Alexco Resource Corp. has entered into an agreement with a syndicate of underwriters pursuant to which the underwriters have agreed to purchase, on a bought deal basis: (i) 1,851,900 common shares to be issued as flow-through shares with respect to Canadian exploration expenses (CEE) within the meaning of the Income Tax Act (Canada) and the regulations thereunder in force as of the date hereof, at a price of $2.70 per CEE flow-through share; and (ii) 1,287,600 common shares to be issued as flow-through shares with respect to Canadian development expenses (CDE) within the meaning of the Income Tax Act, at a price of $2.33 per CDE flow-through share. The gross proceeds of the offering will be approximately $8.0-million.
The Underwriters also have an option to purchase that number of additional CEE Flow-Through Shares and CDE Flow-Through Shares as is equal to 15% of the number of CEE Flow-Through Shares and CDE Flow-Through Shares sold pursuant to the Offering t the CEE Offering Price and CDE Offering Price, for market stabilization purposes and to cover over-allotments for a period expiring 30 days after the date of closing.
The proceeds from the sale of the CEE Flow-Through Shares will be used on exploration expenses on the Keno Hill project as permitted under the Income Tax Act to qualify as CEE. The proceeds from the sale of the CDE Flow-Through Shares will be used on development expenses on the Keno Hill project as permitted under the Income Tax Act to qualify as CDE. The Company will renounce all the CEE qualifying expenditures in favour of the subscribers of the CEE Flow-Through Shares and all CDE qualifying expenditures in favour of the subscribers of the CDE Flow-Through Shares effective on or before December 31, 2022.
The Offering will be qualified by way of a prospectus supplement (the "Prospectus Supplement") to the Company's existing base shelf prospectus in the provinces of British Columbia, Alberta, Ontario, Saskatchewan and Manitoba. The Prospectus Supplement (together with the related Base Shelf Prospectus) will be available on SEDAR at www.sedar.com.
Closing is expected on or about January 27, 2022 and is subject to Toronto Stock Exchange and other necessary regulatory approvals.
Alexco is a Canadian primary silver company that owns and operates the majority of the historic Keno Hill Silver District, in Canada's Yukon Territory, one of the highest-grade silver deposits in the world. Alexco is currently advancing Keno Hill to commercial production and commenced concentrate production and shipments in the first quarter of 2021. Keno Hill is expected to produce an average of approximately 4.4 million ounces of silver per year contained in high quality lead/silver and zinc concentrates. Keno Hill retains significant potential to grow and Alexco has a long history of expanding the operation's mineral resources through successful exploration.