Notes:
(1)		See “Plan of Distribution”.
(2)		A fee (the “Underwriters’ Fee”) equal to $0.245 per Common Share from the sale of the Common Shares will be paid to the Underwriters upon completion of the Offering. See “Plan of Distribution”.
(3)		Before deducting expenses of this Offering, estimated to be approximately $300,000, which together with the Underwriters Fee, will be paid from the proceeds to the Company of the Offering.
(4)		If the Over-Allotment Option (as hereinafter defined) is exercised in full, the total number of Common Shares sold under the Offering will be 8,452,500, the total Price to the Public will be $29,583,750, the total Underwriter’s Fee will be $2,070,862.50, and total net proceeds to the Company will be 27,512,887.50, before deducting costs of the Offering.

 

 

 

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ABOUT THIS PROSPECTUS

Investors should rely only on the information contained in or incorporated by reference into this Prospectus. Alexco has not authorized anyone to provide investors with different information. If anyone provides an investor with different or inconsistent information, it should not be relied on. Alexco is not, and the Underwriters are not, making an offer to sell the Common Shares in any jurisdiction where the offer or sale is not permitted. Investors should assume that the information contained in this Prospectus or in any document incorporated or deemed to be incorporated by reference into this Prospectus is accurate only as of the respective date of the document in which such information appears.

Unless stated otherwise or the context otherwise requires, all references to dollar amounts in this Prospectus are references to Canadian dollars. See “Exchange Rate Information”.

The Company’s financial statements that are incorporated by reference into this Prospectus have been prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”). Canadian GAAP differs in some material respects from generally accepted accounting principles in the United States (“U.S. GAAP”), and so the Company’s financial statements may not be comparable to the financial statements of U.S. companies prepared in accordance with U.S. GAAP. For a discussion of the principal differences between Canadian GAAP and U.S. GAAP as they apply to the financial statements of the Company, refer to note 22 of the Company’s consolidated financial statements prepared in accordance with Item 18 of Form 20-F under the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”) for the fiscal years ended June 30, 2009 and 2008, as incorporated by reference into this Prospectus and filed with the United States Securities and Exchange Commission (the “SEC”) on Form 40-F on September 28, 2009.

Except where specifically indicated otherwise, scientific and technical information included in this Prospectus regarding Alexco’s mineral properties has been prepared by or under the supervision of Stan Dodd, LG (Wash), Vice President, Exploration for Alexco and a Qualified Person as defined by Canadian National Instrument 43-101 — Standards of Disclosure for Mineral Projects (“NI 43-101”).

Unless the context otherwise requires, references in this Prospectus to “Alexco” and the “Company” includes Alexco Resource Corp. and each of its material subsidiaries.

CAUTIONARY NOTE TO UNITED STATES INVESTORS

This Prospectus, including the documents incorporated by reference herein, has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States securities laws. Unless otherwise indicated, all reserve and resource estimates included in this Prospectus have been, and will be, prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Estimation of Mineral Resources and Mineral Reserves Best Practice Guideline. NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. NI 43-101 permits the disclosure of an historical estimate made prior to the adoption of NI 43-101 that does not otherwise comply with NI 43-101, using the historical terminology, if the disclosure: (a) identifies the source and date of the historical estimate; (b) comments on the relevance and reliability of the historical estimate; (c) states whether the historical estimate uses categories other than those prescribed by NI 43-101 and if so includes an explanation of the differences, and (d) includes any more recent estimates or data available. Such historical estimates are presented concerning certain of the Company’s properties described herein.

Canadian standards, including NI 43-101, differ significantly from the requirements of Industry Guide 7 promulgated by the SEC under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and resource and reserve information contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the

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foregoing, the term “resource” does not equate to the term “reserves”. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC’s disclosure standards under Industry Guide 7 do not define the terms and normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. U.S. Investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable.

Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of “reserves” are also not the same as those of the SEC’s Industry Guide 7, and reserves reported by the Corporation in compliance with NI 43-101 may not qualify as “reserves” under Industry Guide 7 standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companies that report in accordance with U. S. standards.

See “Glossary of Technical Terms” for a description of certain of the technical terms used in this Prospectus and the documents incorporated by reference herein and therein.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus and the documents incorporated by reference into this Prospectus contain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws concerning the Company’s business plans, including but not limited to the exploration and development of the Bellekeno property as well as any of its other mineral properties and to the provision of consulting services; capital, operating and cash flow estimates; and other matters. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed. Forward-looking statements may include, but are not limited to, statements with respect to future remediation and reclamation activities, future mineral exploration, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, future mine construction and development activities, future mine operation and production, the timing of activities and the amount of estimated revenues and expenses, the success of exploration activities, permitting time lines, requirements for additional capital and sources and uses of funds. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “estimates”, “intends”, “strategy”, “goals”, “objectives” or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be “forward-looking statements.”

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements. Such factors include, but are not limited to, risks related to actual results of

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exploration and development activities; future results of consulting operations; actual results of remediation and reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold, silver and other commodities; possible variations in mineable resources, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; First Nation rights and title; continued capitalization and commercial viability; global economic conditions; competition; and delays in obtaining governmental approvals or financing or in the completion of development activities.

Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to those referred to in this Prospectus under the heading “Risk Factors” and elsewhere in this Prospectus, and in the documents incorporated by reference herein and therein. Forward-looking statements are based on certain assumptions that management believes are reasonable at the time they are made. In making the forward-looking statements included in this Prospectus and the documents incorporated by reference herein, the Company has applied several material assumptions, including, but not limited to, the assumption that: (1) the proposed development of its mineral projects will be viable operationally and economically and proceed as planned; (2) market fundamentals will result in sustained silver, lead and zinc demand and prices, and such prices will be materially consistent with those anticipated in the Technical Report (see “Summary Description of Business — Bellekeno Property”), (3) the actual nature, size and grade of its mineral resources are materially consistent with the resource estimates reported in the Technical Report; and (4) any additional financing needed will be available on reasonable terms. Other assumptions are discussed throughout this Prospectus and, in particular, under “Risk Factors” herein, under “Risk Factors” in the Annual Information Form incorporated herein by reference, and under “Critical Accounting Estimates” of the management’s discussion and analysis filed on SEDAR on November 16, 2009 and incorporated herein by reference. The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and should not be relied on as representing the Company’s views on any subsequent date. While the Company anticipates that subsequent events may cause its views to change, the Company specifically disclaims any intention or any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change, except as required by applicable law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

EXCHANGE RATE INFORMATION

This Prospectus contains references to United States dollars (“US$”) and Canadian dollars (“$” or “Cdn$” or “C$”). The following table sets out, for each period indicated, the high and low closing exchange rates for one United States dollar expressed in Canadian dollars, the average of such exchange rates during such period (based on the average of the exchange rates on the last day of each month during the period), and the exchange rate at the end of such period based on the nominal noon exchange buying rate as reported by the Bank of Canada:

One U.S. dollar converted to Canadian dollar:

Year Ended June 30		High				Low				Average				Close
2009			1.30				1.00				1.17				1.16
2008			1.08				0.92				1.01				1.02
2007			1.19				1.06				1.13				1.06

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Six Months Ended December 31		High				Low				Average				Close
2009			1.17				1.03				1.08				1.05
2008			1.30				1.00				1.13				1.22

On January 29, 2010, the nominal noon exchange rate as reported by the Bank of Canada for the conversion of one United States dollar into one Canadian dollar was US$1.00 equals C$1.0650 (C$1.00 equals US$0.9390).

GLOSSARY OF TECHNICAL TERMS

The following is a glossary of certain mining terms used in this Prospectus:

Au		Gold.
Deposit		A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures; such a deposit does not qualify as a commercially mineable ore body or as containing ore reserves, until final legal, technical, and economic factors have been resolved.
Dip		The angle at which a stratum is inclined from the horizontal.
g/t		Grams per tonne.
Grade		The amount of valuable metal in each tonne of ore, expressed as grams per tonne (g/t) for precious metals such as silver and gold, and as percent (%) for base metals such as lead and zinc.
km		Kilometers.
m		Meters.

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Mineral Reserve, Proven Mineral Reserve, Probable Mineral Reserve		Under CIM standards, a Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by a preliminary feasibility study or feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.
		The terms “Mineral Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve” used in this Prospectus are mining terms defined under CIM standards and used in accordance with NI 43-101. Mineral Reserves, Proven Mineral Reserves and Probable Mineral Reserves presented under CIM standards may not conform with the definitions of “reserves” or “proven reserves” or “probable reserves” under United States standards. See “ Cautionary Note to United States Investors”.
		Mineral Reserves under CIM standards are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the qualified person(s) making the estimates, is the basis of an economically viable project after taking account of all relevant processing, metallurgical, economic, marketing, legal, environment, socio-economic and government factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term “Mineral Reserve” need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals.
		Under CIM standards, Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve.
		Proven Mineral Reserve: A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that the economic extraction can be justified.
		Probable Mineral Reserve: A Probable Mineral Reserve is the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that the economic extraction can be justified.

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Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource, Inferred Mineral Resource		Under CIM standards, Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. The terms “mineral resource”, “measured mineral resource”, “indicated mineral resource”, and “inferred mineral resource” used in this Prospectus are mining terms defined under CIM standards and used in accordance with NI 43-101. They are not defined terms under United States standards and generally may not be used in documents filed with the SEC by U.S. companies. See “Cautionary Note to United States Investors”.
		A mineral resource estimate is based on information on the geology of the deposit and the continuity of mineralization. Assumptions concerning economic and operating parameters, including cut-off grades and economic mining widths, based on factors typical for the type of deposit, may be used if these factors have not been specifically established for the deposit at the time of the mineral resource estimate. A mineral resource is categorized on the basis of the degree of confidence in the estimate of quantity and grade or quality of the deposit, as follows:
		Inferred Mineral Resource: Under CIM standards, an Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
		Indicated Mineral Resource: Under CIM standards, an Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
		Measured Mineral Resource: Under CIM standards, a Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

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Mineralization		The concentration of metals and their chemical compounds within a body of rock.
Ore		A metal or mineral or a combination of these of sufficient value as to quality and quantity to enable it to be mined at a profit.
Ounce or oz		A troy ounce or twenty penny weights or 480 grains or 31.103 grams.
Quartz		A mineral composed of silicon dioxide.
Strike		Direction or trend of a geologic structure.
Tonne		Metric unit of weight equivalent to volume multiplied by specific gravity; equivalent to 1.102 tons or 1,000 kilograms (2,204.6 pounds).
Vein		Thin sheet-like intrusion into a fissure or crack, commonly bearing quartz.

Metric Equivalents

The following table sets forth the factors for converting between Imperial measurements and metric equivalents:

To Convert From		To		Multiply By
Feet		Meters			0.305
Meters		Feet			3.281
Miles		Kilometers (“km”)			1.609
Kilometers		Miles			0.6214
Grams		Ounces (Troy)			0.03215
Grams/Tonnes		Ounces (Troy)/Short Ton			0.02917
Tonnes (metric)		Pounds			2,205
Tonnes (metric)		Short Tons			1.1023

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Financial Analysis

Mill, G&A, and mine operating costs are presented in Table 1.5, Table 1.6, and Table 1.7. The project operating costs were estimated from a number of sources including cost estimating guides, contractor and vendor quotes, previous studies, and experience.

Table 1.5 Process Operating Cost Summary

						Annual Cost				Unit Cost
Description		Labour				(Cdn$/a)				(Cdn$/t ore)
Process Personnel
Supervision			4				528,247				5.87
Operation			16				1,177,045				13.08
Maintenance			6				516,458				5.74
Sub-total			26				2,221,750				24.69
Supplies
Operating Supplies							631,171				7.01
Maintenance Supplies							29,063				0.32
Power Supply							540,143				6.00
Mobile Equipment							204,451				2.27
Sub-total							1,404,827				15.61
Total			28			$	3,626,577			$	40.30

Table 1.6 G&A Operating Cost Summary

						Annual Cost				Unit Cost
Description		Labour				(Cdn$/a)				(Cdn$/t ore)
Labour			19				1,820,542				20.23
Head Office							100,000				1.11
Insurance							100,000				1.11
Operating Supplies							742,000				8.24
Contracts							1,531,363				17.02
Total			19			$	4,293,905			$	47.71

Table 1.7 Mine Operating Cost Estimate by Function

		LOM				Average
		Cost				Unit Cost
Mine Function		(Cdn$000)				(Cdn$/t)
Alexco Mine Supervision			1,192				3.79
Contractor Overhead — Monthly			18,425				58.60
Contractor Lateral Development			8,138				25.88
Contractor Raising			856				2.72
Contractor Cut & Fill Stoping			13,395				42.60
Contractor Load Underground Trucks			0				0.00
Alexco Surface Truck Haulage			1,562				4.97
Contractor Backfilling			5,880				18.70
Contractor Mine Services			5,035				16.01
Alexco Surface Waste Pile Maintenance			163				0.52
Alexco Technical Services			3,548				11.28
Alexco Energy			4,917				15.64
Mine Operating Cost			63,110				200.70

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Capital cost estimates for the project are shown in Table 1.8.

Table 1.8 Capital Cost Summary

		Total Cost
Area Description		(Cdn$000)
Direct Costs
Site Development			3,282
Underground Mining			6,310
Crushing			901
Fine Ore Storage			1,267
Mill Building			7,128
Tailings			1,681
Site Services			1,489
Ancillary Facilities			1,754
Plant Mobile Fleet			797
Temporary Services			754
Indirect Costs
Project Indirects			4,574
Owner Costs			5,928
Contingency*			5,779
Total Project Costs			41,644

The pre-tax base case financial model was calculated using the following parameters:

	•		assumed current net smelter terms
	•		3.8-year mine life
	•		royalties are 1.5% NSR after all initial capital plus $6.2 M in exploration costs paid back through earnings before income taxes, depreciation, and amortization (EBITDA) and accumulated cash flow turns positive and capped at Cdn$4 M, as per Alexco
	•		production schedule as outlined in this study
	•		operating costs as outlined in this study
	•		capital costs as outlined in this study
	•		the model was prepared on a pre-tax basis
	•		working capital distribution as per Alexco and is credit back end of mine life
	•		depreciation costs not calculated
	•		Silver Wheaton Corp. (Silver Wheaton) capital contribution and capital distribution as per Alexco.

The economic evaluation indicates a base case pre-tax net present value (NPV) of US$29.4 M at a discount rate of 8.0% for the Bellekeno deposit. The summary of pricing scenarios and project economics is presented in Table 1.9 and Table 1.10.

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Table 1.9 Economic Evaluation at Various Cases of Metal Prices

		NPV at 8%
		Discount Rate
Scenario		(US$ M)
3-year Average			38.8
Alexco Base Case			29.4
Wardrop			28.7
Current			53.8

Table 1.10 Metal Prices used for LOM Base Case

		2010				2011				2012				2013
Silver (US$/oz)			16.42				16.38				14.38				13.46
Lead (US$/lb)			0.80				0.78				0.69				0.61
Zinc (US$/lb)			0.82				0.91				0.86				0.82
Gold (US$/oz)			1,067.00				1,092.00				942.00				883.00
Cdn$/US		$	0.92				0.92				0.92				0.92

The payback period is defined as the time required after revenue is first received in Year 1 to achieve break-even cumulative cash flow. For this project, the payback period for the base case is approximately 0.5 years. The payback period is based on the annual un-discounted cash flows. There is no consideration for inflation, interest, or depreciation in this calculation.

Conclusions

The following conclusions have been made regarding the Bellekeno Project:

	•		The testwork results indicate that the tested mineralization responds well to conventional lead/zinc differential flotation process with a cyanide-free zinc mineral suppression regime.
	•		Silver and lead minerals associate intimately and will be recovered together to produce a silver-lead bulk concentrate, and zinc minerals will be concentrated into a separate zinc concentrate.
	•		The historic underground workings at the Bellekeno mine have been extensively examined and in general remain in very good condition.
	•		Based on the mining context of the deposit, a suitable mining method is mechanized overhand cut-and-fill in 3.5 m lifts.
	•		An efficient means of backfilling will be the use of a cemented blend of development waste rock and dry (filtered) tailings back hauled from the process plant. Both materials are available in abundant quantities to meet the mine backfill requirements.
	•		The deposit contains multi-metals and two metal concentrates will be produced on site. For this reason mine planning must be based on NSR values.
	•		Alexco will operate the mine on the basis of contractor mining. The planned mine operating schedule is two 11-h shifts per day, 7 d/wk.

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	•		SRK concludes that the planned mine will achieve a production rate of 250 t/d over a 3.6-year mine life.
	•		Scheduling indicates the mine will be ready to start production at 250 t/d by late June 2010.
	•		The most significant mine related risks are geotechnical, related to weak and challenging conditions that may be locally encountered in stoping.
	•		The most significant mine opportunity is the potential to increase the mine life as a result of exploration and/or higher metal prices.
	•		Providing that the set out design criteria and assumptions are satisfied, there is a strong indication that the project is commercially viable.
	•		Structural and stratigraphic studies, as well as extensive drilling of the Bellekeno deposit has resulted in a number of resource expansion and exploration targets in areas within and immediately adjacent to the existing minable resource. It is recommended that these targets be ranked in order of priority and drilling of initial targets adjacent to existing or planned underground infrastructure in the SW, 99, and Upper East be coordinated with pre-production mine development work.

RISK FACTORS

Investment in the Common Shares involves a high degree of risk and should be considered speculative due to the nature of Alexco’s business and the present stage of the exploration and development of its mineral properties. An investor should carefully consider the risks related to Alexco’s operations, risks related to the silver industry generally and the risks related to the Offering, including the risks described below. Accordingly, prospective investors should consult with their own advisors and carefully consider the risk factors set out below, in addition to other information contained and incorporated or deemed to be incorporated by reference in this Prospectus, before participating in the Offering.

The following risk factors, as well as risks not currently known to the Company or that the Company currently deems to be immaterial, could materially adversely affect the Company’s future business, financial condition, results of operations and prospects and could cause them to differ materially from forward-looking statements relating to the Company. While the significant risk factors which the Company believes it faces are discussed below, they do not comprise a definitive list of all risk factors related to the Company’s business and operations.

Risks Related to the Offering

Negative Operating Cash Flow and History of Losses

The Company has received no revenue to date from the exploration and development activities on its mineral properties, and has negative cash flow from its consolidated operating activities. Although the Company has received revenues and reported gross profits from its consulting services operating segment, such revenues and gross profits are not adequate to cover all of the costs of the Company’s corporate and administrative and exploration activities. In its three most recent financial years, the Company has reported the following net losses: (i) $2,488,000 for the year ended June 30, 2007; (ii) $3,968,000 for the year ended June 30, 2008 and (iii) $9,573,000 for the year ended June 30, 2009. The Company is currently undertaking development activity on its Bellekeno Property, but there is no certainty that the Company will produce revenue, operate profitably or provide a return on investment in the future. The Company has incurred net losses in the past and may incur losses in the future and will continue to incur

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losses until and unless it can derive sufficient revenues from its mineral projects and consulting services operations in aggregate. Such future losses could have an adverse effect on the market price of its Common Shares, which could cause investors to lose part or all of their investment.

The Market Price for the Common Shares is Subject to Volatility

The trading price of the Common Shares may be subject to large fluctuations. The trading price of the Common Shares may increase or decrease in response to a number of events and factors, including:

	•		the price of silver and other metals;
	•		the Company’s operating performance and the performance of competitors and other similar companies;
	•		the public’s reaction to the Company’s press releases, other public announcements and the Company’s filings with the various securities regulatory authorities;
	•		changes in earnings estimates or recommendations by research analysts who track the Common Shares or the shares of other companies in the resource sector;
	•		changes in general economic conditions;
	•		the number of Common Shares to be publicly traded after the Offering;
	•		the arrival or departure of key personnel; and
	•		acquisitions, strategic alliances or joint ventures involving the Company or its competitors.

In addition, the market price of the Common Shares is affected by many variables not directly related to the Company’s success and not within the Company’s control, including developments that affect the market for all resource sector shares, the breadth of the public market for the Common Shares, and the attractiveness of alternative investments. In addition, securities markets have recently experienced an extreme level of price and volume volatility, and the market price of securities of many companies has experienced wide fluctuations which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. As a result of these and other factors, the Company’s share price may be volatile in the future and may decline below the Offering Price. Accordingly, investors may not be able to sell their Common Shares at or above the Offering Price.

The Company May Use Proceeds of This Offering for Purposes Other Than Those Set Out Herein

The Company currently intends to allocate the net proceeds received from the Offering as described in the “Use of Proceeds” section of this Prospectus. However, the Company will have discretion in the actual application of the net proceeds, and may elect to allocate proceeds differently from that described in “Use of Proceeds” if it believes it would be in its best interests to do so as circumstances change. The failure by the Company to apply these funds effectively could have a material adverse effect on the Company’s business.

Potential Dilution

To further the activities of Alexco to acquire additional properties, Alexco will require additional funds and it is likely that, to obtain the necessary funds, Alexco will have to sell additional securities including, but not limited to, its Common Shares or some form of convertible securities, the effect of which could result in a substantial dilution of the present equity interests of Alexco’s shareholders.

Risks Related to the Business of Alexco

Exploration and Development

Mineral exploration and development involves a high degree of risk and few properties which are explored are ultimately developed into producing mines. With respect to Alexco’s properties, should any ore reserves exist, substantial expenditures will be required to confirm ore reserves which are sufficient to

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commercially mine, and to obtain the required environmental approvals and permitting required to commence commercial operations. Should any mineral resource be defined on such properties there can be no assurance that the mineral resource on such properties can be commercially mined or that the metallurgical processing will produce economically viable and saleable products. The decision as to whether a property contains a commercial mineral deposit and should be brought into production will depend upon the results of exploration programs and/or technical studies, and the recommendations of duly qualified engineers and/or geologists, all of which involves significant expense. This decision will involve consideration and evaluation of several significant factors including, but not limited to: (1) costs of bringing a property into production, including exploration and development work, preparation of appropriate technical studies and construction of production facilities; (2) availability and costs of financing; (3) ongoing costs of production; (4) market prices for the minerals to be produced; (5) environmental compliance regulations and restraints (including potential environmental liabilities associated with historical exploration activities); and (6) political climate and/or governmental regulation and control.

The ability of Alexco to sell, and profit from the sale of any eventual production from any of Alexco’s properties will be subject to the prevailing conditions in the marketplace at the time of sale. Many of these factors are beyond the control of Alexco and therefore represent a market risk which could impact the long term viability of Alexco and its operations.

Figures for the Company’s Resources are Estimates Based on Interpretation and Assumptions and May Yield Less Mineral Production Under Actual Conditions than is Currently Estimated

In making determinations about whether to advance any of its projects to development, the Company must rely upon estimated calculations as to the mineral resources and grades of mineralization on its properties. Until ore is actually mined and processed, mineral resources and grades of mineralization must be considered as estimates only. Mineral resource estimates are imprecise and depend upon geological interpretation and statistical inferences drawn from drilling and sampling which may prove to be unreliable. Alexco cannot be certain that:

	•		reserve, resource or other mineralization estimates will be accurate; or
	•		mineralization can be mined or processed profitably.

Any material changes in mineral resource estimates and grades of mineralization will affect the economic viability of placing a property into production and a property’s return on capital. The Company’s resource estimates have been determined and valued based on assumed future prices, cut-off grades and operating costs that may prove to be inaccurate. Extended declines in market prices for silver and other metals may render portions of the Company’s mineralization uneconomic and result in reduced reported mineral resources.

Keno Hill District

While Alexco has conducted exploration activities in the Keno Hill district, other than with respect to the Bellekeno Property, further review of historical records and additional exploration and geological testing will be required to determine whether any of the mineral deposits it contains are economically recoverable. There is no assurance that such exploration and testing will result in favourable results. The history of the Keno Hill district has been one of fluctuating fortunes, with new technologies and concepts reviving the district numerous times from probable closure until 1989, when it did ultimately close down for a variety of economic and technical reasons. Many or all of these economic and technical issues will need to be addressed prior to the commencement of any future production on the Keno Hill properties.

Under the terms of the agreements by which it acquired its initial property interests in the Keno Hill district, Alexco is responsible for carrying out the environmental care and maintenance activities at various sites encompassed within those property interests during the period required to develop and obtain

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acceptance and regulatory approval for the Keno Hill district closure reclamation plan, for annual fees based on an annually-determined fixed fee benchmark adjusted each year for certain operating and inflationary factors and determined on a site-by-site basis. The portion of the annually-determined fee benchmark which is billable each year by Alexco in respect of each site will reduce by 15% each year until all site-specific care and maintenance activities have been replaced by closure reclamation activities. Alexco could incur significant costs over the period it undertakes such care and maintenance activities, particularly if acceptance and approval of the closure reclamation plan and commencement of reclamation activities should be significantly delayed.

Construction and Operation of the Bellekeno Mine

The decision by the Company to proceed with the construction and development of the Bellekeno mine was based on the development plan and economic analysis supported by the Technical Report, which included estimates for metal production and capital and operating costs. Until mined and processed, no assurance can be given that such estimates will be achieved. Failure to achieve these production and capital and operating cost estimates or material increases in costs could have an adverse impact on the Company’s future cash flows, profitability, results of operations and financial condition. The Company’s actual production and capital and operating costs may vary from estimates for a variety of reasons, including: actual resources mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors relating to the mineable resources, such as the need for sequential development of resource bodies and the processing of new or different resource grades; revisions to mine plans; risks and hazards associated with mining; natural phenomena, such as inclement weather conditions, water availability, floods and earthquakes; and unexpected labour shortages or strikes. Costs of production may also be affected by a variety of factors, including changing waste ratios, metallurgical grades, labour costs, commodity costs, general inflationary pressures and currency rates.

Permitting and Environmental Risks and Other Regulatory Requirements

The current or future operations of Alexco, including development activities, commencement of production on its properties and activities associated with Alexco’s mine reclamation and remediation business, require permits or licenses from various federal, territorial and First Nation governmental authorities, and such operations are and will be governed by laws, regulations and agreements governing prospecting, development, mining, production, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities and in mine reclamation and remediation activities generally experience increased costs and delays as a result of the need to comply with the applicable laws, regulations and permits. There can be no assurance that all permits which Alexco may require for the conduct of its operations will be obtainable on reasonable terms or that such laws and regulations would not have an adverse effect on any project which Alexco might undertake, including but not limited to the Bellekeno mine project.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in mining operations or in mine reclamation and remediation activities may be required to compensate those suffering loss or damage by reason of such activities and may have civil or criminal fines or penalties imposed upon them for violation of applicable laws or regulations.

Amendments to current laws, regulations and permits governing operations and activities of mining companies and mine reclamation and remediation activities could have a material adverse impact on Alexco. As well, policy changes and political pressures within and on federal, territorial and First Nation governments having jurisdiction over or dealings with Alexco could change the implementation and interpretation of such laws, regulations and permits, resulting in a material adverse impact on Alexco.

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Such impacts could result in one or more increases in capital expenditures or production costs, reductions in levels of production at producing properties or abandonment or delays in the development of new mining properties.

Environmental Consulting Services

A material decline in the level of activity or reduction in industry willingness to spend capital on mine reclamation, remediation or environmental services could adversely affect demand for Alexco’s services. Likewise, a material change in mining product commodity prices, the ability of mining companies to raise capital or changes in domestic or international political, regulatory and economic conditions could adversely affect demand for Alexco’s services

Two of Alexco’s customers, including the Governments, accounted for a combined 71% of revenues in the 2009 fiscal year (58% in fiscal 2008). The loss of, or a significant reduction in the volume of business conducted with, either or both of these customers could have a significant detrimental effect on Alexco’s environmental consulting services business.

The patents which Alexco owns or has access to or other proprietary technology may not prevent Alexco’s competitors from developing substantially similar technology, which may reduce Alexco’s competitive advantage. Similarly, the loss of access to such patents or other proprietary technology or claims from third parties that such patents or other proprietary technology infringe upon proprietary rights which they may claim or hold would be detrimental to Alexco’s reclamation and remediation business.

Alexco may not be able to keep pace with continual and rapid technological developments that characterize the market for Alexco’s mine reclamation and remediation services and Alexco’s failure to do so may result in a loss of its market share. Similarly, changes in existing regulations relating to mine reclamation and remediation activities could require Alexco to change the way it conducts its business.

Potential Profitability Of Mineral Properties Depends Upon Factors Beyond the Control of Alexco

The potential profitability of mineral properties is dependent upon many factors beyond Alexco’s control. For instance, world prices of and markets for gold and silver are unpredictable, highly volatile, potentially subject to governmental fixing, pegging and/or controls and respond to changes in domestic, international, political, social and economic environments. Profitability also depends on the costs of operations, including costs of labour, equipment, electricity, environmental compliance or other production inputs. Such costs will fluctuate in ways Alexco cannot predict and are beyond Alexco’s control, and such fluctuations will impact on profitability and may eliminate profitability altogether. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for development and other costs have become increasingly difficult, if not impossible, to project. These changes and events may materially affect the financial performance of Alexco.

First Nation Rights and Title

The nature and extent of First Nation rights and title remains the subject of active debate, claims and litigation in Canada, including in the Yukon and including with respect to intergovernmental relations between First Nation authorities and federal, provincial and territorial authorities. There can be no guarantee that such claims will not cause permitting delays, unexpected interruptions or additional costs for Alexco’s projects.

Title to Mineral Properties

The acquisition of title to mineral properties is a complicated and uncertain process. The properties may be subject to prior unregistered agreements of transfer or land claims, and title may be affected by undetected defects. Alexco has taken steps, in accordance with industry standards, to verify mineral properties in which it has an interest. Although Alexco has made efforts to ensure that legal title to its

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properties is properly recorded in the name of Alexco, there can be no assurance that such title will ultimately be secured.

Capitalization and Commercial Viability

Alexco will require additional funds to further explore, develop and mine its properties. Alexco has limited financial resources, and there is no assurance that additional funding will be available to Alexco to carry out the completion of all proposed activities, for additional exploration or for the substantial capital that is typically required in order to place a property into commercial production. In addition, while Alexco intends to draw upon the remaining US$35 million Silver Wheaton deposit amount to fund the construction and development of the Bellekeno mine, there remains a risk that Silver Wheaton will be unable or unwilling to pay such funds. Although Alexco has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that Alexco will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in the delay or indefinite postponement of further exploration and development of its properties.

General Economic Conditions May Adversely Affect Alexco’s Growth and Profitability

The recent unprecedented events in global financial markets have had a profound impact on the global economy and led to increased levels of volatility. Many industries, including the mining industry, are impacted by these market conditions. Some of the impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity. If the current turmoil and volatility levels continue they may adversely affect Alexco’s growth and profitability. Specifically:

	•		the global credit/liquidity crisis could impact the cost and availability of financing and Alexco’s overall liquidity;
	•		the volatility of silver prices would impact Alexco’s revenues, profits, losses and cash flow;
	•		volatile energy prices, commodity and consumables prices and currency exchange rates would impact Alexco’s production costs; and
	•		the devaluation and volatility of global stock markets could impact the valuation of Alexco’s equity and other securities.

These factors could have a material adverse effect on Alexco’s financial condition and results of operations.

Operating Hazards and Risks

In the course of exploration, development and production of mineral properties, certain risks, particularly including but not limited to unexpected or unusual geological operating conditions including rock bursts, cave-ins, fires, flooding and earthquakes, may occur. It is not always possible to fully insure against such risks and Alexco may decide not to insure against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of Alexco.

Adverse weather conditions could also disrupt Alexco’s mine reclamation and remediation business and/or reduce demand for Alexco’s services.

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Competition

Significant and increasing competition exists for mining opportunities internationally. There are a number of large established mining companies with substantial capabilities and far greater financial and technical resources than Alexco. Alexco may be unable to acquire additional attractive mining properties on terms it considers acceptable and there can be no assurance that Alexco’s exploration and acquisition programs will yield any new reserves or result in any commercial mining operation.

Certain of the Company’s Directors and Officers are Involved with Other Natural Resource Companies, Which May Create Conflicts of Interest from Time to Time

Some of Alexco’s directors and officers are directors or officers of other natural resource or mining-related companies. These associations may give rise to conflicts of interest from time to time. As a result of these conflicts of interest, Alexco may miss the opportunity to participate in certain transactions.

The Company May Fail to Maintain Adequate Internal Control Over Financial Reporting Pursuant to the Requirements of the Sarbanes-Oxley Act.

Section 404 of the Sarbanes-Oxley Act (“SOX”) requires an annual assessment by management of the effectiveness of the Company’s internal control over financial reporting. The Company may fail to maintain the adequacy of its internal control over financial reporting as such standards are modified, supplemented or amended from time to time, and the Company may not be able to ensure that it can conclude, on an ongoing basis, that it has effective internal control over financial reporting in accordance with Section 404 of SOX. The Company’s failure to satisfy the requirements of Section 404 of SOX on an ongoing, timely basis could result in the loss of investor confidence in the reliability of its financial statements, which in turn could harm the Company’s business and negatively impact the trading price or the market value of its securities. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm the Company’s operating results or cause it to fail to meet its reporting obligations. Future acquisitions of companies, if any, may provide the Company with challenges in implementing the required processes, procedures and controls in its acquired operations. No evaluation can provide complete assurance that the Company’s internal control over financial reporting will detect or uncover all failures of persons within the Company to disclose material information otherwise required to be reported. The effectiveness of the Company’s processes, procedures and controls could also be limited by simple errors or faulty judgments. Although the Company intends to expend substantial time and incur substantial costs, as necessary, to ensure ongoing compliance, there is no certainty that it will be successful in complying with Section 404 of SOX.

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USE OF PROCEEDS

The net proceeds to be received by Alexco from the Offering are expected to be approximately $23,624,250 after deducting payment of the Underwriters’ Fee of $1,800,750 and the expenses of the Offering estimated at $300,000. Alexco proposes to use the net proceeds from the Offering as follows:

		Estimated
Use of Proceeds		Expenditure
Bellekeno mine construction capital		$	5,562,000
Additional contingency for Bellekeno mine capital cost overruns		$	10,000,000
Initial working capital for Bellekeno mine		$	6,100,000
General working capital and corporate purposes		$	1,962,250
Estimated net proceeds		$	23,624,250

The Company has received no revenue to date from the exploration and development activities on its properties and has negative cash flow in its most recently completed financial year. As a mineral exploration company without any source of revenue from operations other than from its provision of consulting and project management services in respect of environmental permitting and compliance and site remediation and reclamation, the Company’s principal source of funds is through equity financings. Accordingly, the proceeds of this Offering will be used to fund the proposed expenditures set out above as well as other general working capital and corporate expenses which will cause the Company to continue to experience negative cash flow from its operating activities. See also “Risk Factors — Negative Operating Cash Flow and History of Losses”.

If the Over-Allotment Option is exercised in full, an additional 1,102,500 Common Shares will be issued and the estimated net proceeds thereof, will be C$3,588,637.50. The Company intends to use any additional net proceeds from an exercise of the Over-Allotment Option for general working capital and corporate purposes.

Alexco’s focus for the use of proceeds from this Offering is to partially fund the construction and start-up of the Bellekeno mine as described in the Technical Report. Construction activity in respect of the Bellekeno mine was initiated in late calendar 2009, and the Company anticipates that construction will be completed and commercial production will commence in the third quarter of calendar 2010. As described in the Technical Report, the total construction capital required for the Bellekeno mine is estimated to be C$41,644,000 (including contingency provisions totaling C$5,779,000). A total of US$35 million for construction and development of the Bellekeno mine is to be provided by Silver Wheaton under a silver purchase agreement entered into in October 2008. This agreement provides that Silver Wheaton will purchase 25% of future Keno Hill district silver production at a cost of US$3.90 per ounce of silver delivered, plus up-front deposit payments to Alexco totaling US$50 million. An initial US$15 million deposit payment was received in December 2008, and the remaining US$35 million will be received on a monthly draw-down basis over the construction period subject to certain conditions including Alexco having sufficient committed funds available to complete construction and achieve production within specified time frames. Based on an exchange rate of C$1 for US$0.97, the construction capital to be funded by Alexco, net of funds provided by Silver Wheaton, is estimated to be C$5,562,000, which amount will be funded during the construction period from the proceeds from this Offering as indicated in the table above.

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While the estimated construction capital required for the Bellekeno mine already includes contingency provisions totaling C$5,779,000 as described above, mine construction projects in general are subject to significant inherent risks which can result in material unanticipated capital cost overruns, in excess of contingency provisions normally included in estimates of anticipated capital cost requirements (see “Risk Factors”). As part of its measures to mitigate this risk, the Company proposes to allocate C$10,000,000 of the net proceeds from the Offering to fund an additional contingency provision for unanticipated Bellekeno mine capital cost overruns. This allocation will only be made internally and without segregation from Alexco’s general funds, and will not be subject to any trust or escrow conditions. Upon completion of the Bellekeno mine construction project, which is expected to be completed in the third quarter of the 2010 calendar year, any funds remaining from this allocation will then be used for general working capital and corporate purposes.

Under the economic analysis described in the Technical Report, initial working capital for the Bellekeno mine is provisionally estimated to be C$6,100,000, reflecting three months of mine operating costs. Such working capital will be required to finance mine operations from the completion of the mine construction project up until such time as adequate concentrate inventory has been produced and shipped and revenues are received from commercial production. Actual working capital requirements of the Bellekeno mine could be more or less than this amount depending on a number of factors, particularly including, but not limited to, the nature and frequency of concentrate shipments and the nature and terms of the off-take agreements under which such shipments are made.

Included within the category “general working capital and corporate purposes” are general working capital for all of Alexco’s business operations, other than the Bellekeno mine, and its corporate and administrative activities and general exploration activities, including funding for the Company’s negative operating cash flow.

Subject to the foregoing, Alexco will retain broad discretion in allocating the net proceeds and the timeframe over which they are used. The actual amounts that Alexco expects to spend in connection with each of its intended uses of proceeds may vary significantly from the amounts currently anticipated, depending on Alexco’s operating and capital needs, its potential project optimizations or improvements from time to time and various other factors, including those stated under “Risk Factors”. Pending expenditure, Alexco intends to hold the net proceeds of the Offering in short-term investment grade instruments, including but not limited to demand deposits, bankers’ acceptances and term deposits held with major financial institutions in Canada, in accordance with the Company’s existing treasury investment policies.

PRIOR SALES

The following table sets forth for the common shares of the Company and for securities that are convertible into common shares of the Company, for the 12 month period prior to the date of this Prospectus, details of the price at which securities have been issued or are to be issued by the Company, the number of securities issued at that price and the date on which the securities were issued:

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								Issue or
		Type of		No. of				Exercise
		Securities		Common				Price per
Date of Issue		Issued		Shares				Security				Reason for Issue
February 2, 2009		Stock Options			635,000			$	1.65			Grant of stock options
February 6, 2009		Common Shares			110,000			$	0.80			Exercise of stock options
March 17, 2009		Common Shares			3,428,572			$	1.75			Private placement of flow-through common shares
July 21, 2009		Stock Options			50,000			$	2.18			Grant of stock options
November 16, 2009		Stock Options			200,000			$	2.90			Grant of stock options
November 23, 2009		Common Shares			25,000			$	1.50			Exercise of stock options
November 25, 2009		Common Shares			4,000			$	1.50			Exercise of stock options
December 1, 2009		Common Shares			6,600			$	1.50			Exercise of stock options
December 23, 2009		Common Shares			2,375,000			$	4.00			Private placement of flow-through common shares
January 4, 2010		Common Shares			50,000			$	1.65			Exercise of stock options
January 5, 2010		Common Shares			3,750			$	1.65			Exercise of stock options

TRADING PRICE AND VOLUME

The outstanding common shares of the Company are listed for trading on the TSX under the symbol “AXR” and on AMEX under the symbol “AXU”.

The following table sets forth for the period from January 1, 2009 to January 29, 2010 details of the trading prices and volume on a monthly basis of the Common Shares of the Company traded through the facilities of the TSX and AMEX:

TSX (C$)

Period		High				Low				Volume
2009
January		$	1.89			$	1.16				706,500
February		$	2.14			$	1.33				963,800
March		$	1.80			$	1.40				465,200
April		$	1.76			$	1.40				649,300
May		$	2.35			$	1.45				1,776,300
June		$	2.73			$	2.11				1,107,000
July		$	2.34			$	1.98				761,800
August		$	2.39			$	2.05				471,300
September		$	2.91			$	2.25				1,037,200
October		$	3.15			$	2.53				1,747,100
November		$	3.07			$	2.66				2,046,900
December		$	4.45			$	2.87				2,324,300
2010
January 1- 29		$	4.00			$	3.14				4,379,411

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AMEX (US$)

Period		High				Low				Volume
2009
January		$	1.61			$	0.96				1,526,867
February		$	1.76			$	1.04				1,818,682
March		$	1.52			$	1.08				1,202,535
April		$	1.40			$	1.13				1,393,412
May		$	2.16			$	1.27				4,930,174
June		$	2.53			$	1.86				3,416,837
July		$	2.1599			$	1.72				2,015,638
August		$	2.40			$	1.85				1,537,713
September		$	2.79			$	2.05				3,719,785
October		$	3.50			$	2.35				4,055,297
November		$	2.95			$	2.28				3,302,066
December		$	3.98			$	2.75				6,689,982
2010
January 1- 29		$	3.99			$	2.95				4,358,672