clynton Nauman, President and CEO, and Bradley Thrall, Environmental Vice-President and COO, of Alexco Resource Corp. are the recipients of the E. A. Scholz Award for excellence in mine development. They are acknowledged for successfully re-opening the Bellekeno Mine and reviving Yukon's Keno Hill Silver District through an innovative strategy that includes managing environmental liabilities generated from more than 75 years of historic mining. Bellekeno achieved commercial production in January of 2011, and is presently Canada's only primary silver mine.

Alexco was also added to the Market Vectors® Junior Gold Miners ETF (GDXJ) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Junior Gold Miners Index (MVGDXJTR), a rules-based, modified market capitalization-weighted, float-adjusted index intended to investors exposure to small- and medium-capitalization companies in the gold or silver mining industry.

 

Alexco Extending Near-to-Long Term Silver Production Profile

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) recently reported earnings for the first quarter of its 2012 fiscal year ending September 30, 2011, and high-grade silver drill results at its Bermingham target. Alexco declared commercial production at its Keno Hill mill on January 1, 2011. Silver production from its Bellekeno mine led to three consecutive quarters of increasing total revenues, positive earnings, and cash flow over the first three quarters of calendar 2011. As of the end of September 30, 2011, Alexco reported cash and cash equivalents of $48.6 million and net working capital of $50.4 million. While the mill achieved higher rates and levels of production, the rate of the increase has fallen short of earlier aggressive production targets.

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Alexco to Increase Silver Production in the Fourth Quarter

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) declared commercial production at its Keno Hill mill on January 1, 2011. Tonnes per day processed at the mill consistently increased from 201 tonnes per day (tpd) in the first quarter of production, to 208 tpd in the second quarter, and to 234 tpd in the third. This accounts for the increase in silver production of 447.5, 464.3, and 500.7 thousand ounces of silver in the first, second, and third quarters of commercial production, respectively. Earlier in the calendar year, Alexco management has offered guidance for its silver production goal of 2.2 to 2.5 million ounces of silver.

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Alexco Increasing Long-Term Silver Production Profile

Alexco Resource Corp. (TSX: AXR, AMEX: AXU) is among the highest grade silver producers. It has strong growth potential and is operating in an established silver district. Alexco’s Keno Hill silver district is located in the Yukon Territory, a political jurisdiction friendly to mining from an investor’s perspective. Alexco is uniquely qualified by their Access Environmental Group to reduce risk, create strategic opportunities, and generate additional revenues.

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Alexco Systematically Moving Up the Value Curve in 2011

2011 is looking to be an excellent year for Alexco Resource Corp. (AMEX: AXU, TSX: AXR) in three key areas recognized forincreasing shareholder value: increasing production, building resources, and making discoveries. Their Bellekeno mine and mill are producing concentrate as scheduled during a period of record silver prices. They have compliant and historic resources with additional drilling and technical work, important to expand resource estimates and to extend mine life. Their exploration team has completed an extensive review of historic data from the previous owner making possible numerous significant “blind target” discoveries, which they may add to or repeat in 2011. We believe this is precisely the opportunity that Silver Wheaton Corp. (NYSE: SLW) recognized when they purchased 25% of the future silver production at Keno Hill, even ahead of construction of the Bellekeno mine.

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Precious Metals Investment Strategy for 2011

In our opinion, we would not be surprised to see gold holding within $1200 to $1500 through 2011 with a potential beak-out to $1600. This again is a somewhat conservative perspective that lends itself to a barbell investment strategy of selecting low-cost producers with ramping cash-flow surprises in the near-term and exploration and development companies with highly leveraged assets to production in the long-term.

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Alexco Outpaces Competition in Advancing both Production and Exploration

Alexco Resource Corporation (NYSE AMEX: AXU, TSX: AXR) is on schedule and on budget at their Bellekeno mine to reach their targets for production of concentrate within the next four to six weeks. From discovery to production, Alexco’s management team should be applauded for attaining this remarkable achievement in only three years. Bellekeno should be among the highest grade silver and base metal mines in the world, and may be the first of many brought into production by Alexco, at their wholly owned Keno Hill silver district in the Yukon Territory.

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