Alexco Resource (AXU) is pleased to announce it has come to an agreement with Silver Wheaton (SLW) to amend the Silver Purchase Agreement originally dated October 2, 2008, such that the fixed $3.90 per ounce silver streaming production payment is replaced with a variable production payment based on the spot price of silver, with significant positive implications for Alexco and the Keno Hill Silver District in general. The amended silver streaming agreement applies to 25% of Alexco's payable silver produced at its Keno Hill silver mining operations in Yukon, Canada. The newly agreed variable production payment is defined by a pricing curve with an apex at $19.45 spot silver price where Silver Wheaton will make a production payment to Alexco of $18.00 per ounce of silver delivered; that payment decreases by $0.91 per ounce for each $1.00 increase or decrease in silver price from $19.45, returning to a fixed $3.90 per ounce for spot silver prices of $35.00 per ounce and higher. The amendments to the underlying Silver Purchase Agreement are subject to Alexco paying Silver Wheaton $20M by December 31, 2014, with Silver Wheaton taking a lead role via participation in $5M of any Alexco equity raise in excess of $10M towards the $20M payment. In addition, a Silver Wheaton area of interest is established to include additional Alexco currently owned and future acquired properties within one kilometer of existing Alexco holdings in the Keno Hill Silver District. The amendment will be effective for a 10 year term from the time mining production re-commences in the District, with an option for Alexco to extend the amendment for another 5 or 10 years for an additional $10M or $20M, respectively.
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