Alexco Resource Corporation has announced it will be shutting down its Bellekeno silver mine and mill, hopefully only temporarily.

This means 72 Alexco employees will be laid off along with about 70 contract employees, mostly with Procon Mining and Tunnelling.

The company says it hopes the suspension of operations will only be for the winter and the mine can re-open again if silver prices increase.

"This has been a difficult decision, but we feel it is a prudent move to ensure optimization of future production costs, while saving the cost of winter operations,” Clynt Nauman, Alexco's president and CEO, said in a statement issued today.

"Along with reviewing our fixed costs, we will specifically be looking at our third party agreements with a view to better ensuring the longer term sustainability of the Keno Hill operations.”

The company says the decision means it will avoid selling silver at current or weaker market prices and allow the mine and mill to re-open after the winter, "assuming the silver market has improved from current levels and underlying fixed costs have been reduced.”

In an interview this morning, Vicki Veltkamp, the company's vice president of investor relations, said regular operations will continue for the next few weeks.

The operation will be shut down in stages over the next two or 2 1/2 months, starting with the closure of the mine and mill operations by September 1st.

About 10 people will stay on-site through the winter to manage things like maintenance and water treatment, she said.

Nauman spent today with the employees because he wanted them to hear the news straight from him, Veltkamp said.

"His priority is to be with his employees.”

She said about 25 people who work out of the company's Whitehorse office over the winter will also keep their jobs. This includes the exploration team.

As for how high the price of silver would have to reach in order to open the operation up again, Veltkamp said "there are a variety of factors that go into the decision” not just the price.

In the first quarter production cost at the mine was $16 an ounce, Veltkamp said. The second quarter numbers are scheduled to come out in August.

The company's statement says they plan "to use the winter period to significantly restructure the underlying fixed costs at Keno Hill, as well as refine plans for a production ramp-up to 400 tonnes per day in the 2014 - 2015 time period.”

The news comes in the same press release that touts the company's increased silver production in second quarter of 2013.

The mine produced 576,155 ounces during the second quarter of 2013, representing an increase of 52 per cent compared to the first quarter.

This is not the first time the company has had to lay off employees.

Last month, Alexco announced more layoffs, again citing declining silver prices.

A total of 30 positions were affected, though half of those were vacant. Positions impacted ranged from equipment operators to technical professionals and others.

The company also cut 33 contract miners last month who worked for Procon Mining and Tunnelling. Three senior executives were expected to take a 20 per cent cut in pay.

News of the latest layoffs has the Liberal Party calling on the Yukon Party government to diversify the territory's economy.

"Today's announcement is bad news for Yukoners who will now be looking for work and bad news for our economy,” said Klondike MLA Sandy Silver.

"It is also further proof, if we needed any, that our resource economy is driven by world mineral prices.”

Silver claims the Yukon Party has insisted that it was responsible for the improved mining picture in the territory and that prices had nothing to do with it.

"The Yukon Party has been claiming immunity to just these forces for years. Maybe today's announcement will see them singing a different tune,” he said.

"In summary, the Yukon Party claims responsibility for past success brought on by high mineral prices, but blames the pending decline on ‘global market forces'.”

Diversifying the economy is important, he said.

"While riding a wave of high prices for the last number of years the Yukon Party has paid almost no attention to economic diversification,” he said.

"It's time for the government to admit our economy has performed well because of these prices and also admit it has work to do to ensure we have other options.”

The price of silver was at $20.83 an ounce today.