6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February 2020

Commission File Number: 001-33621

ALEXCO RESOURCE CORP.
(Translation of registrant's name into English)

Suite 1225, Two Bentall Centre

555 Burrard Street, Box 216

Vancouver, BC V7X 1M9 Canada
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

¨ Form 20-F           x Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

 SUBMITTED HEREWITH

Exhibits

99.1	Technical Report
99.2	Qualified Person Consent - Adrian Churcher
99.3	Qualified Person Consent - Zach Allwright
99.4	Qualified Person Consent - Paul Hughes
99.5	Qualified Person Consent - Gilles Arseneau
99.6	Qualified Person Consent - Cliff Revering
99.7	Qualified Person Consent - David Farrow
99.8	Qualified Person Consent - Hassan Ghaffari
99.9	Qualified Person Consent - Ting Lu

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Alexco Resource Corp.
	(Registrant)
Date: February 17, 2020	By:	/s/ Mike Clark
		Mike Clark
	Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

 

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

DATE AND SIGNATURE PAGE

This report entitled NI 43-101 Technical Report Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon, Canada, was prepared and signed by the following authors:

	(Signed & Sealed) “Adrian Churcher”
DATED AT VANCOUVER, BC February 13, 2020	Adrian Churcher P.Eng. Senior Mining Consultant
	(Signed & Sealed) “Zach Allwright”
DATED AT VANCOUVER, BC February 13, 2020	Zach Allwright, P.Eng. Professional Engineer
	(Signed & Sealed) “Hassan Ghaffari”
DATED AT VANCOUVER, BC February 13, 2020	Hassan Ghaffari, P.Eng. Director of Metallurgy Tetra Tech Canada Inc.
	(Signed & Sealed) “Ting Lu”
DATED AT VANCOUVER, BC February 13, 2020	Ting Lu, M.Sc., P.Eng. Senior Metallurgical Engineer Tetra Tech Canada Inc.
	(Signed & Sealed) “Gilles Arseneau”
DATED AT VANCOUVER, BC February 13, 2020	Gilles Arseneau, Ph.D., P.Geo. Associate Consultant (Resource Geology) SRK Consulting (Canada) Inc.
	(Signed & Sealed) “Cliff Revering”
DATED AT SASKATOON, SK February 13, 2020	Cliff Revering, P.Eng. Principal Consultant (Geological Engineering) SRK Consulting (Canada) Inc.
	(Signed & Sealed) “Paul Hughes”
DATED AT VANCOUVER, BC February 13, 2020	Paul Hughes, Ph.D., P.Eng. Rock Mechanics Consultant
	(Signed & Sealed) “David Farrow”
DATED AT VANCOUVER, BC February 13, 2020	David Farrow, Pr.Sci.Nat, P.Geo. Geologist Geostrat Consulting Services Inc.

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NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

FORWARD LOOKING INFORMATION

This report contains forward-looking statements or forward-looking information under applicable securities laws (hereinafter collectively referred to as "forward-looking statements").  All statements, other than statements of historical fact regarding Alexco Resource Corp. or the Keno Hill Silver District Project, are forward-looking statements.  The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intend", "project", "continue", "budget", "estimate", "potential", "may", "will", "can", "could" and similar expressions identify forward-looking statements.  In particular, this report contains forward-looking statements with respect to cash flow forecasts, projected capital, operating and exploration expenditure, targeted cost reductions, mine life and production rates, potential mineralization and metal or mineral recoveries, mineral reserve estimates and any information pertaining to potential improvements to financial and operating performance and mine life at the Keno Hill Silver District Project.  All forward-looking statements in this report are necessarily based on opinions and estimates made as of the date such statements are made and are subject to important risk factors and uncertainties, many of which cannot be controlled or predicted.  Material assumptions regarding forward-looking statements are discussed in this report, where applicable.  In addition to such assumptions, the forward-looking statements are inherently subject to significant business, economic and competitive uncertainties, and contingencies.  Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements.  Such factors include, but are not limited to: fluctuations in the spot and forward price of commodities (including gold, copper, silver, lead, zinc, diesel fuel, natural gas and electricity); the speculative nature of mineral exploration and development; changes in mineral production performance, exploitation and exploration successes; risks associated with the fact that the Keno Hill Silver District Project is still in the early stages of evaluation and additional engineering and other analysis is required to fully assess their impact; diminishing quantities or grades of reserves; increased costs, delays, suspensions, and technical challenges associated with the construction of capital projects; operating or technical difficulties in connection with mining or development activities, including disruptions in the maintenance or provision of required infrastructure and information technology systems; damage to Alexco Resource Corp’s or Keno Hill Silver District Project’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the handling of environmental matters or dealings with community groups, whether true or not; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; uncertainty whether the Keno Hill Silver District Project will meet Alexco Resource Corp's capital allocation objectives; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; the impact of inflation; fluctuations in the currency markets; changes in interest rates; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in Canada; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; litigation; contests over title to properties or over access to water, power and other required infrastructure; increased costs and physical risks including extreme weather events and resource shortages, related to climate change; and availability and increased costs associated with mining inputs and labor. In addition, there are risks and hazards associated with the business of mineral exploration, development, and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks).

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NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Many of these uncertainties and contingencies can affect Alexco Resource Corp’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made in this report.  All of the forward-looking statements made in this report are qualified by these cautionary statements.  Alexco Resource Corp and Mining Plus Canada . and the Qualified Persons who authored this report undertake no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law.

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NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table of Contents

1.	Summary		1-1
1.1	Executive Summary		1-1
1.2	Technical Summary		1-4
	1.2.1	Property Description and Ownership	1-4
	1.2.2	History	1-5
	1.2.3	Geology	1-6
	1.2.4	Exploration and Drilling	1-7
	1.2.5	Mineral Resource Estimate	1-7
	1.2.6	Mineral Reserve Estimate	1-9
	1.2.7	Mining Methods	1-10
	1.2.8	Metallurgical Testing and Mineral Processing	1-14
	1.2.9	Project Infrastructure	1-16
	1.2.10	Market Studies and Contracts	1-16
	1.2.11	Environmental Studies, Permitting, and Social or Community Impact	1-16
	1.2.11.1	Environment and Water Quality	1-17
	1.2.11.2	Environmental Assessment and Permitting	1-17
	1.2.11.3	Community and First Nations	1-17
	1.2.11.4	Mine Reclamation and Closure	1-17
	1.2.12	Capital and Operating Costs	1-18
	1.2.13	Economic Analysis	1-19
	1.2.14	Cash Flow Analysis	1-20
	1.2.15	Sensitivity Analysis	1-21
1.3	Recommendations		1-23
2.	Introduction		2-1
2.1	Terms of Reference and Purpose of this Report		2-1
2.2	Qualifications of Consultants		2-2
2.3	Sources of Information		2-3
3.	Reliance on Other Experts		3-1
4.	Property Description and Location		4-1
4.1	Location		4-1
4.2	Mineral Tenure		4-1
4.3	Underlying Agreements		4-5
	4.3.1	Alexco/ERDC Purchase Agreement	4-5
	4.3.2	Other Underlying Agreements and Contracts	4-6

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4.4	Permits and Authorizations	4-6
4.5	Environmental Liabilities	4-7
5.	Accessibility, climate, local resources, infrastructure	5-1
5.1	Accessibility	5-1
5.2	Climate	5-1
5.3	Local Resources	5-1
5.4	Infrastructure	5-1
5.5	Physiography	5-2
6.	Exploration and Development History	6-1
6.1	History of the Bellekeno Mine	6-3
6.2	History of the Lucky Queen Deposit	6-5
6.3	History of Flame & Moth Deposit	6-5
6.4	History of Onek Deposit	6-6
6.5	History of Bermingham Deposit	6-7
6.6	Past Production	6-8
7.	Geological Setting and Mineralization	7-1
7.1	Regional Geology	7-1
7.2	Property Geology	7-2
7.3	Mineralization	7-6
7.4	Bellekeno Mine Mineralization	7-6
7.5	Lucky Queen Mineralization	7-8
7.6	Flame & Moth Mineralization	7-8
7.7	Onek Mineralization	7-9
7.8	Bermingham Mineralization	7-11
8.	Deposit Types	8-1
9.	Exploration	9-1
9.1	Exploration of Bellekeno Deposit	9-5
9.2	Exploration of Lucky Queen Deposit	9-5
9.3	Exploration of Flame & Moth Deposit	9-5
9.4	Exploration of Onek Deposit	9-6
9.5	Exploration of Bermingham Deposit	9-6
10.	Drilling and Trenching	10-1
10.1	Trenching	10-1
10.2	Drilling	10-1
10.3	Historical Drilling at the Bellekeno Mine	10-2
10.4	2006–2013 Alexco Drilling at the Bellekeno Mine	10-3

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NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

10.5	Historical Drilling at Lucky Queen		10-8
10.6	2006 – 2017 Alexco Drilling at Lucky Queen		10-8
10.7	Historical Drilling at Flame & Moth		10-9
10.8	2010 – 2018 Alexco Drilling at Flame & Moth		10-10
10.9	Historical Drilling at Onek		10-11
10.10	2010–2014 Alexco Drilling at Onek		10-11
10.11	Historical Drilling at Bermingham		10-12
10.12	2009–2018 Alexco Drilling at Bermingham		10-12
11.	Sample Preparation, Analyses and Security		11-1
11.1	Sample Preparation and Analyses		11-1
	11.1.1	Historical Sampling (Pre-Alexco)	11-1
11.2	Alexco Core Drilling Sampling - Exploration Programs (2006–2018)		11-1
11.3	Quality Assurance and Quality Control Programs		11-3
	11.3.1	Historical Core Drilling Data	11-3
	11.3.2	Bellekeno Historical Core Drilling Data	11-3
	11.3.3	Lucky Queen Historical Core Drilling Data	11-4
	11.3.4	Flame & Moth Historical Core Drilling Data	11-4
	11.3.5	Onek Historical Core Drilling Data	11-4
	11.3.6	Bermingham Historical Core Drilling Data	11-4
	11.3.7	Historical Chip Sample Data	11-5
	11.3.8	Bellekeno Historical Chip Sample Data	11-5
	11.3.9	Lucky Queen Historical Chip Sample Data	11-6
	11.3.10	Flame & Moth Historical Chip Sample Data	11-6
	11.3.11	Onek Historical Chip Sample Data	11-6
	11.3.12	Bermingham Historical Chip Sample Data	11-6
	11.3.13	Verification of 2006 to 2018 Data by Alexco	11-7
12.	Data Verification		12-1
12.1	Site Visits		12-1
12.2	Verifications of Analytical Quality Control Data for Lucky Queen		12-1
12.3	Verification of Analytical Quality Control Data for Onek		12-2
12.4	Verification of Analytical Quality Control Data for Bermingham		12-2
13.	Mineral Processing and Metallurgical testing		13-1
13.1	Background		13-1
13.2	Metallurgical Testing Sample Description		13-2
	13.2.1	Master Composites	13-2
13.3	Sample Physical Characteristics Testwork		13-4
13.4	Mineralogical Analysis		13-5

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NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

	13.4.1	Mineralogy Analysis on Bellekeno Samples	13-5
	13.4.2	Mineralogy Analysis on Bermingham Samples	13-6
	13.4.3	Mineralogy Analysis on Flame & Moth and Lucky Queen Samples	13-7
	13.4.4	Mineralogy Analysis Comparison among Flame & Moth, Bermingham, Lucky Queen and Bellekeno Samples	13-9
13.5	Flotation Testwork Overview		13-9
	13.5.1	Bellekeno Samples	13-9
	13.5.2	Bermingham Samples	13-10
	13.5.3	Flame & Moth Samples and Blended composites (Bermingham with Flame & Moth)	13-12
	13.5.4	Lucky Queen Samples	13-16
13.6	Miscellaneous Testwork		13-16
13.7	Metal Recovery Projections		13-17
14.	Mineral Resource Estimate		14-1
14.1	Introduction		14-3
14.2	Resource Estimation Procedures		14-4
14.3	Resource Database		14-4
	14.3.1	Database for the Bellekeno Mine	14-4
	14.3.2	Database for the Lucky Queen Mine	14-5
	14.3.3	Database for the Flame & Moth Deposit	14-6
	14.3.4	Database for the Onek Deposit	14-8
	14.3.5	Database for the Bermingham Deposit	14-9
14.4	Solid Body Modelling		14-10
	14.4.1	Solid Body Modelling for the Bellekeno Mine	14-10
	14.4.2	Solid Body Modelling for the Lucky Queen Mine	14-11
	14.4.3	Solid Body Modelling for the Flame & Moth Deposit	14-12
	14.4.4	Solid Body Modelling for the Onek Deposit	14-13
	14.4.5	Solid Body Modelling for the Bermingham Deposit	14-16
14.5	Bulk Density Data		14-18
	14.5.1	Bulk Density for the Bellekeno Mine	14-18
	14.5.2	Bulk density for the Lucky Queen Mine	14-19
	14.5.3	Bulk density for the Flame & Moth Deposit	14-20
	14.5.4	Bulk density for the Onek Deposit	14-21
	14.5.5	Bulk density for the Bermingham Deposit	14-23
14.6	Compositing		14-24
	14.6.1	Compositing for the Bellekeno Mine	14-24
	14.6.2	Compositing for the Lucky Queen Mine	14-25
	14.6.3	Compositing for the Flame & Moth Deposit	14-25
	14.6.4	Compositing for the Onek Deposit	14-26

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NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

	14.6.5	Compositing for the Bermingham Deposit	14-27
14.7	Evaluation of Outliers		14-28
	14.7.1	Evaluation of Outliers for the Bellekeno Mine	14-28
	14.7.2	Evaluation of Outliers for the Lucky Queen Mine	14-28
	14.7.3	Evaluation of Outliers for the Flame & Moth Deposit	14-29
	14.7.4	Evaluation of Outliers for the Onek Deposit	14-31
	14.7.5	Evaluation of Outliers for the Bermingham Deposit	14-31
14.8	Statistical Analysis and Variography		14-33
	14.8.1	Statistical Analysis and Variography for the Bellekeno Mine	14-33
	14.8.1.1	Southwest Zone	14-33
	14.8.1.2	The 99 Zone	14-33
	14.8.1.3	The East Vein	14-33
	14.8.2	Statistical Analysis and Variography for the Lucky Queen Mine	14-50
	14.8.3	Statistical Analysis and Variography for the Flame & Moth Deposit	14-52
	14.8.4	Statistical Analysis and Variography for the Onek Deposit	14-55
	14.8.5	Statistical Analysis and Variography for the Bermingham Deposit	14-59
14.9	Block Model and Grade Estimation		14-61
	14.9.1	Block Model and Grade Estimation for the Bellekeno Mine	14-61
	14.9.2	Block Model and Grade Estimation for the Lucky Queen Mine	14-62
	14.9.3	Block Model and Grade Estimation for the Flame & Moth Deposit	14-63
	14.9.4	Block Model and Grade Estimation for the Onek Deposit	14-65
	14.9.5	Block Model and Grade Estimation for the Bermingham Deposit	14-67
14.10	Model Validation and Sensitivity		14-73
	14.10.1	Model Validation and Sensitivity for the Bellekeno Mine	14-73
	14.10.2	Model Validation and Sensitivity for the Lucky Queen Mine	14-78
	14.10.3	Model Validation and Sensitivity for the Flame & Moth Deposit	14-79
	14.10.4	Model Validation and Sensitivity for the Onek Deposit	14-82
	14.10.5	Model Validation for the Bermingham Deposit	14-86
14.11	Mineral Resource Classification		14-90
	14.11.1	Mineral Resource Classification for the Bellekeno Mine	14-90
	14.11.2	Mineral Resource Classification for the Lucky Queen Mine	14-91
	14.11.3	Mineral Resource Classification for the Flame & Moth Deposit	14-91
	14.11.4	Mineral Resource Classification for the Onek Deposit	14-91
	14.11.5	Mineral Resource Classification for the Bermingham Deposit	14-92
14.12	Mineral Resource Statements		14-92
	14.12.1	Mineral Resource Statement for the Bellekeno Mine	14-94
	14.12.2	Mineral Resource Statement for the Lucky Queen Mine	14-95
	14.12.3	Mineral Resource Statement for the Flame & Moth Deposit	14-96

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	14.12.4	Mineral Resource Statement for the Onek Deposit	14-97
	14.12.5	Mineral Resource Statement for the Bermingham Deposit	14-98
14.13	Previous Mineral Resource Estimates		14-100
	14.13.1	Bellekeno Previous Resource Estimates	14-100
	14.13.2	Flame & Moth Previous Resource Estimates	14-100
	14.13.3	Onek Previous Resource Estimates	14-101
	14.13.4	Bermingham Previous Resource Estimates	14-101
15.	Mineral Reserve Estimate		15-1
15.1	Mineral Reserve Block Model Preparation		15-1
15.2	Cutoff Grade and NSR Calculation		15-2
15.3	Mineral Reserve Estimate		15-2
16.	Mining Methods		16-1
16.1	Introduction		16-1
16.2	Geotechnical Analysis		16-3
	16.2.1	Geotechnical Database	16-3
	16.2.2	Geotechnical Domains	16-3
	16.2.3	Mining Methods and Locations	16-3
	16.2.4	Ground Water	16-5
	16.2.5	Rock Mass Assessment	16-5
	16.2.5.1	Rock Quality Designation (RQD)	16-5
	16.2.5.2	NGI Q Values	16-6
	16.2.6	Empirical Ground Support Design	16-7
	16.2.7	Stope Stability Analysis – Empirical Assessment	16-8
	16.2.8	Stope Over-Break	16-9
	16.2.9	Stope Stability Analysis – Numerical Assessment	16-10
	16.2.10	Pillar Stability	16-11
16.3	Mining Methods		16-11
	16.3.1	Cut and Fill	16-12
	16.3.2	Longhole Open Stoping	16-13
	16.3.3	Uphole Stoping	16-14
16.4	Dilution and Recovery		16-14
	16.4.1	Development Dilution	16-14
	16.4.2	Stoping Dilution	16-14
	16.4.3	Recovery	16-15
	16.4.4	Minimum Mining Width	16-15
16.5	Net Smelter Return (NSR)		16-15
16.6	Mine Design		16-17

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	16.6.1	Bellekeno Mine Plan	16-17
	16.6.2	Flame & Moth Deposit	16-22
	16.6.3	Bermingham Mine	16-25
	16.6.4	Lucky Queen Mine	16-28
16.7	Production Schedule		16-31
16.8	Mine Equipment		16-34
16.9	Manpower		16-35
16.10	Mine Operations		16-36
16.11	Backfilling		16-36
16.12	Ventilation		16-36
	16.12.1	Mine Air Heating	16-37
	16.12.2	Ventilation Modelling	16-37
	16.12.3	Flame & Moth Mine	16-38
	16.12.4	Bermingham Mine	16-39
	16.12.5	Lucky Queen Mine	16-41
16.13	Mine Services		16-43
	16.13.1	Compressed Air	16-43
	16.13.2	Dewatering	16-43
	16.13.3	Electrical	16-44
	16.13.4	Maintenance Facilities	16-44
17.	Recovery Methods		17-1
17.1	Introduction		17-1
17.2	Process Design Criteria		17-1
17.3	LOM Predicted Mill Feed		17-2
17.4	Process Flowsheet Modifications		17-3
	17.4.1	Previous Operation	17-4
	17.4.2	Mill Modifications and Upgrades	17-4
	17.4.2.1	Grinding Circuit	17-5
	17.4.2.2	Flotation Circuit	17-6
	17.4.2.3	Dewatering Circuit	17-6
17.5	Process Unit Operation Description		17-7
	17.5.1	Simplified Process Flowsheet	17-7
	17.5.2	ROM Ore Crushing, Ore Storage, and Reclaim	17-8
	17.5.3	Primary Grinding Circuit	17-9
	17.5.4	Classification	17-9
	17.5.5	Lead Flotation Circuit	17-9
	17.5.5.1	Lead Rougher and Rougher Scavenger Flotation	17-9

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	17.5.5.2	Lead Rougher Concentrate Regrinding	17-10
	17.5.5.3	Lead 1st Cleaner Flotation	17-10
	17.5.5.4	Lead 2nd Cleaner Flotation	17-10
	17.5.5.5	Lead 3rd Cleaner Flotation	17-11
	17.5.6	Zinc Flotation Circuit	17-11
	17.5.6.1	Zinc Rougher Flotation	17-11
	17.5.6.2	Zinc Rougher Concentrate Regrinding	17-12
	17.5.6.3	Zinc 1st Cleaner Flotation and Zinc 1st Cleaner Scavenger Flotation	17-12
	17.5.6.4	Zinc 2nd Cleaner Flotation	17-12
	17.5.6.5	Zinc 3rd Cleaner Flotation	17-13
	17.5.7	Lead and Zinc Concentrates Dewatering And Loadout	17-13
	17.5.7.1	Lead Concentrate	17-13
	17.5.7.2	Zinc Concentrate	17-13
	17.5.8	Tailings Dewatering and Handling	17-14
	17.5.9	Reagent Handling and Storage	17-15
17.6	Plant Services		17-15
	17.6.1	Water Supply	17-15
	17.6.2	Air Supply	17-16
	17.6.3	Instrumentation and Process Control	17-16
	17.6.4	Quality Control	17-16
17.7	Annual Production Estimate		17-16
18.	Project Infrastructure		18-1
18.1	Off-site Facilities		18-1
18.2	Concentrate Shipment Infrastructure		18-1
18.3	Elsa Facilities		18-1
18.4	Flat Creek Camp Facilities		18-2
18.5	Mill Facility		18-2
18.6	Area Haul Road System		18-4
18.7	Bellekeno Mine Surface Infrastructure		18-4
18.8	Lucky Queen Mine Surface Infrastructure		18-7
18.9	Flame & Moth Mine Planned Surface Infrastructure		18-9
18.10	Bermingham Mine Surface Infrastructure		18-10
18.11	Electrical Power		18-12
19.	Market Studies and Contracts		19-1
19.1	Markets		19-1
19.2	Contracts		19-1
	19.2.1	Concentrate Sales	19-1

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	19.2.2	Wheaton Precious Metals Agreement	19-2
	19.2.3	Other Agreements	19-3
	19.2.4	Other Contracts	19-3
20.	Environmental Studies, Permitting, and Social or Community Impact		20-1
20.1	Site Context		20-1
20.2	Environmental and Socio-economic Setting		20-1
20.3	Permits and Regulatory Context		20-2
20.4	Water Management		20-4
	20.4.1	Mine Water	20-4
	20.4.2	Water Treatment	20-5
	20.4.3	Mill Water Supply	20-6
	20.4.4	Receiving Environment	20-6
20.5	Waste Management		20-6
	20.5.1	Waste Rock	20-6
	20.5.2	Tailings	20-7
20.6	Community and First Nation Relations		20-10
	20.6.1	First Nations Relations	20-10
	20.6.2	Community Relations	20-11
20.7	Closure Plan and Security		20-11
21.	Capital and Operating Costs		21-1
21.1	Capital & Sustaining Capital Cost Estimate		21-1
	21.1.1	Capital Cost Assumptions and Basis of Estimate	21-1
	21.1.2	Capital Cost Summary	21-2
	21.1.3	Mine Capital Cost Estimate	21-3
	21.1.4	Mill Capital Cost Estimate	21-6
21.2	Operating Cost Estimate		21-6
	21.2.1	Operating Cost Assumptions and Basis of Estimate	21-6
	21.2.2	Operating Cost Summary	21-7
	21.2.3	Mining Operating Cost Estimate	21-9
	21.2.4	Mill Operating Cost Estimate	21-10
21.3	All-In Sustaining Cost Estimate		21-12
22.	ECONOMIC ANALYSIS		22-1
22.1	Methodology Used		22-1
22.2	Economic Criteria		22-2
	22.2.1	Wheaton Precious Metals Streaming Agreement	22-2
	22.2.2	Operating Costs	22-2
	22.2.3	Treatment, Refining and Transport	22-3

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	22.2.4	Capital Costs	22-3
	22.2.5	Closure Cost and Salvage Value	22-4
	22.2.6	Taxation and Royalties	22-4
22.3	Cash Flow Analysis		22-4
22.4	Financial Results		22-6
22.5	Sensitivity Analysis		22-10
23.	Adjacent Properties		23-1
24.	Other Relevant Data and Information		24-1
25.	Interpretation and Conclusions		25-1
25.1	Property Description and Ownership		25-1
25.2	Exploration and Mineral Resources		25-1
25.3	Mineral Reserves, Mine Planning and Mine Development		25-1
25.4	Metallurgical Testing and Mineral Processing		25-2
25.5	Environment, Community, Permitting and Closure		25-3
25.6	Capital and Operating Costs and Economic Evaluation		25-4
25.7	Economic Analysis		25-4
26.	Recommendations		26-1
26.1	Mineral Resources		26-1
26.2	Processing and Metallurgy		26-2
26.3	Mining and Geomechanics		26-2
26.4	Environment and Permitting		26-3
26.5	Delivery on Cost Assumptions and Project Economics		26-3
27.	REFERENCES		27-1
28.	CERTIFICATE OF QUALIFIED PERSON		28-1

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List of Tables

Table 1-1	Keno Hill Mineral Resources (SRK, 2019)(Effective Date March 28, 2019)	1-2
Table 1-2	Summary of Mineral Resource Estimates as at March 28, 2019)	1-8
Table 1-3	Mineral Reserves, Alexco Resource Corp. – Keno Hill Silver District Project	1-9
Table 1-4	Mine Design Criteria – Cutoff Values	1-12
Table 1-5	Mine Production Summary	1-13
Table 1-6	Expected Metallurgical Performance1 – Recovery to Concentrates	1-15
Table 1-7	Expected Metallurgical Performance1 – Concentrates	1-15
Table 1-8	Life of Mine Direct Operating Cost Summary	1-19
Table 1-9	Results of Sensitivity Analysis	1-21
Table 4-1	Relevant Assessment and Regulatory Approvals	4-7
Table 6-1	District Production through to 1989 (Cathro, 2006)	6-2
Table 6-2	Historical Resource Estimate for Silver King Property 1	6-2
Table 6-3	Bellekeno Mine Production Summary, 1919 to 2013 (Data compiled from internal documents)	6-4
Table 6-4	Past Production Records for the Lucky Queen Property	6-5
Table 6-5	Past Production Records for the Flame & Moth Property	6-6
Table 6-6	Past Production Records for the Onek Property	6-7
Table 6-7	Past Production Records for the Bermingham Property	6-8
Table 9-1	Distribution of Drill Holes 2006 to October 2018 Alexco Resource Corp.	9-1
Table 10-1	2006 to 2013 Bellekeno Property Core Drilling Summary	10-4
Table 10-2	Summary of Bellekeno Surface and Underground Core Recovery Statistics 1996 – 2009	10-5
Table 10-3	Summary of Bellekeno Underground Core Recovery Statistics 2009 – 2012	10-6
Table 11-1	Statistical Review of UKHM Bellekeno Production Chip Data	11-6
Table 11-2	Commercial Standard Reference Material Used by Alexco for Drilling Programs for the KHSD Project	11-8
Table 11-3	Standard Reference Material Used by Alexco developed from  the Bellekeno Mine	11-9
Table 11-4	Quality Control Data Produced by Alexco from 2006 to 2013 for Bellekeno	11-9
Table 11-5	Quality Control Data Produced by Alexco from 2006 to 2010 for Lucky Queen	11-10

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Table 11-6	Quality Control Data Produced by Alexco from 2010 to 2014 for Flame & Moth	11-10
Table 11-7	Quality Control Data Produced by Alexco from 2007 to 2014 for Onek	11-10
Table 11-8	Quality Control Data Produced by Alexco from 2009 to 2018 for Bermingham	11-11
Table 13-1	Metallurgical Test Work Programs – 1996 to 2019	13-1
Table 13-2	Bermingham Composites for Metallurgical Testing	13-3
Table 13-3	Flame & Moth Composites for Metallurgical Testing	13-4
Table 13-4	Grindability Test Results	13-5
Table 13-5	Mineral Liberation and Exposure of Bermingham Master Composite	13-7
Table 13-6	Mineral Liberation and Exposure of Flame & Moth and Lucky Queen Samples	13-8
Table 13-7	Locked Cycle Testing Summary (2016-2019)	13-9
Table 13-8	Locked Cycle Flotation Test Results on Bellekeno Samples	13-10
Table 13-9	Open Cycle Cleaner Flotation Test Results on Bermingham Sample – SGS 2019	13-11
Table 13-10	Locked Cycle Flotation Test Results on Bermingham Samples	13-12
Table 13-11	Open Cycle Cleaner Flotation Test Results on Flame & Moth Samples	13-13
Table 13-12	Locked Cycle Flotation Test Results on Flame & Moth Samples and Blended Flame & Moth with Bermingham	13-15
Table 13-13	Open Cycle Cleaner Flotation Tests on Lucky Queen Test Samples	13-16
Table 13-14	Concentrate Metal Production	13-19
Table 14-1	Summary of Mineral Resource Estimates as at March 28, 2019	14-2
Table 14-2	Bellekeno Mine Sample Database	14-5
Table 14-3	Bellekeno Mine Samples Used for Mineral Resource Estimation	14-5
Table 14-4	Lucky Queen Deposit Sample Database	14-5
Table 14-5	Flame & Moth Deposit Sample Database	14-6
Table 14-6	Flame & Moth Deposit Core Drill Hole Vein Intercepts	14-6
Table 14-7	Original and Adjusted Narrow Mineralized Zones Drill Hole Intersections	14-7
Table 14-8	Sample Gaps in Mineralized Zones	14-7
Table 14-9	Examples of Sample Intervals Assumed to Have No Recoveries	14-8
Table 14-10	Onek Deposit Sample Database Average Assay Values Inside Veins	14-8

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Table 14-11	Summary Statistics for Mineralized Assay Data (length weighted) Grouped by Vein System	14-9
Table 14-12	Bermingham Deposit Geological Model	14-16
Table 14-13	Lucky Queen Bulk Density Measurements	14-19
Table 14-14	Flame & Moth Bulk Density Measurements within Mineralized Zones	14-20
Table 14-15	Onek Bulk Density Measurements	14-21
Table 14-16	Composite Capping Levels for the Bellekeno Mine	14-28
Table 14-17	Composite Capping Levels for Lucky Queen	14-29
Table 14-18	High Grade Thresholds in the Flame & Moth Deposit	14-29
Table 14-19	High Grade Search Radii	14-31
Table 14-20	Sample Capping Levels for Onek	14-31
Table 14-21	Sample Capping Levels for Bermingham	14-32
Table 14-22	Composite Data Summary Statistics for the Lucky Queen Mine	14-51
Table 14-23	Modelled Semi-Variogram for Silver	14-52
Table 14-24	Correlogram Models in the Lightning Zone	14-54
Table 14-25	Correlogram Models in the Christal Zone	14-55
Table 14-26	Composite Data Summary Statistics for Onek	14-56
Table 14-27	Modelled Correlograms for Onek Veins	14-59
Table 14-28	Summary statistics for composited assay data grouped by vein system for Bermingham	14-60
Table 14-29	Variogram Details for the Bermingham Main, Bear and Footwall Vein Systems	14-61
Table 14-30	Block Model Location and Setup (ISATIS convention)	14-62
Table 14-31	Search Ellipse Parameters for the Bellekeno Mine	14-62
Table 14-32	Block Model Location and Setup for the Lucky Queen Mine	14-63
Table 14-33	Search Ellipse Parameters for the Lucky Queen Mine	14-63
Table 14-34	Block Model Location and Setup for the Flame & Moth Deposit	14-64
Table 14-35	Search Ellipse Parameters for the Flame & Moth Deposit in the Lightning Zone	14-65
Table 14-36	Search Ellipse Parameters for the Flame & Moth Deposit in the Christal Zone	14-65
Table 14-37	Onek Block Model Location and Setup	14-66

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Table 14-38	Search Ellipse Parameters for Onek Vein 1	14-66
Table 14-39	Search Ellipse Parameters for Onek Vein 1F	14-67
Table 14-40	Search Ellipse Parameters for Onek Vein 2	14-67
Table 14-41	Bermingham Block Model Location and Setup Table	14-68
Table 14-42	Estimation Parameters for Silver	14-68
Table 14-43	Estimation Parameters for Gold	14-70
Table 14-44	Estimation Parameters for Lead	14-71
Table 14-45	Estimation Parameters for Zinc	14-72
Table 14-46	Estimation Parameters for Specific Gravity	14-73
Table 14-47	Bellekeno Inferred and Indicated Block Model Quantity and Grade Estimates at Various Cut-Off Values	14-77
Table 14-48	Nearest Neighbor Block Model Validation	14-78
Table 14-49	Lucky Queen Mine Indicated and Inferred Block Model Quantity and Grade Estimates at Various Cut-off Values	14-79
Table 14-50	Flame & Moth Indicated and Inferred Block Model Quantity and Grade Estimates at Various Cut-off Values	14-82
Table 14-51	OK and ID2 Estimate at $185 Dollar Value cut-off	14-84
Table 14-52	Onek Global Block Model Quantity and Grade Estimates at Various Dollar cut-off values	14-84
Table 14-53	Assumptions Considered for Preparing the Bellekeno Mineral Resource Statement (SRK, 2013)	14-93
Table 14-54	Assumptions Considered for Preparing the Lucky Queen, Flame & Moth, and Onek Mineral Resource Statement (SRK, 2013)	14-93
Table 14-55	Assumptions Considered for Preparing the Bermingham Mineral Resource Statement	14-94
Table 14-56	Mineral Resource Statement, Bellekeno Deposit, GeoStrat Consulting Services Inc. March 28, 2019	14-95
Table 14-57	Mineral Resource Statement, Lucky Queen Deposit, SRK Consulting (Canada) Inc., January 3, 2017	14-96
Table 14-58	Mineral Resource Statement, Flame & Moth Deposit, SRK Consulting (Canada) Inc., January 3, 2017	14-97
Table 14-59	Mineral Resource Statement, Onek Deposit, SRK Consulting (Canada) Inc., January 3, 2017	14-98
Table 14-60	Mineral Resource Statement, Bermingham Deposit, SRK Consulting (Canada) Inc. March 28, 2019	14-99
Table 14-61	Consolidated Mineral Resource Statement for the Bellekeno Deposit, GeoStrat Consulting Services Inc. September 30, 2012	14-100
Table 14-62	Mineral Resource Statement for the Flame & Moth Deposit, April 28, 2015	14-100

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Table 14-63	Mineral Resource Statement for the Onek Deposit, SRK Consulting (Canada) Inc., October 15, 2014	14-101
Table 14-64	Mineral Resource Statement for the Bermingham Deposit, SRK Consulting (Canada) Inc., January 3, 2017	14-101
Table 15-1	Probable Mineral Reserves, Alexco Resource Corp. – Keno Hill Silver District Project1,2,4	15-3
Table 16-1	Summary of RQD Values for Flame & Moth and Bermingham deposits by Geotechnical Domain	16-6
Table 16-2	Summary of NGI Q values for Flame & Moth and Bermingham deposits by Geotechnical Domain	16-7
Table 16-3	Ground Support Recommendations for Bermingham and Flame & Moth Deposits	16-8
Table 16-4	Stope Design Parameters-Flame & Moth Deposit	16-9
Table 16-5	Stope Design Parameters-Bermingham Deposit	16-9
Table 16-6	Total Dilution	16-15
Table 16-7	NSR Commodity and Exchange Price	16-16
Table 16-8	NSR Parameters*	16-16
Table 16-9	Initial Operating Cost Estimate	16-17
Table 16-10	NSR Cut off Values	16-17
Table 16-11	Bellekeno Mine Production Quantities	16-18
Table 16-12	Flame & Moth Production Quantities	16-24
Table 16-13	Bermingham Production Quantities	16-28
Table 16-14	Lucky Queen Production Schedule	16-29
Table 16-15	Plant Feed	16-31
Table 16-16	Underground Equipment Fleet	16-34
Table 16-17	Surface Equipment Fleet	16-35
Table 16-18	Annual Manpower Estimate	16-36
Table 17-1	Modified Mill Design Criteria	17-2
Table 17-2	Summary of LOM Grades and Tonnes per Deposit	17-3
Table 17-3	Summary of Plant Modifications to Achieve LOM Planned Throughput	17-5
Table 17-4	Summary of Reagents	17-15
Table 17-5	LOM Projected Concentrate Production1	17-18
Table 17-6	LOM Projected Concentrate Production1, 2	17-19

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Table 17-7	LOM Projected Concentrate Production - Metal Quantities1	17-19
Table 19-1	Assumed Lead Concentrate Sales Terms	19-2
Table 19-2	Assumed Zinc Concentrate Sales Terms	19-2
Table 20-1	Keno Hill Silver District Environmental Setting Summary	20-2
Table 20-2	Relevant Assessment and Regulatory Approvals	20-3
Table 20-3	Waste Rock Permitted Capacity	20-7
Table 20-4	Tailings Permitted Capacity	20-10
Table 21-1	Initial Capital Costs	21-3
Table 21-2	Sustaining Capital Cost Summary	21-3
Table 21-3	Mine Capital Cost Summary (Inclusive of Initial Capital Cost)	21-4
Table 21-4	Mill Equipment, Engineering and Construction Costs	21-6
Table 21-5	Life of Mine Direct Operating Cost Summary	21-7
Table 21-6	Project Operating Cost by Area (not including initial capital production or costs)	21-8
Table 21-7	Flame and Moth Mine Operating Cost by Activity	21-9
Table 21-8	Bermingham Mine Operating Cost by Activity	21-10
Table 21-9	Summary of Mill Operating Costs	21-11
Table 21-10	Reagent Costs (based on 400 tonnes per day operation)	21-11
Table 21-11	Cost Component Summary with Study Metal Prices	21-12
Table 21-12	Cost Component Summary with Current (March 22, 2019) Metal Prices	21-13
Table 22-1	Summary of LOM Operating Costs (unit costs averaged over LOM)	22-3
Table 22-2	Treatment, Refining and Transport Cost Statistics (unit costs averaged over mine life)	22-3
Table 22-3	Inputs to the Economic Model	22-4
Table 22-4	Valuation Metrics	22-6
Table 22-5	LOM Production Summary	22-6
Table 22-6	Financial Result Summary	22-7
Table 22-7	Discounted Cash Flow Model	22-8
Table 22-8	Sensitivity Analysis Result Table	22-11

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Table 25-1	Concentrate Metal Production	25-3
Table 26-1	Summary of Mineral Resource not included in the mine plan as at January 1, 2019	26-1

List of Figures

Figure 1-1	View of the Existing District Mill Showing the Dry Stack Tailings Facility and Christal Lake	1-5
Figure 1-2	View of the Current Bellekeno Portal	1-10
Figure 1-3	View of the Current Bermingham Portal	1-10
Figure 1-4	Metal Price Projection	1-20
Figure 1-5	After-Tax 5% NPV Sensitivity	1-22
Figure 1-6	After-Tax IRR Sensitivity	1-23
Figure 4-1	Keno Hill Silver District Location Map	4-2
Figure 4-2	Keno Hill Silver District Mining Operations Area Overview	4-3
Figure 4-3	Alexco Quartz Mining Claim and Lease Holdings in the Keno Hill Silver District Excluding the Tailings Property	4-4
Figure 7-1	Regional Geology	7-2
Figure 7-2	Keno Hill Silver District Simplified Stratigraphy	7-3
Figure 7-3	Geology of the Keno Hill Silver District	7-5
Figure 7-4	Schematic Longsection of the 48 Vein Bellekeno Mine showing Workings	7-7
Figure 7-5	48 Vein Structures and Mineralogy, Bellekeno Mine	7-7
Figure 7-6	Vein-Fault Intercept in Drill Hole K-07-0114, Lucky Queen	7-8
Figure 7-7	Vein-Fault Intercept in Drill Hole K-12-0432, Flame & Moth	7-9
Figure 7-8	Vein-Fault Intercept in Drill Hole K-10-0306, in the Onek Deposit	7-10
Figure 7-9	Vein-Fault Intercept in Drill Hole K-15-0580, in the Bermingham Deposit	7-13
Figure 9-1	Keno Hill Silver Project Distribution of Surface Exploration Drill Holes	9-3
Figure 9-2	Underground Drill Hole Locations	9-4
Figure 10-1	Bellekeno Mine Long Section, 1986–1996 UKHM Core Drill Holes. view to northwest	10-3
Figure 10-2	Bellekeno Mine Long Section, Surface Core Drill Holes, 2006–2013. view to northwest	10-5

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Figure 10-3	Bellekeno Mine Long Section, Underground Core Drill Holes, 2006–2013. view to northwest	10-6
Figure 10-4	Photographic Section of 48 Vein Heterogeneity, Bellekeno Mine	10-7
Figure 10-5	Location of Surface Drill Holes Drilled from 2006 to 2010 at Lucky Queen. view to northwest	10-9
Figure 10-6	Location of Surface Drilling from 2010 to 2014 at Flame & Moth Used in Resource Estimation. view to northwest	10-10
Figure 10-7	Location of Surface and Underground Drilling from 2007 to 2013 at Onek. view to northwest	10-12
Figure 10-8	Location of Bermingham drilling from 2009 to 2018 (Oblique longitudinal view to northwest)	10-15
Figure 13-1	Source of Metallurgical Samples from Bermingham	13-3
Figure 13-2	Source Metallurgical Samples from Flame & Moth	13-4
Figure 13-3	Mineral Abundance of Bermingham Master Composite	13-6
Figure 13-4	Mineral Abundance of Flame & Moth and Lucky Queen Samples	13-8
Figure 13-5	Open Cycle Cleaner Flotation Test Results on Bermingham Master Composite Samples	13-11
Figure 13-6	Locked Cycle Flotation Tests Flowsheet on Bermingham Master Composite Samples	13-12
Figure 13-7	Locked Cycle Flotation Tests Flowsheet on Flame & Moth and Blended Samples	13-14
Figure 13-8	Metal Recoveries at Head Grades for Recovery Projection	13-18
Figure 14-1	Bellekeno Mine Long Section, Wireframes, Looking North-Northwest (top) and Looking South-Southeast (bottom)	14-11
Figure 14-2	Section of Lucky Queen Wireframes Looking Northwest	14-12
Figure 14-3	Vein Wireframes and Location of Surface Drilling at Flame & Moth Used in Resource Estimation, Section (Looking North-Northwest)	14-13
Figure 14-4	Long Section of Onek Wireframes Looking South	14-15
Figure 14-5	Long Section of Onek Wireframes Looking North	14-15
Figure 14-6	Bermingham Geological Model (Plan View)	14-17
Figure 14-7	Bermingham Geological Model (3D Isometric looking North East)	14-17
Figure 14-8	Cross-cutting Faults (View looking North West)	14-18
Figure 14-9	Scatter Plot of Lead Assay Results and Bulk Density Measurements	14-19
Figure 14-10	Pulp Versus Core SG Values	14-20
Figure 14-11	Correlation Between Bulk Density and Metal Content for Onek Veins	14-22

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Figure 14-12	Comparison of Core and Pulp Density Measurements for Onek	14-23
Figure 14-13	Comparison between Pulp and Core Density Measurements	14-24
Figure 14-14	Histogram of Sample Lengths for the Mineralized Zones for Bellekeno Mine	14-25
Figure 14-15	Histogram of Sample Lengths in the Mineralized Zones for Flame & Moth Deposit	14-26
Figure 14-16	Histogram of Sample Lengths within Onek Veins	14-27
Figure 14-17	Histogram of Sample Lengths within Bermingham Veins	14-28
Figure 14-18	Continuity of High Grade Ag Assays at High Grade Thresholds in Lightning Zone	14-30
Figure 14-19	Histograms and Probability Plots for Silver, Capped and Uncapped, Southwest Zone	14-34
Figure 14-20	Histograms and Probability Plots for Lead and Zinc, Capped and Uncapped, Southwest Zone	14-35
Figure 14-21	Normal Variography of Silver, Southwest Zone	14-36
Figure 14-22	Lognormal Variography of Silver, Southwest Zone	14-37
Figure 14-23	Normal Variography of Lead, Southwest Zone	14-38
Figure 14-24	Lognormal Variography of Lead, Southwest Zone	14-39
Figure 14-25	Normal Variography of Zinc, Southwest Zone	14-40
Figure 14-26	Lognormal Variography of Zinc, Southwest Zone	14-41
Figure 14-27	Histograms and Probability Plots for Silver, 99 Zone	14-42
Figure 14-28	Histograms and Probability Plots for Lead and Zinc, 99 Zone	14-43
Figure 14-29	Log Space Variograms for Capped Silver, 99 Zone	14-44
Figure 14-30	Log Space Variograms for Lead, 99 Zone	14-45
Figure 14-31	Log Space Variograms for Zinc, 99 Zone	14-46
Figure 14-32	Histograms and Probability Plots for Silver, East Zone	14-47
Figure 14-33	Histograms and Probability Plots for Lead, East Zone	14-48
Figure 14-34	Histograms and Probability Plots for Zinc, East Zone	14-49
Figure 14-35	Log space Variograms for Silver, East Zone	14-50
Figure 14-36	Q-Q Plot of Chip and Drill Hole Silver Assay Sample Data	14-51
Figure 14-37	Statistics of Ag Composite Grades in the mineralized zones	14-53
Figure 14-38	Statistics of Silver Composite Grades in the Mineralized Zones	14-53

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Figure 14-39	Statistics of Zinc Composite Grades in the Mineralized Zones	14-54
Figure 14-40	Modelled Directional and Downhole Correlograms for Vein 1 and Vein 1FW	14-57
Figure 14-41	Modelled Omnidirectional Correlograms for Vein 2	14-58
Figure 14-42	Comparison of ID2 and Average Sample Grades for Silver, Lead, and Zinc, 48 Vein, Southwest Zone	14-74
Figure 14-43	Comparison of ID2 and Average Sample Grades for Silver, Lead, and Zinc, 48 Vein, 99 Zone	14-75
Figure 14-44	Comparison of ID2 and Average Sample Grades for Silver, Lead, and Zinc, 48 Vein, East Zone	14-76
Figure 14-45	Grade Tonnage Curve for Bellekeno	14-77
Figure 14-46	Swath Comparison of ID2 and NN Estimation	14-78
Figure 14-47	Comparison of (a) Silver and (b) Zinc Block Estimates with Borehole Assay Data Contained Within Blocks in the Lightning Zone	14-80
Figure 14-48	Lightning Zone Declustered Average Silver Composite Grades Compared to Silver Block Estimates	14-81
Figure 14-49	Lightning Zone Declustered Average Zinc Composite Grades Compared to Zinc Block Estimates	14-81
Figure 14-50	Comparison of OK and ID2 Estimation for Onek	14-83
Figure 14-51	Silver Grade Tonnage Curve for Onek	14-85
Figure 14-52	Zinc Grade Tonnage Curve for Onek	14-85
Figure 14-53	Swath plot of silver grade for the Bear vein system	14-86
Figure 14-54	Swath plot of silver grade for the Footwall vein system	14-87
Figure 14-55	Comparison of block model silver grades to nearest neighbor model	14-88
Figure 14-56	Comparison of block model gold grades to nearest neighbor model	14-88
Figure 14-57	Comparison of block model lead grades to nearest neighbor model	14-89
Figure 14-58	Comparison of block model zinc grades to nearest neighbor model	14-89
Figure 16-1	Deposit Locations	16-2
Figure 16-2	Bermingham Zone and Mining Method Domains	16-4
Figure 16-3	Flame & Moth Mine Zone and Mining Method Domains	16-5
Figure 16-4	Cut and Fill Sequencing	16-12
Figure 16-5	(Downhole) Longhole Stoping	16-13
Figure 16-6	(Uphole) Longhole Stoping	16-14
Figure 16-7	Bellekeno Long Section	16-19

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Figure 16-8	Bellekeno Area Plan View	16-20
Figure 16-9	Flame & Moth Long Section	16-21
Figure 16-10	Flame & Moth and Mill Area Surface Layout	16-22
Figure 16-11	Bermingham Mine Isometric View	16-25
Figure 16-12	Bermingham Mine As Built and Surface Layout	16-26
Figure 16-13	Lucky Queen Isometric View	16-29
Figure 16-14	Lucky Queen Mine Plan View	16-30
Figure 16-15	Mined and Recovered Silver Oz Distribution by Mining Method	16-32
Figure 16-16	Ore and Waste Tonnes	16-32
Figure 16-17	Ore vs Precious Metal Grade	16-33
Figure 16-18	Ore vs Base Metal Grade	16-33
Figure 16-19	Mayo, YT Monthly Average Temperature	16-37
Figure 16-20	Flame & Moth Primary Airflow Schematic	16-38
Figure 16-21	Flame & Moth Project Ventilation Demand	16-39
Figure 16-22	BRM Primary Airflow Schematic – Mining Plus 2019	16-40
Figure 16-23	BRM Project Ventilation Demand	16-41
Figure 16-24	Lucky Queen Primary Airflow Schematic	16-42
Figure 16-25	Lucky Queen Project Ventilation Demand	16-43
Figure 17-1	Source of Mill Feed in Tonnes per Year	17-3
Figure 17-2	Simplified Process Flow Diagram of the Mill Complex	17-8
Figure 18-1	Site Layout - Keno District Mill and Flame & Moth	18-3
Figure 18-2	Existing Infrastructure at the Bellekeno East Portal	18-5
Figure 18-3	Site Layout at Bellekeno	18-6
Figure 18-4	Existing Infrastructure at Lucky Queen Mine Portal	18-7
Figure 18-5	Site Layout at Lucky Queen	18-8
Figure 18-6	Existing Mill Site Infrastructure	18-9
Figure 18-7	Existing Infrastructure at the Bermingham Portal	18-10

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Figure 18-8	Site Layout at Bermingham	18-11
Figure 18-9	Bermingham Decline As built and Mine Plan	18-12
Figure 20-1	Aerial view of DSTF at Keno Hill	20-9
Figure 21-1	Mine Capital Cost Breakdown by Mine Operations	21-5
Figure 21-2	LOM Capital Cost Summary by Mine	21-5
Figure 22-1	Metal Price Projection - Mining Plus, 2019	22-1
Figure 22-2	Cumulative Cash Flow After Tax ($ ‘000) - Mining Plus, 2019	22-5
Figure 22-3	Revenue Distribution of Metals - Mining Plus, 2019	22-5
Figure 22-4	After-Tax 5% NPV Sensitivity - Mining Plus, 2019	22-12
Figure 22-5	After-Tax IRR Sensitivity - Mining Plus, 2019	22-13

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List of Acronyms and Abbreviations

AEG	Alexco Environmental Group Inc.
Ag	Silver
AgEq	Silver Equivalent
AGAT	AGAT Laboratories
Ai	Bond Abrasion Index
AISC	All In Sustaining Cost
AKHM	Alexco Keno Hill Mining Corp.
Alexco	Alexco Resource Corp.
ALS	ALS Laboratories
ANFO	ammonium nitrate/fuel oil
ARSA	Amended and Restated Subsidiary Agreement
Au	Gold
BK	Bellekeno mine
BM	Bermingham mine
BWI	Bond Ball Mill Work Index
°C	degrees Celsius
C&F	cut and fill
CBD	core bulk density
CCBA	Comprehensive Cooperation and Benefits Agreement
CDN$	Canadian Dollar
CER	Christal Exhaust Raise
cfm	cubic feet per minute
CIM	Canadian Institute of Mining, Metallurgy and Petroleum
CIRNAC	Crown Indigenous Relations and Northern Affairs Canada
cm	centimeter
CRF	cemented rock fill
DIAND	Department of Indian Affairs and Northern Development
DSTF	dry stack tailings facility
ERDC	Elsa Reclamation & Development Company Ltd.
FEM	finite element method
FM	Flame & Moth Mine
FNNND	First Nation of Na-Cho Nyäk Dun
ft	foot
FW	Foot Wall
g	grams
g/t	grams per tonne
H	Height
HW	Hanging Wall
ICP	inductively coupled plasma
ID2	inverse distance squared
IRR	internal rate of return

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k	thousand
KHSD	Keno Hill Silver District
km	kilometer
koz	thousand troy ounces
kW	kilowatt hours
L	Length
lbs	Pounds
LER	Lightning Exhaust Raise
LH	longhole stoping
LHDs	load-haul-dumps
LHOS	long hole open stoping
LOM	life of mine
LQ	Lucky Queen mine
L/S	litres per second
m	meter
M	Million
MCF	mechanized cut and fill
Mining Plus	Mining Plus Canada Consulting Limited
mm	millimeter
m/s	meter per second
m3/s	cubic meters per second
MSO	mineable shape optimizer
MW	Megawatt
N-AML	Non-acid metal leaching
NPV	net present value
NSR	net smelter return
OK	ordinary kriging
oz	Troy Ounce
P-AML	Potential acid metal leaching
PAG	potential acid generation
Pb	Lead
PBD	pulp bulk density
PEA	Preliminary Economic Assessment
PFS	Preliminary Feasibility Study
ppm	part per million
PRA	Inspectorate American Corporation
PWC	PriceWaterhouse Coopers
QP	Qualified Persons
RCP	Reclamation and Closure Plan
RPA	Roscoe Postle Associates Inc.
RQD	Rock Quality Designation
RWI	Bond Rod Mill Work Index
S&A	Starkey & Associates

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SGS	SGS Canada Inc.
sh, t	short ton
Silver Wheaton	Silver Wheaton Corp.
SPA	Silver Purchase Agreement
SRK	SRK Consulting Canada
SRM	standard reference material
t	Metric Tonnes
tpd	tonnes per day
tpy	tonnes per year
TYC	Treadwell Yukon Company Limited
UKHM	United Keno Hill Mines Ltd.
URF	unconsolidated waste rock fill
US$	United States Dollar
µm	micrometer
WGM	Watts Griffith and McQuat
WPM	Wheaton Precious Metals Corp.
yd	yard
YESAA	Yukon Environmental & Socio-economic Assessment Act
YESAB	Yukon Environmental & Socio-economic Assessment Board
YG	Government of Yukon
Zn	Zinc

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Table of Contents

1.	Summary		1-1
1.1	Executive Summary		1-1
1.2	Technical Summary		1-4
	1.2.1	Property Description and Ownership	1-4
	1.2.2	History	1-5
	1.2.3	Geology	1-6
	1.2.4	Exploration and Drilling	1-7
	1.2.5	Mineral Resource Estimate	1-7
	1.2.6	Mineral Reserve Estimate	1-9
	1.2.7	Mining Methods	1-10
	1.2.8	Metallurgical Testing and Mineral Processing	1-14
	1.2.9	Project Infrastructure	1-16
	1.2.10	Market Studies and Contracts	1-16
	1.2.11	Environmental Studies, Permitting, and Social or Community Impact	1-16
	1.2.11.1	Environment and Water Quality	1-17
	1.2.11.2	Environmental Assessment and Permitting	1-17
	1.2.11.3	Community and First Nations	1-17
	1.2.11.4	Mine Reclamation and Closure	1-17
	1.2.12	Capital and Operating Costs	1-18
	1.2.13	Economic Analysis	1-19
	1.2.14	Cash Flow Analysis	1-20
	1.2.15	Sensitivity Analysis	1-20
1.3	Recommendations		1-23

List of Tables

Table 1-1  Keno Hill Mineral Resources (SRK, 2019)	1-2
Table 1-2  Summary of Mineral Resource Estimates	1-8
Table 1-3  Mineral Reserves, Alexco Resource Corp. – Keno Hill Silver District Project	1-9
Table 1-4  Mine Design Criteria – Cutoff Values	1-12
Table 1-5  Mine Production Summary	1-13
Table 1-6  Expected Metallurgical Performance1 – Recovery to Concentrates	1-15
Table 1-7  Expected Metallurgical Performance1 – Concentrates	1-15

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Table 1-8  Life of Mine Direct Operating Cost Summary	1-19
Table 1-9  Results of Sensitivity Analysis	1-21

List of Figures

Figure 1-1  View of the Existing District Mill Showing the Dry Stack Tailings Facility and Christal Lake	1-5
Figure 1-2  View of the Current Bellekeno Portal	1-10
Figure 1-3  View of the Current Bermingham Portal	1-10
Figure 1-4  Metal Price Projection	1-20
Figure 1-5  After-Tax 5% NPV Sensitivity	1-22
Figure 1-6  After-Tax IRR Sensitivity	1-23

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1. Summary

1.1 Executive Summary

Mining Plus Canada Consulting Ltd. (Mining Plus) was retained by Alexco Resource Corp. (“Alexco”) to prepare a Preliminary Feasibility Study (“PFS” or the “Study”) and Independent Technical Report (the “Technical Report”) on the Keno Hill Silver Project (the “Project”), located in the Yukon Territory, Canada. The purpose of this report is to disclose the results of the PFS. This Technical Report conforms to National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”).

Alexco is a public company with its headquarters in Vancouver, B.C. Alexco, through wholly owned subsidiaries, owns the mineral rights for the Keno Hill Silver District (“KHSD” or the “District”) following its successful bid for the assets of United Keno Hill Mines Ltd in 2006. Alexco acquired the properties with all pre-existing liabilities subject to indemnification from the Federal Government of Canada.

The Project contemplates the conventional mining and milling of silver-lead-zinc ore from four deposits in the District. There is an existing mill which will process a high grade silver-lead-zinc ore from four deposits across the District. Over the eight year mine life contemplated in this PFS, the mines will produce 1.18 million (“M”) tonnes of mill feed (the probable Mineral Reserves) at an average 805 grams per tonne (“g/t”) silver (“Ag”), 2.98% lead (“Pb”), 4.13% zinc (“Zn”) and 0.34 g/t gold (“Au”). Following commissioning, the mill will produce two concentrates; a high grade lead-silver concentrate averaging 15,890 g/t Ag, 54% Pb, and 3.7 g/t Au, and a zinc-silver concentrate averaging 649 g/t Ag and 53% Zn. The annualized silver product in concentrate is 4.0 M ounces (“oz”).

The KHSD is a historic mining district, with the first production recorded in 1913. Since that time, an estimated 200 million ounces of silver has been produced from over 30 small mines across the district. Due to the high grade, steeply dipping veins which host the mineralization, the historic mines were typically small underground operations “chasing the vein”, followed by open pit operations beginning in the 1970’s to recover the crown pillars.

In the late 1980’s, the then-owner United Keno Hill Mining Company (“UKHM”) declared bankruptcy and the site was eventually declared abandoned in 2001, reverting to the Government of Canada. Alexco was the successful bidder in a commercial sale and purchase process and in 2006 became the 100% owner of the assets. Through this transaction, Alexco has the right to mine the deposits and the obligation to develop, permit and implement a reclamation and closure plan for the legacy liabilities across the District. Alexco is fully indemnified for the historic liabilities.

Alexco has been actively developing the Keno Hill Silver District since 2006. Alexco built a new mill complex in 2010 which operated for three years, processing material from the Bellekeno Mine. Since suspending mining operations in 2013, Alexco has maintained the District on a care and maintenance status and focused on additional exploration leading to increases in the estimated Mineral Resources for the Bermingham and Flame & Moth deposits. In 2018, Alexco completed over 1,000 meters (“m”) of underground development work including an advanced exploration decline at the Bermingham deposit and a new portal and ramp at the Flame & Moth deposit.

The estimated Mineral Resource includes the Bellekeno, Lucky Queen, Flame & Moth, Onek, and Bermingham. The total estimated Mineral Resource inclusive of estimated probable Mineral Reserves is shown in Table 1-1.

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Table 1-1 Keno Hill Mineral Resources (SRK, 2019)

Category	Tonnes		Ag (g/t)		Au (g/t)		Pb (%)		Zn (%)		Contained Ag (Oz)
Indicated		3,875,800		594		0.34		2.0		5.3		74,034,000
Inferred		1,660,600		455		0.20		1.6		3.7		24,271,000

Notes:

1. All Mineral Resources are classified following the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) of NI 43-101.

2. Indicated Mineral Resources are inclusive of probable Mineral Reserves estimates.

3. Mineral Resources are not mineral reserves and do not have demonstrated economic viability. All numbers have been rounded to reflect the relative accuracy of the estimates.

4. The Mineral Resource estimates comprising Bellekeno, Lucky Queen and Flame & Moth, Onek and Bermingham are supported by disclosure in the news release dated March 28, 2019 entitled “Alexco Announces Positive Pre-Feasibility Study for Expanded Silver Production at Keno Hill Silver District” and this Technical Report filed on SEDAR dated February 13, 2020 with an effective date of March 28, 2019.

5. The Mineral Resource estimates for the Bermingham and Bellekeno deposits are based on mineral resource estimates having an effective date of March 28, 2019. The Bellekeno deposit has been depleted to reflect all mine production from the Bellekeno mine to date.

6. The mineral resource estimate for the Lucky Queen, Flame & Moth and Onek deposits have an effective date of January 3, 2017.

The mine plan for this Project comprises mining from four deposits (also referred to as “mines”); Bermingham, Flame & Moth, Bellekeno, and Lucky Queen. The majority of the mill feed will come from Bermingham and Flame & Moth (over 90%). Two mines will be operating at any given time, with the exception of the initial three month ramp up period of ore from Bellekeno only.

The mine plan is based on conventional mining methods. Based on the orientation, width of the veins, review of historic mining in the District, and geotechnical information, a combination of mechanized overhand cut and fill, and longhole stoping with cemented rock fill have been selected as the appropriate mining methods for all four deposits. The deposits require the use of mining methods that can adequately support the vein and that are flexible and selective while minimizing the direct mining costs. The backfill is planned to be a mixture of waste rock fill and tailings from the dry stack tailings facility (“DSTF”) with cement added as required.

The estimated probable Mineral Reserves calculated by the Qualified Person (from Mining Plus) for this Project are 1.18 M tonnes grading 805 g/t Ag, 2.98% Pb, 4.13% Zn and 0.34 g/t gold for an overall silver equivalent (“AgEq”) grade of 1,136 g/t AgEq as of March 28, 2019.

The District mill will be recommissioned at the currently permitted average throughput of 400 tonnes per day (“tpd”) (157,000 tonne per year (“tpy”)) with a planned increase in throughput in Year 3, for an overall life-of-mine (“LOM”) average throughput of 430 tpd. The mill is a conventional flotation mill producing two concentrates. Tailings are thickened, filtered, and placed in a conventional DSTF, which will be progressively reclaimed.

The Bellekeno, Flame & Moth and Lucky Queen mines have all permits and authorizations in place to commence full scale mine production. Although licences are also in place for Onek, there are currently no plans for production from this deposit. The Bermingham deposit requires a final licence amendment, expected in the third quarter of 2019, to commence production. The mill and tailings facilities are fully permitted.

The Project risks are substantially minimized compared to a greenfields project by a combination of Alexco’s previous operations at Keno Hill, the recently completed underground development and drilling, the existing and well maintained infrastructure both onsite and offsite (including grid power) and the safe jurisdiction of the Yukon.

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The initial capital cost is $23.2 M. This initial capital (pre-production prior to achieving positive cash flow) comprises $17.9 M of mine development and PP&E and $5.3 M of net working capital for the initial construction and ramp up period of five months. The LOM sustaining capital is estimated at $76.5 M, primarily for ongoing mine development.

The direct operating costs for the Project are estimated at a total of $362 M or $312 per tonne of ore. These comprise $226 M direct mine costs, $70 M of direct mill costs, and $67 M for site general and administrative (“G&A”) costs (excluding corporate). However corporate costs are included in calculation of all-in sustaining costs (“AISC”). The AISC is a non-GAAP financial measure that does not have any standardized meaning. Alexco has adopted the practice of calculating this performance measure as the net cost of producing an ounce of silver (our primary payable metal) after deducting revenues gained from incidental by-product production.

Revenue derives from selling four metals (silver as main product and lead, zinc and gold as by-products), reporting to two concentrates; a lead-silver concentrate and a zinc-silver concentrate. The Project will produce a total of 58,200 tonnes of lead-silver concentrate and 67,800 tonnes of zinc-silver concentrate over the eight year mine life. Over the LOM, the payable metals produced in these concentrates total 27.2 M oz Ag, 65.4 M pounds (“lbs”) Pb, 67.2 M lbs Zn and 4,707 oz Au.

Metal pricing was based on information from external sources. The LOM net revenue (“Net Smelter Return”) is $652 M and the total cash flow is at $174 M. These are based on metal pricing assumptions as follows:

· Silver ranging from US$15.75/oz in 2019 to the long-term price of US$18.25/oz;

· Zinc: US$1.25/lb in 2019 and 2020, and US$1.22/lb thereafter;

· Lead: US$0.96/lb in 2019, and US$1.00/lb thereafter; and

· Gold: US$1,275/oz in 2019, US$1,315/oz in 2020 and US$1,325/oz thereafter.

The project economics show this to be a robust project with low capital and high returns with a pre-tax net present value at a 5% discount rate (“NPV₅”) of $136.2 M and after-tax NPV₅ of $101.2 M. The pre-tax internal rate of return (“IRR”) is 84% and after-tax IRR is 74%. Considering the Project on a stand-alone basis, the undiscounted after-tax cash flow totals $129.3 million over the mine life. Simple payback occurs approximately two years from start of production, approximately 26 months after the end of the initial capital period).

The brownfields nature of the Project means a relatively rapid timeline to full production of six months total. The pre-production period is expected to require up to three months, during which the mill modifications and construction of the additional surface infrastructure (expansion of camp, offices) will be completed. Once the permitting process is completed, underground development will continue and the mill will be re-commissioned. The ramp up to full production in the mill is expected to take three months.

Exploration will continue at Keno Hill, to expand the current resources and in the short term is particularly focused on the Bermingham deposit. Alexco plans approximately 7,500 m of surface diamond drilling at Bermingham and other areas in Galena Hill in 2019; this is not included in the Project costs summarized in this Technical Report. It is recognized that there remains considerable estimated Mineral Resources in the indicated category after extraction of the probable Mineral Reserves considered herein.

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1.2 Technical Summary

1.2.1 Property Description and Ownership

The Keno Hill Silver Project is located on Alexco’s Keno Hill Silver District (KHSD) in the central Yukon. The site is located approximately 350 km north of Whitehorse, Yukon, Canada in central Yukon and is in the traditional territory of First Nation of Na-Cho Nyäk Dun (FNNND). Access to the property is via the Alaska, Klondike and Silver Trail highways from Whitehorse to Mayo (407 km) and an all-weather gravel road northeast from Mayo to Elsa (45 km); a total distance of 452 km.

Alexco Keno Hill Mining Corp. (AKHM) is a wholly-owned subsidiary of Alexco and has been incorporated for operation of mineral extraction and development in the KHSD. Elsa Reclamation and Development Company Ltd. (ERDC), a wholly owned subsidiary of Alexco, continues to advance the development and eventual implementation of the District Wide Closure Plan (ESM Reclamation Plan) which addresses the historic environmental liabilities of the district from past mining activities. The potential liabilities associated with the historic operations in the KHSD are indemnified by the Government of Canada under the terms and conditions of the commercial agreement subject to the requirement for ERDC to develop, permit and implement the site Reclamation Plan. The Reclamation Plan for the historic liabilities is currently being reviewed by the Yukon Environmental and Socio-economic Assessment Board (YESAB).

Alexco has been actively developing the KHSD since 2006 under this unique contractual arrangement with the Government of Canada whereby it can enter into production at historic and newly discovered deposits within the district while it undertakes reclamation activities to remediate historic environmental impacts.

The KHSD quartz mining claims and quartz mining leases are held by one of two wholly-owned subsidiaries of Alexco: ERDC or AKHM. The current property ownership, access and licences cover the areas included in the geological model, Mineral Resources and Mineral Reserves in this study.

Alexco has exploration, maintenance, and camp facilities near the location of the historic mining town of Elsa, which is located just off the Silver Trail Highway, and administration, mill and mine facilities at the mill complex located near Keno City, as shown in Figure 1-1. The KHSD is well connected by a network of public and private gravel roads. A large number of roads constructed for past mining operations are still serviceable. The KHSD is supplied with electrical power by Yukon Energy Corporation from two hydroelectric plants near Mayo.   The area is covered by NTS map sheets 105M/13 and 105M/14.

The central Yukon is characterized by a subarctic continental climate with cold winters and warm summers. Exploration and mining work can be carried out year-round. Annual precipitation averages 28 cm. Half of this amount falls as snow, which starts to accumulate in October and remains into May or June. The landscape surrounding the KHSD is characterized by rolling hills and mountains with a relief of up to 1,600 m. The highest elevation is Keno Hill at 1,975 m. Slopes are gentle except the north slopes of Keno Hill and Sourdough Hill.

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Source: 2018 photo from Alexco files

Figure 1-1 View of the Existing District Mill Showing the Dry Stack Tailings Facility and Christal Lake

1.2.2 History

The Keno Hill mining camp area has a rich history of exploration and mining dating back to the beginning of the 1900s. Notable periods of interest in the historic evolution of the Keno Hill mining camp included: :

· Early gold prospecting near Mayo, particularly after the Klondike gold rush of 1898;

· The first silver was found in 1903 and small-scale mining commenced in 1913 at the Silver King mine;

· The end of the First World War and high silver prices led to renewed exploration and production activity by the Yukon Gold Company and later Keno Hill Limited;

· In the early 1920s, the Treadwell Yukon Company Limited (TYC) started mining.

· The 1950s proved to be the most successful period, starting in the early 1960s, new discoveries, and additions to mineral inventory were less than production.

· After the Second World War there was a sharp decline in activity in the Keno Hill camp until a new company, Keno Hill Mining Company Ltd., later United Keno Hill Mines Ltd. (UKHM), purchased all TYC properties, started production and sparked increased exploration activity. Production was primarily from underground mining, following the silver veins;

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· The peak activity occurred in the 1950s and early 1960s, with new discoveries across the district adding to mineral inventory and production from the larger underground complexes such as the Hector Calumet camp;

· Open pit mining began in the late 1970’s, mainly to recover crown pillars; from 1982 to 1985 Sadie-Ladue and Shamrock were mined on a small scale basis, and from 1989 to 1990 Shamrock, Silver King, Hector-Calumet, Lucky Queen, and Keno were mined;

· UKHM stopped production from the Keno Hill District permanently in early 1989; and

· The mine was declared abandoned in 2001 by the Government of Canada and the assets reverted to the Crown.

Alexco acquired the KHSD in 2006 and produced from Bellekeno mine from 2011 to 2013. Exploration has resulted in development and identification of the Lucky Queen, Flame & Moth, Onek, and Bermingham deposits.

1.2.3 Geology

The Keno Hill mining camp is located in the northwestern part of the Selwyn Basin in an area characterized by the Robert Service and Tombstone Thrust Sheets that are overlapping and trend northwest. The area is underlain by Upper Proterozoic to Mississippian rocks that were deposited in a shelf environment during the formation of the northern Cordilleran continental margin. The KHSD geology is dominated by the Mississippian Keno Hill Quartzite comprising the Basal Quartzite Member and conformably overlying Sourdough Hill Member. The unit is overthrust in the south by the Upper Proterozoic Hyland Group Yusezyu Formation and is conformably underlain in the north by the Devonian Earn Group (McOnie and Read, 2009).

Mineralization is of the polymetallic silver-lead-zinc vein type that typically exhibits a succession of hydrothermally precipitated minerals from the vein wall towards the vein centre. However, in the KHSD, multiple pulses of hydrothermal fluids or fluid boiling, probably related to repeated reactivation and breccia formation along the host fault structures, have formed a series of vein stages with differing mineral assemblages and textures. Supergene alteration may have further changed the nature of the mineralogy in the veins. Much of the supergene zone may have been removed due to glacial erosion.

In general, common gangue minerals include (manganiferous) siderite and, to a lesser extent, quartz and calcite. Silver predominantly occurs in argentiferous galena and argentiferous tetrahedrite (freibergite). In some assemblages, silver is also found as native silver, in polybasite, stephanite, and pyrargyrite. Lead occurs in galena and zinc in sphalerite, which at the KHSD can be either an iron-rich or iron-poor variety. Other sulphides include pyrite, pyrrhotite, arsenopyrite, and chalcopyrite.

The Keno Hill mining camp has long been recognized as a polymetallic silver-lead-zinc vein district with characteristics possibly similar to other well-known mining districts in the world. Examples of this type of mineralization include the Kokanee Range (Slocan), British Columbia; Coeur d’Alene, Idaho; Freiberg and the Harz Mountains, Germany; and Príbram, Czech Republic.

In the KHSD, the largest accumulation of minerals of economic interest occur in areas of increased hydrothermal fluid flow in structurally prepared competent rocks such as the Basal Quartzite Member and Triassic Greenstone. Incompetent rocks like phyllites tend to produce fewer and smaller (if any) open spaces, limiting fluid flow and resulting mineral precipitation.

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1.2.4 Exploration and Drilling

The exploration conducted by Alexco since 2005 is the first comprehensive exploration effort in the KHSD since 1997. The work has included a program of geologic data compilation, aerial geophysical surveying, and surface core drilling. Alexco converted the historic maps and documents from nearly 70 years of mining in the district to digital form. The digital data has been used to construct district scale maps and three-dimensional (3D) mine models.

Since acquiring the Keno Hill property, Alexco has completed a total of 737 surface diamond drill holes for a total of 189,529 m. In addition, a total of 431 underground holes for 29,673 m has also been completed, mainly at Bellekeno, but also includes 24 holes for 4,213 m HQ drilled in 2018 from the Bermingham exploration decline.

Exploration drilling by Alexco has primarily been conducted to test targets immediately adjacent to historic resource areas and, to a lesser extent, to evaluate targets based on interpretation of exploration data. The objective has been to locate structurally controlled vein mineralization.

Standard logging and sampling conventions are used to capture information from the drill core. Since 2010 all core logging data has been directly digitally entered to the geology database with data including comments captured in separate tables including lithology, structure, mineralization type, intensity of oxidation, phases and abundance of veining, alteration, stratigraphy, and geotechnical.

1.2.5 Mineral Resource Estimate

Definitions for resource categories used in this report are consistent with the CIM definitions incorporated by reference into NI 43-101. The resource evaluations reported herein are a reasonable representation of the global polymetallic Mineral Resources in the Bellekeno, Lucky Queen, Flame & Moth, Onek, and Bermingham deposits given the current level of sampling.

The Mineral Resources have been estimated in conformity with the generally accepted CIM Estimation of Mineral Resources and Mineral Reserves Best Practices Guidelines (CIM, 2003) and are reported in accordance with NI 43-101. Mineral resources are not mineral reserves and have not demonstrated economic viability.

In the opinion of the QPs from SRK Consulting (Canada) Inc. (SRK), the resource evaluations reported herein are a reasonable representation of the global polymetallic Mineral Resources in the Bellekeno, Lucky Queen, Flame & Moth, Onek, and Bermingham deposits given the current level of sampling. The databases used to update the Bellekeno mine and Flame & Moth mineral resource estimates were audited by the Qualified Persons (QPs). The QPs are of the opinion that the current drilling information is sufficiently reliable to interpret with confidence the boundaries for the polymetallic mineralization and that the assay data are sufficiently reliable to support mineral resource estimation.

Mintec’s MineSight software was used to construct the geological solids for all five deposits. The Lucky Queen and Onek, geological models and database were imported into GEMS format Access databases for geostatistical analysis, block model construction, metal grades estimates, and the tabulation of the Mineral Resources. Maptek’s Vulcan software was used for geostatistical analysis and block model estimation for the Bermingham mineral resource estimate. Isatis was used for geostatistical analysis and variography, block model construction, estimating metal grades, and mineral resource tabulation for Bellekeno. The Lucky Queen, Flame & Moth, and Onek block models were estimated using GEMS.

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Methodology for the five deposits employed the following procedures:

· Database compilation and verification;

· Construction of wireframe models for the boundaries of the polymetallic mineralization;

· Definition of resource domains;

· Estimation of bulk density;

· Data conditioning (compositing and capping) for geostatistical analysis and variography;

· Block modelling and grade interpolation;

· Resource classification and validation;

· Assessment of “reasonable prospects for economic extraction” and selection of appropriate cutoff grades; and

· Preparation of the Mineral Resource Statement.

A summary of the mineral resource estimate for the Project is shown in Table 1-2.

Table 1-2 Summary of Mineral Resource Estimates

Category1,2,3	Deposit		Tonnes		Ag (g/t)		Au (g/t)		Pb  (%)			Zn (%)			Contained Ag (oz)
Indicated		Bellekeno2,4&5		262,000		585		n/a		3.5	%		5.3	%		4,928,000
		Lucky Queen2,4&6		132,300		1,167		0.2		2.4	%		1.6	%		4,964,000
		Flame & Moth2,4&6		1,679,000		498		0.4		1.9	%		5.3	%		26,883,000
		Onek4&6		700,200		191		0.6		1.2	%		11.9	%		4,300,000
		Bermingham2,4&5		1,102,300		930		0.1		2.4	%		1.7	%		32,959,000
Total Indicated				3,875,800		594		0.34		2.0	%		5.3	%		74,034,000
Inferred		Bellekeno4&5		243,000		428		n/a		4.1	%		5.1	%		3,344,000
		Lucky Queen4&6		257,900		473		0.1		1.0	%		0.8	%		3,922,000
		Flame & Moth4&6		365,200		356		0.3		0.5	%		4.3	%		4,180,000
		Onek4&6		285,100		118		0.4		1.2	%		8.3	%		1,082,000
		Bermingham4&5		509,400		717		0.2		1.7	%		1.5	%		11,743,000
Total Inferred				1,660,600		455		0.2		1.6	%		3.7	%		24,271,000

Notes:

1. All Mineral Resources are classified following the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) of NI 43-101.

2. Indicated Mineral Resources are inclusive of probable Mineral Reserves estimates.

3. Mineral resources are not Mineral Reserves and do not have demonstrated economic viability. All numbers have been rounded to reflect the relative accuracy of the estimates.

4. The Mineral Resource estimates comprising Bellekeno, Lucky Queen and Flame & Moth, Onek and Bermingham are supported by disclosure in the news release dated March 28, 2019 entitled “Alexco Announces Positive Pre-Feasibility Study for Expanded Silver Production at Keno Hill Silver District” and this Technical Report filed on SEDAR dated February ##, 2020 with an effective date of March 28, 2019.

5. The mineral resource estimate for the Bermingham and Bellekeno deposits are based on mineral resource estimates having an effective date of March 28, 2019. The Bellekeno deposit has been depleted to reflect all mine production from the Bellekeno mine to date.

6. The mineral resource estimate for the Lucky Queen, Flame & Moth and Onek deposits have an effective date of January 3, 2017.

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1.2.6 Mineral Reserve Estimate

The Mineable Shape Optimizer (MSO) tool was used to create mineable shapes using the NSR values coded into the block models. The results generated from the MSO process were used as guidance to generate detailed development layouts and crosscut designs. The economic viability of all stope blocks and levels were tested to ensure that all the probable Mineral Reserves are economically viable.

The Mineral Reserves (Table 1-3) show the total Mineral Reserves for the Keno Hill Silver District; all Mineral Reserves are probable Mineral Reserves. External dilution and mineable recovery has been applied to the Mineral Reserves. Please note that rounding of tonnes, average grades, and contained metal may result in apparent discrepancies with totals rounded.

Table 1-3 Mineral Reserves, Alexco Resource Corp. – Keno Hill Silver District Project

												Contained		Contained
												Metal		Metal		Contained		Contained
						Pb		Zn		Au		(000 oz		(000 oz		Metal		Metal
Deposit3	Category	Tonnes		Ag (g/t)		(%)		(%)		(g/t)		Ag)		Au)		(M Ibs Pb)		(M Ibs Zn)
Bellekeno	Proven	-		-		-		-		-
	Probable		40,109		843.1		11.79		6.31		-		1,087		-		10		6
Lucky Queen	Proven		-		-		-		-		-		-				-		-
	Probable		70,717		1,244.39		2.63		1.38		0.12		2,829		-		4		2
Flame and Moth	Proven		-		-		-		-		-		-				-		-
	Probable		704,211		671.95		2.71		5.73		0.49		15,214		11		42		89
Bermingham	Proven		-		-		-		-		-		-				-		-
	Probable		362,343		972.02		2.59		1.32		0.13		11,324		2		21		11
Total	Proven		-		-		-		-		-		-				-		-
	Probable		1,177,380		804.51		2.98		4.13		0.34		30,454		13		77		107

Notes:

1. Mineral Reserves are reported herein based on an NSR cutoff value using estimated metallurgical recoveries, assumed metal prices and smelter terms, which include payable factors, treatment charges, penalties, and refining charges

2. Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounces

3. The Bellekeno, Lucky Queen, Flame & Moth and Bermingham deposits are incorporated into the current mine plan supported by disclosure in the news release dated March 28, 2019 entitled “Alexco Announces Positive Pre-Feasibility Study for Expanded Silver Production at Keno Hill Silver District”.

4. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content.

The Mineral Reserves identified comply with CIM definitions and standards for a NI 43-101 technical report. Detailed information on mining, processing and other relevant factors are contained in the following sections and combined demonstrate that the KHSD Project is an economically viable project.

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1.2.7 Mining Methods

The project contains four separate deposits: Bellekeno, Bermingham, Flame & Moth, and Lucky Queen. All are characterized by high-grades and narrow vein widths. A photo of the existing Bellekeno portal is shown in Figure 1-2, and similarly of the current Bermingham portal in Figure 1-3.

Source: 2018 photo from Alexco files

Figure 1-2 View of the Current Bellekeno Portal

 

Source: 2-18 photo from Alexco files

Figure 1-3 View of the Current Bermingham Portal

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The KHSD is historically known for locally challenging ground conditions encountered that limit the applicable mining methods to fully supported methods with limited spans, such as cut and fill or very small scale longhole. For most of its historic mining life, the most successful method was square set stoping with timber.

Historical mining methods used in the KHSD have included cut and fill, small scale longhole stoping, shrinkage stoping, and square set stoping. The veins typically have dips around 70 to 80 degrees but vary between deposits from approximately 50 degrees at Lucky Queen to 80 degrees at Flame & Moth.

Numerous geotechnical studies have been carried out on the KHSD most recently by Jacobs Engineering (Jacobs, 2019). Geotechnical data for this study was only available for the Flame & Moth and Bermingham deposits which comprise approximately 90% of the PFS mill feed. Operational experience gained during previous production mining at the Lucky Queen and Bellekeno deposits has been used to guide (but not directly influence) the development of geotechnical mine design parameters for the PFS. At a feasibility level the geotechnical conditions of the Lucky Queen and Bellekeno would need to be verified.

To understand the ground conditions at the KHSD Project, geotechnical domains were created for the BM and FM deposits. Preliminary geotechnical parameters were assessed using major lithology types as identified by Alexco geology personnel. The geotechnical domains are outlined below on which ground support designs have been based:

· Domain 1: Quartzite (waste development);

· Domain 2 Schist (waste development);

· Domain 3: Faults (waste and production development); and

· Domain 4: Mineralization (production development).

Based on the estimated rock mass classification Q values, ground support classes were developed for standard lateral development and production drifts for the Flame & Moth and Bermingham deposits. Mining of the Lucky Queen and Bellekeno deposits will exploit existing underground development. For this study, previously used ground support standards or the standards outlined for the Flame & Moth and Bermingham deposits (whichever provides greater capacity) will be used in the limited additional development that is planned. The ground support uses conventional technology; a combination of shotcrete, rock bolts and mesh.

In general, the infrastructure and development excavations are open for the long-term, and support has been designed accordingly. The infrastructure has been designed to avoid areas with potential poor ground conditions; in some situations, this is unavoidable, and support will be increased to provide long term stability.

The mine design strategy for the Project was to design as many areas as practical using small scale longhole mining methods while planning mechanized overhand cut and fill for areas where ground conditions were poor, or where the combination of vein dip and true width was not compatible with longhole stoping methods. A 3D design of the development and stope shapes was completed for all four deposits using Deswik Software.

Based on the orientation, width of the veins, review of historic mining in the district, and geotechnical information, a combination of mechanized overhand cut and fill, and longhole stoping with cemented rock fill has been selected as the appropriate mining methods for all four deposits. The deposits require the use of mining methods that can adequately support the vein and that are flexible and selective while minimizing the direct mining costs. The backfill is planned to be a mixture of waste rock fill and tailings from the DSTF with cement added as required.

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For the majority of the mine life two deposits will be providing mill feed at all times. The only exceptions are early in the mine life when only the Bellekeno mine will be producing the mill feed and late in the mine life. There will be a 10-month development period at Flame & Moth and Bermingham with steady state production being reached in Year 2 of the 8-year mine life. Steady state production over the 8-year mine life will average about 160,000 tonnes per annum.

Revenue comes from selling four metals (silver as main product and lead, zinc and gold as by-products), reporting to two concentrates; a lead-silver concentrate and a zinc-silver concentrate. Stope shapes and mining areas were created and manually validated based upon an NSR value per tonne cutoff of $339. This NSR cutoff value was calculated by using the initial operating cost estimate. Mining recovery was applied at 95% for Bellekeno, Flame & Moth, Bermingham and Lucky Queen which is in line with Alexco’s historic operational experience. All stope shapes and mining areas were reviewed to remove any unprofitable areas.

To maximize project value a higher cutoff value was selected on a mine-by-mine basis. This accelerates payback and eliminates the scheduling of marginal or near marginal tonnes. Based on the directive of Alexco management to target minimum 650 g/t Ag average LOM head grade for each deposit. The cut off values selected to meet this mandate are in Table 1-4 below.

Table 1-4 Mine Design Criteria – Cutoff Values

Mine	Cutoff Value ($/t)
Bellekeno		420
Lucky Queen		460
Bermingham		350
Flame & Moth		350

Stope dilution is calculated in the block model for each block, based on the specific block width, and is also reported to give an average dilution for the entire stope. To factor in unplanned dilution outside the stopes shapes boundaries, a dilution skin of 0.5 m was applied to both the hanging wall (HW) and footwall (FW) during the stope optimizer process. This dilution was considered when evaluating whether or not shapes are economic to ensure only diluted economic stope shapes are included in the mine plan.

Internal dilution (Planned Dilution) is primarily a function of the width of the orebody and minimum mining width. Minimum mining width for cut and fill method in both Bermingham and Flame & Moth deposits is 3.5 m wide and for the Lucky Queen deposit is 2.5 m wide which is determined from the size of the equipment selected and consistent with the geotechnical design parameters. For longhole stoping, the minimum mining width is planned at 1.8m. Dilution for the four deposits is; Flame & Moth 15%, Bermingham 37%, Lucky Queen 39%, and Bellekeno 21%.

The underground mine design for all four deposits results in total probable Mineral Reserves of 1,177,380 tonnes (diluted) with an average grade of 805 g/t Ag, 2.98% Pb, and 4.13% Zn. The overall NSR value for the reserve is $554/tonne.

A monthly production schedule was generated using excel for each task associated with mine development and production. This schedule was created using Deswik Scheduling software and targeted approximately 16,000 tonnes ore/month coming from two deposits at any given time. The total annual mill feed and waste production from the four mines are summarized in Table 1-5 below.

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Table 1-5 Mine Production Summary

	TOTAL			2019			2020			2021			2022			2023			2024			2025			2026			2027
ORE TONNES1		1,177,380			58,384			136,174			163,200			199,800			198,800			142,324			164,655			105,468			8,575
WASTE TONNES		755,123			102,696			235,874			147,658			122,717			45,717			51,897			28,920			19,644			-
TOTAL TONNES		1,932,502			161,080			372,048			310,858			322,517			244,516			194,222			193,575			125,111			8,575
Calculated Average Grade
Ag(g/t)		805			881			875			903			784			796			775			822			595			672
Au(g/t)		0.34			0.1			0.3			0.3			0.3			0.3			0.4			0.4			0.5			0.9
Pb(%)		2.98	%		9.1	%		2.5	%		3.3	%		2.9	%		2.6	%		3.3	%		2.0	%		2.0	%		2.2	%
Zn(%)		4.13	%		5.5	%		3.7	%		3.3	%		4.3	%		3.6	%		4.3	%		3.4	%		6.6	%		8.7	%
Calculated Contained Metal
Ag(Oz)		30,453,593			1,653,067			3,832,080			4,740,188			5,034,181			5,088,284			3,548,358			4,353,560			2,018,645			185,230
Au(Oz)		12,992			119			1,191			1,572			1,844			1,862			2,029			2,380			1,752			243
Pb(lbs)		77,289,572			11,712,803			7,367,704			11,981,444			12,644,948			11,156,854			10,219,624			7,128,997			4,656,048			421,150
Zn(lbs)		107,195,512			7,119,086			11,101,079			11,734,556			19,030,982			15,630,812			13,436,290			12,247,614			15,258,571			1,636,522

Notes:

1. The term “ore” in this document means the total probable Mineral Reserve as presented in Chapter 15 of this report.

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NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Key equipment requirements during the pre-production and production period will include jumbos, load-haul-dumps (LHDs), haulage trucks, bolters, shotcrete sprayers and a longhole drill. Raise development will be carried out using alimaks. Alexco currently owns much of the mining equipment required; the additional major equipment required is assumed to be leased for the Project.

Manpower will consist of technical staff, mining crews, mechanics, electricians and other support staff. Manpower reaches 222 personnel at full production with up to 122 personnel on site at any given time.

The ventilation system for each deposit is designed to meet Yukon regulations. Permanent fans will be located on surface at the raise collars. All intake air entering the mine workings will be heated above freezing point during the winter months.

1.2.8 Metallurgical Testing and Mineral Processing

Metallurgical testwork has been conducted independently on each of the four deposits included in the production plan independently. Testwork performed from 1996 through 2009 was the basis for the design and construction of the mill facility in 2010. The Bellekeno mine and mill complex achieved commercial production in January 2011, processing an average of 253 tpd in 2012. Since 2011, samples from Lucky Queen, Flame & Moth, and Bermingham deposits were tested to assess flotation performance.

The KHSD Property (the Property) is of a polymetallic silver-lead-zinc vein type mineralization. According to this PFS production plan, additional deposits of Flame & Moth, Bermingham, and Lucky Queen, as well as the remnant Bellekeno deposit will feed the mill complex at 400 tpd for the first two years before reaching the peak capacity 550 tpd at year three. Bellekeno mineralization at the Property was processed in the Keno Hill District Mill at 250 tpd from 2011 and 2013. The existing Keno Hill District Mill will be upgraded to allow processing of material from additional deposits at the increased feed capacity.

Based on metallurgical testwork described in Section 13.0 and previous operation experience, a conventional sequential flotation process with regrinding stages on both lead and zinc rougher concentrates has been selected for this Project to produce silver-lead concentrate and zinc concentrate. The target primary grind size P80 was designed to be 100 to 120 µm to recover liberated lead and zinc minerals in rougher flotation circuits. A regrind mill in each of the lead and zinc cleaner flotation circuits will be included for further liberation and upgrading.

Based on the mill capacity/modification reviews, modifications to the existing Keno Hill District Mill will be required in three areas including grinding circuit, flotation circuit, and tailings dewatering circuit and have been included in this PFS. Specifically, one additional grinding ball mill, two regrinding ball mills, and one larger plate frame filter for tailings dewatering will be installed. To reach the higher rate 550 tpd, campaigns will be run to identify additional modifications in the initial operation. An allowance of $1 million has been included in this Project for this purpose.

Ore will be crushed and then processed in a conventional flotation mill producing two concentrates. Concentrates will be thickened, filtered, and trucked off site for sale. Tailings will be also thickened, filtered, and stored in a dry stack tailing facility adjacent to the mill. Process water will be stored in the mill pond adjacent to the mill complex and recycled to the plant for varied applications. A simplified process flowsheet is included in Section 17.0 (Figure 17-1). The primary makeup water source is from the Flame & Moth underground mine which will be treated within the already constructed water treatment plant.

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The expected metallurgical recoveries are shown in Table 1-6 for the life of mine (including ramp up and commissioning) and for the period after the ramp up and commissioning in Year 1. The total concentrate production over the life of mine is shown in Table 1-7. Also shown in this table, for comparison, is the concentrate production starting after the ramp up and commissioning period through to the end of the mine life.

While the overall recoveries are similar for both time periods, the concentrate characteristics differ. This is due to the different head grades and metallurgical performance of the Bellekeno production which is used for the start up and commissioning.

Table 1-6 Expected Metallurgical Performance¹ – Recovery to Concentrates

	Average LOM		Average LOM Following Commissioning2
% into Pb-Ag Concentrate
Ag		90.9		90.9
Pb		88.6		88.3
Au		49.0		49.0
% into Zn Concentrate
Ag		4.6		4.7
Zn		73.6		73.5

Notes:

1. Based on the total probable Mineral Reserves presented in Section 15 and mine plan presented in Section 16, metallurgical testing presented in Section 13.

2. “following commissioning” refers to Year 2 through to end of mine.

Table 1-7 Expected Metallurgical Performance¹ – Concentrates

	LOM		Average LOM Following
	(including year 1)		Commissioning2
Pb-Ag Concentrate
Dry tonnes		58,151		52,772
Ag g/t3		14,822		15,890
Pb %3		54.0		54.0
Au g/t3		3.4		3.7
Zn Concentrate
Dry tonnes		67,768		65,436
Ag g/t3		642		649
Zn %3		53.0		53.0

Notes:

1. Based on the total probable Mineral Reserves presented in Section 15 and mine plan (Section 16).

2. “following commissioning” refers to Year 2 through to end of mine.

3. Grades are calculated weighted averages

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1.2.9 Project Infrastructure

There is considerable infrastructure on site since the mine was in production from 2011 to 2013. This infrastructure has remained either in use (by the site activities for Care and Maintenance) or has been regularly maintained.

In Elsa, there are administrative, engineering and exploration offices, as well as maintenance and warehouse facilities. The nearby Flat Creek camp facilities include bunkhouses, a kitchen facility and drillers dry, as well as houses at the old Flat Creek town site (part of Elsa).

At the mill, to the east of Elsa and adjacent to the Flame & Moth portal, there are mine and mill offices and dry, an assay lab, and the mill and DSTF complex as shown in Figure 1-1 above. Power, water, roads and communications are in place and maintained throughout the site. There is a network of access roads and haul roads throughout the district. Haul roads have been upgraded between Bermingham and the mill, and a bypass constructed around Keno City to reduce traffic and noise for the residents.

There is minimal additional infrastructure required for this Project; minor additional office/dry expansion, and mill modifications to reliably achieve the throughput. The capital projects required for mine development, such as ventilation raises, are included in the mine planning and costing.

Offsite infrastructure includes highway access to between Whitehorse and the Keno Hill site as well as to Skagway (for concentrate shipping). Alexco has an administrative office in Whitehorse. No additional offsite infrastructure is required for this Project.

1.2.10 Market Studies and Contracts

The principal commodities at KHSD are freely traded, at prices that are widely known, so that prospects for sale of any production are virtually assured. Future production will continue to be sold in concentrate form and revenue will be based on terms provided by traders or smelters to which the concentrate is sold. For the economic analysis herein, concentrate sales terms were developed from discussions with various traders or smelters, and compared with other current projects.

Alexco has entered into contracts with the following companies to support the operations of the Project:

· Canadian Lynden Transport is contracted by Alexco to transport lead and zinc concentrates to a smelter in North America and to back haul supplies to the site;

· Yukon Energy Corporation provides power under contract to various substations; and

· Superior Propane provides propane with the largest consumption for mine air heating in the winter.

1.2.11 Environmental Studies, Permitting, and Social or Community Impact

Alexco and its subsidiary, ERDC, have a unique commercial agreement with the Government of Canada in which Alexco is responsible for the care, maintenance, and closure of the historical mines, with government and company funding provided to address the historical liabilities. Under the agreement, Alexco is indemnified from the historic environmental liabilities. The company, along with territorial, federal, and First Nation governments, is responsible for developing a district-wide closure plan that addresses these historic environmental liabilities arising from past mining activities. The UKHM Reclamation Plan is currently within the Yukon environmental assessment process under the Yukon Environment and Socio-economic Assessment Act (YESAA). That work is not part of this PFS.

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1.2.11.1 Environment and Water Quality

The KHSD has an extensive database of environmental monitoring and environmental impacts assessments, going back twenty years in some areas. This is in large part due to the historic operations and the reclamation planning requirements. The additional environmental requirements for both operations and closure have been clearly defined through the permitting processes.

Geochemical and water quality studies consistently show that the site is not a source of acid rock drainage. However, oxidation of sulphides and metal leaching under circumneutral conditions does occur, with local zones of acidity in areas of higher sulphide material, particularly proximal to the mineralized veins. The tailings are neither net acid generating nor a source of metal leaching. Tailings are deposited in a lined dry stack tailings facility which is progressively reclaimed during operations. There are comprehensive waste management, water management and monitoring programs defined by permits and in effect on site.

1.2.11.2 Environmental Assessment and Permitting

The Bellekeno, Flame & Moth, and Lucky Queen mines have all permits and authorizations in place to commence full scale mine production. Although licences are also in place for Onek, there are currently no plans to bring this deposit into production.

The Bermingham deposit has in place a Class 4 Mining Land Use Approval which authorizes the underground development and advanced exploration drilling completed to date. Before milling and further mining of material from the Bermingham deposit, an amendment to the Water Use Licence and Quartz Mining Licence are required. The water licence renewal process is well advanced. The public hearing process is expected in Q2 2019 followed by issuance of the water licence amendment in Q3 2019.

The existing approvals and amendments submitted are for the mill throughput of 400 tonnes per day (tpd) (based upon a 12-month average) and would require a minor amendment to increase mine throughput to 550 tpd.

1.2.11.3 Community and First Nations

The KHSD is situated in the traditional territory of the FNNND. Alexco has met regularly with stakeholders and First Nations regarding their ongoing operations as well as the new plans, presenting detailed information about the Project and seeking expression of concerns.

Alexco has signed a Comprehensive Cooperation and Benefits Agreement (CCBA) with the FNNND that recognizes the rights, obligations, and opportunities of the two parties. The Agreement includes detailed discussion about respecting and protecting the environment, including enhanced opportunities for FNNND to be involved in environmental management of all operations, from mining through to closure and reclamation. The CCBA was reviewed and amended in May 2016 and there are no material changes to the CCBA.

1.2.11.4 Mine Reclamation and Closure

An updated Reclamation and Closure Plan was approved by the Government of Yukon in 2018 that encompasses all of the active mining and processing activities in the KHSD (Alexco, 2018). Alexco will have a site presence for many years while reclamation of the historical liabilities occurs. Therefore, monitoring of the Bellekeno, Lucky Queen, Flame & Moth, and Bermingham mine areas can be integrated with KHSD monitoring programs over the long term. This is expected to improve the efficiency of these ongoing water treatment and monitoring activities.

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The YG requires financial security in the form of a letter of credit to cover potential liabilities associated with the cost of reclamation and closure. Alexco has posted a total of $6.5M of security. The estimated cost for the additional reclamation is recently estimated at $6.6M. Any additional security that may be required following amendment of the quartz and water use licence would be posted as change to the value of the current surety.

1.2.12 Capital and Operating Costs

Capital costs were developed by Alexco, and the QPs from Mining Plus and Tetra Tech (process plant only). The QPs from Mining Plus and Tetra Tech reviewed the costs in detail and modified as required to be consistent with a PFS study and the Project. All costs are in Canadian dollars unless otherwise noted. Mining Plus considers the accuracy of capital cost estimate components to be at a prefeasibility level of +/- 25%. A 12.5% contingency has been included in the capital cost estimate based upon a review of the capital details.

The capital cost estimates are based primarily on quotations by vendors on equipment, mill modifications, materials, and supplies. The remaining estimates were developed from first principles and previous site experience. Escalation has not been included in the estimate. The capital cost estimates were generated by Alexco and were reviewed and modified based upon detailed review by the QP.

The capital costs include the restart of the Bellekeno mine, completion of development of the Flame & Moth deposit, completion of development of the Bermingham deposit and the reopening of the Lucky Queen plus the necessary modifications to process plant and infrastructure for the restart of operations.

The capital cost estimate for the Project includes the initial and sustaining capital costs. The initial (pre-production) capital cost of $23.2 million comprises two components: $17.9 million of mine development, PP&E (property, plant and equipment), mill upgrades and site wide infrastructure modifications costs prior to mill recommissioning, plus an additional $5.3 million of net working capital for two months of ramp up prior to achieving positive cash flow.

Total sustaining capital (including underground development and property, plant and equipment (PP&E) is estimated to be $76.5M which excludes the initial capital of $23.2M. The sustaining capital is mainly the major mine development in the deposits to be mined.

The LOM direct operating costs total $362 million comprising $226 million of direct mine costs (primarily mine development), $70 million of direct processing costs, and $67 million for site general and administrative (“G&A”) costs (excluding corporate) as shown in Table 1-8. This corresponds to a LOM unit cost of $312 per tonne of ore. These costs were developed by Alexco and reviewed by the QPs from Mining Plus (model and all components except processing plant) and Tetra Tech (processing plant only) and. Operating costs do not include contingency. Operating costs are in Canadian dollars. Operating costs are based on vendor quotations or build up from first principles

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NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 1-8 Life of Mine Direct Operating Cost Summary¹

Area	LOM Opex ($ M)		Unit Cost ($/tonne ore)
Mine		225.9		194
Mill		69.5		60
G&A		66.9		58
LOM Total Site		362.3		312

1.2.13 Economic Analysis

The Project presented herein will process 1.18 million tonnes of mill feed (the probable Mineral Reserves)and produce two concentrates; 52,772 tonnes of lead silver concentrate and 65,436 tonnes of zinc concentrate. The LOM total payable silver in concentrate is 27.2 million ounces, or an annualized silver production of 4 million ounces per year. At the design processing throughput averaging 430 tpd over the mine life, following ramp up, the current project life totals 8 years. The Project economics are based on assumptions for marketing of concentrate directly to a smelter. This financial analysis does not include any sunk costs for exploration and project advancement prior to the completion of this study.

The project value is determined on a pre-tax and after-tax basis at 5% discount rate with the following additional economic criteria:

· Metal prices as shown in Figure 1-4 ;

· 25% of silver is sold to Wheaton Precious Metals under a streaming agreement at a price ranging from US$5.59/oz to US$11.79/oz silver;

· NSR includes shipping, treatment, and refining costs;

· There is a 1.5% NSR (to a maximum of $4 million) to the Government of Canada.;

· Revenue is recognized at the time of production; and

· Pre-production period: 3 months, following mill start up a further 2 months of production will be required until the operation is cash-flow positive.

¹ Summary excludes the capitalized operating cost from Jul 2019 to Nov 2019

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Source: Mining Plus 2019

Figure 1-4 Metal Price Projection

An exchange rate of $0.75 US$/CDN$ in first six months and increasing to $0.77 US$/CDN$ long-term were used was assumed to convert US$ market price projections and particular components of the initial capital cost estimates into CDN$. No provision was made for the effects of inflation. Current Canadian tax regulations were applied within the financial model by Alexco Management with support from Alexco’s tax advisors.

1.2.14 Cash Flow Analysis

Considering the Project on a stand-alone basis, the undiscounted after-tax cash flow totals $129.3 million over the mine life. Simple payback occurs approximately two years from start of production, approximately 26 months after the end of the initial capital period.

An estimate of all-in sustaining cost (“AISC”) per contained silver ounce on a by-product basis was calculated and is summarized below. Corporate G&A after mine closure is not considered in the project economic evaluation. All costs below are calculated in United States Dollars (US$). Metal price and foreign exchange assumptions are presented in Section 22.1. The AISC is US$12.36/contained oz Ag. For comparison, the AISC at current (March 22, 2019) metal prices and foreign exchange rates was calculated at US$11.30/contained oz Ag. Pricing assumptions are detailed in Section 21.3.

The after-tax Net Present Value (NPV) at a 5% discount rate is $101.2 million, and the after-tax Internal Rate of Return (IRR) is 74%. The pre-tax NPV at a 5% discount rate is $136.2 million, and the pre-tax IRR is 84%.

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1.2.15 Sensitivity Analysis

Project risks can be identified in both economic and non-economic terms. Key economic risks were examined by running cash flow sensitivities:

· Silver price;

· Exchange rate;

· Silver head grade;

· Operating costs; and

· Capital costs.

After-tax NPV and IRR sensitivity over the base case has been calculated for a range of variations. The after-tax sensitivities are shown in Table 1-9, Figure 1-5, and Figure 1-6.

Table 1-9 Results of Sensitivity Analysis

Project Variables	Factors (%)			5% NPV5 ($ M)		IRR (%)
		-30	%	$	26		19	%
		-20	%	$	57		38	%
		-10	%	$	81		56	%
Silver Price		0	%	$	101		74	%
(US$/oz)		10	%	$	119		94	%
		20	%	$	135		114	%
		30	%	$	148		136	%
		-30	%	$	1		6	%
		-20	%	$	42		29	%
		-10	%	$	72		50	%
Silver Recovery		0	%	$	101		74	%
(%)		10	%	$	130		103	%
		20	%	$	158		138	%
		30	%	$	186		179	%
		-30	%	$	16		15	%
		-20	%	$	51		35	%
		-10	%	$	77		54	%
Silver Head Grade		0	%	$	101		74	%
(g/t)		10	%	$	124		96	%
		20	%	$	145		119	%
		30	%	$	165		143	%
		-30	%	$	165		174	%
		-20	%	$	144		131	%
		-10	%	$	123		99	%
Operating Cost		0	%	$	101		74	%
($)		10	%	$	80		54	%
		20	%	$	58		38	%
		30	%	$	33		23	%
		-30	%	$	120		129	%
		-20	%	$	114		106	%
		-10	%	$	108		88	%
Capital Cost		0	%	$	101		74	%
($)		10	%	$	95		63	%
		20	%	$	89		54	%
		30	%	$	82		47	%

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From both NPV and IRR analysis, project value is most sensitive to silver recovery. For ±10% variance in silver recovery, project NPV and IRR can vary by 30% and 28% respectively. With the historical data from Alexco on mill performance, there is sufficient confidence in the recovery estimation. It is recognized that the various mill feed ore sources considered in this evaluation (from different properties) represent slight variances in mineral composition, however this does not constitute major risk in terms of silver recovery of project cashflows.

Project value is also sensitive to silver head grade; during the analysis process, change in silver head grade also results in a change to the silver recovery. Taking account of the downstream effect on silver recovery, a ±10% variance in silver head grade resulted in a 23% variance in NPV and 21% variance in IRR.

Source: Mining Plus 2019

Figure 1-5 After-Tax 5% NPV Sensitivity

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Source: Mining Plus 2019

Figure 1-6 After-Tax IRR Sensitivity

Amongst the selected parameters, project value is least sensitive to capital cost. The result is reflective of the low project capital requirements, leveraging the existing development and infrastructure.

1.3 Recommendations

The authors provide the following recommendations, the majority of which are opportunities to improve the level of detail for the next stage of project study:

· The QPs from Mining Plus and SRK consider that there is an opportunity to extend the mine life by additional drilling and sampling, considering the in situ remaining resources, net of the reserves considered in this Project.

· The QPs from Tetra Tech consider that more detailed metallurgical predictions of production could be achieved with additional variability locked cycle testing of different blends (that is, of ore from different mines) according to the LOM production plan. There may be an opportunity to improve concentrate grades with further testing.

· During the first year of operation, it is recommended that the Company conduct campaigns of higher plant throughout above the 400 tpd to identify potential bottlenecks and requirements for mill modifications to achieve 550 tpd throughput.

· Additional work on the geomechanics is recommended at a feasibility level including verification of the geotechnical conditions of the LQ and BK, and 3D inelastic modeling to confirm stope geometry stability and extraction sequence. It is recommended that geotechnical mapping and estimation of Q values, along with collection of excavation performance should commence once development begins.

· The QP from Mining Plus recommends that due to the multiple orebodies to be mined, along with their varying grade a comprehensive global optimization process should occur. This should consider timing of Lucky Queen orebody development as well as the timing of increasing the mill capacity.

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2. Introduction

2.1 Terms of Reference and Purpose of this Report

Mining Plus Canada Consulting Ltd. (Mining Plus) was retained by Alexco Resource Corp. (Alexco) to prepare a Prefeasibility Study (PFS or the Study) and Independent Technical Report on the Keno Hill Silver Project (the Project), located in the Yukon Territory, Canada. The purpose of this report is to disclose the results of the PFS. This Technical Report conforms to NI 43-101 Standards of Disclosure for Mineral Projects.

Alexco is a public company with its headquarters in Vancouver, B.C. Alexco, through wholly owned subsidiaries, owns the mineral rights for the Keno Hill Silver District (KHSD) following its successful bid for the assets of the bankrupt United Keno Hill Mines Ltd. in 2006. Alexco Keno Hill Mining Corp. (AKHM) is a wholly-owned subsidiary of Alexco and has been incorporated for operation of mineral extraction and development in the KHSD. Elsa Reclamation and Development Company Ltd. (ERDC), a wholly owned subsidiary of Alexco, continues to advance the development and eventual implementation of the District Wide Closure Plan (ESM Reclamation Plan) which addresses the historic environmental liabilities of the district from past mining activities. The potential liabilities associated with the historic operations in the KHSD are indemnified by the Government of Canada under the terms and conditions of the commercial agreement subject to the requirement for ERDC to develop, permit and implement the site Reclamation Plan. The Reclamation Plan for the historic liabilities is currently being reviewed by the Yukon Environmental and Socio-economic Assessment Board (YESAB).

The Keno Hill Silver Project contemplates the conventional mining and milling of silver-lead-zinc ore from four deposits in the District. There is an existing mill which will process a high grade silver lead zinc ore from four deposits across the District. Over the eight year mine life, the mines will produce 1.18 M tonnes of mill feed averaging 805 g/t Ag. The mill will produce two concentrates; a high grade lead silver concentrate averaging 15,890 g/t Ag and 54% Pb and a zinc concentrate averaging 640 g/t Ag and 53% Zn. The annualized silver product in concentrate is 4.0 M oz

Alexco and Wheaton Precious Metals (WPM) (formerly Silver Wheaton) entered into an agreement on October 2, 2008 (the “SPA”) whereby 25% of all future silver production from the KHSD properties owned or controlled by Alexco at the time of the consummation of the SPA will be delivered to WPM in exchange for a payment of US$3.90/oz as well as a payment by WPM of US$50 M for use in the development and construction of the Bellekeno silver mine. Effective March 29, 2017, Alexco amended the agreement with WPM, whereby WPM will continue to receive 25% of the life of mine (LOM) payable silver from the KHSD with the production payment to be based on monthly silver head grade and monthly silver price. The production payment will fall within the range set by a lower and upper grade and price range.

Alexco used the funds from the SPA for development of the Bellekeno mine, the 2010 construction of a 408 tpd capacity flotation processing plant and the commencement of mining at the Bellekeno deposit. In 2014 a PEA was published for the Bellekeno, Flame & Moth, and Lucky Queen deposits. With low metal prices, Alexco maintained the Project on a care and maintenance status and focused on additional exploration leading to increases in the Mineral Resources for the Bermingham and Flame & Moth deposits. In 2017, Alexco published an updated Preliminary Economic Assessment (PEA) for the Bellekeno, Flame & Moth, Lucky Queen and Bermingham deposits. Continued exploration and drilling resulted in updates to the mineral resources, with the most recent Mineral Resource Statement issued in the news release of Sept 20, 2018. The revised Bermingham Mineral Resource has been included in this PFS for a 400 tpd operation including the Flame & Moth, Bellekeno, Bermingham, and Lucky Queen deposits.

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In addition to the development of the PFS, the Mineral Resource estimates for the Onek, Lucky Queen, Flame & Moth, and Bermingham deposits have been updated to a single reference date and with the same metal price and foreign exchange rates.

This report is considered by Mining Plus to meet the requirements of a PFS as defined in Canadian NI 43-101 regulations. This report provides Mineral Resource and Mineral Reserve estimates and a classification of resources and reserves prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Reserves: Definitions and Guidelines, May 10, 2014. (CIM, 2014). There is no certainty that economic forecasts on which this PFS is based will be realized.

2.2 Qualifications of Consultants

The Consultants preparing this technical report are specialists in the fields of geology, exploration, Mineral Resource and Mineral Reserve estimation and classification, underground mining, geotechnical, environmental, permitting, metallurgical testing, mineral processing, processing design, capital and operating cost estimation, and mineral economics.

All Qualified Persons (QPs) listed are deemed independent according to 43-101 guidelines. The results of this Technical Report are not dependent upon any prior agreements about the results or the conclusions to be reached. All work completed for this report has been done in accordance with normal professional consulting practice.

The following individuals, by virtue of their education, experience and professional association, are considered QPs as defined in the NI 43-101 standard, for this report, and are members in good standing of appropriate professional institutions. The QPs responsible for this Technical Report are:

Mr. Adrian Churcher, P.Eng., Senior Mining Consultant for Mining Plus Canada Consulting Ltd. Mr. Churcher has overall responsibility for the report and is responsible for Sections 1-5, 15-16, 18-20 and 23-27 of this report.

Mr. Zach Allwright, P.Eng, MBA, and Manager - North America for Mining Plus Canada Consulting Ltd., is responsible for Section 21 pertaining to Mining Capital and Operating Costs and Section 22 of this report.

Dr. Paul Hughes. PhD, P.Eng, and Principal Geotechnical Consultant for Mining Plus Canada Consulting Ltd is responsible for Sections 16.2 and 26.2.

Dr. Gilles Arseneau reviewed the geology, exploration, drilling sampling, assaying, and resource estimate work. He is responsible for Sections 6 through 12, and the portions of Section 14 of the report related to the Flame & Moth, Lucky Queen, and Onek deposits and relevant portions of Section 26.

Mr. Cliff Revering, P.Eng, reviewed the geology, sampling protocols, and assay data for the Bermingham deposit. Mr. Revering conducted the 2018 Mineral Resource estimate for the Bermingham deposit and was responsible for relevant portions of Section 14 and Section 26 pertaining to the Bermingham deposit.

Mr. David Farrow, P.Eng, Principal Geologist, GeoStrat Consulting Services Inc. (GeoStrat) was responsible for parts of Section 14 pertaining to the Bellekeno deposit.

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Mr. Hassan Ghaffari, P.Eng, M.A.Sc., and Director, Metallurgy for Tetra Tech Canada, reviewed the metallurgical testwork and performance and was responsible for Section 17 and the portions of Sections 1, 21, 22 and 26 related to the metallurgy and mill performance.

Ms. Ting Lu P.Eng, Senior Metallurgical Engineer of Tetra Tech Canada, reviewed metallurgical testwork on the Property and was responsible for Section 13 and the portions of Sections 1, 25, and 26 related to the mineral processing and metallurgical testing. Ms. Ting Lu has no prior involvement with the Property that is the subject of this technical report.

Site visits in 2019 were carried out by representatives of Mining Plus as follows:

• Mr. Adrian Churcher, Senior Mining Consultant, on February 13, 2019 and included site tours and discussions with Mr. Neil Chambers, Senior Mining Engineer from Alexco.

Site visits have previously been carried out by SRK Consulting Canada as follows:

• Dr. Gilles Arseneau most recently from September 12 to 14, 2016 and included discussions with Alexco personnel Mr. Seymour Iles (Keno District Exploration Manager), Mr. Al McOnie, Vice President Exploration FAusIMM, and Mr. Brad Thrall, President of Alexco; and,

• Mr. Cliff Revering, P.Eng., Principal Consultant, SRK (Canada) Consulting from July 24 to 27, 2018 and included discussions with Alexco’s Mr. Seymour Iles (Keno District Exploration Manager), Mr. Alan McOnie, FAusIMM, Alexco’s Vice President, Exploration and Mr. Brad Thrall, President of Alexco.

The site visit and inspection by Tetra Tech were completed by Mr. Hassan Ghaffari from March 31 to April 2, 2008, and included discussions with Mr. Brad Thrall, President of Alexco and Alexco’s process team at the time.

The documentation reviewed, as well as other sources of information, are included in Section 27.

2.3 Sources of Information

This report has been prepared by Mining Plus Canada Consulting Ltd. (Mining Plus) of Vancouver for Alexco Resource Corp. (Alexco). The information, conclusions, opinions, and estimates contained herein are based on:

• Information available to Mining Plus at the time of preparation of this report including supporting information from the Alexco PEA 2017 and internal (Alexco) technical reports;

• Documentation for licencing and permitting, published government reports, and public information as included in the References section of this report (Section 27) and cited in this report;

• Assumptions, conditions, and qualifications as set forth in this report; and

• Data, reports, and other information supplied by Alexco and other third-party sources as listed below.

Discussions in relation to past and current operations at the KHSD were held with the following personnel:

• Brad Thrall, President, Alexco;

• Linda Broughton, Vice President Technical Services, Alexco;

• Neil Chambers, Senior Mining Engineer, Alexco;

• Seymour Iles, Keno Hill District Exploration Manager, Alexco;

• Al McOnie; Vice President Exploration, Alexco; and

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• Kourosh Tarighi, Principal Mining Consultant, Mining Plus (formerly Senior Mining Engineer, Alexco).

The third-party sources providing information in support of this document are:

• SRK Consulting (Canada);

• Tetra Tech (Canada);

• Julian Watson, BSc (Hons), MEng, MAusIMM CP (Geotech), RPEQ | Technical Director, Rock Mechanics, Global, Jacobs Engineering and formerly Principal Mining Consultant for Petram Mechanica:

• Keno Hill Silver District-Pre-Feasibility Study Geotechnical Engineering. Project No. DMNY5500 Rev #2 March 21, 2019.

• Metallurgical laboratory testing including:

• An Investigation into The Flotation of Samples from The Bermingham and Christal Zone Deposits, prepared for Alexco Resource Corp. Project 15774-002 – SGS Final Report #2 March 15, 2019 prepared by SGS Canada Inc.;

• An Investigation into the Flotation of Samples from the Bermingham Deposit, prepared for Alexco Resource Corp. Project 15774-001 – SGS Final Report October 25, 2018 prepared by SGS Canada Inc.; and

• An Investigation into The Comminution and Flotation of Samples from the Lucky Queen and Flame & Moth Deposits prepared for Alexco Resource Corp. Project 15774-002 – SGS Final Report, November 29, 2018.

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3. Reliance on Other Experts

This report has been prepared by Mining Plus Canada Consulting Ltd. (Mining Plus) of Vancouver for Alexco Resource Corp. (Alexco). For the purpose of this report, Mining Plus has relied on ownership and land tenure information as of December 21, 2019 provided by Alexco, for Sections 1 and 4 of this Technical Report. Mining Plus has not researched property title or mineral rights for the District and expresses no opinion as to the ownership status of the property.

Mining Plus has relied on Alexco for guidance on applicable taxes, royalties, and other government levies or interests that are, or may be, applicable to revenue or income from the Project.

Except for the purposes legislated under provincial securities laws, any use of this report by any third party is at that party’s sole risk.

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4. Property Description and Location

4.1 Location

The Keno Hill Silver Project is located within Alexco’s KHSD in the central Yukon. The site covers an area of approximately 15,000 ha and is located approximately 350 km north of Whitehorse, Yukon, Canada (Figure 4-1) in central Yukon (63° 54' 32" N, 135° 19’ 18” W; NTS 105M/14 & 105M/13). The site is located in the traditional territory of the First Nation of Na-Cho Nyäk Dun.

Access to the property is via the Alaska, Klondike and Silver Trail Highways from Whitehorse to Mayo (407 km) and an all-weather gravel road northeast from Mayo to Elsa (45 km); a total distance of 452 km.

The property lies along the broad South McQuesten River valley on three prominent hills to the south of the valley; on and around Galena Hill, Keno Hill and Sourdough Hill, collectively known as the KHSD. The Bermingham deposit is located on Galena Hill (Figure 4-2). The Lucky Queen and Onek mines are located on Keno Hill, while the Bellekeno mine is located on Sourdough hill. The Flame & Moth mine and the Keno Hill District Mill are located at the headwaters of Christal Creek.

Alexco has exploration, maintenance, and camp facilities near the location of the historic mining town of Elsa, which is located just off the Silver Trail Highway, and administration, mill and mine facilities at the mill complex located near Keno City. The KHSD is supplied with electrical power by Yukon Energy Corporation from two hydroelectric plants near Mayo.   The area is covered by NTS map sheets 105M/13 and 105M/14.

4.2 Mineral Tenure

Mineral exploration in the KHSD area was initially permitted under the terms and conditions set out by the Government of Yukon (YG) in the Class 3 Quartz Mining Land Use Permit LQ-00186, issued on July 5, 2006 and valid until July 4, 2011. Alexco subsequently obtained a Class 4 Quartz Mining Land Use Permit – LQ-00240 on June 17, 2008. The two permits were amalgamated on December 8, 2008 under LQ-00240, which has subsequently been renewed as Class 4 Mining Land Use Approval LQ00476 on June 17, 2018.

All quartz mining leases and Crown Grants have been legally surveyed; the quartz mining claims have not been legally surveyed.

The KHSD quartz mining claims and quartz mining leases are held by one of two wholly-owned subsidiaries of Alexco: Elsa Reclamation & Development Company Ltd. (ERDC) or Alexco Keno Hill Mining Company Ltd. (AKHM), except for holding a 50% share with third party individuals in three leases (Rico, Kiddo and Argentum) (Appendix 1).

The total Alexco Keno Hill property quartz mineral holdings (at 31 December 2018), excluding the mineral claims that are the subject of the separate technical report “Mineral Resource Estimation Elsa Tailings Project Yukon, Canada” by SRK dated June 16, 2010, covers an area of 238.12 km², and comprises 703 quartz mining leases, 867 quartz mining claims and two Crown Grants as shown in Figure 4-3 (also attached separately with claim label detail).

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Figure 4-1 Keno Hill Silver District Location Map

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Figure 4-2 Keno Hill Silver District Mining Operations Area Overview

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Figure 4-3 Alexco Quartz Mining Claim and Lease Holdings in the Keno Hill Silver District Excluding the Tailings Property

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The Bellekeno mine is centred at Latitude 63.90853 degrees north; Longitude 135.26201 degrees west. The mineral Resources for the Bellekeno deposit reported herein are located on the following quartz mining leases: SAM 55327, TUNDRA 12838, WHIPSAW 14081, and NOD FR. 16170.

The Lucky Queen deposit is centred at Latitude 63.94786 degrees north; Longitude 135.25421 degrees west. The Mineral Resources for the Lucky Queen deposit are located on the following quartz mining leases: ANTHONY 12909, OK FRACTION 13094, UNCLE SAM 12923, MATHOLE 12937, and MAYO 12919.

The Flame & Moth deposit is centred at Latitude 63.90588 degrees north; Longitude 135.32931 degrees west. The Mineral Resources for the Flame & Moth deposit are located on the MOTH, FLAME, FRANCES 5, and FRANCES 7 quartz mining leases and the BLUE claim.

The Onek deposit is centred at Latitude 63.91293 degrees north; Longitude 135.29134 degrees west. The Mineral Resources for the Onek deposit are located on the following quartz mining leases: FISHER, ELI, GALENA FARM, and LONE STAR.

The Bermingham deposit is centred at Latitude 63.908° N, Longitude 135.434° W. The Mineral Resources for the Bermingham prospect reported herein are located on the ATLANTIC, ARCTIC, ETTA, and MASTIFF quartz mining leases.

4.3 Underlying Agreements

4.3.1 Alexco/ERDC Purchase Agreement

Alexco’s rights to the majority of the KHSD are held through the ERDC and AKHM, both wholly-owned subsidiaries of Alexco Resource Corp.

United Keno Hill Mines (UKHM), the previous owner of the properties ceased operations in 1989. In January 2001, the Minister of the Department of Indian Affairs and Northern Development (DIAND) exercised his authority under the Yukon Waters Act by issuing a determination that the mine had been abandoned. In October 2001, the site was declared a Type II Site under the Devolution Transfer Agreement, which meant that Yukon would manage the property, but financial responsibility for environmental liabilities would remain with the Government of Canada.

In June 2005, PricewaterhouseCoopers (PwC), a court appointed interim receiver and receiver-manager of United Keno Hill Mines Limited and UKH Minerals Limited (collectively UKHM), selected Alexco as the preferred purchaser of the assets of UKHM. PwC and Alexco entered into an agreement (the “Purchase Agreement”) dated August 4, 2005, and as amended November 2, 2005 and January 31, 2006.

Alexco assigned the Purchase Agreement to its wholly owned subsidiary ERDC on February 6, 2006. In February 2006, following the negotiation of a Subsidiary Agreement between the Government of Canada, the Government of Yukon, and Alexco, the Supreme Court of Yukon approved the purchase of the assets of UKHM by Alexco through its wholly-owned subsidiary ERDC. The UKHM assets comprised two Crown grants, 674 mining leases, 289 mineral claims, a concentration plant, various buildings and equipment, as well as partial ownership interest in three mining leases, 36 mineral claims, in addition to a leasehold interest in one mineral claim.

Interim closing of the UKHM transaction was completed on April 18, 2006. Alexco assumed responsibility for care and maintenance operations at the UKHM property. On the initial closing, among other things, Alexco:

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· Deposited $10 million in trust to be used exclusively to fund ERDC’s contribution to the cost of the reclamation of the pre-existing environmental liabilities of the UKHM property.

· Obtained possession of the mineral claims and leases, titled property, and Crown grants of UKHM and the equipment on the UKHM properties for the purposes of contracted care and maintenance and exploration by ERDC of the UKHM property.

Title to all UKHM assets was transferred to Alexco (final closing) in late November 2007, following the approval of a Type B Water Licence by the Yukon Water Board. All quartz mining leases have been legally surveyed, whereas most of the quartz mining claims have not.

Under the agreement, ERDC is responsible for ensuring that the site remains in compliance with the terms and conditions of the Water Licence, and all applicable environmental laws. The commercial agreement requires ERDC to develop and implement a Reclamation Plan for the District, and to retain the liabilities of the UKHM site subject to indemnification by the Government of Canada. Under the commercial agreement, Government of Canada, as represented by Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC), retain the obligation for funding for the Reclamation Project.

The commercial agreement also allows Alexco to undertake exploration of the UKHM site and undertake active mining. In the event that Alexco wishes to designate a portion of the UKHM site for development and production (a “Production Unit”), agreements between CIRNAC and ERDC will govern which party is responsible for the costs of reclamation and water-related components of that Production Unit. One such Production Unit was declared in 2011 for the Bellekeno mine and the District Mill effective as of the start of commercial production.

4.3.2 Other Underlying Agreements and Contracts

Future production from the Project is subject to a 1.5% NSR royalty, capped at $4.0 million, payable to the Government of Canada. This royalty is a condition of the Subsidiary Agreement. Payment of the royalty does not begin until all pre-production capital has been recouped plus an additional allowance for the Project exploration of approximately $6.2 million.

Alexco and Wheaton Precious Metals (formerly Silver Wheaton) entered into an agreement on October 2, 2008 (the “SPA”) whereby 25% of all future silver production from the KHSD properties owned or controlled by Alexco at the time of the consummation of the SPA will be delivered to Wheaton Precious Metals in exchange for a payment of US$3.90/oz as well as a payment by Wheaton Precious Metals of US$50 million for use in the development and construction of the Bellekeno silver mine.

Effective March 29, 2017, Alexco amended the agreement with Wheaton Precious Metals, whereby Wheaton Precious Metals will continue to receive 25% of the LOM payable silver from the KHSD with the production payment to be based on monthly silver head grade and monthly silver price, as described in detail in Section 19. Other underlying agreements and contracts are discussed in Section 19.

4.4 Permits And Authorizations

The Bellekeno, Lucky Queen, and Flame & Moth mines have all permits and authorizations in place to commence full scale mine production. The Bermingham deposit has in place a Class 4 Mining Land Use Approval (LQ00476) which authorizes the underground development and advanced exploration drilling completed to date. Before milling and further mining of material from the Bermingham deposit, an amendment to Water Use Licence QZ09-092 and Quartz Mining Licence QML-0009 are required. The Quartz Mining Licence amendment application was submitted in fall of 2018 to allow underground development and mining to commence at the Bermingham deposit. Water Use Licence Application QZ18-044 has been submitted to the Yukon Water Board in August 2018. The water licence renewal process is well advanced and the final permitting phase for Bermingham is to hold a public hearing. The public hearing process is expected in early Q2 2019 followed by issuance of the water licence amendment in Q3 2019. The key permits for the activities at KHSD are summarized in Table 4-1.

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Table 4-1 Relevant Assessment and Regulatory Approvals

Purpose	YESAA Approval	Quartz Mining Act Approval	Water Use Licence
Alexco Keno Hill Mining Permits
Bellekeno Advanced Exploration	Project # 2008-0039 Decision Document	Class 4 Mining Land Use Approval (LQ00476, expires 2028)	Type B Water Use Licence QZ07- 078/Amendment 1 QZ10-0606, expires 2018b
Bermingham Advanced Exploration	Project#2017-0086 Decision Document	Class 4 Mining Land Use Approval (LQ00476, expires 2028)	Schedule 3 Notice of Water Use/Deposit of a Waste without a Licence
Bellekeno Mine Production	Project # 2009-0030 Decision Document	Quartz Mining Licence (QML-0009, expires 2031)a	Type A Water Use Licence QZ09-092, Amendment 2 expires 2020b
Onek and Lucky Queen Mine Production	Project#2011-0315 Decision Document	Quartz Mining Licence (QML-0009, amendment 1, expires 2031)a	Type A Water Use Licence QZ09-092, amendment 2 expires 2020b
Flame & Moth Mine Production	Project # 2013-0161 Decision Document	Quartz Mining Licence (QML-0009, Amendment 2, expires 2031)a	Type A Water Use Licence QZ09-092, Amendment 2 expires 2020b
Bermingham Mine Production	Project#2017-0176 Decision Document	QML-0009 amendment application submitted to Government of Yukon	Application QZ18-044 (renewal of QZ09-092) being reviewed by Yukon Water Board
Elsa Reclamation and Development Company Permits
Care and Maintenance	Project # 2006-0293 and 2012-0141	N/A	Type B Water Use Licence QZ17-076 expires 2022b
Reclamation Plan	Project #2011-0187 Decision Document (construction and operation of land treatment facility) Project #2012-0077 Decision Document (building demolition) Project #2018-0169 currently under assessment (Reclamation Plan implementation)	N/A	Submission to Water Board pending YESAB Decision Document for Project #2018-0169

4.5 Environmental Liabilities

Under the commercial agreement with the Government of Canada, responsibility for the historic environmental liabilities within the KHSD is assigned to ERDC, a wholly owned subsidiary of Alexco Resource Corp., as tenure holder of the District. However, under the Amended and Restated Subsidiary Agreement (the ARSA) between ERDC, Alexco and Government of Canada, dated July 18, 2013, Canada agrees to indemnify ERDC (the “Indemnity”) in respect of the environmental state of the District known and unknown to be existing as at April 14, 2006 (the “Existing State of the Mine”). Determination of the Existing State of the Mine was the subject of a Baseline Environmental Study. The Study, pursuant to the ARSA, remains a living document in that historical liabilities as and when discovered, are incorporated into the Study and into the Existing State of Mine Reclamation Plan.

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The ARSA contains a provision that addresses the liability for the Existing State of the Mine if Alexco brings either historic mines or newly discovered deposits into production/operation. Under the ARSA, a “Production Unit” is a surface area encompassing the area agreed between Canada and ERDC as being affected by activities related to such production. Under the ARSA, ERDC must give notice to Canada once production of ore for commercial purposes commences in respect of such area and a Production Unit is created effective on the start of such production. Upon creation of a Production Unit, the Indemnity in respect of the Production Area terminates.

Notwithstanding the creation of a Production Unit, the Indemnity continues to apply to any contamination that may migrate from the District onto a Production Unit and for that reason, among others, a Baseline Environmental Assessment of the proposed Bermingham Production Unit was completed establishing the environmental baseline conditions associated with such proposed Production Unit.

With respect to contemporary mining operations, the Government of Yukon (“YG”) requires financial security in the form of a letter of credit to cover potential liabilities associated with the cost of reclamation and closure. As part of QML-0009, YG currently holds $6.3 million in security for the Bellekeno, Lucky Queen, Flame & Moth, and Onek mine operations, the mill area, and the dry stack tailings facility (DSTF). This amount was set in 2016, following a third-party review of Alexco’s costs. As part of Mining Land Use Approval LQ-00476 YG currently holds $194K in security for Bermingham Advanced Exploration Project, for a total of $6.5 million of security held by YG. YG has estimated that the costs for reclaiming this area could be on the order of $6.6 million. Additional security may be required for Bermingham following amendment of the quartz and water use licence as discussed in Section 13 of this document and would be done through an increase in the surety.

Mining Plus is not aware of any other environmental liabilities on the property. The permits and licences are discussed in Section 20.

Alexco has all required permits to conduct the proposed work on the property with the exception of the Bermingham deposit which requires completion of a licence amendment, expected in Q3 2019, to commence production. Mining Plus is not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform the proposed work program on the property.

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5. Accessibility, climate, local resources, infrastructure

5.1 Accessibility

The Project is located in central Yukon, Canada. The closest sizable town is Mayo which is located on the Stewart River, approximately 40 km to the southwest. Mayo is accessible from Whitehorse via a 460 km all-weather road and is also serviced by the Mayo airport, which is located just to the north of Mayo. An all-weather gravel road known as the Silver Trail Highway leads from Mayo to the Project, the historic company town of Elsa, and the village of Keno City.

5.2 Climate

The central Yukon is characterized by a subarctic continental climate with cold winters and warm summers. Average temperatures in the winter are between -15 and -20 degrees Celsius (°C), but can reach -60°C. The summers are moderately warm with average temperatures in July approximately 15°C. Exploration and mining work can be carried out year-round.

Because of its northern latitude, winter days are short with the sun low on the horizon such that north-facing slopes can experience 10 weeks without direct sunlight throughout the winter solstice. Conversely, summer days are very long, especially in early summer throughout the summer solstice. Annual precipitation averages 28 centimetres (cm); half of this amount falls as snow, which starts to accumulate in October and remains into May or June.

5.3 Local Resources

The KHSD is well connected by a network of public and private gravel roads including the Silver Trail Highway and the Bellekeno haul road, which was built to bypass the mining traffic around the village of Keno City. A large number of roads constructed for past mining operations are still serviceable.

Local resources in terms of manpower, rental equipment, materials, and supplies are very limited.

5.4 Infrastructure

The existing infrastructure at the site includes:

· A network of public and private roads connecting the mines, process plants, and other facilities, including the Silver Trail Highway;

· Administration, maintenance, and camp facilities near the town of Elsa;

· Mine workings, ventilation fans, and dewatering pumps at the Bellekeno mine;

· Portal and decline development at both Flame & Moth mine and at Bermingham mine completed in 2018;

· Mine workings and minor surface buildings at Lucky Queen mine;

· Waste rock storage facility at Lucky Queen mine;

· Waste rock storage at the Bellekeno mine;

· Crushing plant and flotation processing plant with a design capacity of 408 tonnes per day (tpd);

· DSTF located adjacent to the process plant;

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· Process and potable water sources; and

· Electrical power is available in the area from the Yukon Electrical Company Limited grid.

5.5 Physiography

The landscape surrounding the KHSD is characterized by rolling hills and mountains with a relief of up to 1,600 metres (m). The highest elevation is Keno Hill at 1,975 m. Slopes are gentle except the north slopes of Keno Hill and Sourdough Hill.

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6. Exploration and Development History

The history of the Keno Hill mining camp is described in Cathro (2006); the information presented in this section draws heavily from that source.

The Keno Hill mining camp area has a rich history of exploration and mining dating back to the beginning of the 1900s. Earliest prospectors had been working the area in the vicinity of Mayo for gold, especially after the Klondike gold rush of 1898. The first silver was found in 1903; however, interest was low due to the prospector’s interest in gold alone — despite an assay from 1905 yielding more than 11 kilograms per tonne (kg/t) silver. Small-scale mining finally commenced in 1913 at the Silver King mine with the first shipment of 50 tonnes (t) of vein material to a smelter in San Francisco.

In the ensuing 100 years of mining, activity peaked and decreased with changes in silver prices, world events, and operating companies in the Yukon. Notable periods of interest in the historic evolution of the Keno Hill mining camp included:

· After WW I, success at the Keno mine led to a staking rush, resulting in the discovery of a number of rich deposits. In the early 1920’s, the Treadwell Yukon Company Limited (TYC) acquired a number of claims and started mining;

· Peak mining activity occurred in the 1950’s through to the 1970’s, with new discoveries across the district adding to mineral inventory and production from the larger underground complexes such as the Hector Calumet camp;

· Open pit mining began in the late 1970’s, mainly to recover crown pillars; from 1982 to 1985 Sadie-Ladue and Shamrock were mined on a small scale basis, and from 1989 to 1990 Shamrock, Silver King, Hector-Calumet, Lucky Queen, Bermingham and Keno were mined;

· UKHM stopped production from the Keno Hill Silver District permanently in early 1989; and,

· In June 2005, Alexco was selected as the preferred purchaser of the assets of UKHM by PwC, the court-appointed interim receiver and receiver-manager of the Project holdings. In February 2006, the Supreme Court of the Yukon approved Alexco’s purchase of UKHM’s assets through Alexco’s wholly-owned subsidiary ERDC.

The production history for the district has been document in Cathro (2006) and reproduced in Table 6-1. Note, the original reference is presented in imperial units and reproduced as such in the table.

Dominion Mineral Resources and Sterling Frontier Properties Company of Canada Limited (Dominion) acquired a 32% interest in UKHM, and between 1990 and 1998 carried out both reclamation work across the district as well as exploration at the Bellekeno, Husky Southwest, and Silver King mines in order to reopen the camp. A historical resource estimate completed for the Silver King deposit during this time is shown in Table 6-2.

Financial difficulties in the late 1990s caused Dominion to abandon its right; in effect reverting back the rights to UKHM. Environmental liabilities and site maintenance costs drove UKHM into bankruptcy. In 2001 the site was declared abandoned by the Government of Canada, and the federal government inherited the assets.

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Table 6-1 District Production through to 1989 (Cathro, 2006)

			Recovered Grades
Mine	Tons  (‘000)		Ag (oz/ ton)		Pb (%)		Zn (%)		Ag (‘000 oz)		Pb ('000 lb)		Zn ('000 lb)
Hector-Calumet		2,721.3		35.4		7.5		6.1		96,220		406,913		334,571
Elsa		491.0		61.4		4.9		1.4		30,158		47,708		13,485
Husky		429.4		41.7		3.9		0.4		17,889		33,290		3,309
Sadie Ladue		244.3		52.1		6.5		4.5		12,726		31,924		22,029
Keno		283.8		44.4		10.7		3.7		12,602		60,549		21,189
Lucky Queen		123.6		89.2		7.0		2.7		11,019		17,223		6,653
Silver King		207.6		53.0		7.7		0.8		10,996		31,918		3,510
No Cash		166.5		29.8		3.6		1.9		4,969		11,912		6,188
Galkeno		167.1		27.2		5.2		2.7		4,544		17,437		8,999
Bermingham		186.3		20.3		4.2		0.6		3,778		15,576		2,158
Bellekeno		40.5		42.6		9.8		2.3		1,724		7,967		1,829
Black Cap		48.6		27.4		1.6		0.3		1,331		1,560		269
Onek		95.3		13.6		5.5		3.4		1,299		10,456		6,452
Ruby		40.7		25.2		3.0		1.3		1,024		2,421		1,023
Shamrock		5.3		180.3		37.6		0.3		962		4,013		37
Comstock		22.9		39.7		10.7		3.8		907		4,891		1,719
Dixie		23.9		20.2		3.8		5.1		482		1,813		2,456
Husky Southwest		10.5		39.6		0.3		0.1		414		56		17
Townsite		18.6		16.4		4.3		2.0		305		1,583		730
Mt. Keno		1.6		139.3		17.7		-		221		562		-
Miller (UN & Dragon)		9.4		15.1		2.2		0.7		141		420		140
Flame & Moth		1.6		18.3		1.1		0.9		29		35		29

Table 6-2 Historical Resource Estimate for Silver King Property ¹

Class	Tonnes		Ag (g/t)		Au (g/t)	Pb (%)		Zn (%)
Proven, Probable and Indicated		98,998		1,354	n/a		1.6		0.1
Inferred		22,581		1,456	n/a		0.1		n/a

The historical resources for Silver King estimated by UKHM (as shown in the table above) were documented in an internal report entitled “Mineral Resources and Mineable Ore Reserves” dated March 9, 1997 and supported by the disclosure noted above. These resources were estimated based on a combination of surface and underground drill holes and chip samples taken on the vein and calculated using the polygonal (block) model and the 1997 CIM definitions for resource categories. These estimated historical resources include a total of 55,674 t classified as proven and probable reserves and 43,324 t classified as indicated resources, plus an additional 22,581 t classified as Inferred Resources. Verification of the estimate would require new drill holes into a statistically significant number of the historical resource blocks and/or a combination of on-vein sampling. A qualified person has not done sufficient work to classify this estimate of historical resources as current, nor is Alexco treating this historical estimate as a current Mineral Resource.

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In June 2005, Alexco was selected as the preferred purchaser of the assets of UKHM by PwC, the court-appointed interim receiver and receiver-manager of the Project holdings. In February 2006, following lengthy negotiations with federal and territorial governments, the Supreme Court of the Yukon approved Alexco’s purchase of UKHM’s assets through Alexco’s wholly-owned subsidiary ERDC.

Under the Keno Hill Subsidiary Agreement, ERDC/Alexco are indemnified against all historical liability, has property access for exploration and future development, and are not required to post security against pre-existing liabilities. ERDC will also be reimbursed for its future environmental reclamation activities — estimated at more than $50 million — while itself contributing $10 million to the reclamation works. To finalize the Project acquisition, ERDC applied for and received a water licence in November 2007. Upon receipt of the water licence, ERDC received clear title to surface and subsurface claims, leases, free-hold land, buildings, and equipment at the Project.

During 2006, Alexco embarked on an aggressive exploration program in the Project, targeting the historical resources at Bellekeno and Husky Southwest, and subordinately other former mines in the Project.

6.1 History of the Bellekeno Mine

The Bellekeno area hosts ten veins on the north facing slope of Sourdough Hill across the Lightning Creek valley from the Keno mine. Initially staked in 1919 by Andrew Johnson following the discovery of the Tundra vein, the nearby Ram vein was staked the following year. During 1921, Alex Gordon staked the Eureka, Whipsaw, and Extension mining claims. Combined, these five claim groups covered all the known veins in the Bellekeno deposit.

The Bellekeno deposit was mined during four periods between 1921 and 2011. Each period of mining was followed by a period of extensive exploration to replace exhausted mineral inventory. Between 1921 and 1928, 495 t of hand-sorted vein material grading 9,621 grams per tonne (g/t) silver was sacked and shipped to San Francisco.

The Depression, World War II, and perhaps some litigation marked the transition into larger scale mining. In 1947, the claims were purchased by Mayo Mines Ltd. After extensive exploration and adit development, production briefly recommenced. Under the ownership of Mayo Mines, the Bellekeno mine extracted two products: a direct shipping high grade product, and a lower grade concentrate that was processed at the nearby Mackeno mill. With high development requirements, small deposits and poor milling recovery (<70%), the company operated at a net loss between 1947 and 1954.

Between 1955 and 1965, the property changed owners a number of times, as production attempts proved unsuccessful, before it was purchased by UKHM. After acquiring the deposit, UKHM began intermittent exploration, development, and rehabilitation programs, and the development of the Bellekeno 625 adit. Exploration programs included surface overburden drilling, soil and geophysics surveys, trenching, and core drilling. Bellekeno was in production between 1988 and 1989, until UKHM was forced into bankruptcy in 2000 and its assets were inherited by the Canadian federal government. Purchased in 2006 by Alexco, the small mineral inventory has been expanded and it was in commercial production from 2011 to 2013. Mining to date by Alexco has extracted 5.6 million oz of silver along with lead, zinc, and gold. Production results are summarized in Table 6-3.

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Table 6-3 Bellekeno Mine Production Summary, 1919 to 2013 (Data compiled from internal documents)

Year	Shipper	Claims	Tonnes		Ag (g/t)		Pb (%)3		Ag (oz)
1921-27	Gordon	Eureka		186		10,900		73.9		65,200
Whipsaw				6.8		8,280		61.9		1,810
Extension				0.9		7,820		75.4		230
Chance				1.4		5,420		71.1		240
1927-28	Johnson	Ram		266		8,850		64.0		75,690
Subtotal				460		9,660		68.0		143,100
1947-52	Mayo Mines	Ram		several 100
Bellekeno - DS1				113		6,000		70.0		21,800
1953	Bellekeno - DS			131		6,690		72.0		28,200
Bellekeno - MK2				4,690		1,880		11.6		283,500
1954	Bellekeno - DS			91		7,280		74.0		21,300
Bellekeno - MK				4,980		2,030		9.3		325,000
Subtotal				10,010		2,110		12.5		679,800
1966	UKHM			3,450		250				27,700
				170		2,430				13,300
Subtotal				3,620		352				41,000
1988	UKHM			11,600		1,510				563,200
1989	UKHM			17,100		1,510				830,100
Subtotal				28,700		1,510				1,393,300
2010	Alexco			18,600		210		9.2		125,600
2011	Alexco			71,992		834		10.2		1,930,400
2012	Alexco			86,354		760		9.6		2,110,000
2013	Alexco			65,206		705		7.7		1,478,000
				242,150		725		9.2		5,644,000
Grand Total				284,940		862		8.4		7,901,200

Notes:

1. Direct shipping

2. Material processed at the historic Mackeno Mill

3. Pb grade based on tonnes with known production grades

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6.2 History of the Lucky Queen Deposit

The Lucky Queen deposit was mined from 1927 to 1932 when mineral inventory was exhausted, producing 112,100 t of vein material at 3,060 g/t Ag from two mineralized shoots. Four levels of underground workings (50, 100, 200, and 300) totalling approximately 1,085 m, were developed, with level development roughly coincident with extensive stoping, resulting in the Lucky Queen production totals listed in Table 6-4. There were no historical Mineral Resources or Mineral Reserves remaining at the Lucky Queen mine.

Table 6-4 Past Production Records for the Lucky Queen Property

Mine	Tonnes	Ag (g/t)	Pb (%)	Zn (%)	Ag (‘000 oz)	Pb (‘000 lb)	Zn (‘000 lb)
Lucky Queen	112,100	3,060	7.0	2.7	11,020	17,220	6,650

The Lucky Queen vein and strike extensions were explored intermittently by surface overburden drilling, trenching, and soil sampling throughout the decades from 1950 to the early 1980s.

A 500-level exploration drift, collared near the Black Cap prospect and totalling approximately 1,800 m, was developed by UKHM in 1985-1987. It was designed to come in underneath the historical Lucky Queen workings and to drive a raise up to the 300 level and connect with the No 2 inclined shaft. Poor ground conditions near the shaft, combined with difficulty in locating the vein and an urgent need for miners elsewhere in the KHSD caused the adit to be abandoned.

Drilling by Alexco in the Lucky Queen prospect area totalled four surface core drill holes (875 m) in 2006, three surface core drill holes (557 m) in 2007, 12 surface core drill holes (2,999 m) in 2008, 14 surface core drill holes (3,048 m) in 2009, and 14 surface core drill holes (3,625 m) in 2010.

Following rehabilitation of most of the 500 level, four underground core holes (210 m) were drilled in 2012 outside of the resource area.

6.3 History of Flame & Moth Deposit

Claim staking and prospecting began at Flame & Moth in 1920. By 1923, numerous surface workings and a 13 m inclined shaft had been sunk with a 4.6 m crosscut developed from it on the Moth claim. It is believed that a second shaft to a depth of 30.5 m was also sunk in this vicinity. An adit was developed to a length of 12.2 m on the Frances 7 claim. Production for this period is not known.

Subsequent to this early work, little or nothing appears to have happened on the property until the acquisition by UKHM just prior to 1950. A 27.4 m inclined shaft was sunk to a vertical depth of 21.3 m along the footwall of what was likely the Moth vein. A crosscut, through the zone 13.7 m below surface and 42.7 m of drifting 22.9 m below surface, identified quartz-carbonate vein hosted mineralization averaging 343 g/t Ag, 1.6% Pb, and 5% Zn developed in quartzite and greenstone along a zone approximately 30.5 m long and up to 9.1 m wide. Thirteen horizontal core drill holes totalling 193 m were drilled from the drift, but the core recovery was poor.

During 1954 and 1955, mineralization of pyrite and minor arsenopyrite was reported up to 240 m along strike to the north. This was explored by bulldozer trenching, soil sampling, and ground geophysics, but was unsuccessful because of the depth of gravel overburden, reported to a 12 m depth.

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UKHM returned to Flame & Moth in 1961 with a program of soil sampling and ground geophysics (self-potential, magnetics, Ronka EM), and drilled five surface core drill holes located near the shaft to test the mineralization at depth. The soil samples and geophysics yielded little information, and no veining was intercepted in the drilling.

In 1965, 28 vertical overburden drill holes were drilled, along with another attempt at soil sampling and geophysics. A proposal to excavate an open pit was first made at this date, based on a calculated resource of 3,360 t grading 573 g/t silver (Ag), 1.4% lead (Pb), and 5.6% zinc (Zn). The pit would have reached to 18.3 m below the surface.

In 1974, four lines of angled overburden drill holes totalling 989 m were drilled for extensions along a 180 m strike length with limited success due to deep overburden and broken ground conditions, although a weakly mineralized structure was located at 76 m in the footwall of the main vein.

More overburden drilling was completed along strike in 1984 and four core drill holes were sited to test the downward projection of the known mineralization. The deeper drilling (60 to 90 m below surface) returned only very low values from a wide but diffuse pyritic vein zone. A small amount of vein material (368 t grading 699 g/t Ag, 1.39% Pb, and 0.72% Zn) was sent to the mill, which may have come from vein material exposed during stripping of overburden in preparation for the open pit development. In May 1987, the open pit Mineral Resources were re-evaluated at 12,600 t grading 699 g/t Ag and 4.0% Pb to a depth of 24.4 m. The key assumptions used to estimate this historical estimate are not known. This historical estimate was prepared before the adoption of NI 43-101 and therefore should not be relied upon. That estimate is superseded by the Mineral Resources reported herein.

Total production at the Flame & Moth property is listed (Table 6-5) as 1,440 t grading 627 g/t Ag, 1.1% Pb, and 0.9% Zn (Cathro, 2006). It is assumed most of these figures came from the underground work in the 1950s.

Table 6-5 Past Production Records for the Flame & Moth Property

Mine	Tonnes	Ag (g/t)	Pb (%)	Zn (%)	Ag (oz)	Pb (lb)	Zn (lb)
Flame & Moth	1,440	627	1.1	0.9	29,100	35,400	28,900

Surface core drilling by Alexco in the Flame & Moth resource area totalled 14 drill holes (3,986.2 m) in 2010, 32 drill holes (7,149.2 m) in 2011, and 48 drill holes (10,106.5 m) in 2012, eight drill holes (1,835 m) in 2013, and 49 drill holes (12,166.4 m) in 2014.

6.4 History of Onek Deposit

The Onek Mining Company Ltd. was organized in 1922 to explore the core Onek claims via a number of open cuts and shallow underground workings in two shafts. In 1950 to 1952, UKHM reopened the shafts and drove an adit in from the northwest to drift along the vein strike at the 400 level for approximately 396 m, driving raises up into the historic workings along the way. Some developmental mineralized material was removed. The Onek deposit was revisited in the early 1960s with limited success due to manpower shortages and poor ground support, as the timbers from the 1950s had been left in place. All mining at Onek ceased in 1965 until the late 1980s when a 20 m to 40 m deep open pit was developed over the length of the majority of the Onek workings near the historical shafts. Historical production from the Onek deposit is shown in Table 6-6.

Surface exploration consisted of extensive overburden drilling along the vein strike as exploration stepouts and as infill drilling for open pit delineation.

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Table 6-6 Past Production Records for the Onek Property

Mine	Tonnes		Ag (g/t)		Pb (%)		Zn (%)		Ag (oz)		Pb (lb)		Zn (lb)
Onek		86,447		466		5.5		3.4		1,299,333		10,456,254		6,452,107

Drilling by Alexco in the Onek prospect area totalled 13 surface core drill holes (2,803 m) in 2007, 29 surface core drill holes (5,127 m) in 2008, 25 surface core holes (2,913 m) in 2010, 12 surface core holes (1,138 m) in 2011, and two surface core holes (531.98 m) in 2012.

A 220 m decline was driven towards the Onek deposit in 2012 and 2013 following the drilling of a single 236.77 m surface core portal cover hole. In 2013, 12 underground core holes (738.50 m) were drilled.

6.5 History of Bermingham Deposit

The first claims in the Bermingham area were staked in 1921, within a decade of commercial production starting in the Keno Hill Silver District. Shallow underground workings were initiated in 1923 with the discovery of vein float and limited production of high-grade silver and lead from the Bermingham Vein ensued. When TYC optioned the Mastiff claim group in 1928, a 30 m shaft and 223 m of drifting had been completed on three separate levels. The underground workings showed a structure with a maximum width of 17 m on the 100 level that contained multiple bands of mineralization with interstitial waste that was cut off at its southwest extent by the Mastiff fault.

The TYC optioned the ground in 1928 and completed additional underground workings and identified a fault offset vein portion but dropped the lease in 1930 due to low silver prices and a lack of ore grade material. Trenching and prospect shafts identified the offset vein approximately 91 m to the west-northwest, where TYC sank the No. 1 shaft and completed 22 m of drifting. An oxidized siderite-pyrite vein with some galena was located below the position of the future main Bermingham pit but no mineralized material was reported from 127 m of drifting completed on the 200 level. TYC relinquished the lease in 1930 due to low silver prices and the absence of economic grade material. A variety of individual workers extracted another 676 t grading 7,875 g/t Ag and 70% Pb between 1930 and 1940. This work was poorly documented but is known to include considerable trenching, shafting, and drifting during 1930, 1932 to 1937, and 1939 to 1940.

UKHM subsequently purchased the property as part of the district consolidation, and during 1948 to 1951 drove an adit and drift approximately 9 m below the bottom of the TYC workings. In 1952, many of the old Treadwell workings were surveyed and sampled, but the adit level was subsequently abandoned in 1954 after very little ore grade material was realized. During this time, UKHM reportedly milled 5,165 tons of ore at 47.3 oz/ton (opt) Ag, 8% Pb, and 1.3% Zn, of which all but 60 tons was recovered from the old dumps.

Between 1965 and 1982, 874 overburden drill-holes totalling 19,931 m, and 27 core holes totalling 2,407 m were drilled in the Bermingham area, a small portion of which occurred in the present resource area. Poor ground conditions prevented many of these holes from adequately penetrating the vein zone, however they outlined an open pit resource and stripping began in 1977.

Stripping on the main Bermingham pit began in 1977 and until 1983 reportedly producing 82,649 t grading 572 g/t Ag. Overburden drilling and open pit mining led to a much better understanding of the geology. The feasibility of deepening the Bermingham pit was evaluated during 1980 to 1982 with several percussion drill holes testing the vein below the pit and two diamond drill holes testing the Bleiler extension to the northeast. The drill holes indicated a narrowing of the vein to 3.0 m to 4.5 m wide and did not encounter ore grade.

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To the southwest of the open pit and in the hangingwall of the Mastiff Fault, several historic shafts had tested the offset extension of the Bermingham Vein. These included the No. 3 shaft, sunk by TYC, which included 22 m of drifting on the 45 level. The vein was reported to be 2.4 m wide and to mainly consist of siderite with small bunches of galena; however, no ore was encountered. A small open pit did operate on this segment of the vein in the mid-1980s, and an intended second pit located 150 m to the southwest was stripped to bedrock in 1983. However, the veins exposed there appeared weak and un-mineralised. The historical mineral resource estimate does not use mineral resource categories stipulated by NI 43-101. The historical estimate should not be relied upon; it is only stated here for historical completeness.

The exploration conducted by Alexco is the first comprehensive exploration effort in the district since 1997. The first holes drilled by Alexco in the Bermingham area were in 2009 (two core holes totalling 523 m), targeting the Bermingham Vein at depth in the hanging wall of the Mastiff Fault below an area with a historic shallow open pit resource. Results of this drilling were sufficiently encouraging to continue exploration in 2010 and 2011. Alexco conducted further diamond drilling programs at Bermingham in 2012, 2014, 2015 and 2016 in the Bermingham deposit and surrounding area.

Between 2009 and 2018, a total of 56,324 m surface core diamond drilling has been completed by Alexco at Bermingham, with a total of 169 drill holes, including two drill holes (523 m) in 2009, nine drill holes (3,046 m) in 2010, 25 drill holes (6,888 m) in 2011, 17 drill holes (5,576 m) in 2012, eight drill holes (2,668 m) in 2014, eight drill holes (2,606 m) in 2015, 50 drill holes (17,371 m) in 2016, 38 drill holes (13,277 m) in 2017 and 12 drill holes (4,369 m) in 2018. In addition, 24 underground drill holes (4,214 m) were completed from the exploration decline in 2018. All holes were diamond cored in HQ/HTW apart for a few reduced to NQ/NTW because of ground conditions.

6.6 Past Production

In total, the Bermingham property reportedly produced 3,777,932 oz of silver from 168,979 tonnes of material milled (Cathro, 2006).

Table 6-7 Past Production Records for the Bermingham Property

Mine	Tonnes	Ag (g/t)	Pb (%)	Zn (%)	Ag (‘000 oz)	Pb (‘000 lb)	Zn (‘000 lb)
Bermingham	168,979	695	4.2	0.6	3,778	15,575	2,158

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7. Geological Setting and Mineralization

7.1 Regional Geology

The Keno Hill Silver District is located within the northwestern part of the Selwyn Basin in the central Yukon. The area is underlain by Upper Proterozoic to Mississippian metasedimentary rocks that were originally deposited in a marine shelf environment along the northern Cordilleran continental margin (Figure 7-1).

A compressional regime that existed during the Jurassic and Cretaceous produced thrusts, folds, and penetrative fabrics of various scales, with the geological structure in the area dominated by the highly deformed northwest trending Robert Service and Tombstone Thrust Sheets. Early large-scale deformation (D1 and D2) produced recumbent folds, resulting in local structural thickening of strata. A third deformational event (D3) produced gentle southwest-plunging synform and antiform pairs (Roots, 1997). The dominant structural fabric (foliation) is essentially axial planar to the early recumbent folds.

The Robert Service Thrust Sheet lies immediately to the south of the Keno Hill Silver District and is composed of a Late Proterozoic to Cambrian coarse-grained quartz rich turbidite sequence containing interbedded shales and locally limestone of the Hyland Group Yusezyu Formation.

The Tombstone Thrust Sheet underlies the Keno Hill Silver District and consists of basal Devonian phyllite, felsic meta-tuffs, and metaclastic rocks of the Earn Group that are conformably overlain by the Mississippian Keno Hill Quartzite Formation. The stratigraphy is locally thickened due to folding and/or thrusting and the basal part of the Keno Hill Quartzite is the predominant host of the silver-lead-zinc mineralization.

Four periods of intrusive rocks are recognized. During the Late Triassic, at about 232 million years ago (My), gabbro to diorite formed sills within the Tombstone Thrust Sheet. A second phase of plutonism took place approximately 92 My ago in the early Cretaceous and resulted in the widespread and voluminous felsic Tombstone intrusions of granitic to granodioritic composition that are regionally associated with gold mineralization. Cretaceous lamprophyre dated at 89 My occurs as metre scale dykes and sills. The youngest intrusions are peraluminous megacrystic potassium feldspar granite of the Upper Cretaceous McQuesten suite dated at approximately 65 My.

In addition to the polymetallic silver – lead – zinc mineralization occurring at Keno Hill, the region also hosts a number of other mineral occurrences and showings of tungsten, copper, gold, lead, zinc, antimony, and barite.

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Source: Yukon Geological Survey 2011

Figure 7-1 Regional Geology

7.2 Property Geology

The Keno Hill Silver District geology is dominated by the Mississippian Keno Hill Quartzite Formation comprising the Basal Quartzite Member and conformably overlying Sourdough Hill Member. The sequence is overthrust from the south by the Upper Proterozoic Hyland Group Yusezyu Formation and is conformably underlain in the north by the Devonian Earn Group as shown in the simplified local stratigraphic column in Figure 7-2 (McOnie and Read, 2009).

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Source: SRK 2013

Figure 7-2 Keno Hill Silver District Simplified Stratigraphy

The Yusezyu Formation of the Precambrian Hyland Group comprises greenish quartz-rich chlorite-muscovite schist with locally clear and blue quartz-grain gritty schist and is separated from the Keno Hill sequence by the regionally extensive Robert Service Thrust Fault that occurs immediately south of the area.

The Earn Group, formerly mapped as the “lower schist formation” (Boyle, 1965), is typically composed of recessive weathering grey graphitic schist and green chlorite-sericite schist with an upper siliceous graphitic schist found locally.

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Within the Keno Hill Quartzite Formation, the Basal Quartzite Member that is the dominant host to the silver mineralization, comprises commonly calcareous, thick to thin-bedded quartzite and graphitic schist and may be up to approximately 1,100 m thick where structurally thickened. The overlying Sourdough Hill Member, formerly mapped as the “upper schist formation” (Boyle, 1965), is up to approximately 900 m in thickness and comprises predominantly graphitic and sericitic schist, chloritic quartz augen schist some of which may be of volcanogenic origin, and minor thin bedded limestone.

The Earn Group and Keno Hill Quartzite are locally intruded by stratigraphically conformable, although lensoidal, Middle Triassic greenstone sills, for which any feeder dykes are unrecognizable. The sequence was metamorphosed to greenschist facies assemblages during Cretaceous regional deformation at about 100 My, and subsequently intruded by aplite sills or dikes considered to be related to the Tombstone intrusive suite.

Three phases of folding are identified with the two earliest phases consisting of isoclinal folding with subhorizontal, east or west trending fold axes, the axial plane forming the dominant regional foliation. The later fold phase displays subvertical axial planes and moderate southeast-trending and plunging fold axes. The first phases of folding formed structurally dismembered isoclinal folds of which the Basal Quartzite Member outlines synforms at Monument Hill where the Lucky Queen mine is located and at Caribou Hill, while between Galena Hill and Sourdough Hill the Bellekeno mine, the Flame & Moth and Bermingham deposits are located on the upper limb of a large-scale anticline that closes to the north.

Up to four main periods of faulting are recognized with the oldest fault set consisting of south dipping foliation parallel structures that developed contemporaneously with the first phases of folding, sometimes shown as “low angle bedding faults”. The Robert Service Thrust Fault truncates the top of the Keno Hill Quartzite Formation and sets the Precambrian schist of the Yusezyu Formation above the Mississippian Sourdough Hill Member. The silver mineralization in the Keno Hill Silver District is hosted by a series of northeast oriented, southeasterly dipping veins formed in pre- and syn- mineral faults referred to as vein-faults (Boyle, 1965) that display left lateral normal oblique displacement. There are two related sets locally recognized as either a more easterly trending “longitudinal” vein set that, depending on the competency of the host rock, can form up to a 30 m wide zone of anastomosing subparallel veins, or a more northerly trending “transverse” vein set that can reach up to 5 m in thickness.

The mineralized vein-faults are commonly offset by northwest striking, steeply southwest dipping, post-mineral cross faults, that display right lateral normal oblique displacement.

The simplified geology of the Keno Hill Silver District and location of the mineral deposits is shown in Figure 7-3 (Alexco, 2018).

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Source: RPA 2017

Figure 7-3 Geology of the Keno Hill Silver District

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7.3 Mineralization

Mineralization in the Keno Hill Silver District comprises carbonate vein hosted polymetallic silver-lead-zinc as described by Boyle (1965), Cathro (2006), Murphy (1997) and Roots (1997). It typically exhibits a succession of hydrothermally precipitated minerals deposited in veins or veinlets as a result of multiple pulses of hydrothermal fluid boiling events, probably related to repeated depressurization due to movement along the host fault structures. As a result, a progressive series of differing mineral depositional stages, assemblages and textures can be identified. To a minor extent, supergene alteration may have further changed the nature of the mineralogy in the veins, although this may have been largely removed due to glacial erosion.

In general, common gangue minerals include (manganiferous) siderite and, to a lesser extent, quartz and calcite. Silver occurs predominantly in argentiferous galena and argentiferous tetrahedrite (freibergite) with associated native silver, and the silver-bearing sulphosalts polybasite, stephanite and pyrargyrite being other important silver bearing minerals. Lead occurs in galena and zinc in sphalerite, which can be either an iron-rich or iron-poor variety. Other sulphides include pyrite, pyrrhotite, arsenopyrite and chalcopyrite.

Historically, it was believed that economic mineralization in the Keno Hill mining camp was restricted to a shallow zone of approximately 120 m thickness. However, the 370 m depth of production from the Hector-Calumet mine and drill indicated mineralization to over 350 m depth at Flame & Moth and Bermingham demonstrate that silver rich veins do exist over greater vertical intervals and suggests that other known veins may exhibit exploration potential at depth. It has been suggested (Cathro, 2006) that the mineralization may exhibit a vertical zonation with a typical mineralized shoot displaying a high silver and lead-rich top down to a low silver zinc-rich base; however, this has not been verified.

Across the district, favourable environments for mineralization are considered to occur where:

· Competent quartzite or greenstone host rock is present on one wall of the vein-fault as it can be observed that veins pinch down significantly in schist bound structures;

· The vein-fault splits to form a more northerly striking orientation; and

· The vein-fault changes to a steeper dip.

Wide veining with development of high-grade silver mineralization is spatially associated with vein-fault domains exhibiting steeper dip and/or more northerly strike.

7.4 Bellekeno Mine Mineralization

The Bellekeno vein system consists of ten known veins with variable characteristics. Vein material has been extracted from the Ram, Eureka, Tundra, 48, 49, and 50 veins that generally strike 030° to 040°, with dip directions varying 60° southeast to 80° northwest. Recent mechanized mining has focused on the stronger 48 Vein structure, while conventional historical narrower mining focused on the smaller, higher grade vein structures.

There are three main zones within the 48 Vein structure: the Southwest, 99, and East zones, each with distinctive silver to lead ratios, zinc content, and accessory mineral assemblages (Figure 7-4).

The thickness of the vein ranges between a few cm to upwards of 5.5 m. Post-mineral faulting typically shows intense iron carbonate alteration and local brecciation while the distribution of syn-mineral faulting is observed to have a strong impact on silver grades and mineral textures (Figure 7-5). Left oblique-normal movement along the 48 Vein structure is estimated from stratigraphic offset to be approximately 35 m.

The mineralized zones appear as discontinuous steeply plunging shoots, hosted within manganese-rich siderite vein structures and may have pervasive secondary limonitic alteration where exposed to groundwater. Minerals of economic interest include very fine-grained silver-bearing sulphosalts associated with galena and sphalerite. Common accessory minerals include pyrite, arsenopyrite, and chalcopyrite while anglesite, cerrussite, smithsonite, malachite and azurite have been occasionally observed.

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Figure 7-4 Schematic Longsection of the 48 Vein Bellekeno Mine showing Workings

 

Source: SRK 2013

Note. (gn) galena; (sid) manganese rich siderite; (sp) iron rich; (Fe 65) sphalerite; (lim) limonitic oxidation of carbonate facies; (sslts) non-specific sulphosalts; (qtz) siliceous floods and concretions associated with late breccias; (crb) white carbonate

Figure 7-5 48 Vein Structures and Mineralogy, Bellekeno Mine

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7.5 Lucky Queen Mineralization

The Lucky Queen vein-fault structure is essentially a singular structure with an average strike of approximately 043^o, that locally varies between 025^o to 060^o, and has an average dip of approximately 045^o to the southeast within a range of 30^o to 55^o. The main structure has a drill defined strike length of approximately 650 m with vein thicknesses ranging from just a few centimetres to several metres and is open along strike in both directions. Stratigraphic units correlated across the structure show a normal separation of approximately 30 to 35 m across the vein-fault. Mineralized zones are largely composed of brecciated wall rock, siderite (± limonite), vein quartz, with silver sulphosalts, galena, sphalerite, and native silver with minor arsenopyrite and pyrite (Figure 7-6).

 

Source: SRK 2013

Figure 7-6 Vein-Fault Intercept in Drill Hole K-07-0114, Lucky Queen

7.6 Flame & Moth Mineralization

The Flame Vein is unique because of its uniformly singular form, width, grade and length. It occurs over a one kilometre (“km”) strike length orientated at strike of 025^o and dipping approximately 65^o southeast and has been traced by drilling over to least 300 m depth extent. Two main styles of mineralized veining commonly with multiple banding, internal brecciation and often rehealed textures are observed (Figure 7-7). The early phase comprises dominantly quartz gangue with abundant but irregular amounts of pyrite, pyrrhotite, sphalerite and arsenopyrite, while a later phase comprises predominantly siderite containing abundant sphalerite, pyrite, galena, with minor chalcopyrite and trace amounts of tetrahedrite, pyrargyrite, jamesonite, boulangerite and cassiterite as identified in thin section samples.

The vein is divided into two parts by an approximate 90 m right lateral offset on the post-mineral Mill Fault that are referred to as the Lightning Zone in the southeast and the Christal Zone in the northwest.

The associated Moth Vein, the subject of historic prospecting, is considered to represent a footwall splay of the Flame Vein, although the relationship is not fully understood.

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Source: SRK 2013

Figure 7-7 Vein-Fault Intercept in Drill Hole K-12-0432, Flame & Moth

7.7 Onek Mineralization

The Onek vein system comprises at least three individual vein-faults occurring within a broad northeast striking, southeast dipping structural zone. The vein-faults occur over a strike length of at least 600 m formed in brittle fractured or milled zones, locally containing massive sulphide vein material in, or associated with, siderite and comprising sphalerite and galena along with minor pyrite, and arsenopyrite. Mineralized breccia zones, consisting of wall rock fragments and siderite-sulphide cement are also present, and are often surrounded by brittle fractured zones cemented by siderite and minor sphalerite stringers (Figure 7-8).

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Source: SRK 2014

Figure 7-8 Vein-Fault Intercept in Drill Hole K-10-0306, in the Onek Deposit

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7.8 Bermingham Mineralization

The Bermingham zone comprises a closely spaced series of subparallel steeply southeast dipping vein sets related to the master Bermingham vein-fault system. These are identified (hangingwall to footwall) as the Bermingham, Bermingham Footwall and Bear veins that can be traced over a north easterly strike distance exceeding 850 meters (“m”). In addition, a small resource is contained in a conjugate set of related West Dipping veins. In places less extensive, north-northeast striking vein geometries are observed within the mineralized system. Recent detailed underground and surface drilling work has focused on the Arctic and Bear Zones where the vein sets are connected either laterally or vertically within the wider Bermingham vein-fault structural corridor. Mineralization extends from between 90 m to 160 m below surface to a depth of approximately 450 m where veining remains open.

The mineralized veins are displaced by several post-mineral faults that essentially subdivide the system into several zones used for mineral resource estimation purposes, with the sequence from the southwest being Etta, Arctic, Bear and Northeast Zones separated by the Mastiff, Arctic and Ruby B faults respectively.

The early Aho Vein comprises predominantly quartz, that occurs over several metres width within a wide halo of structurally damaged rocks. Minor sulphides are present with arsenopyrite and pyrite being the most abundant, with accessory galena and sphalerite.

The Bermingham Vein has a strike between 029° and 042° and dips between 40° and 64° to the southeast and the structure accommodates approximately 65 m of the total Bermingham displacement. In the Etta Zone, and within the hangingwall of the post-mineral Mastiff fault, the Bermingham vein at its most southwestern extent is observed to converge with the Aho Vein structure; while to the northeast, it converges with the Bermingham Footwall vein.

The Bermingham Footwall Vein has a strike of between 040° and 060°, and dips between 67° and 73° to the southeast, and the structure accommodates approximately 70 m of the total Bermingham displacement. In the Etta Zone, the Bermingham Footwall Vein terminates against the Bermingham Vein up-dip and this intersection plunges moderately-steeply to the northeast into the Arctic Zone in the footwall of the post-mineral Mastiff fault. At depth the Bermingham Footwall Vein terminates against the Aho vein along a steep plunging north-easterly trajectory.

The Bermingham and Bermingham Footwall veins typically exist within a 5 m to 10 m wide structurally damaged zone containing numerous stringers, veinlets, breccias and gouge and generally forms a discrete silver mineralized vein 0.5 m to 2.5 m wide within this zone. It consists predominantly of carbonate (dolomite, ankerite, siderite and calcite), and quartz gangue, with the sulphides galena, sphalerite, pyrite, and arsenopyrite, and accessory, chalcopyrite, argentian tetrahedrite (freibergite), jamesonite, pyragyrite and native silver (Figure 7-9).

The Bear Vein strikes between 010°and 050° and dips between 65°and 80° to the southeast and accommodates approximately 30 m of the total Bermingham displacement. It occupies a position in the footwall of the system beneath a major flexure in the Bermingham Vein, with which it joins up-dip. At depth and to the southwest, the Bear Vein junctions with the Bermingham Footwall vein. Early phase mineralization is absent, and the Bear structure is considered a late response to the slip-impeding flexure in the Bermingham vein noted above, with the high-grade silver mineralization located on the more northerly striking and steeper dipping areas.

The West Dipping Vein is located between the Bear and Bermingham veins and it strikes 020° and dips 50° to the west. It displays only minor displacement that is considered to represent an adjustment due to a pronounced curvature in the hangingwall surface of the Bear Vein. Similarly, oriented veins were observed historically in the Keno Hill district in the Elsa, Husky, Runer, Black Cap mines and are also interpreted at Hector-Calumet and Lucky Queen (Boyle, 1965; Cathro 2006; UKHM, unpublished). The Bear and West Dipping veins are structurally and mineralogically similar to the Bermingham Vein, although early quartz and calcite are less abundant or absent, whilst silver sulphosalts are more abundant. This difference is considered a product of a shorter period of later deformation on the Bear and West Dipping vein-faults that provided mineral depositional sites only during the latter stages of the mineralizing cycle.

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The post-mineral faults that are recognized within the Bermingham resource area include the Mastiff, Hangingwall, Arctic, Ruby B and Super faults. The attitude of these southwest dipping faults appears bimodal, with one set striking between approximately 285° and another at approximately 315°, and likely represent end members of a single fault set. These northwest trending structures cut and displace all mineralized veins, and while they are typically non-mineralized, it is sometimes observed that mineralization may have been dragged into the later fault.

The Mastiff Fault has an attitude of 137° / 51° SW and displaces the hangingwall obliquely 131 m down to the northwest along a vector 302° / -23°. Its location is well constrained by drilling and exposure in the main pit. When discussing the location of the mineralization, the vein zones located to the east in the footwall of the Mastiff Fault are referred to as the Arctic, Bear and Northeast zones, and as the Etta Zone in the west in its hangingwall.

The Hangingwall Fault strikes between 000° and 025° and dips easterly at between 53° and 65° and is represented in drill core by very wide (10 - 30 m) zones of unconsolidated fault breccia and gouge, with sporadic weakly developed mineralization that occurs as trails of fragmented clasts interpreted to represent pre-fault material. The Hangingwall Fault extends to surface where it was intersected by historic trenching northeast of the current resource area.

The Arctic Fault strikes between 120° and 130° and dips between 45° and 68° to the southwest and displaces all veins 76 m down to the southwest along a vector 274° / -29°. It includes two sub-parallel splays and their generation is considered a response to a strong flexure in the main fault shape. A splay off the Arctic Fault, named the A Fault, is mapped in the open pit but this does not appear to have significant displacement and does not affect the current resource area.

The Super Fault is exposed in the eastern end of the open pit where the fault surface exhibits a thin skin of fault breccia on an undulating surface that has an average attitude of 133° / 25° SW with the hangingwall displaced approximately 42 m down to the southwest along a vector 272° / -15°. The structure is well represented in drill core and separates the mineralization in the shallow historic underground mine workings and open pit from the current resource area which is wholly situated in its footwall.

The Ruby B Fault strikes between 115° and 130° and dips between 60° and 70° to the southwest and separates the Bear Zone mineralization from the Northeast Zone by approximately 60 m right lateral offset. A similar separation of veining is observed on the fault within the historical underground Ruby mine located approximately 200 m to the northwest.

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Source: Mining Plus 2019

Figure 7-9 Vein-Fault Intercept in Drill Hole K-15-0580, in the Bermingham Deposit

Note: For the interval 307.82 – 313.16 m, being a 5.34 m interval that composited at 9,250 g/t (297.4 oz/t) Ag, 10.9 Pb and 0.4%Zn.

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8. Deposit Types

The Keno Hill deposits do not readily fit into a recognised mineral deposit model and attempts to classify a “deposit type” for the mineralization are questionable since the source(s) of metals and conditions related to ore-deposition are poorly understood.

Beaudoin and Sangster (1992) classified the Keno Hill as sediment-hosted veins, likened to the silver bearing deposits at Coeur d’Alene, USA and the Kokanee Range, Canada. A genetic relationship between silver-lead-zinc and intrusion related gold mineralization has also been postulated (Mair et al., 2006).

The mineralization has been more recently classified as belonging to the Lithogene genetic group (Greybeal and Vikre, 2010) which invokes a depositional environment of re-mobilized metals, with no magmatic contribution or associated gold.

Current information, however, shows that this latter classification is not correct, as there is some magmatic component, with local felsic intrusives acting at least in part as a heat source for hydrothermal fluid circulation and gold is associated with the mineralization.

Mineral precipitation occurred within the thick sequence of clastic metasedimentary rock from hydrothermal fluids at temperatures of between 250 to >400°C and estimated depths of up to 11 km. Mineral deposition probably occurred in multiple pulses in response to pressure and temperature changes as boiling or fluid mixing took place preferentially in structurally prepared open spaces primarily in the competent Basal Quartzite Member and Greenstone lithologies. The source of the metals is not fully known and could be leached from crustal rocks by hot circulating fluids or derived from late stage fractionation of the intrusives.

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9. Exploration

United Keno Hill Mines undertook extensive exploration in the Keno Hill Silver District until the mines closed in 1989 (Cathro, 2006). This historic work involved surface and underground drilling designed to explore and extend mining resources in the underground mines, as well as conducting regional surveys, mapping and drilling. It is beyond the scope of this report to describe all the historical exploration work completed in the district and only the relevant historical work is referred to below.

The exploration work conducted by Alexco since 2005 comprises the first comprehensive exploration effort in the Keno Hill Silver District since 1997, and it commenced with a program of digitally scanning and compiling a large number of geological maps and documents relating to nearly 70 years of historic mining into a coherent database with data combined from over 6,000 historic diamond and 16,000 overburden (RAB) drill holes. The data is available on a mapping platform that continues to be used to construct mine scale maps and three-dimensional (3D) mine models.

In 2006 a wide spaced district scale aerial magnetic and electromagnetic geophysical survey and air photography was undertaken. Diamond drilling of prospects ranked highly as having the potential to return mineable silver resources was also commenced that year with work focussing on the Bellekeno, Silver King and Lucky Queen mine areas.

Since acquiring the Keno Hill property, Alexco has completed a total of 737 surface diamond drill holes for a total of 189,529 m as shown in Figure 9-1. In addition, a total of 431 underground holes for 29,673 m has also been completed, mainly at Bellekeno, but also includes 24 holes for 4,213 m HQ drilled in 2018 from the Bermingham exploration decline. A further 34 RC holes and one sonic hole for a total of 1,242 m have been completed in the South McQuesten Valley area, exclusive of the resource definition drilling previously undertaken for the Elsa Tailings deposit. Table 9-1 provides an overview of all Alexco drilling across the District by area.

Exploration drilling by Alexco has been primarily conducted to test targets immediately adjacent to historic resource areas, and to a lesser extent to evaluate structurally controlled narrow vein mineralization targets based on interpretation of historic exploration data (Figure 9-2).

Table 9-1 Distribution of Drill Holes 2006 to October 2018 Alexco Resource Corp.

Deposit	Surface Holes		Surface Metres		Underground Holes		Underground Metres		Total Holes		Total Metres
Bellekeno		73		20,236		374		23,703		447		43,940
Lucky Queen		49		11,538		4		210		53		11,748
Onek		87		13,455		12		975		99		14,430
Flame & Moth area		167		37,822		17		572		184		38,394
Bermingham area		169		56,322		24		4,213		193		60,535
Other*		192		50,155						192		50,155
RC		35		1,242						35		1,242
Total		772		190,770		431		29,673		1,203		220,444

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Other prospects include: Bellekeno South, Black Cap, Brefalt, Bulldozer, Coral Wigwam, Eagle, Elsa, Galkeno, Hector-Calumet, Husky, Keno 700, Leo, Mackeno, McQuesten, Mom & Son, No Cash, Ruby, Runer, Shamrock, Silver King, Tick, Townsite.

In the western part of the district, initial drill programs have been completed at the McQuesten prospect (which is currently under active exploration by option holders Banyan Gold) and the Leo prospects. At Silver King, drilling of 10,453 m in 42 drill holes has mainly focused on extending the historic resource in the No. 5 Vein that is located in the hangingwall to the historically mined mineralization. Some significant intercepts indicate that further exploration is required on this structure, as well as along the extensions of the past producing No. 1 and No. 2 veins.

Along the Husky – Husky SW vein system, the northeastern extension of the Silver King structure, Alexco has completed 12,467 m of drilling in 46 drill holes. The results of this drilling have confirmed that in places the historically mined veins extend at depth below mine workings and thus the potential for locating additional mineralization is open.

The mineralized Bermingham vein structure is considered to be spatially related to the southwest extension of the major 96 m oz silver historic producing Hector-Calumet mine vein system and to extend southwest to the Coral Wigwam and Brefalt offset area; however, the structure is complex and a number of different veins are known. To date Alexco has completed 12,206 m drilling in 44 surface drill holes on exploring the Galena Hill area beyond the Bermingham resource area, and which includes several other subparallel mineralized vein structures such as Elsa, Townsite, No Cash and Ruby. This has resulted in the discovery of significant high-grade silver mineralization and importantly has possibly also located the faulted offset to the Bermingham system to the southwest. Other targets drilled at the northeastern end of Galena Hill at Eagle and Galkeno have obtained mineralized intercepts that will be followed up in the future.

In the Flame & Moth area, a new blind exploration discovery was made in 2010 based on following up on some historic drill results. Further exploration has been completed beyond the central resource zone to the Flame West, Mackeno, and Northeast Flame areas, with the total drilling in the Flame & Moth area comprising 42,695 m in 187 surface drill holes.

On Keno Hill, apart from within the Lucky Queen and Onek resource areas, Alexco has completed a total of drilling in 19 holes for 3,717 m on the Keno, Shamrock, Black Cap and Runer vein systems. In each of these locations results indicate that additional exploration work would be justified.

A district-wide surface geological mapping and structural study, started in 2007, has continued through the 2018 field season.

In late 2018, Alexco undertook an aerial EM-Magnetic geophysical survey over Galena Hill, which has provided detailed structural data that is assisting with the definition of future drill targets.

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Figure 9-1 Keno Hill Silver Project Distribution of Surface Exploration Drill Holes

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Figure 9-2 Underground Drill Hole Locations

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9.1 Exploration of Bellekeno Deposit

A series of surface and underground core drilling programs and geophysical surveys have been conducted on the Bellekeno deposit since 2006. The combined drilling programs have produced 43,940 m of drill core from 447 drill holes targeting mineralized zone extensions including the Ram, Eureka, 48 Vein systems, including the projected southwest Thunder Zone extension of the 48 Vein and the northern extension at Balto. Results were used to verify historical results and for mineral resource estimation (Wardrop, 2009).

This includes surface drilling totalling 20,237 m HQ core in 73 surface holes and 23,703 m in 374 underground holes (with all HQ apart from 79 NQ for 5,095 m). Since the interim closure of the Bellekeno Mine in 2013, modelling of the mine geology has assisted in the development of a Keno district exploration model that has helped in obtaining an understanding of the structural controls of mineralization.

9.2 Exploration of Lucky Queen Deposit

Drilling in the Lucky Queen prospect area in 2006 totalled 875 m in four surface core drill holes that targeted the vein structure below the southwest end of the historical workings and around the lowermost reaches of the internal winze.

Further drilling late in the 2007 season consisted of 557 m in three surface core drill holes, however only one reached the target depth before inclement weather forced an end to the program. In 2008, a further twelve surface core drill holes totalling 2,999 m were completed as stepouts along the strike of the vein to the southwest. Closer spaced and infill drilling around the 2007 drill hole intercept was the focus of the 2009 and 2010 programs when a total of 6,673 m drilling was completed in 28 surface holes to form the basis for a resource estimate (SRK, 2011).

Following partial rehabilitation of the historic 500 adit level in 2013, four underground core holes (211 m) were drilled outside of the resource area.

A district-wide surface geological mapping and structural study, started in 2007, was continued through the 2012 field season with findings incorporated into the Lucky Queen geologic model where applicable.

9.3 Exploration of Flame & Moth Deposit

Field mapping in the vicinity of shallow historic prospect workings on the Moth Vein identified the presence of a north-northeast trending vein-fault thought to have displacement of approximately 450 m based on the offset of local stratigraphy (McOnie and Read, 2009). In conjunction with review of the past exploration results on the property, this led to the generation of drill targets with the completion of 3,986 m of drilling in 14 drill holes in 2010 that provided the Flame Vein discovery hole (K-10-0264) intercepting 693 g/t silver over a 4.64 m interval.

During 2010, a soil geochemical and a ground magnetic geophysical survey were also completed over the area. A further 32 drill holes for 7,150 m were drilled in 2011 with the results leading to the publication of the initial resource estimate (SRK, 2012a). Follow up drilling of 49 drill holes for 10,325 m completed in 2012 supported a revised resource estimate (Farrow and McOnie, 2013).

During 2013 a further eight drill holes completed for 1,835 m, extended the strike length of the mineralization for at least 220 m to the southwest to a total of over 900 m. Several ground geophysical surveys were also undertaken at this time; however, these were not particularly successful in delineating the mineralization.

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Drilling completed in 2014 comprised 53 holes for 13,360 m that was largely designed to infill for an updated resource estimation (RPA, 2017) and to explore further along strike to the southwest.

Initial portal development of approximately 20 m was completed in 2016, followed by 17 geotechnical underground drill holes along the proposed decline trace, for a total of 572 m. At the end of September 2018, the decline had progressed for a distance of 312 m with a further 11 geotechnical and metallurgical drill holes completed in 1,167m.

9.4 Exploration of Onek Deposit

Drilling on the Onek prospect in 2007 totalled 13 surface core drill holes for 2,803 m that targeted the down-plunge extension of the mineralization outlined in the historical workings. Twenty-nine surface core drill holes for 5,130 m were drilled in 2008 as infill and extension around the well mineralized 2007 intercepts, and also targeted the historical resource blocks. No work was completed in 2009, but renewed focus in 2010 saw a further twenty nine surface holes drilled for 3,694 m further along strike to the southwest of the historical workings. Infill drilling to the southwest was completed in 14 surface core holes for 1.295 m in 2011 and in 2012 a further two surface holes for 532 m were drilled further along strike to the southwest outside of the resource area.

The drill data and results of detailed open pit mapping were used to constructing the geological model that formed the basis of the initial resource estimate completed in 2011 (SRK, 2011).

Following the drilling of a 237 m long surface core portal cover hole in 2012, a 220 m decline was driven northwest from the Lightning Creek valley and remains just short of the mineralized vein system. In 2013, eleven underground core holes for 739 m were drilled.

9.5 Exploration of Bermingham Deposit

The first targets generated in the Bermingham area were drilled by Alexco in 2009 with two holes completed for 523 m. The Bermingham Vein was targeted at depth in the hangingwall of the Mastiff Fault below an area where an historic shallow open pit resource had been outlined by UKHM and some unexplained silver drill hole anomalies existed. Results of this drilling were sufficiently encouraging to continue exploration in 2010 and 2011 when a further 34 holes were completed for 9,933 m.

In 2010, a soil-gas survey was conducted along a 2,200 m long by 175 m wide corridor stretching from Coral-Wigwam, over the historic Bermingham pit area, to the Townsite mine. An induced polarity and resistivity geophysical survey was conducted over the same area. As a result of these surveys, some anomalies were identified on the Bermingham trend along strike southwest of the historic open pit workings and these remain as future drilling targets.

Seventeen drill holes were completed for 5,576 m in 2012 to identify southwesterly extensions of the vein system and to also investigate vein continuity to the northeast into the footwall of the Mastiff fault. As a result of this drilling, an initial mineral resource estimate for the Etta and Arctic Zones was completed (SRK, 2012b).

Eight drill holes were completed for 2,667 m in 2014, to establish continuity to northeastern extensions to the mineralization, and in 2015 a further eight drill holes were completed for 2,606 m to follow up on a very high-grade intersection on what is now recognized as the Bear Vein located in the footwall of the Bermingham Vein. A revised resource estimate was prepared in 2015 (RPA, 2017).

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Fifty drill holes were completed for 17,371 m in 2016, to define the extent of this high-grade Bear Vein and to better understand the vein geometries and position of some post-mineral faulting known in the area. As reported later, the drilling was completed at sufficient intercept spacing to allow a renewed resource estimate (SRK, 2017). In addition, because all holes had been drilled in a northwesterly direction against the dip of the target structures, and there were some unexplained mineralized vein intercepts that could not be readily correlated, the presence of a reverse dipping vein set as seen in some historic mines was suspected. To test this, a series of five holes for 1,729 m were deliberately drilled in a southeasterly direction and confirmed the presence of the mineralized West Dipping Vein.

In 2017 a drill program was dedicated to the infill and better definition of the mineralized vein structures previously outlined at Bermingham and a total of 38 drill holes for 13,277 m were completed. On the basis of these results confirming the geological interpretation and tenor of silver grades, a 550 m underground exploration decline was completed by June 2018 to provide a platform for close spaced infill resource drilling.

In 2018, the Bermingham exploration program comprised a 24-hole, 4,213 m infill underground drilling component as well as a 12-hole 4,369 m surface program for deeper and more extensive targets.

The results of the district-wide surface geological mapping and structural study have been used in conjunction with the drill results and detailed remapping of the historic Bermingham open pit to resolve the stratigraphy and structural complications at Bermingham and to further refine vein targeting.

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10. Drilling and Trenching

10.1 Trenching

Limited historical trenching work was completed along vein strike extensions, with very limited assaying and little geological information was documented.

In 2013 Alexco completed a six trench program totalling 375 m on Galena Hill between the Bermingham and Hector-Calumet historic mines.

10.2 Drilling

In 2006, core drilling was performed by Peak Diamond Drilling, based out of Courtenay, British Columbia, utilizing two skid mounted drill rigs, a LF-70 drill, and an EF-90 drill. Drilling employed the wireline method using N-size equipment (NQ2).

In 2007 and 2008, core drilling was performed by Quest Diamond Drilling, based out of Abbotsford, British Columbia, utilizing four skid mounted drill rigs, two LF-70 drills, and two LF-90 drills in 2007; and two skid mounted drill rigs, one LF-90, and one QD-4 drills in 2008. Drilling employed the wireline method using H-size equipment (HQ).

The 2009 surface drilling was performed by Kluane Drilling of Whitehorse, Yukon, utilizing two skid mounted KD-1000 drills. Drilling employed the wireline method using N- and H-size equipment.

Surface drilling in 2010 was split among three contractors: Cabo Drilling based in Surrey, BC, Kluane Drilling out of Whitehorse, Yukon, and Ensign Encore Drilling from Calgary, Alberta.

Boart Longyear, based in Calgary, Alberta, completed the 2011 to 2018 surface drilling programs using LF70, LF90 wireline drill rigs or a LX11 multipurpose RC/core drill rig. All core was recovered in PQ, HQ and NQ sizes.

For all campaigns the drilling was well supervised, the drill sites were clean and safe, and the work was efficiently completed. Diamond drill operational safety inspections were conducted on each drill rig at various times throughout the drilling programs.

Underground core drilling at Bellekeno, Lucky Queen, and Onek in 2009, 2010, 2011, 2012, and 2016 was completed in NQ or HQ core size by Boart Longyear utilizing skid-mounted LM90 diamond drill rigs. Underground core drilling at Bermingham in 2018 was conducted by Boart Longyear utilizing two LM90 drill rigs and recovered in most cases HQ core.

Air rotary geotechnical/hydrological drilling programs completed at Flame & Moth and Bermingham in 2013 and 2016 were completed by Midnight Sun Drilling, based out of Whitehorse, Yukon, utilizing a Sandvik Marlin M5 Truck Mount rig. This drilling is not included in the drilling summary above.

Proposed surface drill hole collars were initially located using a handheld Garmin GPS device, with the completed collars being surveyed with either an Ashtech GPS device utilizing post-processing software or a Sokkia GRX1 RTK GPS.

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All underground collars and drill stations were surveyed by underground surveyors (employed by Procon Mining & Tunnelling Ltd. or Alexco) using a total station survey instrument. In 2017 – 2018 all underground surveying was undertaken by Alexco personnel with drill hole collar orientations set by Reflex Gyrocompass.

All coordinates are recorded in the Universal Transverse Mercator (UTM) NAD 83 Zone 8 map projection system. Up until 2010 downhole surveys are recorded using Reflex survey tools at regular intervals of between 15 m and 30 m depending on the hole location and geologic conditions. Since 2011 surface holes have been surveyed progressively down hole at 24 m intervals using Reflex single shot tools, while underground surveys have been by Reflex Multishot at 12 m intervals obtained on pulling out of the hole.

Standard logging and sampling conventions are used to capture information from the drill core. Between 2006 and 2010 core was logged in detail using paper forms with the resulting data entered into a commercial computerized logging program either by the logging geologist or a technician. Since then all core logging data has been directly digitally entered into a SQL based database with data including comments captured in separate tables including:

· Lithology: rock type, including significant fault or mineralized vein-faults, and textural modifiers;

· Structure: type of structure and measurements relative to core axis;

· Mineralization to identify type and intensity of oxidation, metamorphic, hydrothermal, or disseminated phases, and abundance of veining;

· Alteration;

· Stratigraphy: units consistent with the surface mapping; and

· Geotechnical: percentage recovery and rock quality determination and fracture intensity. Additionally, more detailed geotechnical data has been recorded from the Flame & Moth and Bermingham drilling.

Alexco systematically measured core bulk density (CBD) of mineralized material as well as basic rock types. Bulk density was measured using a balance and measuring the weight of core pieces in air and in water. The core weighted in water was not covered by wax or plastic film. Pulp bulk density (PBD) measurements were obtained by pycnometry on select assay intervals of mineralized zones for Alexco drilling by ALS Laboratories (ALS) and AGAT Laboratories (AGAT).

10.3 Historical Drilling at the Bellekeno Mine

Historical percussion and core drilling for the Bellekeno area extended from 1975 to 1996, and although all of the data has been compiled, some sections are most likely incomplete.

Between 1975 and 1996, UKHM drilled four surface, and two underground percussion programs. These drill holes were logged, sampled, and assayed at four and five -foot intervals, respectively (1.22 m and 1.52 m). Originally, percussion drilling and sampling was undertaken to mitigate loss of vein material observed in coring programs. However, the nature of chip logging, recirculation of water and rock material within these types of drill holes are considered poor data sources for technical reports and were not used for the resource estimation.

Coring programs between 1986 and 1996 were drilled from underground totalling 4,944 m across 60 drill holes under UKHM. Drill holes were drilled with BQ and NQ bits, but generally resulted in moderate to poor recovery in areas where foliation and stratigraphy were subparallel to the core angle, heavily fractured, and or friable material was encountered.

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Drill holes were generally designed to test for the downward extension of the 99 Zone, and smaller programs for the Southwest and East zones, as illustrated in Figure 10-1.

 

Source: SRK 2013

Figure 10-1 Bellekeno Mine Long Section, 1986–1996 UKHM Core Drill Holes. view to northwest

Archived drilling data and procedures were briefly reviewed by G. David Keller, P.Geo., of SRK as part of the updated PEA technical report issued by Wardrop in 2009. As part of this review, Mr. Keller discussed the drill core sampling procedures with UKHM staff active during the mining operations at Bellekeno. The drilling procedures were deemed reasonable based upon the limited information available (Wardrop, 2009), and thus considered reliable for geologic interpretation and resource calculations.

10.4 2006–2013 Alexco Drilling at the Bellekeno Mine

A total of 42,733 m of drilling from both surface and underground (excluding service holes) was completed at the Bellekeno deposit between 2006 and 2013 (Table 10-1).

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Table 10-1 2006 to 2013 Bellekeno Property Core Drilling Summary

Year	No. of Drill Holes		Length (m)
Surface Drilling
2006		10		3,737
2007		37		11,004
2008 (decline cover holes)		2		782
2009		17		2,730
2010		5		1,560
Total		71		19,812
Underground Drilling
2009		136		7,728
2010		49		4,938
2011		89		4,610
2012		64		4,520
2013		36		1,908
Total		374		23,703

In 2006 Alexco commenced an aggressive core drilling program to confirm and test the 1997 historical mineral inventory and block model as well to extend the known mineralization in preparation for publishing an updated resource. Between 2006 and 2009, 200 drill holes of HQ and HQ3 size were drilled from underground and surface platforms, resulting in 25,199 m core focused on the 48 and 49 vein structures. The drill core sampling and logging procedures were reviewed, and later compared against the UKHM drilling programs and active mining. The larger core diameter, along with triple tube chambers helped to limit core loss in the vicinity of the vein but did not fundamentally change core recovery. Drill core programs, surveying, and sampling procedures were considered reliable for geological modelling and mineral resource estimation.

During 2010, five surface core drill holes were drilled for 1,560 m with two drill holes on the southern offset of the 48 Vein structure and three drill holes to the north of the 99 Zone. The drill holes ranged in length from 124 m to 615 m, generally oriented to the northwest at inclinations of between -55° and -72°, to provide intercepts almost perpendicular to the vein structure resulting in vein intercepts close to true thickness. Downhole surveys were generally taken every 30 m, using a Reflex downhole survey tool. The distribution of surface drill holes is illustrated in Figure 10-2.

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Source: SRK 2013

Figure 10-2 Bellekeno Mine Long Section, Surface Core Drill Holes, 2006–2013. view to northwest

Underground core drilling programs undertaken at Bellekeno between 2010 and 2013 focused on infill resource definition, geotechnical and, to a lesser degree, extensional exploration programs. Over this period 238 drill holes for 15,976 m were drilled with completed lengths between 12 m and 285 m. Resource infilling drill holes were typically targeted on 15 m centres, while larger step outs of 25 m and 50 m were more common on exploratory drill holes. Attempts were made to intersect the vein structures at orientations that would provide intercepts close to true thickness. Drilling was generally along a northwest – southeast orientation, with declinations between +65° and -55°. The drilling pattern was considered consistent to operational requirements and sufficient to provide accurate resource estimations given the heterogeneity of the vein composition. The distribution of underground core drill hole traces is shown in Figure 10-3. A summary of core recovery by year is summarized in Table 10-2 and Table 10-3.

Drilling procedures and results have been reviewed and are considered reliable for geologic interpretations and resource calculations.

Table 10-2 Summary of Bellekeno Surface and Underground Core Recovery Statistics 1996 – 2009

	Core Recovery				NQ		HQ
Zone	%*		%**		Intervals		Intervals
East		81		83		5		0
99		67		75		30		5
SW		79		88		45		13
Average		76		83		Sum   80		18
* NR Zones are treated as 0% recovery ** NR Zones are excluded

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Table 10-3 Summary of Bellekeno Underground Core Recovery Statistics 2009 – 2012

	Core Recovery (%)
Headings	2009		2010		2011		2012
East Zone
Number		14		3
Average		67		21
Min		24		2
Max		91		34
99 Zone
Number		44				13		20
Average		72				58		62
Min		44				26		36
Max		89				99		86
Southwest Zone
Number		64		27		53		4
Average		80		73		62		80
Min		25		16		36		74
Max		98		98		86		84

Vein heterogeneity and moderate to poor vein recovery during drilling was overcome by the incorporation of chip data into the geological model. An example of vein heterogeneity is illustrated in Figure 10-4.

Source: SRK 2013

Figure 10-3 Bellekeno Mine Long Section, Underground Core Drill Holes, 2006–2013. view to northwest

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Source: SRK 2013

Figure 10-4 Photographic Section of 48 Vein Heterogeneity, Bellekeno Mine

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10.5 Historical Drilling at Lucky Queen

Historical drilling information is available for the Lucky Queen area from the 1950s through the 1980s. In 1957 UKHM drilled two surface core drill holes (Lucky Queen 2 and Lucky Queen 4) that intercepted the main Lucky Queen structure below the existing 300 level workings; however, core recovery was very poor. For example, across a 50.90 m interval (from a depth of 156.06 m to 206.96 m in drill hole Lucky Queen 4), recorded recovery averaged only 22% in the approximate vicinity of the vein because of the fractured and friable nature of vein material. No assays exist for these drill holes because vein material was either not intercepted or was not recovered and, thus, assaying was likely deemed unnecessary. In addition, survey control for these drill holes is sparse. For the above reasons the historical surface core drilling data was not used in the Lucky Queen resource estimate.

Between 1985–1987 UKHM drilled underground percussion test drill holes from the Lucky Queen 500 level adit that were sampled and assayed at 4 ft intervals. As percussion drilling does not reliably present the accurate location of a sample and no recovery data was obtained by UKHM. On this basis, historic assays were not used in this resource estimate. The test drill holes did however provide some useful geological information and were used to help constrain the geometry of the main Lucky Queen structure and associated splay structures during wireframe construction.

Shallow, rotary percussion surface drill holes were also drilled in the Lucky Queen area in the 1970’s through 1980 totalling approximately 20,400 m in 507 drill holes. As with the underground rotary percussion drill holes, these data were not deemed reliable for mineral resource estimation although the data was used in select geostatistics (variography) and in construction of mineralization and geological models, where applicable.

10.6 2006 – 2017 Alexco Drilling at Lucky Queen

Alexco conducted surface core drilling programs at Lucky Queen between 2006 and 2010 with 47 core drill holes totalling 11,105 m designed to test development of mineralization along strike and down-plunge of the historical workings (Figure 10-5).

In 2017 two core holes were completed for 433 m in the resource area for the purposes of obtaining fresh samples for metallurgical testwork.

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Source: SRK 2011a

Figure 10-5 Location of Surface Drill Holes Drilled from 2006 to 2010 at Lucky Queen. view to northwest

Surface drill holes ranged in length from 18 m to 324 m, averaging 235 m, with most drill holes drilled on a northwest azimuth with an inclination of between 45° and 80°. In most cases the drill holes were designed to intercept the mineralized zones perpendicular to the strike direction to give as close as possible a true thickness to the mineralized interval. Downhole surveys were taken approximately every 60 m in 2006, 30 m in 2007 and 2008, and 15 m in 2009 and 2010 using a single shot Reflex survey tool.

Drilling was designed to have a regular grid pattern with vein pierce point spacing on the order of 20 m to 30 m.

Following rehabilitation of most of the 500 adit level in 2012, four underground core holes for 210 m were drilled, although these were outside the resource area.

10.7 Historical Drilling at Flame & Moth

Historical drilling at Flame & Moth was predominantly shallow surface percussion overburden drill holes with 133 drill holes totalling 4,044 m drilled on an average azimuth of 320°. Nine core drill holes totalling 731 m were drilled from surface and 13 drill holes totalling 193 m were drilled from the shallow underground workings. Core recovery was generally poor, particularly in mineralized zones which were the only intervals assayed.

Due to recovery issues for the historical core drill holes, lack of careful sampling techniques, and the open hole nature of the percussion drilling, drilling data from these programs was not deemed reliable for use in the Mineral Resource estimation, although the data were used in the construction of geological models where applicable.

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10.8 2010 – 2018 Alexco Drilling at Flame & Moth

Between 2010 and 2014, Alexco conducted surface core drilling programs within the resource area at Flame & Moth with a total of 151 holes for 35,244 m in the area wireframe modelled for resource estimation (Figure 10-6). The exploration drilling was initially designed to test geologically derived targets in the vicinity of the historical shallow Moth workings. Following the new blind discovery of the Flame Vein in 2010, additional drilling was successful in outlining two zones of silver-lead-zinc mineralization on the Flame Vein, offset by the post-mineral Mill Fault to the Lightning Zone in the southwest and the Christal Zone in the northeast (Chipman and McOnie, 2015). Sufficient density of drilling has been completed to support mineral resource estimation.

 

Source: RPA 2017

Figure 10-6 Location of Surface Drilling from 2010 to 2014 at Flame & Moth Used in Resource Estimation. view to northwest

In 2010, 14 drill holes for 3,986 m were collared to target deep below the historically recorded mineral occurrence on an inferred pre-mineral fault structure identified by surface mapping (McOnie and Read, 2009). After losing the first drill hole in deep overburden, 11 other drill holes intercepted silver-lead-zinc mineralization that defined a mineralized vein structure striking 025° and dipping 62° southeast. One drill hole that was drilled furthest to the southwest at that time, encountered mineralization much deeper than anticipated and implied a right lateral post mineral fault offset of the structure.

In 2011, 32 drill holes were collared; however, eight were lost or abandoned, largely due to the presence of a deep paleo-river channel containing unconsolidated running sands and boulder beds. The majority of the drill holes targeted the up-dip extension of the mineralized vein located in the hangingwall of the Mill Fault (Lightning Zone) that had been identified in the 2010 drilling campaign. In total, 24 drill holes were completed to target depth for a total of 6,708 m.

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In 2012, a further 49 drill holes were collared to infill and extend the initially defined resource, although four were abandoned. Approximately half of the holes targeted the upper part of the Lightning Zone not previously drill tested, while the remaining holes were drilled in the lower and southwestern part of that zone and in various infill areas in the Christal Zone. In total, 39 drill holes were drilled to target depth for a total of 8,610 m.

In 2013, eight drill holes were completed outside the resource area for a total of 1,835 m to better define the upper part of the Christal Zone and the southwest extension of the Lightning Zone. Three air rotary holes were also drilled for hydrogeological purposes for an additional 624 m.

In 2014, 59 drill holes were collared in and around the Flame & Moth area, of which nine were abandoned. A total of 46 drill holes were designed to infill in the Christal and Lightning Zones and follow the southwest extension of the Lightning Zone. Three drill holes were used to define the overburden depth over a potential decline location while another ten drill holes tested nearby vein targets and geophysical targets adjacent to the resource area. In total, 50 drill holes were drilled to target depth for a total of 14,560 m.

In 2016, following the initial development of the Flame portal, 17 underground geotechnical drill holes were completed along the proposed decline trace, for a total of 572 m.

In 2018, a series of six shallow drill holes for 346 m were drilled to better define the base of the overburden channel in the vicinity of the proposed underground development and four holes for 773 m were completed to provide fresh material for metallurgical testwork.

Surface core drill holes in the mineral resource area that were drilled to target depth ranged in length from 38 m to 715 m. Most drill holes were drilled on a northwest azimuth with an inclination of between 45° and 90°. In most cases, the drill holes were designed to intercept the mineralized zones perpendicular to the strike direction to give as close as possible a true thickness to the mineralized interval. Drill hole spacing is in the order of 25 m to 60 m, with a closer spaced grid pattern in the core of the higher-grade mineral resource areas.

10.9 Historical Drilling at Onek

Historical core drilling at Onek is limited to 10 short horizontal underground drill holes that were drilled at various azimuths and did not include downhole surveys. Drill recovery was generally poor, particularly in mineralized zones and core assays were restricted to well mineralized zones.

Shallow, open-hole, surface percussion drilling was also undertaken in the Onek area, mainly in the historic open pit area, during the 1970s, with a total of approximately 13,000 m completed in 319 holes.

Due to recovery issues for the core holes, lack of careful sampling techniques, and the open-hole nature of the test/percussion, drilling data from these programs was not deemed reliable for use in the resource calculation. The data was used in select geostatistical analyses (variography) and in construction of mineralization/geologic models, where applicable.

10.10 2010–2014 Alexco Drilling at Onek

Alexco conducted surface diamond drilling programs at Onek in 2007, 2008, 2010 and 2011 with a total seventy-eight core drill holes for 11,828 m completed in the resource area (Figure 10-7). The drilling was designed to confirm and test historic reserve/resource blocks and extend known mineralization along strike and down plunge in order to produce a robust geological model for a new resource calculation in keeping with current standards.

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Two surface exploration core holes for 531.98 m were drilled along strike to the southwest outside of the resource area in 2012.

A 220 m decline was driven towards the Onek deposit in 2013 following the drilling of a single 236.77 m surface core portal cover hole, and eleven underground core holes for 739 m were drilled.

 

Source: SRK 2014

Figure 10-7 Location of Surface and Underground Drilling from 2007 to 2013 at Onek. view to northwest

10.11 Historical Drilling at Bermingham

Historical core drilling at Bermingham is limited to 16 core drill holes dating from 1969 located in the resource estimation area. The holes were drilled at an average azimuth of 323° and were not surveyed downhole. The average hole length was approximately 80 m with several holes ranging up to 146 m. Drill recovery was generally poor, particularly in mineralized zones, and core assays were restricted to well mineralized zones.

A small portion of the 874 shallow, open-hole, surface percussion drill holes completed historically in the Bermingham area were focused on the present resource area, first as vertical holes in a grid pattern on approximately 30 m centers, followed later by a definition drill program of inclined holes along strike of the vein to define an open pit target.

Due to recovery issues for the core holes, lack of careful sampling techniques, and the open-hole nature of the percussion drilling, drilling data from these programs was not deemed reliable for use in the resource calculation. The data were used in construction of mineralization/geologic models, where applicable.

10.12 2009–2018 Alexco Drilling at Bermingham

Alexco has conducted surface diamond drilling programs at Bermingham between 2009 and 2018 and underground drilling from the exploration decline in 2018. The database at Bermingham currently includes 193 drill holes for a total of 60,535 m of HQ core. Alexco commenced surface diamond drilling at Bermingham in 2009 with two core holes for a total of 523 m that were designed to test the Bermingham Vein at depth in the hangingwall section of the Mastiff Fault below historic open pit workings (Iles and McOnie, 2017).

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Silver-lead-zinc mineralization encountered in both holes and was deemed significant enough to warrant follow-up drilling the next year when nine core holes totalling 3,046 m were completed. Of these six intercepted the Bermingham Vein, one was abandoned due to bad ground and one missed the target due to unforeseen structural complexity. Interpretation of the data at this time led to the recognition of the subparallel Aho Vein located in the hangingwall of the Bermingham Vein.

Encouraging assays led to an expanded 2011 drill program with 25 holes for a total of 6,888 m completed, with 13 of these for 3,217 m completed in the hangingwall of the Mastiff Fault (Etta Zone) designed to explore and infill in the vicinity of the earlier drilling. The additional data obtained necessitated interpretation of a third vein structure developed in the footwall of the Bermingham Vein referred to as the Bermingham Footwall Vein. As well, nine holes for 2,466 m were completed in the footwall of the Mastiff Fault (Arctic Zone), partly to explore the intersection of the Bermingham and Aho veins as this structural configuration was thought to control the mineralization observed in the Mastiff hangingwall zone. Two of these holes were, however, abandoned due to poor ground conditions but the continuation of vein structures was traced several hundred metres to the northeast.

In 2012, 17 drill holes totalling 5,576 m were completed with one 314 m long hole drilled to follow up on 2011 drill holes that encountered structures carrying anomalous silver values to the northeast of the Bermingham open pit. As a result, the strike length of the Aho Vein was extended 440 m in this direction. Nine holes totalling 2,978 m were drilled in the Arctic Zone in the footwall of the Mastiff Fault to better define and extend mineralization encountered in this zone during 2011 drilling. One of these holes had to be abandoned due to poor ground conditions before reaching target depth and another missed the target vein due to fault complexity. The seven holes that successfully intercepted the Bermingham structures demonstrated the continuity of strong mineralization along a strike length of more than 200 m with one intercept of 1,639 g/t (52.7 oz/t) Ag over 4.04 m true thickness that contained pyrargyrite and native silver. Mineralization remained open at depth and along strike to the northeast. Four holes totalling 1,798 m were also drilled 200 m to the southwest of the resource area and intercepted vein extensions in the Etta Zone; however, the silver values were low grade.

In 2014, eight core holes were drilled for a total of 2,668 m, with four of these (1,192 m) drilled in the immediate footwall of the Mastiff Fault (Arctic Zone) to allow for resource estimation, and four holes (1,476 m) drilled to the northeast of this area to expand and infill around a well mineralized Bermingham Vein intercept in drill hole K-12-0477. All four holes intersected the mineralization, with one intercept returning a composite assay of 6,118 g/t (196.7 oz/t) Ag over 5.81 m true thickness in hole K-14-0537 on a vein that is now referred to as the Bear Vein.

Eight core holes targeting the area around the high-grade intercept in drill hole K-14-0537 were drilled in 2015 for a total of 2,606 m. Four of these holes intercepted similar grades to define a steeply plunging shoot in the newly recognized Bear Vein.

Fifty drill holes were completed in 2016 for 17,371 m, primarily to explore the Bear Vein that ranges in true width up to 6.4 m at 5,660 g/t (182 oz/t) Ag in drill hole K-14-0537 and in grade up to 7,465 g/t (240 oz/t) Ag over 5.0 m true width in drill hole K-15-0580.

In 2017, 38 core holes were completed for 13,277 m to extend mineralization in the Arctic Zone and to explore further northeast to the location where the Northeast Zone mineralization was discovered.

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In 2018, a total of 38 core drill holes for 8,583 m was completed. This comprised 24 underground HQ holes collared from two sites in the exploration decline for 4,214 m that were designed to close space infill on the upper part of the high-grade Bear Vein, and 12 surface holes for 4,369 m designed to provide deeper intersections on the Bermingham and Bermingham Footwall veins and infill the area between the Etta and Arctic zones.

The Bear Vein mineralization has now been traced over a down-plunge extent of over 300 m (over a vertical range of 230 m) and a plunge width of up to about 100 m, with the top of the deposit being approximately 130 m below surface. Deeper exploration drilling has also been initiated with the objective to explore the set of mineralized veins known from Bermingham at the elevations where they can be expected to occur in the same competent host rock stratigraphy as seen in the nearby major Hector-Calumet deposit.

To date the interpretation of the consolidated drilling results has identified four significantly mineralized vein-fault sets that splay and change orientation along strike within the north-northeast striking and moderately to steeply southeast dipping Bermingham structural corridor. This structural corridor is divided into the Etta Zone in the hangingwall of the post-mineral Mastiff Fault and the Artic Zone in its immediate footwall, with the Bear Zone now identified between the post-mineral Arctic and Ruby B faults and the Northeast Zone to the northeast of the Ruby B Fault. The main through going Bermingham and Bermingham Footwall veins both occur in the Etta, Arctic and Bear zones, while the Bear and associated conjugate West Dipping vein sets occur within the Arctic and Bear zones in a position controlled by a flexure in the Bermingham vein-fault, and the Bermingham and Bear veins are interpreted to occur in the Northeast Zone.

Surface drill holes in the area have been drilled to depths of up to 611 m. Most holes were drilled on a northwesterly azimuth with a declination of between 50° and 80° and were designed to intercept the primary mineralized zones as perpendicular as possible to the strike direction to give as close as possible a true thickness to the mineralized interval, although this was not always possible due to maximizing use of drill sites and the complexity of veining and several commonly being intercepted in a single drill hole. Downhole surveys for surface holes were taken at approximately 15 to 24 m intervals using a single shot Reflex survey tool, while the underground holes were surveyed with a multishot Reflex survey tool at 12 m intervals.

In addition to the core holes, two air rotary holes were drilled in 2016 for hydrogeological purposes.

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Source: Mining Plus 2019

Scale: 500m grid lines.

Figure 10-8 Location of Bermingham drilling from 2009 to 2018 (Oblique longitudinal view to northwest)

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11. Sample Preparation, Analyses and Security

11.1 Sample Preparation and Analyses

11.1.1 Historical Sampling (Pre-Alexco)

Information regarding historical (pre-Alexco) sampling approach and methodology is limited. The available documentation is outlined below.

A 1965 UKHM document outlines the sampling procedures for a newly purchased percussion drill. It was found that in most cases the frozen ground gave sufficient support for the drill hole without additional casing. In a few cases where the ground was not frozen, casing was advanced with the drill bit.

Drill cuttings were collected using a locally designed cone-shaped deflector with a catch pan shaped to fit around the casing. During drilling operations, cuttings were blown upwards between the drill rod and the casing, where they hit the deflector and were caught by the catch pan. Runs were 5 ft (1.5 m) in length and provided 10 lb to 15 lb of sample material. At the end of each shift, several hundred grams were split from each sample in the geochemical laboratory; the remainder of the sample material was screened to -14 mesh. Constituents of the fine and coarse fraction were identified separately.

A document dated 1994 by Watts Griffiths and McQuat (WGM) outlines sampling procedures for the reverse circulation drilling. Two samples were to be collected for each 5 ft interval. One sample was sent to the laboratory while the other sample stayed at the drill for reference. The samples were collected in porous plastic bags and were dried prior to analysis. The document stresses cleanliness during the sampling procedure in order to avoid contamination.

An undated UKHM document outlines underground chip sample procedures as well. In addition to the above information, emphasis is put on clean faces in order to prevent sample contamination from previous blasting activities. Samples were to be taken within a 1.5 ft (0.5 m) wide area across the rock face. In addition to separate samples per rock type, this undated document requires separate samples for a change in structure. The sample location was to be measured from the nearest survey station; the resulting distance measurement was used to plot the samples (and assay results) on level plans. More detailed information was listed regarding the direction in which samples were to be taken for various kinds of underground openings.

11.2 Alexco Core Drilling Sampling - Exploration Programs (2006–2018)

The sampling protocol adopted by Alexco has remained relatively unchanged for the surface and underground drill programs conducted between 2006 and 2018.

Core logging and sampling is completed by Alexco staff, where a logging geologist marks the sample intervals and cutting orientation normal to veins on the core. After logging, the core is digitally photographed and for surface core sawn in half lengthwise using a diamond saw where possible and for broken core it is manually split in half. One half is returned to the core box for storage at the site and the other placed in a thick-walled plastic bag for sample shipment. At Bellekeno, whilst in production, some core was whole core sampled, and recently at Bermingham a proportion of the underground resource definition core was also whole core sampled to obtain more representative samples of the high-grade silver mineralization. No further on-site processing is undertaken.

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Samples are a maximum of 2 m in length within unmineralized major rock types but are broken at lithological contacts and at significant mineralization changes. Intervals with no recovery due to core loss are recorded separately. Sample intervals within mineralized zones range from 0.10 to 1.0 m, based on consistency of mineralization. In initial work at the prospects, drill holes were sampled top to bottom; however, once a considerable body of geochemical data was available and the nature and distribution of the mineralization better understood, some intervals of barren material have not been sampled particularly in close proximity to adjacent drill holes that had been sampled continuously.

Some minor modification in the sample shipment procedure has occurred over time, primarily in response to changing laboratory locations and the logistics surrounding available commercial transport. In all cases, approximately four to five individual samples are placed in polyfibre bags for shipment.

In 2006, samples were sent to Whitehorse, Yukon by Kluane Transport then by Manitoulin Transport to the ALS Chemex facility in North Vancouver, British Columbia for preparation and analysis. Beginning in 2007, each shipping bag was sealed with a numbered security tag, before being placed on pallets and shrink wrapped for shipping.

In 2007/2008, samples were transported to the Canadian Freightways facility in Whitehorse, Yukon by Alexco personnel. Canadian Freightways then trucked the samples to the ALS Chemex facility in Terrace, British Columbia for preparation. Pulverized subsample splits were then sent to the ALS Chemex facility in North Vancouver, British Columbia for analysis.

In 2009, samples were transported to the Eco Tech Labs preparation facility in Whitehorse, Yukon by Alexco personnel. Pulverized subsample splits were then sent to the Eco Tech facility in Kamloops, British Columbia for analysis.

In 2010, samples were shipped via Manitoulin Transport to Whitehorse, Yukon where they were couriered to the preparation facilities of either AGAT or ALS Minerals in Whitehorse. The pulverized subsample splits were then sent to the AGAT facility in Mississauga, Ontario, or the ALS facility in North Vancouver, British Columbia, for analysis.

Between 2011 and 2013, samples were shipped via Manitoulin Transport to Whitehorse, Yukon where they were delivered directly to the preparation facilities of ALS Minerals in Whitehorse. The pulverized subsample splits were then sent under seal by the laboratory to the ALS facility in North Vancouver, British Columbia, for analysis.

Since 2014, samples have been shipped in sealed wooden boxes containing approximately 100 samples, directly by Alexco employees to the ALS Minerals sample preparation facility in Whitehorse and again the assay pulp is transported under seal by the laboratory to the North Vancouver analytical facility.

ALS Minerals, Eco Tech, and AGAT are all accredited to ISO 17025 by the Standards Council of Canada for a number of specific test procedures, including fire assay for gold and silver with atomic absorption and gravimetric finish; multi-element inductively coupled plasma optical emission spectroscopy; and atomic absorption assays for silver, copper, lead, and zinc. ALS Minerals laboratories also participate in a number of international proficiency tests, such as those managed by CANMET and Geostats.

Sample preparation and analyses have been consistent for the 2006–2018 Alexco programs. Sample preparation consists of initial fine crushing of the sample to better than 70% passing 2 mm with the crusher cleaned with “barren material” after every sample. A nominal 250 g split of this material is then pulverized to greater than 85% passing 75 m for analyses with the pulverizer cleaned with “barren material” after every sample. Duplicate samples are prepared at the preparation facility by collecting a second 250 g split from the crushed material taken from the preceding sample when noted.

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Samples are analyzed for gold by fire assay and atomic absorption spectrometry on 30 g subsamples and for a suite of 27 to 48 elements by four acid digestion and either inductively coupled plasma atomic emission spectroscopy (ICP-AES) or induced coupled plasma mass spectroscopy (ICP-MS) (on 0.5 g subsamples). Elements exceeding the concentration limits of ICP-AES or ICP-MS are re-assayed by single element four acid digestion and atomic emission spectroscopy. Silver results exceeding ICP-AES limits are re-assayed by fire assay and gravimetric finish on 30 g subsamples. Lead and zinc results exceeding concentration limits are analyzed by volumetric titration.

Crush reject material and residue assay pulps are annually returned to the Elsa exploration base for storage.

In the opinion of the author, the sampling preparation, security, and analytical procedures used by Alexco are consistent with generally accepted industry best practices and are, therefore, adequate for inclusion in this study.

11.3 Quality Assurance and Quality Control Programs

Alexco implements standard assay quality control procedures for all Keno Hill Silver District drilling campaigns. Each 20-sample batch sent for assaying includes three control samples: a commercial standard reference material (SRM), a blank, and a duplicate. The location of control samples in the sample stream is defined by the logging geologist (standard reference material or SRM, blank, and duplicate). Control samples are inserted when the core is sawn or when the whole core is sampled. The SRM is already processed to a pulp and is inserted as a 50 g to 100 g sample. The blank is commercially purchased “landscape rock,” either dolomite or basalt with approximately 0.35 kg to 1.5 kg of this material inserted. An empty sample bag is inserted at the location of the duplicate, which is prepared during sample preparation at the laboratory prep facility. The duplicate consists of a coarse reject split of the preceding sample.

The quality control program developed by Alexco is considered mature and overseen by appropriately qualified geologists. The data collected by Alexco on the Project was acquired using adequate quality control procedures that generally met or exceeded industry best practices for an exploration property at the resource delineation stage.

11.3.1 Historical Core Drilling Data

All accessible core drill hole logs were transcribed onto standardized spreadsheets as close to verbatim as possible; the original logs were scanned, and file names and numbers were recorded in the new spreadsheets as well. These first spreadsheets were then inspected by geologists for consistency. The next step was to “normalize” the original transcribed data in order to match current nomenclature; data verification was ongoing. Collar information, as well as survey, assay, and recovery data were then verified by a person other than the original data entry person; the final step was to amalgamate separate spreadsheets into one global database.

11.3.2 Bellekeno Historical Core Drilling Data

Bellekeno underwent three phases of core drilling: 1986, 1994–1996, and 2006–2013. Alexco’s access to mine workings in 2009 allowed resurveying of the 1986 and 1994–1996 historical (UKHM) drill hole collars in UTM coordinates, thereby assuring all collar locations were tied to a common datum.

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In instances where 2009 underground drilling and historical drilling were twinned, the positioning of the 2009 composite locations were honoured, as historically down-hole surveying was irregularly spaced or not done at all.

In instances where surface drilling and underground drilling had conflicting contact locations, 2009 underground drilling was honoured. This was the case in the Southwest zone with surface drill hole K-07-0101. The vein intercept in this drill hole is 376 m downhole. Within 15 to 20 m on each side are two Alexco underground drill holes of 15 m length of similar grade and thickness. In this case, the grade from K-07- 0101 was used in the estimation but its position is assumed to be defined by the adjacent underground drill holes.

Drilling programs under the supervision of UKHM were given careful scrutiny prior to being incorporated into the Alexco resource estimation. Historic data was evaluated and checked by processing paper drilling logs into electronic formats, resurveying of underground drill hole collars, and twinning of historical vein pierce points. Early programs were deemed reasonably complete and accurate for the purpose of resource and geologic modelling.

Two phases of underground core drilling occurred at the Bellekeno mine under UKHM management, 1986 and 1994-1996. During this time, most of the drilling operated off the local Treadwell grid system. For verification purposes, Alexco resurveyed the collar positions of the core and percussion drill holes in 2009 on the areas where the mine rehabilitation had been completed. The collar data was then verified against the UTM NAD 83 Zone 8 map projection coordinates. Only minor discrepancies were found in the underground percussion drilling. While the collar positions were updated, these drill holes were not included in the resource evaluation.

As part of the due diligence for the 2009 updated preliminary economic assessment (PEA) conducted by Wardrop (2009), twinning of the core drill hole vein pierce points was conducted. Twinned intercepts were commonly within 0.5 m to 1.5 m of the original pierce point. In most cases, the intercepts of both drill holes were commonly useable for interpretations. However, in instances where the two pierce points were significantly different, the 2009 underground drilling was given precedence. Surface drill holes were assumed to have more deviation because of down-hole depth, and irregularly spaced or incomplete down-hole survey data.

11.3.3 Lucky Queen Historical Core Drilling Data

Historical drilling data are not deemed reliable and, therefore, was not considered for mineral resource estimation.

11.3.4 Flame & Moth Historical Core Drilling Data

Historical drilling data are not deemed reliable and, therefore, was not considered for mineral resource estimation.

11.3.5 Onek Historical Core Drilling Data

Historical drilling data are not deemed reliable and, therefore, was not considered for mineral resource estimation.

11.3.6 Bermingham Historical Core Drilling Data

Historical drilling data are not deemed reliable and, therefore, was not considered for mineral resource estimation.

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11.3.7 Historical Chip Sample Data

Data verification by Alexco personnel and the QP was completed on the TYC and UKHM underground chip sample data from the assay plan maps for each deposit where they were available. The verification procedure consisted of cross-checking the assay values in the database to the values on the original scanned historic assay plan maps. The sample interval points and respective silver assays were imported from the database and overlain on the original maps. All points were visually inspected to ensure that chip sample lines fell within the boundaries of the drift outlines. Then all assay intervals in the database were checked to ensure they matched with what was originally written on the maps.

11.3.8 Bellekeno Historical Chip Sample Data

Both historical (UKHM) chip sample and Alexco chip sample data was used in the grade estimation. Historical chip samples were commonly analyzed for silver, lead, and zinc only. Chip samples were generally taken as cuts across the vein and into the hangingwall and footwall rocks. The wireframe was constructed regardless of chip sample location. Chip samples were not used to define wireframe contacts or wireframe width. The determination of which chip samples to use in the grade estimation was made by “capturing” the chip sample intervals within the wireframe and tagging those intervals for composite. An interval had to be at least 25% within the wireframe to be tagged and used for compositing. The 25% rule was used because of the location uncertainty in the historical surveying of upper levels and stopes that were inaccessible to Alexco.

The high density of chip sample composites warranted declustering so that drill hole data influence on estimation would be honoured and chip sampling bias would be reduced. Chip sample composites were declustered on a 10 m x 6 m x 10 m grid.

Historical chip sample data was extensively reviewed by Alexco and the QP as part of the 2009 updated PEA. Chip assay values and string traces were visually referenced against the grades plotted on level plan view maps. During this early review, chip data was accepted if:

a. the chip lines matched the UTM co-ordinates in the database within 0.1 m;

b. the chip lines fell within the boundaries of the drift outline;

c. the assays were real values; and

d. the grades checked against the face grade sheets.

Literary reviews of UKHM practices suggest a strong emphasis was placed on chip sampling, and chip sample protocols were well established by the time stoping began at Bellekeno in 1988. Mine correction factors issued across the KHSD suggest the chip samples from Bellekeno were very representative of the vein material received; the mine was assigned a correction factor of 1.0.

Chip samples collected by UKHM were commonly analyzed for silver, lead, and zinc, while chip samples above the 400 level were commonly only analyzed for silver. Data tracking for Bellekeno during 1988–1989 included car sampling of the vein material before it was transported to the mill. A production review of the data showed a 12% variance between the car and chip data. Further analyses of the chip data using declustered data by zones are summarized in Table 11-1. This table summarizes a 14% to 40% variance in silver assay by zone. Results are significantly higher than anticipated, and do not reflect the chip sample to mill sample variations currently observed with active production. Sampling tests conducted by the QP in 2011 showed a good mixing trend between chip samples, truck samples, and belt samples taken at the mill over a one-month period. After reviewing the historical statistical data, the declustering analysis was considered excessively conservative given the reconciliation of the active chip samples with smelter products, and the chip- truck-belt cut mixing curves observed. The QP considers the historical chip data from the Bellekeno resource area to be reliable.

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Table 11-1 Statistical Review of UKHM Bellekeno Production Chip Data

	Mean
Area	Ag (ppm)			Pb (%)			Zn (%)
99 Zone
Chip Sample Data		1,269			6.93			2.89
Declustered Chip Sample Data		897			5.19			2.31
Difference		-29	%		-25	%		-20	%
Southwest Zone
Chip Sample Data		1,047			10.15			3.53
Declustered Chip Sample Data		626			5.85			2.58
Difference		-40	%		-42	%		-27	%
East Zone
Chip Sample Data		391			0.57			6.83
Declustered Chip Sample Data		338			0.49			6.2
Difference		-14	%		-14	%		-9	%

11.3.9 Lucky Queen Historical Chip Sample Data

No historical chip data were used for mineral resource estimation. The data were used in select geostatistical analyses (variography) and in the construction of mineralization and geological models, where applicable.

11.3.10 Flame & Moth Historical Chip Sample Data

No historical chip data were available for the Flame & Moth deposit.

11.3.11 Onek Historical Chip Sample Data

The QP reviewed the historical chip data for the Onek deposit and because of the apparent bias associated with the chips sample data, The QP decided only to use the chip data to model the vein contacts. None of the historical chip samples were used to estimate the mineral resource.

11.3.12 Bermingham Historical Chip Sample Data

No historical chip data were available for the Bermingham deposit.

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11.3.13 Verification of 2006 to 2018 Data by Alexco

Alexco maintains an SQL database of all the Project drill and sample data. Each property is assigned an identifier to extract property specific subsets from the master database. Until 2010, all data was entered or imported into the database via Datashed database management software, and subsequently through customized GeoSpark software. The data for individual properties is exported from the SQL database by scripted routine to Excel files, which are imported into MineSight or MapInfo Discover. The following drill hole files are generated: collar, survey, drill hole assay, chip sample assay, lithology, stratigraphy, mineralization, structure and geotechnical. During the drilling programs, Alexco personnel conducted routine visual verifications to ensure the reliability of the drilling data, including a 100% check of the collar and survey tables and a minimum 10% verification of the remaining exported tables. The process uncovered a low level of data entry errors, which were corrected. Subsequently, all drill collar and survey data are validated by a senior geologist and through computer plotting.

Three control samples (standard, blank, duplicate) are included in each 20-sample batch sent for assaying. Alexco originally used one of 16 standard reference material (SRM) purchased from WCM Sales Limited of Burnaby, British Columbia: eight polymetallic copper, lead, zinc, and silver reference materials (PB 111, PB 112, PB 113, PB 116, PB 129, PB 131, and PB 137) and eight silver reference materials (PM 1107, PM 1108, PM 1116, PM 1117, PM 1128, and PM 1133) for inclusion in each 20-sample batch (Table 11-2).

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Table 11-2 Commercial Standard Reference Material Used by Alexco for Drilling Programs for the KHSD Project

SRM	Cu (%)		SD		Pb (%)		SD		Zn (%)		SD		Ag (g/t)		SD		Ag (oz/t)		SD		Au (g/t)		SD
PB111		0.69		0.01		2.12		0.04		0.45		0.02		195		6		-		-		-		-
PB112		0.85		0.01		0.92		0.02		1.27		0.03		222		2		-		-		-		-
PB113		0.47		0.01		1.11		0.02		1.40		0.05		22		1		-		-		-		-
PB116		0.43		0.01		1.40		0.06		0.85		0.02		22		1		-		-		-		-
PB129		0.28		0.01		1.24		0.02		2.00		0.06		23		1.7		-		-		-		-
PB131		0.47		0.01		1.04		0.04		1.89		0.06		262		11		-		-		-		-
PB137		0.21		0.01		2.62		0.09		2.69		0.115		111		2		-		-		-		-
PB141		1.02		0.013		6.68		0.146		3.78		0.136		173		3		-		-		-		-
PM1107		-		-		-		-		-		-		1,194		34		34.8		1.0		-		-
PM1108		-		-		-		-		-		-		658		10		19.2		0.3		-		-
PM1116		-		-		-		-		-		-		769		23		22.4		0.7		-		-
PM1117		-		-		-		-		-		-		386		16		11.3		0.5		-		-
PM1123		0.31		0.0082		-		-		-		-		31		1.2851		-		-		1.42		0.046
PM1127														1580		36
PM1128		-		-		-		-		-		-		592		12		17.3		0.4		-		-
PM1129														34		1.7
PM1130														101		3
PM1132		-		-		-		-		-		-		2287		54.334		66.69		1.5847		-		-
PM1133		-		-		-		-		-		-		757		19		22.1		0.5		-		-

In 2012, Alexco also started using a series of certified standard reference material developed from the Bellekeno deposit: polymetallic standards (Table 11-3), that were certified by Smee & Associates Consulting Ltd. (Bellekeno-C, Bellekeno-M, Bellekeno-S, Bellekeno-R and Bellekeno-W) that were initially tested as internal lab standards at the on site Bellekeno Mine assay laboratory along with CDN Resource Laboratories Ltd. Standards (ME-4, ME-5). The Bellekeno derived standards are now commercially available as the KHP series below and continue to be used routinely with the range of WCM standards.

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Table 11-3 Standard Reference Material Used by Alexco developed from the Bellekeno Mine

SRM	Pb (%)		SD		Zn (%)		SD		Ag (g/t)		SD		Ag (oz/t)		SD
KHP-C		14.62		0.58		12.32		0.23		1,162		23.5		-		-
KHP-M		14.02		0.63		7.85		0.20		971		19		-		-
KHP-R		36.19 (Provisional)		2.33		5.08		0.13		2,224		47		-		-
KHP-S		12.47		0.38		13.17		0.41		1,094		20		-		-
KHP-W		3.06		0.06		1.79		0.05		270		10		-		-
ME-4		4.25		0.12		1.10		0.03		402		12.5		-		-
ME-5		2.13		0.06		0.579		0.01		206.1		6.55		-		-

Assay results for quality control samples are monitored on an ongoing basis during all drill programs with each potential quality control failure investigated, and resolved through batch re-assaying, prior to the assay results being imported to the SQL database.

For the Bellekeno Mine, all mineralized chip samples collected concurrent with mining activities between 2011 and 2012 that were included in the Bellekeno mineral resource were sent to external laboratories for check assays. Duplicate pulp samples were made at the on site Alexco laboratory facility from coarse reject material and submitted for external assay checks. All standards submitted with the chip sample assaying returned within ±2 standard deviations of the mean. Duplicate pulp sample results suggest the silver, lead and zinc grades are reasonably reproducible.

The Bellekeno 2006–2013 analytical quality control data produced by Alexco are summarized in Table 11-4.

Table 11-4 Quality Control Data Produced by Alexco from 2006 to 2013 for Bellekeno

Quality Control Type	Count		Ratio
Core Samples		4,627
Blanks		230	5.0% (1:20)
Standards		313	6.8% (1:15)
Duplicates		380	8.2% (1:12)
Chip Samples		2,078
Blanks		21	1.0% (1:100)
Standard Reference Material		228	11.0% (1:9)
Coarse Reject Duplicate		109	5.2% (1:19)

The Lucky Queen 2006 to 2010 external analytical quality control data produced by Alexco are summarized in Table 11-5.

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Table 11-5 Quality Control Data Produced by Alexco from 2006 to 2010 for Lucky Queen

Quality Control Type	Count		Ratio
Core Samples		3,144	-
Blanks		185	1:17(5.9%)
Standard Reference Material		183	1:17(5.8%)
Coarse Reject Duplicate		186	1:17(5.9%)

The Flame & Moth quality control data produced by Alexco are summarized in Table 11-6.

Table 11-6 Quality Control Data Produced by Alexco from 2010 to 2014 for Flame & Moth

Quality Control Type	Count		Ratio
Core Samples		3,996	-
Blanks		248	1:16(6.2%)
Standard Reference Material		240	1:16(6.0%)
Coarse Reject Duplicate		251	1:16(6.3%)

All standards consistently returned values within ±2 standard deviations of the mean, with only occasional values falling outside this limit, but then within ±3 standard deviations of the mean.

Analysis of assays from coarse reject duplicate samples suggests that silver, lead, and zinc grades can be reasonably reproduced with no apparent bias.

The Onek quality control data produced by Alexco are summarized in Table 11-7.

Table 11-7 Quality Control Data Produced by Alexco from 2007 to 2014 for Onek

Quality Control Type	Count		Ratio
Core Samples		4,730	-
Blanks		282	1:16(6.0%)
Standard Reference Material		302	1:16(6.4%)
Coarse Reject Duplicate		286	1:16(6.1%)

All standards consistently returned values within ±2 standard deviations of the mean with only occasional values within ±3 standard deviations of the mean.

Analysis of assays from coarse reject duplicate samples suggests that silver, lead and zinc grades can be reasonably reproduced from the coarse reject split of the original samples with no apparent bias.

The external analytical quality control data produced by Alexco for the Bermingham area between 2009 to 2018 are summarized in Table 11-8.

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Table 11-8 Quality Control Data Produced by Alexco from 2009 to 2018 for Bermingham

Quality Control Type	Count		Ratio
Core Samples		8,924	-
Blanks		483	1:18(5.4%)
Standard Reference Material		451	1:19(5.1%)
Coarse Reject Duplicate		466	1:19(5.2%)

The QP reviewed the QA/QC data prepared by Alexco, standards, blanks and duplicate performance over time, and has concluded that the result of the QA/QC data supported the inclusion of the assay data in the estimation of mineral resources and mineral reserves.

Overall two standard reference material assays were just outside of the +3SD range of acceptable limits from intervals that were not material to the resource, and one other was below the -3SD range but was from a standard that has been found to be unreliable and is not commonly used.

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12. Data Verification

12.1 Site Visits

Dr. Gilles Arseneau and Chris Elliott of SRK carried out a visit to examine the Lucky Queen, Bellekeno, and Onek deposits. In total, Dr. Arseneau and Mr. Elliot spent two and a half days at the sites between July 26 and 28, 2010 examining drill core, core logging and sampling procedures; visiting drill sites; and examining the mineralization exposed in surface cuts. Alexco provided the SRK representatives with information related to these activities during the site visit. Dr. Arseneau carried out a second site visit on May 7 and 8, 2012 and a third site visit on September 12, 13, and 14, 2016 to examine the surface geology and drill core for the Bermingham deposit.

Cliff Revering, P.Eng, of SRK conducted a site visit from July 24 to 27, 2018 to examine the Bermingham deposit. The site visit focused on examining drill core, core logging and sampling procedures, as well as visiting geology and mineralization exposures within available historical open pit cuts and underground development headings. Inspections of both surface and underground drill rigs was undertaken during this site visit.

12.2 Verifications of Analytical Quality Control Data for Lucky Queen

Dr. Arseneau reviewed and verified the Lucky Queen drill hole data and quality control assay data from 2006 to 2010 and found the data to be reliable for resource estimation purposes.

The 2006 to 2010 quality control data collected by Alexco was considered comprehensive and the assaying results delivered by ALS Chemex and AGAT laboratories are considered reliable for the purpose of resource estimation.

The QP aggregated the assay results for the external quality control samples and duplicate assay pairs. Time series bias charts and assay pair precision plots were constructed for applicable elements.

A total of 185 samples of unknown composition designated as blanks were submitted by Alexco during the drilling operations. Performance of the blank samples was reasonably good, with no systematic failures noted for silver, lead, or zinc. For gold assays, 6% of the submitted blanks returned a grade higher than 0.01 g/t Au.

A total of 183 commercial standard reference samples were submitted by Alexco during the drilling operations. All reference standards used by Alexco were purchased from WCM Minerals, Burnaby, British Columbia. Performance of the commercial standard reference samples was reasonably good, with only the analytical results for one standard (PM-1107) being consistently less than the average grade of the standard.

A total of 186 samples were analyzed as duplicates by Alexco. No significant discrepancies were noted between the original and duplicate analyses, and the correlation between samples is good.

Upon completion of the review, the QP considered that the analytical data produced by Alexco are sufficiently reliable to support Mineral Resource estimation.

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12.3 Verification of Analytical Quality Control Data for Onek

In November 2010, June 2011 and August 2014, Dr. Arseneau completed audits of the Alexco analytical and quality control data acquired with the sampling of the Onek deposit. This involved analysis of the drill hole and assay database, review of the assay certificates received directly from the ALS Chemex and AGAT, and review of assay results for blank, standard, and duplicate samples.

The QP conducted routine verifications to ascertain the reliability of the electronic borehole database provided by Alexco. All assays in the current database were verified against the independently sourced sample certificates from ALS Chemex and AGAT. The silver, lead, zinc and gold values in the assay table were found to match the laboratory certificates. In addition, the QP verified the conversion of units between different methods utilized in the laboratories and believes the conversions were done correctly.

Several assay batches were received from AGAT in 2010, where any one or more of the standards, blanks and duplicates included in the batch did not pass Alexco's quality control standards and were sent for re-assay either through AGAT or submitted to ALS Chemex. A very minor number of batches showed sample preparation errors that were either resolved through the lab in question or by quarter-coring the remaining core and submitting new samples to ALS Chemex.

The review of analytical quality control data produced by ALS Chemex, AGAT and Alexco, suggests that silver, gold, lead and zinc grades can be reasonably reproduced, suggesting that the final assay results reported by ALS Chemex and AGAT are generally reliable for the purpose of resource estimation.

After the review, the QP was of the opinion that the Onek drilling database is sufficiently reliable for resource estimation.

12.4 Verification of Analytical Quality Control Data for Bermingham

In 2018, the QP completed an audit of the Alexco analytical and quality control data acquired during the sampling of the Bermingham deposit; this audit conducted of routine verifications to ascertain the reliability of the electronic drill hole database provided by Alexco. All assays in the current database were verified against independently sourced sample certificates from ALS Chemex, Echo-Tech, and AGAT. The silver, lead, zinc, and gold values in the assay table were found to match the laboratory certificates with a few exceptions where samples had been re-assayed and the database had not been updated with the re-assay certificate number. Alexco corrected this and the samples values were found to match the re-assay certificates.

After the review, the QP is of the opinion that the drilling database is sufficiently reliable for resource estimation.

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13. Mineral Processing and Metallurgical testing

13.1 Background

The metallurgical response of Keno Hill mineralization is well understood through testwork and operational experience. Previous test work on the varied mineralization at the Property can be traced back prior to 1996 until 2017 as indicated from the multiple studies by Rescan (1996), Wardrop (2009), SRK (2013/2014), and RPA (2017/2018). The Bellekeno deposit was widely investigated between 1996 and 2009 with the test results compiled to form the basis for the design and construction of Keno Hill District Mill in 2010. From 2011 to 2013, samples from deposits of Lucky Queen and Flame & Moth were tested to assess their flotation performance. Since 2018, additional metallurgical testwork has been conducted on samples from these deposits and from the Bermingham mineralization area to support the mine plan (discussed in more detail in Section 16). Table 13-1 lists the test work assessed in this PFS report.

Table 13-1 Metallurgical Test Work Programs – 1996 to 2019

Year	Laboratory/Simulation Report	Samples Domain	Hardness	Mineralogy	Rougher/ Cleaner Flotation	Locked Cycle Flotation	Other Tests
1996	PRA	Bellekeno (BK), Silver King (SK), blended BK/SK (85%/15%)	ü				ü
2008	SGS – Lead, Zinc and Silver Flotation Testing on Bellekeno Samples	BK	ü	ü
2009	Inspectorate (PRA)	BK, East/Southwest Zones of BK, and Onek	ü	ü			ü
2011	Inspectorate (PRA)*	Lucky Queen (LQ) and Onek			ü
2013	Inspectorate (PRA)*	Flame & Moth (F&M)			ü
2013	Starkey & Associates (S&A) – Bellekeno Grinding Circuit Comminution Throughput Analysis Report	Grinding circuit survey of Keno Hill District Mill	ü
2017	SGS – The Flotation of Samples from the Bermingham and Christal Zone Deposits (Appendix B)	F&M and LQ		ü
2018	SGS – The Flotation of Samples from the Bermingham Deposit	Bermingham (BM)		ü	ü	ü
2018	SGS – The Comminution and Flotation of Samples from the Lucky Queen and Flame & Moth Deposits	LQ, F&M (combined Christal and Lightning Zones), F&M (Christal Zone), F&M (Lightning Zone), BM-F&M (Christal Zone), and BM-F&M (Lightning Zone)	ü		ü	ü
2019	SGS - The Flotation of Samples from the Bermingham and Christal Zone Deposits	Blended F&M (Christal Zone)/BM (70%/30%)			ü	ü
*Results provided to Tetra Tech in Excel sheet as compilation of results

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13.2 Metallurgical Testing Sample Description

13.2.1 Master Composites

The Flame & Moth metallurgical sampling programs from Lightning zone and Christal Zone are considered to be representative of its respective geological rock -type domain. The samples used for composites were collected from exploration drilling programs. The samples for each of the composites were spatially distributed throughout each of the deposits and contained head grades consistent with typical ranges observed in the exploration programs.

The initial metallurgical composites for Bermingham and Lucky Queen were each prepared from samples from exploration drill holes throughout the deposit representing high-grade domains. These were used for testing completed prior to 2018, including both batch and locked cycle testing as reported in the PEA (RPA, 2017).

In 2018, two drill holes were completed in each of the two zones of Flame & Moth (four holes totaling 60 m of drilling) specifically to provide fresh unoxidized material for metallurgical testing on composites representative of each of the Lightning and Christal zones. These composites were then combined with Bermingham composites to test locked cycle metallurgical response to the flowsheet. Two Bermingham composites were used: the master composite in 2017 from previous testwork and a second new composite in 2018 with lower head grade which would be more typical LOM metals content in order to evaluate expected conditions and evaluate fluctuations in plant feed. The Bermingham, Flame & Moth and Lucky Queen metallurgical testing results to date have contained similar head grades and have behaved metallurgically similar within each respective deposit.

The Bermingham Master Composite and New Bermingham Composite were prepared from samples collected from the drilled intervals shown in Figure 13-1.

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Source: Mining Plus 2019

Figure 13-1 Source of Metallurgical Samples from Bermingham

The assayed characteristics of each of the two composites are shown in Table 13-2.

Table 13-2 Bermingham Composites for Metallurgical Testing

Sample	Pb	Zn	Ag	Au
	%	%	g/t	g/t
Master Composite	6.09	1.77	3308	0.37
New Composite	3.57	2.95	1712	-

The Flame & Moth composites were prepared from samples collected from the drilled intervals shown in Figure 13-2.

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Source: Mining Plus 2019

Figure 13-2 Source Metallurgical Samples from Flame & Moth

The assays of each of the composites are shown in Table 13-3.

Table 13-3 Flame & Moth Composites for Metallurgical Testing

Sample	Pb	Zn	Ag	Au
	%	%	g/t	g/t
Lightning Zone Composite	3.16	5.24	749	0.53
Christal Zone Composite	3.56	5.21	857	0.98

No new composites were prepared for either the Bellekeno or Lucky Queen testwork since the PEA.

13.3 Sample Physical Characteristics Testwork

Values for the initial Bond Rod Mill Work Index (RWi), Bond Ball Mill Work Index (BWi), and Bond Abrasion Index (Ai) were determined for Bellekeno samples during the 1996 and 2009 test programs. The measured RWi on the single Bellekeno composite sample was 8.7 kWh/t, while BWi values on four samples ranged from 7.9 kWh/t to 9.5 kWh/t. This indicated that the Bellekeno samples can be categorized as soft materials with low variability. The abrasion index (AI) was measured on a single Bellekeno sample with the value of 0.438 g, which was considered moderately abrasive.

In 2013 a benchmark survey on the grinding circuit of Keno Hill District Mill was conducted by Starkey & Associates (S&A) to assess the circuit operation to debottleneck the grinding circuit throughput limitation. Stream samples from the ball mill discharge, pump sump, and ball mill screen oversize and undersize were taken and tested to determine their RWi and BWi values. The RWi was found to be 12.4 kWh/t and the BWi was found to be 10.2 kWh/t. Both results are significantly higher than previous test results from 1996 to 2009. S&A then modelled the grinding circuit operation based on these results, which is summarized in Section 17.0 of this report.

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In 2018 BWi test work was conducted on samples from other zones, namely the Christal and Lightning zones within the Flame & Moth deposit. The BWi values obtained were consistent at 10.5 kWh/t and 10.4 kWh/t, respectively, which indicated that the test materials were soft. The test results are summarized in Table 13-4.

The specific gravity values for the head samples were determined in 1996 by Inspectorate America Corporation (PRA), which was 3.57 for the Bellekeno sample and 2.81 for the SK sample. PRA completed an additional specific gravity test with the flotation concentrates samples, which was reported to be 6.49 for Ag-Pb concentrate and 3.95 for Zn concentrate. The 2018 measurement by SGS Canada Inc. (SGS) showed a range between 2.78 and 4.36 for Lightning Zone drill samples and 2.75 and 4.71 for Christal Zone drill samples.

Table 13-4 Grindability Test Results

Test Program	Sample	Bond Ball Mil Work Index (kWh/t)		Bond Rod Mill Work Index (kWh/t)	Abrasion Index (g)	Specific Gravity
1996 PRA	Bellekeno Comp	9.3	**				3.57
	Silver King Comp	10.3	**				2.81
2007 SGS	Bellekeno Comp	9.5	*
2008/2009 PRA	Bellekeno Master Comp	-		8.7	0.438
	Bellekeno East Zone Comp	7.9	*
	Bellekeno SW Zone Comp	8.2	*
2013	Grinding circuit survey of Keno Hill District Mill	10.2		12.4
2018 SGS	Christal Zone Composite	10.5	**				2.75 – 4.71
	Lightning Zone Composite	10.4	**				2.78 – 4.36
* at a closing mesh size of 106 µm; ** at a closing mesh size of 149 µm.

13.4 Mineralogical Analysis

Mineralogical investigations were conducted in several test programs on different samples. A recent comparison of the results from the Flame & Moth, Bermingham, Lucky Queen, and Bellekeno deposits was made by Alexco in 2018.

13.4.1 Mineralogy Analysis on Bellekeno Samples

Both SGS and PRA studied the mineralogy characteristics of the Bellekeno mineralization samples in the 2007 and 2009 test programs. In 2007, SGS completed a QEMSCAN™ analysis that indicated that galena and sphalerite were the principal lead and zinc minerals, respectively. Pyrite accounted for less than 4% of the mass, while trace sulphide minerals included chalcopyrite, bornite, chalcocite, tetrahedrite, and arsenopyrite.

Both the SGS and PRA studies reported on the general coarse texture for the galena and sphalerite minerals, specifically, with the SGS data indicating liberation at a relatively coarse size. At an 80% passing (P80) grind size of 170 µm, 96% of the sphalerite and 95% of the galena particles analyzed were present as liberated phases.

PRA’s 2009 tests included a microscopic examination of the composite samples from the Bellekeno Southwest zone and the Bellekeno East zone. The results confirmed galena and sphalerite as the main economic minerals. The Southwest zone composite contained more galena, while the East zone contained predominantly sphalerite. Proustite-pyrargyrite was identified as the only specific silver mineral and was present as small inclusions in galena. Tennantite-tetrahedrite and sphalerite were identified as being additional silver carriers. Native gold was also found as fine inclusions of less than 5 µm in chalcopyrite from the Southwest zone composite sample. In addition, a part of the Bellekeno East zone sample showed the presence of secondary minerals including limonite, covellite, and a minor portion of colloform pyrite that can decompose to sulphate. The PRA study also confirmed the texture of the galena and sphalerite minerals were coarse in general.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

13.4.2 Mineralogy Analysis on Bermingham Samples

In 2018 SGS conducted a QEMSCAN analysis on the Bermingham Master Composite ground to 80% passing 250 µm and screened at 150 µm. Similar observations were made from both the fractions of +150 µm and -150 µm showing that lead was present predominantly as galena and zinc as sphalerite. Silver minerals were also identified from the analyses and examined as a group without specifying the individual silver mineral. The minerals of interest contained in the sample included 6.9% galena, 3.0% sphalerite, and 0.67% silver minerals. The major gangue minerals included 51.2% quartz, 22.3% Fe-Mn oxides, and 8.5% sericite/muscovite, with minor gangue minerals composed of 3.4% pyrite and 1.1% chlorite. Other gangue minerals such as K-feldspars, dolomite, and rutile were low in content with each type less than 1%. Figure 13-3 shows the mineral abundance of the Bermingham sample tested.

 

Source: SGS 2018a

Figure 13-3 Mineral Abundance of Bermingham Master Composite

The liberation and exposure information of galena, sphalerite, pyrite, and silver minerals are summarised in Table 13-5. At a grind size of approximately 80% passing 250 μm, high values of free/liberated galena and sphalerite were observed with high exposure percentages, namely 86% and 95%, respectively, were fully liberated. About 82% of pyrite was found free or liberated and with a low association with galena and sphalerite. Fully exposed pyrite accounts for 75% of the total, with 95% of the pyrite >20% exposed. Free and liberated silver mineral grains accounted for 65% of the total, while 13% of the silver minerals were found associated with galena, and another 13% of silver minerals were present in complex mineral assemblages. Fully exposed silver mineral grains accounted for 64% of the total and 91% of the silver grains were >20% exposed.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 13-5 Mineral Liberation and Exposure of Bermingham Master Composite

	Free	Liberated	Complex	Exposure
Minerals*	(%)	(%)	(%)	100	%	20	%
Galena	80.5	11.4	4.2	86.0		97.7
Sphalerite	87.5	9.44	1.49	94.8		98.9
Pyrite	64.1	17.9	9.33	74.5		95.2
Silver Minerals	48.3	16.4	12.8	63.9		91.1

*combination of + 150 µm and – 150 µm fractions

13.4.3 Mineralogy Analysis on Flame & Moth and Lucky Queen Samples

In 2017 SGS conducted QEMSCAN examinations on the Flame & Moth and Lucky Queen samples. The mineral distributions are shown in Figure 13-4 for both samples. The minerals of interest contained in the samples included galena at about 3.4% for the Flame & Moth sample and 5.3% for the Lucky Queen sample, sphalerite at 13.0% for the Flame & Moth sample and 1.9% for the Lucky Queen sample, while silver minerals were present at 0.19% for the Flame & Moth sample and 0.22% for the Lucky Queen sample. The major gangue minerals included quartz, Fe-Mn oxides, and pyrite/arsenopyrite for both samples. The Flame & Moth sample contained a much higher pyrite content of 14.5% as compared with the Lucky Queen sample, which had a pyrite content of 1.6%. Similarly, arsenopyrite in the Flame & Moth sample was about 4.4%, which is higher than that of the Lucky Queen sample at a level of 0.2%. About 2.2% and 4.5% sericite/muscovite was identified in the Flame & Moth sample and Lucky Queen sample, respectively. Other gangue minerals such as K-feldspars, dolomite, and rutile was low in content, with each type less than 1%.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SGS 2019

Figure 13-4 Mineral Abundance of Flame & Moth and Lucky Queen Samples

The liberation and exposure information of galena, sphalerite, pyrite, and silver minerals are summarized in Table 13-6. As compared with the Lucky Queen sample, the Flame & Moth sample showed a lower content of the free and liberated galena, as well as a smaller portion of exposed rate. In addition, galena in the Flame & Moth sample had a greater association with sphalerite and complex mineralogy, which means more than two mineral types in the grain.

Table 13-6 Mineral Liberation and Exposure of Flame & Moth and Lucky Queen Samples

Minerals*	Flame & Moth Sample								Lucky Queen Sample
	Association				Exposure				Association					Exposure
	Free (%)	Liberated (%)	Sphalerite (%)	Complex (%)	100	%	20	%		Free (%)	Liberated (%)	Sphalerite (%)	Complex (%)	100	%	20	%
Galena	47.0	19.7	6.2	15.1	53.5		86.3			82.3	10.6	0.5	2.1	87.0		98.7
Sphalerite	61.3	17.5	n/a	10.6	68.9		95.1			84.1	5.0	n/a	3.0	86.0		97.7
Pyrite	71.9	18.4	0.9	5.8	79.7		98.0			58.5	17.3	0.0	14.9	59.3		85.7
Silver Minerals	34.1	13.8	4.2	30.7	45.6		75.3			45.9	10.7	6.7	2.29	53.1		90.7

*combination of + 150 µm and – 150 µm fractions

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

13.4.4 Mineralogy Analysis Comparison among Flame & Moth, Bermingham, Lucky Queen and Bellekeno Samples

Alexco compared the mineralogical analyses of the samples collected from the Flame & Moth, Bermingham, Lucky Queen, and Bellekeno deposits for the purpose of explaining the inferior metallurgical performance observed on the Flame & Moth samples. The conclusions from the QEMSCAN comparison indicated that the Flame & Moth sample had a smaller portion of exposed galena and a greater association of sphalerite and pyrite complex mineralogy. This observation was in line with a much higher ratio of zinc to lead in the Flame & Moth sample as compared with the other deposit samples. The petrographic comparison further indicated that Flame & Moth samples presented a less coarse size of galena, which was more closely intergrown with sphalerite.

13.5 Flotation Testwork Overview

Rougher, cleaner, and locked cycle flotation tests were initially performed on samples representing Bellekeno deposit to develop the original process flowsheet used in historical operations. To recommission the mill, similar flotation tests following the same processing philosophy were carried out on individual and blended samples from Flame & Moth, Bermingham, and Lucky Queen deposits. More extensive locked cycle testing was completed on these samples to provide additional data as the basis for this PFS. The locked cycle testing on the composites is outlined in Table 13-7 and referencing the samples previously described in Section 13.2.1.

Table 13-7 Locked Cycle Testing Summary (2016-2019)

Locked Cycle Test	Sample	Year
LCT1 – 2017	Bermingham Master Composite	2017
LCT2 – 2017	Bermingham Master Composite	2017
LCT1 – 2018	Christal Zone Composite	2018
LCT2 – 2018	Lightning Zone Composite	2018
LCT3 – 2018	30% Bermingham Master Composite – 70% Christal Zone Composite Blend	2018
LCT4 – 2018	30% Bermingham Master Composite - 70% Lightning Zone Composite  Blend	2018
LCT5 – 2019	30% New Bermingham Composite - 70% Christal Zone Composite  Blend	2019

13.5.1 Bellekeno Samples

The batch flotation testwork program for Bellekeno samples was completed between 2007 and 2009 and included rougher flotation tests to assess the impacts of primary grind size, reagent schedule, and other test conditions, open cycle cleaner flotation tests to investigate the quality of the cleaner concentrates produced at various conditions, as well as bench-scale locked cycle flotation tests. The major conclusions are summarized as follows:

• Lead and zinc recoveries in the rougher flotation tests were not sensitive to the primary grind size in a P80 size range between 79 µm to 174 µm; and

• Regrinding of the lead rougher concentrate prior to the cleaner flotation stages could improve the zinc rejection in the lead cleaner flotation stage. While for the zinc rougher concentrate regrind tests, only a slight or no improvement on the upgrading of the zinc rougher concentrate were observed.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

The locked cycle flotation tests on Bellekeno samples are described in detail in the 2009 PEA report by Wardrop. Of the five tests, the optimum results were obtained from LCT1 test reported by PRA in 2008/2009, which was based on the common sequential lead and zinc flotation circuits with a regrinding stage for each circuit. . The results are provided in Table 13-8. The anticipated mill recoveries for Bellekeno are based on this testwork and the actual results during previous operation. All the five locked cycle tests produced qualified lead and zinc concentrates. High recoveries of silver, lead, and zinc were obtained in the 1996 PRA test and 2008/2009 PRA -LCT1 and LCT 2 tests. SGS testwork produced lower recoveries of silver and zinc that may be related to the regrind size and the lack of zinc rougher concentrate regrind. The LCT 3 test program by PRA also produced a low silver recovery that can be attributed to the low silver head grade of the tested sample.

Table 13-8 Locked Cycle Flotation Test Results on Bellekeno Samples

				Lead Cleaner Concentrate							Zinc Cleaner Concentrate
	Head Grade			Mass	Grade			Recovery			Mass	Grade			Recovery
Test No.	Ag g/t	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %
PRA 1996	1,022	12.73	4.51	15.6	6,253	77.6	0.88	95.7	95.3	3.1	8.2	233	2.56	52.1	1.9	1.6	94.3
SGS 2007	1,227	12.2	11.6	16.4	5,864	72.5	5.37	78.4	97.6	7.6	14.9	750	0.45	56.0	9.1	0.6	71.7
PRA 2008/2009 – LCT1	933.1	13.1	11.2	18.0	4,874	72.0	2.2	94.0	98.8	3.6	17.1	200.7	0.4	61.5	3.7	0.5	94.4
PRA 2008/2009 – LCT2	963.5	13.8	10.5	18.8	4,878	72.0	3.1	95.2	98.2	5.6	18.2	157.9	0.3	53.1	3.0	0.4	92.2
PRA 2008/2009 – LCT3	270.2	1.9	17.0	3.2	5,705	53.1	5.0	68.3	89.6	1.0	28.1	254.8	0.5	59.1	26.5	7.0	97.6

13.5.2 Bermingham Samples

The batch flotation testwork on Bermingham samples was completed between 2017 and 2019 by SGS on one master composite sample. The 2017 open cycle cleaner flotation tests are plotted in Figure 13-5, which shows that although high grade lead concentrate can be produced, the grade of zinc concentrates were found to be low.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SGS 2018a

Figure 13-5 Open Cycle Cleaner Flotation Test Results on Bermingham Master Composite Samples

In the 2019 optimization batch flotation tests, SGS included two regrinding stages on both lead and zinc rougher concentrates. As shown in Table 13-9, satisfactory results were obtained - the lead concentrate was grading at over 32,000 g/t silver and 60% lead; the zinc concentrate was grading at 58.4% zinc.

Table 13-9 Open Cycle Cleaner Flotation Test Results on Bermingham Sample – SGS 2019

	Calc Head Grades			Lead Rougher Concentrate								Lead Cleaner Concentrate
				Mass	Grade			Recovery				Mass	Grade			Recovery
Test No	Ag g/t	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %		Zn %	%	Ag g/t	Pb %	Zn %	Ag %		Pb %		Zn %
Bermingham-F1	1,712	3.57	2.95	19.5	8,393	17.6	5.34	95.5		96.1	35.3	4.7	32,484	60.5	4.1		88.5		79.1	6.6

	Head Distribution			Zinc Rougher Concentrate								Zinc Cleaner Concentrate
				Mass	Grade			Recovery				Mass	Grade			Recovery
Test No.	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %		Zn %	%	Ag g/t	Pb %	Zn %	Ag %		Pb %		Zn %
BM-F1	100	100	100	12.9	508	0.66	14.4	3.8		2.4	63.3	2.7	1,405	0.63	58.4		2.2		0.5	52.9

Two locked cycle flotation tests were completed on the Bermingham Master Composite sample by SGS in 2017. The flowsheet used in the test is shown in Figure 13-6. The feed samples were ground to particle size P80, approximately 150 µm, which was followed by a silver-lead rougher flotation. The silver-lead rougher concentrate reported to a three-stage cleaner flotation circuit to produce a final silver-lead cleaner concentrate. The lead second cleaner tailings and third cleaner tailings were returned to the previous circuit to further recover silver and lead. ZnSO₄ was used in the silver-lead circuit to depress sphalerite and 3418A was used as the lead collector. The silver-lead rougher tailings and first cleaner tailings fed the lead circuit composed of a zinc rougher flotation and a two-stage zinc cleaner flotation. CuSO₄ was used in the zinc circuit to activate the previously depressed sphalerite and SIPX was used as the zinc circuit collector.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SGS 2018a

Figure 13-6 Locked Cycle Flotation Tests Flowsheet on Bermingham Master Composite Samples

The test results are listed in Table 13-10. With LCT 1 test, high-grade silver-lead concentrates were generated containing 35,972 g/t Ag and 58.4% Pb at the corresponding recoveries of 95.9% for silver and 86.7% for lead. The zinc concentrate was graded at 48.3% Zn at a recovery of 60.0%. The LCT2 test was performed with a modified reagent scheme, including a higher dosage of 3418 A to increase lead recovery, more CuSO4, and a higher pH level to improve lead recovery. The resulted silver-lead concentrates contained 31,597 g/t Ag and 56.7% Pb with the corresponding recoveries of 97.5% for silver and 95.3% for lead. The zinc concentrates were graded as 52.8% Zn at a recovery of 63.6%. The flotation performance of lead and zinc were improved with the LCT2 test.

Table 13-10 Locked Cycle Flotation Test Results on Bermingham Samples

		Head Grade			Lead Cleaner Concentrate							Zinc Cleaner Concentrate
Test No.	Sample				Mass	Grade			Recovery			Mass	Grade			Recovery
		Ag g/t	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %		Pb %	Zn %
LCT1	Bermingham Master Composite	3,446	6.2	1.8	9.2	35,972	58.4	3.8	95.9	86.7	19.4	2.3	1,324	3.0	48.3		0.9	1.1	60.0
LCT2	Bermingham Master Composite	3,574	6.6	1.9	11.0	31,597	56.7	4.1	97.5	95.3	24.0	2.3	1,283	2.4	52.8		0.8	0.8	63.6

13.5.3 Flame & Moth Samples and Blended composites (Bermingham with Flame & Moth)

The initial batch flotation test on Flame & Moth samples was completed in 2013 by Inspectorate Labs and then subsequently was optimized in 2018 in t SGS testwork. The 2018 batch cleaner flotation test results are listed in Table 13-11, together with the optimum batch cleaner flotation test results. These results suggest that Flame & Moth material could be sensitive to regrinding. This agrees with the mineralogy observations on Flame & Moth samples, which showed a smaller portion of exposed galena with a greater association of sphalerite and pyrite complex mineralogy. Regrinding for both concentrates is included in the mill modifications for this PFS.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 13-11 Open Cycle Cleaner Flotation Test Results on Flame & Moth Samples

	Head Grade			Lead Cleaner Concentrate							Zinc Cleaner Concentrate
Test No.				Mass	Grade			Recovery			Mass	Grade			Recovery
	Ag g/t	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %
F&M-F8	751	2.3	7.2	16.0	4,159	12.8	9.26	88.8	88.7	20.7	3.3	16,963	53.1	5.0	73.9	75.1	2.3
Lightning Zone-F1	646	3.3	5.3	12.4	4,725	21.0	10.5	90.7	80.2	24.3	4.3	12,645	53.6	7.4	83.7	70.5	5.9
Lightning Zone-F2	671	3.3	5.6	16.0	3,855	17.4	10.4	92.0	85.3	29.8	5.1	11,228	49.4	8.4	85.2	76.9	7.6
Lightning Zone-F3	679	3.1	5.5	16.9	3,643	16.1	11.2	90.7	89.1	34.3	3.5	15.110	58.3	4.5	77.1	66.0	2.8
Christal Zone-F1	786	3.4	5.2	16.7	4,468	19.6	7.0	95.0	96.2	22.7	2.4	11,685	50.1	5.0	91.3	90.6	5.9

	Head Distribution			Zinc Rougher Concentrate							Zinc Cleaner Concentrate
				Mass	Grade			Recovery			Mass	Grade			Recovery
Test No.	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %
F&M-F8	100	100	100	18.8	273	0.6	29.5	6.8	4.6	77.3	8.7	384	0.5	54.0	4.4	1.8	65.2
Lightning Zone-F1	100	100	100	17.2	310	1.3	22.3	8.2	6.8	71.9	6.3	417	1.0	50.8	4.1	2.0	60.1
Lightning Zone-F2	100	100	100	19.8	239	0.9	19.1	7.1	5.7	67.8	6.9	380	0.9	51.2	3.9	1.9	63.2
Lightning Zone-F3	100	100	100	20.4	201	0.7	17.2	6.0	4.9	63.5	6.4	358	0.8	51.0	3.4	1.7	59.4
Christal Zone-F1	100	100	100	20.6	130	0.3	19.2	3.4	1.8	76.5	7.2	242	0.3	52.1	2.2	0.6	72.2

The locked cycle flotation test on Flame & Moth samples from each of the were performed by SGS between 2018 and 2019. SGS conducted five locked cycle flotation tests: one Christal Zone composite sample, one Lightning Zone composite sample, one Bermingham -Flame & Moth (Lightning Zone) blended sample , and two Bermingham -Flame & Moth (Christal Zone) blended samples (30% Bermingham to 70% Lightning or Christal Zone).

The basic flowsheet used in the locked cycle flotation tests is shown in Figure 13-7. The ground feed samples had a particle size of P80 between 107 µm to 132 µm, which were first treated in a two-stage silver-lead rougher flotation. Then, the silver-lead rougher concentrate was reground to approximately 80% passing 23 µm to 31 µm, prior to a three-stage cleaner flotation circuit to produce a final silver-lead cleaner concentrate. ZnSO₄ was used in the lead circuit to depress sphalerite and 3418A was used as the lead collector. The silver-lead rougher tailings, first cleaner tailings, and second cleaner tailings from the lead circuit were combined and sent to the zinc circuit, which included a two-stage zinc rougher flotation, followed by a regrinding to approximately 80% passing 25 µm to 35 µm and a two-stage zinc cleaner flotation. CuSO₄ was used to activate the previously depressed sphalerite and SIPX was used as the zinc circuit collector.

February 14, 2020 Page 13-13

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SGS 2018b, 2019

Figure 13-7 Locked Cycle Flotation Tests Flowsheet on Flame & Moth and Blended Samples

The test results are listed in Table 13-12. All the five locked cycle tests generated high-grade silver-lead concentrates containing 10,853 g/t to 23,191 g/t Ag and 47.6% to 53.3% Pb. The corresponding recoveries ranged from 85.2% to 96.1% for silver and 77.8% to 92.7% for lead.

The blended samples (Flame & Moth plus Bermingham) produced better silver-lead concentrates with higher recoveries than composite samples for Flame & Moth alone. These tests on the blended mill feed are considered more representative for future mill operation as the expected mill production will be based on blended material of Flame & Moth with Bermingham or Lucky Queen deposit.

The zinc concentrates produced from all the locked cycle tests ranged from 49.8% to 54.2% Zn with recoveries ranging from 73.6% to 88.5%. All samples produced similar zinc concentrate grades and recoveries. The blended feed samples (i.e., Bermingham plus Flame & Moth) samples produced similar grade zinc concentrates and recoveries as compared with individual mine composite samples. Zinc contents recovered to the silver-lead concentrates were between 5.9% to 12.8% grading at 4.8% to 9.1% Zn, while lead contents reported to zinc concentrates ranged from 1.4% to 4.6% grading at 0.9% to 1.9% Pb. Gold recovery to the lead concentrate was 36.8% to 41.6% with a grade from 2.2 g/t to 3.9 g/t Au.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 13-12 Locked Cycle Flotation Test Results on Flame & Moth Samples and Blended Flame & Moth with Bermingham

	Calc Head Grade				Lead Cleaner Concentrate									Zinc Cleaner Concentrate
					Mass	Grade					Recovery			Mass		Grade				Recovery
	Ag	Pb	Zn	Au		Ag	Pb	Zn	Au	Ag	Pb	Zn	Au		Ag	Pb	Zn	Au	Ag	Pb	Zn	Au
Test No.	g/t	%	%	g/t	%	g/t	%	%	g/t	g/t	%	%	g/t	%	g/t	%	%	g/t	g/t	%	%	g/t
LCT1	811	3.7	5.4	-	6.3	12,049	52.1	5.0	-	91.9	89.4	5.9	-	8.4	344	0.9	54.2	-	3.4	2.1	83.8	-
LCT2	645	3.3	5.7	-	5.4	10,853	47.6	9.1	-	85.2	77.8	8.7	-	8.6	515	1.8	49.8	-	6.4	4.6	75.5	-
LCT3	1,596	4.5	4.3	0.71	8.1	19,270	51.6	4.8	3.4	96.1	92.7	9.1	36.8	6.8	443	1.0	53.5	0.44	1.9	1.4	84.7	4.0
LCT4	1,769	4.3	4.4	0.37	7.2	23,191	51.7	7.8	2.2	94.2	86.5	12.8	41.6	6.5	564	1.9	49.8	0.26	2.07	2.8	73.6	4.4
LCT5	1,115	3.7	4.6	0.66	6.3	16,266	53.3	5.2	3.9	92.3	90.7	7.1	37.5	7.7	524	1.0	53	0.65	3.6	2.0	88.5	7.6

Notes:  LCT1 - Christal Zone Composite; LCT2 - Lightning Zone Composite; LCT3 – Bermingham Master Composite-Christal Zone Blend; LCT4 - Bermingham Master Composite -Lightning Zone Blend; LCT5 - New Bermingham Composite-Christal Zone Blend.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

13.5.4 Lucky Queen Samples

The batch flotation tests on Lucky Queen samples were completed in 2013 and 2018. The 2013 tests were performed by Inspectorate using an open circuit cleaner sequential flotation method with no regrinding stages. The testwork results were the best of the four deposits. On average, the lead concentrate contained 68% Pb and 33,960 Ag at a silver recovery of 89% and lead recovery of 91%. The zinc recovery was 73% at a concentrate grade of 59% zinc. Table 13-13 shows the cleaner flotation test results.

Table 13-13 Open Cycle Cleaner Flotation Tests on Lucky Queen Test Samples

	Calc Head Grades			Lead Rougher Concentrate							Lead Cleaner Concentrate
				Mass	Grade			Recovery			Mass	Grade			Recovery
Test No.	Ag g/t	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %
F9	2,322	4.5	3.4	11.4	20,144	39.1	5.2	99.1	98.5	17.3	6.6	33,084	65.9	3.0	93.3	95.1	5.7
F10	4,965	9.7	4.8	20.0	24,637	48.0	5.0	99.1	98.5	21.0	12.1	34,837	70.5	1.9	84.6	87.3	4.8

	Head Distribution			Zinc Rougher Concentrate							Zinc Cleaner Concentrate
				Mass	Grade			Recovery			Mass	Grade			Recovery
Test No.	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %	%	Ag g/t	Pb %	Zn %	Ag %	Pb %	Zn %
F9	100	100	100	8.3	160	0.3	33.2	0.6	0.5	80.3	4.3	215	0.2	58.8	0.4	0.2	73.6
F10	100	100	100	12.3	233	0.7	30.3	0.6	0.9	78.2	5.9	301	0.7	58.9	0.4	0.4	72.5

The 2018 flotation tests by SGS included five cleaner flotation tests with no regrinding stages. Good silver-lead cleaner concentrates were produced, which contained 15,893 g/t to 18,963 g/t Ag, 50.8% to 58.2% Pb. The zinc cleaner concentrate showed a lower grade, ranging from 30.6% to 41.5% Zn, which may be improved by regrinding the zinc rougher concentrates since the primary grind size was around 90 µm, which was much coarser as compared with other samples reground to 20 µm in cleaner tests. No locked cycle flotation tests have been performed on Lucky Queens samples.

13.6 Miscellaneous Testwork

The 1996 and 2008/2009 test programs by PRA included a series of miscellaneous tests, namely settling tests, filtration tests, and an analysis of flotation tailings. Since then, no further similar tests were conducted. A summary of the previous testwork by PRA is presented in this report. Details can be found in the 2009 PEA report by Wardrop (Wardrop, 2009).

Settling tests were performed on samples of both Bellekeno lead and zinc concentrates and the tailings. Two flocculants, Percol 156 and Percol 351, were tested in the two test programs. An average unit thickener area of 0.02 m²/tpd was identified for the mill design criteria. Vacuum filtration tests were performed in the 2008/2009 testing on samples of lead and zinc concentrates without any issues reported.

Whole rock assay and inductively coupled plasma (ICP) analysis were performed by PRA in 2008 on bulk tailings samples to determine the chemical characteristics. The main components identified were silicon and iron. The tailings water was also assayed by the ICP scan. Acid base accounting tests were performed on low and high sulphide tailings samples to determine their acid generating potential. The results indicated that the bulk tailings (low sulphide) was not likely acid-generating; however, the zinc cleaner scavenger tailings may pose some acid generation potential.

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13.7 Metal Recovery Projections

From the mineralogy comparison, the deposits of Bellekeno, Bermingham and Lucky Queen can be considered as high-grade and coarse-grained in nature; while the deposit of Flame & Moth were found less coarse grained with a greater association of sphalerite and pyrite complex. Blending of Flame & Moth deposit with other deposits could produce good flotation response which has been illustrated in the locked cycle flotation tests on the blended samples. In addition, the optimized lead rougher recovery of the four individual deposits tends to range from 89% to 98%. This indicates that a well cleaner flotation performance can be expected. As a result, the overall flotation recovery for this Project can be estimated by using both the open circuit flotation test results and the locked cycle test data which can also provide confirmation or validity for the former data.

Specifically, metal recoveries of silver, lead, and zinc were projected based on the optimised test results obtained from the locked cycle and open cycle flotation test programs on the representative samples under the PFS LOM mine plan, while test data from the potentially oxidised samples, the samples with higher head grades than the LOM’s estimates, or the samples collected from locations beyond the planned mine areas were not included in this projection. Metal recoveries from the batch open cleaner flotation tests were adjusted according to locked cycle results to reflect the middling recirculation and regrinding effects on overall metallurgical performances.

The metal recoveries with varied head grades on the selected samples are plotted in Figure 13-8. The red dots represent the data from the locked cycle tests, while the green dots represent the data from the batch open cleaner flotation tests. The trendline was developed from both the locked cycle test data and the batch open cleaner test data.

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Source: Alexco 2019a

Figure 13-8 Metal Recoveries at Head Grades for Recovery Projection

In general, a reasonable relationship can be observed between silver head grades and silver recoveries. For lead recovery to lead concentrates, a weak dependence on the feed grade was observed. This may be caused by various test conditions used by different laboratories. However, when considering the locked cycle test data only, which were drawn from SGS tests, the lead grade-recovery relationship appears to be better. With zinc recovery to zinc concentrates, the dependence on feed grade is also weak as part of zinc reporting to lead concentrates. Variability locked cycle tests are therefore recommended to verify the observed trends using blended samples according to the LOM production plan.

For this study, regression analysis was used to model the metal recoveries with varied head grades. Table 13-14 summarizes the projected metal recoveries for all the deposits included in this Project. When the feed grades beyond the ranges specified in the table, constant metal recovery is recommended in the projection. A Zn to Pb concentrate recovery formula was not generated; instead an overall recovery of 82% Zn was applied and the quantity in the Pb concentrate is the difference between the 82% recovery and the calculated Zn to Zn concentrate recovery using the formula presented in Table 13-14.

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Table 13-14 Concentrate Metal Production

Ag Recovery
Ag Head Grade	< 500 g/t Ag	500 -3000 g/t Ag	> 3000 g/t Ag
Ag Recovery to Pb Con	80%	= 4.07*ln(Ag head grade, g/t) + 63.75	96.5%
Ag Recovery to Zn Con	6%	= -2.85*ln(Ag head grade, g/t) + 23.66	0.5%
Total Ag Recovery	86%		97%

Pb Recovery to Pb Concentrate
Pb Head Grade	<1% Pb	1-10% Pb	>10% Pb
Pb Recovery to Pb Con, %	75%	= 6.2*ln(Pb head grade, %) + 82.26	96.7%

Zn Recovery to Zn Concentrate
Zn Head Grade	<1% Zn	1-10% Zn	>10% Zn
Zn Recovery to Zn Con, %	55%	= 63.52*(Zn head grade, %)0.10	85%

Pb Recovery to Zn Concentrate
Pb Head Grade	<2.68% Pb	>2.68% Pb
Pb Recovery to Zn Con, %	5%	= 34.31*(Pb head grade, %)(-1.96)

Note: Equation coefficients are displayed as rounded to 2 decimal places for edition purpose; more digits are required to generate the projected results in Section 17

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14. Mineral Resource Estimate

Definitions for resource categories used in this report are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM definitions) incorporated by reference into NI 43-101. In the CIM classification, a Mineral Resource is defined as “a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction”. Mineral Resources are classified into Measured, Indicated, and Inferred categories. A Mineral Reserve is defined as the “economically mineable part of a Measured and/or Indicated Mineral Resource” demonstrated by studies at prefeasibility or feasibility level as appropriate. Mineral Reserves are classified into Proven and Probable categories.

A summary of the Mineral Resource at the KHSD is shown in Table 14-1.

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Table 14-1 Summary of Mineral Resource Estimates as at March 28, 2019

				Ag		Au		Pb			Zn			Contained Ag
Category1,2,3	Deposit	Tonnes		(g/t)		(g/t)		(%)			(%)			(oz)
	Bellekeno2,4&5		262,000		585		n/a		3.5	%		5.3	%		4,928,000
	Lucky Queen2,4&6		132,300		1,167		0.2		2.4	%		1.6	%		4,964,000
Indicated	Flame & Moth2,4&6		1,679,000		498		0.4		1.9	%		5.3	%		26,883,000
	Onek4&6		700,200		191		0.6		1.2	%		11.9	%		4,300,000
	Bermingham2,4&5		1,102,300		930		0.1		2.4	%		1.7	%		32,959,000
Total Indicated			3,875,800		594		0.34		2.0	%		5.3	%		74,034,000
	Bellekeno4&5		243,000		428		n/a		4.1	%		5.1	%		3,344,000
	Lucky Queen4&6		257,900		473		0.1		1.0	%		0.8	%		3,922,000
Inferred	Flame & Moth4&6		365,200		356		0.3		0.5	%		4.3	%		4,180,000
	Onek4&6		285,100		118		0.4		1.2	%		8.3	%		1,082,000
	Bermingham4&5		509,400		717		0.2		1.7	%		1.5	%		11,743,000
Total Inferred			1,660,600		455		0.2		1.6	%		3.7	%		24,271,000

Notes:

1. All mineral resources are classified following the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) of NI 43-101.

2. Indicated mineral resources are inclusive of probable Mineral Reserves estimates.

3. Mineral resources are not mineral reserves and do not have demonstrated economic viability. All numbers have been rounded to reflect the relative accuracy of the estimates.

4. The mineral resource estimates comprising Bellekeno, Lucky Queen and Flame & Moth, Onek and Bermingham are supported by disclosure in the news release dated March 28, 2019 entitled “Alexco Announces Positive Pre-Feasibility Study for Expanded Silver Production at Keno Hill Silver District” and this Technical Report filed on SEDAR dated February 13, 2020 with an effective date of March 28, 2019.

5. The mineral resource estimate for the Bermingham and Bellekeno deposits are based on mineral resource estimates having an effective date of March 28, 2019. The Bellekeno deposit has been depleted to reflect all mine production from the Bellekeno mine to date.

6. The mineral resource estimate for the Lucky Queen, Flame & Moth and Onek deposits have an effective date of January 3, 2017.

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14.1 Introduction

The assumptions and methodologies used to prepare the Mineral Resource estimates for the four deposits included in this PFS technical report and one additional deposit not included in the PFS economic analysis (Section 22):

· Bellekeno deposit;

· Lucky Queen deposit;

· Flame & Moth deposit;

· Onek deposit (not part of the PFS economic analysis); and

· Bermingham deposit.

The Mineral Resources have been estimated in conformity with the generally accepted CIM Estimation of Mineral Resources and Mineral Reserves Best Practices Guidelines (CIM, 2003) and are reported in accordance with NI 43-101. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability.

In the opinion of the QP, the resource evaluations reported herein are a reasonable representation of the global polymetallic mineral resources in the Bellekeno, Lucky Queen, Flame & Moth, Onek, and Bermingham deposits given the current level of sampling.

The updated Bellekeno Mineral Resource Statement presented herein represents the third Mineral Resource evaluation prepared for the Bellekeno deposit in accordance with CIM definitions. The Mineral Resource model was prepared by Alexco personnel under the supervision of a third-party consulting geologist and considers 405 core drill holes drilled by Alexco during the period of 2006 to 2012 as well as historical drilling and chip sampling data collection during production undertaken both historically and by Alexco. The resource estimation work was completed by David Farrow, P.Geo, of GeoStrat, a QP as defined in NI 43-101.

The updated resource model for the Bellekeno mine was reviewed by Dr. Gilles Arseneau, P. Geo., of SRK and found to be completed to a standard acceptable to SRK and in accordance with NI 43-101.

The Mineral Resource model for the Lucky Queen deposit was prepared by SRK and published in an independent technical report on September 8, 2011. The author of the report was Dr. Arseneau. The report is entitled “Technical Report on the Lucky Queen Deposit, Lucky Queen Property, Keno Hill District, Yukon.”

The Mineral Resource model for the Flame & Moth deposit was prepared by Marek Nowak, P.Eng, SRK Consulting Canada Inc. (SRK), and published in a News Release dated April 29, 2015.

The Mineral Resource estimate for the Onek deposit was prepared by SRK and published in an independent technical report on September 8, 2011. The author of the report was Dr. Arseneau. The report is entitled “Technical Report on the Onek Deposit, Onek Property, Keno Hill District, Yukon.” The Onek mineral resource has been updated in this report to include the results of additional drilling carried out in 2012 and 2013.

The most recent Mineral Resource estimate for the Bermingham deposit was prepared by SRK in 2019 and published in a news release dated March 28, 2019 entitled “Alexco Announces Positive Prefeasibility Study for Expanded Silver Production at Keno Hill Silver District”.

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The databases used to update the Bellekeno mine and Flame & Moth Mineral Resource estimates were audited by the QPs. The QPs are of the opinion that the current drilling information is sufficiently reliable to interpret with confidence the boundaries for the polymetallic mineralization and that the assay data are sufficiently reliable to support Mineral Resource estimation.

Hexagon Mining’s MineSight software was used to construct the geological solids for all five deposits. The Lucky Queen and Onek, geological models and database were imported into GEMS format Access databases for geostatistical analysis, block model construction, metal grades estimates, and the tabulation of the Mineral Resources. Maptek’s Vulcan software was used for geostatistical analysis and block model estimation for the Bermingham mineral resource estimate. Isatis was used for geostatistical analysis and variography, block model construction, estimating metal grades, and Mineral Resource tabulation for Bellekeno. The Lucky Queen, Flame & Moth, and Onek block models were estimated using GEMS.

14.2 Resource Estimation Procedures

Methodology for the five deposits employed the following procedures:

· Database compilation and verification;

· Construction of wireframe models for the boundaries of the polymetallic mineralization;

· Definition of resource domains;

· Estimation of bulk density;

· Data conditioning (compositing and capping) for geostatistical analysis and variography;

· Block modelling and grade interpolation;

· Resource classification and validation;

· Assessment of “reasonable prospects for economic extraction” and selection of appropriate cut-off grades; and

· Preparation of the Mineral Resource Statement.

14.3 Resource Database

14.3.1 Database for the Bellekeno Mine

The Bellekeno database comprises a cumulative database from all sampling campaigns undertaken on the deposit to May 2012. These data include recent exploration drilling, from both surface and underground, and underground face (chip) samples, both recent and historical. Summary of the data available is shown in Table 14-2. Samples from within the defined geological solids were used in the resource estimation and are summarized in Table 14-3.

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Table 14-2 Bellekeno Mine Sample Database

Sample Type	Count		Number of Samples		Length (m)
Chip		1,666		5,232		4,226.9
Core (Surface)		65		8,541		15,273.9
Core (Underground)		348		7,645		12,003.6
Total		2,079		21,418		31,504.4

Table 14-3 Bellekeno Mine Samples Used for Mineral Resource Estimation

Sample Type	Count		Number of Samples		Length (m)
Chip		1,064		2,617		2,006.7
Core (Surface)		37		156		135.0
Core (Underground)		183		776		649.9
Total		1,284		3,549		2,791.6

The Mineral Resource database was imported into an ISATIS database, and validated by checking for inconsistencies in naming conventions, analytical units, duplicate entries, length, distance values, or sample intervals less than or equal to zero, blank or zero-value assays, out-of-sequence intervals, intervals or distances greater than the reported drill hole length, inappropriate collar locations, and missing interval and coordinate fields. A few minor inconsistencies were noted and corrected. No other significant validation errors were noted in the supplied database.

14.3.2 Database for the Lucky Queen Mine

The Lucky Queen data were exported from the SQL database by scripted routine to CSV files, which were imported into MineSight. The following drill hole files were generated: collar, survey, drill hole assay, chip sample assay, geology, and geotechnical.

The Lucky Queen database comprises descriptive information and assay values both from historical underground sampling and from exploration drilling carried out by Alexco from 2006 through 2010. The database was provided to SRK as an Excel format spreadsheet and contains a total of 558 records encompassing 47 core drill holes and 511 historical underground channel samples (Table 14-4). From the drilling results, Alexco has identified a total of 106 core drill hole intervals as primary vein intercepts and 26 intervals as secondary splay intercepts, based on a combination of geological logging and assay grades.

Table 14-4 Lucky Queen Deposit Sample Database

Type	Count		Ag (g/t)		Au (g/t)		Pb (ppm)		Zn (ppm)		Vein Width (m)
Historical Chip		511		2,175		NA		50,661		39,216		1.20
Alexco Core Vein		106		1,426		0.19		36,523		21,222		0.67
Alexco Core Splays		26		1,128		0.06		18,340		6,905		0.78
Alexco Core other		3,012		3.6		0.02		322		378		1.84

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The Mineral Resource database was imported into a GEMS format Access database and validated by checking for:

· inconsistencies in naming conventions or analytical units;

· duplicate entries;

· overlapping intervals;

· length or distance values less than or equal to zero;

· blank or zero-value assay results;

· out-of-sequence intervals;

· intervals or distances greater than the reported drill hole length;

· inappropriate collar locations; and

· missing interval and coordinate fields.

Two trivial terminal interval survey distances were noted and corrected; no other significant validation errors were noted in the supplied database. Assay intervals marked as below detection limit were assigned a nominal grade of 0.001 ppm prior to importing into GEMS.

14.3.3 Database for the Flame & Moth Deposit

The Flame & Moth drill hole database comprises descriptive information and assay values from exploration drilling carried out by Alexco from 2010 through 2014. The database was provided to SRK as an Excel format spreadsheet and contains 149 core drill holes (Table 14-5) drilled in the Flame & Moth area, of which 112 drill holes intercepted mineralized domains (Table 14-6).

Table 14-5 Flame & Moth Deposit Sample Database

	Drill Hole				Number of
Drill Hole Type	Number		Length (m)		Samples
Core		149		36,659		6,038

Table 14-6 Flame & Moth Deposit Core Drill Hole Vein Intercepts

	Drill Hole				Number of
Vein	Number		Length (m)		Samples
Flame Vein - Christal Zone		66		326		496
Flame Vein - Lightning Zone 1		46		242		366
Flame Vein - Lightning Zone 2		15		50		83
Total		1128		618		945
Note. The total is not the sum of drill holes intersecting each zone. One drill hole may intersect two zones

The Mineral Resource database was imported into GEOVIA GEMS^TM and validated with a focus on checking for narrow mineralized intersections, sampling gaps, and sample intervals with no assay data within mineralized intersections.

For resource estimation a small number of narrow drill hole intersections of the mineralized zones were expanded to at least 1.5 m mining widths. This resulted in some adjustments to the original mineralized solids (Table 14-7).

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Table 14-7 Original and Adjusted Narrow Mineralized Zones Drill Hole Intersections

Hole-ID	From Orig		To Orig		Length Orig		From Adj.		To Adj.		Length Adj.		Rock Name
K-10-0303		302.15		303.66		1.51		301.19		304.51		3.32		V1C
K-11-0343		156.36		156.68		0.32		155.37		157.65		2.28		V2
K-12-0396		103.91		104.09		0.18		103.14		104.7		1.56		V1L
K-12-0398		96.65		96.88		0.23		95.55		97.63		2.08		V2
K-12-0404		37.08		38.6		1.52		37.08		38.6		1.52		V1L
K-12-0414		148.05		148.5		0.45		147.44		149.14		1.70		V2
K-12-0417		163.86		165.25		1.39		163.71		166.05		2.34		V1L
K-12-0420		120.43		120.58		0.15		119.56		121.4		1.84		V1L
K-12-0421		133.86		134.71		0.85		133.42		135.15		1.73		V2
K-12-0425		162.79		163.26		0.47		162.03		164		1.97		V1L
K-13-0498		77.73		79.17		1.44		77.16		79.7		2.54		V1C
K-14-0540		368.46		369.7		1.24		368.2		369.89		1.69		V1L
K-14-0561		206.56		207.82		1.26		206.33		208.03		1.70		V1C
K-14-0572		279.4		281.05		1.65		279.18		281.23		2.05		V1C

There are a small number of sampling gaps within mineralized intersections. These are related to gaps with no recovery or fault intersections (Table 14-8).

Table 14-8 Sample Gaps in Mineralized Zones

Hole-ID	From		To		Adjacent From		Adjacent To		Gap Length		Code
K-12-0404		32.34		32.49		32.74		33.16		0.25		V2
K-12-0404		32.74		33.16		33.24		33.63		0.08		V2
K-12-0406		45		45.35		45.65		46.06		0.30		V1L
K-12-0409		135.5		135.6		135.65		136.1		0.05		V2
K-12-0438		344.53		345.8		346.80		347.25		1.00		V1L
K-14-0528		230.52		230.93		231.45		232.35		0.52		V1L
K-14-0548		481.3		482		482.40		483		0.40		V1L

There are 90 additional intervals inserted by loggers at sample locations with lower recoveries. A review of those intervals showed that they occurred primarily in zones of slight to moderate core loss, and the intervals may not reflect actual no recovery locations. An example of those intervals is presented in Table 14-9. Alexco has reviewed core photos and logged data and commented on each one of the intervals in question. As a result of this review, The QP proceeded with assignment of missing assay values from adjacent assays. Only in a few cases where extremely low recoveries were logged, the missing assay values were excluded from the resource estimation process (10 intervals).

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Table 14-9 Examples of Sample Intervals Assumed to Have No Recoveries

Hole-ID	From		To		Ag (g/t)		Code
K-12-0406		33.39		33.76		463		V2
K-12-0406		33.76		34.65				V2
K-12-0406		34.65		35.06		147		V2
K-12-0406		47		47.55		546		V1L
K-12-0406		47.55		48.05				V1L
K-12-0406		48.05		48.23		29.8		V1L
K-12-0406		48.23		48.53				V1L
K-12-0406		48.53		48.65		217		V1L
K-12-0406		48.65		49.35				V1L
K-12-0406		49.35		49.52		1225		V1L

All assays below detection limit entered in the database as negative values were assigned as follows: Ag - 0.02 g/t, Au – 0.001 g/t, Pb – 0.5 g/t.

14.3.4 Database for the Onek Deposit

The Onek data were exported from the SQL database by scripted routine to CSV files, which were imported into MineSight. The following drill hole files were generated: collar, survey, drill hole assay, chip sample assay, geology, and geotechnical.

The Onek database comprises descriptive information and assay values both from historical underground sampling and from exploration drilling carried out by Alexco from 2007 through 2013. The database was provided to SRK as an Excel format spreadsheet and contains a total of 1,567 records encompassing 92 core drill holes and 1,302 historical underground channel samples, 10 historical drill holes, 29 percussion holes and 134 test holes (Table 14-10). From the drilling results, Alexco has identified a total of 106 core drill hole intervals as primary vein intercepts and 26 intervals as secondary splay intercepts, based on a combination of geological logging and assay grades.

Table 14-10 Onek Deposit Sample Database Average Assay Values Inside Veins

Type	Count		Sample inside Veins		Ag (g/t)		Au (g/t)		Pb (ppm)		Zn (ppm)
Historical Chip		1,302		1156		275		NA		23,283		111,645
Alexco Drilling		92		633		215		0.57		17,134		112,434
Historical Drilling		10		8		NA		NA		6		3,250
Percussion Test holes		29		72		NA		NA		NA		29,014
Test Holes		134		97		NA		NA		3,277		32,439
Total		1,567		1,966

The Mineral Resource database was imported into a GEMS format Access database and validated by checking for:

· inconsistencies in naming conventions or analytical units;

· duplicate entries;

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· overlapping intervals;

· length or distance values less than or equal to zero;

· blank or zero-value assay results;

· out-of-sequence intervals;

· intervals or distances greater than the reported drill hole length;

· inappropriate collar locations; and

· missing interval and coordinate fields.

A few minor inconsistencies were noted and corrected by Alexco. No other significant validation errors were noted in the supplied database. Assay intervals marked as below detection limit were assigned a nominal grade of 0.001 ppm prior to importing into GEMS.

14.3.5 Database for the Bermingham Deposit

The Bermingham drill hole database was exported from the SQL database by scripted routine to Microsoft Excel format, and consisted of 201 drillholes with requisite data related to collar location, down-hole deviation survey, sample assays and specific gravity/density measurements, lithology and structural geology. The drill hole data was imported into Maptek Vulcan software and vetted for inconsistencies. No significant inconsistencies were noted.

The assay table contained a total of 8,920 sample intervals with associated assay data totalling 9,608.3 m of sampled drill core length. Of this total, 1,114 intervals (723.3m) were located within the interpreted mineralized wireframes. An additional 50 intervals totaling 32.8 m of drill core length located within the mineralized wireframes were labeled as “NR” referring to intervals of core loss with no associated assay data. Summary statistics (length weighted) for mineralized assay intervals contained within the mineralized wireframes are provided in Table 14-11.

Table 14-11 Summary Statistics for Mineralized Assay Data (length weighted) Grouped by Vein System

		BERMINGHAM MAIN								BEAR								FOOTWAL						WEST DIPPER
METAL	STATISTIC	Arctic		Bear		Etta		North East		Arctic		Bear		Bear South		North East		Arctic		Bear		Etta		WD2		Bear		Bear South
	Sample Numbers		198		45		75		21		52		241		51		33		129		99		70		21		60		19
	Mean		780		1,201		697		669		437		3,566		2,258		1,476		1,226		1,282		532		993		858		2,288
	Std Dev		1,152		3,176		1,087		1,182		632		4,880		3,381		2,241		1,770		2,966		811		1,029		1,586		2,452
Ag (g/t)	CV		148		264		156		177		145		137		150		152		144		231		152		104		185		107
	25th Percentile		106		97		120		43		34		199		363		58		135		75		73		328		31		199
	Median		306		355		272		226		190		1190		1100		161		494		466		332		792		262		1785
	75th Percentile		1,303		963		1,220		788		528		6,670		5,180		2,353		1,535		1,410		886		1,400		1,375		4,070
	Mean		0.18		0.22		0.08		0.11		0.07		0.31		0.37		0.21		0.18		0.16		0.08		0.12		0.12		0.28
	Std Dev		0.23		0.38		0.10		0.15		0.07		0.37		0.47		0.20		0.18		0.20		0.07		0.10		0.18		0.26
Au (g/t)	CV		129		169		124		131		104		119		127		99		100		122		95		80		146		93
	25th Percentile		0.04		0.05		0.02		0.04		0.02		0.04		0.06		0.04		0.04		0.03		0.03		0.06		0.01		0.03

February 14, 2020 Page 14-9

NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

			BERMINGHAM MAIN								BEAR								FOOTWAL						WEST DIPPER
METAL	STATISTIC		Arctic		Bear		Etta		North East		Arctic		Bear		Bear South		North East		Arctic		Bear		Etta		WD2		Bear		Bear South
		Median		0.09		0.14		0.05		0.06		0.05		0.14		0.14		0.11		0.11		0.12		0.05		0.13		0.07		0.23
		75th Percentile		0.22		0.24		0.13		0.20		0.09		0.52		0.82		0.31		0.26		0.22		0.10		0.22		0.20		0.57
		Mean		1.74		1.87		2.85		2.03		1.12		7.74		6.57		2.60		4.75		2.56		1.34		4.58		1.30		10.55
		Std Dev		2.86		2.86		4.12		2.82		1.83		9.26		9.82		3.17		9.57		5.59		2.16		7.52		2.29		13.80
Pb (%)		CV		165		153		145		139		164		120		150		122		202		218		161		164		175		131
		25th Percentile		0.14		0.10		0.29		0.28		0.08		0.31		0.37		0.15		0.23		0.15		0.12		1.51		0.08		0.09
		Median		0.54		0.53		1.09		1.04		0.38		3.43		1.86		0.58		1.04		0.70		0.63		3.60		0.35		0.93
		75th Percentile		2.69		2.02		4.52		2.52		1.36		13.25		14.20		3.83		4.77		3.29		2.00		6.81		2.94		20.99
		Mean		2.06		1.63		2.57		1.08		0.90		2.70		2.08		2.87		1.74		2.10		1.99		2.41		1.64		4.10
		Std Dev		2.70		2.28		2.26		0.79		1.41		3.94		3.22		2.81		2.49		3.87		2.28		2.73		3.48		4.77
ZN (%)		CV		131		140		88		73		157		146		155		98		144		185		115		113		213		116
		25th Percentile		0.23		0.20		0.90		0.55		0.17		0.21		0.19		0.34		0.10		0.19		0.38		0.57		0.22		0.28
		Median		1.03		0.70		1.77		0.69		0.39		1.04		0.89		1.11		0.50		0.66		1.42		1.75		0.70		1.33
		75th Percentile		3.36		1.90		4.07		1.67		1.17		3.83		2.23		4.84		1.71		3.82		3.52		4.08		2.01		6.96

14.4 Solid Body Modelling

3D wireframe solids were constructed by Alexco with oversight by the QP to accurately represent the geometry of the Bellekeno mine, Lucky Queen, Flame & Moth, Onek, and Bermingham vein structures. These wireframes were further reviewed and validated by the QP before Mineral Resource estimation.

14.4.1 Solid Body Modelling for the Bellekeno Mine

Wireframes were constructed for three portions of the Bellekeno deposit: the Southwest (SW) vein and splay, 99 vein and splay, and the East vein and splay (Figure 14-1). The wireframes were constructed using Mintec’s MineSight 3D software. All points of construction on the veins are from Alexco’ s core drilling and mapping of underground exposure during mining. Individual points were constructed on the hangingwall and footwall of each drill hole vein/structure intercept. These points were chosen based on the fault/vein structure where, in most cases, the hangingwall and footwall contacts were clear and the mineralization was contained within a well-defined structure.

February 14, 2020 Page 14-10

NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-1 Bellekeno Mine Long Section, Wireframes, Looking North-Northwest (top) and Looking South-Southeast (bottom)

14.4.2 Solid Body Modelling for the Lucky Queen Mine

At Lucky Queen, the majority of high-grade, silver-bearing vein material is confined between relatively intact rock of the hangingwall and footwall and is manifested as vein mineral and highly deformed fault rock (in varying proportions). High silver values are only rarely found outside the main structure as stringer zones or splays. Coincidence of high-grade mineralization within identifiable structural limits made it sensible to base the wireframe interpretation on structural and geological controls, and contacts were chosen accordingly. In addition to Alexco drill hole data, historical drill hole data and geological mapping conducted by UKHM were used to constrain the geometry of the main Lucky Queen structure and associated splay structures, where applicable.

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Historical drift and stope mapping is considered by Alexco to be accurate and representative. Field verification of the mapping could not be performed by Alexco geologists because the underground workings are inaccessible. However, historical maps of other mines in the KHSD have been verified and found to be generally accurate in their representation of the geology. Historical maps were scanned, geo-referenced, and imported into MineSight. The images were then draped onto drift solids at the appropriate elevation. This mapping was used to tag hangingwall and footwall contacts on the wireframe.

The main Lucky Queen mineralized body occupies a central part of the primary wireframe and the most important constraints delineating it are the lower grade drill intercepts that occupy locations above, below, and to the northeast. Beyond these drill holes, the wireframe is cut off (approximately) along the deepest extents of the 200 and 300 level historic workings. Fault 3 and 5 cut off the wireframe to the northeast and at shallow elevations, respectively. The earlier Lucky Queen workings included extensive stoping. As a result, it was decided to exclude the entire area containing the 50, 100, 200, and 300 level workings from the wireframe solid. Those areas of the 500 level workings that intersect the wireframes were also removed from the wireframe solid (Figure 14-2).

14.4.3 Solid Body Modelling for the Flame & Moth Deposit

Wireframes were constructed for two portions of the Flame vein offset along the Mill fault in the geology model for the Flame & Moth prospect. The Flame vein in the hangingwall of the Mill fault was termed the Lightning zone while the portion in the footwall of the Mill fault was termed the Christal zone (Figure 14-3).

Source: SRK 2011 a

Figure 14-2 Section of Lucky Queen Wireframes Looking Northwest

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: RPA 2017

Figure 14-3 Vein Wireframes and Location of Surface Drilling at Flame & Moth Used in Resource Estimation, Section (Looking North-Northwest)

The QP reviewed and validated the wireframes and concluded that the wireframes of the Flame & Moth deposit are fair representations of the mineralized veins. The wireframes were constructed using MineSight software. All points of construction on the Flame vein are from Alexco’s core drilling. Individual points were constructed on the hangingwall and footwall of each drill hole vein/structure intercept. These points were chosen based on the fault/vein structure where in most cases, the hangingwall and footwall contacts are clear and the mineralization is contained within a well-defined structure. The Flame vein strikes between 025° and 027° and dips between 62° and 66° to the southeast.

14.4.4 Solid Body Modelling for the Onek Deposit

Three-dimensional wireframe solids for the Onek deposit were constructed by Alexco to accurately represent the geometry of Onek vein structures. The QP reviewed and validated the wireframes before resource estimation. The QP concluded that the wireframes of the Onek deposit were fair representations of the mineralized veins and acceptable for resource estimation.

Wireframes for three separate veins were constructed for Onek: Vein 1, Vein 2, and Vein 1FW. Vein 1 is the dominant vein-fault structure at Onek, extending over 600 m in length and up to 260 m in depth. The vein is interpreted to extend through all drilling done to date and to encompass the drifts, stopes, and raises of the historical workings. The vein-fault thickness varies from approximately 7.5 m to less than 1 m but, on the whole, is fairly thick and persistent. The farthest southwest drilling contains very little grade and acts as a constraint to the strike extent of the mineralization. On the northeastern end of the deposit, the underground mapping on the 400 level shows the vein narrowing and splitting into two, with the likely more dominant structure curving to the south-east and ending with sporadic mineralization in a possible cross fault (Figure 14-4).

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Vein 2 forms an anastomosing structure in the hangingwall of Vein 1, with repeated convergence and divergence from the Vein 1 structure, as seen in the drill holes and underground level plan mapping. Vein 2 thickness is much smaller and less consistent than Vein 1 and the mineralization has much less continuity. This is regarded as a secondary structure in the Onek deposit. Vein 2 also bends sharply to the east at the northeastern end of the deposit where intercepts in the drill holes are much more sporadic. Several small weakly mineralized vein intercepts were noted in the hangingwall of Vein 2 but continuity of mineralization could not be established and they are not modeled at this time (Figure 14-5).

Two drill holes, K-08-0149 and K-10-0244, were drilled from separate collar locations but passed within 0.5 m of each other within the Vein 2 shape. As the location of Vein 2 in hole K-08-0149 could not be reconciled with the Vein 2 location in hole K-10-0244 without significant deviation in the wireframe, and since the K-10-0244 intercept had better survey control and was less oblique to the vein surface, the K-08-0149 Vein 2 intercept was excluded from the wireframe.

A third vein, Vein 1FW, was identified in several drill holes at the southwestern end of the deposit, likely splaying sharply off Vein 1, and was modelled for resource estimation.

Several weakly mineralized vein fault intercepts were identified in drill holes in the footwall to Vein 1 in the central portion of the deposit, in the vicinity of the historical workings. The continuity of these intercepts could not be established with the information available and these veins are regarded as small splays off the main Vein 1 structure. These intercepts were not modeled for resource purposes at this time.

Each of the vein shapes were wireframed independently, with a hangingwall surface and a footwall surface constructed using the drill hole intercepts, the shapes of the veins mapped in the levels and raises, and surface pit mapping. Where there was less information available, a contour tool was used to interpolate the vein shape and width every 10 m in elevation and to smooth the vein surface. The vein shapes were extended to approximately 50 m beyond known drilling and given a nominal vein thickness. Veins 2 and 1FW were clipped against the Vein 1 shape. Veins 1 and 1FW were also clipped against the topographic that was based on casing depth in nearby diamond drill holes and interpreted overburden depths in proximal historic overburden (rotary) holes.

February 14, 2020 Page 14-14

NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2014

Figure 14-4 Long Section of Onek Wireframes Looking South

 

Source: SRK 2014

Figure 14-5 Long Section of Onek Wireframes Looking North

Historical drift and stope mapping is considered by Alexco to be accurate and representative. Field verification of the mapping could not be performed by Alexco geologists because of the current inaccessibility of the underground workings, however; historical maps of other mines in the Keno Hill district have been verified and found to be generally accurate in their representation of the geology. Historical maps were scanned, geo-referenced and imported into MineSight. The images were then draped onto drift solids at the appropriate elevation. This mapping was used to tag hangingwall and footwall contacts on the wireframe. Historical (UKHM) chip sample data were not used to define wireframe contacts or wireframe width.

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

14.4.5 Solid Body Modelling for the Bermingham Deposit

The geological interpretation of the Bermingham deposit was developed by Alexco and provided to SRK in dxf format. The geological model consists of 14 wireframes representing mineralized veins that are grouped into 5 main zones of mineralization. Table 14-12 provides a summary of the geological model nomenclature for the Bermingham deposit, with depictions of the model provided in Figure 14-6 and Figure 14-7.

The 4 main vein systems within the Bermingham deposit are known as the Bermingham Main vein, Bear vein, Footwall vein and West Dipper veins. Three of these vein systems (i.e., Bermingham Main, Bear and Footwall veins) have a strike orientation of approximately 40° to the North East and dip to the South East at approximately 55° to 75°. The West Dipper veins have a strike orientation between 20 to 40° to the North East and dip approximately 57° to the North West. The veins are segregated (and offset) by cross-cutting fault structures into four distinct mineralized zones known as the Etta, Arctic, Bear and North East zones (Figure 14-8).

The potentially economic mineralization occurs within structural corridors characterized by a damaged zone surrounding the mineralization. The mineralized veins within these structural corridors were interpreted using a silver grade cut-off of 100 g/t. The QP reviewed the wireframes relative to the drill hole data supplied by Alexco and concluded the interpretation of the mineralized veins was a reasonable representation of the mineralization system and were of sufficient quality to use for mineral resource estimation.

Table 14-12 Bermingham Deposit Geological Model

ZONE	VEIN	WIREFRAME VOLUME (m3)
	Bermingham Main		114,235
Arctic	Bear		47,034
	Footwall		83,944
	Bermingham Main		28,932
Bear	Bear		44,532
	Bear South		6,907
	Footwall		57,403
Etta	Bermingham Main		33,520
	Footwall		79,999
North East	Bermingham Main		17,099
	Bear		26,212
	Bear		5,249
West Dipper	Bear South		1,652
	WD2		6,417

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2018

Figure 14-6 Bermingham Geological Model (Plan View)

 

Source: SRK 2018

Figure 14-7 Bermingham Geological Model (3D Isometric looking North East)

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2018

Figure 14-8 Cross-cutting Faults (View looking North West)

14.5 Bulk Density Data

14.5.1 Bulk Density for the Bellekeno Mine

The bulk density of vein material at the Bellekeno mine is very sensitive to the lead, zinc, and iron concentrations. To accommodate for these variations, regression analyses were done using metal grades and bulk density measured on pulp (PSG) for the Southwest and 99 zones of the Bellekeno mine. The relationships were used to calculate rock mass bulk density. A comparison of the smelter returns, production tonnage, and metal content for January 2011 to May 2012 shows a less than a 1% variance between metal tonnes. Production tonnes are calculated from the bulk density lead-based regression equations.

Bulk density measured on core samples (CBD) has a limited application for estimating block bulk density and production results. However, the in situ rock mass density can be back calculated from metal assays using the regression relationships between the measured PBD and the CBD for the Southwest and 99 zones, respectfully. The relationships are as summarized:

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Although limited PBD and CBD data has been collected on the East zone, there is a poor regression correlation between assay results and measured CBD. An average bulk density of 3.45 was assigned to East zone vein material based upon the average CBD measured. The poor correlation is most likely the result of poor core recovery in the vein areas. Once mining has actively commenced in the area, a new bulk density study will begin.

Material outside of the veins was assigned a bulk density of 2.7. This measurement is based upon the average CBD measured.

14.5.2 Bulk density for the Lucky Queen Mine

The bulk density data for Lucky Queen included a total of 191 bulk density measurements (Table 14-13) on core samples. Bulk density was measured by Alexco using a laboratory scale and recording the mass of core pieces in air and in water. Core was not covered by wax or plastic film prior to immersion. Regression analysis of the bulk density measurements shows a moderately strong correlation between the lead assay results and the reported bulk density, with a correlation coefficient of 0.62 (Figure 14-9). Therefore, a linear correlation was used to assign a bulk density value to each block based on the following relationship:

Bulk density = Pb (ppm) x 0.00006 + 2.617

Table 14-13 Lucky Queen Bulk Density Measurements

	Bulk Density Measured on Core
Count	Minimum		Maximum		Average		Median
191		1.24		6.81		2.74		2.60

 

Source: SRK 2011a

Figure 14-9 Scatter Plot of Lead Assay Results and Bulk Density Measurements

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

14.5.3 Bulk density for the Flame & Moth Deposit

The data supplied by Alexco for Flame & Moth included a total of 691 bulk density measurements on core samples and 3,340 pulp density measurements, 304 and 724 of which, respectively, fall within the modelled vein solids (Table 14-14).

Table 14-14 Flame & Moth Bulk Density Measurements within Mineralized Zones

	Type of				Bulk Density
Zone	material		Count		Minimum		Maximum		Average
Christal		Pulp		290		2.53		5.6		3.79
		Core		114		2.6		5.28		3.63
Lightning V1		Pulp		365		2.65		5.71		3.51
		Core		169		2.54		5.24		3.48
Lightning V2		Pulp		69		2.84		4.6		3.46
		Core		21		2.79		4.23		3.5
Total		Pulp		724		2.54		5.71		3.62
		Core		304		2.54		5.28		3.54

Bulk density was measured on core samples by Alexco using a laboratory scale and recording the mass of core pieces in air and in water. Core was not covered by wax or plastic film prior to immersion. Pulp bulk density measurements were measured by pycnometry at ALS in North Vancouver. A linear regression between core and pulp bulk density measurements has been used to adjust the pulp density values by a factor of 0.957 as shown in Figure 14-10.

For estimates of block SG values a combination of core bulk density and adjusted pulp density values was used.

Source: RPA 2017

Figure 14-10 Pulp Versus Core SG Values

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

14.5.4 Bulk density for the Onek Deposit

The data supplied by Alexco for Onek included a total of 626 bulk density measurements on core samples and 1,549 pulp density measurements. Of the density measurement from core, 182 were from the mineralized veins and of the 1,549 pulp density measurements, 521 were from inside the mineralized veins (Table 14-15).

Bulk density was measured on core samples by Alexco using a laboratory scale and recording the mass of drill hole core pieces in air and in water. Drill hole core was not covered by wax or plastic film prior to immersion. Pulp bulk density measurements were measured by pycnometer at ALS Chemex in Vancouver.

A linear regression of the core versus pulp bulk density measurements for samples was calculated, where:

Core Bulk density = 0.8532*Pulp Bulk density + 0.408

Table 14-15 Onek Bulk Density Measurements

Vein	Type	No of Samples		Minimum		Maximum		Average		Median
Vein 1	Pulp		385		2.54		4.92		3.44		3.47
	Core		140		2.47		7.32		2.67		3.45
Vein 1FW	Pulp		12		2.25		4.08		3.25		3.22
	Core		1		3.75		3.75		3.75		3.75
Vein 2	Pulp		124		2.59		4.90		3.17		2.96
	Core		41		2.55		5.07		3.28		3.21
All Samples	Pulp		521		2.25		4.92		3.37		3.35
	Core		182		2.47		7.32		3.36		3.42

The QP evaluated the bulk density data to see if there existed a correlation between SG and metal content. Figure 14-11 shows the correlation between the bulk density of samples collected from the Onek vein plotted against lead, zinc, and iron content. As can be seen from the figure there is a strong positive correlation between bulk density and metal content. For this reason, SRK decided to weight the composites against density as well as length for the resource estimation.

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of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: RPA 2017

Figure 14-11 Correlation Between Bulk Density and Metal Content for Onek Veins

There are 633 assay intervals within the veins at Onek containing 703 bulk density measurements. Of the 633 assay intervals, 91 intervals have no density measurements leaving 542 intervals with density measurements and 161 of these intervals contain BD measurements from both core and pulp.

For the estimation of bulk density into the block model the QP used core measurement if both core and pulp measurements were present, pulp measurements where core measurements were missing and the QP calculated a bulk density based on the metal content where both core and pulp measurements were absent.

The QP acknowledges that pulp measurements are slightly higher than core density measurements where both sample types are present and that using pulp measurement without correction could lead to a slight (3% to 5%) over estimation of the bulk density (Figure 14-12). However, the QP is of the opinion that the difference is minimal and not material.

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of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: RPA 2017

Figure 14-12 Comparison of Core and Pulp Density Measurements for Onek

14.5.5 Bulk density for the Bermingham Deposit

The data supplied by Alexco for Bermingham included a total of 4,999 specific gravity measurements (derived from the pycnometer method for SG determination on pulps) collected on assay samples, of which 953 were located within the mineralized wireframes. Alexco also collected a total of 835 bulk density field measurements on core using the water immersion method.

A direct comparison of the data obtained from the 2 methodologies is not possible since the sample intervals are not consistent between the datasets. Field measurements were obtained on sample intervals that have corresponding pycnometer measurements; however, field measurements represent single pieces of intact core that fall within a larger assay sample interval for which the pulp SG represents. Nevertheless, when aligning sample intervals as best as possible it appears that pycnometer measurements provide SG measurements slightly higher than the field obtained bulk density measurements (Figure 14-13).

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2018

Figure 14-13 Comparison between Pulp and Core Density Measurements

Based on the observations noted above, SG measurements derived using the pycnometer technique were used for interpolating bulk density into the block model. However, density weighting of assay composites during grade interpolation was not used to compensate for the apparent higher densities obtained from the pycnometer technique.

14.6 Compositing

14.6.1 Compositing for the Bellekeno Mine

Alexco identified a total of 3,549 assay intervals as vein intercepts. These assay intervals were imported into ISATIS, and assays were then composited to 1 m length-weighted intervals within the defined vein wireframes. A histogram of sample lengths for the mineralized zones can be seen in Figure 14-14.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-14 Histogram of Sample Lengths for the Mineralized Zones for Bellekeno Mine

14.6.2 Compositing for the Lucky Queen Mine

Alexco identified a total of 106 core drill hole assay intervals as primary vein intercepts and 26 intervals as secondary splay intercepts. These assay intervals were imported into GEMS, and assays were then composited to one metre length-weighted intervals within the defined vein wireframes. Terminal composites with a length of less than 50 cm were merged with the preceding composite in order to avoid a short sample bias during estimation. Missing sample intervals were assigned a nominal value of 0.001 during compositing.

14.6.3 Compositing for the Flame & Moth Deposit

Before compositing, four very extreme assay values were capped: two for Ag at 7,500 g/t and two for Zn at 30%. Assays were composited to one metre intervals within the defined zone wireframes. All composites shorter than 0.5 m were attached to the previous composite assay. A histogram of sample lengths within the mineralized zones is presented in Figure 14-15.

Two sets of composited data were produced:

1. Composites within original wireframes of the mineralized areas with occasional very narrow intersections.

2. Composites within adjusted wireframes of mineralized areas with narrow intersections expanded to a minimum of 1.5 m mining widths. This expansion had very minimal effect on the Lightning and Christal zones but had a substantial effect of increased volume in the V2 zone.

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

The two sets of composites were used to estimate block grades in two block models: (1) for resource reporting with mineralized zones expanded to a minimum of 1.5 m, and (2) for further engineering analysis and design of stopes based on originally designed wireframes.

 

Source: SRK 2014

Figure 14-15 Histogram of Sample Lengths in the Mineralized Zones for Flame & Moth Deposit

14.6.4 Compositing for the Onek Deposit

Alexco identified a total of 633 diamond drill hole assay intervals as vein intercepts. These assay intervals were imported into GEMS, and assays were then composited to one metre length and density-weighted intervals within the defined vein wireframes. A histogram of sample lengths within the mineralized zones can be seen in Figure 14-16.

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: RPA 2017

Figure 14-16 Histogram of Sample Lengths within Onek Veins

14.6.5 Compositing for the Bermingham Deposit

A target composite internal length of 1m was selected for Bermingham based on the average raw assay sample length being 0.65 m, and approximately 90% of mineralized assay samples consisting of sample lengths of 1.0 m or less. Wireframes of the mineralized veins were used to constrain assay data composting, and intervals of missing sample data recorded as “NR” (i.e., not recovered) due to core loss were ignored during data compositing. Due to vein geometry and missing data intervals, composite intervals of less than 0.5 m were either incorporated with the adjacent composite interval or removed from the final composite data set.

February 14, 2020 Page 14-27

NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2018

Figure 14-17 Histogram of Sample Lengths within Bermingham Veins

14.7 Evaluation of Outliers

14.7.1 Evaluation of Outliers for the Bellekeno Mine

Grade capping analysis was conducted on the domain-coded sample assay and composites data in order to limit the influence of extreme assay values during estimation. The assays were examined using histograms and cumulative frequency plots. After analysis, only silver composites were capped at a value of 5,000 g/t (Table 14-16). This capping threshold value was selected to minimize changes in the sample distribution. Composites were capped prior to estimation.

Table 14-16 Composite Capping Levels for the Bellekeno Mine

	Maximum		Cap			Mean		Number
Element		Value		Value	Mean		Capped		Capped	Lost Metal*
Ag (g/t)		10,128		5,000	1,044		1,025		21	1.82	%

Note. *Lost metal is (Average – Averaged Capped)/Average * 100 where Average is the average grade of the assays before capping and Average Capped is the average grade of the assays after capping.

14.7.2 Evaluation of Outliers for the Lucky Queen Mine

Grade capping analysis was conducted on the domain-coded and composites data in order to limit the influence of extreme assay values during estimation. The combined composite sample population for the main Lucky Queen vein and splay was examined using histograms, probability graphs, and capping plots. Capping threshold values were selected that minimize changes in the sample distribution, and sample values were capped to these values prior to compositing and estimation (Table 14-17). For lead, the capping threshold was set to the percentile used for grade capping of silver in order to maintain the observed correlation between these two elements.

February 14, 2020 Page 14-28

NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-17 Composite Capping Levels for Lucky Queen

Element	Maximum Value		Cap Value		Mean		Mean Capped		Number Capped		Lost Metal*
Ag (g/t)		13,998		6,300		960		834		2		13.1	%
Au (g/t)		3.00		2.00		0.16		0.15		1		10.0	%
Pb (ppm)		303,963		148,000		20,831		18,461		2		11.4	%
Zn (ppm)		210,100		70,000		13,944		10,143		3		27.2	%

Note. * Lost metal is (Average – Averaged Capped)/Average * 100 where Average is the average grade of the assays before capping and Average Capped is the average grade of the assays after capping.

14.7.3 Evaluation of Outliers for the Flame & Moth Deposit

Block grade estimates may be unduly affected by very high-grade assays. Instead of capping the composites for high grade assays, the QP elected to limit the influence of the high grade intersections during the estimation process. For each estimation domain and each metal, a probability plot of composite assay grades was used to select a high grade threshold. Table 14-18 shows the high grade thresholds selected in the Flame & Moth deposit.

Table 14-18 High Grade Thresholds in the Flame & Moth Deposit

Domain	Metal	Max Assays		Cap		Cap Extreme	Num Extreme Capped		High Grade Threshold Defined from Comps		Num All Comps		Number above threshold		%Dat above Threshold
Lightning	Au (g/t)		6.85			No				1.5		330		13		4
	Ag (g/t)		13,365		7,500	Yes		2		2,000.0		330		14		4
	Pb (%)		48.80			No				8.0		330		12		4
	Zn (%)		35.63		30	Yes		2		18.0		330		20		6
Christal	Au (g/t)		4.02			No				1.5		245		12		5
	Ag (g/t)		6,270			No				2,000.0		245		12		5
	Pb (%)		52.30			No				12.0		245		12		5
	Zn (%)		22.40			No				10.0		245		10		4
V2	Au (g/t)		1.65			No				1.0		52		2		4
	Ag (g/t)		3,390			No				1500.0		52		3		6
	Pb (%)		23.30			No				3.0		52		4		8
	Zn (%)		26.20			No				10.0		52		5		10

Continuity of the high grade assays was studied with a technique called “p-gram”. To construct p-grams, composites above a high grade threshold were coded with an indicator. Using a process similar to that for indicator variography, the data were paired over a series of lag distances. Only those pairs of data that are found in economic mineralization (above the threshold) were considered. The proportion of those pairs relative to the total number of pairs that started in high grade was determined. The higher the proportion, the greater continuity of the high grade assays.

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NI 43-101 Technical Report on Prefeasibility Study
of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Figure 14-18 shows the continuity of high grade silver composite assays at different thresholds in the Lightning zone. High grade continuities can be indicated up to a distance where plotted curves roughly level off. It is apparent that in this specific example the curves level off at distances higher than 20 m. The continuity of the high grade mineralization is very short. The p-grams were produced only for silver and zinc in the Lightning and Christal zones and the results were translated to a design of search radii in for all zones and all metals (Table 14-19). The direction of the high grade search ellipsoid was aligned with the overall direction of grade continuity in each zone.

 

Source: RPA 2017

Figure 14-18 Continuity of High Grade Ag Assays at High Grade Thresholds in Lightning Zone

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NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-19 High Grade Search Radii

	Radii
Metal	X-Rot		Y-Rot		Z-Rot
Au		30		30		15
Ag		20		15		15
Pb		30		30		15
Zn		30		40		15

14.7.4 Evaluation of Outliers for the Onek Deposit

Before compositing, grade capping analysis was conducted on the domain-coded sample assay data in order to limit the influence of extreme assay values during estimation. The assays from Vein 1 and Vein 1FW and, separately, the assays from Vein 2 were examined using histograms, and cumulative frequency plots. Capping threshold values were selected that minimize changes in the sample distribution, and sample values were capped to these values prior to compositing and estimation (Table 14-20).

Table 14-20 Sample Capping Levels for Onek

Vein	Commodity	Maximum Value		Cap Value		Number Capped		Average		Average Capped		Lost Metal*
Vein 1 and Vein 1FW	Ag (g/t)		3,440		3,000		2		210		208		0.7	%
	Au (g/t)		10.2		5		4		0.65		0.63		4.8	%
	Pb %		48.36		35		2		1.61		1.57		2.5	%
	Zn %		55.92		35		56		13.36		12.46		7.3	%
Vein 2	Ag (g/t)		4,080		3,000		4		238		221		7.8	%
	Au (g/t)		3.1		2		1		0.33		0.32		2.3	%
	Pb %		46.13		25		4		2.08		1.9		16.3	%
	Zn %		40.45		20		4		4.48		4.22		6.1	%

Note.* Lost metal is (Average – Averaged Capped)/Average * 100 where Average is the average grade of the assays before capping and Average Capped is the average grade of the assays after capping.

14.7.5 Evaluation of Outliers for the Bermingham Deposit

Grade capping analysis was conducted on the vein-coded composited assay data in order to limit the influence of extreme assay values during estimation. The composites from the Bermingham veins were examined using histograms and normal quantile plots. Capping threshold values were selected on the one metre composited data to minimize changes in the sample distribution, and composited values were capped prior to estimation (Table 14-21).

It should be noted that the Bear and Bear South veins were assessed as one continuous vein due to the limited structural offset observed between these two veins.

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Table 14-21 Sample Capping Levels for Bermingham

		BERMINGHAM MAIN								BEAR								FOOTWAL						WEST DIPPER
METAL	STATISTIC	Arctic		Bear		Etta		North East		Arctic		Bear		Bear South		North East		Arctic		Bear		Etta		WD2		Bear
	Sample Numbers		119		33		46		12		44		152		32		18		87		78		53		19		53
	Max Value (uncapped)		6,956		11,900		5,987		3,240		2,729		31,899		11,096		10,913		7,776		10,000		2,641		3,065		9,387
	Max Value (capped)		2,500		4,000		2,000		600		2,729		17,000		11,096		3,000		5,000		3,300		1,000		3,065		4,000
Ag (ppm)	Mean (uncapped)		766		1,305		769		474		424		3,128		2,098		1,399		1,204		1,168		514		1,008		1,073
	Mean (capped)		663		930		635		254		424		2,897		2,098		959		1,097		836		413		1,008		954
	CV (uncapped)		143		194		141		189		136		164		129		183		141		181		113		73		161
	CV (capped)		111		137		97		90		136		144		129		113		123		118		81		73		137
	Number Samples Capped		6		2		2		1		0		4		0		1		5		5		7		0		1
	Max Value (uncapped)		1.80		1.49		0.68		0.30		0.20		2.21		1.84		0.95		0.96		1.16		0.30		0.34		0.84
	Max Value (capped)		0.93		0.90		0.36		0.30		0.20		2.21		1.84		0.46		0.68		0.48		0.30		0.34		0.52
	Mean (uncapped)		0.17		0.24		0.09		0.09		0.06		0.27		0.35		0.20		0.18		0.14		0.07		0.12		0.14
Au (ppm)	Mean (capped)		0.16		0.22		0.08		0.09		0.06		0.27		0.35		0.17		0.18		0.13		0.07		0.12		0.13
	CV (uncapped)		148		126		133		97		76		144		133		115		100		127		87		66		131
	CV (capped)		120		105		105		97		76		144		133		87		95		103		87		66		116
	Number Samples Capped		3		2		1		0		0		0		0		1		1		2		0		0		2
	Max Value (uncapped)		17.49		15.21		18.77		6.67		8.76		46.73		32.65		15.60		65.95		19.14		13.94		18.22		41.14
Pb(%)	Max Value (capped)		6.80		6.80		8.00		3.00		4.00		46.73		32.65		6.30		18.40		9.20		5.60		9.00		7.10
	Mean (uncapped)		1.65		2.08		3.05		1.61		1.15		6.77		6.24		2.86		4.61		2.34		1.29		4.68		3.28
	Mean (capped)		1.43		1.72		2.69		1.30		0.97		6.77		6.24		2.15		3.38		1.96		1.13		4.20		1.51
	CV (uncapped)		164		156		125		117		159		142		145		142		218		168		167		86		254
	CV (capped)		131		121		101		86		127		142		145		103		145		132		121		62		145
	Number Samples Capped		5		2		2		1		2		0		0		2		4		3		1		1		4
	Max Value (uncapped)		17.44		7.67		10.20		3.56		3.74		23.75		14.25		8.86		12.82		19.61		13.28		7.42		17.53
	Max Value (capped)		7.40		7.67		10.20		1.60		2.20		23.75		14.25		6.00		8.30		9.80		5.00		3.50		4.90
	Mean (uncapped)		1.94		1.70		2.68		1.12		0.76		2.38		1.89		2.79		1.69		1.90		1.97		2.33		2.10
Zn (%)	Mean (capped)		1.74		1.70		2.68		0.95		0.64		2.38		1.89		2.49		1.59		1.77		1.72		1.96		1.36
	CV (uncapped)		138		112		85		79		132		149		141		100		152		160		119		82		177
	CV (capped)		108		112		85		51		110		149		141		88		139		138		90		61		115
	Number Samples Capped		4		0		0		1		4		0		0		2		2		1		2		3		5

  February 14, 2020 Page 14-32

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

14.8 Statistical Analysis and Variography

14.8.1 Statistical Analysis and Variography for the Bellekeno Mine

The Bellekeno data was analyzed by zone and is presented in the following series of graphics - the SW zone, the 99 zone, and the East zone.

14.8.1.1 Southwest Zone

Figures 14-19 to 14-26 through present the results for the SW zone: histograms, probability plots, normal variography, and lognormal variography.

In general, it is noted that reasonable variograms are obtained in log space for silver, lead, and zinc, with an omnidirectional range of approximately 40 m to 50 m in the plane of the vein.

14.8.1.2 The 99 Zone

Figures 14-27 to 14-31 present the results for the 99 zone: histograms, probability plots, normal variography, and lognormal variography.

Range for the 99 zone is shorter than the SW zone, approximately 20 m to 30 m in the plane of the vein.

14.8.1.3 The East Vein

Figures 14-32 to 14-35 present the results for the East zone: histograms, probability plots, normal variography, and lognormal variography.

Lead and zinc did not display a spatial structure, possibly due to the relatively small data set available for analysis. The silver variogram appears to indicate a 20 m to 30 m range in the plane of the vein.

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Source: SRK 2013

Figure 14-19 Histograms and Probability Plots for Silver, Capped and Uncapped, Southwest Zone

  February 14, 2020 Page 14-34

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Source: SRK 2013

Figure 14-20 Histograms and Probability Plots for Lead and Zinc, Capped and Uncapped, Southwest Zone

  February 14, 2020 Page 14-35

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: RPA 2017

Figure 14-21 Normal Variography of Silver, Southwest Zone

  February 14, 2020 Page 14-36

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-22 Lognormal Variography of Silver, Southwest Zone

  February 14, 2020 Page 14-37

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-23 Normal Variography of Lead, Southwest Zone

  February 14, 2020 Page 14-38

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-24 Lognormal Variography of Lead, Southwest Zone

  February 14, 2020 Page 14-39

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-25 Normal Variography of Zinc, Southwest Zone

  February 14, 2020 Page 14-40

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-26 Lognormal Variography of Zinc, Southwest Zone

  February 14, 2020 Page 14-41

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-27 Histograms and Probability Plots for Silver, 99 Zone

  February 14, 2020 Page 14-42

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-28 Histograms and Probability Plots for Lead and Zinc, 99 Zone

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NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-29 Log Space Variograms for Capped Silver, 99 Zone

  February 14, 2020 Page 14-44

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-30 Log Space Variograms for Lead, 99 Zone

  February 14, 2020 Page 14-45

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-31 Log Space Variograms for Zinc, 99 Zone

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Source: SRK 2013

Figure 14-32 Histograms and Probability Plots for Silver, East Zone

  February 14, 2020 Page 14-47

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Source: SRK 2013

Figure 14-33 Histograms and Probability Plots for Lead, East Zone

  February 14, 2020 Page 14-48

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Source: SRK 2013

Figure 14-34 Histograms and Probability Plots for Zinc, East Zone

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Source: SRK 2013

Figure 14-35 Log space Variograms for Silver, East Zone

14.8.2 Statistical Analysis and Variography for the Lucky Queen Mine

Examination of the distribution of drill hole and chip assay sample populations suggests that drill hole assay data differ significantly from the chip assay data (Figure 14-36). The chip sample data were, therefore, used for continuity analysis, but were not used for Mineral Resource estimation.

  February 14, 2020 Page 14-50

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Source: SRK 2011a

Figure 14-36 Q-Q Plot of Chip and Drill Hole Silver Assay Sample Data

Summary statistics were compiled for the composite data, both for the defined Lucky Queen vein and for a secondary splay identified by Alexco (Table 14-22). A total of 66 composites were derived for the Lucky Queen vein, and 15 composites for the secondary splay. An additional five composites averaging 1,591 g/t Ag have been identified by Alexco but were not assigned to the primary Lucky Queen vein or the secondary splay. Correlation analysis between elements indicates a strong correlation between silver and lead, with a correlation coefficient of 0.62.

Table 14-22 Composite Data Summary Statistics for the Lucky Queen Mine

Type	Statistic	Ag (g/t)		Au (g/t)		Pb (ppm)		Zn (ppm)
	Number of Samples		81		81		81		81
	Average		814		0.14		17,909		12,080
Total Composites	Minimum		0.2		0.001		2,327		44
	Maximum		13,998		3.00		303,963		210,100
	Standard Deviation		1,929		0.375		42,651		31.353
	Coefficient of Variation		2.4		2.8		2.4		2.6
	Number of Samples		66		66		66		66
	Average		960		0.161		20,831		13,944
Vein Composites	Minimum		0.6		0.001		32		44
	Maximum		13,998		3.00		303,963		210,010
	Standard Deviation		2,098		0.412		46,265		34,315
	Coefficient of Variation		2.2		2.6		2.2		2.5
	Number of Samples		15		15		15		15
	Average		174		0.022		5,054		3,877
Splay Composites	Minimum		0.2		0.001		23		116
	Maximum		2,125		0.155		60,714		27,195
	Standard Deviation		547		0.040		15,496		7,862
	Coefficient of Variation		3.2		1.8		3.1		2.0

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3D continuity analysis was conducted on the composite data and underground chip sample data for the Lucky Queen vein. Downhole and directional un-transformed and normal-scores transformed and normalized experimental semi-variograms were examined for silver, with the horizontal and across-strike directions aligned with the modelled vein orientation (Table 14-23).

Rotation was defined by the GEMS ZYZ convention within the rotated block model coordinate space. Due to the spatial distribution of the data, only a strike experimental semi-variogram could be satisfactorily modelled, and the range of the resulting normal-scores experimental semi-variogram was used to define sample selection requirements and classification criteria.

Table 14-23 Modelled Semi-Variogram for Silver

Direction	Experimental Semi-Variogram		Range
Nugget		0.2
Sill 1		0.2		12
Sill 2		0.6		100

14.8.3 Statistical Analysis and Variography for the Flame & Moth Deposit

Summary statistics compiled for declustered composite data for Ag and Zn are presented in Figures 14-37 and 14-38. The QP tested the bivariate relationship between the metals used in the estimation process. In general, the correlation between different metals is quite weak. The only exception is the correlation between Ag and Pb. Figure 14-39 shows an example of the correlation between Ag and Zn and Ag and Pb assays in the Lightning zone.

Experimental correlograms were derived for Ag and Zn from one metre composites in the Lightning and Christal zones. This type of a model was preferred because it is less sensitive to very high values and is normalized to the variance of the data used for a given lag. Downhole correlograms were used to model nugget effects (i.e., assay variability at very close distances). Directional correlograms were used to model grade continuities for larger distances. Final correlogram models used in in the resource estimation are presented in Table 14-24 and Table 14-25. Note that, in view of a good correlation between Ag and Pb assays, the correlogram models for Pb were assumed to be identical to Ag assays.

Block grades for all other metals were estimated by the Inverse Distance Squared procedure.

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Source: RPA 2017

Figure 14-37 Statistics of Ag Composite Grades in the mineralized zones

 

Source: RPA 2017

Figure 14-38 Statistics of Silver Composite Grades in the Mineralized Zones

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Source: RPA 2017

Figure 14-39 Statistics of Zinc Composite Grades in the Mineralized Zones

Table 14-24 Correlogram Models in the Lightning Zone

	Nugget		Sill C1		Gemcom Rotations (RRR rule)						Ranges a1, a2
Metal	C0		and C2		around Z		around Y		around Z		X-Rot		Y-Rot		Z-Rot
Ag		0.20		0.60		-30		60		17		70		50		3
				0.20								100		80		10
Pb		0.20		0.60		-30		60		17		70		50		3
				0.20								100		80		10
Zn		0.05		0.60		-30		60		17		40		50		5
				0.35								80		150		10

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Table 14-25 Correlogram Models in the Christal Zone

	Nugget		Sill C1		Gemcom Rotations (RRR rule)						Ranges a1, a2
Metal	C0		and C2		around Z		around Y		around Z		X-Rot		Y-Rot		Z-Rot
Ag		0.28		0.30		-25		60		0		30		30		5
				0.42								85		85		10
Pb		0.28		0.30		-25		60		0		30		30		5
				0.42								85		85		10
Zn		0.05		0.40		-25		60		0		20		20		5
				0.55								60		60		10

14.8.4 Statistical Analysis and Variography for the Onek Deposit

Examination of the distribution of the drill hole and chip assay sample populations suggests that the drill hole assay data differ significantly from the chip assay data. Therefore, the chip sample data were not used for Mineral Resource estimation.

Summary statistics were compiled for the composite data for the Onek veins (Table 14-26). A total of 351 composites were derived for Vein1, 16 composites for Vein 1FW and 147 composites for Vein 2. Any composites lengths that were less than 0.5 m in length were linked to the previous composite to assure equal weighting of all composite and to assure that all composites were between 0.5 m and 1.5 m in length. Correlation analysis between commodities indicates a strong correlation between Ag and Pb, with a correlation coefficient of 0.83.

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Table 14-26 Composite Data Summary Statistics for Onek

Type	Statistic	Ag g/t		Ag Cap g/t		Au g/t		Au Cap g/t		Pb %		Pb Cap %		Zn %		Zn Cap %
	No of Samples		514		514		514		514		514		514		514		514
	Average		181		175		0.51		0.49		1.4		1.26		9.5		8.93
Total Composites	Minimum		0.64		0.64		0		0		0		0		0		0
	Maximum		3,410		3,000		7.68		4.89		46.13		27.94		50		35
	St Dev.		408		369		0.7		0.58		4.26		3.42		10.94		9.59
	CV		2.25		2.11		1.37		1.18		3.04		2.71		1.15		1.07
	No of Samples		351		351		351		351		351		351		351		351
	Average		166		165		0.6		0.58		1.11		1.08		12.18		11.41
Vein 1 Composites	Minimum		0		0		0		0		0		0		0		0
	Maximum		2,776		2,428		7.68		4.89		26.96		21.35		50		35
	St Dev.		309		299		0.77		0.63		2.92		2.75		11.92		10.36
	CV		1.86		1.81		1.28		1.09		2.63		2.55		0.98		0.91
	No of Samples		16		16		16		16		16		16		16		16
	Average		135		135		0.3		0.3		2.32		2.32		4.11		3.78
Vein 1FW Composites	Minimum		0.64		0		0		0		0		0		0		0
	Maximum		1,400		1,400		1.91		1.91		27.94		27.94		28.66		23.46
	St Dev.		364		364		0.59		0.59		7.15		7.15		7.29		6.14
	CV		2.70		2.70		1.97		1.97		3.08		3.08		1.77		1.62
	No of Samples		147		147		147		147		147		147		147		147
	Average		222		201		0.31		0.3		1.99		1.57		3.7		3.56
Vein 2 Composites	Minimum		0		0		0		0		0		0		0		0
	Maximum		3,410		3,000		1.77		1.65		46.13		25		30.14		24.1
	St Dev.		583		499		0.41		0.39		6.12		4.16		4.51		3.93
	CV		2.63		2.48		1.32		1.30		3.08		2.65		1.22		1.10

Experimental correlograms and correlogram models were generated for silver, lead, zinc, and gold from combined composite grade data for Vein 1 and Vein 1FW and from composite grade data for Vein 2. The nugget effect was established from downhole correlograms. Directional and downhole correlograms were examined for silver, lead, zinc, and gold. Apart from zinc, modeled directions of spatial continuity were aligned with strike and dip directions of modeled vein orientations. For zinc, the major direction of continuity was modelled as a shallow dipping south-west trending structure. Nugget effect and across-structure continuity was established from downhole correlograms. Rotation was defined by the GEMS ZYZ convention within the rotated block model coordinate space. The continuity ellipsoids for silver, lead, zinc, and gold were displayed as search ellipsoids in GEMS to validate the ellipsoid orientations. The correlogram models used for grade estimation within Vein1 and Vein 1FW (Figure 14-40), and Vein 2 (Figure 14-41) are summarized in Table 14-27.

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Source: RPA 2017

Figure 14-40 Modelled Directional and Downhole Correlograms for Vein 1 and Vein 1FW

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Source: RPA 2017

Figure 14-41 Modelled Omnidirectional Correlograms for Vein 2

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Table 14-27 Modelled Correlograms for Onek Veins

						Gemcom Rotations						Range a
						(RRR rule)						X-		Y-		Z-
Metal	Zone	Nugget C0		Sill C		around Z		around Y		around Z		Rot		Rot		Rot
Silver	Vein 1 and Vein 1FW		0.20		0.80		-45		65		0		60		30		11
	Vein 2		0.20		0.80		-45		65		0		25		25		10
Lead	Vein 1 and Vein 1FW		0.20		0.80		-45		65		0		60		40		8
	Vein 2		0.20		0.80		-45		65		0		25		25		10
Zinc	Vein 1 and Vein 1FW		0.15		0.85		-45		65		-70		60		40		8
	Vein 2		0.30		0.70		-45		65		0		80		80		7
Gold	Vein 1 and Vein 1F		0.30		0.70		-45		65		0		70		50		10
	Vein 2		0.30		0.70		-45		65		0		30		30		10

14.8.5 Statistical Analysis and Variography for the Bermingham Deposit

Summary statistics compiled for the composite data for the Bermingham veins are provided in Table 14-28.

Due to limited composites within most individual veins, variogram analysis was conducted on the larger vein system (i.e., Bermingham Main, Bear and Footwall vein system) and then applied to each individual vein within the larger system. Directional variograms for silver, gold, lead, and zinc were produced for the three dominant vein systems. Variogram ellipse orientations generated for the vein systems were slightly adjusted to better align with individual vein orientations as detailed in Table 14-29.

Variograms for the West Dipper vein system could not be generated due to limited data. As well, variograms for specific gravity data were also not generated due to data limitations.

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Table 14-28 Summary statistics for composited assay data grouped by vein system for Bermingham.

		BERMINGHAM MAIN				BEAR				FOOTWAL			WEST DIPPER
METAL	STATISTIC	Arctic	Bear	Etta	North East	Arctic	Bear	Bear South	North East	Arctic	Bear	Etta	WD2	Bear
	Sample Numbers	119	33	46	12	44	152	32	18	87	78	53	19	53
	Mean	766	1,305	769	474	424	3,128	2,098	1,399	1,204	1,168	514	1,008	1,073
	Std Dev	1,094	2,538	1,087	894	576	5,138	2,712	2,560	1,697	2,109	582	738	1,730
Ag (ppm)	CV	143	194	141	189	136	164	129	183	141	181	113	73	161
	25th Percentile	131	164	114	42	75	122	427	135	176	90	88	492	67
	Median	316	387	387	207	221	1,129	1,146	437	531	498	347	829	306
	75th Percentile	984	987	1,086	516	446	3,346	3,197	2,086	1,502	1,153	602	1,344	1,211
	Mean	0.17	0.24	0.09	0.09	0.06	0.27	0.35	0.20	0.18	0.14	0.07	0.12	0.14
	Std Dev	0.25	0.30	0.11	0.09	0.05	0.39	0.46	0.23	0.18	0.18	0.07	0.08	0.18
	CV	148	126	133	97	76	144	133	115	100	127	87	66	131
Au (ppm)	25th Percentile	0.05	0.09	0.02	0.03	0.03	0.04	0.08	0.06	0.05	0.03	0.03	0.06	0.02
	Median	0.09	0.15	0.05	0.06	0.04	0.12	0.17	0.11	0.12	0.09	0.06	0.12	0.07
	75th Percentile	0.19	0.28	0.11	0.16	0.09	0.34	0.42	0.31	0.23	0.20	0.10	0.14	0.18
	Mean	1.65	2.08	3.05	1.61	1.15	6.77	6.24	2.86	4.61	2.34	1.29	4.68	3.28
	Std Dev	2.70	3.24	3.80	1.88	1.83	9.61	9.05	4.06	10.03	3.93	2.15	4.03	8.34
	CV	164	156	125	117	159	142	145	142	218	168	167	86	254
Pb (%)	25th Percentile	0.19	0.36	0.45	0.40	0.10	0.22	0.82	0.43	0.31	0.22	0.24	2.24	0.09
	Median	0.54	0.79	1.31	0.74	0.35	2.72	1.72	1.47	1.40	0.86	0.64	4.28	0.34
	75th Percentile	1.87	2.58	4.94	2.38	1.59	10.22	10.11	3.16	3.98	2.78	1.46	5.36	2.19
	Mean	1.94	1.70	2.68	1.12	0.76	2.38	1.89	2.79	1.69	1.90	1.97	2.33	2.10
	Std Dev	2.67	1.90	2.29	0.89	1.00	3.54	2.68	2.78	2.57	3.04	2.34	1.91	3.71
	CV	138	112	85	79	132	149	141	100	152	160	119	82	177
Zn (%)	25th Percentile	0.30	0.44	1.10	0.61	0.16	0.22	0.57	0.32	0.17	0.18	0.39	0.79	0.33
	Median	1.11	0.75	1.75	0.82	0.29	1.09	1.08	2.17	0.85	0.65	0.97	1.87	0.67
	75th Percentile	2.48	2.71	3.27	1.52	0.96	3.05	1.89	4.26	1.67	2.50	2.74	3.11	1.82

Note: The Bear and Bear South data sets within the West Dipper vein system have been grouped in the following summary

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-29 Variogram Details for the Bermingham Main, Bear and Footwall Vein Systems

Vein System	Zone	Metal	Bearing (Rot. about Z)	Plunge (Rot. about Y)	Dip (Rot. about X)	Nugget		Sill	Major Axis	Semi- Major	Minor
Bermingham Main	Arctic North East	Ag	310◦				0.2	S1 = 0.8	S1 = 45	S1 = 35	S1 = 3
	Bear		295◦
	Etta		300◦
	Arctic North East	Au	310◦				0.36	S1 = 0.64	S1 = 55	S1 = 45	S1 = 4
	Bear		295◦
	Etta		300◦
	Arctic North East	Pb	310◦	58◦	0◦		0.18	S1 = 0.22 S2 = 0.60	S1 = 20 S2 = 60	S1 = 7.5 S2 = 50	S1 = 1 S2 = 3
	Bear		295◦
	Etta		300◦
	Arctic North East	Zn	310◦				0.12	S1 = 0.15 S2 = 0.73	S1 = 13 S2 = 75	S1 = 13 S2 = 60	S1 = 1 S2 = 3
	Bear		295◦
	Etta		300◦
Bear	Arctic Bear Bear South	Ag	307◦				0.2	S1 = 0.13 S2 = 0.67	S1 = 10 S2 = 45	S1 = 20 S2 = 40	S1 = 4 S2 = 6
	North East		300◦
	Arctic Bear Bear South	Au	307◦	62◦	0◦		0.2	S1 = 0.16 S2 = 0.46 S3 = 0.18	S1 = 3.2 S2 = 13.6 S3 = 40	S1 = 5.5 S2 = 17.6 S3 = 40	S1 = 2.3 S2 = 6 S3 = 6
	North East		300◦
	Arctic Bear Bear South	Pb	307◦				0.23	S1 = 0.19 S2 = 0.58	S1 = 23 S2 = 50	S1 = 18 S2 = 40	S1 = 3 S2 = 6
	North East		300◦
	Arctic Bear Bear South	Zn	307◦				0.23	S1 = 0.2 S2 = 0.57	S1 = 30 S2 = 60	S1 = 15 S2 = 50	S1 = 5 S2 = 7
	North East		300◦
Footwall	Arctic Bear Etta	Ag	312◦				0.2	S1 = 0.36 S2 = 0.44	S1 = 15 S2 = 40	S1 = 8 S2 = 40	S1 = 1 S2 = 4
		Au		76◦	0◦		0.15	S1 = 0.39 S2 = 0.46	S1 = 3 S2 = 40	S1 = 8 S2 = 35	S1 = 2 S2 = 5
		Pb					0.2	S1 = 0.6 S2 = 0.2	S1 = 11 S2 = 35	S1 = 6 S2 = 30	S1 = 1 S2 = 4
		Zn					0.12	S1 = 0.4 S2 = 0.48	S1 = 17 S2 = 50	S1 = 10 S2 = 50	S1 = 2 S2 = 3.5

14.9 Block Model and Grade Estimation

14.9.1 Block Model and Grade Estimation for the Bellekeno Mine

A rotated block model was constructed to cover the entire extent of the mineralized veins. The block model includes separate sub models for silver, lead, zinc, and gold grade estimates, as well as bulk density, classification criteria, validation estimates, and a calculated block value. A block percentage model was used to accurately determine volume and tonnage values based on the reviewed and validated vein wireframes supplied by Alexco. The geometrical parameters of the block model are summarized in Table 14-30.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-30 Block Model Location and Setup (ISATIS convention)

Description	Easting (X)	Northing (Y)	Elevation (Z)
Block model origin (NAD 83 Zone 8N)	486,450	7,086,000	750
Block dimensions (metres)	2	2	2
Number of blocks	125	750	275
Rotation (degree)		32° (clockwise)

Grades were interpolated into blocks using an inverse distance estimator (power of two) and search ellipses were set up to parallel the strike and dip of the veins. For silver, lead, zinc, and gold, a two-pass series of expanding search ellipsoids was used for sample selection and estimation.

Composite data used for the estimation was restricted to samples located in the respective veins. Individual block grades were used to calculate a NSR block model. Estimation criteria for each vein zone are summarized in Table 14-31. Blocks were classified as Indicated Mineral Resources if at least two drill holes and six composites were found within a 30 m by 30 m search ellipse. All other interpolated blocks were classified as Inferred Mineral Resource.

Table 14-31 Search Ellipse Parameters for the Bellekeno Mine

			ISATIS Rotations						Range						Number of Composites				Max.
Commodity	Search Pass		Principal Azimuth		Principal Dip		Intermed Azimuth		X-Rot		Y-Rot		Z-Rot		Min.		Max.		Samples per hole
SW Vein		1		-32		77		0		50		25		20		2		10		2
Ag, Pb, Zn		2		-32		77		0		100		50		20		2		10		2
99 Vein		1		-44		79		0		30		30		30		2		10		2
Ag, Pb, Zn,		2		-44		79		0		60		60		60		2		10		2
East Vein		1		-32		78		0		30		30		30		2		10		2
Ag, Pb, Zn		2								60		60		60

14.9.2 Block Model and Grade Estimation for the Lucky Queen Mine

A rotated block model was constructed to cover the entire extent of the mineralized veins as defined by Alexco. The block model includes separate sub models for silver, lead, zinc, and gold grade estimates, as well as estimated bulk density, classification criteria, validation estimates, and a calculated block value. A block percentage model was used to accurately determine volume and tonnage values based on the reviewed and validated vein wireframes supplied by Alexco. The geometrical parameters of the block model are summarized in Table 14-32.

  February 14, 2020 Page 14-62

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of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-32 Block Model Location and Setup for the Lucky Queen Mine

Description	Easting (X)	Northing (Y)	Elevation (Z)
Block model origin (NAD 83 Zone 8N)	486,900	7,091,300	1,200
Block dimensions (metres)	10	10	10
Number of blocks	70	100	50
Rotation (degree)		-50° counter-clockwise

An inverse distance estimator (power of two) was used for the estimation of block grades. A two-pass series of expanding search ellipsoids with varying minimum sample requirements was used for sample selection and estimation, with the primary and secondary axes of the search ellipsoid defined by the silver semi-variogram range. Composite data used during estimation were restricted to samples located in their respective domain. Individual block grades were then used to calculate a block model. For the second pass, estimation results were also iteratively queried to ensure that all potential mineral resources within the defined domains were estimated. Estimation criteria are summarized in Table 14-33.

During the first pass, four to 12 composites from two or more drill holes within a search ellipsoid corresponding to 50% of the semi-variogram range were required for the estimation. All blocks estimated during the first pass were classified as Indicated (Table 14-33).

During the second pass, the search ellipse was expanded to ensure that all blocks within the defined vein and splay models were estimated. Between four to 12 composites from one or more drill holes were used for estimation. All blocks estimated during the second pass were classified as Inferred. All splay resources were also classified as Inferred due to the small number of total samples for this domain.

Table 14-33 Search Ellipse Parameters for the Lucky Queen Mine

Search

Rotation

Search Ellipse Size

Number of Composites

Max. Samples per

Estimator

Pass

Search Type

Z

Y

X (m)

Y (m)

Z (m)

Min.

Max.

hole

ID2

1

Ellipse

0°

50°

50

50

10

4

12

3

ID2

2

Ellipse

0°

50°

300

300

60

4

12

0

14.9.3 Block Model and Grade Estimation for the Flame & Moth Deposit

A rotated block model was constructed to cover the entire extent of the mineralized veins as defined by Alexco. The block model includes separate sub models for silver, lead, zinc, and gold grade estimates, as well as estimated bulk density, classification criteria, validation estimates, and a calculated block value. A block percentage model was used to accurately determine volume and tonnage values based on the reviewed and validated vein wireframes supplied by Alexco. The geometrical parameters of the block model are summarized in Table 14-34.

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of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-34 Block Model Location and Setup for the Flame & Moth Deposit

	Easting	Northing	Elevation
Description	(X)	(Y)	(Z)
Block Model Origin (Lower left corner)	483395.115	7086090.000	420.000
Block Dimension (m)	3	5	5
Number of Blocks	130	215	100
AZ Rotation		30° clockwise

A total of seven metals were estimated, four of which are included as part of the current resource (Au, Ag, Pb, Zn). Estimates of grades from Cu, As, Cd, and Mn will be used for internal studies by Alexco. As discussed in other sections, the resource estimation methodology was based on the following:

· The assays were composited to 1 m intervals. Two Ag and two Zn extremely high assays were capped before compositing;

· Ten missing assays (no recoveries) were excluded from compositing;

· The compositing was done within two sets of wireframes: original with some narrow mineralized intersections and modified with a minimum of 1.5 m mining width;

· All short composites (< 0.5 m) were combined with previous composite data;

· Ag, Zn, and Pb were estimated by kriging. Au, Cu, As, Cd, and Mn were estimated by Inverse distance squared (ID²);

· A minimum of two and a maximum sixteen composite assays were used in the estimation process;

· The composite assay grades from high-grade populations were used in the estimation process with limited influence; and

· SG was estimated by ID². All unestimated blocks were assigned an average SG within each mineralized zone.

The selection of the search radii and rotations of search ellipsoids were guided by variogram models. In addition, the search radii were established to estimate a large portion of the blocks within the modelled area with limited extrapolation. The parameters were established by conducting repeated test resource estimates and reviewing the results as a series of plan views and sections.

In the Lightning and Christal zones the Ag, Au, Pb, Zn, and Cu metal grade estimation involved two successive steps. The first step considered a relatively small search ellipsoid, which was doubled in size for the second step (Table 14-35 and Table 14-36). Smaller search radii were used to restrict high grade assays (Table 14-18). In the V2 zone the estimates were done in one step. The first step in the estimation process ensured that the blocks were estimated from at least two drill holes.

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of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-35 Search Ellipse Parameters for the Flame & Moth Deposit in the Lightning Zone

		Gemcom Rotations (RRR rule)						Radii
Metal	Step	around Z		around Y		around Z		X-Rot		Y-Rot		Z-Rot
Au	1		-30		60		17		60		60		20
	2		-30		60		17		120		120		40
Ag	1		-30		60		17		60		40		20
	2		-30		60		17		120		80		40
Pb	1		-30		60		17		60		60		20
	2		-30		60		17		120		120		40
Zn	1		-30		60		17		40		60		20
	2		-30		60		17		80		120		40

Table 14-36 Search Ellipse Parameters for the Flame & Moth Deposit in the Christal Zone

		Gemcom Rotations (RRR rule)						Radii
Metal	Step	around Z		around Y		around Z		X-Rot		Y-Rot		Z-Rot
Au	1		-25		60		0		60		60		20
	2		-25		60		0		120		120		40
Ag	1		-25		60		0		40		40		20
	2		-25		60		0		80		80		40
Pb	1		-25		60		0		60		60		20
	2		-25		60		0		120		120		40
Zn	1		-25		60		0		40		40		20
	2		-25		60		0		80		80		40

14.9.4 Block Model and Grade Estimation for the Onek Deposit

A rotated block model was constructed to cover the entire extent of the mineralized veins as defined by Alexco. The block model includes separate sub-models for silver, lead, zinc and gold grade estimates, as well as estimated specific gravity, classification criteria, validation estimates and a calculated block dollar value. A block percentage model was used to accurately determine volume and tonnage values based on the supplied Alexco vein wireframes and the percentage contained within the underground workings removed from the vein percentage to account for the mined out volume. The geometrical parameters of the block model are summarized in Table 14-37.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-37 Onek Block Model Location and Setup

Description	Easting (X)	Northing (Y)	Elevation (Z)
Block Model Origin NAD 83	485350	7087200	1120
Block Dimensions (metres)	3	5	5
Number of Blocks	80	150	80
Rotation (degree)	50° clockwise

Ordinary Kriging (OK) of capped composite values was used for the estimation of block grades. Because of the strong correlation between density and contained metal, all grades were weighted against density and a grade times density model was prepared for silver, lead, zinc, and gold. Interpolation was carried out in two passes with expanding search ellipsoids with the primary and secondary axes of the search ellipsoid defined by the correlogram ranges. For Vein 1 and Vein 1F a third pass was used for sample selection and estimation of silver. Correlogram and search parameters derived for Vein 1 were applied to Vein 1 FW with varying minimum and maximum number of samples required for estimation.

Composite data used for estimation was restricted to samples located in the respective veins. Individual block grades were used to calculate a dollar equivalent value for each block. Estimation criteria for Vein 1, Vein 1F, and Vein 2 are summarized in Table 14-38, Table 14-39, and Table 14-40, respectively. Blocks were classified as Indicated Mineral Resources if at least two drill holes and five composites were found within a 60 m by 30 m search ellipse. All other interpolated blocks were classified as Inferred Mineral Resource.

Table 14-38 Search Ellipse Parameters for Onek Vein 1

		Search		Search	Rotation						Search Ellipse Size						Number of Composites				Max. Samples
Commodity	Estimator	Pass		Type	Z		Y		Z		X (m)		Y (m)		Z (m)		Min.		Max.		per DDH
Ag	OK		1	Ellipsoidal		5°		65°		90°		60		30		11		5		10		3
	OK		2	Ellipsoidal		5°		65°		90°		90		45		33		5		10		3
	OK		3	Ellipsoidal		5°		65°		90°		30		30		33		1		10		-
Pb	OK		1	Ellipsoidal		5°		65°		0°		60		40		8		4		10		3
	OK		2	Ellipsoidal		5°		65°		0°		90		60		32		4		10		3
Zn	OK		1	Ellipsoidal		5°		65°		0°		60		40		8		4		10		3
	OK		2	Ellipsoidal		5°		65°		0°		90		60		32		4		10		3
Au	OK		1	Ellipsoidal		5°		65°		0°		70		50		10		5		10		3
	OK		2	Ellipsoidal		5°		65°		0°		105		75		30		5		10		3

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-39 Search Ellipse Parameters for Onek Vein 1F

					Rotation						Search Ellipse Size						Number of Composites				Max. Samples
Commodity	Estimator	Search Pass		Search Type	Z		Y		Z		X (m)		Y (m)		Z (m)		Min.		Max.		per DDH
Ag	OK		1	Ellipsoidal		5°		65°		90°		60		30		11		3		10		2
	OK		2	Ellipsoidal		5°		65°		90°		90		45		33		3		10		2
	OK		3	Ellipsoidal		5°		65°		90°		30		30		33		1		10		-
Pb	OK		1	Ellipsoidal		5°		65°		0°		60		40		8		3		10		2
	OK		2	Ellipsoidal		5°		65°		0°		90		60		32		3		10		2
Zn	OK		1	Ellipsoidal		5°		65°		0°		60		40		8		3		10		2
	OK		2	Ellipsoidal		5°		65°		0°		90		60		32		3		10		2
Au	OK		1	Ellipsoidal		5°		65°		0°		70		50		10		3		10		2
	OK		2	Ellipsoidal		5°		65°		0°		105		75		30		3		10		2

Table 14-40 Search Ellipse Parameters for Onek Vein 2

					Rotation						Search Ellipse Size						Number of Composites				Max. Samples
Commodity	Estimator	Search Pass		Search Type	Z		Y		Z		X (m)		Y (m)		Z (m)		Min.		Max.		per DDH
Ag	OK		1	Ellipsoidal		5°		65°		0°		25		25		10		4		10		3
	OK		2	Ellipsoidal		5°		65°		0°		75		75		30		4		10		3
Pb	OK		1	Ellipsoidal		5°		65°		0°		25		25		10		4		10		3
	OK		2	Ellipsoidal		5°		65°		0°		75		75		30		4		10		3
Zn	OK		1	Ellipsoidal		5°		65°		0°		80		80		7		4		10		3
	OK		2	Ellipsoidal		5°		65°		0°		120		120		21		4		10		3
Au	OK		1	Ellipsoidal		5°		65°		0°		30		30		10		4		10		3
	OK		2	Ellipsoidal		5°		65°		0°		75		75		30		4		10		3

14.9.5 Block Model and Grade Estimation for the Bermingham Deposit

A block model was constructed to cover the entire extent of the mineralized veins as defined by Alexco. The block model includes separate sub-models’ attributes for silver, lead, zinc, and gold grade estimates, as well as estimated specific gravity, classification criteria, validation estimates, and a calculated block dollar value. A sub-block model (1 m x 1 m x 1 m sub-block size) was used to accurately determine volume and tonnage values based on the reviewed and validated vein wireframes supplied by Alexco. The geometrical parameters of the block model are summarized in Table 14-41.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-41 Bermingham Block Model Location and Setup Table

Description	Easting (X)	Northing (Y)	Elevation (Z)
Block Model Origin NAD 83	478910	7086330	710
Block Model Rotation		Bearing of 45°
Block Dimensions (m)	9	3	6
Block Model Dimensions	1,008 m	624 m	690 m

Summaries of estimation parameters used for the estimation of silver, gold, lead, zinc and specific gravity are provided in Tables 14-42 to 14-46. Grades were interpolated using a 3-pass estimation approach for sample selection, with the 3^rd pass generally being used to interpolate grades into a low number of peripheral blocks along the vein margins. Ordinary Kriging (OK) was used for estimating silver, gold, lead and zinc grades into all mineralized veins except for the West Dipper vein system. ID² was the alternative technique used for interpolating metal grades within the West Dipper vein system, as well for specific gravity for all mineralized veins. Composite selection during estimation was generally restricted to only those composites located within the mineralized vein. The one exception to this was for the Bear and Bear South veins which were treated as one continuous vein due to the limited structural offset between these veins.

Table 14-42 Estimation Parameters for Silver

					Search Ellipse Size (m)			Number of Composites			High Grade Restriction
Vein			Estimation	Search		Semi-				Max Per	High Grade	Search Ellipse Size (m)
System	Zone	Metal	Technique	Pass	Major	Major	Minor	Min	Max	DDH	Threshold	Major	Semi-Major	Minor
Bermingham Main	Arctic Bear Etta North East	Ag	Ok	1	50	40	10	5	15	3	na	na	na	na
	Arctic Bear Etta North East			2	100	80	15	5	10	3	na 2000 g/t 1500 g/t na	na 50 50 na	na 40 40 na	na 10 10 na
	Arctic Etta Bear North East			3	100 100 120 125	80 80 100 100	15 15 15 15	1	6	3	na 1500 g/t 2000 g/t na	na 50 50 na	na 40 40 na	na 10 10 na
Bear	Arctic Bear Bear South North East	Ag	Ok	1	50	45	10	5	15	3	na	na	na	na
	Arctic Bear Bear South North East			2	100	90	15	5	10	3
	Arctic Bear South Bear North East			3	100 100 125 130	90 90 125 130	15 15 15 15	1	6	3
Footwall	Arctic Bear Etta	Ag	Ok	1	45	45	10	5	15	3	na	na	na	na
	Arctic Bear Etta			2	90	90	15	5	10	3	na 2500 g/t na	na 45 na	na 45 na	na 10 na
	Arctic Bear Etta			3	110 125 90	110 125 90	15 15 15	1	6	3	na 2500 g/t na	na 45 na	na 45 na	na 10 na

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Search Ellipse Size (m)

Number of Composites

High Grade Restriction

Vein

Estimation

Search

Semi-

Max Per

High Grade

Search Ellipse Size (m)

System

Zone

Metal

Technique

Pass

Major

Major

Minor

Min

Max

DDH

Threshold

Major

Semi-Major

Minor

West Dipper

Bear South Bear WD2

Ag

ID2

1

25

18

10

5

15

3

na

na

na

na

Bear South Bear WD2

2

50

36

15

5

10

3

na na 1500 g/t

na na 25

na na 18

na na 10

Bear South Bear WD2

3

75

54

15

1

6

3

na na 1500 g/t

na na 25

na na 18

na na 10

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-43 Estimation Parameters for Gold

					Search Ellipse Size (m)			Number of Composites			High Grade Restriction
Vein			Estimation	Search		Semi-				Max Per	High Grade	Search Ellipse Size (m)
System	Zone	Metal	Technique	Pass	Major	Major	Minor	Min	Max	DDH	Threshold	Major	Semi-Major	Minor
Bermingham Main	Arctic Bear Etta North East	Au	Ok	1	75	60	5	5	15	3	na	na	na	na
	Arctic Bear Etta North East			2	100	80	10	5	10	3	na	na	na	na
	Arctic Bear Etta North East			3	100	80	15	1	6	3	na	na	na	na
Bear	Arctic Bear Bear South North East	Au	Ok	1	60	50	10	5	15	3	na	na	na	na
	Arctic Bear Bear South North East			2	100	100	15	5	10	3
	Arctic Bear Bear South North East			3	100	100	15	1	6	3
Footwall	Arctic Bear Etta	Au	Ok	1	50	50	5	5	15	3	na	na	na	na
	Arctic Bear Etta			2	100	100	10	5	10	3	na	na	na	na
	Arctic Bear Etta			3	100	100	15	1	6	3	na	na	na	na
West Dipper	Bear South Bear WD2	Au	ID2	1	25	18	10	5	15	3	na	na	na	na
	Bear South Bear WD2			2	50	36	15	5	10	3	na	na	na	na
	Bear South Bear WD2			3	75	54	15	1	6	3	na	na	na	na

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-44 Estimation Parameters for Lead

					Search Ellipse Size (m)			Number of Composites			High Grade Restriction
Vein			Estimation	Search		Semi-				Max Per	High Grade	Search Ellipse Size (m)
System	Zone	Metal	Technique	Pass	Major	Major	Minor	Min	Max	DDH	Threshold	Major	Semi-Major	Minor
Bermingham Main	Arctic Bear Etta North East	Pb	Ok	1	60	50	10	5	15	3	na 5% 6% na	na 50 50 na	na 50 50 na	na 5 5 na
	Arctic Bear Etta North East			2	100	80	15	5	10	3	na 5% 6% na	na 50 50 na	na 50 50 na	na 5 5 na
	Arctic Etta Bear North East			3	100 100 120 125	80 80 100 100	15 15 15 15	1	6	3	na 5% 6% na	na 50 50 na	na 50 50 na	na 5 5 na
Bear	Arctic Bear South Bear North East	Pb	Ok	1	50	45	10	5	15	3	na 17% 21% na	na 50 25 na	na 40 20 na	na 10 6 na
	Arctic Bear South Bear North East			2	100 100 80 100	90 90 65 90	15	5	10	3	na 17% 21% na	na 50 25 na	na 40 20 na	na 10 6 na
	Arctic Bear South Bear North East			3	100 100 125 130	90 90 125 130	15	1	6	3	na 17% 21% na	na 50 25 na	na 40 20 na	na 10 6 na
Footwall	Arctic Bear Etta	Pb	Ok	1	40	35	10	5	15	3	na 5% na	na 35 na	na 30 na	na 4 na
	Arctic Bear Etta			2	80	70	15	5	10	3	na 5% na	na 35 na	na 30 na	na 4 na
	Arctic Bear Etta			3	100	90	15	1	6	3	na 5% na	Na 35 na	na 30 na	na 4 na
West Dipper	Bear South Bear WD2	Pb	ID2	1	25	18	10	5	15	3	na	na	na	na
	Bear South Bear WD2			2	50	36	15	5	10	3	na na 5%	na na 25	na na 18	na na 10
	Bear South Bear WD2			3	75	54	15	1	6	3	na na 5%	na na 25	na na 18	na na 10

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-45 Estimation Parameters for Zinc

					Search Ellipse Size (m)			Number of Composites			High Grade Restriction
Vein			Estimation	Search		Semi-				Max Per	High Grade	Search Ellipse Size (m)
System	Zone	Metal	Technique	Pass	Major	Major	Minor	Min	Max	DDH	Threshold	Major	Semi-Major	Minor
Bermingham Main	Arctic Bear Etta North East	Zn	Ok	1	75	60	5	5	15	3	na	na	na	na
	Arctic Bear Etta North East			2	100	80	10	5	10	3	na 4% na na	na 75 na na	na 60 na na	na 3 na na
	Arctic Bear Etta North East			3	100 120 100 125	80 100 80 100	15	1	6	3	na 4% na na	na 75 na na	na 60 na na	na 3 na na
Bear	Arctic Bear South Bear North East	Zn	Ok	1	60	50	10 10 7 10	5	15	3	na na 8% na	na na 30 na	na na 25 na	na na 3.5 na
	Arctic Bear South Bear North East			2	100 100 80 100	100 100 65 100	15 15 10 15	5	10	3	na na 8% na	na na 30 na	na na 25 na	na na 3.5 na
	Arctic Bear South Bear North East			3	100 100 125 100	100 100 125 100	15	1	6	3	na na 8% na	na na 30 na	na na 25 na	na na 3.5 na
Footwall	Arctic Bear Etta	Zn	Ok	1	50	50	5	5	15	3	6% 5% na	50 30 na	50 30 na	5 3.5 na
	Arctic Bear Etta			2	100 75 100	100 75 100	10	5	10	3	6% 5% na	50 30 na	50 30 na	5 3.5 na
	Arctic Bear Etta			3	100	100	15 10 15	1	6	3	6% 5% na	50 30 na	50 30 na	5 3.5 na
West Dipper	Bear South Bear WD2	Zn	ID2	1	25	18	10	5	15	3	4% 4% 2.50%	20 20 25	15 15 18	5 5 10
	Bear South Bear WD2			2	50	36	15	5	10	3	4% 4% 2.50%	20 20 25	15 15 18	5 5 10
	Bear South Bear WD2			3	75	54	15	1	6	3	4% 4% 2.50%	20 20 25	15 15 18	5 5 10

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-46 Estimation Parameters for Specific Gravity

					Search Ellipse Size (m)			Number of Composites			High Grade Restriction
Vein			Estimation	Search		Semi-				Max Per	High Grade	Search Ellipse Size (m)
System	Zone	Metal	Technique	Pass	Major	Major	Minor	Min	Max	DDH	Threshold	Major	Semi-Major	Minor
Bermingham  Main	Arctic Bear Etta North East	SG	ID2	1	50	50	6	5	15	3	na	na	na	na
	Arctic Bear Etta North East			2	100	100	12	5	12	3	na	na	na	na
	Arctic Bear Etta North East			3	150	150	15	1	6	3	na	na	na	na
Bear	Arctic Bear South Bear North East	SG	ID2	1	45	45	6	5	15	3	na	na	na	na
	Arctic Bear South Bear North East			2	90	90	12	5	12	3	na	na	na	na
	Arctic Bear South Bear North East			3	125	125	15	1	6	3	na	na	na	na
Footwall	Arctic Bear Etta	SG	ID2	1	45	45	6	5	15	3	na	na	na	na
	Arctic Bear Etta			2	90	90	12	5	12	3	na	na	na	na
	Arctic Bear Etta			3	125	125	15	1	6	3	na	na	na	na
West Dipper	Bear South Bear WD2	SG	ID2	1	25	18	6	5	15	3	na	na	na	na
	Bear South Bear WD2			2	50	36	12	5	12	3	na	na	na	na
	Bear South Bear WD2			3	75	55	15	1	6	3	na	na	na	na

14.10 Model Validation and Sensitivity

14.10.1 Model Validation and Sensitivity for the Bellekeno Mine

The block model was validated visually by the inspection of successive section lines in order to confirm that the block model correctly reflects the distribution of high-grade and low-grade samples. The average composite sample grades for all blocks containing composite samples (informed blocks) were compared to the ID² estimates using scatter plots. Both Inferred and Indicated blocks were plotted for both zones. The scatter plots for silver, lead, and zinc for blocks in the SW, 99, and East zones are displayed in Figures 14-42 to 14-44 and show an acceptable correlation between informed and estimated blocks.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-42 Comparison of ID² and Average Sample Grades for Silver, Lead, and Zinc, 48 Vein, Southwest Zone

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-43 Comparison of ID² and Average Sample Grades for Silver, Lead, and Zinc, 48 Vein, 99 Zone

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2013

Figure 14-44 Comparison of ID² and Average Sample Grades for Silver, Lead, and Zinc, 48 Vein, East Zone

Table 14-47 tabulates global quantities and grade estimates at different cut-off grades for the Bellekeno deposit. Figure 14-45 presents the effects of increasing cut-offs on the tonnage and grade of the deposit. The reader is cautioned that these figures should not be misconstrued as a Mineral Resource. The reported quantities and grades are only presented as a sensitivity of the resource model to the selection of cut-off grades.

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of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-47 Bellekeno Inferred and Indicated Block Model Quantity and Grade Estimates at Various Cut-Off Values

Cut-Off		Indicated				Inferred
(CDN$)		Tonnes		Ag (g/t)		Tonnes		Ag (g/t)
$	200		356,473		670		230,903		442
$	185		365,037		658		242,634		428
$	180		367,934		656		246,445		423
$	160		379,177		640		263,052		405
$	140		391,963		623		279,851		387
$	120		407,438		604		296,204		371
$	100		426,986		581		313,408		355

Notes:

1.	The reader is cautioned that the figures presented in this table should not be misconstrued as a Mineral Resource Statement. The reported quantities and grades are only presented to show the sensitivity of the resource model to the selection of a cut-off grade.
2.	CDN$ values calculated at 1CDN$ = 1US$.

 

Source: SRK 2013

Figure 14-45 Grade Tonnage Curve for Bellekeno

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

14.10.2 Model Validation and Sensitivity for the Lucky Queen Mine

The block model was validated visually by the inspection of successive section lines in order to confirm that the block model correctly reflects the distribution of high-grade and low-grade samples.

Trend analysis for the Lucky Queen Mineral Resource estimate demonstrates a minimal global bias and slight smoothing of the inverse distance estimates as compared to a nearest neighbor (NN) estimates, and correctly reflects grade trends along the strike of the deposit (Figure 14-46). An additional validation check was completed by comparing the undiluted inverse distance estimates to undiluted nearest neighbour estimates generated using the same search criteria and tabulated at a zero cut-off (Table 14-48). The observed difference between two models average block estimates are a function of the sharp grade drop immediately adjacent to the high-grade core of the vein.

 

Source: SRK 2011a

Figure 14-46 Swath Comparison of ID² and NN Estimation

Table 14-48 Nearest Neighbor Block Model Validation

Variable	Inverse Distance Block Average		Nearest Neighbor Block Average
Ag (g/t)		545		452
Au (g/t)		0.14		0.15
Pb (%)		1.22		1.14
Zn (%)		0.82		0.70

The Lucky Queen Mineral Resources are not sensitive to the selection of a cut-off grade. Table 14-49 shows the global quantities and grade estimates at different cut-off grades for the Lucky Queen vein. The reader is cautioned that these figures should not be misconstrued as a Mineral Resource. The reported quantities and grades are only presented as a sensitivity of the resource model to the selection of cut-off grades.

  February 14, 2020 Page 14-78

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of the Keno Hill Silver District Project, Yukon Territory, Canada
File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 14-49 Lucky Queen Mine Indicated and Inferred Block Model Quantity and Grade Estimates at Various Cut-off Values

Cut-Off (CDN$)		Indicated Tonnes		Ag (g/t)		Inferred Tonnes		Ag (g/t)
$	230		128,400		1,195		201,900		537
$	215		129,800		1,185		221,600		512
$	200		130,800		1,178		242,200		489
$	185		132,300		1,167		257,900		473
$	170		134,000		1,154		269,400		462
$	160		135,700		1,142		275,000		456
$	140		137,000		1,130		290,000		441

Note.

The reader is cautioned that the figures presented in this table should not be misconstrued as a Mineral Resource Statement.  The reported quantities and grades are only presented to show the sensitivity of the resource model to the selection of a cut-off grade.

14.10.3 Model Validation and Sensitivity for the Flame & Moth Deposit

All estimated zones were validated by completing a series of visual inspections and by:

· Comparison of local “well-informed” block grades with composites contained within those blocks; and

· Comparison of average assay grades with average block estimates along different directions – swath plots.

Figure 14-47 shows a comparison of estimated silver and zinc block grades with drill hole assay composite data contained within those blocks in the Lightning zone. On average, the estimated Zn blocks are slightly lower than the composite data, and the estimated Pb block grades are very similar to the composite data with very little scatter around the x = y line. This indicates that estimated block grades, at least those close to the data, are quite variable and not over smoothed. Similar results were noted in other estimation domains.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: SRK 2014

Figure 14-47 Comparison of (a) Silver and (b) Zinc Block Estimates with Borehole Assay Data Contained Within Blocks in the Lightning Zone

As a final check, average composite grades and average block estimates were compared along different directions. This involved calculating de-clustered average composite grades and comparison with average block estimates along east-west, north-south, and horizontal swaths. Figure 14-48 shows the swath plots for silver in the Lightning zone. Note good similarity between the estimates and data at higher elevations and somewhat higher estimated block grades at lower elevations where fewer data are available. This area has been assigned to the Inferred category. Figure 14-49 shows the swath plots for zinc in the Lightning zone. Note good similarity between the estimates and data. A similar relationship can be shown for all other estimation domains. Overall, the validation shows that current resource estimates are a good reflection of drill hole assay data.

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Source: RPA 2017

Figure 14-48 Lightning Zone Declustered Average Silver Composite Grades Compared to Silver Block Estimates

 

Source: RPA 2017

Figure 14-49 Lightning Zone Declustered Average Zinc Composite Grades Compared to Zinc Block Estimates

Table 14-50 tabulates Indicated and Inferred global quantities and grade estimates at different cut-off values for the Flame & Moth deposit.

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Table 14-50 Flame & Moth Indicated and Inferred Block Model Quantity and Grade Estimates at Various Cut-off Values

Cut-Off (CDN$)		Indicated Tonnes		Ag (g/t)		Inferred Tonnes		Ag (g/t)
$	230		1,537,000		528		297,000		399
$	215		1,582,000		518		317,000		385
$	200		1,626,000		509		342,000		369
$	185		1,679,000		498		365,000		356
$	170		1,727,300		487		383,000		346
$	160		1,759,200		481		396,000		339
$	140		1,805,000		472		428,000		324

Note.

The reader is cautioned that the figures presented in this table should not be misconstrued as a Mineral Resource Statement.  The reported quantities and grades are only presented to show the sensitivity of the resource model to the selection of a cut-off grade.

14.10.4 Model Validation and Sensitivity for the Onek Deposit

The block model was validated visually by the inspection of successive section lines in order to confirm that the block model correctly reflects the distribution of high-grade and low-grade samples. An ID² estimate was prepared for the blocks using the same search criteria and compared against the OK estimate. Analysis of OK versus ID² estimates at various cut-off values for the Onek deposit demonstrate a slight smoothing of the OK estimate compared to the ID² estimate for the indicated resource (Figure 14-50). For the inferred resource, OK estimate for silver show less smoothing than the ID² estimate. Average grades of the OK and ID² estimates for silver, lead, zinc, and gold at a $185 NSR cut-off are compared in Table 14-51.

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Source: RPA 2017

Figure 14-50 Comparison of OK and ID² Estimation for Onek

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Table 14-51 OK and ID2 Estimate at $185 Dollar Value cut-off

	Indicated				Inferred
	OK		ID2		OK		ID2
Ag (g/t)		200		198		134		126
Pb (%)		1.29		1.31		1.24		1.26
Zn (%)		12.30		12.93		8.86		9.26
Au (g/t)		0.62		0.62		0.44		0.44

Table 14-52 tabulates global Indicated and Inferred quantities and grade estimates at different cut-off grades for the Onek deposit. Figure 14-51 represents the effects of increasing cut-offs on the tonnage and silver grade of the deposit and Figure 14-52 demonstrates the same for the zinc grade. The reader is cautioned that these figures should not be misconstrued as a Mineral Resource. The reported quantities and grades are only presented as a sensitivity of the resource model to the selection of the cut-off grades.

Table 14-52 Onek Global Block Model Quantity and Grade Estimates at Various Dollar cut-off values

Class	Cut-off ($)		Tons (000)		Ag (g/t)		Au (g/t)		Pb (%)		Zn (%)
	$	230		634,500		204		0.62		1.32		12.50
	$	215		657,300		199		0.62		1.29		12.28
	$	200		680,100		195		0.61		1.26		12.05
Indicated	$	185		700,200		191		0.60		1.24		11.85
	$	170		719,400		187		0.60		1.21		11.66
	$	160		730,000		185		0.60		1.20		11.55
	$	140		751,300		181		0.59		1.8		11.32
	$	230		217,900		139		0.45		1.26		9.11
	$	215		236,600		133		0.44		1.23		8.84
	$	200		260,400		125		0.43		1.19		8.56
Inferred	$	185		285,100		118		0.42		1.15		8.26
	$	170		312,400		112		0.41		1.11		7.96
	$	160		331,000		107		0.40		1.08		7.76
	$	140		365,000		101		0.40		1.03		7.41

Notes:

1. The reader is cautioned that the figures presented in this table should not be misconstrued as a mineral statement. The reported quantities and grades are only presented to show the sensitivity of the resource model at various cut-offs.

2. CDN$=US$ x 0.80.

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Source: RPA 2017

Figure 14-51 Silver Grade Tonnage Curve for Onek

 

Source: RPA 2017

Figure 14-52 Zinc Grade Tonnage Curve for Onek

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14.10.5 Model Validation for the Bermingham Deposit

Block model validation for Bermingham was conducted using multiple techniques including:

1. Swath plot analysis of grade profiles between the block model and assay composites;

2. Comparison of block model mean grades to a nearest neighbour model produced on a 1 m by 1 m by 1 m grid; and

3. Visual inspection of estimated block grades relative to assay composites.

Swath plots of silver grade (generated along the easting coordinate) for the Bermingham Main, Bear and Footwall vein systems are provided in Figure 14-53 and Figure 14-54.

In general, the grade profiles are comparable between the block model and assay composites with an expected smoothed profile generated from the block model. This smoothing effect is a function of the estimation process and sample selection criteria defined within the estimation algorithm. Some discrepancy between block grades and assay composites can be observed along the margins of zones, however this is reflective of decreased numbers of assay composites along the periphery of the interpreted mineralized veins. These peripheral areas account for significantly reduced tonnages within the block model as reflected in the block number profile plotted along the top of each figure (in grey).

 

Source: SRK 2018

Figure 14-53 Swath plot of silver grade for the Bear vein system

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Source: SRK 2018

Figure 14-54 Swath plot of silver grade for the Footwall vein system

Comparisons of estimated mean grades for silver, gold, lead and zinc relative to a nearest neighbour model produced on a 1 m by 1 m by 1 m grid are provided in Figures 14-55 to 14-58. The abbreviation of the vein system along x-axis is denoted by “BM” for Bermingham Main, “BR” for Bear, “FW” for Footwall and “WD” for West Dipper. A tonnage profile is plotted on each graph and represents the total tonnes contained within each vein.

In general, the mean block grade and nearest neighbour mean grade for each vein are comparable.

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Source: SRK 2018

Figure 14-55 Comparison of block model silver grades to nearest neighbor model

 

Source: SRK 2018

Figure 14-56 Comparison of block model gold grades to nearest neighbor model

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Source: SRK 2018

Figure 14-57 Comparison of block model lead grades to nearest neighbor model

 

Source: SRK 2018

Figure 14-58 Comparison of block model zinc grades to nearest neighbor model

Visual inspection of the estimated block grades relative to the assay composites through cross-sectional interrogation again showed general agreement. As noted above, block grades demonstrate a typical smoothing effect produced from the estimation process and sample selection criteria within the estimation algorithm. However, the block model adequately reflects the distribution of grades observed within the composited assay data.

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14.11 Mineral Resource Classification

Mineral Resource classification is typically a subjective concept. Industry best practices suggest that resource classification should consider both the confidence in the geological continuity of the mineralized structures, the quality and quantity of exploration data supporting the estimates, and the geostatistical confidence in the tonnage and grade estimates. Appropriate classification criteria should aim at integrating these concepts to delineate regular areas at similar resource classification.

The QP is satisfied that the geological modelling honours the current geological information and knowledge. The location of the samples and the assay data are sufficiently reliable to support resource evaluation.

Generally, for mineralization exhibiting good geological continuity investigated at an adequate spacing with reliable sampling information accurately located, The QP considers that blocks estimated during the first estimation run considering full variogram ranges can be classified in the Indicated category within the meaning of the CIM definitions. For those blocks, The QP considers that the level of confidence is sufficient to allow appropriate application of technical and economic parameters to support mine planning and to allow evaluation of the economic viability of the deposit.

Conversely, blocks estimated during the second and third passes considering search neighbourhoods set larger than the variogram ranges should be appropriately classified in the Inferred category because the confidence in the estimate is insufficient to allow for the meaningful application of technical and economic parameters or to enable an evaluation of economic viability.

All Mineral Resource estimates presented in this PFS technical report have been classified within the meaning of the CIM definitions by independent QPs as defined by NI 43-101.

The Mineral Resources were estimated in conformity with the generally accepted CIM Estimation of Mineral Resources and Mineral Reserves Best Practices Guidelines (CIM, 2003). Mineral Resources may be affected by further infill and exploration drilling that may result in increases or decreases in subsequent resource estimates. Mineral resources may also be affected by subsequent assessments of mining, environmental, processing, permitting, taxation, socio-economic, and other factors.

14.11.1 Mineral Resource Classification for the Bellekeno Mine

Block model quantity estimates, grade estimates, and resource classification for the Bellekeno deposit were prepared by David Farrow, P.Geo, of GeoStrat, an independent QP.

GeoStrat considers that the quality of the exploration and production data (confidence in the location and reliability of the assaying results) acquired by Alexco is good and is not a factor that would impact resource classification. The confidence in the underlying data sets supports classification of Indicated and Inferred Mineral Resources. There is insufficient information to confirm both the geological and grade continuity with the current level of sampling to support a Measured Mineral Resource classification.

All blocks estimated in the first estimation run using drill sampling data were classified as Indicated Mineral Resources and all blocks estimated using the subsequent runs were classified as Inferred. Dr. Gilles Arseneau, P.Geo, of SRK reviewed the process.

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14.11.2 Mineral Resource Classification for the Lucky Queen Mine

Block model quantity estimates, grade estimates, and resource classification for the Lucky Queen deposit were prepared by F. H. Brown, CPG, PrSciNat, under the supervision of Dr. Gilles Arseneau, P.Geo; both independent QPs.

The QP considers that the quality of the exploration data (confidence in the location and reliability of assaying results) acquired by Alexco is good and, therefore, is not a factor that would impact resource classification. The confidence in the underlying data sets supports classification of Indicated and Inferred Mineral Resources. There is insufficient information to confirm both the geological and grade continuity with the current level of sampling to support a Measured Mineral Resource classification.

All blocks estimated in the first estimation run were classified as Indicated Mineral Resources and all blocks estimated using the second estimation run were classified as Inferred Mineral Resources.

14.11.3 Mineral Resource Classification for the Flame & Moth Deposit

Block model quantity estimates, grade estimates, and resource classification for the Flame & Moth deposit were prepared by Marek Nowak, P.Eng, of SRK who is an independent QP.

The confidence in the underlying datasets supports classification of Indicated and Inferred Mineral Resources within the meaning of the CIM definitions. There is insufficient information to confirm both the geological and grade continuity with the current level of sampling to support a Measured Mineral Resource classification within the meaning of the CIM Definition Standards.

Block classification was applied to the resource model based on a combination of average distances to composites from a local estimate, the number of drill holes contributing to the local estimate, and minimum number of samples used. Blocks were assigned to an Indicated category if they were estimated in step 1 of the estimation process from at least two drill holes, from the data with average distance to the estimated blocks less than 40 m and at least six samples. All other estimated block grades were assigned to an Inferred category.

14.11.4 Mineral Resource Classification for the Onek Deposit

Block model quantity estimates, grade estimates, and resource classification for the Onek project were prepared by Dr. Gilles Arseneau P.Geo., who is an Independent QP.

The QP considers that the quality of the exploration data (confidence in the location and reliability of assaying results) acquired by Alexco is good and therefore is not a factor that would impact resource classification. The confidence in the underlying datasets supports classification of Indicated and Inferred Mineral Resources within the meaning of the CIM definitions. There is insufficient information to confirm both the geological and grade continuity with the current level of sampling to support a Measured Mineral Resource classification within the meaning of the CIM definitions.

Blocks were classified as Indicated Mineral Resources if at least two drill holes and five composites were found within a 60 m by 30 m search ellipse. All other interpolated blocks were classified as Inferred Mineral Resource.

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14.11.5 Mineral Resource Classification for the Bermingham Deposit

Block model quantity estimates, grade estimates, and resource classification for the Bermingham deposit were prepared by Cliff Revering P.Eng., an Independent QP.

Mineral Resource classification is typically a subjective concept, industry best practices suggest that resource classification should consider both the confidence in the geological continuity of the mineralized structures, the quality and quantity of exploration data supporting the estimates and the geostatistical confidence in the tonnage and grade estimates. Appropriate classification criteria should aim at integrating both concepts to delineate regular areas at similar resource classification.

The QP is satisfied that the geological modelling honours the current geological information and knowledge. The location of the samples and the assay data are sufficiently reliable to support resource evaluation. The confidence in the underlying datasets supports the classification of Indicated and Inferred Mineral Resources within the meaning of the CIM definitions. There is insufficient information to confirm both the geological and grade continuity with the current level of sampling to support a Measured Mineral Resource classification within the meaning of the CIM definitions.

Blocks were classified as Indicated Mineral Resources provided they were estimated within the first pass of the estimation algorithm for silver and met the CDN$185/t dollar equivalent cut-off value criteria. All other interpolated blocks were classified as Inferred Mineral Resources provided they met the same CDN$185/t dollar equivalent cut-off value criteria.

14.12 Mineral Resource Statements

CIM (2014) defines a Mineral Resource as:

“A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.”

The “reasonable prospects for eventual economic extraction” requirement generally implies that the quantity and grade estimates meet certain economic thresholds and that the Mineral Resources are reported at an appropriate cut-off grade that takes into account extraction scenarios and processing recoveries.

The Mineral Resource for the Bellekeno was estimated in 2012 and subsequently updated to reflect depletion from mining to September 30, 2013, when the mine production ceased. No drilling or other work has been carried out on the deposit since the time of the updated Mineral Resource estimate and that estimate remains unchanged as of January 3, 2017. The block model quantities and grade estimates were assessed to identify the portions of the Bellekeno deposit having “reasonable prospects for eventual economic extraction” considering underground mining based on parameters summarized in Table 14-53.

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Table 14-53 Assumptions Considered for Preparing the Bellekeno Mineral Resource Statement (SRK, 2013)

Parameter	Value		Unit
Silver price		22.50	US$ per ounce
Lead price		0.85	US$ per pound
Zinc price		0.95	US$ per pound
Exchange rate		0.96	US$/CDN$
NSR cut-off value		185	CDN$ per tonne mined
Process recovery silver		96	%
Process recovery gold		72	%
Process recovery lead		97	%
Process recovery zinc		88	%

The Mineral Resources for the Lucky Queen, Flame & Moth, and Onek deposits were estimated in 2011, 2015, and 2011 respectively. The Lucky Queen, Flame & Moth, and Onek models were reviewed and updated by SRK in 2017. In the QP’s opinion, the Mineral Resources for the three deposits satisfy the CIM definitions for Mineral Resources and Mineral Reserves. There has been no additional drilling or exploration work completed on the Lucky Queen, Flame & Moth, and Onek deposits since the previous Mineral Resource estimates. For this Study, the Mineral Resources for the three deposits were estimated and reported at a CDN$185 NSR cut-off value using updated metal prices and are considered current to January 3, 2017. The block model quantities and grade estimates were assessed to identify the portions of the Lucky Queen, Flame & Moth, and Onek deposits having “reasonable prospects for eventual economic extraction” considering underground mining based on parameters summarized in Table 14-54.

Table 14-54 Assumptions Considered for Preparing the Lucky Queen, Flame & Moth, and Onek Mineral Resource Statement (SRK, 2013)

Parameter	Value		Unit
Silver price		20.00	US$ per ounce
Gold price		1,300	US$ per ounce
Lead price		0.95	US$ per pound
Zinc price		1.00	US$ per pound
Exchange rate		0.80	US$/CDN$
NSR cut-off value		185	CDN$ per tonne mined
Process recovery silver		96	%
Process recovery gold		72	%
Process recovery lead		97	%
Process recovery zinc		88	%

The Bermingham model was re-estimated in 2018 to include new drilling in 2017 and 2018. In the QP’s opinion, the Mineral Resources for this deposit satisfy the 2014 CIM definitions for Mineral Resources and Mineral Reserves. The Mineral Resources for the Bermingham deposit were estimated and reported at a CDN$185/t dollar equivalent cut-off value using updated metal prices and are considered current to September 26, 2018. The block model quantities and grade estimates were assessed to identify the portions of the Bermingham deposit having “reasonable prospects for eventual economic extraction” considering underground mining based on parameters summarized in Table 14-55.

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Table 14-55 Assumptions Considered for Preparing the Bermingham Mineral Resource Statement

Parameter	Value		Unit
Silver price		20.80	US$ per ounce
Gold price		1,450	US$ per ounce
Lead price		1.05	US$ per pound
Zinc price		1.20	US$ per pound
Exchange rate		0.80	US$/CDN$
NSR cut-off value		185	CDN$ per tonne mined
Process recovery silver		96	%
Process recovery gold		72	%
Process recovery lead		97	%
Process recovery zinc		88	%

14.12.1 Mineral Resource Statement for the Bellekeno Mine

The Bellekeno mine was in operation to the end of August 2013 and as such has demonstrated its amenability to underground extraction. From June 1, 2012, the date of the previous Mineral Resource estimate, to the temporary mine shutdown in September 2013, Alexco reports actual tonnes processed from the Bellekeno mine of 124,000 tonnes at average grades of 701 g/t Ag, 8.3% Pb, and 4.3% Zn.

Commodity prices were provided to GeoStrat by Alexco as representative of its long-term strategic forecast. Metallurgical recoveries were from a previous PEA for the Bellekeno project at the KHSD (Wardrop, 2009) (see Table 14-53). These metal prices and metallurgical recoveries were used to estimate values (CDN $/t) for blocks in the resource block model. No drilling or other work has been carried on the Bellekeno deposit since the previous Mineral Resource estimate and the estimate remains unchanged as of January 3, 2017. Mineral Resources for the Bellekeno deposit, updated for depletion from mining to September 30, 2013, are tabulated in Table 14-56 and have been reported relative to a cut-off value of CDN $185.00/t. It is the opinion of the QP that the Mineral Resource Estimate presented herein for the Bellekeno deposit meets the current (CIM 2014) definition for inferred mineral resources, and thus is updated to the effective date of this report.

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Table 14-56 Mineral Resource Statement, Bellekeno Deposit, GeoStrat Consulting Services Inc. March 28, 2019

Vein	Class	Tonnes	Ag (g/t)	Pb (%)	Zn (%)	Au (g/t)
Total	Indicated	262,000	585	3.50	5.30	n/a
	Inferred	243,000	428	4.10	5.10	n/a

Notes:

1. The Mineral Resource estimate is has an effective date of March 28, 2019 and has been depleted to reflect all mine production from the Bellekeno mine to date.

2. 2014 CIM definitions followed for Mineral Resources.

3. Reported at a cut-off value of CDN$185.00/t considering metal prices of US$22.50/oz for Ag, US$ 0.85/lb for Pb, and US$ 0.95/lb for Zn; and recovery of 96% for Ag, 97% for Pb, and 88% for Zn.

4. All numbers have been rounded to reflect the relative accuracy of the estimates.

5. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability.

14.12.2 Mineral Resource Statement for the Lucky Queen Mine

The QP considers that the mineralization evaluated in the Lucky Queen deposit is amenable to underground extraction. Approximately 20% of the Lucky Queen vein as modelled by Alexco has a horizontal width of less than 1.20 m. In order to determine the quantities of material offering reasonable prospects for economic extraction from an underground mining operation, grades for blocks with a horizontal width of less than 1.20 m were adjusted (diluted) to a minimum thickness of 1.20 m assuming zero grade internal dilution.

Commodity prices were provided to SRK by Alexco as representative of its long-term strategic forecast. Metallurgical recoveries were from a previous PEA for the Bellekeno project at the Keno Hill Silver District (Wardrop, 2009) (see Table 14-56 above).

These metal prices and metallurgical recoveries were used to estimate values (CDN$/t) for blocks in the resource block model.

Mineral Resources for the Lucky Queen deposit are shown in Table 14-57 and have been reported relative to a cut-off value of CDN$185.00/t.

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Table 14-57 Mineral Resource Statement, Lucky Queen Deposit, SRK Consulting (Canada) Inc., January 3, 2017

Vein	Class	Tonnes	Ag (g/t)	Pb (%)	Zn (%)	Au (g/t)
Main Lucky Queen	Indicated	132,300	1,167	2.43	1.63	0.16
Vein	Inferred	235,800	465	1.00	0.77	0.14
Splay	Inferred	22,100	564	1.51	1.10	0.04
Total	Indicated	132,300	1,167	2.43	1.63	0.16
	Inferred	257,900	473	1.04	0.80	0.13

Notes:

1. 2014 CIM definitions followed for Mineral Resources.

2. Reported at a cut-off value of CDN$185.00/t considering US$/CDN$ exchange of US$0.80=CDN$1.00.

3. Metal prices of US$20.00/oz for Ag, US$0.95/lb for Pb, US$1.00/lb for Zn, and US$1,300/oz for Au; and recovery of 96% for Ag, 97% for Pb, 88% for Zn and 72% for Au.

4. All numbers have been rounded to reflect the relative accuracy of the estimates.

5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

14.12.3 Mineral Resource Statement for the Flame & Moth Deposit

Commodity prices were provided to SRK by Alexco as representative of a consensus long-term strategic forecast. Metallurgical recoveries were from a previous PEA for the Bellekeno project at the Keno Hill Silver District (Wardrop, 2009) (Table 14-56 above).

These metal prices and metallurgical recoveries were used to estimate values (CDN$/t) for blocks in the resource block model.

Mineral Resources for the Flame & Moth deposit are shown in Table 14-58 and have been reported relative to a cut-off value of $185.00/t.

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Table 14-58 Mineral Resource Statement, Flame & Moth Deposit, SRK Consulting (Canada) Inc., January 3, 2017

Zone	Class	Tonnes	Ag (g/t)	Pb (%)	Zn (%)	Au (g/t)
Christal	Indicated	571,900	530	2.33	3.65	0.50
	Inferred	70,600	207	0.91	2.38	0.22
Lightning	Indicated	997,900	489	1.63	6.34	0.40
	Inferred	292,600	392	0.37	4.69	0.27
Lightning V2	Indicated	109,200	406	1.31	4.80	0.23
	Inferred	2,000	367	0.87	5.50	0.27
Total	Indicated	1,679,000	498	1.85	5.33	0.42
	Inferred	365,200	356	0.47	4.25	0.26

Notes:

1. 2014 CIM definitions followed for Mineral Resources.

2. Reported at a cut-off value of CDN$185.00/t considering US$/CDN$ exchange of US$0.80=CDN$1.00.

3. Metal prices of US$20.00/oz for Ag, US$ 0.95/lb for Pb, US$ 1.00/lb for Zn, and US$ 1,300/oz for Au; and recovery of 96% for Ag, 97% for Pb, 88% for Zn and 72% for Au.

4. All numbers have been rounded to reflect the relative accuracy of the estimates.

5. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability.

14.12.4 Mineral Resource Statement for the Onek Deposit

The QP considers that the mineralization evaluated in the Onek deposit is amenable for underground extraction.

Commodity prices were provided to SRK by Alexco as representative of their long term strategic forecast. Economic parameters are summarized in Table 14-58 above.

Mineral Resources for the Onek deposit defined relative to a dollar equivalent cut-off of $185/tonne, using metallurgical recoveries as proposed in the recent PEA for the Bellekeno project at Keno Hill (Wardrop, 2009), are listed in Table 14-59 below.

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Table 14-59 Mineral Resource Statement, Onek Deposit, SRK Consulting (Canada) Inc., January 3, 2017

Zone	Class	Tonnes	Ag g/t	Pb %	Zn %	Au g/t
Vein 1	Indicated	614,200	175	1.03	12.66	0.63
	Inferred	234,500	114	0.98	8.94	0.45
Vein 1 FW	Indicated	8,800	325	5.10	3.71	0.57
	Inferred	5,500	141	4.86	4.20	0.44
Vein 2	Indicated	77,100	302	2.42	6.31	0.45
	Inferred	45,100	136	1.63	5.27	0.27
Total	Indicated	700,200	191	1.24	11.85	0.60
	Inferred	285,100	118	1.15	8.26	0.42

Notes:

1. 2014 CIM definitions followed for Mineral Resources.

2. Reported at a cut-off value of CDN$185.00/t considering US$/CDN$ exchange of US$0.80=CDN$1.00.

3. Metal prices of US$20.00/oz for Ag, US$ 0.95/lb for Pb, US$1.00/lb for Zn, and US$1,300/oz for Au; and recovery of 96% for Ag, 97% for Pb, 88% for Zn and 72% for Au.

4. All numbers have been rounded to reflect the relative accuracy of the estimates.

5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

14.12.5 Mineral Resource Statement for the Bermingham Deposit

The QP considers that the mineralization evaluated in the Bermingham deposit is amenable for underground extraction.

Commodity prices were provided to SRK by Alexco as representative of their long-term strategic forecast. Economic parameters are summarized in Table 14-60.

Mineral Resources for the Bermingham deposit defined relative to a dollar equivalent cut-off of $185/t, using metallurgical recoveries as proposed in the PEA for the Bellekeno project at Keno Hill (Wardrop, 2009) are listed in Table 14-60 below.

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Table 14-60 Mineral Resource Statement, Bermingham Deposit, SRK Consulting (Canada) Inc. March 28, 2019

Zone	Class	Vein	Tonnes	Silver (g/t)	Gold (g/t)	Lead (%)	Zinc (%)
Arctic	Indicated	Bermingham Main	267,900	750	0.14	1.7	1.7
		Bear	74,100	550	0.07	0.9	0.8
		Footwall	203,250	1,000	0.17	3.2	1.4
Bear	Indicated	Bermingham Main	42,950	1,100	0.24	1.8	1.9
		Bear	93,000	2,020	0.21	5.1	1.8
		Bear South	16,700	2,310	0.35	7.7	1.7
		Footwall	137,950	770	0.14	1.7	1.3
Etta	Indicated	Bermingham Main	98,150	760	0.09	3.1	3.0
		Footwall	91,800	640	0.08	1.5	1.7
North East	Indicated	Bermingham Main	24,700	330	0.10	1.6	1.0
		Bear	36,300	1,120	0.19	2.4	3.0
West Dipper	Indicated	Bear	11,800	770	0.11	1.2	1.0
		Bear South	3,700	2,090	0.30	3.0	2.5
TOTAL INDICATED			1,102,300	930	0.14	2.4	1.7

Zone	Class	Vein	Tonnes	Silver (g/t)	Gold (g/t)	Lead (%)	Zinc (%)
Arctic	Inferred	Bermingham Main	82,100	740	0.25	1.8	2.3
		Bear	25,750	480	0.06	0.9	0.6
		Footwall	68,100	860	0.24	2.4	0.9
Bear	Inferred	Bermingham Main	26,900	560	0.22	1.3	1.5
		Bear	48,500	1,470	0.16	2.6	0.8
		Bear South	6,100	1,590	0.24	1.1	1.0
		Footwall	19,700	390	0.09	1.2	0.6
Etta	Inferred	Bermingham Main	7,000	520	0.09	2.0	2.0
		Footwall	138,500	480	0.07	1.1	2.1
North East	Inferred	Bermingham Main	18,200	250	0.12	1.3	1.0
		Bear	43,400	730	0.12	2.0	1.7
West Dipper	Inferred	Bear	3,650	680	0.08	0.9	0.6
		Bear South	1,900	2,240	0.33	4.5	2.1
		WD2	19,600	850	0.12	3.8	1.8
TOTAL INFERRED			509,400	717	0.15	1.7	1.5

Notes:

1. 2014 CIM definitions followed for Mineral Resources.

2. Reported at a cut-off value of CDN$185.00/t considering US$/CDN$ exchange of US$0.80=CDN$1.00.

3. Metal prices of US$20.80/oz for Ag, US$1.05/lb for Pb, US$1.20/lb for Zn, and US$1,450/oz for Au; and recovery of 96% for Ag, 97% for Pb, 88% for Zn and 72% for Au.

4. All numbers have been rounded to reflect the relative accuracy of the estimates, numbers may differ slightly due to rounding.

5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

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14.13 Previous Mineral Resource Estimates

14.13.1 Bellekeno Previous Resource Estimates

In its initial exploration efforts on the KHSD, Alexco targeted the historical resources documented at the Bellekeno deposit by validating and confirming the existence of the polymetallic silver mineralization. The QP, in conjunction with Alexco, produced an initial Mineral Resource Statement for the Bellekeno deposit on November 10, 2007, which was subsequently updated on January 28, 2008. During 2008, Alexco constructed a new 633-metre decline designed to access the historical Bellekeno workings. This allowed for tight-spaced underground core drilling and updated geologic mapping within all three Bellekeno resource zones (Southwest, 99, and East) during 2009, which was incorporated into a Mineral Resource Statement dated November 9, 2009 (Wardrop, 2009). In 2012, GeoStrat updated the Bellekeno Mineral Resource estimate as summarized in Table 14-61.

Table 14-61 Consolidated Mineral Resource Statement for the Bellekeno Deposit, GeoStrat Consulting Services Inc. September 30, 2012

Category	Zone	Tonnes	Ag (g/t)	Pb (%)	Zn (%)
Indicated	Southwest	195,000	602	6.7	5.7
Indicated	99	95,000	760	4.0	3.5
Indicated	East	75,000	675	3.3	6.9
Total Indicated		365,000	658	5.3	5.3
Total Inferred		243,000	428	4.1	5.1

Notes:

1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

2. All figures have been rounded to reflect the relative accuracy of the estimates.

3. Reported at an NSR cut-off of CDN$185.00 considering metal prices of US$22.50/oz for Ag, US$0.85/lb for Pb, and US$0.95/lb for Zn; and recovery of 96% for Ag, 97% for Pb, and 88% for Zn.

14.13.2 Flame & Moth Previous Resource Estimates

A previous Mineral Resource Statement was produced by Alexco in 2013. The results were detailed in the Updated Technical Report on the Flame & Moth Deposit (Alexco, 2013), and are summarized in Table 14-62.

Table 14-62 Mineral Resource Statement for the Flame & Moth Deposit, April 28, 2015

Class	Tonnes	Ag (g/t)	Au (g/t)	Pb (%)	Zn (%)
Indicated	1,638,000	506	0.4	1.9	5.4
Inferred	348,000	366	0.3	0.5	4.4

Notes:

1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

2. All figures have been rounded to reflect the relative accuracy of the estimates.

3. Reported at an NSR cut-off of $185 (0.96 US$ = 1 CDN$)/tonne using consensus long term metal prices (US$) and recoveries developed for the nearby Bellekeno deposit (Ag US$20.00/oz, recovery 96%; Pb US$ 0.94/lb, recovery 97%; Zn US$ 1.00/lb, recovery 88%; Au US$1,300/oz, recovery 72%). For all veins, Ag grades capped at 3,000 g/t; Pb and Zn capped at 15% and 20% respectively; Au grades not capped.

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14.13.3 Onek Previous Resource Estimates

A previous Mineral Resource Statement was produced by SRK in 2011. The results were detailed in the previous technical report (SRK, 2011b) and are summarized in Table 14-63.

Table 14-63 Mineral Resource Statement for the Onek Deposit, SRK Consulting (Canada) Inc., October 15, 2014

Class	Tonnes	Ag (g/t)	Au (g/t)	Pb (%)	Zn (%)
Indicated	654,000	200	0.6	1.3	12.3
Inferred	234,000	134	0.4	1.2	8.9

Notes:

1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

2. All figures have been rounded to reflect the relative accuracy of the estimates.

3. Reported at an NSR cut-off of $185 considering metal prices of US$20.00/oz for Ag, US$0.90.lb for Pb, US$0.95/lb for Zn, and US$1,250/oz Au; and recovery of 96% for Ag; 97% for Pb; 88% for Zn; 72% for Au.

14.13.4 Bermingham Previous Resource Estimates

A previous Mineral Resource Statement was produced by SRK with an effective date of January 3, 2017 and is summarized in Table 14-64.

Table 14-64 Mineral Resource Statement for the Bermingham Deposit, SRK Consulting (Canada) Inc., January 3, 2017

Class	Tonnes	Ag (g/t)	Au (g/t)	Pb (%)	Zn (%)
Indicated	858,000	628	0.13	2.40	1.65
Inferred	221,000	770	0.15	2.13	2.21

Notes:

1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

2. All figures have been rounded to reflect the relative accuracy of the estimates.

3. Reported at a value per tonne cut-off of $185 (0.80 US$ = 1 CDN$) using consensus long term metal prices (US$) and recoveries developed for the nearby Bellekeno deposit (Ag US$20.00/oz, recovery 96%; Pb US$ 0.95/lb, recovery 97%; Zn US$1.00/lb, recovery 88%; Au US$1,300/oz, recovery 72%).

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15.  Mineral Reserve Estimate

This section describes the methodology and parameters used to estimate the Mineral Reserves for the KHSD. The estimate is effective as at March 28, 2019 considers all information used in the Mineral Resources estimate (as at March 28, 2019) and presented in Section 14 of this Technical Report.

The Probable Mineral Reserves are those Indicated Mineral Resources (there are no Measured Resources in the current estimate) that have been identified as being economically extractable and which incorporate mining losses and the addition of mining dilution. The Probable Mineral Reserves form the basis for the mine plan presented in Section 16.0. The Mineral Resource is inclusive of the probable Mineral Reserve.

Mineral Reserves are those parts of Mineral Resources, which, after the application of all mining factors, result in an estimated tonnage and grade that is the basis of an economically viable project. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the economic mineralized rock 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.

The reserve classifications used in this report conform to the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards. Mineral Reserves are sub-divided in increasing confidence into Probable and Proven Mineral Reserves. They are described below:

· A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve. Probable Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a Pre-Feasibility Study.

· A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors. Proven Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a Pre-Feasibility Study (CIM, 2014)

15.1 Mineral Reserve Block Model Preparation

The probable Mineral Reserve estimate is based on the Indicated Mineral Resource block models provided by Alexco Resources for the Bellekeno, Flame & Moth, Lucky Queen and Bermingham deposits.

The files were provided in different formats. Comma Separated Value (.csv), Vulcan and Datamine formats and were imported and validated in Deswik CAD to ensure the validity and integrity of the model, and the transfer process.

All models have similar attributed fields and properties. These models required a sub-celling process to be conducted and the addition of an NSR field in order to be utilized for mine planning. According to CIM standards, material classified as inferred may not be used to create a reserve. All blocks classified as inferred were assigned zero grades. No other modifications were made.

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The following mine planning block models were created:

· Bellekeno: BK_Final_NSR_ADDED.dm

· Flame and Moth: FMBM_25_UPDATE.dm

· Bermingham: BRM20181221_NSR_IND.dm

· Lucky Queen: LQBM_25_6_SUBCELLED_IND.dm

15.2 Cutoff Grade and NSR Calculation

Mineral Reserves and revenue attributable to the Project were calculated by coding a Net Smelter Return (NSR) to the block model. NSR takes into account the multiple by-products available as well as the sliding streaming agreement with Wheaton Precious Metals (previously Silver Wheaton). The parameters used to calculate the NSR are available in Tables 16-2 and 16-3 under Net Smelter Return.

15.3 Mineral Reserve Estimate

The Mineable Shape Optimizer (MSO) tool was used to create mineable shapes that meet cut off grade using the NSR values coded into the block model. The results generated from the MSO process were used as guidance to generate detailed development layouts and crosscut designs. The economic viability of all stope blocks and levels were tested to ensure that all ore are economically viable.

The Mineral Reserves (Table 15-1) reflect the total mineral reserves for the Keno Hill Silver District. External dilution and mineable recovery has been applied to the mineral reserves. These Probable Mineral Reserves are included in the Mineral Resources shown in Table 14-1. Please note that rounding of tonnes, average grades, and contained metal may result in apparent discrepancies with totals rounded.

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Table 15-1 Mineral Reserves, Alexco Resource Corp. – Keno Hill Silver District Project^1,2,4

												Contained Metal
Deposit3	Category	Tonnes		Ag (g/t)		Pb (%)		Zn (%)		Au (g/t)		Ag (000 oz)		Au (000 oz)		Pb (MIbs)		Zn (MIbs)
Bellekeno	Proven	-		-		-		-		-
	Probable		40,109		843.1		11.79		6.31		-		1,087		-		10		6
Lucky Queen	Proven		-		-		-		-		-		-				-		-
	Probable		70,717		1,244.39		2.63		1.38		0.12		2,829		-		4		2
Flame and Moth	Proven		-		-		-		-		-		-				-		-
	Probable		704,211		671.95		2.71		5.73		0.49		15,214		11		42		89
Bermingham	Proven		-		-		-		-		-		-				-		-
	Probable		362,343		972.02		2.59		1.32		0.13		11,324		2		21		11
Total	Proven		-		-		-		-		-		-				-		-
	Probable		1,177,380		804.51		2.98		4.13		0.34		30,454		13		77		107

Notes:

1. Probable Mineral Reserves are reported herein based on an NSR cutoff value using estimated metallurgical recoveries, assumed metal prices and smelter terms, which include payable factors, treatment charges, penalties, and refining charges

2. Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounce

3. The Bellekeno, Lucky Queen, Flame & Moth and Bermingham deposits are incorporated into the current mine plan supported by disclosure in the news release dated March 28, 2019 entitled “Alexco Announces Positive Pre-Feasibility Study for Expanded Silver Production at Keno Hill Silver District”.

4. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content

The Mineral Reserves identified in Table 15-1 comply with CIM definitions and standards for a NI 43-101 technical report. Detailed information on mining, processing and other relevant factors are contained in the following sections and combined demonstrate that the Keno Hill Silver District Project is an economically viable project.

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16. Mining Methods

16.1 Introduction

The Keno Hill Silver District (KHSD) project contains four separate deposits: Bellekeno, Bermingham, Flame & Moth, and Lucky Queen. All are characterized by high-grades, narrow vein widths, and challenging ground conditions. Historical mining methods used in the KHSD have included cut and fill, small scale longhole stoping, shrinkage stoping, and square set stoping.

All four deposits will be mined by mechanized underground mining methods of cut and fill (MCF) and longhole stoping (LH) with cemented rock fill and unconsolidated rock fill. The location of all four deposits are shown in Figure 16-1 below, the mill, administration, and shop complexes are located near the Flame & Moth Deposit.

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Source: Mining Plus 2019 

Figure 16-1 Deposit Locations

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16.2 Geotechnical Analysis

The KHSD Project is composed of four silver / lead / zinc narrow-vein hosted deposits located throughout the district; Bellekeno Deposit (BK); Lucky Queen Deposit (LQ); Flame & Moth Deposit (FM); and Bermingham Deposit (BM). It is noted that the Flame & Moth and Bermingham deposits are comprised of several zones. All deposits will be extracted using overhand cut and fill (C&F) and long hole open stoping (LHOS) underground mining methods with cementitious back fill. A top-down extraction approach is planned.

Production mining has previously been undertaken at Lucky Queen and Bellekeno deposits by Alexco. However, the Bermingham and Flame & Moth deposits are ‘greenfield’, with only limited decline development being completed at both deposits to enable underground resource definition and geotechnical drilling to be undertaken. Numerous geotechnical studies have been carried out on the KHSD most recently by Jacobs Engineering (Jacobs, 2019).

16.2.1 Geotechnical Database

Geotechnical data for this study was only available for the Flame & Moth and Bermingham deposits. Based on discussions with Alexco personnel, it is reasonable to assume that ground conditions previously encountered at the Lucky Queen and Bellekeno deposits will be comparable with those expected at the Bermingham and Flame & Moth deposits based on this geotechnical study. Therefore, operational experience gained during previous production mining at the Lucky Queen and Bellekeno deposits has been used to guide (but not directly influence) the development of geotechnical mine design parameters for the PFS. At the feasibility stage the geotechnical conditions of the Lucky Queen and Bellekeno will need to be verified.

16.2.2 Geotechnical Domains

To understand the ground conditions at the KHSD Project, geotechnical domains were created for the Bermingham and Flame & Moth deposits. Preliminary geotechnical parameters were assessed using major lithology types as identified by Alexco geology personnel. The geotechnical domains are outlined below on which ground support designs have been based:

· Domain 1: Quartzite (waste development);

· Domain 2 Schist (waste development);

· Domain 3: Faults (waste and production development); and

· Domain 4: Mineralization (production development).

16.2.3 Mining Methods and Locations

While production mining at KHSD Project will predominantly use mechanized C&F mining method, several zones of the Bermingham and Flame & Moth deposits will be extracted using LHOS. In these areas, all available geotechnical drill hole data proximal to the planned stope hanging wall was used for stability analysis, including:

· Bermingham Deposit planned LHOS zones:

· NE Zone

· Arctic Zone (Lower)

· Flame & Moth Deposit planned LHOS zones:

· Christal Zone (Lower)

· Lightning Zone (West)

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Figure 16-2 and Figure 16-3 show the Flame & Moth and Bermingham mines with the associated zones and Mining Methods.

Source: Jacobs 2019

Figure 16-2 Bermingham Zone and Mining Method Domains

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Source: Jacobs 2019

Figure 16-3 Flame & Moth Mine Zone and Mining Method Domains

16.2.4 Ground Water

The Bellekeno, Lucky Queen, and Bermingham proposed mining zones are located above the valley floor. Consequently, this tends to limit the occurrence and effect of adverse hydrogeological conditions. However, the Flame & Moth deposit is located in a valley floor such that there is a possibility of water inflow to the planned workings. Preliminary investigations suggest that ground water may be structurally compartmentalized in the deposit-scale Mill Fault.

16.2.5 Rock Mass Assessment

16.2.5.1 Rock Quality Designation (RQD)

A first pass assessment of the rock mass in geotechnical domains was completed by considering the Rock Quality Designation (RQD) (after Deere, 1964). RQD is a fundamental input into several rock mass characterization schemes, and is generally regarded as a reliable, basic indicator of ground conditions. The RQD is calculated as the ratio of the sum of the lengths of all core sticks greater than 4 inches / 10 cm in length, to the total length of the drill core run, expressed as a percentage.

A summary of RQD values for the Bermingham and Flame & Moth deposits and geotechnical domains are presented in Table 16-1. The descriptive statistics for each domain are described as ‘Poor’, except for the Fault domain of the Bermingham deposit (‘Very Poor’) and the Mineralization Domain of the Flame & Moth deposit (‘Fair’).

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Table 16-1 Summary of RQD Values for Flame & Moth and Bermingham deposits by Geotechnical Domain

Deposit	Descriptive Statistics	Domain 1			Domain 2			Domain 3			Domain 4
Flame & Moth	Mean		48.6	%		42.6	%		27.2	%		51.2	%
	Median		49.3	%		42.3	%		24.0	%		56.8	%
	Std. Deviation		24.9	%		24.5	%		21.9	%		26.1	%
	Coefficient of Variation		51.3	%		57.6	%		80.4	%		50.9	%
Bermingham	Mean		35.7	%		29.7	%		21.9	%		34.7	%
	Median		33.3	%		25.3	%		16.7	%		34.0	%
	Std. Deviation		24.8	%		23.4	%		20.6	%		22.2	%
	Coefficient of Variation		69.4	%		78.8	%		94.2	%		63.9	%

It should be noted that over 90% of bore holes in the geotechnical database were developed using conventional, double tube drilling equipment. This approach can often lead to excessive disturbance of core (‘mechanical’ or handling breaks) which can be difficult to distinguish from naturally occurring joints when logging RQD. This can typically result in conservative RQD values. Based on review of in-situ rock mass exposed in underground excavations, an under representation of RQD values in double-tube core drilling is likely to be the case at the KHSD Project. As such, the summary values in Table 16-1 may be ‘worst case’, however it is problematic to estimate likely upper bound values with confidence. At the Feasibility level, it is recommended that all geotechnical holes are drilled with the triple-tube system.

16.2.5.2 NGI Q Values

Rock mass classification was conducted using the Norwegian Geotechnical Institute's tunneling quality index (the Q-system), as proposed by Barton et al. (1974), where Q is obtained from the following relationship: RQD (as described above), Joint Set Number (Jn), Joint roughness (Jr), Joint Alteration (Ja), Joint Water Factor (Jw), and the Stress Reduction Factor (SRF):

 

(1)

Q values have been estimated using the methods outlined by Barton and Grimstad (1994), whereby:

· Use representative Q input values for each geotechnical domain; and

· Where logged recorded RQD values are ≤ 10% (including 0%), use a nominal value of 10% to evaluate Q.

To better understand the statistical variability and character within each data set, basic descriptive statistics and histograms were generated for each input value, within each geotechnical domain for the Bermingham and Flame & Moth deposits. This information was used to identify representative values for each Q input values. In the case of Jw and SRF, site experience, assumed far-field stress conditions, and typical depth of mining were applied, along with engineering judgment to derive input values. The Q estimates for the Bermingham and Flame & Moth deposits and geotechnical domains are presented in Table 16-2.

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Table 16-2 Summary of NGI Q values for Flame & Moth and Bermingham deposits by Geotechnical Domain

Deposit		Domain 1		Domain 2		Domain 3		Domain 4
Flame & Moth	Min.		0.3		0.2		0.2		0.7
	Average		2.7		1.1		0.9		3.3
	Max		40		21.1		18.5		48.0
Bermingham	Min.		0.6		0.2		0.2		0.4
	Average		7		1.3		0.7		2.3
	Max		36		10.6		4.0		27.0

16.2.6 Empirical Ground Support Design

Preliminary ground support requirements have been estimated using the updated rock reinforcement design chart (after Grimstad and Barton, 1993). The Q-System rock reinforcement design chart relates rock quality, excavation span, and service life to support requirements. The method converts the width (span) of the excavation to an equivalent dimension (De), which considers the function of the excavation.

Equivalent Dimension (De);

 

(2)

Where;

· ESR = Excavation Support Ratio

An ESR value of 1.3 has been assumed for this study.

Based on the estimated rock mass classification Q values (Table 16-2), ground support classes have been developed for standard lateral development and production drifts for the Flame & Moth and Bermingham deposits see Table 16-3. For the recommended support designs to work as a system, it is good practice to install rock bolts through surface support, such as mesh and shotcrete (where recommended by the ground support design).

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Table 16-3 Ground Support Recommendations for Bermingham and Flame & Moth Deposits

Location	Drift Dimensions	DOMAIN 1: QUARTZITE	DOMAIN 2: SCHIST	DOMAIN 3: FAULTS	DOMAIN 4: ORE
Development - LOM	4.0mH x 3.7mW	DESIGN: 1A (LOM)	DESIGN: 2A (LOM)	DESIGN: 3A (LOM)	N/A
		Shotcrete: None	Shotcrete: 50 mm, to floor	Shotcrete: 60 mm, to floor
		Bolt No. & Type: 8 x Rebar	Bolt No. & Type: 8 x Rebar	Bolt No. & Type: 8 x Rebar
		Bolt Length: 1.8 m	Bolt Length: 1.8 m	Bolt Length: 1.8 m
		Bolt Spacing: 1.4 m	Bolt Spacing: 1.4 m	Bolt Spacing: 1.4 m
		Bolt Ring Spacing: 1.4 m	Bolt Ring Spacing: 1.4 m	Bolt Ring Spacing: 1.4 m
		Weld Mesh: 10cm squares, 1 m from floor (min.)	Weld Mesh: 10cm squares, to floor.	Weld Mesh: 10 cm squares, to floor
Development - (<2 Years)	4.0mH x 3.5mW	DESIGN: 1B (<2 YEARS)	DESIGN: 2B (<2 YEARS)	DESIGN: 3B (<2 YEARS)	N/A
		Shotcrete: None	Shotcrete: 50 mm, to floor	Shotcrete: 60 mm
		Bolt No. & Type: 8 x Swellex	Bolt No. & Type: 8 x Swellex	Bolt No. & Type: 8 x Swellex
		Bolt Length: 1.8 m	Bolt Length: 1.8 m	Bolt Length: 1.8 m
		Bolt Spacing: 1.5 m	Bolt Spacing: 1.5 m	Bolt Spacing: 1.5 m
		Bolt Ring Spacing: 1.4 m	Bolt Ring Spacing: 1.4 m	Bolt Ring Spacing: 1.4 m
		Weld Mesh: 10cm squares, 1 m from floor (min.)	Weld Mesh: 10cm squares, to floor.	Weld Mesh: 10 cm squares, to floor
Production - Cut & Fill / Long Hole	3.5mH x 3.5mW	N/A	N/A	DESIGN: 3C	DESIGN: 4A
				Shotcrete: 60 mm, to floor	Shotcrete: None
				Bolt No. & Type: 7 x Swellex	Bolt No. & Type: 7 x Swellex
				Bolt Length: 1.5 m	Bolt Length: 1.5 m
				Bolt Spacing: 1.4 m	Bolt Spacing: 1.4 m
				Bolt Ring Spacing: 1.4 m	Bolt Ring Spacing: 1.4 m
				Weld Mesh: 10cm squares, to floor	Weld Mesh: 10cm squares, 1 m from floor (min.)

It should be noted that mining of the Lucky Queen and Bellekeno deposits will exploit existing underground development. Therefore, it is suggested that previously used ground support or those outlined for the Flame & Moth and Bermingham deposits (whichever provides greater capacity) be used in the limited additional development that is planned. (Note that remediation of existing excavations in the Lucky Queen and Bellekeno deposits is beyond the scope of this study and requires separate and detailed geotechnical assessment.)

To confirm and refine assumptions applied in these preliminary ground support designs, it is recommended that geotechnical mapping and estimation of Q values, along with collection of excavation performance should commence once development begins.

16.2.7 Stope Stability Analysis – Empirical Assessment

As previously outlined, LHOS is only planned for specific locations: Arctic Zone (Lower) and NE Zone of the GM deposit, and Christal Zone (Lower) and Lightning Zone (West) of the FM deposit. In these areas, all available geotechnical drill hole data located within 20 m of the planned stope hanging walls was used for stope stability analysis (refer to Table 16-4 and Table 16-5).

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Modified Stability Graph Method (after Mathews et al., 1981; Potvin, 1988; and Mawdesley and Trueman 2003), as described in Hutchinson and Diederichs (1996). This empirical approach is widely used throughout the Australian and North American mining industries to obtain first pass estimates of possible stope spans in mining studies where no or little prior stoping experience is available under local conditions. It should be noted that the method is approximate only, and early stoping should be carefully monitored and designs adjusted in response to actual performance. It should also be noted that the presence of faults in stope walls is not considered when assessing stope stability and can adversely and significantly affect these results.

In the Modified Stability Graph Method, the stability number N' is calculated from the following expression, using the modified Tunneling Quality Index (Q’) (after Barton eta al., 1974); rock stress factor (A); joint orientation adjustment factor (B), and the gravity adjustment factor (C):

 

(3)

N’ values have been plotted against the hydraulic radius (HR) of the stope face being assessed. The HR is calculated by dividing the area of a stope face by the perimeter of that face. Analyses considered the maximum stable HR value for stope hanging walls, as permitted by the N’ values. The stope stability analysis followed a design criterion whereby data points plotted either within the ‘stable’ zone or on the ‘stable’ / ‘transition’ divide. Recommended stope design parameters for the Flame & Moth and Bermingham deposits are presented in Table 16-4 and Table 16-5 respectively. Based on discussion with Alexco personnel, similar LHOS stope design parameters have been successfully achieved at the Bellekeno deposit under operational conditions.

Table 16-4 Stope Design Parameters-Flame & Moth Deposit

		Standard Long Hole									Short Long Hole
Deposit	Design	Dimension	mH		mL		HR		Width (m)		Dimension	mH		mL		HR		Width (m)
Flame & Moth	Christal Zone	21mH x 7mL		21		7.0		2.6		3.5	14mH x 10mL		14		8.5		2.6		3.5
	Lightning Zone	21mH x 7.5mL		21		7.5		2.8			14mH x 9mL		14		9.3		2.8

Table 16-5 Stope Design Parameters-Bermingham Deposit

		Standard Long Hole									Short Long Hole
Deposit	Design	Dimension	mH		mL		HR		Width (m)		Dimension	mH		mL		HR		Width (m)
Bermingham	Arctic Zone	17mH x 7.5mL		17		7.5		2.6		3.5	14mH x 8.5mL		14		8.5		2.6		3.5
	NE Zone	17mH x 7.5mL		17		7.5		2.6			14mH x 8.5mL		14		8.5		2.6

16.2.8 Stope Over-Break

An assessment of stope over-break in zones where LHOS is planned has been estimated by reviewing the Equivalent Linear Over-break / Slough (ELOS) number, as first described by Pakalnis et al. (1996). The assessment suggests that HR and N’ value of stope hanging walls plot in the ‘minor sloughing’ to ‘moderate sloughing’ zones (after Pakalnis et. al., 1996). Based on industry experience (see Oddie and Pascoe, 2005), over-break on walls and backs of around <0.5 m should be expected. As with stope stability analysis, the presence of faults is not considered when estimating ELOS which can adversely and significantly affect these results. Results of 2D numerical simulations (discussed later) of hanging wall stability (discussed below) broadly support this factor.

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16.2.9 Stope Stability Analysis – Numerical Assessment

Caution has been advised when applying the Modified Stability Graph Method empirical design chart to narrow vein orebodies (Suorineni, 2012). This is due to various factors, including the limited number of narrow-vein case histories used to generate the empirical design chart. Consequently, high level 2D numerical assessments have been used to review results derived from the empirical approach. Unlike empirical approaches, numerical methods do not rely on a database of case studies, nor implicitly assume that the problem at hand is represented by this database. Rather, site specific conditions can be applied (such as ground conditions and geological / mining geometries), along with inputs that can change with time or mining schedules (such as localized stress states).

Finite element method (FEM) numerical software has been applied to assess hanging wall stability suggested by the empirical analysis. Given the linear nature of deposit geometries (i.e., plane strain) it is thought appropriate to use 2D FEM numerical software (Phase2, after RocScience, 2012).

It should be noted that 2D model simulations have several inherent limitations – particularly when compared to 3D modeling assessments. Consequently, 2D models can return unreliable results when used in this application, as compared to 3D simulations of the same geometry. Therefore, 3D inelastic modeling should be considered at the feasibility design stage to confirm stope geometry stability and extraction sequence.

To complete a 2D FEM numerical assessment, rock mass strength criteria and material properties were estimated for each domain using geotechnical data located within 20 m of the hanging walls. The Hoek-Brown failure criterion was applied, which requires the Geological Strength Index (GSI) rock mass classification scheme to be initially assessed.

Hoek and Brown (1980a, 1980b) proposed a method for obtaining estimates of the strength of jointed rock masses, based upon an assessment of the interlocking of rock blocks and the condition of the surfaces between these blocks. The method has developed over the years and is referred to as the Generalized Hoek-Brown failure criterion (after Hoek and Brown, 1988):

(4)

Where;

· σ’1 and σ’3 are the maximum and minimum effective stresses at failure;

· mb is the value of the Hoek-Brown constant m for the rock mass;

· s and a are constants which depend upon the rock mass characteristics; and

· σci is the uniaxial compressive strength of the intact rock pieces.

The Hoek-Brown criterion was developed for all geotechnical domains using the approach outlined by Hoek et al (2013) and RocLab software (RocScience, 2013)

High level 2D FEM numerical modeling results suggest the following:

· Stope hanging walls are likely to be stable when using <22m sub-levels (stope floor to backs); and

· Stope over-break is likely to be around <0.25 m (which is less than predicted from empirical approaches).

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16.2.10 Pillar Stability

Based on previous production experience at the KHSD Project, it is understood Alexco intends to form stable rib and sill pillars using the following approaches:

· Rib Pillars: lateral extent of production development will be controlled by; deposit geometries; the placement of central access development; and the positioning of rib-pillars in uneconomic material throughout the deposits. Conversations with Alexco personnel indicate this to be achievable based on previous production experience at the KHSD Project.

· Sill pillars: the use of a top-down extraction approach will result in sill pillars being formed. Sill pillar stability will be controlled by; the construction of sill matts (based on previous experience), timely emplacement of cementitious backfill, and careful mining practices. Again, Alexco personnel indicate this to be achievable based on previous production experience at the KHSD Project.

As outlined by Brady and Brown (2006), pillars formed between two excavations with similar / same spans should not be less than approximately two widths of the greatest excavation span. However, this approach needs to be assessed on a case by case basis, particularly where larger excavations are formed. Given general rock mass quality, planned depth of mining, and assumed in-situ stress conditions of the KHSD Project, relatively favourable mining conditions are likely (but not assured) to prevail with regards to excavation interaction in areas away from the deposits.

16.3 Mining Methods

The Mining Methods selected for this study are Overhand Cut and Fill and longhole stoping. In the wider areas of the orebody, a Drift and Fill method with cemented rock fill (CRF) will be used. Longhole Open Stoping will be either standard longitudinal retreat with CRF or uphole stoping with no CRF. Longhole stoping will be used where the ground conditions and ore body dip allow or to recover sill pillars between Cut and Fill levels. These mining methods were chosen due to the narrow steeply dipping nature of the orebody and to maximize safety and productivity.

The main factors driving the mining method selection process are:

· Proven mining methods used at the Bellekeno mine;

· Ground conditions in the vein and along the vein contacts range from good to very poor;

· Ground conditions can vary substantially over short distances (five metres);

· Vein continuity is good; however, the vein geometries vary greatly between deposits:

· Metal content and distribution varies significantly between deposits and varies over the stope mining scale;

· The footwall is often characterized by competent quartzite but can be weak in some areas;

· The hangingwall varies from competent quartzite to weak layers of quartz breccia with clay filled shear bands, graphitic schists, or sericite schists;

· Geological contacts at the hangingwall and footwall can often be visually identified but can be faulted or fractured contacts with gouge and breccias;

· Mineralization contacts are less clearly defined and are based on a combination of structure, vein mineralogy, and metal grades;

· Vein systems can be locally water bearing and required time to drain when they are first crosscut by development; and

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· Vein depths are shallow with a low-stress regime, high-stress issues are not a factor in mine planning, but lack of clamping forces contributes to the poor ground conditions.

The various deposits require the use of mining methods that can adequately support the vein and that are flexible and selective while minimizing the direct mining costs.

The mine design strategy was to design as many areas as practical using small scale longhole mining methods while planning mechanized overhand cut and fill for areas where ground conditions were poor, or where the combination of vein dip and true width was not compatible with longhole stoping methods.

16.3.1 Cut and Fill

Cut and Fill will be the primary mining method for the Flame & Moth, Bermingham, and Lucky Queen deposits. In Cut and Fill method, an attack ramp is developed from the main ramp at a gradient of -15%. Upon reaching the orebody, an intersection is developed and a lift is developed in both directions along strike, following the geological contact of the orebody. At the end of the lens, the void is backfilled using either unconsolidated rock fill or cemented rockfill (CRF) with a Load Haul Dump (LHD) machine. The LHD utilizes a rammer-jammer plate (a dozer plate modified to be attached to a scoop to push waste tight to the back) to ensure that the backfill is placed tight to the back of the drift.

Once the level has been completely backfilled, the next lift above the previously mined lift is accessed by slashing down the back of the attack ramp and working off the muck from the backslash and the backfill placed in the lens. Figure 16-4 below illustrates the sequence of activities with Cut and Fill mining.

 

Source: Mining Plus 2019

Figure 16-4 Cut and Fill Sequencing

Drift sizes for Flame & Moth and Bermingham deposits are 3.5m H x 3.5m W. Drift sizes for Lucky Queen mine are 2.5m H x 2.5m W. For areas wider than the drift width, a second parallel drift will be mined beside the backfilled drift to fully extract the orebody prior to accessing the lift above. In this situation, the first drift will be completely backfilled with cemented rock fill to ensure a stable wall to allow adjacent mining activity.

For the Bermingham and Flame & Moth deposits in each panel the lifts are sequenced bottom up; however, to maximize productivity the panels are mined from the top down as they are accessed by the ramp spiralling down. As such, a pillar will remain between the top lift of one panel and the bottom lift of the panel above. These pillars will be extracted using an uphole drill and blast method discussed in Section 16.3.3 below.

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16.3.2 Longhole Open Stoping

Longhole Open Stoping will be the preferred mining method when the ground conditions and the lens geometry allow. In Longhole Open Stoping, two drifts are developed along the strike of the orebody at a vertical spacing of 17.5m. After development is complete, rings of holes are drilled in parallel from the top level to the bottom level. These holes are planned to be 64 mm in diameter with a ring of blastholes spaced every 1.0 m. These drill holes will be immediately cased with 50 mm ID plastic pipe to prevent the drill holes from collapsing or plugging.

Drill holes will be double primed and loaded with ammonium nitrate/fuel oil (ANFO) immediately prior to blasting. Several rows will also typically be pre-loaded to minimize the loading crew’s exposure to the open stope brow.

An initial slot is developed by drilling and blasting a drop raise made up of multiple holes in close spacing. Once this initial slot has been blasted (retaining a minimum pillar below the top drift) the entire stope is blasted and mucked using a remote-operated LHD. All remote mucking will be carried out using a 2.2 yd³ LHD equipped with a remote package, while manual mucking will be done with either a 2.2 yd3 LHD or a 3.5 yd³ LHD.

Stope strike lengths are based on the geotechnical analysis that has been performed and is set at 10 m for Flame & Moth and Bermingham deposits. Once the stope is empty, the stope is backfilled with Cemented Rock Fill (CRF) and given time to cure before extracting the adjacent stope. Figure 16-5 illustrates the Longhole Open Stoping Method. Longhole Stoping will be used in the Flame & Moth deposit where possible and ground condition permits as well as NE zone of the Bermingham deposit.

 

Source: Mining Plus 2019

Figure 16-5 (Downhole) Longhole Stoping

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16.3.3 Uphole Stoping

A modified version of Longhole stoping will be used at the top of a cut and fill level to extract the sill pillar between one cut and fill level and the level above, or in areas where there is no access for a top drift. In uphole stoping, a series of parallel rings are drilled from the bottom drift into the back, to the limit of the lens. An inverse raise is drilled on the extremity of the stope and then blasted in one shot. The longhole rings are then blasted into the void and mucked using a remote-operated LHD. No backfill is necessary in this method. Figure 16-6 below illustrates the uphole stoping method.

Source: Mining Plus 2019

Figure 16-6 (Uphole) Longhole Stoping

The sole mining method used at Bellekeno Mine will be uphole stoping to extract a mostly developed panel at the beginning of mine production. Uphole stoping will also be used to extract sill pillars in the Bermingham and Flame & Moth Mines.

16.4 Dilution and Recovery

16.4.1 Development Dilution

Due to the challenging ground conditions in the KHSD the expected dilution for development (lateral-CAPEX) is 20%. This is comparable to what was achieved during the excavation of the Flame & Moth and Bermingham exploration declines.

16.4.2 Stoping Dilution

Dilution refers to material below cutoff grade that is blended with ore and contained in stope shapes and reducing the grade of excavated material. Dilution is impossible to avoid due to the narrow geometry of the orebody. It is divided into planned and unplanned dilution. The planned dilution is included in stope shapes, which is the waste material necessary to extract the ore. Unplanned dilution is material that originates outside the stope boundaries.

To factor in unplanned dilution outside the stopes shapes boundaries, a dilution skin of 0.5 m was applied to both the HW and FW during the MSO process. This dilution was taken into account when evaluating whether or not shapes are economic to ensure only diluted economic stope shapes are included in the mine plan.

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Internal dilution (planned dilution) is primarily a function of the width of the orebody and the minimum mining width. Minimum mining width for cut and fill method in both Bermingham and Flame & Moth deposits is 3.5 m W and for the Lucky Queen deposit is 2.5 m W which is driven by the size of the equipment selected. For longhole method stoping, the minimum mining width is 1.8m. Dilution (counting both internal and external dilution) is presented in Table 16-6.

Table 16-6 Total Dilution

Deposit Name	Average Dilution (%)
Flame & Moth		15
Bermingham		37
Lucky Queen		39

The dilution percentage is defined as tonnes of dilution material (W) divided by tonnes of mineralized material (O)(Dilution % = W/O x 100).

As described above, Bermingham and Lucky Queen deposits are narrower than Flame & Moth, and in some places shallower dipping which will cause an increase in dilution. Also, at both Bermingham and Lucky Queen, the focus on higher-grade mineralization results in narrower high grade vein’s being extracted with a resulting increase in internal dilution.

16.4.3 Recovery

Mining recovery is the difference between the planned amount of ore and the actual amount of ore that is mucked and sent to the mill. The primary sources of a reduction in mined recovery are:

· Pillars: ore left unmined to ensure geotechnical stability;

· Drill and Blast Underbreak: blasts do not always break loose the entire stope and the remaining ore becomes unrecoverable. This is primarily in longhole stopes blasting because the entire area of the blast does not always break, and the remaining ore is unrecoverable; and

· Mucking: unrecovered broken ore either on the floor of development or in corners that are unreachable.

Due to the high-grade nature of the mineralization, all efforts will be made to ensure that recovery is maximized. Mining Recovery of 95% has been applied to all production blocks and is based on previous Bellekeno mine operation data, for all stopes except stopes located near fault zones where recovery has been reduced to 85% to take into account the need for additional pillars and the higher risks of mining in these areas.

16.4.4 Minimum Mining Width

Minimum mining width for cut and fill method in both Bermingham and Flame & Moth deposits is 3.5 m W and for the Lucky Queen deposit is 2.5 m W; for longhole methods the minimum width is 1.8 m. The longhole minimum mining width was based on how tight the drilling could be and still expect the stope to break reliably. The cut and fill stope minimum mining width is based on the equipment available.

16.5 Net Smelter Return (NSR)

Revenue comes from selling four metals (Silver as main product and Lead, Zinc and Gold as By-Products), reporting to two concentrates. NSR takes into account the multiple by-products available as well as the sliding streaming agreement with Wheaton Precious Metals. The parameters used to calculate the NSR are available in the following tables. The NSR value in the resource block models and then the economic cutoff values were used to outline areas to be included in the PFS mine plan, referred to as mining shapes. The impact of mining dilution was accounted for in the stope shapes. Table 16-7 shows the commodity prices and exchange rate used in NSR value calculation.

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Table 16-7 NSR Commodity and Exchange Price

Metal	Unit	Price
Silver	US$/oz		18.50
Effective Silver Price*	US$/oz		15.38
Gold	US$/oz		1,300
Lead	US$/lb		1.00
Zinc	US$/lb		1.15
Exchange Rate	US$:CDN$		0.79

* The effective silver price in the table above takes into account the effects of the Wheaton Precious Metals stream.  

Table 16-8 NSR Parameters*

NSR Assumptions	Unit	Ag-Pb Concentrate			Zn Concentrate
Recovery
Ag	%		91.2	%		5.8	%
Au	%		50	%		20	%
Zn	%		7.7	%		89.25	%
Pb	%		93.9	%		3.1	%
Concentrate Grade
Ag	g/t		15,918			512
Au	g/t		4.8			0.98
Zn	%		9.4			55
Pb	%		65			1.1
Moisture Content	%		5.5			5.5
Payability
Minimum Deductible Ag	grams/DMT of Concentrate		50			93
Minimum Deductible Au	grams/DMT of Concentrate		1			NA
Minimum Deductible PB/Zn	%		3			8
Payable Ag after Deductions	%		95			70
Payable Au after Deductions	%		95			NA
Payable Pb/ZN after Deductions	%		95			85
Charges
Concentrate Treatment Charge	$/DMT		177			203
Freight Charge	$/wmt		330			330
Refining Charge Ag	$/ Payable Oz		1.01			NA
Refining Charge Au	$/Payable Oz		23.42			NA
Price Participation Charge Zinc	$/lb Payable Zinc					0.04

*Preliminary recoveries, concentrate grades, payment terms and charges available at the time of mine planning, used for the design only.

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Stope shapes and mining areas were created based upon an NSR value per tonne cutoff of $339. This NSR cutoff value was calculated by using the initial operating cost estimate. A breakdown of the operating cost estimate can be seen in Table 16-9 below. Mining recovery was applied at 95% for Bellekeno, Flame & Moth, Bermingham and Lucky Queen which is in line with Alexco’s historic operational experience. All stope shapes and mining areas were reviewed to remove any unprofitable areas.

Table 16-9 Initial Operating Cost Estimate

Area	$/Tonne*
Mine General		24
Mine Operations		193
Milling		61
G&A		61
Total		339

*Tonnages are diluted and recovered

To maximize project value a higher cutoff value was selected on a mine-by-mine basis. This accelerates payback and eliminates the scheduling of marginal or near marginal tonnes. Based on the directive of Alexco management to target minimum 650 g/t average head grade for each deposit, the cutoff values selected to meet this mandate are in Table 16-10 below.

Table 16-10 NSR Cut off Values

Mine	Cutoff Value* ($/t)
Bellekeno		420
Lucky Queen		460
Bermingham		350
Flame & Moth		350

*The NSR value was based on estimated metallurgical recoveries, assumed metal prices and smelter terms, which include payable factors, treatment charges, penalties, and refining charges  

16.6 Mine Design

16.6.1 Bellekeno Mine Plan

The Bellekeno Mine was in production from 2011 to 2013 when it was placed on care and maintenance. There is no significant new development required to extract the probable mineral Reserves in Bellekeno. The current workings in the mine are sized at 3.7m W x 4.0m H (average dimension). Access to the mine is via an existing portal and ramp system, emergency egress and ventilation through the 625 level fresh air drift. Table 16-11 shows the production schedule for the Bellekeno mine.

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Table 16-11 Bellekeno Mine Production Quantities

			Year 1
Bellekeno	Total		Month 1		Month 2		Month 3		Month 4		Month 5		Month 6
Mill Feed Tonnes2		40,109		7,500		7,500		7,500		7,500		6,531		3,578
Waste Tonnes2		16,595		11,405		5,191		-		-		-		-
Total Tonnes		56,704		18,904		12,691		7,500		7,500		6,531		3,578
MCF (Tonnes)		12,431		7,500		4,931		-		-		-		-
LH (Tonnes)		27,678		-		2,569		7,500		7,500		6,531		3,587
MCF Backfill Tonnes		-		-		-		-		-		-		-
LH Backfill Tonnes		-		-		-		-		-		-		-
Total Backfill Tonnes		-		-		-		-		-		-		-
Ag(g/t)		843		1,366.52		849.28		775.49		774.05		600.07		463.14
Au(g/t)		-		-		-		-		-		-		-
Pb (%)		11		16.31		10.99		11.47		11.71		10.07		7.96
Zn (%)		6		6.90		4.08		5.93		9.43		6.43		3.83
Ag(Oz)		1,087,219		329,503		204,788		186,993		186,648		126,006		53,282
Au(Oz)		-		-		-		-		-		-		-
Pb (lbs)		10,424,015		2,695,953		1,816,573		1,896,751		1,936,967		1,449,683		628,088
Zn (lbs)		5,582,829		1,141,651		673,893		979,915		1,559,361		926,130		301,880
Development (m)1		302		176		126

Notes:

1.        Lateral and Vertical meter

2.        Mill feed tonnes are all probable mineral Reserves as shown in Section 15 of this report.

3.        Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content;

4.        Tonnages are diluted and recovered

5.        Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounce

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Source: Mining Plus 2019

Figure 16-7 Bellekeno Long Section

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Source: Mining Plus 2019

Figure 16-8 Bellekeno Area Plan View

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16.6.2 Flame & Moth Deposit

Flame & Moth mine is located adjacent to the existing mill and administration facilities. Access to the mine will be through an already developed portal and 370m long ramp. Ore from the Flame & Moth mine will be sourced from the Lightning and the Christal zones, which contains approximately 66% and 33% of total ore tonnes, respectively. Development in the Flame & Moth mine will be sized 3.7m W x 4.0m H for the ramp and 3.5m W x 3.5m H for the operating development and cut and fill stopes. Emergency egress and ventilation for the Flame & Moth Mine will be provided through a vent raise driven to surface. Figure 16-9 below shows a long section of the existing and planned workings. Figure 16-10 shows a plan view of the Flame & Moth workings as well as the adjacent Mill infrastructure.

Source: Mining Plus 2019

Figure 16-9 Flame & Moth Long Section

Table 16-12 shows the production schedule for the Flame & Moth mine.

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Source: Mining Plus 2019

Figure 16-10 Flame & Moth and Mill Area Surface Layout

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Table 16-12 Flame & Moth Production Quantities

Flame & Moth	Total		Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9
Mill Feed Tonnes2		704,211		12,200		65,569		73,200		109,800		109,800		109,800		109,800		105,468		8,575
Waste Tonnes		381,041		40,165		89,655		92,975		92,036		20,745		14,109		11,712		19,644		-
Total Tonnes		1,085,252		52,365		155,224		166,175		201,836		130,545		123,909		121,512		125,111		8,575
MCF Tonnes		436,797		12,200		63,552		61,588		60,098		62,283		69,205		57,874		49,996		-
LH Tonnes		267,413		-		2,017		11,611		49,702		47,516		40,595		51,926		55,472		8,575
MCF Backfill Tonnes		247,210		6,457		42,983		28,900		36,396		26,477		39,833		34,171		28,085		3,909
LH Backfill Tonnes		131,224		-		-		-		26,367		27,038		22,565		34,684		20,569		-
Total Backfill Tonnes		378,434		6,457		42,983		28,900		62,764		53,515		62,398		68,855		48,654		3,909
Ag(g/t)		671.95		625.25		731.64		810.37		640.11		667.61		743.79		587.15		595.32		671.90
Au(g/t)		0.49		0.24		0.42		0.50		0.41		0.42		0.54		0.61		0.52		0.88
Pb(%)		2.71		2.55		2.72		4.04		3.05		2.43		3.62		1.59		2.00		2.23
Zn(%)		5.73		5.16		6.04		5.74		6.83		5.34		5.12		4.45		6.56		8.66
Ag(Oz)		15,213,490		245,247		1,542,370		1,907,158		2,259,685		2,356,760		2,625,686		2,072,709		2,018,645		185,230
Au(Oz)		11,165		95		893		1,188		1,455		1,480		1,892		2,167		1,752		243
Pb(Ibs)		42,088,577		686,143		3,928,076		6,526,764		7,379,153		5,883,885		8,758,986		3,848,372		4,656,048		421,150
Zn(Ib)		88,903,498		1,388,404		8,724,018		9,264,274		16,525,046		12,936,929		12,390,282		10,779,453		15,258,571		1,636,522
Development (m)1		9,920		928		2,147		2,178		2,458		816		468		422		503		-

 Notes:

1.        Lateral and Vertical meter
2.        Mill feed tonnes are all probable mineral reserves as shown in Section 15 of this report.
3.        Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content;
4.        Tonnages are diluted and recovered
5.        Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounce

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16.6.3 Bermingham Mine

The Bermingham Mine is located approximately 4 km from the mill underneath the historical Bermingham Pit. Access to the mine will be through an already developed portal and 520 m long ramp. Ore from the Bermingham Mine will be sourced from the Footwall, Bear and North East zones as shown in Figure 16-11. Development in the Bermingham mine will be sized 3.7 m W x 4.0 m H for the ramp and 3.5 m W by 3.5 m H for the operating development and cut and fill stopes. Primary mining method is MCF method except the NE Zone which is LH method.

The production schedule is based on the assumption that 85% of the geotechnical pillars will be mined as the pillars are located within high grade areas of the deposit and will pay for the additional costs associated with their extraction in challenging ground conditions. Emergency Egress and ventilation for the Bermingham Mine will be provided through a vent raise driven to surface.

Ore and waste will be handled by 15 tonne capacity haulage trucks underground and out to on surface. Trucks will be loaded at remuck bays on the ramp systems and will haul directly to the surface ore pad. From the ore pad all ore will be loaded on 30 tonne surface trucks to be transported to the mill.

Life of Mine development waste rock broken underground is estimated at 300 kt. Approximately 208 kt of this waste rock is needed for backfill. Detailed plans for the surface handling of Bermingham waste rock depend on the further geochemical characterization which has not been completed. Figure 16-11 shows an isometric view of the existing and planned workings of Bermingham mine. Figure 16-12 shows the surface layout as well as a plan view of the as-built.

Table 16-13 below shows the production quantities and table for the Bermingham Mine.

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Source: Mining Plus 2019

Figure 16-11 Bermingham Mine Isometric View

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Source: Mining Plus 2019

Figure 16-12 Bermingham Mine As Built and Surface Layout

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Table 16-13 Bermingham Production Quantities

Bermingham	Total		Year 1		Year 2		Year 3		Year 4		Year 5		Year 6
Mill Feed Tonnes2		362,343		6,075		70,605		90,000		90,000		89,000		16,663
Waste Tonnes		302,489		45,935		146,219		54,683		30,681		24,971		-
Total Tonnes		664,832		52,010		216,824		144,683		120,681		113,971		16,663
MCF Tonnes		275,102		6,075		57,243		85,892		74,356		43,833		7,704
LH Tonnes		87,241		-		13,362		4,108		15,644		45,167		8,959
MCF Backfill Tonnes		190,500		4,293		34,488		57,902		50,764		37,131		5,923
LH Backfill Tonnes		17,755		-		9,208		1,054		1,246		6,246		-
Total Backfill Tonnes		208,255		4,293		43,696		58,957		52,402		42,986		5,923
Ag(g/t)		972.02		1,641.53		1,008.68		979.08		958.85		954.61		698.63
Au(g/t)		0.13		0.13		0.13		0.13		0.13		0.13		0.12
Pb(%)		2.59		4.50		2.21		2.75		2.65		2.69		1.73
Zn(%)		1.32		1.10		1.53		1.25		1.26		1.37		0.99
Ag(Oz)		11,323,635		320,600		2,289,710		2,833,030		2,774,495		2,731,525		374,275
Au(Oz)		1,543		25		298		383		389		382		66
Pb(lbs)		20,669,895		602,645		3,439,628		5,454,680		5,265,794		5,272,968		634,179
Zn(lbs)		10,560,344		147,854		2,377,062		2,470,282		2,505,936		2,693,883		365,328
Development (m)1		7,051		1,110		3,290		1,313		749		589		-

Notes:

1.        Lateral and Vertical meter

2.        Mill feed tonnes are all probable mineral reserves as shown in Section 15 of this report.

3.        Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content;

4.        Tonnages are diluted and recovered

5.        Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounce

16.6.4 Lucky Queen Mine

The Lucky Queen Mine is located approximately 10 km from the mill and has previously been the site of underground production by a previous operator. Alexco has rehabilitated approximately 1 km of underground drift from the portal. The access drift is 3.0 m W x 3.6 m H and production drifts will be sized at 2.5 m W x 2.5 m H. These drifts are too small for the mining fleet used at the other mines. As such, a special fleet of smaller scale units will be required to extract the Lucky Queen deposit. In 2012, Alexco purchased a Young’s 470 TZ underground haul truck rated at 6.4-tonne capacity. One truck is capable of hauling 100 tpd of ore to the portal, while a second, additional truck will be required to haul the development waste rock to the portal or to the stope to make cemented rock fill. Emergency egress and ventilation for the Lucky Queen will be provided through a vent raise driven to surface. The total life of mine production for the underground operations is shown in Table 16-14.

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Table 16-14 Lucky Queen Production Schedule

LUCKY QUEEN	Total		Year 6		Year 7		Year 8
Mill Feed Tonnes2		70,717		23,004		36,600		11,113
Waste Tonnes		54,996		48,484		4,935		1,577
Total Tonnes		125,713		71,488		41,535		12,690
Total Backfill Tonnes		52,930		15,109		28,142		9,678
Ag(g/t)		1,244.39		1,233.74		1,327.95		991.24
Au(g/t)		0.12		0.13		0.12		0.13
Pb (%)		2.63		2.68		2.75		2.16
Zn (%)		1.38		1.60		1.21		1.48
Ag(Oz)		2,829,248		912,467		1,562,622		354,159
Au(Oz)		284		94		142		48
Pb(lbs)		4,107,083		1,360,714		2,218,297		528,073
Zn(lbs)		2,148,841		811,904		973,913		363,024
Development (m)1		2,036		1,685		266		85

Notes:

1.        Lateral and Vertical meter
2.        Mill feed tonnes are all probable mineral reserves as shown in Section 15 of this report.
3.        Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content;
4.        Tonnages are diluted and recovered
5.        Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounce

Figure 16-13 shows an isometric view of the existing and planned working, while Figure 16-14 shows a plan view of the Lucky Queen Mine and associated surface infrastructure.

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Source: Mining Plus 2019

Figure 16-13 Lucky Queen Isometric View

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Figure 16-14 Lucky Queen Mine Plan View

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

16.7 Production Schedule

The overall production schedule is based on feeding a consistent 400 to 550 tpd to the centrally located mill. The mine production schedule includes concurrent operation of two mines with occasionally a third in development phase. The operations were sequenced in an effort to maximize Net Present Value and to minimize the number of operations concurrently active whilst satisfying the mill throughput targets. All references to Ore in this section are exclusively the probable mineral reserves outlined in Chapter 15.

Initially, the Bellekeno mine will be rehabilitated and some development will occur to extract approximately 40,000 tonnes of ore. While Bellekeno production is occurring, development will be advanced in the Bermingham and Flame & Moth deposits to prepare them for production. Bermingham and Flame & Moth will be the two primary ore sources to the mill. Ore production at Flame & Moth Mine will occur over 9 years at an average rate of 220 tpd. Bermingham will produce ore for 4.5 years at an average rate of 230 tpd. As the Bermingham mine ramps down, the Lucky Queen mine will begin development to supplement ore feed to the mill. The Lucky Queen Mine will produce ore for 2.5 years at an average rate of 100 tpd.

Table 16-15 shows total life of mine production for the underground operations.

Table 16-15 Plant Feed

Mine	Diluted Tonnes2	Ag (g/t)	Au (g/t)	Pb (%)	Zn (%)
Bellekeno	40,109	843	-	11.79	6.31
Lucky Queen	70,717	1244	0.12	2.63	1.38
Bermingham	362,343	972	0.13	2.59	1.32
Flame & Moth	704,211	672	0.49	2.71	5.73
Total Plant Feed	1,177,380	805	0.34	2.98	4.13

Notes:

1. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content;

2. All Diluted tonnes are probable mineral Reserves as shown in Section 15 of this report.

3. Tonnages are diluted and recovered

4. Tonnage and grade measurements are in metric units.

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Figure 16-15 shows the overall silver ounces recovered by each of the two different mining methods. Figure 16-16 to Figure 16-18 show the tonnage and grade relation over the life of mines.

 

Source: Mining Plus 2019

Figure 16-15 Mined and Recovered Silver Oz Distribution by Mining Method

 

Source: Mining Plus 2019

Figure 16-16 Ore and Waste Tonnes

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Source: Mining Plus 2019

Figure 16-17 Ore vs Precious Metal Grade

 

Source: Mining Plus 2019

Figure 16-18 Ore vs Base Metal Grade

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

16.8 Mine Equipment

All mobile equipment will be diesel-powered rubber-tired equipment owned by Alexco. Alexco currently owns some of the equipment with the rest to be purchased over the mine life to supplement the fleet. Bellekeno, Bermingham, and Flame & Moth Mine will all use similar size equipment while the Lucky Queen mine will use smaller scale units.

Table 16-16 below shows the underground equipment build up by period and Table 16-17 shows surface mobile equipment fleet. There are also pickups and light equipment such as pumps, light plants, and miscellaneous equipment at the site.

Table 16-16 Underground Equipment Fleet

Type		Size	Unit	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7
LHD
JS125	existing	1.25	yd	-	-	-	-	-	-	1
JS220	existing	2.2	yd	1	-	-	-	-	-	-
JS220	existing	2.2	yd	-	-	-	-	-	-	1
JS350	existing	3.5	yd	1	-	-	-	-	-	-
New LHD	new	3.5	yd	-	4	2	-	-	-	-
New LHD	new	2.2	yd	-	-	-	-	-	-	1
Drills
Mini Jumbo	existing			-	-	-	-	-	-	1
HS105D Jumbo	existing			1	-	-	-	-	-	-
HS105D Jumbo	existing			-	1	-	-	-	-	-
Jumbo	new			-	3	-	-	-	-	-
Longhole	new			-	1	1	-	-	1	1
Bolters
Tamrock Bolter	existing			1	-	-	-	-	-	-
Bolter	new			-	3	-	-	-	-	-
Trucks				-	-	-	-	-	-	-
EJC416D	existing	15	sh,t	1	-	-	-	-	-	-
EJC416D	existing	15	sh,t	-	1	-	-	-	-	-
Young 470T7	existing	7	sh,t	-	-	-	-	-	-	1
Young 470T7	new	7	sh,t	-	-	-	-	-	-	1
Volvo A340	existing	35	sh,t	-	1	-	-	-	-	-
Volvo A340	existing	35	sh,t	-	1	-	-	-	-	-
Truck	new	15	sh,t	-	3	-	-	-	-	-
Utility Vehicles
03451 JUT 41	existing			-	1	-	-	-	-	-
Scissor Lift	new			-	2	1	-	-	-	-
Tractors	new			1	4	1	-	-	-	-
CAT D-3 Dozer	existing			-	-	-	-	-	-	-
Shotcrete Sprayer/Forklift	existing			-	1	-	-	-	-	-
Shotcrete Sprayer/Forklift	new			-	-	2	-	-	-	-
Service Truck	new			-	-	1	-	-	-	-

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 16-17 Surface Equipment Fleet

Type	Units
Heavy Highway Truck		4
Medium Highway Truck		3
Cat 930 Loader 3		3
Cat 966 G Loader		1
Cat D7R Dozer		1
Cat CS 56E Packer		1
Hitachi Zaxis 270LC		1
KX 161 Excavator		1
Skidsteer/forklift		4
Compressor electric (750 cfm)		2
Diesel Compressor 750 cfm		1
Diesel Compressor 800 cfm		1
Cat generators (350-450 kW)		2
Cat generators (100 kW)		1

16.9 Manpower

Alexco will operate the mill as well as provide the technical services, management, and administration staff. All underground development and production will be performed by Alexco. Table 16-18 shows the total estimated annual manpower for Alexco.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 16-18 Annual Manpower Estimate

	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9
Management/Admin	8	12	12	12	12	12	12	11	9
Mine General	17	21	21	21	21	21	21	19	15
Bellekeno	46	0	0	0	0	0	0	0	0
Flame & Moth	37	57	60	65	64	63	63	55	51
Bermingham	17	53	58	65	57	29	0	0	0
Lucky Queen	0	0	0	0	0	25	41	31	0
Mill Operations	23	38	38	38	38	38	38	35	24
Site Services	13	15	15	15	15	15	15	14	12
Environmental	2	2	2	2	2	2	2	2	2
Health and Safety	4	4	4	4	4	4	4	4	4
Total	167	202	210	222	213	209	196	170	117

16.10 Mine Operations

All mine operations will be performed by Alexco personnel using the company’s owned equipment. Mine Operations will proceed 24 hours per day, 7 days per week with 4 crews rotating to site and staying at the Alexco camp. All mining will be performed using mechanized methods; with the exception of bolting in small section headings where bolting will be performed off scissor lifts with stoper drills and jacklegs. All mucking will be performed by diesel-powered load-haul dump units (LHDs) mucking to diesel-powered underground haul trucks. For the Bermingham, Bellekeno and Lucky Queen mines, ore will be hauled to the portal and stockpiled on surface where it will be rehandled by Alexco’s surface truck fleet. Due to the proximity of the mill to the Flame & Moth mine, the underground fleet will haul the ore directly to the ore pad. Waste will be hauled to the nearest backfill site underground or, if there are none available, hauled to surface and stockpiled.

16.11 Backfilling

Backfilling will be either unconsolidated waste rock fill (URF) or cemented rock fill (CRF). All backfill will be hauled by the underground haul trucks and placed using LHDs. In areas where a tight seal between the backfill and the back is required the LHD will be equipped with a rammer-jammer plate to push the backfill tight to the back. CRF will be mixed in the nearest remuck to the backfill area, which will be driven at a slight negative grade. Cement will be deposited into the remuck by a transmixer and mixed with the waste rock by the LHD. The Cement content in the CRF will be 3% - 5% in areas where needed.

16.12 Ventilation

A ventilation model was designed based on the mine plan for the Bermingham, Flame & Moth, and Lucky Queen mines. Primary fans, auxiliary fans, and heating units will be reused from the Bellekeno mine as well as shared between other operations to reduce total capital expenditure.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

16.12.1 Mine Air Heating

Alexco will need to heat the ambient air to +2°C in all three mines. This will require approximately 1.4 MW for the Flame & Moth mine; 1.6 MW for Bermingham; and 2.5 MW for Lucky Queen in the coldest month of January. Figure 16-19 displays the average temperature at the nearest weather station of Mayo.

 

Source: Alexco 2019b

Figure 16-19 Mayo, YT Monthly Average Temperature

16.12.2 Ventilation Modelling

A ventilation model for each mine was developed based on the proposed designs for the three new mines using Ventsim® software. No model was created for the Bellekeno mine because the primary ventilation circuit is already in place and only auxiliary ventilation will be required. This was used to determine operability and estimate the required primary fan duties required at different stages of the mine life. Key modelling considerations include:

· Expected diesel equipment fleets for each mine are based on the mine plan;

· Utilization of Availability for equipment is based on the mine plan;

· Associated friction factors and resistances are based on excavation methodology and accepted industry design values;

· A leakage allowance of 20% of total airflow demand;

· Early development work in both the main and ventilation declines will have fans located well outside each portal, a minimum of 50 m away, to limit the possibility of recirculation;

· Airways will maintain an air velocity of at least 0.5 m/s to remove contaminants and maintain an appropriate temperature in the mine; and

· Working areas will be limited to an air velocity of 4 m/s and travelways to a maximum of 6 m/s to maintain a safe and healthy environment.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

16.12.3 Flame & Moth Mine

The proposed layout for the Flame & Moth underground project will support a relatively simple negative pressure ventilation circuit. Primary fan(s) located on the surface of the dedicated exhaust raises will cause air to be drawn into the main portal, along the respective access declines to working levels. Each production level will have a primary exhaust connection through which decline air and returning level air can exhaust. Each of these connections must be regulated to ensure only the desired volume is permitted to flow. A system of dedicated exhaust raises and lateral airways will return air to surface.

Two surface exhaust raises are planned, one supporting the northern mining areas and the other the central and southern mining areas. The proposed location of the Christal Exhaust Raise (CER), close to the portal collar, induces the possibility of recirculation occurring. A duct arrangement will be necessary to direct airflow a sufficient distance from the intake portal to guard against this. The Lightning Exhaust Raise (LER) is adequately separated to prevent this. Figure 16-20 shows the basic primary airflow through the mine.

 

Source: Mining Plus 2019

Figure 16-20 Flame & Moth Primary Airflow Schematic

Fan duties will be relatively low and suits the use of axial-flow fans. Peak fan power for the Christal exhaust raise estimated to be 8.3 kW, with Lightning requiring installed power of 11 kW. These fans will require variable speed drives to ensure that the airflow is balanced to each zone since there won’t be sufficient airflow to operate each zone at maximum capacity. Peak airflow requirements reach 41.7 m³/s in year 5 of project schedule; however, the peak requirements are relatively constant from year 2. Figure 16-21 shows airflow demand over the life of project.

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Source: Mining Plus 2019

Figure 16-21 Flame & Moth Project Ventilation Demand

16.12.4 Bermingham Mine

The proposed layout for the Bermingham underground project will support a relatively simple negative pressure ventilation circuit. Primary fan(s) located on the surface of the dedicated exhaust raise will cause air to be drawn into the main portal, along the access decline to working levels. At each working area, a fan will force fresh air to the face where it will return to the intersection, continue down the ramp, and exhaust at the lowest connected portion of the raise. Each of these connections must be regulated to ensure only the desired volume is permitted to flow and one must always be open to allow the ventilation circuit to be complete. Figure 16-22 shows the basic primary airflow through the mine.

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Source: Mining Plus 2019

Figure 16-22 BRM Primary Airflow Schematic – Mining Plus 2019

Peak airflow requirements reach 47.4 m³/s in year 2 of project schedule and remains constant for the remaining mine life. Figure 16-23 shows airflow demand over the life of project.

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Source: Mining Plus 2019

Figure 16-23 BRM Project Ventilation Demand

In ‘peak flow’ situations the air velocity in the exhaust raises approaches that in which water-blanket formation is possible. If this becomes an issue it will be controlled by implementing a regular, automatic ‘dump’ cycle for the fan control system in which airflow through fans is reduced to allow any suspended water to fall to the base of the raise for collection.

16.12.5 Lucky Queen Mine

The proposed layout for the Lucky Queen underground project will support a simple positive pressure ventilation circuit. Primary fan(s) located at the collar of a dedicated intake raise will cause air that has passed through a heating system to enter the mine. The air will then flow onto the ramp at the first available opportunity where it will be forced onto each level by an auxiliary fan, sweeping the face and returning to the ramp to repeat the process at the next working area. Ultimately, the air will exhaust from the main portal. Figure 16-24 shows an isometric view of the ventilation circuit.

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Source: Mining Plus 2019

Figure 16-24 Lucky Queen Primary Airflow Schematic

Peak airflow requirements reach 72.5 m³/s in year 2 of project schedule and remain constant for the life of mine. Figure 16-25 shows airflow demand over the life of project.

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Source: Mining Plus 2019

Figure 16-25 Lucky Queen Project Ventilation Demand

During initial development, low-friction twin ducts will be used to push the air the distance to the face. The number of concurrent activities underground will be restricted until the ventilation raise has broken through to surface and the main fans have been commissioned

16.13 Mine Services

16.13.1 Compressed Air

Compressed air will be supplied underground through 6” diameter HDPE pipes. In the case of the Flame & Moth mine, the compressed air will be supplied by a fixed air compressor associated with the mill. In the case of the other three mines, compressed air will be supplied by an air compressor located at the portal.

16.13.2 Dewatering

The Bellekeno and Lucky Queen mines are located above the valley floor so total groundwater inflow is expected to be limited. Dewatering will still be required to remove service water from the mine. Bermingham and Flame & Moth are both expected to have higher groundwater flows. For the Flame & Moth mine, the maximum groundwater flow is expected to be 33 L/s. For Bermingham mine, the maximum inflow is expected to reach 3.25 L/s; however, a value of 11 L/s has been used for engineering purposes.

For all the mines, the dewatering strategy is to use electric submersible pumps to collect water from sumps near the active mining areas and pump it in stages to the dirty water sump located on the ramp. The dirty water will decant to a clean water sump where a clean water pump will pump the water to surface for recycling or treatment and eventual discharge.

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16.13.3 Electrical

All the mines will be connected to the site and provincial power grid. Primary power transmission underground will be 4,160 V to power centres located in strategic locations underground where voltages will be stepped down to 600V for final distribution.

16.13.4 Maintenance Facilities

For both Flame & Moth and Bermingham mines, the maintenance department will have a fuel/lube truck, a mechanic’s service truck, a tractor, and access to a scissor lift and a boom truck.

In addition to the mobile equipment, the mine maintenance department will be responsible for the stationary equipment consisting of air compressors, main ventilation fans, propane air heaters, underground electrical distribution system, and main dewatering pumps.

Most of the mobile equipment maintenance will be performed in a surface shop, which will be constructed near the portal.

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17. Recovery methods

17.1 Introduction

The Keno Hill Silver District Property (the Property) is of a polymetallic silver-lead-zinc vein type mineralization. Silver predominantly occurs in argentiferous galena and argentiferous tetrahedrite, and to a lesser content, as native silver and the silver-bearing minerals polybasite, stephanite, and pyrargyrite. Lead occurs in galena and zinc in sphalerite in either an iron-rich or iron-poor variety. Other sulphides identified at the Property include pyrite, pyrrhotite, arsenopyrite, and chalcopyrite. Common gangue minerals include siderite, quartz and calcite in decreasing order of abundance (RPA, 2017).

The Keno Hill District Mill (also called the Bellekeno Mill), is on a care and maintenance status maintained by Alexco. The mill complex was constructed in 2010 with a nameplate processing capacity of 408 tpd. The commercial operations started on January 1, 2011 at a nominal processing rate of 250 tpd with ore materials from the Bellekeno Mine. Operation of this plant was discontinued in the end of August 2013 due to low silver prices and other economic factors. The original process flowsheet of the mill was mainly developed from the metallurgical testwork conducted on Bellekeno samples from 1996 to 2009 (Wardrop, 2009).

The Keno Hill District Mill will be recommissioned for operation with a LOM average throughput of 430 tpd according to the 8-year mine plan for this PFS. The initial mill throughput will be 275 tpd and ramp up to 400 tpd with the peak throughput of 550 tpd at year 3. For commissioning, the existing mill will be fed with ores from the Bellekeno Mine exclusively for the first month, after which the mill will be continuously supplied by blended ores from two mines at any time of the LOM. Details on the mine plan and production schedule are found in Section 16.

The original process flowsheet has been modified accordingly to allow the increased feed capacity based on additional metallurgical testwork described in Section 13, the experience from previous operations, as well as mill modifications and upgrades. This Section (Section 17.0) will include the major processing design criteria, the modified flowsheet development including previous operation and proposed plan modifications/upgrades, a general process description, process unit operation description, and annual metals production estimate.

17.2 Process Design Criteria

The design criteria described in this section represents 400 tpd mill throughput, as the plant will be operated at 400 tpd for the first two years before ramping up to 550 tpd. Where applicable, the design criteria for the increased throughput are shown in parenthesis. The mill complex will process ore at a 75% availability for the crushing plant on the basis of one 12-hour shift per day, a 92% availability for the grinding and flotation plant. The primary grinding will be conducted in two stages with a target grind size P₈₀ of 100 to 120 µm. A regrind mill in each of the lead and zinc flotation circuits will be included to further liberate lead and zinc minerals. The regrinding particle size P₈₀ was designed as 30 µm for the lead rougher concentrates and 30 µm for the zinc concentrates.

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The key design criteria are shown in Table 17-1.

Table 17-1 Modified Mill Design Criteria

Descriptions	Unit	Values
Daily Processing Rate	tpd	400 (ramping up to 550 tpd from year 3)
Annual Operating Days	d/y	365
Operating Schedule – Crushing		1 shift per day (12 h/shift)
Operating Schedule – Grinding/Flotation		2 shifts per day (12 h/shift)
Crushing Availability	%	75
Grinding/Flotation Availability	%	92
Head Grades, LOM Average
Ag Grade	g/t	805
Au Grade	g/t	0.34
Pb Grade	%	2.98
Zn Grade	%	4.13
Bond Ball Mill Work Index	kWh/t	10.5
Grinding
Feed Particle Size P80	µm	12,000
Product Particle Size P80	µm	100 to 120
Regrinding
Lead Rougher Concentrate Particle Size P80	µm	30
Zinc Rougher Concentrate Particle Size P80	µm	30
Flotation Concentration Procedure		Pb Ro/3-stage Cleaner flotation  followed by Zn Ro/3-stage Cleaner flotation
Tailings Management:
Tailings		Surface Dry Stacking
F&M Portion of Tailings		Underground Backfill

17.3 LOM Predicted Mill Feed

To provide context for the discussion of the metallurgical testing and the various composites, the following summarizes the LOM mill feed based on the mine plans in Section 16 of this report.

According to the PFS LOM production plan, ore will be produced from Bellekeno, Bermingham, Flame & Moth and Lucky Queen, with typically two mines in production at any time. The annual mill feed schedule is shown graphically in Figure 17-1.

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Source: Mining Plus 2019

Figure 17-1 Source of Mill Feed in Tonnes per Year

Table 17-2 provides more details of the mill feed, summarizing the total tonnes, with the contribution by each deposit, and the average head grades for the PFS LOM production plan. The Flame & Moth deposit and Bermingham deposit represent the major mineralization sources, providing more than 90% of the total mill feed materials. The remaining mill feed material will come from the Lucky Queen deposit for about 6% of the total, and the Bellekeno deposit for about 3% of the total. The lead and zinc grades of the three major deposits (Flame & Moth, Bermingham, and Lucky Queen) are in the range of 2.59% to 2.71% Pb and 1.32% to 5.73% Zn, which is significantly lower than the feed grades of the Bellekeno deposit.

Table 17-2 Summary of LOM Grades and Tonnes per Deposit

LOM Average	Flame & Moth			Bermingham			Lucky Queen			Bellekeno			Total
Ratio of Mill Feed		60	%		31	%		6	%		3	%		100	%
Tonnage (kt)		704			362			71			40			1,177
Lead grade (% Pb)		2.71			2.59			2.63			11.8			2.98
Zinc grade (% Zn)		5.73			1.32			1.38			6.3			4.14
Gold grade (g/t Au)		0.49			0.13			0.12			-			0.34
Silver grade (g/t Ag)		672			972			1,244			843			805

17.4 Process Flowsheet Modifications

The mill process flowsheet has been modified from the original design based on previous operation experience, mill modifications, mill capacity review comments, as well as the additional metallurgical testwork results.

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17.4.1 Previous Operation

The Keno Hill District Mill was operated by Alexco between 2011 and 2013, and processed ore at an average rate of 250 tpd via a two-stage crushing, one-stage grinding, and sequential lead and zinc flotation process. No regrinding stage was employed in the existing mill complex, which, had been proposed in the 2009 design by Wardrop to further grind the lead rougher and second cleaner tailings. The mill operating data for this period was reviewed by SRK and RPA and presented in their 2014 and 2017 PEA Technical Reports. The 2012 operating data is quoted as follows from the SRK report:

· The mill processed 92,000 t of Bellekeno vein material generating 12,000 t of lead-silver concentrate and 6,000 t of zinc concentrate. The year average monthly throughput was 252 tpd at 89% availability. The maximum monthly throughput for the year was 305 tpd, with peak production in September and October.

· Head grades averaged 654 g/t silver, 9% lead and 4% zinc. The head grades ranged from 620 g/t to 1,075 g/t silver; 8% to 16% lead; and 4% to 9% zinc.

· The lead recoveries in 2012 ranged from 84% to 98% with a concentrate lead grade of 55% to 68%. The silver recoveries to silver-lead concentrate ranged from 83% to 97% with silver grades from 4,231 g/t to 5,270 g/t. Zinc grade in the silver-lead concentrate ranged from 4% to 9% with recovery as high as 26%.

· The zinc recovery to zinc concentrate ranged from 46% to 64% with a final zinc grade of 40% to 49% zinc. The silver recoveries to zinc concentrate ranged from 2% to 6% and the maximum lead recovery to zinc concentrate was 6% with a maximum grade of 7% lead.

The head grades for the original design were based on Bellekeno ore at 871 g/t silver, 9.5% lead, and 5.6% zinc, which corresponded to the mill feed grades during operation. Satisfactory lead and zinc concentrate products were produced during production. However, where concentrates grades and recoveries were lower than the predicted values, it appears related to insufficient liberation and/or reagent schemes in operation.

17.4.2 Mill Modifications and Upgrades

During the previous operation, there were no changes to the mill complex as built in 2010. Since the temporary shutdown in 2013, maintenance projects have been completed in preparation for restarting the mill for the project described herein. The major maintenance works already completed include rebuilding both flotation cells and pumps, removal of the Derrick screen in preparation for cyclone installation in the primary grinding circuit, and removal of the smaller tailings filter presses in preparation for replacement. A water treatment circuit to treat water from the Flame & Moth mine was installed in 2018 consisting of a clarifier and reagent addition (lime and flocculant) for treating water from underground, prior to discharge or recycle into the mill. The water treatment plant was constructed inside the existing mill building.

In this study, capacity and process review were conducted mainly in the three areas based on the previous mill performance; grinding circuit, flotation circuit, and dewatering circuit to ensure the mill complex throughput capacity and the mill metallurgical performance based on the additional test results. The required modifications or upgrades of these areas and other proposed upgrades in the overall mill complex are summarized in Table 17-3. During the initial years of operation, campaigns will be run to test higher throughput rates and identify any bottlenecks or additional projects required to achieve the higher throughput. An allowance of $1M has been included in this Project for these additional modifications, as noted in the final row of the table.

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Table 17-3 Summary of Plant Modifications to Achieve LOM Planned Throughput

Process Area	Equipment Changes
ROM Ore Crushing Circuit	• Install a baghouse filter for crusher ventilation • Install enclosed building around secondary crusher and screen
Fine Ore Storage and Reclaim Systems	• Install fine ore apron feeders
Primary Grinding Circuit	• Convert ball mill No 1 to overflow discharge (open circuit) • Install ball mill No 2, pumpbox and pumps (closed with hydrocyclones)
Classification	• Replace Derrick screen with two hydrocyclones
Lead Flotation Circuit	•Install a concentrate regrind mill, pumpbox, pumps, and a hydrocyclone (closed circuit) • Lead 1st cleaner tailings combined with lead rougher scavenger tailings to feed zinc circuit
Zinc Flotation Circuit	• Install rougher concentrate regrind mill, pumpbox, pumps and a hydrocyclone (closed circuit)
Lead and Zinc Concentrate Dewatering and Loadout	• No changes required
Tailings Dewatering and Handling	• Replace one of the existing filters (the smaller) with a larger filter (23 plates)
Reagent Handling and Storage	• Replace process water line loop
Slurry Handling	• Modifications as indicated from test campaigns e.g. replace undersized pumps, possibly tailings thickener, possibly additional zinc third cleaner retention time

17.4.2.1 Grinding Circuit

Three specific modifications are planned to increase the mill throughput including:

· replacing the existing ball mill separation screen to classifying cyclones;

· modifying the existing ball mill discharge type from grate discharge to overflow type; and

· adding one additional ball mill to the grinding circuit in series with the existing ball mill which was in open circuit.

These modifications are based on both grinding testwork and review of the planned mill feed/throughput for the LOM. Starkey & Associates (S&A) of Oakville, Ontario, performed a grinding circuit throughput analysis in 2013. S&A conducted a one-hour benchmark survey on the grinding circuit and collected samples for grindability testing (Starkey & Associates, 2013). In the investigation, the Bond rod mill work index was found to be 12.4 kWh/t; while the Bond ball mill work index was measured as 10.20 kWh/t. Both the working indices are noticeably higher than the 2009 design as of 8.7 kWh/r (RWi) and 9.5 kWh/t (BWi). Based on the results of the comminution analysis and simulations, S&A suggested to install a similarly sized second ball mill 1.8 m x 3 m with 130 kW of installed power in series after the existing mill to reduce the feed size F80 of 9 mm to 80% passing 180 µm. This arrangement would allow the mills to process up to 435 tpd (at 90% availability) of material with similar hardness in the site visit.

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The S&A assessment was expanded on by International Metallurgical in 2018 and forms the basis for the changes to mill equipment. International Metallurgical evaluated the conversion of the existing grate discharge on the primary ball mill into an overflow discharge to supplement the second ball mill installation. The assessment also included the replacement of the vibrating Derrick screen with two cyclones. Based on an overall Bond Work index of 11.0 kWh/t from previous operations and grindability testing (Starkey & Associates, 2013), the two-stage ball mill grinding performance was estimated to reduce the feed size F80 of 6 mm to 80% passing 120 µm in the cyclone overflow. This arrangement would allow the mills to process 811 tpd.

The QP reviewed the planned grinding circuit which is composed of two identical overflow ball mills, each with a dimension of 1.8 m diameter x 3.6 m, and an installed power of 150 kW. It was estimated that at a feed size F80 of 10 mm and an overall BWi of 10.5 kWh/t, the two-stage ball mill grinding circuit could achieve 600 tpd. The particle size of the ground product will be 80% passing 100 to 120 µm which is considered appropriate for this mill feed.

Alexco has purchased the secondary grinding ball mill but it has not been installed. Installation of this equipment and the purchase and installation of the classifying cyclones, primary ball mill trommel, secondary ball mill pump box, cyclone transfer pumps and classifying cyclones are included in the costing for this project, based on vendor quotations, and as reviewed by the QP.

17.4.2.2 Flotation Circuit

Two major modifications were proposed in flotation circuit based on the recent test results. The first modification is to divert the lead 1^st cleaner scavenger tailings to feed the zinc rougher flotation circuit. This can give a better control of zinc reporting to the lead concentrates particularly for samples from the F&M zone which has a high ratio of Zn:Pb.

The second modification is to add two regrind ball mills to the current lead and zinc flotation circuit, one for each of the lead and zinc concentrate regrinds. This modification results from the analysis of the results of the metallurgical testwork conducted from 2016 to 2019 on representative samples of both the F&M and Bermingham deposits, and composites thereof (see Section 13.0). The testwork results suggest that the regrinding of both the lead and zinc rougher concentrates respectively prior to cleaning will assist in improving the zinc grade of the final zinc concentrate and lowering the zinc level in lead concentrate. This improvement is critical to optimizing both recovery and final concentrate grades, particularly beneficial for the F&M ore, which showed an inferior flotation response in the testwork program. Therefore, a regrind stage is included in both the lead and the zinc flotation circuits.

The purchase and installation of the two regrinding ball mills and classifying cyclones are included in the costing for this project, based on vendor quotations, and as reviewed by the QP.

17.4.2.3 Dewatering Circuit

Plate and frame pressure filters will continue to be used for dewatering of both the lead and zinc concentrates, and for the tailings products. The current concentrate filters will remain unchanged, as they are expected to be sufficient to meet the 550 tpd plant capacity. The existing tailings filters will be insufficient to meet the 550 tpd mill throughput because of the lower head grades and increased throughput. The smaller filter press (1000 x 1000 mm, 9 plates) will be replaced with a larger filter press (1250 x 1250 mm, 23 plates). The purchase and installation of the larger membrane filter press is included in the costing for this project, based on vendor quotations, and as reviewed by the QP.

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17.5 Process Unit Operation Description

The Keno Hill District Mill is based on a conventional sequential flotation process producing lead and zinc concentrates. The lead concentrates are high in silver which typically account for approximately 90 to 95 percent of the mill feed silver values since silver is strongly associated with lead minerals. Overall, silver represents 70 to 80 percent of the value of the ores in the district.

Ore will be crushed and then processed in a conventional flotation mill producing two concentrates; a silver/lead concentrate and a zinc concentrate. Concentrates are thickened, filtered, and trucked off site for sale. Tailings are also thickened, filtered, and stored in a dry stack tailing facility (DSTF) adjacent to the mill.

Process water will be stored in the mill pond adjacent to the mill complex and recycled to the plant for varied applications. The primary makeup water source is from the Flame & Moth underground mine which can will be treated within the already constructed water treatment plant. This can be supplemented by fresh water from the Mill Well if required in the initial years of operation. Excess water can be discharged to either of two nearby drainage basins, Christal Creek or Lightning Creek, once the permitted water quality is achieved. The environmental permits, water management and water treatment are discussed in Section 20.

The following sections provide descriptions of the unit operations of the mill complex. The process described in this section represents 400 tpd mill throughput, as the plant will be operated at 400 tpd for the first two years before ramping up to 550 tpd. The values corresponding to the increased throughput for the 550 tpd are shown in parentheses following. Most of the plant modifications to allow it to achieve 550 tpd throughput target will be completed prior to mill commissioning and are described in detail section 17.4.

17.5.1 Simplified Process Flowsheet

The simplified process flowsheet of the mill complex is shown in Figure 17-2. The mill complex consists of the following process sections and unit operations:

· primary and secondary crushing circuits with a radial stacker belt conveyor to transport the crushed ore to the covered fine ore stockpile;

· draw down pocket reclaiming the crushed ore from the covered fine ore stockpile;

· two-stage grinding in a closed circuit with hydro-cyclones to produce a grinding product P₈₀ size of 120 µm;

· a grinding classification circuit to produce a cyclone overflow to feed the lead rougher and rougher scavenger flotation circuit to recover lead and silver minerals; the process to produce lead rougher and lead rougher scavenger flotation concentrates which will be reground to a P₈₀ size of 30 µm;

· the reground lead rougher and lead rougher scavenger flotation concentrates to be upgraded in three stages of cleaner flotation producing the final silver-bearing lead concentrate;

· the zinc rougher and the zinc rougher scavenger flotation circuit to be fed by the lead rougher scavenger tailings and the lead 1^st cleaner tailings to produce the zinc rougher concentrates and the final zinc rougher scavenger tailings;

· the zinc rougher concentrate to be reground to a P80 size of 30 µm followed by upgrading in three stages of cleaner flotation; the cleaner circuit to generate the final zinc concentrate and the zinc 1st cleaner scavenger tailings;

· thickening and pressure filtration of the lead concentrate and the zinc concentrate;

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· thickening and pressure filtration of each of the zinc rougher scavenger and zinc 1^st cleaner scavenger tailings, which will then be disposed of either underground as cemented backfill, or on surface as dry stack tailings;

· a reagent preparation section; and,

· utilities distribution for compressed air and water distribution.

 

Source: Mining Plus 2019

Figure 17-2 Simplified Process Flow Diagram of the Mill Complex

17.5.2 ROM Ore Crushing, Ore Storage, and Reclaim

The crushing system will be operated for 8 h/d at a process rate of 50 t/h (up to 10 h/d at a process rate of 55 t/h). The ROM ore will be crushed in a two-stage crushing circuit closed with a vibrating screen. The final crushed product size P₈₀ will be minus 10 mm. ROM ore will be dumped by 30 t haulage trucks into either a ROM ore stockpile of directly into the jaw crusher feed hopper with a 47 t capacity. The hopper is equipped with a stationary grizzly with a 450 mm aperture opening to prevent oversize ore entering the downstream jaw crusher.

The feed to the primary crusher, the jaw crusher, is controlled by using a vibrating grizzly feeder. The 508 mm by 914 mm jaw crusher with a 75 kW motor will crush the ROM ore from minus 450 mm to a P₈₀ size of 50 mm with the crusher closed side setting of 70 mm. The primary crushing products, joined by the secondary crushing discharge, will feed the sizing screen to produce the final crushed product. The oversize product from the sizing screen will feed the secondary cone crusher.

The crushed material will be conveyed to a fine ore stockpile with 550 t live capacity. Crushed ore reclaim will be achieved via a draw down pockets located beneath the fine ore stockpile.

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17.5.3 Primary Grinding Circuit

Crushed ore will be reclaimed from the stockpile onto the ball mill feed conveyor belt at a nominal rate of 18.1 t per operating hour (25 tpd). The primary grinding circuit is a two-stage ball milling process producing a ground material with a P₈₀ size of 100 to 120 µm. The spillage sump and pump are located near the No.1 mill discharge pumpbox. Spillage will be returned to the ball mill feed hopper.

Ore from the ball mill feed conveyor will discharge into the feed chute of the primary No.1 ball grinding mill which will be a heavy-duty tyre driven type grinding mill 1,800 mm in diameter and 3,600 mm long, with an installed power of 150 kW. The primary mill slurry will discharge into a pumpbox and will then be pumped to join the secondary No.2 ball mill discharge. The combined streams will be pumped to the classifying cyclones. The cyclone underflow will return as feed to the secondary ball mill, while the cyclone overflow will report to flotation circuit. The secondary No.2 ball mill has the same size and motor as the primary ball mill.

Grinding media as steel balls will be added as required via the ball mill feed conveyor. This conveyor will discharge the grinding media into the ball mill feed hopper. The ball mill feed conveyor belt will be sampled every shift to provide a head assay of the feed to the plant.

The reagents 3418A and zinc sulphate will be added to the ball mill feed to suppress zinc minerals during the lead mineral flotation stage.

17.5.4 Classification

The primary and secondary ball mill discharges will be combined in a common pumpbox and will then feed a hydro-cyclone pack. Two cyclones will be installed each with a diameter of 250 mm. Operating in a mode of one running and one standby, the cyclone undersize material will return to the secondary grind ball mill by gravity, while the cyclone overflow with a P₈₀ size between 100 and 120 µm will gravity flow to the flotation circuit.

17.5.5 Lead Flotation Circuit

The lead flotation circuit will produce a final silver-lead concentrate through the stages of rougher flotation, rougher scavenger flotation, rougher scavenger concentrates regrinding, followed by three-stages of cleaner flotation. Blower air will be injected into each flotation cell mechanism. The reagents zinc sulphate, 3418A, SIPX and MIBC will be added to the circuit as required.

The flotation area is equipped with a spillage sump and pump for spill clean-up and recycle. The flotation cells are existing units which were sized for the maximum laboratory-scale retention time for Bellekeno samples. Based on the locked cycle flotation testwork completed by SGS discussed in Section 13, these cells are slightly oversized for the planned LOM mill feed which will have lower lead head grades than the Bellekeno ore.

17.5.5.1 Lead Rougher and Rougher Scavenger Flotation

The cyclone overflow fraction from the primary grinding circuit will be conditioned with the reagents 3418A and zinc sulphate in two agitated tanks. The pulp density will contain approximately 33% solids by weight. The conditioning tanks will have a residence time of total 5 minutes at the design volumetric flow rate.

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The conditioned slurry will then flow into the feed box of the first of five 8 m³ lead flotation tank cells with a total maximum residence time of 25 minutes. Laboratory-scale testwork has indicated that a maximum residence time of 10 minutes will be adequate for the flotation of the silver and lead sulphide minerals which, using a scale-up factor of 2.5 implies that a residence time of 25 minutes is required. However, should a shorter residence time be required, some of the cells can be taken off-line. Low pressure blower air will be injected into each cell mechanism to generate the froth for the flotation of lead and silver sulphide minerals.

The lead rougher concentrate from all the rougher cells and the lead rougher scavenger concentrate will flow by gravity to a pumpbox and will then feed the regrinding circuit. The lead rougher tailings will report to the rougher scavenger flotation stage consisting of two 8 m³ tank cells with a total maximum residence time of 10 minutes. The rougher scavenger flotation tailings will flow into a standpipe and will be pumped to the zinc flotation circuit.

17.5.5.2 Lead Rougher Concentrate Regrinding

The regrinding step prior to the lead 1^st cleaner flotation will further liberate silver and lead minerals from the gangue and other sulphide minerals to improve product quality and metal recovery. The lead rougher scavenger concentrates will be pumped to a regrind ball mill which will be 1,050 mm in diameter and 1,400 mm long powered by an 18-kW motor and which will be operated in a closed circuit with two 100 mm cyclones. One cyclone will be in operation at any time and will classify the reground slurry. The regrind cyclone overflow will flow to the lead 1^st cleaner flotation cells while the cyclone underflow will return to the regrind ball mill for further grinding. The particle size target of the regrinding circuit will be a P₈₀ size of about 30 µm.

17.5.5.3 Lead 1st Cleaner Flotation

The reground lead rougher scavenger concentrates, and the lead 2^nd cleaner flotation tailings will be upgraded in the 1^st cleaner flotation stage. The cleaner flotation feed will gravitate from the lead regrind cyclone overflow into the feed box of the first of three 3 m³ 1^st cleaner flotation cells where it will be joined by the 2^nd cleaner flotation tailings pumped from a standpipe. The 1^st cleaner tailings will report to the first conditioning tank of the zinc rougher flotation circuit, while the concentrate from the 1^st cleaner stage will feed the 2^nd cleaner flotation stage.

The major equipment used in the 1^st lead cleaner flotation circuit include the following:

· three 3 m³ conventional flotation cells; and

· one 1,050 mm diameter and 1,400 mm long tyre-driven regrind ball mill with 18 kW installed power.

The 1^st cleaner flotation train has a total maximum residence time of 18 minutes. This residence time has been deemed adequate but can be reduced, if required, by taking flotation cells off-line.

17.5.5.4 Lead 2nd Cleaner Flotation

The lead 1^st cleaner concentrates and the lead 3^rd cleaner flotation tailings will be upgraded in the 2^nd cleaner flotation stage. The 2^nd cleaner tailings will be recycled back to the 1^st cleaner, while the 2^nd cleaner flotation concentrate will feed the lead 3^rd cleaner stage.

The major equipment used in the lead 2^nd cleaner flotation circuit include two 3 m³ conventional flotation cells.

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The feed to the 2^nd cleaner flotation circuit will be the tailings from the 3^rd cleaner flotation cell and the 1^st cleaner concentrate. These cells are two 3 m³ cells. Blower air will be injected into each cell mechanism. The 2^nd cleaner flotation train has a total maximum residence time of 15 minutes. This residence time has been deemed adequate but can be reduced, if required, by taking a flotation cell off-line. The 2^nd cleaner flotation concentrate will flow into a standpipe which will transfer the slurry to the 3^rd cleaner flotation circuit.

17.5.5.5 Lead 3rd Cleaner Flotation

The lead 2^nd cleaner concentrate will be upgraded in the 3^rd cleaner flotation stage. The 3^rd cleaner tailings will return by gravity to the 2^nd lead cleaner flotation stage, while the concentrate will be pumped to the lead concentrate thickener for dewatering.

The major equipment used in the 3^rd lead cleaner flotation circuit will include one 3 m³ conventional flotation cell.

The 3^rd cleaner flotation feed will be pumped from the 2^nd cleaner circuit into the feed box of the 3 m³ cleaner flotation cell. The 3^rd cleaner flotation cell has a residence time of 12 minutes. The 3^rd cleaner flotation concentrate will flow into a standpipe, which will transfer the slurry to the lead concentrate dewatering circuit. The 3^rd cleaner flotation tailings will be recycled by gravity flow to the 2^nd cleaner flotation circuit.

17.5.6 Zinc Flotation Circuit

The zinc flotation circuit will process the tailings generated from lead flotation circuit through the stages of rougher flotation, rougher scavenger flotation, rougher concentrate regrinding, followed by three stages of zinc cleaner flotation. Three products will be produced, namely the final zinc concentrate and the zinc rougher scavenger tailings and zinc 1^st cleaner scavenger tailings which will be filtered and either stored in the dry stack tailings facility or used as backfill. Blower air will be injected into each cell mechanism.

Reagents copper sulphate, SIPX, lime and MIBC will be added to the circuit as required. The flotation area is equipped with a dedicated spillage sump and pump for clean-up purposes. The flotation cells are existing units sized on the maximum laboratory-scale retention time for Bellekeno samples, which is more than the required residence time based on the locked cycle flotation tests by SGS discussed in Section 13.0.

17.5.6.1 Zinc Rougher Flotation

Prior to zinc flotation, the zinc rougher flotation feed materials, consisting of lead rougher scavenger tailings, lead 1^st cleaner tailings, and the returned zinc rougher scavenger tailings, will be conditioned with copper sulphate to activate the depressed zinc minerals, and lime to suppress pyrite if required. The zinc rougher flotation stage will generate a zinc rougher concentrate, and rougher scavenger flotation tailings which will be low in pyrite and feed the corresponding dewatering circuit.

Two zinc flotation conditioning tanks are used in operation. The conditioned slurry at a solids density of 29% will flow into the feed box of the first of four 8 m³ rougher flotation tank cells with a total residence time of 40 minutes. Testwork has indicated that a maximum residence time of 30 minutes will be adequate for the flotation of the zinc sulphide minerals. However, should a shorter residence time be required, some of the cells can be taken off-line.

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The zinc rougher flotation concentrate will be transferred to a pumpbox by gravity to feed the zinc rougher concentrate regrinding circuit. The zinc rougher flotation tailings will flow by gravity into the zinc rougher scavenger flotation cell.

17.5.6.2 Zinc Rougher Concentrate Regrinding

As for the lead concentrate regrinding, the zinc rougher regrinding will further liberate lead and zinc minerals from gangue and other sulphide minerals to improve concentrate product quality and metal recovery. The zinc rougher concentrates will be pumped to a regrind ball mill of 1,050 mm in diameter and 1,400 mm long powered by an 18-kW motor, which will be operated in a closed circuit with two 100 mm cyclones in the classification circuit. In operation, one cyclone will classify the reground slurries. The regrind cyclone overflow will flow to the zinc 1^st cleaner flotation cells while the cyclone underflow will return to the zinc regrind ball mill. The P₈₀ particle size target of the regrinding circuit will be around 30 µm.

17.5.6.3 Zinc 1st Cleaner Flotation and Zinc 1st Cleaner Scavenger Flotation

The zinc rougher flotation concentrate will be further upgraded by three stages of cleaner flotation in a total of seven 3 m³ conventional flotation cells. The 1^st cleaner scavenger flotation tailings will have a high pyrite content, which will be pumped to the No.2 dewatering circuit. The 2^nd and 3^rd cleaner tailings will be recycled to the respective preceding cleaning stages by gravity flow. The zinc 3^rd cleaner concentrate will be the final product zinc concentrate which will be dewatered prior to shipping.

The feed box of the zinc 1^st cleaner flotation feed will receive three streams, namely 1) the zinc regrinding cyclone overflow by gravity flow; 2) the zinc 1^st cleaner scavenger flotation concentrates by pumping, and 3) the zinc 2^nd cleaner flotation tailings by gravity flow. The 1^st cleaner flotation train has three 3m³ cells, which gives a total maximum residence time of 15 minutes. This residence time has been deemed adequate, but can be reduced, if required, by taking flotation cells off-line. The 1st cleaner flotation concentrate will flow into a standpipe, which will transfer the slurry to the zinc 2^nd cleaner flotation circuit.

The zinc 1^st cleaner tailings will report to a cleaner scavenger flotation cell which will be one 3 m³ tank with a total maximum residence time of 9 minutes. The cleaner scavenger flotation tailings will flow into a standpipe and will be pumped to the feed box of the zinc 1^st zinc flotation circuit.

17.5.6.4 Zinc 2nd Cleaner Flotation

The zinc 1st cleaner flotation concentrate will be further upgraded in the second cleaner flotation stage consisting of two 3 m³ conventional flotation cells.

The 2nd cleaner flotation feed will be pumped from the zinc 1^st cleaner flotation standpipe into the feed box of the first of two zinc 2^nd cleaner stage flotation cells. The zinc 2^nd cleaner flotation train has a total maximum residence time of 15 minutes. This residence time has been deemed adequate but can be reduced, if required, by taking a flotation cell off-line. The 2^nd cleaner flotation concentrate will flow into a standpipe which will transfer the slurry to the 3^rd cleaner flotation circuit.

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17.5.6.5 Zinc 3rd Cleaner Flotation

The 3^rd cleaner flotation feed will be pumped from the zinc 2^nd cleaner flotation concentrate standpipe into the feed box of the 3 m³ zinc 3^rd cleaner flotation cell. Blower air will be injected into the cell mechanism. The 3^rd cleaner flotation cell has a residence time of 12 minutes. The 3^rd cleaner concentrate will be the final grade zinc concentrate which will be dewatered prior to shipping.

17.5.7 Lead and Zinc Concentrates Dewatering And Loadout

17.5.7.1 Lead Concentrate

The final lead flotation concentrate will be discharged to the lead 3^rd cleaner concentrate standpipe and will then be pumped to the lead concentrate thickener. Flocculant will be added as an aid in settling the solids. The thickener is a 3.05 m diameter high-rate unit fitted with an automated rake lifting mechanism and an auto-dilution system. It will produce a thickener underflow density of 60% solids which will be pumped to the lead concentrate filter feed stock tank. Thickener overflow solution will flow into a lead process water collection tank and will be pumped to the lead flotation circuit for re-use.

A 25 m³ holding tank will hold the thickener underflow lead concentrate prior to dewatering by using a pressure filter. The concentrate filter feed tank has a residence time of 10 hours in order to provide sufficient time for regular maintenance on the lead concentrate filter. The filter is a 1,000 mm by 1,000 mm pressure filter unit with 9 plates. Slurry will be pumped into the filter chambers on a batch basis, and solution will be squeezed out by high pressure air. Then air will be blown through to dry the cake to attain the required moisture level of 8%.

The filter cake will be discharged periodically onto a stockpile. Samples will be tested to determine the moisture content of the filter cake for metallurgical mass balance purposes. Filtrate from the filter will be returned to the concentrate thickener. The dewatered lead concentrate will be discharged to the covered lead concentrate stockpile, which will have a storage capacity of 7 days of lead concentrate production.

Filtrate from the pressure filter will be pumped back to thickener feed well as dilution water. The concentrate thickener overflow will be distributed to the lead flotation circuit as process water. The lead concentrate dewatering area will be equipped with a spillage sump for clean-up and recycle. Spillage will be returned to the lead concentrate thickener.

17.5.7.2 Zinc Concentrate

The final zinc flotation concentrate will be discharged to the zinc 3^rd cleaner concentrate standpipe and will then be pumped to the zinc concentrate thickener. Flocculant will be added as an aid in settling the solids. The thickener is a 3.05 m diameter high-rate unit fitted with an automated rake lifting mechanism and an auto-dilution system. It will produce a thickener underflow density of 60% solids, which will be pumped to the zinc concentrate filter feed stock tank. Thickener overflow solution will flow into a process water collection tank and will be pumped to the zinc flotation circuit for re-use.

A 25 m³ holding tank will hold the thickener underflow zinc concentrate prior to dewatering by a pressure filter. The concentrate filter feed tank has a residence time of 10 hours in order to provide sufficient time for regular maintenance on the zinc concentrate filter. The filter is a 1,000 mm by 1,000 mm pressure filter unit with 9 plates. Slurry will be pumped into the filter chambers on a batch basis, and solution will be squeezed out by high pressure air. Then air will be blown through to dry the cake to attain the required moisture level of 8%.

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Filter cake will be discharged periodically onto a concentrate stockpile. Samples will be tested for the moisture content of the filter cake and to determine the concentrate grade used for metallurgical mass balance. Filtrate from the filter will be returned to the zinc concentrate thickener. The dewatered zinc concentrate will discharge to the covered zinc concentrate stockpile which will have a storage capacity of approximately seven days of zinc concentrate production.

Filtrate from the pressure filter will be pumped back to thickener feed well as dilution water. The concentrate thickener overflow will be distributed to the zinc flotation circuit as process water. The zinc concentrate dewatering area will be equipped with dedicated spillage sump and pump for clean-up purposes. Spillage will be returned to the zinc concentrate thickener.

17.5.8 Tailings Dewatering and Handling

The tailings thickening area is equipped with one dedicated spillage sump and pump for clean-up purposes. The spillage will be returned to one of the two tailings thickeners.

The zinc 1^st cleaner scavenger tailings will feed the No.2 tailings thickener where it will be combined with flocculant solution to aid the settling. The thickener is a 3.05 m in diameter high-rate type, allowing for the thickener underflow density of 58% solids to be produced ahead of filtration stage. Thickener overflow solution will flow via gravity into the water polishing/settling pond. Thickener underflow slurry will be pumped to a tailings storage tank and will then be pumped to No.2 tailings filter presses for dewatering. Filtrate solution from the filter press will be collected in a filtrate standpipe and will be returned to No.2 tailings thickener as dilution water.

Similarly, zinc rougher scavenger tailings standpipe will feed the No. 1 tailings thickener, where it will be combined with flocculant to aid settling. The thickener is 6.1 m diameter, and high-rate type, allowing for a thickener underflow density of 58% solids to be produced ahead of the filtration stage. Thickener overflow solution will flow via gravity into the water polishing/settling pond. Thickener underflow slurry will be pumped to a tailings storage tank and will then be pumped to the No. 1 tailings filter press for dewatering. Filtrate solution from the filter will be collected into a filtrate standpipe and will be returned to the No. 1 thickener as dilution water.

Both tailings filters will discharge onto the filtered tailings belt conveyer. The tailings filter products will have >88% solids content, which will be suitable for disposal by truck from the stockpile to either the underground as cemented tails backfill or the dry stack tailings facility.

The major equipment for tailings management includes:

· One 3,050 mm diameter tailings thickener (No.2 Tailings Thickener);

· One 6,100 mm diameter tailings thickener (No. 1 Tailings Thickener);

· One 1,250 mm by 1,250 mm pressure filter with 23 plates (No. 2 Tailings Filter Press); and

· One 1,250 mm by 1,250 mm pressure filter with 23 plates (No. 1 Tailings Filter Press).

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17.5.9 Reagent Handling and Storage

Most reagents will be received in bulk in palletized bags, chemical containers, drums, or bulk bags.

The covered and curbed reagent storage and preparation area is located adjacent to the flotation area. A forklift with a drum handler attachment will be used for reagent handling, while the electric hoist servicing the reagent area will lift the reagents to the respective reagent mixing area located above the mixed reagent storage area. The reagent system includes unloading and storage facilities, mixing tanks, transfer pumps, and feeding equipment. Table 17-4 shows the reagents currently being specified for use in the process plant.

Table 17-4 Summary of Reagents

Reagent	Preparation Method	Use
Flocculant	Received as powder in 25 kg bags; mixed to 0.3% storing strength; transferred to a storage tank and dosed directly to thickeners following further dilution to 0.03% dosing strength.	Flocculation of flotation tailings, and flotation lead and zinc concentrates, in thickeners.
Copper Sulphate	Received as powder in 25 kg bags; mixed to 10% strength; transferred to a storage tank.  Dosed to the zinc flotation circuit.	Regulator for zinc sulphide minerals in flotation process.
MIBC	Received as liquid in 200 L drums; dosed undiluted to lead and zinc flotation circuits.	Promotion and stabilization of froth bubbles in flotation cells.
SIBX	Received as powder in 25 kg bags; mixed to 10% strength; transferred to a storage tank.  Dosed to both lead and zinc flotation circuits.	Collector reagent for sulphide minerals into the froth phase of the flotation cells.
3418A	Received as liquid in 200 L drums; dosed undiluted to lead flotation circuit.	Additional collector reagent for lead and silver sulphide minerals into the froth phase of the flotation cells.
Zinc Sulphate	Received as powder in 25 kg bags; mixed to 10% solution strength; transferred to a storage tank.  Dosed to the primary grinding and lead flotation circuit, if required.	Regulator of lead sulphide minerals in flotation process.
Lime	Received as powder in 1 t bags, mixed to 20% storing strength; transferred to a storage tank and dosed directly to the lead regrind and zinc flotation circuits.	pH control and pyrite depressant; added as required
Carbon Dioxide	Received in 240 L compressed gas cylinders. Dosed to lead process water.	pH control to prevent sphalerite activation in the lead flotation circuit.

Anti-scaling chemicals may be required to minimize scale build up in the reclaim or recycle water lines. This reagent will be delivered in liquid form and metered directly into the reclaim water tank.

17.6 Plant Services

17.6.1 Water Supply

Fresh water and process water supply systems are installed for the process plant operations. Fresh water will be used primarily for reagent preparation, gland seal water, and general mill make-up water supply. The fresh water will be delivered on demand to a 4 m diameter by 4 m high storage tank, where fresh water is further pumped to various application points.

Process water will be supplied to the plant via centrifugal pumps, one operating and one stand-by unit, which will provide water supply for process stream dilution and for use by the plant clean-up hosing stations. Process makeup water will primarily be treated water from the Flame & Moth water treatment plant discharge. The reclaimed water will be directed to a storage tank prior to distribution throughout the process plant.

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17.6.2 Air Supply

The air service systems will supply the required air in the following areas:

· flotation: low pressure air for flotation cells will be provided by air blowers;

· filtering: high pressure air for filter pressing and drying of concentrates and tailings will be provided by a dedicated air compressor;

· crushing: high pressure air will be provided for the baghouse filters in the crushing facility; and

· instrumentation: dried and oil-free instrument air will come from the plant air compressors and stored in a dedicated air receiver

Two 365 cfm compressors, each with 75 kW motors, will supply the high-pressure air used in plant operations and the instrumentation. The compressed air will be filtered and then stored in dedicated air receivers. For instrumentation air, an additional drying stage will be required. A low-pressure centrifugal blower will be used to supply low-pressure air to the various flotation circuits.

17.6.3 Instrumentation and Process Control

The plant process control system consists of individual locally mounted control panels located near the main equipment. The mill control system includes an Allen Bradley PLC that provides local and centralized start/stop control. Major process performance including throughput, mill power draw and motor variable speeds are displayed on the centralized computer within the mill operator control room. Alarm annunciation will be local to the major equipment or located on the local control panel. The local control panels will act as a marshalling point for monitoring and control of the nearby equipment and instrumentation. It will also act as a distribution point of power for instrumentation.

17.6.4 Quality Control

A metallurgical and assay laboratory will conduct daily quality control and optimize process performance. The assay laboratory is equipped with the necessary analytical instruments to provide all the routine assays for the mine samples, the geological samples, the process plant samples, and samples taken for environmental monitoring. The metallurgical laboratory will undertake all basic testwork to monitor metallurgical performance and to improve the process flowsheet and efficiencies.

17.7 Annual Production Estimate

According to the current LOM plan, four deposits are considered to provide the future mill feed, namely, the Flame & Moth (61% of the total mill feed), Bermingham (32%), Lucky Queen (6%), and Bellekeno (1%). Based on this distribution and metal projections given in Section 13.0, the LOM concentrate production is provided in Table 17-5.

The concentrate grades and recoveries are based on the testwork and recovery relationships presented in Section 13. Once in commercial production, the Pb-Ag concentrate would have an expected commercial grade of 54% Pb and 17,300 g/t Ag. The Zn concentrate is expected to contain a commercial grade of 53% Zn and 700 g/t Ag. The concentrates grade and projected life of mine metals production are provided in Table 17-6 and Table 17-7, respectively. Also shown in Table 17-6, for comparison, is the concentrate production starting after the ramp up and commissioning period through to the end of the mine life.

While the overall recoveries are similar for both time periods, the concentrate characteristics differ. This is due to the different head grades and metallurgical performance of the Bellekeno ore which is used for the start up and commissioning. Both calculations are shown as the former is the basis for the economic model calculations of total concentrate production, total payable metal production and revenues. The latter is shown as the basis for estimating the expected concentrate quality for the majority of the Project life, after processing of Bellekeno material is completed during Year 1.

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Previous Bellekeno operations were not required to pay any penalties on concentrate produced. The locked cycle testing completed in 2017 and 2018 were analyzed for penalty elements including: As, Bi, Sb, Hg, F, SiO₂, Mn, Fe, Cd and Zn (in Pb). Based on initial smelter terms discussions, the Pb-Ag concentrate only showed slightly elevated As, Bi and Sb, while the Zn concentrate only showed slightly elevated As and Cd. No penalties are applied to the payable metals in this prefeasibility study.

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Table 17-5 LOM Projected Concentrate Production¹

Products	Unit	Total/Average		Year 12		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 92
Mill Feed	t		1,177,380		27,000		141,800		154,500		187,500		198,000		177,300		144,000		138,000		9,280
Mill Feed Head Grades
Au	g/t		0.34		0.00		0.23		0.29		0.29		0.29		0.41		0.49		0.45		0.85
Ag	g/t		805		944		870		914		785		816		742		790		702		657
Pb	%		2.98		11.1		3.5		3.3		2.9		2.6		2.9		2.0		2.1		2.2
Zn	%		4.13		6.0		4.0		3.3		4.2		3.6		4.2		3.7		5.4		8.6
Recoveries to Ag-Pb Concentrates
Au	%		49		49.0		49.0		49.0		49.0		49.0		49.0		49.0		49.0		49.0
Ag	%		90.9		91.6		91.3		91.5		90.9		91.0		90.6		90.9		90.4		90.1
Pb	%		88.6		97.1		89.6		89.6		88.9		88.2		88.8		86.5		86.9		87.2
Zn 3	%		8.4		5.5		8.6		10.0		8.2		9.3		8.3		9.3		6.5		2.5
Recoveries to Zn Concentrates
Ag	%		4.6		4.2		4.4		4.2		4.7		4.6		4.9		4.7		5.0		5.2
Pb	%		5.5		0.3		4.2		3.5		4.2		5.2		4.7		9.6		7.9		7.4
Zn	%		73.6		76.5		73.4		72.0		73.8		72.7		73.7		72.7		75.5		79.5

Notes:

1. Based on the mineral reserves presented in Section 15 and mine plan presented in Section 16, metallurgical testing presented in Section 13.

2. Partial years of production (Year 1 ramp up of 3 months, and Year 9 is 2 months and <400 tpd)

3. A Zn to Pb concentrate recovery formula was not generated; instead an overall recovery of 82% Zn was applied and the quantity in the Pb concentrate is the difference between the 82% recovery and the calculated Zn to Zn concentrate recovery using the formula presented in Section 13.

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Table 17-6 LOM Projected Concentrate Production^{1, 2}

	LOM (including year 1)		Average LOM Following Commissioning2
Pb-Ag Concentrate
Dry tonnes		58,151		52,772
Ag g/t3		14,822		15,890
Pb %3		54.0		54.0
Au g/t3		3.4		3.7
Zn Concentrate
Dry tonnes		67,768		65,436
Ag g/t3		642		649
Zn %3		53.0		53.0

Notes:

1. Based on the mineral reserves presented in Section 15 and mine plan (Section 16).

2. “following commissioning” refers to Year 2 through to end of mine.

3. Grades are calculated weighted averages

Table 17-7 LOM Projected Concentrate Production - Metal Quantities¹

Products	Unit	Total		Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9
Metals Contained in Pb Concentrate
Au	ozs		6,353		0		518		717		862		905		1,141		1,113		974		124
Ag	M ozs		27.71		0.75		3.62		4.16		4.30		4.73		3.83		3.33		2.82		0.18
Pb	M lbs		69.23		6.40		10.00		9.96		10.83		10.17		10.27		5.59		5.60		0.39
Zn 2	M lbs		8.72		0.19		1.07		1.13		1.42		1.48		1.33		1.07		0.98		0.04
Payable Metals Contained in Pb Concentrate
Au	ozs		4,707		0		298		448		569		630		863		962		822		114
Ag	M ozs		26.32		0.71		3.44		3.95		4.08		4.49		3.64		3.16		2.68		0.17
Pb	M lbs		65.38		6.05		9.44		9.41		10.23		9.61		9.70		5.28		5.29		0.37
Metals Contained in Zn Concentrate
Ag	M ozs		1.40		0.03		0.17		0.19		0.22		0.24		0.20		0.17		0.15		0.01
Pb	M lbs		4.39		0.00		0.44		0.40		0.68		0.67		0.66		0.60		0.85		0.09
Zn	M lbs		79.18		2.73		9.20		8.14		12.83		11.55		12.23		8.51		12.59		1.40
Payable Metals Contained in Zn Concentrate
Ag	M ozs		0.84		0.02		0.11		0.12		0.13		0.15		0.12		0.10		0.09		0.00
Zn	M lbs		67.23		2.31		7.81		6.91		10.90		9.81		10.38		7.23		10.69		1.19

Notes:

1. Based on the mineral reserves presented in Section 15 and mine plan presented in Section 16, metallurgical testing presented in Section 13

2. An overall recovery of 82% Zn was applied and the quantity in the Pb concentrate is the difference between the 82% recovery and the calculated Zn to Zn concentrate recovery using the formula presented in Section 13.

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18. Project Infrastructure

18.1 Off-site Facilities

The project includes an existing administrative building located in Whitehorse. This office complex will be used to support operations at site.

The project is located in central Yukon, near the community of Keno. Keno is approximately 460 highway kilometers or approximately 5 hours by road north of Whitehorse via Yukon highways 2 and 11. Road access to the project is maintained year round by the Yukon Governments department of highways.

The nearest airport with scheduled service is the Mayo Airport, located approximately 55 kilometers south of the project.

The Project is supplied with electrical power from a hydroelectric plant near Mayo and connection to the Yukon wide electrical grid. In the past, this facility had sufficient capacity to supply electricity to the mill and all of the various mines. However, after the closure of UKHM, Yukon Energy Corporation (YEC) built a transmission line from Mayo to Dawson City to allow the shutdown of diesel power generation in Dawson City. There remains ample capacity on the grid to power the combined mine and mill operations at a 430 tpd throughput.

The Yukon and federal governments announced in August 2009 approval and financing for the expansion of the hydroelectric plant in Mayo (Mayo B Project) as well as the extension of the power line from Pelly Crossing to Stewart Crossing, thus completing the northern grid and tying in Mayo/Elsa with the entire southern Yukon electrical generating and distribution systems. The power line extension was completed in 2010 and is able to provide ample power for any future mine throughput increases at Flame & Moth, Bermingham, and Lucky Queen, and throughout the rest of the Project.

18.2 Concentrate Shipment Infrastructure

All infrastructure and services are in place for concentrate shipment. This PFS is based on the concentrate shipping and sales to Trail that was used for the previous operations. Briefly, lead and zinc concentrates are loaded into concentrate pots (owned by the trucking company) at the District Mill site. Each pot is individually numbered, and the pots are re-used.

The concentrate leaves the District Mill site by truck and delivered to Skagway, Alaska and stored on post platforms. On a weekly basis a barge will arrive in Skagway. The post platforms with the concentrate pots are loaded onto the barge, and post platforms with empty pots will be offloaded for return to the District Mill site. Barges depart Skagway once per week. Transport time to Seattle on the barge is one week. When the barge arrives in Seattle, the loaded concentrate on post platforms will be offloaded and transported via truck to the Teck Smelter at Trail, BC.

18.3 Elsa Facilities

The administrative offices and first aid facilities are currently based in Elsa, Yukon in a large facility that also accommodates the exploration group offices and core processing area. Maintenance and warehouse facilities are also located at Elsa. The warehouse building in Elsa is a two-story building with warehousing on both levels and a fully serviced maintenance shop on the northern end of the bottom floor. This building is used as a centralized warehouse/surface equipment facility for the Project operations and requires no further upgrades.

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18.4 Flat Creek Camp Facilities

The currently licensed Flat Creek camp facilities include a trailer camp, kitchen facility, and drillers dry assembled at the old Flat Creek town site (part of Elsa). The camp has a total capacity of 90 permanent beds. There are four refurbished houses located nearby with a total of 28 rooms, and an additional 20 rooms available in a bunkhouse. A fourth bunkhouse located adjacent to the houses is primarily used for seasonal surface exploration programs. The entire capacity of the camp facilities is 140 rooms. The facilities will require expansion to accommodate the estimated 230 operations employees in addition to the ongoing surface exploration employees and contractors.

Alexco is licensed to withdraw water from Flat Creek and an existing groundwater well for domestic use. A water treatment facility located within the Flat Creek camp consists of 5,000 L of storage, a water softener, UV treatment, and chlorination. Alexco has two sewage disposal permits at Elsa: one for the Flat Creek camp and one for the houses. Waste water is treated in septic tanks and released via drain fields.

A Commercial Dump Permits # 81-012 and #81-067 is currently held from Yukon Government Environment in accordance with the Environment Act Solid Waste Regulations as well as the Public Health and Safety Act. The permits were renewed effective January 1, 2017 and will continue to be used in support of mine operations. In compliance with this permit, upgrades to the location of solid waste disposal included upgrades to the electric bear fence and the addition of a cattle guard to prevent animals from entering the facility.

18.5 Mill Facility

The current facilities at the District Mill facility include mine and mill offices and dry, an assay lab, first aid facilities, and the mill and DSTF complex, as seen on Figure 18-1. The mine geology and engineering office buildings from Bellekeno were moved to the mill area to serve as a central office and dry facility for all mining operations.

A metallurgical and assay laboratory conducts all basic testwork to monitor and improve the process flowsheet metallurgy and efficiency, and to support environmental monitoring.

The assay laboratory was constructed as a pre-packaged unit consisting of two retrofitted 40 ft shipping containers converted into laboratory modules, which are located adjacent to the mill building. The laboratory is equipped with the necessary analytical instruments to provide all routine assays for the mine, plant, and environmental quality control monitoring. The equipment included allows for the preparation and analysis of approximately 80 samples per 12-hour shift. Standard analysis includes acid digestion of samples followed by analysis on an atomic absorption spectrometer.

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Figure 18-1 Site Layout - Keno District Mill and Flame & Moth

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18.6 Area Haul Road System

Alexco has constructed a series of access and haul roads to route mine traffic around the Keno City community.

All traffic between Elsa and the Mill facility and/or the Bellekeno mine is routed along the Christal Lake Road and subsequently the Bellekeno haul road.

During conceptual mine production, heavy truck traffic from Lucky Queen will be routed along the Keno City bypass road to/from the Bellekeno haul road. Light truck traffic from Lucky Queen will continue to be routed through Keno City during mine operations. The Keno City bypass road was developed from the Wernecke Road, crossing Sign Post Road, along the historic Onek power line, to the Onek 990 portal, crossing Lightning Creek Road and the Onek access bridge across Lightning Creek to the Bellekeno haul road. The bypass road is approximately 2.1 km long and six to nine meters wide as per Yukon Workers’ Compensation Health and Safety Board regulations and the identified haul road type (i.e., single or double lane). The Bermingham Mine traffic will use the Bermingham access road, Calumet Road and a short section of the Duncan Creek road (~3 km) between the Mill and the Bermingham mine.

18.7 Bellekeno Mine Surface Infrastructure

The Bellekeno East portal is fully equipped with all infrastructure needed to operate the underground mine including miners’ office buildings with septic storage, maintenance shop, miners’ dry area, warehouse containers, and surface layout area. The existing infrastructure and planned site layouts are shown in Figure 18-2 to Figure 18-9, respectively.

Water discharge from the Bellekeno mine is treated at the Bellekeno 625 adit portal water treatment facility. Service water for Bellekeno is supplied from the clean sump in the underground workings. Water is distributed to the underground workings through a 2 or 4 inch HDPE pipe. Mine water use is expected to be <50 gpm at Bellekeno during production.

All waste rock material generated from mining operations at Bellekeno will be backfilled underground in previously mined out areas. It is anticipated that all of the approximately 16,000 tonnes of waste rock will remain underground during operations. However, there is a temporary storage pad for potential acid metal leaching rock (P-AML) located near the Bellekeno East portal.

Power is supplied to the mine through an existing transmission line that connects the Bellekeno 625 portal substation to 69 kV/4.16 kV 3 MVA substation located at the mill facility.

Explosives will be stored in separate powder and detonator magazines located underground off the main decline.

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Source: 2018 photo from Alexco files

Figure 18-2 Existing Infrastructure at the Bellekeno East Portal

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Figure 18-3 Site Layout at Bellekeno

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18.8 Lucky Queen Mine Surface Infrastructure

The existing Lucky Queen portal pad, developed on a historic waste dump, will be used to support mining operations at Lucky Queen. The existing site infrastructure is shown in Figure 18-4 and planned site layout is shown on Figure 18-5.

Mine support facilities, such as the miners’ dry area, equipment and supplies laydown area, offices and trailers, are in place on the Lucky Queen portal pad.

A set of fresh air fans with mine air heaters are also installed at the portal. Compressed air and power were being supplied by a portable diesel compressor and a diesel generator set mounted in a sea container. The plan is to replace the diesel compressor with an electrical compressor once the planned power line extension is completed.

A planned return air ventilation raise will provide additional ventilation to the underground workings and function as an emergency escapeway to surface. A small building will be constructed over the ventilation raise surface break through and signage will be installed warning of the open hole hazard.

Non-acid metal leaching (N-AML) waste rock generated from development and mining at Lucky Queen will be deposited in a new N-AML waste rock disposal area, which will be built as an extension to the historic waste rock storage area at Lucky Queen. P-AML waste rock is expected to be deposited in a P-AML waste rock storage facility constructed nearby.

A settling pond is located on top of the historic waste rock disposal area near the Lucky Queen portal and is used to settle suspended solids from adit water prior to discharge. A diversion ditch is proposed above the Lucky Queen portal and the non-acid or metal leaching (N-AML) waste rock storage facility.

Fuel and petroleum products will be held in two Envirotanks to supply fuel for mine development and production operations: one 28,500 L main tank and a 2,100 L “day tank” for the diesel generator.

At Lucky Queen, up to 4,500 kg of explosives will be stored in an appropriate location on the portal bench.

 

Source: 2018 photo from Alexco files

Figure 18-4 Existing Infrastructure at Lucky Queen Mine Portal

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Figure 18-5 Site Layout at Lucky Queen

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18.9 Flame & Moth Mine Planned Surface Infrastructure

The Flame & Moth mine uses existing infrastructure at the District Mill site. Existing infrastructure consists of geology and engineering office trailers, maintenance shop and fuel storage facility (see Figure 18-6).

Additional infrastructure in the area of the Flame & Moth mine portal, northeast of the mill building, consists of:

· a miners’ office trailer and miners’ dry facility;

· cold storage structure;

· air compressors; and

· settling pond for mine water discharge, with clarified water supplying the underground mine.

The fresh air raise collar location is planned south of the crusher and coarse vein material stockpile (Figure 18-1). The main ventilation fans and mine air heater will be located at the raise collar.

Non-acid metal leaching (N-AML) waste rock generated from development and mining at Flame & Moth will be deposited around the mill area to create extensions to laydown and storage areas. P-AML waste rock will be deposited in a temporary P-AML waste rock storage facility constructed nearby before being backfilled underground.

The site receives explosives deliveries by truck and the explosives will initially be stored in licensed and permitted surface magazines. A second powder and detonator magazine will be constructed underground during pre-production using existing remucks off the main decline.

 

Source: 2018 photo from Alexco files

Figure 18-6 Existing Mill Site Infrastructure

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18.10 Bermingham Mine Surface Infrastructure

Various surface facilities and infrastructure were constructed in 2017 to support the new Bermingham underground exploration decline including include a dedicated mine office, dry/lunch room, maintenance shop, diesel power generation, fuel storage tanks and laydown yard. The surface infrastructure that was constructed for the advanced exploration decline will remain in place and be expanded to facilitate development and production at the new Bermingham mine. A lined water management pond already constructed will be used as part of the water treatment system required during active mine operations.

An aerial photo with existing Bermingham infrastructure is provided in Figure 18-7. The planned site layout of the surface facilities for the new Bermingham mine is presented Figure 18-8 including the current portal location. An as-built of the new Bermingham exploration decline is shown in oblique view along with proposed mining shapes in Figure 18-9.

Non-acid metal leaching (N-AML) waste rock generated from development and mining at Bermingham will be deposited in a new N-AML waste rock disposal area, which will be built as an extension to the current waste rock disposal area at Bermingham. P-AML waste rock is expected to be deposited in a P-AML waste rock storage facility constructed nearby.

The site receives explosives deliveries by truck and the explosives will initially be stored in licensed and permitted surface magazines. A second powder and detonator magazine will be constructed underground during pre-production using existing remucks off the main decline.

 

Source: 2018 photo from Alexco files

Figure 18-7 Existing Infrastructure at the Bermingham Portal

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Figure 18-8 Site Layout at Bermingham

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Source: Mining Plus 2019

Figure 18-9 Bermingham Decline As built and Mine Plan

18.11 Electrical Power

The Project is supplied with electrical power from a hydroelectric plant near Mayo and connection to the Yukon-wide electrical grid. In the past, this facility had sufficient capacity to supply electricity to the mill and all of the various mines. However, after the closure of UKHM, YEC built a transmission line from Mayo to Dawson City to allow the shutdown of diesel power generation in Dawson City. There remains ample capacity on the grid to power the combined mine and mill operations at a 430 tpd throughput.

The Yukon and federal governments announced in August 2009 approval and financing for the expansion of the hydroelectric plant in Mayo (Mayo B Project) as well as the extension of the power line from Pelly Crossing to Stewart Crossing, thus completing the northern grid and tying in Mayo/Elsa with the entire southern Yukon electrical generating and distribution systems. The power line extension was completed in 2010 and is able to provide ample power for any future mine throughput increases at Flame & Moth, Bermingham, and Lucky Queen, and throughout the rest of the Project.

A new 69 kV/4.16 kV 3 MVA substation was installed to deliver power to the mill facility, Flame & Moth, and associated infrastructure.

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Alexco owns several substations in the area, including the Elsa substation, the Onek substation, and the Bellekeno 625 portal substation. It also owns the transmission line connecting the latter two. Power for the Bellekeno and Flame & Moth mines is now provided exclusively by the YEC electrical distribution system.

Power for the camp is supplied from the local grid that runs through Elsa to Keno City

Electrical power for Bermingham was initially provided by on-site diesel-powered generators and eventually will transition to grid power. Under full operating conditions, Bermingham is expected to require 1MVA which is available. A transmission line (via surface teck cable) will be established from Calumet road to the site, as shown on Figure 18-8.

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19. Market Studies and Contracts

19.1 Markets

The principal commodities of the KHSD are freely traded, at prices that are widely known, so that prospects for sale of any production are virtually assured. Mining Plus used metal prices of:

· Silver: US$15.75/oz in 2019, US$17.00/oz in 2020, US$17.50/oz in 2021, and, US$18.25/oz thereafter;

· Zinc: US$1.25/lb in 2019 and 2020, and US$1.22/lb thereafter;

· Lead: US$0.96/lb in 2019, and US$1.00/lb thereafter; and

· Gold: US$1,275/oz in 2019, US$1,315/oz in 2020 and US$1,325/oz thereafter.

The currency exchange was C$1.00:US$0.75 for 2019, C$1.00:US$0.76 for 2020, 2021, and 2022 and C$1.00:US$0.77 thereafter.

For the purposes of determining appropriate pricing to use in this analysis, pricing was obtained from Consensus Economics Inc., CIBC Global Mining Group analyst consensus price forecasts, and Bloomberg median price forecasts.

19.2 Contracts

19.2.1 Concentrate Sales

Previously both the silver-lead concentrate and the zinc concentrate from the mill facility were sold under contract with Glencore Ltd. The terms of the contract were reviewed and renegotiated annually to reflect current market conditions.

Future production will continue to be sold in concentrate form and revenue will be based on terms provided by traders or smelters to which the concentrate is sold. The sales terms used in the PFS were developed from indicative terms discussed with various potential traders or smelters over Q4 2018 to Q1 2019. These concentrate sales terms are shown in Table 19-1 and Table 19-2 below. While gold content is expected to be payable in the zinc concentrate, for the purposes of economic modelling it has been conservatively assumed that Alexco will not receive value for the contained gold content in the zinc concentrate.

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Table 19-1 Assumed Lead Concentrate Sales Terms

Metallic Payables for Each Dry Metric Tonne
Metal	Payables	Subject to Minimum Deduction
Silver	95%	50 g/mt
Gold	95%	1 g/mt
Lead	95%	3 units
Zinc	Not Payable

TC, RC, Costs for Freight
Silver RC	US$0.60-$0.85/oz
Gold RC	US$15.00/oz
Concentrate TC	US$65-125 per mt
Freight	US$179.72 plus CDN$103.81 per mt

Table 19-2 Assumed Zinc Concentrate Sales Terms

Metallic Payables for Each Dry Metric Tonne
Metal	Payables	Subject to Minimum Deduction
Silver	70% after a 3oz deduction
Lead	Not Payable
Zinc	85%	8 units

TC, RC, Costs for Freight
Silver RC	not applicable
Concentrate TC	US$200-250 per mt
Freight	US$179.72 plus CDN$103.81 per mt

19.2.2 Wheaton Precious Metals Agreement

Alexco and Wheaton Precious Metals (formerly Silver Wheaton) entered into an agreement on October 2, 2008 (the “SPA”) whereby 25% of all future silver production from the KHSD properties owned or controlled by Alexco at the time of the consummation of the SPA will be delivered to Wheaton Precious Metals (WPM) in exchange for a payment of US$3.90/oz as well as a payment by WPM of US$50 M for use in the development and construction of the Bellekeno silver mine.

On June 16, 2014, the terms of this agreement were agreed to be altered, however the terms of that amendment were never fulfilled. Effective March 29, 2017, Alexco amended the agreement with WPM, whereby WPM will continue to receive 25% of the LOM payable silver from the KHSD with the production payment to be based on monthly silver head grade and monthly silver price. The actual monthly production payment will fall within a defined grade and pricing range governed by upper and lower numeric criteria (ceiling grade/price and floor grade/price) pursuant to the following formula:

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(Ceiling Grade – Deemed Shipment Head Grade)	X	(Ceiling Price – Deemed Shipment Silver Price)	X	Market Price
(Ceiling Grade – Floor Grade)		(Ceiling Price – Floor Price)

Where:

Floor Grade	=	600 g/t Ag
Floor Price	=	US$13/oz Ag
Ceiling Grade	=	1,400 g/t Ag
Ceiling Price	=	US$25/oz Ag
Deemed Shipment Head Grade	=	Calculated monthly mill silver head grade
Deemed Shipment Silver Price	=	Average monthly silver price
Market Price	=	Spot silver price prior to day of sale

The above noted terms have been used in the economic model.

19.2.3 Other Agreements

As a condition of the commercial agreement with the Government of Canada under which Alexco acquired the property, future production from the Project is subject to a 1.5% NSR royalty, capped at $4.0 million, payable to the Government of Canada. This royalty is a condition of the Subsidiary Agreement. Payment of the royalty does not begin until all pre-production capital has been recouped plus an additional allowance for the Project exploration of approximately $6.2 million.

19.2.4 Other Contracts

Alexco has entered into contracts with the following companies to support the operations of the Project:

· Canadian Lynden Transport is contracted by Alexco to transport lead and zinc concentrates to a smelter in North America and to back haul supplies to the site;

· Yukon Energy provides power under contract to various substations and to the Keno Hill; and

· Superior Propane provides propane under contract to Keno Hill with the largest consumption for mine air heating in the winter.

Alexco has provided Mining Plus with information on all outstanding contracts as well as the discussions of indicative pricing terms with smelters.

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20. Environmental Studies, Permitting, and Social or Community Impact

20.1 Site Context

The Bellekeno, Lucky Queen, Flame & Moth, and Bermingham deposits are all part of the former UKHM claims, which included several historical mines and processing facilities within the Keno Hill Silver District (KHSD). The historical operations in the district commenced in the early 1900s, are spread out over approximately 200 km², and comprises upwards of 50 mine sites, three tailings disposal areas, and dozens of different shafts, adits and open pits. The Bellekeno, Lucky Queen and Bermingham sites have historical mine workings, waste rock storage areas, and mine water discharges, whereas the Flame & Moth site only has minor historical surface mine workings and a waste rock storage area that were reclaimed during the construction of the Keno Hill District Mill.

Alexco and its subsidiary, ERDC, have a commercial agreement with the Government of Canada in which Alexco is responsible for the care, maintenance, and closure of the historical mines, with government and company funding provided to address the historical liabilities. Under the agreement, Alexco is indemnified from the historic environmental liabilities. The commercial agreement also allows Alexco to undertake exploration of the UKHM site and undertake active mining. Under this agreement, Alexco is responsible for environmental assessment, permitting, compliance, and costs associated with its ongoing exploration and new mine development activities. Additionally, if a new mine is brought into production including the use of infrastructure associated with a historic mine, terrestrial liabilities (i.e., waste rock storage areas and roads) and water related liabilities located within a designated “Production Unit” become the responsibility of Alexco. For example, water treatment from the Bellekeno workings (which are intermixed with historical workings) is now Alexco’s responsibility. At this time, Bellekeno is the only area that has been defined as an active Production Unit. However, once commercial operations commence, the Lucky Queen, Flame & Moth and Bermingham mining areas would be classified as Production Units for which Alexco would be responsible for historic terrestrial and water related liabilities that are contained within the new active mining footprint.

The company, along with territorial, federal, and First Nation governments, is also responsible for developing a district-wide reclamation plan that addresses these historic environmental liabilities arising from past mining activities. The reclamation plan has been submitted to Yukon Environmental and Socio-economic Assessment Board (YESAB) for assessment in September 2018. The reclamation plan will be implemented following YESAB assessment and Water Licence is obtained. However, some high priority activities have already been implemented to address health and safety concerns. Currently, active care and maintenance water treatment is carried out at four locations in the Keno Hill Silver District (Galkeno 300, Galkeno 900, Silver King, and Valley Tailings), as required by the ERDC’s Care and Maintenance Water Licence QZ17-076.

20.2 Environmental and Socio-economic Setting

The property is located within the Yukon Plateau (North) Ecoregion and is characterized by rolling upland areas and wide open valleys. Vegetation communities include Northern boreal forests along the lower slopes and valley bottoms, and open scree slopes above treeline. Many of the valley bottoms include open peatlands, fens, and meadows. A variety of wildlife, birds, and fish species are present in the area.

The KHSD falls in the subarctic clime of the Koppen climate classification. The closest current long-term climate record is at the Mayo Airport, which had an average daily temperature of -2.4°C and average annual precipitation of 313.5 mm, with 203.8 mm falling as rain for the 1981 to 2010 period. The wet season occurs in summer/fall with drier winters. Meteorological data have been collected in the KHSD for three locations: since 2007 at the Calumet weather station (as part of the development of the reclamation studies for historic liabilities); since 2011 at the Keno Hill District Mill meteorological station (installed as part of Bellekeno mining operations); and, since 2012 at the Valley Tailings Facility meteorological station.

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The environmental setting of the site is summarized in Table 20-1. As noted above, the KHSD has a long mining history and is a brownfields site. The current environmental conditions reflect the brownfield conditions and recent improvements as a result of Care and Maintenance water treatment upgrades and interim reclamation undertaken by ERDC for the historic liabilities.

Table 20-1 Keno Hill Silver District Environmental Setting Summary

Drainage Region	Stewart River drainage region
Local Catchments	No Cash Creek, Flat Creek, Christal Creek, Lightning Creek
Ecoregion	Yukon Plateau (North)
Study Area Elevation	900-1,350 masl
Vegetation Communities	Northern boreal forests occupy lower slopes and valley bottom; spruce, pine and alder; grasses and sedges, mosses occupy forest floor; heavy moss and lichen growth resident as ground cover; understory of shrub willow; open and forest fringe areas of willow and scrub birch, and various flowering plant species.
Wildlife Species	Moose, grizzly and black bear, caribou, beaver, wolf, lynx, marten, wolverine, western tanager, magnolia warbler, white-throated sparrow, bald eagle, furbearers and small animals. Committee on the Status of Endangered Wildlife in Canada (COSEWIC) listed species include: Common Nighthawk (Threatened); Rusty Blackbird and Olive-Sided Flycatcher (Special Concern).
Fish Species	Bering and Beaufort Sea salmonids and freshwater species, including: Arctic grayling, Arctic char, lake trout, trout perch, lake whitefish, broad whitefish, burbot, inconnu, Arctic Cisco, Northern pike, slimy sculpin

The KHSD is situated in the traditional territory of the First Nation of Na-cho Nyäk Dun (FNNND). The deposits are located within 5 km of Keno City, which has population of 20 as of June 2016, and 50 km from the community of Mayo, which has a population of 499 residents as of June 2017. The area has been shaped by mineral development over the past hundred years. Silver and lead ore deposits were discovered on Keno Hill in the early 1900s and the area has since seen fluctuating levels of ongoing quartz and placer mining and exploration. Today the area supports not only mineral development, but also tourism, recreational and traditional land uses.

The KHSD is supplied with electrical power by Yukon Energy Corporation from two hydroelectric plants near Mayo. The Silver Trail Highway runs through the KHSD, en route to Keno City, and is the primary access route for the site. This road is a public highway that is maintained by Government of Yukon.

20.3 Permits and Regulatory Context

Quartz mining project’s in Yukon requires assessment under Yukon Environmental and Socio-economic Act (YESAA), as well as Quartz Mining Licence under the Quartz Mining Act and Water Use Licence under the Waters Act. The existing approvals, as well as assessment currently under way, for exploration and mine development activities are summarized in Table 20-2. The table also includes existing approvals under ERDC for the historic liabilities care and maintenance, and reclamation plan. A number of environmental and socio-economic studies have been completed for the KHSD since 2006 in support of the mining permit applications, as well as in support of the reclamation planning being completed by ERDC.

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Table 20-2 Relevant Assessment and Regulatory Approvals

Purpose	YESAA Approval	Quartz Mining Act Approval	Water Use Licence
Alexco Keno Hill Mining Permits
Bellekeno Advanced Exploration	Project # 2008-0039 Decision Document	Class 4 Mining Land Use Approval (LQ00476, expires 2028)	Type B Water Use Licence QZ07- 078/Amendment 1 QZ10-060, licence cancelled in 2015 as authorizations moved to amended type A Water Licence in 20152
Bermingham Advanced Exploration	Project#2017-0086 Decision Document	Class 4 Mining Land Use Approval (LQ00476, expires 2028)	Schedule 3 Notice of Water Use/Deposit of a Waste without a Licence
Bellekeno Mine Production	Project # 2009-0030 Decision Document	Quartz Mining Licence (QML-0009, expires 2031)1	Type A Water Use Licence QZ09-092, Amendment 2 expires 20202
Onek and Lucky Queen Mine Production	Project#2011-0315 Decision Document	Quartz Mining Licence (QML-0009, amendment 1, expires 2031)1	Type A Water Use Licence QZ09-092, amendment 2 expires 20202
Flame & Moth Mine Production	Project # 2013-0161 Decision Document	Quartz Mining Licence (QML-0009, Amendment 2, expires 2031)1	Type A Water Use Licence QZ09-092, Amendment 2 expires 20202
Bermingham Mine Production	Project#2017-0176 Decision Document	QML-0009 amendment application submitted to Yukon Government	Application QZ18-044 (renewal of QZ09-092) being reviewed by Yukon Water Board
Elsa Reclamation and Development Company Permits
Care and Maintenance	Project # 2006-0293 and 2012-0141	N/A	Type B Water Use Licence QZ17-076 expires 20222
Reclamation Plan	Project #2011-0187 Decision Document (construction and operation of land treatment facility) Project #2012-0077 Decision Document (building demolition) Project #2018-0169 currently under assessment (Reclamation Plan implementation)	N/A	Submission to Water Board pending YESAB Decision Document for Project #2018-0169

Notes:

1. http://www.emr.gov.yk.ca/mining/pdf/mml_keno_qml-0009_flamemoth_amendment

2. http://www.yukonwaterboard.ca/waterline/

The Bellekeno, Flame & Moth, and Lucky Queen mines have all permits and authorizations in place to commence full scale mine production. The Bermingham deposit has in place a Class 4 Mining Land Use Approval (LQ00476) which authorizes the underground development and advanced exploration drilling completed to date. Before milling and further mining of material from the Bermingham deposit, an amendment to Water Use Licence QZ09-092 and Quartz Mining Licence QML-0009 are required. The existing approvals and amendments submitted are for the mill throughput of 400 tonnes per day (tpd) (based upon a 12-month average) and would require additional amendment to increase mine throughput to 550 tpd. Although licences are also in place for Onek, there are currently no plans to bring this deposit into production.

Under the YESAA process, amendments to the Quartz Mining License and Water Use Licence, require a review by the YESAB. The review for the Bermingham project was completed on June 27, 2018, and YESAB has made a recommendation to the Yukon Government (YG) to allow the Project to proceed, subject to a number of specified terms and conditions (YESAB 2018). A Decision Document was issued by YG on July 27, 2018. The terms and conditions for the Bermingham development, outlined in the Decision Document, include additional water treatment requirements, waste rock management criteria development, water quality monitoring expansion, traffic management, heritage resources assessment, and community consultation to address community concerns regarding air quality and noise related issues.

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The Quartz Mining License amendment application was submitted in fall of 2018 to allow underground development and mining to commence at the Bermingham deposit. Water Use Licence Application QZ18-044 has been submitted to the Yukon Water Board in August 2018 to renew existing Water Use Licence QZ09-92 to include Bermingham deposit and extend the licence term for a further 17 years to 2037 including the currently permitted deposits including Bellekeno, Flame & Moth, Lucky Queen and Onek. The Water Licence renewal process is well advanced and the final permitting phase for Bermingham is to hold a public hearing. The public hearing process is expected in Q2 2019 followed by issuance of the water license renewal in Q3 2019. As noted, development and construction of the Bermingham decline is fully authorized and has been completed prior to issuance of the amended Water Licence.

20.4 Water Management

20.4.1 Mine Water

Detailed studies of the mine water balances, water supply, management and treatment have been completed in support of the Water Licence and most recently reported in Alexco (2019b).

At Bellekeno, the current average daily dewatering rate of 2-4 L/s is expected during operations and is within the licenced rate of up to 10 L/s (864 m³/day). All water collected in the active mining areas is settled in the underground sumps and then pumped out the 625 level portal to the existing water treatment facility at Bellekeno.

Adit drainages from Bellekeno have neutral pH levels but elevated total zinc concentrations. Active mining operations have also resulted in slightly elevated ammonia concentrations. Conventional water treatment is in operation and is effective in treating Bellekeno mine water to remove metals and ammonia prior to discharge. Treatment for metals is likely to continue over the long-term, and these costs are included in the approved Reclamation and Closure Plan (RCP) for the Bellekeno mine. The current approved RCP indicates that the Bellekeno 625 water treatment ponds will be converted to a passive treatment system (bioreactor) for treatment of long-term adit drainage.

The new underground workings at Bermingham will not be connected to the historical underground workings. At present there is approximately 3 L/s of drainage from the advanced exploration Bermingham adit. A comprehensive hydrogeological investigation was completed at the Bermingham deposit to assess the hydrological conditions associated with development of the deposit. The hydrogeological investigation estimates that up to 960 m³/d or 11.1 L/s of groundwater inflow could be expected to be encountered during the operation of the Bermingham mine.

Bermingham adit water chemistry is anticipated to be similar to that observed at the historical Bermingham 200 adit. Management of mine inflows at Bermingham is planned to be via underground sumps and pumps, similar to the water management program at the Bellekeno Mine. Water that is dewatered from the proposed workings will be pumped to surface and directed to a water treatment plant (a clarifier and mix tank) to be installed at the portal.

Water will be treated to meet proposed effluent quality standards before being discharged to ground via a diffuser, similar to the Flame & Moth mine discharge to Christal Creek. If excess water accumulates in either of the reactive rock storage areas (P-AML WRSF or the temporary ore/P-AML pad), the water will be collected by a Vac truck and transported to the water treatment plant as done at the Bellekeno mine.

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The majority of the Flame & Moth mine workings are expected to be below the water table; however, the portal has been developed approximately 20 m above the water table so that there will be no long-term discharge from the site. A review of the existing groundwater data in the mill area and a drilling program were undertaken to characterize the potential mine inflow rates and water quality associated with the Flame & Moth deposit. Hydrogeologic studies and water balance estimates indicate a potential adit discharge during production of 2,912 m³/day (33 L/s), when the mine reaches its deepest levels.

Water encountered in the underground workings is anticipated to be similar to or better than that observed at the Bellekeno 625 adit. Water that is dewatered from the proposed workings will be pumped to surface and directed to the water treatment circuit in the mill. There are two water management ponds at the mill, one for water treatment effluent and the other for process water.

The new workings at Lucky Queen will not intersect the historical workings and will be above the current groundwater table, as understood at present. However, the new workings will connect with the 500 level adit, and, therefore, any water from this new area will be allowed to mix with water from the historical area. The Water Licence requires a groundwater investigation to be completed at Lucky Queen once mining commences at Lucky Queen. This investigation will ensure that there is adequate monitoring in the down gradient environment to assess potential changes in flow or chemistry resulting from the new workings and will consider some sampling and testing of water from within the mine to assess whether the water quality data from the portal is representative of the water quality from the mine as a whole.

20.4.2 Water Treatment

Adit drainages from Bellekeno have neutral pH levels but elevated total zinc concentrations. Active mining operations have also resulted in slightly elevated ammonia concentrations. A lime precipitation conventional water treatment is in place and is effective in treating Bellekeno mine water to remove metals and ammonia prior to discharge. There is an ion exchange plant at Bellekeno that operated for a short period of time for ammonia treatment. More recent practices of using different explosives under wet conditions and managing water in sumps have substantially reduced ammonia loading at all sites within the District.

Historical adit drainages at Lucky Queen have metal concentrations below the licensed discharge criteria, with slightly elevated zinc concentrations that are below effluent quality standards. The water is currently directed to an unlined settling pond for control of total suspended solids (TSS) and is then allowed to infiltrate into the ground. Flows are small (approximately 1 L/s), and there is approximately 3 km of distance before groundwater flows from this area would reach Christal Creek, suggesting that attenuation mechanisms should be sufficient to protect down gradient water quality. No additional water treatment is proposed at Lucky Queen.

The Flame & Moth mine will require continual dewatering, with discharge flows dependent on mine depth. It is estimated that flow rates may reach a maximum of 35 L/s with incoming water quality generally compliant except for some metals (current groundwater wells show some iron and zinc), and with elevated levels of ammonia and total suspended solids from underground mining activities. The treatment facility is located within the Keno Hill District Mill.

The Bermingham mine will require continual dewatering, with discharge flows dependent on mine depth. It is estimated that flow rates may reach a maximum of 1,200 m³/d or 13.9 L/s with incoming water quality generally compliant except for some metals, and with elevated levels of ammonia and total suspended solids from underground mining activities. The new treatment facility would be located adjacent to the Bermingham portal.

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The water treatment at both Flame & Moth and Bermingham will use conventional water treatment processes comprising metals removal as needed with the addition of alkali (lime) for pH adjustment, and a polymer for flocculation and removal of suspended solids. The treatment is done in a conventional clarifier with a mix tank and reagent addition tank. If required, the site is also permitted to treat ammonia via biological oxidation/degradation processes and/or ion exchange.

20.4.3 Mill Water Supply

The majority of the water used in the mill is recycled from one of two water management ponds at the mill. One pond is typically used for water treatment plant effluent (which can treat all the water pumped from the Flame & Moth underground portal adjacent to the mill). The second pond is used to collect the seepage and drainage from around the mill, the mill dewatering circuits, and the DSTF. The two water management ponds at the mill can both be used for water recycle. Both are also permitted to discharge and have appropriate environmental monitoring points.

There is also a groundwater well adjacent to the mill and the Flame & Moth portal that can provide freshwater makeup. The mill requires less than one litre per second of make up for 400 tonne/day production rate.

20.4.4 Receiving Environment

The site is permitted to discharge water from both the mill pond and from the different mines. The Water Licence has varying standards for discharge water chemistry depending on the receiving environment. There is a substantial network of environmental monitoring stations, combined with many years of data and water modelling that shows that operations are not constrained by the net positive water balance, although water must be carefully managed across the site. Details are documented in the Water Licence renewal application (Alexco, 2019b).

20.5 Waste Management

20.5.1 Waste Rock

Studies conducted throughout the KHSD and specifically within each of the mineralized target zones (Bellekeno, Onek 990, Lucky Queen, Flame & Moth, and Bermingham) provide a foundation for correlating and understanding the weathering behavior or ‘geoenvironmental’ tendencies of rock in the KHSD. These studies were used to derive the P-AML geochemical screening criteria for each deposit, estimated proportions of P-AML and N-AML material by rock type for the proposed development activities at each of the deposits, and field criteria for differentiating P-AML and N-AML rock during excavation activities at each deposit.

N-AML waste rock is categorized as rock of non-economic grade, expected to be comprised of over 85% Central Quartzite unit (quartzite typically intercalated with minor amounts of schist), and less than 15% Greenstone. The majority of the waste rock excavated is expected to be N-AML. Waste rock field classified as N-AML will be stored in designated locations at each of the mine sites.

P-AML waste rock is categorized as waste rock and mineralized waste rock of no economic interest with increased likelihood for acidic or metal leaching. Rocks field-classified as P-AML (mainly pyrite rich graphitic schist) will be stored in designated P-AML waste rock storage facilities or permanently stored underground as cemented back fill within excavated stopes. In addition to P-AML wall rocks, some vein material especially along the margins of zoned veins contain mostly gangue minerals such as siderite, pyrite and quartz but do not contain economic amounts of Ag, Zn, or Pb minerals and therefore are of no economic interest.

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Any water that enters a P-AML waste rock storage facility (WRSF) will be collected at the base of the facility by the liner. Depending on the amount of waste rock within the P-AML WRSF, if any ponded water was present in the facility it would be sampled otherwise water can be collected from the vertical culverts. Water quality monitoring stations are included within each P-AML facility. As mentioned above, the P-AML WRSF are lined facilities and no seepage is anticipated. Additionally, monitoring upgradient and downgradient of each P-AML facility is done as part of ongoing site monitoring.

The projected waste rock amounts for each of the mine sites is presented in Table 20-3.

Table 20-3 Waste Rock Permitted Capacity

	Bellekeno		Onek		Lucky Queen		Flame & Moth		Bermingham
Permitted a,b
Backfill (thousand tonnes)		355		N/A		N/A		N/A		N/A
Max N-AML on surface (thousand tonnes)		360				80		125		190
Max P-AML on surface (thousand tonnes)		100		47		44		12		16
Production and Deposition Prior to July 1, 2019 c
Total waste rock produced prior to July 1, 2019 (thousand tonnes)		124		0		0		20		19
Waste Rock Backfilled (thousand tonnes)		42		0		0		0		0
N-AML on surface (thousand tonnes)		80		0		0		20		19
P-AML on surface (thousand tonnes)		2		0		0		0		0
Production and Deposition per PFSd
Total WR to be produced per PFS (thousand tonnes)		17		0		55		381		302
PFS N-AML (thousand tonnes)		17		0		36		328		212
PFS P-AML (thousand tonnes)		0		0		19		53		91
Maximum N-AML on surface at anytime (thousand tonnes)		92		0		33		179		152
Maximum P-AML on surface in temporary Facility at anytime (thousand tonnes)		7		0		8		3		15
Total to be Backfilled (thousand tonnes)		2		0		53		378		208
Left on surface N-AML (thousand tonnes)		80		0		2		3		94
Left on surface P-AML (thousand tonnes)		0		0		0		0		0

20.5.2 Tailings

Alexco uses Dry Stack Tailings technology for management and long-term storage of tailings. Tailings will continue to be deposited in the licensed Dry Stack Tailings Facility (DSTF) located near the mill or used as backfill in the operating mines. The facility is designed and managed to meet both operational and closure requirements, with a minimum long term liability and no long-term water treatment requirement. The experience on the existing DSTF supports that with the following performance indicators:

· The moisture content of the filtered and stacked tailings is lower than design, resulting in lower makeup water requirements and no discharge of mill water;

· The metals content of the pore water is orders of magnitude lower than initially estimated (~ 2 mg/L vs. 20 mg/L);

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· Humidity cell test results for actual Bellekeno tailings deposited in the DSTF demonstrate there is no concern for acid or metals generation;

· Progressive reclamation plans have been resulted in successful recontouring and revegetation of the western face of the DSTF completed;

· No pore water has been measured or observed in the DSTF monitoring well installed within the DSTF;

· Compaction results have met design specifications;

· No surface subsidence has been observed; and

· Ground temperature and slope indicator readings indicate no thawing of underlying permafrost or movement has occurred to date.

Geochemical characterization has been completed on tailings samples and presented as part of the previous and current permitting and water licencing tasks. It has been shown in both laboratory and field work that the tailings from Bellekeno are non-acid generating. Based on geochemical analyses on the metallurgical testing products, the tailings from Flame & Moth, Lucky Queen, and Bermingham are also shown to be non-acid generating and not a source of metal leaching to the environment. Geochemical testing on tailings from Bermingham show that they will be geochemically similar to the already licensed tailings and that no additional measures will be required to control metal leaching.

The DSTF, as shown in Figure 20-1 is lined and any drainage is to the mill pond where any water would be used in the mill or treated to the effluent quality standards prior to discharge. It should be noted that to date no seepage has been observed from the existing DSTF. Given that no seepage has been recorded from the DSTF in over three years of operation, and a piezometer installed in the DSTF has found no free water within the tailings (EBA, 2013), the tailings are unlikely to be a significant source of metal loading to the surrounding environment during operations or during closure. Progressive reclamation has already begun on the DSTF with final slopes being re-contoured and revegetated with a soil cover.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

 

Source: 2018 photo from Alexco files

Figure 20-1 Aerial view of DSTF at Keno Hill

The expected tailings production rate and permitted capacity are summarised in Table 20-4. As of September 2013, 179,811 t of tailings have been placed in the DSTF. The current material balance for the project indicates that a total of 1,250,356 t of tailings will be generated. Of this, 895,426 t will be stored in the DSTF, below the currently permitted DTSF capacity of 907,000 t. Although a relatively low quantity of tailings (<10% of total) has been used as backfill to date as a consequence of using more waste rock for backfill than originally predicted, current projections indicate that approximately 28% or 354,930 t of the total tailings produced can be backfilled into the underground workings.

The DTSF footprint is shown in Figure 18-1. The design capacity of DSTF Phase 1 is 322,00 t with the remaining capacity of 142,189 t. An expanded DSTF (Phase 2) has been permitted and included in the amended QML. The DSTF Phase 2 is located immediately adjacent to the current Phase 1 DSTF and has a design capacity of 585,000 t. It is expected that DSTF will be expanded to Phase 2 in year 2 of the project.

The Phase 2 expansion is approved and included in the amended QML and Water Licence. EBA (pers comm. Justin Pigage) have indicated that the Phase 2 expansion would be constructed using the same foundation system, tailings placement techniques, and geometry (side slopes and bench elevations) as the current DSTF design. All other conditions regarding placement and compaction of the tailings as detailed in the DSTF Operation, Maintenance, and Surveillance Manual (EBA, 2010) are assumed to remain the same as those used in the current facility. The subsurface conditions within the footprint of the expansion are assumed to be generally similar to those under the existing approved footprint but will be investigated as part of the detailed design.

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Table 20-4 Tailings Permitted Capacity

Year	Production (tonnes)		To DSTF (tonnes)		To Backfill (tonnes)
Prior to July 1, 2019		198,896		179,811		19,085
Year 1		19,288		13,806		5,482
Year 2		125,525		84,673		40,852
Year 3		139,163		90,203		48,960
Year 4		167,421		107,481		59,940
Year 5		179,565		119,925		59,640
Year 6		158,207		118,727		39,480
Year 7		132,020		90,563		41,457
Year 8		122,517		85,056		37,461
Year 9		7,753		5,181		2,572
Total:		1,250,356		895,426		354,930
Permitted capacity		-		907,000		Unlimited

20.6 Community and First Nation Relations

Alexco meets regularly with stakeholders and First Nations regarding their ongoing operations as well as the new development plans for Flame & Moth and Bermingham, presenting detailed information about the Project and seeking expression of concerns. Additional consultation facilitated by the regulators is also part of the formal YESAA and licencing processes.

Key socio-economic risks identified for the project include relying on all employee workforce and not contractor for development, including availability of skilled workforce locally and retainment of the workforce.

20.6.1 First Nations Relations

Alexco has signed a Comprehensive Cooperation and Benefits Agreement (CCBA) with the FNNND that recognizes the rights, obligations, and opportunities of the two parties. Individual chapters in the CCBA include human resources (employment and training), contracting, a formal drug and alcohol policy, business contracting and business partnering opportunities, environmental issues, and financial resourcing for the CCBA including legacy funding contributions.

Since environmental matters occupy prime importance with FNNND, the CCBA includes detailed discussion about respecting and protecting the environment, including enhanced opportunities for FNNND to be involved in environmental management of all operations, from mining through to closure and reclamation. The CCBA also describes a “Cooperative Engagement Process” that allows for early engagement of FNNND in the mine permitting process. The CCBA was reviewed and amended in May 2016 and there are no material changes to the CCBA.

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20.6.2 Community Relations

Due to the close proximity of this site to the community of Keno City, noise, dust, and traffic have been high profile issues at this site and are the subject of ongoing discussions with the community. Several specific issues were raised during the YESAA process and have been included in the decision document and Quartz Mining Licence. Mitigation measures that have already been implemented or that are proposed by the company include limiting certain activities (e.g., crusher operations) and types of traffic to the hours of 7 am – 7 pm, constructing a building around the crusher and has installed a sound dampening enclosure around the Flame & Moth ventilation fan.

Dust is closely managed and monitored at the site. The dust monitoring data are compared to the Yukon ambient air quality standards.

Traffic-related issues have resulted in the construction of bypass roads and signage to separate public traffic from mine operations in key areas. A new bypass road has been constructed to haul vein material from Lucky Queen to the mill facility. No additional roads are required for the Flame & Moth mine. Required roads upgrades to access the Bermingham portal location were completed in 2018 mainly widening, surfacing and installing properly sized berms along Calumet Road.

The local community and First Nations have expressed concerns regarding continued access for recreation and tourism in the area, subsistence harvesting and traditional use, sport and commercial hunting, fishing and trapping, mineral development, and preservation of historical resources. Although impacts are expected to be minor, Alexco is working with the various stakeholders to address these concerns. A Heritage Resource Overview Assessment was completed in 2018, in which no areas of overlapping high heritage values were identified for the project area (Ecofor, 2018).

20.7 Closure Plan and Security

An updated Reclamation and Closure Plan was approved by the Yukon Government (YG) in 2016 that encompasses all of the active mining and processing activities in the KHSD (Alexco, 2015). Some key aspects of the closure plan are listed as below:

· Waste rock storage facilities will be regraded and then scarified. Organic materials may be blended into the surface to promote growth of vegetation. P-AML waste rock will mainly be placed as backfill in the mine or sloped to shed water and then covered with a 0.5 m layer of low permeability borrow material.

· Adits and raises will be sealed to prevent access. Bulkheads will be constructed in some areas to enhance water management activities.

· At the Flame & Moth, Bermingham and Bellekeno mines, in situ treatment measures will be implemented to reduce metal loadings if required. The active treatment systems will be replaced with passive bioreactor systems.

· All buildings and equipment that are not needed for the treatment activities will be removed from the portal areas. Any additional debris will be transferred to the Elsa solid waste disposal facility. The portal areas will be re-contoured and scarified to facilitate re-vegetation.

· Linear disturbances (roads) will be subject to standard decommissioning measures such as removal of culverts, scarification, re-vegetation, and removal of safety berms.

· The Flat Creek camp will be downsized as needed to support ongoing care and maintenance activities in the KHSD.

· Buildings and other infrastructure in the mill area will be dismantled and sold for salvage or demolished on site and disposed of in an approved landfill. Concrete footings will be covered with overburden, scarified, and re-vegetated.

· The DSTF will continue to be progressively reclaimed over the life of the facility with recontouring the side slopes to the final design slope angle (3:1) and placing of cover. If monitoring indicates that it is necessary, meteoric water will be directed to a passive biological treatment system for polishing prior to discharge.

· Various monitoring activities will continue until the performance of the closure measures has been verified.

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Alexco will have a site presence for many years while reclamation of the historical liabilities occurs. Therefore, monitoring of the Bellekeno, Lucky Queen, Flame & Moth, and Bermingham mine areas can be integrated with KHSD monitoring programs over the long term. This is expected to improve the efficiency of these ongoing water treatment and monitoring activities.

The YG requires financial security in the form of a letter of credit to cover potential liabilities associated with the cost of reclamation and closure. As part of QML-0009, the YG currently holds $6,304,508 in security for the Bellekeno, Lucky Queen, Flame & Moth, and Onek mine operations, the mill area, and the DSTF. This amount was set in 2016, following a third-party review of Alexco’s costs. As part of Mining Land Use Approval LQ00476, YG currently holds $194,192 in security for Bermingham Advanced Exploration Project, for a total of $6,498,700 of security held by YG. Alexco has estimated that the costs for reclaiming this area would be on the order of $6,566,730. Additional security may be required for Bermingham following amendment of the QML and renewal of Water Licence. This would be posted as change to the value of the current surety.

Additional closure costs may be incurred if the effectiveness of the current closure concepts cannot be demonstrated. For example, active water treatment may be required at Bellekeno if passive bioreactors are not capable of meeting the discharge criteria. A full-scale pilot bioreactor has operated successfully at Galkeno 900 to support the long-term water management and treatment assumptions in the closure plan. The ongoing monitoring programs will be critical for ensuring that there is sufficient information available to support final closure plans for these production areas. A pilot scale in situ treatment process has been successfully demonstrated at the Silver King mine.

The reclamation and closure plan must be updated every two years to incorporate any changes to site conditions.

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21. Capital and Operating Costs

This section describes:

· Capital cost estimates, also referred to as Capital Expenditure or Capex estimates; and

· Operating cost estimates, also referred to as Operating Expenditure or Opex estimates.

The forecasted Project capital and operating cost is estimated to an overall accuracy of +/-25% accuracy which is appropriate for a Preliminary Feasibility Study (PFS) in accordance with the Toronto Stock Exchange and Ontario Securities Commission’s interpretation of NI 43-101 guideline for a prefeasibility study.

The cost estimate is developed by area and includes the restart of the Bellekeno mine, development of the Flame & Moth deposit, development of the Bermingham deposit, and the re-opening of the Lucky Queen mine plus the necessary mill upgrades and site wide infrastructure for the restart of operations at Keno Hill Silver Project.

All costs are in Canadian dollars (CDN$) unless otherwise specified.

21.1 Capital & Sustaining Capital Cost Estimate

21.1.1 Capital Cost Assumptions and Basis of Estimate

The capital cost estimates were generated by Alexco and reviewed in detail and modified by the respective QPs from Mining Plus for all components except the process plant, and by Tetra Tech (process plant only). The QPs considers the accuracy of the components of the capital cost estimate to be at a PFS study level. Alexco is also referred to as “Owner” in the following text.

The mining capital cost estimate is based on the following information:

· Equipment costs based on vendor quotations and Owner cost sheets and estimates in accordance with equipment specifications and/or datasheets developed for the PFS;

· Quantity takes-offs from underground development and production designs with a monthly mining schedule;

· Quantity take-offs for materials provided by engineering drawings from source projects;

· Labour rates provided and updated based on current market conditions by local and regional rates assuming owner perform and current labour rates in effect at Keno Hill; and,

· Productivities for mobile equipment, mining processes, and labour based on first principles cost estimates, and correlation with similar projects in the region, elsewhere in North America and performance estimates provided by experienced mining contractors who are familiar with the location and conditions.

The Keno Hill District Mill restart cost estimation is based on the following information:

· Schedule and costing for the mill upgrades and modifications based on contractor estimates and a detailed work plan to restart the mill;

· Equipment prices for materials based on vendor quotations, current market conditions, and historical data from Alexco;

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· When vendor quotations were received in US$, an exchange rate of between 0.76 and 0.78 US$ per CDN$ was used to convert the currency (dependent on the date the quote was received);

· Labour rates provided by local and regional construction contractors and current labour rates in effect at the Keno Hill Silver Project;

· Productivity of installed equipment based on historical operational performance and data and supplier specifications for new equipment installation; and,

· DSTF expansion cost based upon the previous cost per area, engineered design, and the tonnage capacity per unit area of DSTF constructed.

The underground mining equipment fleet required for mine development and operations in the capital plan will be purchased as shown in Section 16, Table 16-16 and subsequently moved from mine to mine as needed as part of the production schedule.

Exclusions from the initial capital cost estimate include, but are not limited to, the following:

· Study costs to advance the project engineering;

· Fluctuations in exchange rates;

· All sunk costs prior to the end of June 2019;

· Project financing and interest charges; and

· Escalation during construction and operation.

A contingency of 12.5% has been included in the capital cost estimate to account for uncertain elements of cost within the Project scope. The contingency was set to capture the “known-unknown” costs associated with anticipated variances in quantities due to uncertainty of conditions or of assumptions made in the design basis.

21.1.2 Capital Cost Summary

The initial (pre-production) capital cost of $23.2 million comprises two components: $17.9 million of mine development, PP&E (property, plant and equipment), mill upgrades and site wide infrastructure modifications costs prior to mill recommissioning, plus an additional $5.3 million of net working capital to reach positive cash flow. This initial capital covers the first five month period of mine development and mill ramp up. The initial capital costs are summarized in Table 21-1.

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File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Table 21-1 Initial Capital Costs

Initial Capital Costs ($ M)
Mine Development/PP&E	$	11.8
Mill Refurbishment	$	2.8
Site Infrastructure/PP&E	$	1.4
Owners Costs, Contingency	$	1.9
Total Pre-Production Capital	$	17.9
Working Capital Build Up	$	5.3
Total Initial Capital Cost	$	23.2

The LOM sustaining capital cost, following the initial capital expenditure, is $76.5 million. This includes ongoing mine development and PP&E, mill modifications to reach 550 tpd in Year 3, and project contingency. A summary of the sustaining capital cost estimate is shown in Table 21-2.

Table 21-2 Sustaining Capital Cost Summary

		Total		Year 1		Year 2		Year 3		Year 4		Year 5		Yr 6-9
Mine Operation	$ M	$	67.7	$	2.7	$	25.7	$	13.9	$	10.0	$	3.3	$	12.1
District Mill	$ M	$	1.3		-	$	0.2	$	1.0		-		-		-
Project Contingency	$ M	$	7.5	$	0.3	$	2.9	$	1.4	$	1.0	$	0.3	$	1.5
Total Sustaining Capital Cost	$ M	$	76.5	$	3.0	$	28.8	$	16.4	$	11.0	$	3.7	$	13.6

The details of the components of this capital cost summary are discussed in the following sections.

21.1.3 Mine Capital Cost Estimate

The details of the estimated mining capital cost (inclusive of initial capital cost) for each mine are shown in Table 21-3 Indirect costs that are shared amongst multiple mines such as surface equipment and technical services are included in the Mine General account.

Table 21-3. The surface infrastructure costs are also included in the mine capital cost estimate; additional capital cost for camp and office expansion is compiled in G&A cost. The additional water treatment required at Bermingham is included in the Bermingham mine capital costs. Indirect costs that are shared amongst multiple mines such as surface equipment and technical services are included in the Mine General account.

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Table 21-3 Mine Capital Cost Summary (Inclusive of Initial Capital Cost)

($ ‘000)		Total		Year 1		Year 2		Year 3		Year 4		Year 5		Yrs 6-9
	Equipment Fleet Capital	$	45	$	45		-		-		-		-		-
BELLEKENO	Surface Facilities	$	50	$	50		-		-		-		-		-
	PP&E	$	75	$	75		-		-		-		-		-
	Capitalized Operating Cost	$	5,697	$	5,697		-		-		-		-		-
	Lateral and Vertical Development	$	7,179		-		-		-		-		-	$	7,179
LUCKY QUEEN	Equipment Lease Capitalized	$	2,853		-		-		-		-		-	$	2,853
	PP&E	$	1,666		-		-		-		-		-	$	1,666
	Capitalized Operating Cost		-		-		-		-		-		-		-
	Lateral and Vertical Development	$	28,962	$	4,388	$	8,826	$	7,746	$	6,474	$	1,304	$	224
FLAME & MOTH	Equipment Fleet Capital	$	179	$	179		-		-		-		-		-
	PP&E	$	1,978	$	876	$	877	$	75	$	75	$	75		-
	Capitalized Operating Cost	$	2,507	$	2,507		-		-		-		-		-
	Lateral and Vertical Development	$	24,749	$	6,461	$	12,683	$	2,644	$	1,414	$	1,414	$	133
	Equipment Fleet Capital	$	23	$	23		-		-		-		-		-
BERMINGHAM	Surface Facilities	$	1,058	$	1,058		-		-		-		-		-
	PP&E	$	2,285	$	1,876	$	409		-		-		-		-
	Capitalized Operating Cost	$	1,569	$	1,569		-		-		-		-		-
	Mine General	$	11,502	$	2,565	$	2,887	$	3,442	$	2,053	$	554		-
	Total	$	92,378	$	27,370	$	25,683	$	13,907	$	10,016	$	3,347	$	12,056

The mining fleet is detailed in Section 16, showing the equipment currently owned by Alexco, as well as additional equipment required for this mine plan. The basis of estimate for this mine plan is that the additional equipment will be leased. The total capital requirement for the additional equipment fleet is $14.4 million. The details of the mining capital costs (inclusive of initial capital cost) are shown graphically for each mine operation in Figure 21-1 The capital costs for each mine are summarized in Figure 21-2.

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Source: Mining Plus 2019

Figure 21-1 Mine Capital Cost Breakdown by Mine Operations

 

Source: Mining Plus 2019

Figure 21-2 LOM Capital Cost Summary by Mine

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21.1.4 Mill Capital Cost Estimate

The capital cost for the mill modifications is $2.8M. This capital cost is allocated to mill upgrades to increase the grinding and tailings capacity, and other improvements and modifications prior to reaching commercial production. The description and basis for the modifications to the existing district mill are described in Section 17. The primary features included in the capital cost estimate are summarized in Table 21-4 and include the following:

· Mill refurbishment;

· Expansion of grinding circuit;

· Expansion of tailings filtration circuit;

· Expansion of slurry handling system to achieve 550 tpd capacity;

· Installation of supporting infrastructure including: second mill dry, mill lineup trailer, and mill wash car; and

· These cost estimates are obtained from consultation with an experienced contractor, Alexco’s experience with construction in the Keno Hill district, and vendor quotations.

Table 21-4 Mill Equipment, Engineering and Construction Costs

Capital Improvements	Unit		Preproduction Capital		Sustaining Capital		Total
ROM Ore Crushing Circuit		$ ’000	$	422			$	422
Fine Ore Storage and Reclaim Systems		$ ’000	$	95			$	95
Primary Grinding Circuit		$ ’000	$	646			$	646
Classification		$ ’000	$	25			$	25
Lead Flotation Circuit		$ ’000	$	187			$	187
Zinc Flotation Circuit		$ ’000	$	187			$	187
Tailings Dewatering and Handling		$ ’000	$	460			$	460
Reagent Handling and Storage		$ ’000	$	104			$	104
Mill Supporting Infrastructure		$ ’000	$	164			$	164
Engineering Project Management		$ ’000	$	180			$	180
DSTF Expansion		$ ’000			$	223	$	223
Slurry Handling for 550 TPD Mill Expansion		$ ’000			$	1,050	$	1,050
Total Mill Equipment Capital		$ ’000	$	2,470	$	1,273	$	3,743

21.2 Operating Cost Estimate

21.2.1 Operating Cost Assumptions and Basis of Estimate

Operating costs have been estimated in detail by Alexco and the information reviewed and modified as required by the QP.

The operating cost estimate is based on following information:

· Labour rates provided and updated based on current market conditions by local and regional rates assuming owner perform and current labour rates in effect at Keno Hill;

· Operating costs apply once production of concentrate has commenced and positive cash flow for the project is achieved. Prior to this, the operating costs are included under initial capital; and,

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· Productivities for mobile equipment, mining processes and labour based on first principles cost estimates, and correlation with similar projects in the region, elsewhere in North America and performance estimates provided by experienced mining contractors who are familiar with the location and conditions.

All mill related infrastructure with the exception of the crusher will operate 24 hours per day, 365 days per year, less planned maintenance downtime of 8%. The crusher will operate 10 – 12 hours per day during the day shift only. The mine will operate two 11.5 hour shifts per day. Allowing for “non-productive” work time such as shift change, equipment inspection and reporting, this results in an effective production time per shift in the mine of 8.4 hours or 73%.

Wages and salaries were built up from base salaries or hourly rates depending on the role, and where appropriate by bonus. A calculated burden averaging 28% was applied to the base hourly labour rates. Burden includes Canada Pension Plan and Employment Insurance contributions, Worker’s Compensation, retirement plan (RRSP) contributions, group benefits, and other minor items. The workforce varies throughout the years, depending on the production and development schedules. The peak workforce is 222 people. comprising 12 site management roles, 12 mine general roles, 38 mill roles, and 21 in site services, environment, and health & safety. The majority of employees will work a 2 week on, 2 week off rotating schedule.

Electrical power is supplied by Yukon Electric Corporation. Operating costs are based on existing costs at site, long-term contracts, and the calculated power requirements for the Project presented herein. The overall average monthly power cost ranges from $0.12/kWh to $0.15/kWh. Fuel used on site includes diesel, propane, gasoline and heating oil. The diesel for underground equipment is the most significant operating cost for fuel. The study uses $1.07/L for diesel.

The category of “G&A” or “General and Administration” includes the areas of Financial Administration, Site Environmental, Health & Safety, Camp Operations, Site Services, and Mine General. G&A costs are estimated based on various fixed monthly costs as well as variable costs such as camp, equipment operations and employee travel.

Contingency has not been applied to operating cost estimates.

21.2.2 Operating Cost Summary

The total operating costs are $362 million over the life of mine (LOM). This is net of capitalized underground development and mill upgrades. Mine, Mill and Site G&A costs (excluding Corporate G&A), are as summarized in Table 21-5 and discussed in more detail in the following sections.

Table 21-5 Life of Mine Direct Operating Cost Summary¹

Area	LOM Site Opex ($M)		Unit Cost ($/tonne milled)
Mine	$	225.9	$	194
Mill	$	69.5	$	60
G&A	$	66.9	$	58
LOM Total Site	$	362.3	$	312

¹ Summary excludes the capitalized operating cost from Jul 2019 to Nov 2019

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A more detailed breakdown of the operating costs per area is shown in Table 21-6. This does not include the tonnage or costs for the initial capital period. Mine general cost is distributed in accordance to the monthly mining tonnage distribution.

Table 21-6 Project Operating Cost by Area (not including initial capital production or costs)

		Total		Year 1		Year 2		Year 3		Year 4		Year 5		Yr6-9
	Bellekeno		4		4		-		-		-		-		-
	Lucky Queen		71		-		-		-		-		-		71
Mined Tonnage 2 ('000 t)	Flame & Moth		698		6		66		73		110		110		334
	Bermingham		358		2		71		90		90		89		17
	Total		1,131		12		136		163		200		199		421
	Bellekeno		844		844		-		-		-		-		-
	Lucky Queen		27,816		-		-		-		-		-		27,816
Mine Operating Costs ($ '000)	Flame & Moth		107,397		1,283		14,912		15,246		16,819		14,231		44,907
	Bermingham		63,352		783		14,010		16,187		16,159		13,486		2,727
	Mine General		26,481		309		3,711		3,711		3,711		3,711		11,329
	Bellekeno		236		236		-		-		-		-		-
	Lucky Queen		393		-		-		-		-		-		393
Mine Unit Cost ($/t mined)	Flame & Moth		154		210		227		208		153		130		135
	Bermingham		177		409		198		180		180		152		164
	Mine General		23		27		27		23		19		19		27
Processed Tonnage2	('000 t)		1,162		12		142		155		188		198		469
Mill Cost	($'000)		69,524		818		9,490		9,528		10,047		10,215		29,426
Site G&A Cost	($'000)		66,892		801		9,276		9,354		9,487		9,388		28,586
Total Cost	($'000)		362,308		4,838		51,398		54,026		56,223		51,031		144,791
Mill Unit Cost	($/t milled)		60		68		67		62		54		52		63
Site G&A Unit Cost	($/t milled)		58		67		65		61		51		47		61
Total Unit Cost	($/t milled)		312		403		362		350		300		258		309

² Exclude tonnage during pre-production period

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21.2.3 Mining Operating Cost Estimate

The mine operating cost estimate includes equipment operation and maintenance, labour and supervision, new materials, explosives, ground support, electrical power, ventilation, underground air heating, fuel, mine water pumping and treatment, parts, and supplies within the following major categories:

· Lateral and vertical development, including ground control;

· Underground services development;

· Production drilling, blasting, load/haul; and

· Backfilling.

The main operating cost is labour, representing approximately 40% of the total mine operating cost. Direct mining production costs represents about 17% of the total cost.

Operating costs for the mine were developed from first principles and calibrated with previous operating experience. The following two tables (Table 21-7 and Table 21-8) show more details of the costs by task and component, for Flame & Moth and Bermingham, which represent about 90% of the mined production.

Table 21-7 Flame and Moth Mine Operating Cost by Activity

Metric	LOM Total Cost ($M)		Unit Cost ($/tonne mined)
Mine Labour	$	34.6	$	50
Maintenance Labour	$	15.1	$	22
Mining Direct	$	19.1	$	27
Ore Access	$	13.3	$	19
Backfill & Waste	$	4.2	$	6
Materials & Supplies	$	1.5	$	2
Contractor & Services	$	1.5	$	2
Communication & Travel	$	3.1	$	4
Fuel	$	7.6	$	11
Power	$	7.4	$	11
Total	$	107.4	$	154

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Table 21-8 Bermingham Mine Operating Cost by Activity

Metric	LOM Total Cost ($M)		Unit Cost ($/tonne mined )
Mine Labour	$	16.2	$	45
Maintenance Labour	$	10.3	$	29
Mining Direct	$	13.2	$	37
Ore Access	$	9.7	$	27
Backfill & Waste	$	2.7	$	8
Materials & Supplies	$	1.0	$	3
Contractor & Services	$	0.9	$	3
Communication & Travel	$	1.8	$	5
Fuel	$	4.2	$	12
Power	$	3.2	$	9
Total	$	63.2	$	176

21.2.4 Mill Operating Cost Estimate

The mill operating costs were developed by Alexco and reviewed and modified by the QP for the process plant (Tetra Tech). The quantities and cost data that form the basis for the mill operating costs include the following sources:

· Metallurgical testwork;

· Supplier quotations; and

· Previous experience with operating the existing mill.

The annual mill operating cost is estimated at $9.1 million per year or $60/tonne of ore. The process operating costs commence at the ore stockpile located beside the primary crusher building. A breakdown of the operating costs is summarized in Table 21-9.

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Table 21-9 Summary of Mill Operating Costs

Area	Total Cost ($M)		Average Annual Operating Cost ($M)		Cost per Tonne Milled3 ($ / tonne)
Crushing	$	1.7	$	0.22	$	1.45
Grinding	$	1.8	$	0.23	$	1.55
Flotation	$	6.4	$	0.83	$	5.49
Dewatering	$	1.8	$	0.23	$	1.54
DSTF	$	1.6	$	0.21	$	1.38
Assay Lab	$	0.6	$	0.07	$	0.48
Labour4	$	33.0	$	4.31	$	28.41
Power	$	8.2	$	1.08	$	7.09
Fuel	$	3.8	$	0.50	$	3.30
Equipment	$	3.0	$	0.39	$	2.59
Materials/Supplies/Other5	$	7.6	$	0.99	$	6.53
Total	$	69.5	$	9.07	$	59.81

The reagent costs are shown in Table 21-10. Metallurgical test work was used to determine the consumption rates and were benchmarked against generally accepted practice within the industry. The reagent vendor quotes used in this cost estimate were in US$, a 0.75 US$ per CDN$ exchange rate was used to convert the currency.

Table 21-10 Reagent Costs (based on 400 tonnes per day operation)

Consumables	Consumption (g/tonne milled)		Unit Cost ($/kg reagent)		Annual Consumption (kg)		Cost/Year ($ ‘000’s)		Source
Flocculant		45		4.8		6,570	$	32	Testing/Vendor Quote
Copper Sulfate		350		3.7		51,100	$	191	Testing/Vendor Quote
Zinc Sulfate		1000		1.7		146,000	$	253	Testing/Vendor Quote
MIBC		60		4.0		8,760	$	35	Testing/Vendor Quote
3418A		55		15.3		8,030	$	123	Testing/Vendor Quote
SIPX (Xanthate)		60		2.4		8,760	$	21	Testing/Vendor Quote
Other							$	23	Alexco
Total Annual Reagent Cost		$678
Reagent Unit Cost		$4.5/tonne

³ Based on the LOM average mill throughput

⁴ Only includes Alexco labour and travel costs

⁵ Includes communication, insurance, general materials / supplies not decided to crushing, grinding, flotation and dewatering circuits, and professional consultant and contractor labour and travel costs

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Non-reagent consumables include, but are not limited to: liners, drive belts, screens, pumps, cyclones, grinding media, filter cloth, electrical supplies, pipes, hoses, fittings, valves, motors, lubricants, fuel, lumber and steel. The grinding media assumed forged balls and consumption was based on the previous mill operation that was increased to account for the higher throughput in the current mine plan.

The mill operating costs include the on-site assay lab located in the mill for regular operational samples. An allowance has been included for external assays on mill concentrates.

21.3 All-In Sustaining Cost Estimate

An estimate of all-in sustaining cost (AISC) per contained silver ounce on a by-product basis was calculated and is summarized below. AISC are non-GAAP financial measures that does not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Alexco has adopted the practice of calculating this performance measure as the net cost of producing an ounce of silver (primary payable metal) after deducting revenues gained from incidental by-product production. This performance measurement has been commonly used in the mining industry as a relatively simple way of comparing the net production costs of the primary metal for a specific period against the prevailing market price of that metal. AISC are based on total silver ounces sold and calculated on a per ounce basis net of credits for realized revenues from all metals other than silver.

Corporate G&A after mine closure is not considered in the project economic evaluation. All costs below are calculated in United States Dollars (US$). Metal price and foreign exchange assumptions are presented in Section 22.1. The AISC is US$12.36/contained oz Ag. Table 21-11 shows the cost build-up of the AISC.

Table 21-11 Cost Component Summary with Study Metal Prices

	Unit Cost			Total			Cost Summary	Unit Cost		Total
Cost Components	(US$ / Ag oz)			(US$M)			Components	(US$/ Ag oz)		(US$M)
Direct Mining Costs	$	6.00		$	172
Direct Milling Costs	$	1.85		$	53		Operating Costs	$	7.85	$	225
Transportation	$	1.16		$	33
TC/RC	$	1.37		$	39		Cash Costs	$	10.37	$	297
By-Product Credit	$	(5.18	)	$	(148	)	Net Cash Costs	$	5.20	$	149
WPM Royalty Cost	$	2.39		$	68
Sub Agreement Royalty	$	0.11		$	3		Adjusted Cash Costs	$	7.69	$	220
Site G&A	$	1.78		$	51
Corp. G&A	$	0.87		$	25
Sustaining Capital	$	2.02		$	58		All In Sustaining Costs	$	12.36	$	354

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For the purpose of evaluating AISC at current (March 22, 2019) metal prices and foreign exchange rates, the all-in-sustaining cost (AISC) per contained silver ounce was calculated. The prices used for this assessment were:

· Silver Price US$15.46/oz

· Gold Price US$1311.30/oz

· Lead Price US$0.9187/lb

· Zinc Price US$1.2961/lb

· US$/CAD$ Exchange rate 0.75

The AISC calculated using these prices resulted in US$11.30/contained oz Ag. Table 21-12 shows the cost build-up of the AISC using the current metal prices.

Table 21-12 Cost Component Summary with Current (March 22, 2019) Metal Prices

	Unit Cost			Total			Cost Summary	Unit Cost		Total
Cost Components	(US$ / Ag oz)			(US$M)			Components	(US$/ Ag oz)		(US$M)
Direct Mining Costs	$	5.91		$	169
Direct Milling Costs	$	1.82		$	52		Operating Costs	$	7.73	$	222
Transportation	$	1.15		$	33
TC/RC	$	1.37		$	39		Cash Costs	$	10.25	$	294
By-Product Credit	$	(5.17	)	$	(148	)	Net Cash Costs	$	5.09	$	146
WPM Royalty Cost	$	1.50		$	43
Sub Agreement Royalty	$	0.10		$	3		Adjusted Cash Costs	$	6.69	$	192
Site G&A	$	1.75		$	50
Corp. G&A	$	0.85		$	24
Sustaining Capital	$	2.00		$	57		All In Sustaining Costs	$	11.30	$	324

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22. ECONOMIC ANALYSIS

The results of the economic analysis discussed in this section represent forward-looking information as defined under Canadian securities law. Actual results may differ materially from those expressed or implied by forward-looking information. The reader should refer to Section 3 of this Report for more information regarding forward looking statements, including material assumptions (in addition to those discussed in this section and elsewhere in this Report) and risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in this section and elsewhere in this Technical Report.

22.1 Methodology Used

The financial analysis was carried out using a discounted cash flow (“DCF”) model. The net cashflow for each period is discounted at an annual rate of 5% (unless stated otherwise) to a present value and are then added to yield a net present value (“NPV").

The DCF model for the Project assumes that all figures are expressed in constant dollars or real terms. No inflation or real cost escalation was assumed. All monetary figures are expressed in Canadian dollars unless otherwise specified.

The QP has reviewed the LOM cost estimates and DCF model in sufficient detail to be satisfied that economic extraction of these Probable Mineral Reserves is justified.

Cost estimates are presented in Canadian currency unless otherwise noted and, where applicable, US foreign exchange rates were applied based on Q1-2019 price projections in U.S. currency.

The economic parameters are based on a metal price forecast provided by Alexco as per analyst consensus and carried forward in the financial evaluation. Price summary is shown in Figure 22-1 below:

 

Source: Mining Plus 2019

Figure 22-1 Metal Price Projection - Mining Plus, 2019

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An exchange rate of $0.75 US$/CDN$ in first six months and increasing to $0.77 US$/CDN$ long-term was assumed to convert US$ market price projections and particular components of the initial capital cost estimates into CDN$. No provision was made for the effects of inflation. Current Canadian tax regulations were applied within the financial model by Alexco Management with support from Alexco’s tax advisors.

22.2 Economic Criteria

The project value is determined on a pre-tax and after-tax basis at a 5% discount rate with the following economic criteria:

• Mine life of eight years (approx.) over nine calendar years;

• Processing approximately 430 tonnes per day of mill feed (157,000 tonnes per year) for a total of 1.18 M tonnes LOM;

• Mill recovery based on operations experience and as indicated by test work, averaging 95.6% silver, 82.0% zinc, 94.1% lead, and 49% gold recovered in two concentrates;

• LOM production plan as summarized in Tables 16-11, 16-12, 16-13, and 16-14;

• Total Probable Mineral Reserves is shown in Table 15-1;

• Lead – silver concentrate and zinc concentrate shipped to smelter for treatment;

• 25% of silver is sold to Wheaton Precious Metals under a streaming agreement at a price ranging from US$5.59/oz to US$11.79/oz silver;

• NSR includes shipping, treatment, and refining costs;

• There is a 1.5% NSR (to a maximum of $4 million) to the Government of Canada.;

• Revenue is recognized at the time of production;

• Pre-production period: 3 months, following mill start up a further 2 months of production will be required until the operation is cash-flow positive; and

• Average operating cost after the initial start up period is $312 per tonne milled.

22.2.1 Wheaton Precious Metals Streaming Agreement

As per the financing agreement with Wheaton Precious Metals, 25% of the payable silver ounces are scheduled to be sold to Wheaton Precious Metals at a modified silver price. Refer to Section 19.2.2 for details on this agreement.

22.2.2 Operating Costs

The LOM operating costs are shown in Table 22-1. The mining cost per tonne of ore milled is $194 per tonne and processing costs are estimated at $60 per tonne of ore milled. General and administration costs are estimated at $58 per tonne of ore milled for a total operating cost of $312 per tonne of ore.

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Table 22-1 Summary of LOM Operating Costs (unit costs averaged over LOM)

Operating Cost	LOM Total Cost ($ M)		LOM $/Tonne Milled		LOM $/oz  Ag
Mining	$	225.9	$	194	$	8.32
Processing	$	69.5	$	60	$	2.56
General and Administration	$	66.9	$	58	$	2.46

22.2.3 Treatment, Refining and Transport

The total treatment and refining costs equate to an average of $44 per tonne of ore milled for the life of mine. Transport costs equate to an average of $38 per tonne of ore milled for the life of mine. These are summarized in Table 22-2.

Table 22-2 Treatment, Refining and Transport Cost Statistics (unit costs averaged over mine life)

Cost	LOM Total Cost ($ M)		LOM $/tonne Milled		LOM $/oz Ag
Treatment and Refinement	$	51.5	$	44	$	1.90
Transport	$	43.7	$	38	$	1.61

22.2.4 Capital Costs

Total LOM capital requirements have been estimated as $99.7 million and are described in detail in Section 21. The initial capital cost is estimated to be $23.2 million. The subsequent sustaining capital over the LOM is $76.5 million.

This financial analysis does not include any sunk costs for exploration and project advancement prior to the completion of this study. Table 22-3 provides a LOM summary of metal prices, foreign exchange rates, treatment, refining and freight (transport) economic inputs considered in this financial evaluation.

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Table 22-3 Inputs to the Economic Model

	Units	Avg.		Year 1	Year 2	Year 3	Year 4		Year 5		Year 6		Year 7		Year 8		Year 9
Metal Prices
Ag	US$/oz Ag		17.93	15.75	17.00	17.50	18.25
Ag (WPM)	US$/oz Ag		7.89	11.27	7.51	6.61		7.90		7.49		8.38		7.82		9.07		9.29
Au	US$/oz Au		1,324	1,275	1,315	1,325
Pb	US$/lb Pb		1.00	0.96	1.00
Zn	US$/lb Zn		1.22	1.25		1.22
Exchange Rate	US$:C$		0.76	0.75	0.76					0.77
Treatment, Refining and Freight Charge
TC - Pb	US$/dmt		104	65				125
TC - Zn	US$/dmt		207	250		200
RC - Ag in Pb	US$/oz		0.75	0.60				0.75		0.85
RC - Au in Pb	US$/oz		15.00	15.00
Freight	US$/wmt		258.7	257.6	258.1			258.6		259.1

22.2.5 Closure Cost and Salvage Value

The YG requires financial security in the form of a letter of credit to cover potential liabilities associated with the cost of reclamation and closure. As part of QML-0009, the YG currently holds $6,304,508 in security for the Bellekeno, Lucky Queen, Flame & Moth, and Onek mine operations, the mill area, and the DSTF. This amount was set in 2016, following a third-party review of Alexco’s costs. As part of Mining Land Use Approval LQ-00476 YG currently holds $194,192 in security for Bermingham Advanced Exploration Project, for a total of $6,498,700 of security held by YG. Alexco has posted security for the amount required by YG for reclaiming this area; estimated by the YG to be on the order of $6,566,730. Additional security may be required for Bermingham following amendment of the quartz and water use licence. This would be posted as a change to the value of the current surety bond.

22.2.6 Taxation and Royalties

There is a NSR royalty of 1.5% payable to the Government of Canada. The NSR is capped at $4 million and commences when net revenue exceeds $3.06 million.

Taxes include Quartz Mining Tax, Federal, and Yukon Taxes. It is assumed that the four operating deposits will be treated as ‘one mine’ for income tax and royalty tax purposes.

The QP has relied upon Alexco and its tax advisors for the calculation of the taxes in the economic model.

22.3 Cash Flow Analysis

Considering the Project on a stand-alone basis, the undiscounted after-tax cash flow totals $129.3 million over the mine life. Simple payback occurs approximately two years from start of production, approximately 26 months after the end of the initial capital period).

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Figure 22-2 provides a summary of LOM cumulative after tax cashflow.

 

Source: Mining Plus 2019

Figure 22-2 Cumulative Cash Flow After Tax ($ ‘000) - Mining Plus, 2019

Figure 22-3 provides a breakdown of revenue distribution by metal over project LOM.

 

Source: Mining Plus 2019

Figure 22-3 Revenue Distribution of Metals - Mining Plus, 2019

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22.4 Financial Results

The after-tax Net Present Value (NPV) at a 5% discount rate is $101.2 million, and the after-tax Internal Rate of Return (IRR) is 74%. The pre-tax and after-tax results are summarized in Table 22-4. LOM production is summarized in Table 22-5.

Table 22-4 Valuation Metrics

5% Discount Rate	Unit		Pre-Tax			After-Tax
Net Present Value (NPV5)		$M	$	136.2		$	101.2
IRR		%		83.5	%		74.0	%
Payback Period		Years		2.1			2.2

Table 22-5 LOM Production Summary

Item	Unit	LOM Total		Annual LOM Average
Life of Mine	years		8
Production
Ore Milled	'000 tonnes		1,177		154
Waste Mined	'000 tonnes		755		98
Silver Grade	g/t		805
Gold Grade	g/t		0.34
Lead Grade	%		2.98
Zinc Grade	%		4.13
Contained Metal in Mine Production
Silver	koz		30,454		3,972
Gold	koz		13		2
Lead	Mlbs		77		10
Zinc	Mlbs		107		14
Process Recoveries
Silver	%		95.6
Gold	%		49.0
Lead	%		95.2
Zinc	%		82.0
Metal Recovered
Silver	koz		29,109		3,797
Gold	koz		6.4		0.8
Lead	Mlbs		73.6		9.6
Zinc	Mlbs		87.9		11.5

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An after-tax NPV₅ projection model (base case) was generated from the LOM production schedule, capital cost estimates, and operating cost estimates. The key financial results are presented in the Table 22-6.

Table 22-6 Financial Result Summary

Description	Units	Total
Tonnes Milled Per Day	tonnes / day		430
Mill Feed Ag Grade	g/t		805
Payable Ag	oz		27,161,319
Payable Au	oz		4,707
Payable Pb	Mlbs		65.4
Payable Zn	Mlbs		67.2
Total Gross Revenue	US$M	$	570.6
Net Revenue	US$M	$	496.1
Total Operating Cost	$M	$	362.3
Total Capital Cost	$M	$	99.7
Taxes	$M	$	44.7
After-Tax Cashflow	$M	$	129.3
After Tax IRR			74	%
After Tax NPV 5%	$M	$	101.2

The DCF model for the project is summarized in Table 22-7.

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Table 22-7 Discounted Cash Flow Model

	Units	Total	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9
MINING
Underground
Production	'000 tonnes	1,177		58		136		163		200		199		137		146		129		9
Waste	'000 tonnes	755		103		236		148		123		46		51		27		22		-
PROCESSING
Mill Feed	'000 tonnes	1,177		27		142		155		188		198		177		144		138		9
Ag Grade	g/t	805		944		870		914		785		816		742		790		702		657
Au Grade	g/t	0.3		0.00		0.23		0.29		0.29		0.29		0.41		0.49		0.45		0.85
Pb Grade	%	3.0		11.1		3.5		3.3		2.9		2.6		2.9		2.0		2.1		2.2
Zn Grade	%	4.1		6.0		4.0		3.3		4.2		3.6		4.2		3.7		5.4		8.6
REVENUE
Pb Concentrate
Payable Ag	oz	26,324,774		713,073		3,440,695		3,947,698		4,084,096		4.493,811		3,640,921		3,159,146		2,677,553		167,782
Payable Au	oz	4,707		-		298		448		569		630		863		962		822		114
Payable Pb	Mlbs	65.4		6.0		9.4		9.4		10.2		9.6		9.7		5.3		5.3		0.4
Zn Concentrate
Payable Ag	oz	836,545		18,923		105,135		120,270		131,915		145,103		120,917		103,992		85,700		4,590
Payable Zn	Mlbs	67.2		2.3		7.8		6.9		10.9		9.8		10.4		7.2		10.7		1.2
Net Revenue	US$ '000	496,088		15,141		62,361		70,043		78,378		82,573		71,327		58,361		54,012		3,892
Unit NSR	US$/t milled	421		561		440		453		418		417		402		405		391		419
OPERATING COST
Mining (Underground)	C$ '000	225,891		3,219		32,633		35,144		36,689		31,428		28,255		30,930		25,460		2,134
Processing	C$ '000	69,524		818		9,490		9,528		10,047		10,215		9,885		9,364		9,155		1,022
G&A	C$ '000	66,892		801		9,276		9,354		9,487		9,388		9,197		9,208		8,853		1,329
Total Operating Cost	C$ '000	362,308		4,838		51,398		54,026		56,223		51,031		47,337		49,502		43,468		4,485

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	Units	Total		Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9
CAPITAL COST
Mining	C$ '000	67,724			2,715		25,683		13,907		10,016		3,347		8,557		2,826		665		8
Processing	C$ '000	1,273			-		223		1,050		-		-		-		-		-		-
Compiled G&A	C$ '000	-			-		-		-		-		-		-		-		-		-
Initial Capital	C$ '000	23,213			23,213		-		-		-		-		-		-		-		-
Contingency	C$ '000	7,479			310		2,877		1,439		995		349		1,070		353		83		1
Total Capital Cost	C$ '000	99,689			26,239		28,784		16,396		11,011		3,696		9,627		3,179		748		9
CASH FLOW
Taxes	C$ '000	44,694			-		488		2,402		3,522		15,651		12,415		6,521		7,238		3,544
After-Tax Cashflow	C$ '000	129,284			22,758		805		18,556		30,886		37,560		23,858		17,088		19,150		4,139
PROJECT ECONOMICS
After Tax IRR	%	74.0	%
After Tax NPV 5%	C$ '000	101,205

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22.5 Sensitivity Analysis

Project risks can be identified in both economic and non-economic terms. Key economic risks were examined by running cash flow sensitivities, compared to the base case considering:

• Silver price;

• Silver head grade;

• Silver recovery;

• Operating costs; and

• Capital costs.

Exchange rate and commodity price are acknowledged to be synchronized in terms of impact, hence only the silver price is discussed. The revenue stream of silver is approximately 75% of the total revenue stream. IRR and NPV sensitivity over the base case has been calculated for a range of variations. The after-tax sensitivities are shown in Table 22-8, Figure 22-4 and Figure 22-5.

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Table 22-8 Sensitivity Analysis Result Table

Project Variables	Factors (%)			5% NPV ($M)		IRR (%)
		-30	%	$	26		19	%
		-20	%	$	57		38	%
		-10	%	$	81		56	%
Silver Price		0	%	$	101		74	%
(US$/oz)		10	%	$	119		94	%
		20	%	$	135		114	%
		30	%	$	148		136	%
		-30	%	$	1		6	%
		-20	%	$	42		29	%
		-10	%	$	72		50	%
Silver Recovery		0	%	$	101		74	%
(%)		10	%	$	130		103	%
		20	%	$	158		138	%
		30	%	$	186		179	%
		-30	%	$	16		15	%
		-20	%	$	51		35	%
		-10	%	$	77		54	%
Silver Head Grade		0	%	$	101		74	%
(g/t)		10	%	$	124		96	%
		20	%	$	145		119	%
		30	%	$	165		143	%
		-30	%	$	165		174	%
		-20	%	$	144		131	%
		-10	%	$	123		99	%
Operating Cost		0	%	$	101		74	%
($'000)		10	%	$	80		54	%
		20	%	$	58		38	%
		30	%	$	33		23	%
		-30	%	$	120		129	%
		-20	%	$	114		106	%
		-10	%	$	108		88	%
Capital Cost		0	%	$	101		74	%
($'000)		10	%	$	95		63	%
		20	%	$	89		54	%
		30	%	$	82		47	%

Both the NPV and and the IRR analysis indicate that the project value is most sensitive to silver recovery. For a ±10% variance in silver recovery, the project NPV and IRR can vary by 30% and 28% respectively. However, with the historical data from Alexco on mill performance, there is sufficient confidence in the recovery estimation. It is recognized that the various ore sources considered in this evaluation (from different properties) represent slight variances in mineral composition, however this does not constitute major risk in terms of silver recovery of project cashflows.

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Project value is also sensitive to silver head grade; during the analysis process, a change in silver head grade also reflects a change in silver recovery. Taking into account the downstream effect on silver recovery, a ±10% variance in silver head grade resulted in a 23% variance in NPV and 21% variance in IRR. Amongst the selected parameters, project value is least sensitive to capital cost. The result is reflective of the low project capital requirements, leveraging the existing development and infrastructure.

 

Source: Mining Plus 2019

Figure 22-4 After-Tax 5% NPV Sensitivity - Mining Plus, 2019

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Source: Mining Plus 2019

Figure 22-5 After-Tax IRR Sensitivity - Mining Plus, 2019

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Table of Contents

23. Adjacent Properties 23-1

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23. Adjacent Properties

The Project is located within the KHSD which has a long history of mining, as discussed previously in this report in Section 6. There are numerous historic and abandoned workings associated with this history. None are relevant to this project as they are included in the ERDC Reclamation Project as described in Section 6 and Section 20 herein.

There are current and historic placer gold mining operations to the east and north of the property; however, this mineralization is not considered indicative of the mineralization of the Project. Victoria Gold Corp.’s Eagle Gold Mine is located 35 km west of the Project along the Silver Trail Highway and adjacent to Alexco’ s claims. The mineralization is not considered indicative of this Project. However, the construction and operation of the mine may provide both benefits and challenges in terms of available resources for this project.

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24. Other Relevant Data and Information

No additional information or explanation is necessary to make this Technical Report understandable and not misleading.

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25. Interpretation and Conclusions

The author considers that this study has been completed to a Pre-Feasibility level of Study as defined Canadian Institute of Mining, Metallurgy and Petroleum Standard Definitions for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM definitions) as well as industry best practices.

25.1 Property Description and Ownership

The KHSD quartz mining claims and quartz mining leases are held by Alexco through its wholly-owned subsidiaries ERDC and AKHM. The current property ownership, access and licences cover the areas included in the geological model, mineral resources and mineral reserves in this study.

The potential liabilities associated with the historic operations in the KHSD are indemnified by the Government of Canada under the terms and conditions of the commercial agreement, subject to the requirement for ERDC to develop, permit and implement the site Reclamation Plan for the historic mining activities.

25.2 Exploration and Mineral Resources

Since the previous Technical Report (RPA, 2017), Alexco has completed additional resource diamond drilling at Bermingham from both surface and underground to expand the geologic database and density of sampling, and at Flame & Moth to provide additional samples for metallurgical testing.

The Mineral Resources at the KHSD have been estimated in accordance with the CIM Definitions. In the opinion of the QP, the resource evaluations reported herein are a reasonable representation of the global polymetallic mineral resources for the Bellekeno, Lucky Queen, Flame & Moth, Onek and Bermingham deposits given the current level of sampling.

25.3 Mineral Reserves, Mine Planning and Mine Development

The QP was responsible for the mine design, mine planning, and reserve calculations and considers the level of information and work appropriate for a PFS.

Since the PEA (RPA, 2017), Alexco has advanced underground development at both the Flame & Moth and Bermingham mines. The 520 m of ramp development at Bermingham provided additional resource information through underground exploration drilling, as well as geotechnical and hydrogeologic information related to the deposit. The 370 m of ramp development at Flame & Moth also provided additional geotechnical and hydrologic information for mine planning purposes.

The historic geotechnical database for Bermingham and Flame & Moth was reviewed and all data reclassified to provide a lithologic basis for developing geotechnical domains. Four domains were defined for the underground workings with ground support designs determined for each domain. This data along with past mining experience from the Bellekeno Mine were used to select the mining methods for this study, considering both mechanized cut and fill and longhole.

A NSR approach based on Ag, Pb, Zn, and Au was used for mine planning and mineral reserve estimates. The value of each stope (considering metal price, recovery, smelter charges and transportation) was compared to economic cutoff values, as well as development costs and was used to determine the Probable Mineral Reserve. A monthly mine production schedule was developed for each deposit using Deswik software for both development and mine production. The schedule for all deposits was then combined to create a master milling schedule to calculate feed grades as well as for economic modelling.

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The mine designs and mining plans are based upon engineering studies and design appropriate for a PFS. The LOM schedule is based on the specific strategy selected; however, there are other possible scenarios for defining an overall production schedule that may warrant further study, particularly if changing metal prices or exploration results alter the mine planning context.

Total Probable Mineral Reserves are 1.2 Mt @ 805 g/t Ag, 2.98% Pb, 4.13 % Zn and 0.34 g/t Au. Total Contained ounces are 30.5 M oz Ag. Mining production occurs over an 8 year period with an average production rate of 430 tonnes per day.

The key risks to achieving the design basis include:

· Slower excavation rates, increased dilution and increased ground support costs due to the relatively poor nature of the rock mass;

· Stope by stope variation in grade typical of a high grade narrow vein deposit;

· Localized conditions of higher water flow e.g. around Mill Fault; and

· Due to the relatively small nature of the operation any unplanned breakdowns may have a potentially large effect

The QP considers that the mine plan is sound, as it is based on conventional mining techniques, reasonable production assumptions, and due consideration of potential risks to achieving the mine plan. The level of work is considered appropriate for a PFS.

25.4 Metallurgical Testing and Mineral Processing

Since the last Technical Report (RPA, 2017), Alexco has completed additional open circuit (batch) and locked cycle testing. Additional composites have been prepared from exploration drill core, as well as composites blended from the different mines. The focus of the recent metallurgical testing (2017 to 2019) has been on the Bermingham and Flame & Moth deposits which represent over 90% of the total mill feed in this study. The locked cycle testing on the composites (which represent the high grade domains) and on the blended composites were added to the existing metallurgical database. The testwork and database were reviewed in detail to identify both the tests and samples that would be representative of the range of mill feed, and of the mill process flowsheet, in order to estimate concentrate production.

The key conclusions from this review are that the existing processing plant with the planned upgrades can achieve the LOM average and the peak 550 tpd throughput design basis, and that the metallurgical testwork combined with operational data provide a sound basis for the metallurgical performance predictions. Metallurgical testwork has been completed to confirm the expected good performance of a blended mill feed. Table 25-1 summarizes the linear regression curves developed from the metallurgical testing database to estimated metal recoveries based on head grade for all deposits included in this study.

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Table 25-1 Concentrate Metal Production

Metal Concentrate Recoveries	Recovery Equation
Ag Recovery to Pb Con	= 4.07*ln(Ag head grade, g/t) + 63.75
Ag Recovery to Zn Con	= -2.85*ln(Ag head grade, g/t) + 23.66
Pb Recovery to Pb Con, %	= 6.2*ln(Pb head grade, %) + 82.26
Zn Recovery to Zn Con, %	= 63.52*(Zn head grade, %)0.10
Pb Recovery to Zn Con, %	= 34.31*(Pb head grade, %)(-1.96)

Note:

Equation coefficients are displayed as rounded to 2 decimal places for edition purpose; more digits are required to generate the projected results in Section 17.0.

Based on the LOM mill head grades, the LOM average metallurgical recoveries to concentrates are estimated for the lead silver concentrate at 90.9% Ag, 88.6% Pb and 49% Au, and for lead silver concentrate at 4.6% Ag and 73.6% Zn.

Over the life of the mine, the mill will produce two concentrates, totaling 58,151 tonnes of lead silver concentrate averaging 14,822 g/t Ag, 54% Pb and 3.4 g/t Au and 67,768 tonnes of a zinc concentrate averaging 642 g/t Ag and 53% Zn (grades reported for payable metals on in each concentrate under assumed Project economic basis). For the period following the initial ramp up and commissioning (which is primarily on Bellekeno production and ramping up to the design mill throughput, the expected concentrates would be;, a lead silver concentrate would contain 15,890 g/t Ag, 54% Pb and3.7 g/t Au and the zinc concentrate would contain 649 g/t Ag and 53% Zn.

The QP concludes that the level of work is sufficient for a prefeasibility study for an existing mill facility. The remaining risks or opportunities are:

· Zinc losses in the lead circuit are expected to be the only significant metallurgical shortfall however there is opportunity to optimize this with further testing either before operation or during;

· There is an opportunity to reduce the amount of lead that is calculated as reporting to the zinc concentrate, by capping the lower head grade concentrations at a constant recovery (as discussed in Section 13), as this lower cap was not applied in the economic model;

· The construction of the DSTF expansion will be required for the Project.

25.5 Environment, Community, Permitting and Closure

Alexco has been actively developing the KHSD since 2006 under a unique contractual arrangement with the Government of Canada whereby it can enter into production at historic and newly discovered deposits within the district while it undertakes reclamation activities to remediate historic environmental impacts. Thus, the risk of additional liabilities from historic operations is mitigated. Further, this contractual arrangement has meant there is a long and substantial background of environmental monitoring and impact assessment, as well as permitting experience and relationships with communities.

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Currently licenced mines include the Bellekeno mine and operation of the District Mill, the Onek and Lucky Queen mines (in 2013), and in 2017 AKHM received a Water Licence amendment for the addition of the Flame & Moth mine and the DSTF expansion. Alexco is currently in the regulatory process to renew the water licence to include the new Bermingham mine. Environmental assessment under the Yukon Environmental and Socio-Economic Assessment Act (YESAA) is complete with no findings. Mine reclamation and closure is included in the regulatory processes. External project reviews from previous permitting activities, regulatory inspections, and correspondence with communities indicated a reasonably productive and active working relationship. However, it is recognized that future conditions and relationships can change.

As of the date of this report, the QP considers it reasonable to expect that the relatively minor additional permitting requirements can be obtained within the time frames allowed within this Project schedule.

25.6 Capital and Operating Costs and Economic Evaluation

Capital and operating costs have been estimated at a level of detail and information appropriate for a PFS. The overall accuracy is estimated at +/- 25% for both capital and operating costs.

The risks to both capital and operating costs are mitigated by several factors: the relatively low capital required for this project, the established site infrastructure including a mill which operated for three years, and existing access to all four mines including underground development completed in 2018/2019 to Bermingham and Flame & Moth mines. The majority of the operating costs are built up from first principles and calibrated by both previous experience and other projects in the Yukon.

The initial capital cost for the project is CAD$ 23.2M with sustaining capital of CAD$76.5M. Operating costs average $312/t of ore over the life of mine.

25.7 Economic Analysis

The economic model for the project was developed by Alexco and reviewed in detail and modified by the QP. The Project benefits from the operational history, the safe jurisdiction and existing permits, as well as the existing infrastructure. Although a brownfields project, the limitation of liabilities for the historic impacts of mining provides mitigation to that risk of liability and higher than expected closure costs.

Total cumulative after-tax cash flow to the project is CAD$129.3M. The before and after-tax Net Present Value(NPV) of the project are CAD$136.2M and CAD$101.2M respectively at a 5% annual discount rate. The before and after-tax Internal Rate of Return (IRR) is 84% and 74% respectively.

Based on the assumptions in the model, the conclusions are that this Project provides a robust cashflow over the eight year mine life, producing high value lead-silver and zinc concentrates. The Project LOM revenue is sensitive to a combination of foreign exchange and silver prices (which are not completely independent parameters) as well as silver recovery.

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26. Recommendations

26.1 Mineral Resources

The authors consider that there is an opportunity to extend the mine life by additional drilling and sampling, targeted on the inferred resources and lower grade material at each of the deposits. This is based on the information reviewed and consideration of the remaining mineral resources that are not included in the current mine plan.

The mineral resources not captured by the current mine plan have been calculated for the Bermingham, Flame & Moth, Lucky Queen and Onek deposits.  In this context, remaining mineral resources are defined as mineral resources exclusive of mineral reserves and are summarized in Table 26-1.

Table 26-1   Summary of Mineral Resource not included in the mine plan as at January 1, 2019

Deposit	Category	Tonnes		Ag (g/t)		Au (g/t)		Pb (%)		Zn (%)		Ag-Eq (g/t)
Bermingham			738,000		835		0.13		2.1		1.8		940
Flame & Moth	Indicated		320,000		440		0.37		1.4		6.9		690
Lucky Queen			60,000		865		0.14		1.8		1.7		945
Onek			338,000		300		0.71		2.0		16.2		870
TOTAL INDICATED			1,456,000		625		0.32		1.9		6.2		870

Deposit	Category	Tonnes		Ag (g/t)		Au (g/t)		Pb (%)		Zn (%)		Ag-Eq (g/t)
Bermingham			359,000		870		0.15		2.1		1.6		970
Flame & Moth	Inferred		150,000		525		0.28		0.4		5.8		705
Lucky Queen			103,000		715		0.12		1.6		1.3		780
Onek			68,000		235		0.50		1.7		12.1		670
TOTAL INFERRED			680,000		705		0.21		1.6		3.5		850

Notes:

1. Remaining Mineral Resources are exclusive of Probable Mineral Reserves

2. Remaining Mineral Resources are estimated at an NSR cut-off value of $400/tonne.

3. Lucky Queen, Onek, and Flame & Moth are estimated using metal prices of $20.00/oz Ag, USD$0.95/lb Pb, USD$1.00/lb Zn and $1,300/oz Au and a USD$/C$ exchange rate of 0.80

4. Bermingham Mineral Resources are estimated using metal prices of USD$20.80/oz Ag, USD$1.05/lb Pb, USD$1.20/lb Zn and USD$1,450/oz Au and USD$/CAD$ exchange rate of 0.80.  Bermingham Mineral Resources are estimated using metal recoveries of 96% for Ag, 97% for Pb, 88% for Zn and 72% for Au.

5. In situ Remaining Mineral Resources do not have demonstrated economic viability.

6. Numbers may not add due to rounding.

It is warned that new information could lead to a change in estimated resource size and that varied estimates are likely to affect mining plans.

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26.2 Processing and Metallurgy

The QP considers that there is an opportunity to improve the level of detail of the metallurgical predictions and particularly the concentrate production at a month-to-month operational level. Further locked cycle tests at the next stage of study is recommended for samples representing the Flame & Moth deposit and different blends according to the LOM production plan. There may be an opportunity to improve concentrate grades with further testing, particularly of the zinc concentrate. Additional metallurgical testing at different head grades would also support the approach to capping recoveries, particularly for the comportment of Pb to concentrates at lower head grade mill feed.

In addition, further hardness tests are recommended on these samples to verify potential grindability variations for future mill feeds. It is also recommended that testing of increased plant throughout above the 400 tpd be done in the first year of operation to identify potential bottlenecks and confirm requirements for mill modifications to achieve the 550 tpd throughput.

26.3 Mining and Geomechanics

It should be noted that over 90% of bore holes in the geotechnical database were developed using conventional, double tube drilling equipment. This approach can often lead to excessive disturbance of core (‘mechanical’ or handling breaks) which can be difficult to distinguish from naturally occurring joints when logging RQD. This can typically result in conservative RQD values. For future geotechnical holes, it is recommended that they be drilled with the triple-tube system.

To confirm and refine assumptions applied in these preliminary ground support designs, it is recommended that geotechnical mapping and estimation of Q values, along with collection of excavation performance should commence once development begins.

Geotechnical data for this study was only available for the FM and BM deposits. Based on discussions with Alexco personnel, it is reasonable to assume that ground conditions previously encountered at the LQ and BK deposits will be comparable with those expected at the BM and FM deposits based on this geotechnical study. Therefore, operational experience gained during previous production mining at the LQ and BK deposits has been used to guide (but not directly influence) the development of geotechnical mine design parameters for the PFS. However, in future stages the geotechnical conditions of the LQ and BK will need to be verified. As mining progresses these geotechnical conditions and evaluations should be constantly reviewed and updated as further data is collected.

It should be noted that 2D model simulations have several inherent limitations – particularly when compared to 3D modeling assessments. Consequently, 2D models can return unreliable results when used in this application, as compared to 3D simulations of the same geometry. Therefore, 3D inelastic modeling should be considered at the feasibility design stage to confirm stope geometry stability and extraction sequence.

Due to the multiple orebodies to be mined, along with their varying grade a comprehensive global optimization process should occur. This should consider timing of Lucky Queen orebody development as well as the timing of increasing the mill capacity.

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26.4 Environment and Permitting

It is recommended that the Project advance the permitting required for the increased throughput in a timely manner, in order to meet the approximately 18 month permitting timeline assumed herein. While project economics suggest that the 400 tpd throughput can be economic (depending on market conditions and prices at the time), there is clearly more value in the increased throughput to balance the base operating costs with higher tonnage.

Continued geochemical characterization of metallurgical products, particularly of tailings, is prudent for both operations and assurance of post-closure environmental performance.

26.5 Delivery on Cost Assumptions and Project Economics

The QP considers that cost model and the productivity assumptions therein are reasonable for this prefeasibility study. It is recommended that the next stage of work should consider in more detail the link between mining activities and address cycle times, on a stope by stope analysis, and the dependencies to achieve those. It is recommended that work continue on optimization of the mine design and scheduling, as part of continued optimization of the project economics.

It is also recommended that Alexco continue with their evaluation of potentially contracting for mining development or production, as part of the risk mitigation strategies to current market limitations of skilled employees, and particularly maintenance and mechanics.

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27. REFERENCES

Alexco Keno Hill Mining Corp. (Alexco), 2012. Preliminary Reclamation and Closure Plan, Keno District Mine Operations, Keno Hill Silver District, Revision 2, September 2012

Alexco Keno Hill Mining (Alexco), 2018. Reclamation and Closure Plan, Keno District Mine Operations, Keno Hill Silver District. Revision 5. July 2018.

Alexco 2019a. Master Metallurgical Testing Summary Spreadsheet. Alexco, January 23, 2019. Reviewed and modified by Tetra Tech.

Alexco Keno Hill Mining Corp (Alexco) 2019b. Type A Water Licence QZ09-092 Renewal Application QZ18-044, Keno Hill Silver District Mining Operations. April 2019.

Barton, N., Lien, R., Lunde, J., 1974. Engineering Design of Tunnel Support. Rock Mechanics Vol. 6 No. 4. (Chapter 16)

Barton and Grimstad (1994). The Q-System Following Twenty Years of Application in NMT Support Selection. 43rd Geomechanics Colloquy. Felsbau, 6/94. 428-436.

Beaudoin G. and D. F. Sangster (1992). A Descriptive Model for Silver-lead-zinc Veins in Clastic Metasedimentary Terranes. Economic Geology V.87 July 1, 1992.

Boyle, R.W. 1965. Geology, Geochemistry, and Origin of the Lead-zinc-silver Deposits of the Keno Hill-Galena Hill Area, Yukon Territory, Geol. Surv. Canada, Bull. 111, p. 302.)

Brady, B. H. G. and Brown, E. T., 2006. Rock Mechanics for Underground Mining (3rd Ed). Chapman and Ha;. London.

Cathro, R. J., 2006. The History and Geology of the Keno Hill Silver Camp, Yukon Territory, Geoscience Canada, v 33, No. 3, P. 103-134 (2006)

Chipman and McOnie, 2015. Technical Report Flame & Moth Exploration Project. Internal Report Alexco Resource Corp.

CIM, 2003. Estimation of Mineral Resources and Mineral Reserves Best Practices Guidelines, Canadian Institute of Mining and Metallurgy and Petroleum (CIM) May 30, 2003

CIM, 2014. Definition Standards – For Mineral Resources and Mineral Reserves, Canadian Institute of Mining and Metallurgy and Petroleum (CIM) May 10, 2014

D. U. Deere, 1964. Technical Description of Rock Cores for Engineering Purposes. Rock Mechanics and Engineering Geology, 1 (16-22).(Chapter 16)

EBA Engineering Consultants Ltd. (EBA). 2013. Dry Stacked Tailings Facility – Phase II Expansion, Keno Hill District Mill Site, Yukon. Technical Memorandum prepared for Alexco Resource Corp., December 6, 2013.pers comm. Justin Pigage

EBA, 2010. Revision 2010-1, Operation, Maintenance, and Surveillance Manual, Dry Stack Tailings Facility, Keno Hill Mill facility, YT. EBA File: W13101178.008. Prepared for Alexco Keno Hill Mining Corp. September 2010

Ecofor, 20 Ecofor. 2018. Heritage Resource Overview Assessment: Alexco-Banyan Keno Hill Silver District. May 2018

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Elsa Reclamation and Development Company (ERDC) 2018. UKHM Reclamation Project YESAB Project Proposal Submission. September 2018.

Farrow and McOnie, 2013. Farrow, D. and McOnie, A, 2013. Updated Technical Report on the Flame & Moth Deposit, Keno Hill District, Yukon.

Greybeal, F.T. and Vikre, P.G. (2010). A Review of Silver Rich Mineral Deposits and Their Metallogeny. Society of Economic Geology, Special Publication 15. January 1, 2010.

Grimstad and Barton, 1993. Updating of the Q-System for NMT. Proc. Int. Symp. On Sprayed Concrete, Fagernes, Norway, Norwegian Concrete Association, Oslo. (Chapter 16)

Hoek E., and Brown E. T. 1980a. Underground Excavations in Rock. London Instn. Min. Metall. (Chapter 16)

Hoek E., and Brown E. T. 1980b. Empirical Strength Criterion for Rock Masses. J. Geotech. Eng. Div. ASCE 106, 1013-1035. (Chapter 16)

Hoek E. and Brown E. T. 1988. The Hock-Brown Failure Criterion - a 1988 Update. Proc. 15th Can. Rock Mech. Symp. University of Toronto, pp. 31-38. (Chapter 16)

Hoek E, Carter T. G. and Diederichs, M. 2013. Quantification of the Geological Strength Index Chart. 47th US Rock Mechanics / Geomechanics Symposium, San Francisco, CA, USA 23-26 June. (Chapter 16)

Hutchinson, D. J. and Diederichs, M. S, 1996. Cablebolting in Underground Mines. BiTech Publishers, Richmond. (Chapter 16)

Iles, S., and McOnie, A. 2017. Technical Report Bermingham Exploration Project. Internal Report Alexco Resource Corp.

International Metallurgical, 2018. Design Considerations for Modifications to the Alexco Grinding Circuit. Memo prepared for Alexco Resource Corp. January 30, 2018. (Chapter 17)

Jacobs, 2019. Pre-feasibility Study Geotechnical Engineering. Report prepared Alexco Resource Corp. March 21, 2019.

Mathews, K. E., Hoek, E.M., Wylle, D. C. and Stewart, S. B.V., 1981. Prediction of Stable Excavation Spans for Mining at Depths below 1000 meters in Hard Rock. Golder Associates. (Chapter 16)

Mair et al., 2006. Mair, Hart, J.L., C.J.R. and Stephen, J.R. (2006). Deformation History of the Northwestern Selwyn Basin, Yukon, Canada: Implication for Orogen Evolution and Mid-Cretaceous Magmatism; Bulletin of the Geological Society of America, vol. 118, p. 304-323.

Mawdesley C., and Trueman, R. (2003). Predicting Open Stope Stability and Cavability using the Extended Mathews Stability Graph. 1st AGCM Conference 10-13 November. (Chapter 16)

McOnie, A. and Read, P.B., 2009. Stratigraphy, Structure and Exploration Opportunities Sourdough, Galena and part of Keno Hills, Keno Hill Mining Camp, Central Yukon. Internal Report Alexco Resource Corp.

Murphy, D. C., 1997. Geology of the McQuesten River Region, Northern McQuesten and Mayo Map Areas, Yukon Territory (115P/14, 15, 16l 105M/13, 14), Exploration and Geological Services Division, Yukon, Indian and Northern Affairs Canada, Bulletin 6, p.122.

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Oddie M. E. and Pascoe M. J., 2005. Stope Performance at Olympic Dam Mine. 9th Underground Operators’ Conference, Perth, Western Australia. (Chapter 16)

Pakalnis, R., Nickson, S., Lunder, P. , Clark, L., Milne, D. and Mah, P., 1996. Empirical Methods for the Design of Mine Structures. Colloque en controle de terrain de Association Miniere du Quebec, 12 March 1996. (Chapter 16)

Potvin, 1988. The Stability Graph Method for Open Stope Design. 90th Canadian Institute of Mining Annual General Meeting, (Chapter 16)

Roots, C.F., 1997 – Geology of the Mayo Map Area, Yukon Territory (105M), Geological Survey of Canada Bulletin 7, p. 82.

Rescan, 1996 FS. Mine Reopening – Operating Plan Report No. UKH/96/03. Report prepared for United Keno Hill Mines Ltd., August 1996.

RocScience, 2012. 2D Finite element Numerical Code (Phase2 Software). Developed and distributed by RocScience Ltd. (Chapter 16)

RocScience, 2013. Rock mass strength analysis (RocLab Software), Developed and distributed by RocScience Ltd. (Chapter 16)

RPA, 2017. Technical Report Preliminary Economic Assessment of the Keno Hill Silver District Project. Report prepared for Alexco Resource Corp. and filed on SEDAR (www.sedar.com) September 21, 2018.

SGS, 2008. An investigation into Lead, Zinc and Silver Flotation Testing on Bellekeno Samples. SGS Project 11694-002 – Report 1. Report prepared for Alexco Resource Corp. Report prepared for Alexco Resource Corp. April 4, 2008.

SGS, 2018a. An Investigation into the Flotation of Samples from the Bermingham Deposit. SGS Project 15774-001 – Final Report. Report prepared for Alexco Resource Corp October 25, 2018.

SGS, 2018b. An Investigation into the Comminution and Flotation of Samples from the Lucky Queen and Flame & Moth Deposits. SGS Project 15774-002 – Final Report. Report prepared for Alexco Resource Corp. November 29, 2018.

SGS, 2019. An Investigation into the Flotation of Samples from the Bermingham and Christal Zone Deposits. SGS Project 15774-002 – Final Report #2. Report prepared for Alexco Resource Corp. March 15, 2019.

SRK, 2011a. Technical Report on the Lucky Queen Deposit, Lucky Queen Property, Keno Hill District, Yukon. SRK Project 2CA017.001. Prepared for Alexco Resource Corp. September 8, 2011.

SRK, 2011b. Technical Report on the Onek Deposit, Keno Hill District, Yukon, Onek Property, Keno Hill District, Yukon. SRK Project 2CA017.001. Prepared for Alexco Resource Corp. September 8, 2011.

SRK, 2012a. Technical Report on the Flame & Moth Deposit, Flame & Moth Property, Keno Hill District, Yukon. SRK Project 2CA017.004. Prepared for Alexco Resource Corp, August 8, 2012.

SRK, 2012b. Bermingham NI 43-101 Technical Report. SRK project 2CA017.004. Report prepared for Alexco Resource Corp. August 8,2012, effective date of June 15, 2012.

SRK 2013. Updated Preliminary Economic Assessment for the Eastern Keno Hill Silver District Project – Phase 2, Yukon, Canada, November 2013

SRK 2014. Updated Preliminary Economic Assessment for the Keno Hill Silver District Project – Phase 2, Yukon, Canada, December 2014.

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SRK, 2018.  Bermingham Deposit Mineral Resource Update Memo.  SRK Project 2CA017.013.  Prepared for Alexco Resource Corp., October 31, 2018.

Starkey & Associates, 2013. Bellekeno Grinding Circuit Comminution Throughput Analysis Report. Report prepared for Alexco Resource Corp. March 15, 2013. (Chapter 17)

Suorineni, T. F., 2012. A Critical Review of the Stability Graph method for Open Stope Design. MassMin, Sudbury.

UKHM, 1997. Unpublished report on “Mineral Resources and Mineable Ore Reserves” dated March 9, 1997.

Wardrop, 2009. Bellekeno Project Updated Preliminary Economic Assessment Technical Report. Independent technical report prepared for Alexco Resource Corp. and filed on SEDAR (www.sedar.com).

Wardrop (2009 PEA), Bellekeno Project – Updated Preliminary Economic Assessment Technical Report,

Wardrop, 2009) Bellekeno Project – Updated Preliminary Economic Assessment Technical Report – Independent technical report prepared for Alexco Resource Corp. and filed on SEDAR (www.sedar.com).

YESAB 2018. Designated Office Evaluation Report: Bermingham Production and Development Program. Project Number: 2017-0176. July 2018.

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28. CERTIFICATE OF QUALIFIED PERSON

Certificate of Qualified Person

Adrian Churcher, P.Eng

I, Adrian Churcher P.Eng., as an author of this report entitled “NI 43-101 Preliminary Feasibility Study on the Keno Hill Silver District Project, Yukon Territory, Canada” prepared for Alexco Resource Corp. (the “Issuer”) with an effective date of March 28, 2019 and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”), do hereby certify that:

1. I am a Senior Mining Consultant with Mining Plus Canada Consulting Ltd of Suite 310, 1100 Melville St. Vancouver, BC, V6E 4A6;

2. I am a graduate of Queen’s University in Kingston Ontario in 2010 with a Bachelor of Applied Science degree in Mining Engineering. I am a graduate of Queen’s University in Kingston Ontario in 2011 with a Bachelor of Arts in Economics;

3. I am a Registered Professional Engineer in the Province of British Columbia (Reg #46257) and a Registered Professional Engineer in the Province of Ontario (Reg # 100220446). I have worked as an engineer continuously for 7 years in the areas of underground mining and consulting;

4. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101;

5. I visited the project on February 13^th 2019;

6. I am responsible for the preparation of Sections 1-5, 15-16, 18-20 and 23-27 of this report;

7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101;

8. I have had no prior involvement with the property that is the subject of the Technical Report

9. I have read NI 43-101 and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1; and

10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated this 13^th day of February, 2020.

(Signed & Sealed) “Adrian Churcher”

Adrian Churcher P. Eng.

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Certificate of Qualified Person

Zach Allwright, P.Eng

I, Zach Allwright P. Eng., as an author of this report entitled “NI 43-101 Preliminary Feasibility Study on the Keno Hill Silver District Project, Yukon Territory, Canada” prepared for Alexco Resource Corp. (the “Issuer”) with an effective date of March 28, 2019 and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”), do hereby certify that:

1. I am a professional engineer, employed as Manager – North America of Mining Plus Canada Consulting Ltd. (Mining Plus), located at Suite 310, 1100 Melville Street, Vancouver, BC, Canada, V6E 4A6.

2. I am a graduate of the Western Australian School of Mines (Curtin University, Australia) in 2009 with a Bachelor of Engineering (Mining, Honours). In 2011 I completed a Graduate Certificate of Business majoring in Project Management (APM Certified) at Edith Cowan University (Australia). In 2017 I completed a Masters of Business Administration (MBA) from Curtin Graduate School of Business (Curtin University, Australia).

3. I am a member in good standing of the Engineers & Geoscientists of British Columbia (licence No. 45024).

4. I have over 12 continuous years of industry experience in the areas of underground mine planning, consulting and project evaluations. During this time I have been directly involved in over 60 international mining projects. My experience comprises of global technical involvement and site operations level engagements within North America, Australia, SE. Asia and Europe.

5. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101.

6. I am responsible for the preparation of Sections 21 pertaining to mining capital and operating costs and Section 22 of this report

7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.

8. I have had no prior involvement with the property that is the subject of the Technical Report

9. I have read NI 43-101 and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.

10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated this 13^th day of February, 2020.

(Signed & Sealed) “Zach Allwright”

Zach Allwright P. Eng.

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Certificate of Qualified Person

Paul Hughes, P.Eng.

I, Paul Hughes P. Eng., as a supervisor of this report entitled “NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada” prepared for Alexco Resource Corp. (the “Issuer”) with an effective date of March 28, 2019 and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”), do hereby certify that:

1. I am a Rock Mechanics Consultant with Mining Plus Canada Consulting Ltd of Suite 310, 1100 Melville St. Vancouver, BC, V6E 4A6;

2. I am a graduate of the University of British Columbia in Vancouver, British Columbia having have been conferred the degree Bachelor of Applied Science degree in Geological Engineering in 2004; Masters of Applied Science degree in Mining Engineering in 2008; and a Doctor of Philosophy in Mining Engineering in 2014;

3. I am a Registered Professional Engineer in good standing with the Province of British Columbia (Reg #36997) and a Registered Professional Engineer in good standing with the Yukon Territory (Reg # 2657). I have worked as an engineer continuously for 10 years in the areas of underground mining, rock mechanics, geotechnical engineering and consulting;

4. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101;

5. I am responsible for the preparation of Sections 16.2 and 26.2;

6. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101;

7. I have had no prior involvement with the property that is the subject of the Technical Report;

8. I have read NI 43-101 and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1; and

9. At the effective date of the Technical Report, to the best of my knowledge, information, and belief the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated this 13^th day of February 2020, in Vancouver, British Columbia.

(Signed & Sealed)  “Paul Hughes, P.Eng.”

Paul Hughes P. Eng.

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Certificate of Qualified Person

To accompany the report entitled: “NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada” prepared for Alexco Resource Corp. (the “Issuer”) with an effective date of March 28, 2019 and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”).

I, Dr. Gilles Arseneau, residing in North Vancouver, British Columbia do hereby certify that:

1)	I am an Associate Consultant with the firm of SRK Consulting (Canada) Inc. (“SRK”) with an office at Suite 2200-1066 West Hastings Street, Vancouver, BC, Canada;
2)	I am a graduate of the University of New Brunswick with a B.Sc. (Geology) degree obtained in 1979, the University of Western Ontario with an M.Sc. (Geology) degree obtained in 1984 and the Colorado School of Mines with a Ph.D. (Geology) obtained in 1995. I have practiced my profession continuously since 1995. I have worked in exploration in North and South America and have extensive experience modelling precious metal mineralization similar to that at the Keno Hill Project;
3)	I am a Professional Geoscientist registered with the Association of Professional Engineers & Geoscientists of British Columbia (no. 23474);
4)	I have personally inspected the subject project on September 12 to 14, 2016;
5)	I have read the definition of “qualified person” set out in National Instrument 43-101 and certify that by virtue of my education, affiliation to a professional association and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of National Instrument 43-101 and this technical report has been prepared in compliance with National Instrument 43-101 and Form 43-101F1;
6)	I, as a qualified person, I am independent of the issuer as defined in Section 1.5 of National Instrument 43-101;
7)	I am co-author of this report and responsible for Sections 6 through 12, and the portions of Sections 14 of the report related to the Flame & Moth, Lucky Queen, and Onek deposits and relevant portions of Section 26 and accept professional responsibility for those sections of this Technical Report;
8)	I have had prior involvement with the subject property, I am the co-author of the previous technical report on the property dated March 29, 2017 and amended September 14, 2018;
9)	I have read National Instrument 43-101 and confirm that this technical report has been prepared in compliance therewith;
10)	I have not received, nor do I expect to receive, any interest, directly or indirectly, in the Keno Hill Project or securities of Alexco Resource Corp.; and
11)	That, at the effective date of the technical report, to the best of my knowledge, information and belief, this technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

Vancouver, BC	[“signed and sealed”]
February 13, 2020	Dr. Gilles Arseneau, P. Geo.
	Associate Consultant, SRK Consulting Inc.

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Certificate of Qualified Person

To accompany the report entitled: “NI 43-101 Technical Report Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada” prepared for Alexco Resource Corp. (the “Issuer”) with an effective date of March 28, 2019 and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”).

I, Cliff Revering, do hereby certify that:

1)	I am a Principal Consultant (Geological Engineering) with the firm of SRK Consulting (Canada) Inc. (SRK) with a business address at Suite 600, 350 3rd Ave. North, S7K 6G7, Saskatoon, Saskatchewan, Canada;
2)	I am a graduate of the University of Saskatchewan in 1995 with a B.E. in Geological Engineering and completed a Citation in Applied Geostatistics from the University of Alberta. My relevant experience includes more than 23 years employment in the mining industry, related to exploration, mine operations and project evaluations, with a specialization in geological modelling, mineral resource and reserve estimation, production reconciliation, grade control, exploration and production geology and mine planning;
3)	I am a professional Engineer registered with the Association of Professional Engineers and Geoscientists of Saskatchewan (APEGS#9764);
4)	I have read the definition of qualified person set out in National Instrument 43-101 and certify that by virtue of my education, affiliation to a professional association, and past relevant work experience, I fulfil the requirements to be a qualified person for the purposes of National Instrument 43-101;
5)	I am independent of Alexco Resource Corp. as defined in Section 1.5 of National Instrument 43-101;
6)	I am a co-author of this report responsible for the Bermingham Deposit mineral resource estimate as detailed within Section 14.0 and the portion of Section 26 pertaining to the Bermingham Deposit, and accept professional responsibility for this portion of the technical report;
7)	SRK Consulting (Canada) Inc. was retained by Alexco Resource Corp. to conduct a mineral resource update of the Bermingham Deposit. Our mineral resource update was completed using CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines and National Instrument 43-101 guidelines;
8)	I have visited the project site once, from July 24 to July 27, 2018;
9)	I have had no prior involvement with the subject property;
10)	I have read National Instrument 43-101, Form 43-101F1 and confirm that this technical report has been prepared in accordance therewith; and
11)	As at the effective date of the technical report, to the best of my knowledge, information and belief, this technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

Saskatoon, Saskatchewan	[“signed and sealed”]
February 13, 2020	Cliff Revering, PEng, CPAG, BE.
	Principal Consultant (Geological Engineering)

  February 14, 2020 Page 28-5

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Certificate of Qualified Person

To Accompany “NI 43-101 Technical Report Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada” prepared for Alexco Resource Corp. (the “Issuer”) with an effective date of March 28, 2019 and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”).

l, David Farrow, residing in North Vancouver, British Columbia do hereby certify that:

1. I am a Geologist with GeoStrat Consulting Services Inc of 2220 Carmaria Court, North Vancouver, British Columbia, V7J 3M4, Canada;

2. I am a graduate of the University of the Witwatersrand, Johannesburg, South Africa (GDE (Geostatistics) 1998) and the University of Cape Town, Cape Town, South Africa (B.Sc. (Hons) 1982). I have practiced my profession continuously since graduation;

3. I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia (License # 33860). I am also a member in good standing of The South African Council for Natural Science Professions (License # 400074/87);

4. I visited the subject property in October, 2011;

5. As a qualified person, I am independent of the issuer as defined in Section 1.5 of National Instrument 43-101;

6. I am responsible for the preparation of portions of Section 14 pertaining to the Bellekeno deposit;

7. I have had prior involvement with the property that is the subject of the Technical Report, coauthoring a report for Alexco Resource Corporation on the Flame & Moth Deposit, (Farrow and McOnie 2013). I also co-authored an Updated PEA report on the project, completed in December, 2014;

8. I have read National Instrument 43-101 and the definition of "Qualified Person" set out in the Instrument and certify that by virtue of my education, affiliation to a professional association, and past relevant work experience, I fulfill the requirements to be a Qualified Person for the purposes of National Instrument 43101. Further, I have read this Technical Report, and certify that it has been prepared in compliance with National Instrument 43-101 and Form 43-101 Fl;

9. I have not received, nor do I expect to receive, any interest, directly or indirectly, in the subject property or securities of Alexco Resource Corp. (Alexco); and

10. That, as of the date of this certificate, to the best of my knowledge, information and belief, the sections of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated this 13th day of February, 2020

(Signed & Sealed) “David Farrow”

David Farrow

P.Geo, PrSciNat, Fellow of the Geological Society of South Africa

2220 Carmaria Court

farrow.david@geostrat.ca

North Vancouver

BC, Canada

V7J 3M4

  February 14, 2020 Page 28-6

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Certificate of Qualified Person

Hassan Ghaffari, M. A. SC., P.Eng.

To accompany the report entitled: “NI 43-101 Technical Report Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada” prepared for Alexco Resource Corp. (the “Issuer”) with an effective date of March 28, 2019 and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”).

I, Hassan Ghaffari, M. A. Sc., P.Eng., of Vancouver, British Columbia, do hereby certify:

§ I am a Director of Metallurgy with Tetra Tech Canada Inc. with a business address at Suite 1000 – 10^th Floor, 885 Dunsmuir Street, Vancouver, British Columbia, V6C 1N5;

§ I am a graduate of the University of Tehran (M.A.Sc. Mining Engineering, 1990) and the University of British Columbia (M.A.Sc., Mineral Process Engineering, 2004). I am a member in good standing of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (#30408). My relevant experience with respect to mineral engineering includes 27 years of experience in mining and plant operation, project studies, management, and engineering. As the lead metallurgist for the Pebble Copper-Gold Moly Project in Alaska, I was coordinating all metallurgical test work and preparing and peer reviewing the technical report and the operating and capital costs of the plant and infrastructure for both the scoping and prefeasibility studies. For the Ajax Copper-Gold Project in British Columbia, I was the project manager responsible for process, infrastructure, and overall management of the 60,000 t/d mill. As well, I was the project manager responsible for ongoing metallurgical test work and technical assistance for the La Joya Copper-Silver-Gold Project in Durango, Mexico;

§ I am a “Qualified Person” for the purposes of National Instrument 43-101 (the “Instrument”);

§ I visited the Property that is the subject of the Technical Report from March 31^st to April 2^nd of 2008;

§ I am independent of Alexco Resource Corp. as defined by Section 1.5 of the Instrument;

§ My previous experience with the Property that is the subject of this Technical Report includes Preliminary Economic Assessments in 2009 (Effective Date: November 9, 2009);

§ I am responsible for Section 17, and the portions of Sections 1, 21, 22 and 26 related to the metallurgy and mill performance of this Technical Report;

§ I have read the Instrument and the sections of the Technical Report that I am responsible for has been prepared in compliance with the Instrument; and

§ As of the date of this certificate, to the best of my knowledge, information and belief, the sections of the Technical Report that I am responsible for contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Signed and dated this 13^th day of February 2020, in Vancouver, British Columbia.

(Signed & Sealed) “Hassan Ghaffari”

Hassan Ghaffari, M. A. Sc., P.Eng.

Director of Metallurgy

Tetra Tech Canada Inc.

  February 14, 2020 Page 28-7

NI 43-101 Technical Report on Prefeasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada File: MP-6621-Alexco-PFS-Technical Report Keno Hill Silver District-r1

Certificate of Qualified Person

Ting Lu, M.Sc., P.Eng.

To accompany the report entitled: “NI 43-101 Technical Report Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada” prepared for Alexco Resource Corp (the “Issuer”) with an effective date of March 28, 2019 and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”).

I, Ting Lu, M.Sc., P.Eng., of Vancouver, British Columbia, do hereby certify:

§ I am a Senior Metallurgical engineer with Tetra Tech Canada Inc. with a business address at Suite 1000 – 10^th Floor, 885 Dunsmuir Street, Vancouver, British Columbia, V6C 1N5;

§ I am a graduate of Queen’s University (M.Sc. Mineral Processing Engineering, 2006). I am a member in good standing of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (#32897). I have over 20 years of experience with respect to mineral processing engineering industry on base and precious metals, coal, and industrial minerals in areas of metallurgical testwork development/supervision, plant operation, project studies and engineering. Relevant project experience includes working as QP for metallurgy and processing of the Pebble Copper-Gold-Molybdenum Project in Alaska, QP for La Joya metallurgy and processing of the Silver-Copper-Lead-Zinc Project in Mexico and major metallurgical engineer for Fuwan Silver-Lead-Zinc Project in China;

§ I am a “Qualified Person” for the purposes of National Instrument 43-101 (the “Instrument”);

§ I did not visit the Property that is the subject of the Technical Report;

§ I am independent of Alexco Resource Corp. as defined by Section 1.5 of the Instrument;

§ I do not have previous experience with the Property that is the subject of this Technical Report;

§ I am responsible for Section 13, and the portions of Sections 1, 25 and 26 related to the mineral processing and metallurgical testing of this Technical Report;

§ I have read the Instrument and the sections of the Technical Report that I am responsible for has been prepared in compliance with the Instrument; and

§ As of the date of this certificate, to the best of my knowledge, information and belief, the sections of the Technical Report that I am responsible for contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Signed and dated this 13^th day of February 2020, in Vancouver, British Columbia.

(Signed & Sealed) “Ting Lu”

Ting Lu M.Sc., P.Eng.

Senior Metallurgical Engineer

Tetra Tech Canada Inc.

  February 14, 2020 Page 28-8

EX-99.2

Exhibit 99.2

 

CONSENT OF QUALIFIED PERSON

I, Adrian Churcher, P.Eng., consent to the public filing by Alexco Resource Corp. (“Alexco”) of the technical report titled: “NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project Yukon Territory, Canada”, dated May 8, 2019, and an effective date of March 28, 2019 (the “Technical Report”), as amended on February 13, 2020, prepared for Alexco Resource Corp. (“the Issuer”).

I also consent to any extracts from or a summary of the Technical Report in the news release of the Company dated February 18, 2020 (the "News Release"), titled “Alexco Divests Subsidiary Environmental Business AEG”.

I confirm that I have read the News Release and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

Dated February 13, 2020.

[signed] “Adrian Churcher”

By: Adrian Churcher, P.Eng.

DEFINE       |     PLAN     |     OPERATE

EX-99.3

Exhibit 99.3

 

CONSENT OF QUALIFIED PERSON

I, Zach Allwright, P.Eng., consent to the public filing by Alexco Resource Corp. (“Alexco”) of the technical report titled: “NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project Yukon Territory, Canada”, dated May 8, 2019, and an effective date of March 28, 2019 (the “Technical Report”), as amended on February 13, 2020, prepared for Alexco Resource Corp. (“the Issuer”).

I also consent to any extracts from or a summary of the Technical Report in the news release of the Company dated February 18, 2020 (the "News Release"), titled “Alexco Divests Subsidiary Environmental Business AEG”.

I confirm that I have read the News Release and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

Dated February 13, 2020.

[Signed] “Zach Allwright”

By: Zach Allwright, P.Eng.

DEFINE       |     PLAN     |     OPERATE

EX-99.4

Exhibit 99.4

 

CONSENT OF QUALIFIED PERSON

I, Paul Hughes, Ph.D., P.Eng., consent to the public filing by Alexco Resource Corp. (“Alexco”) of the technical report titled: “NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project Yukon Territory, Canada”, dated May 8, 2019, and an effective date of March 28, 2019 (the “Technical Report”), as amended on February 13, 2020, prepared for Alexco Resource Corp. (“the issuer”).

I also consent to any extracts from or a summary of the Technical Report in the news release of the Company dated February 18, 2020 (the "News Release"), titled “Alexco Divests Subsidiary Environmental Business AEG”.

I confirm that I have read the News Release and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

Dated February 13, 2020.

[signed] “Paul Hughes”

Paul Hughes

Professional Engineer (Yukon)

DEFINE       |     PLAN     |     OPERATE

EX-99.5

Exhibit 99.5

CONSENT OF QUALIFIED PERSON

I hereby consent to the public filing of the technical report titled "NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon, Canada" and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”) by Alexco Resource Corp. (the "Company").

I also consent to any extracts from or a summary of the Technical Report in the news release of the Company dated February 18, 2020 (the "News Release") titled “Alexco Divests Subsidiary Environmental Business AEG”.

I confirm that I have read the News Release and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

Dated February 13, 2020.

Original Signed “Dr. Gilles Arseneau, P. Geo.”

Dr. Gilles Arseneau, P. Geo.

Associate Consultant, SRK Consulting Inc.

EX-99.6

Exhibit 99.6

CONSENT OF QUALIFIED PERSON

I hereby consent to the public filing of the technical report titled "NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon, Canada" and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”) by Alexco Resource Corp. (the "Company").

I also consent to any extracts from or a summary of the Technical Report in the news release of the Company dated February 18, 2020 (the "News Release"), titled “Alexco Divests Subsidiary Environmental Business AEG”.

I confirm that I have read the News Release and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

Dated February 13, 2020

Original Signed “Cliff Revering, P.Eng”

Cliff Revering, P.Eng

Principal Consultant (Geological Engineering)

EX-99.7

Exhibit 99.7

CONSENT OF QUALIFIED PERSON

I, David Farrow, hereby consent to the public filing of the technical report titled "NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon, Canada" and dated May 8, 2019, as amended February 13, 2020 (the “Technical Report”) by Alexco Resource Corp. (the "Company").

I also consent to any extracts from or a summary of the Technical Report in the news release of the Company dated February 18, 2020 (the "News Release"), titled “Alexco Divests Subsidiary Environmental Business AEG”.

I confirm that I have read the News Release and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

Dated February 13, 2020

Original Signed “David Farrow”

David Farrow

P.Geo, PrSciNat, Fellow of the Geological Society of South Africa

EX-99.8

Exhibit 99.8

February 13, 2020

Hassan Ghaffari, M. A. Sc., P.Eng.

Tetra Tech Canada Inc.

Suite 1000 – 10^th Floor, 885 Dunsmuir Street

Vancouver, British Columbia V6C 1N5

Subject: Consent of Qualified Person

I, Hassan Ghaffari, M. A. Sc., P.Eng., hereby consent to the public filing of the technical report titled "NI 43-101 Technical Report on Preliminary Feasibility Study of the Keno Hill Silver District Project, Yukon Territory, Canada”, dated May 8, 2019, and an effective date of March 28, 2019, as amended February 13, 2020 (the “Technical Report”) by Alexco Resource Corp. (the "Company").

I also consent to any extracts from or a summary of the Technical Report in the news release of the Company dated February 18, 2020 (the "News Release"), entitled, “Alexco Divests Subsidiary Environmental Business AEG”.

I confirm that I have read the News Release and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

Dated February 13, 2020

[signed] “Hassan Ghaffari”

Hassan Ghaffari, M. A. Sc., P.Eng.

Director of Metallurgy, Tetra Tech Canada Inc.

EX-99.9

Exhibit 99.9

February 13, 2020

Ting Lu, M. Sc., P.Eng.

Tetra Tech Canada Inc.

Suite 1000 – 10^th Floor, 885 Dunsmuir Street

Vancouver, British Columbia V6C 1N5

Subject: Consent of Qualified Person

I, Ting Lu, M.Sc., P.Eng., hereby consent to the public filing of the technical report titled "NI 43-101 Technical Report on Preliminary Feasibility Study the Keno Hill Silver District Project, Yukon Territory, Canada”, dated May 8, 2019, and an effective date of March 28, 2019 as amended February 13, 2020 (the “Technical Report”) by Alexco Resource Corp. (the "Company").

I also consent to any extracts from or a summary of the Technical Report in the news release of the Company dated February 18, 2020 (the "News Release") entitled, “Alexco Divests Subsidiary Environmental Business AEG”.

I confirm that I have read the News Release and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

Dated February 13, 2020

[signed] “Ting Lu”

Ting Lu M. Sc., P.Eng.

Senior Metallurgical Engineer, Tetra Tech Canada Inc.