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Alexco's 2012 exploration program at its Keno Hill Silver District properties was its most aggressive to date, with more than 25,000 meters of surface drilling and about 4,700 meters of underground drilling completed. The year was without precedent on the exploration front with a 52% increase announced by the end of 2012 in the District-wide Indicated silver resources to 40.2 million ounces of Indicated silver resource and 10.5 million ounces of Inferred resource, plus more than 5 million ounces of historical silver resource. In early 2013, Alexco released new resource calculations for its Flame & Moth deposit, further ramping up the total consolidated silver resource for the District to 51.3 million ounces of Indicated silver resource and 7.7 million ounces of Inferred silver resource.

The Flame & Moth deposit is a new discovery in the Keno Hill District, a target first unearthed by Alexco's exploration team in 2010 after thorough interpretation of the District's geological trends. The Flame & Moth is located next to the District processing mill. Additional positive drill results were announced in January 2013, underscoring the robust nature of the deposit, and by the end of January 2013, the Flame & Moth resource estimate was nearly 23 million ounces of Indicated and 1 million ounces of Inferred silver resource and growing.

The mineralization here is wider than many of the historical mines in the District, comes nearly to the surface, and could represent a paradigm change in the type of mining for the District. Depending upon final results, this deposit could potentially lend itself to more economic bulk mining with lower dilution. Mineralization now extends 600 meters along strike and 350 meters down dip, while remaining open to the south and east, and westerly toward the surface.

The Flame and Moth deposit is divided into two zones, the Lightning and the Christal Zones, southwest and northeast of the Mill Fault, respectively. The results from both zones continue to increase the confidence in the Flame & Moth deposit, which could represent the most significant near-term production growth opportunities in the Keno Hill District. In addition, exploration drilling has identified a new discovery similar in appearance to the Flame Vein about 600 meters to the west-southwest of the Flame & Moth deposit, with a single drill hole intersecting 10.7 ounces per ton silver over a 0.85 meter interval, significantly expanding the area of potential mineralization likely related in some manner to the Flame & Moth deposit.

In 2013, Alexco plans to initiate baseline geotechnical, metallurgical and environmental work as well as preliminary engineering on the Flame & Moth deposit. This work is expected to include studies of future potential production options in context with existing mines and other opportunities in the District.