"Initial commissioning of our mill is a significant milestone on our journey toward establishing Alexco as Canada's only primary silver producer," chairman and CEO Clynt Nauman said.

The project is expected to produce about 4 million ounces of silver annually over eight years and deliver an after-tax IRR of 74%, according to a 2019 prefeasibility study.

Alexco received the final permits and made the final production decision for Keno Hill mid-year. 

The company has been developing the district since 2006 under an arrangement with the federal government, allowing it to produce from historical and newly-discovered deposits while also remediating historical environmental impacts.

The initial ore source for mill commissioning is the Bellekeno underground mine, which Alexco previously had in production between 2011-2013.

"There is still a lot of work ahead in our ramp-up and underground development programmes at the Bermingham and Flame and Moth operations, which are scheduled to sequentially replace Bellekeno ore feed over the course of the first half of 2021," Nauman said.

In light of the Yukon government's new COVID-19 protocols and restrictions announced last week, Alexco said it was preparing an operations plan to maintain development activities, and was "assessing the longer-term scheduling impact of alternative development and ore supply strategies".

The company expected to start shipping concentrates this quarter.

It has said Keno Hill had the potential to grow, with assays results imminent from this year's C$3.5 million surface exploration programme, and underground infill and extension/exploration drilling set to begin as scheduled in early 2021.

Alexco shares (TSX: AXU) have ranged from C$1-$4.65 over the past year.

They gained 3.2% yesterday to close at $3.20, capitalising it about $439 million (US$338 million).