KENO HILL SILVER DISTRICT ADAPTIVE MANAGEMENT PLAN – 2009 UPDATE PREPARED BY: FEBRUARY 2009 ALEXCO RESOURCE CORP. KENO HILL SILVER DISTRICT ADAPTIVE MANAGEMENT PLAN – 2009 UPDATE TABLE OF CONTENTS 1. INTRODUCTION..............................................................................................................1-1 1.1 BACKGROUND .............................................................................................................1-1 1.2 HISTORIC MINE WORKINGS ..........................................................................................1-3 1.3 ALEXCO ACTIVITIES .....................................................................................................1-7 1.4 PLANS IN PLACE ..........................................................................................................1-8 2. ADAPTIVE MANAGEMENT PLAN OVERVIEW.............................................................2-1 2.1 ADAPTIVE MANAGEMENT PLAN OBJECTIVES ................................................................2-1 2.2 AMP EVENTS SUMMARY..............................................................................................2-2 2.3 AMP APPROACH .........................................................................................................2-3 3. CHANGE IN WATER QUALITY OR QUANTITY ............................................................3-1 3.1 SIGNIFICANT CHANGE IN WATER QUALITY....................................................................3-1 3.1.1 Description..........................................................................................................3-1 3.1.2 Locations ............................................................................................................3-1 3.1.3 Monitoring Requirements..................................................................................3-2 3.1.4 Specific Thresholds ...........................................................................................3-2 3.1.4.1 Water Treatment Facilities/ Licenced Effluent Discharges .........................3-3 3.1.4.2 Adit Discharge ............................................................................................3-3 3.1.4.3 Bellekeno Mine Water Quality Significantly Altered After Dewatering........3-5 3.1.4.4 Receiving Water Quality Significantly Altered During or Subsequent to Dewatering Bellekeno Mine........................................................................3-6 3.1.5 Approach to Responses ....................................................................................3-6 3.1.5.1 Water Treatment Facilities/ Licenced Effluent Discharges .........................3-6 3.1.5.2 Adit Discharge ............................................................................................3-8 3.1.5.3 Bellekeno Mine Water Quality Significantly Altered After Dewatering........3-9 3.1.5.4 Receiving Water Quality Significantly Altered During or Subsequent to Dewatering Bellekeno Mine........................................................................3-9 3.1.6 Significant Change in Water Quality AMP Summary ....................................3-10 3.2 SIGNIFICANT INCREASE OR DECREASE IN MONITORED FLOW OCCURS ........................3-12 3.2.1 Description........................................................................................................3-12 3.2.2 Locations ..........................................................................................................3-12 3.2.3 Monitoring Requirements................................................................................3-13 ACCESS CONSULTING GROUP FEBRUARY 2009 i ALEXCO RESOURCE CORP. KENO HILL SILVER DISTRICT ADAPTIVE MANAGEMENT PLAN – 2009 UPDATE 3.2.4 Specific Thresholds .........................................................................................3-13 3.2.4.1 Decrease in Discharge .............................................................................3-15 3.2.4.2 Increase in Discharge...............................................................................3-15 3.2.5 Approaches to Responses ..............................................................................3-15 3.2.5.1 Decrease in Discharge .............................................................................3-16 3.2.5.2 Increase in Discharge...............................................................................3-16 3.2.5.3 Bellekeno Mine Water Quantity Significantly Altered After Dewatering....3-17 3.2.6 Significant Increase or Decrease in Flow AMP Summary ............................3-18 3.3 CURRENTLY MONITORED WATER FLOW STOPS ..........................................................3-20 3.3.1 Description........................................................................................................3-20 3.3.2 Locations ..........................................................................................................3-20 3.3.3 Monitoring Requirements................................................................................3-21 3.3.4 Specific Thresholds .........................................................................................3-21 3.3.5 Approach to Responses ..................................................................................3-21 3.3.6 AMP Summary for Monitored Flow Stops......................................................3-23 3.4 NEW WATER FLOW IS OBSERVED ..............................................................................3-25 3.4.1 Description........................................................................................................3-25 3.4.2 Locations ..........................................................................................................3-25 3.4.3 Monitoring Requirements................................................................................3-25 3.4.4 Specific Thresholds .........................................................................................3-25 3.4.5 Approach to Responses ..................................................................................3-26 3.4.6 AMP Summary for New Water Flow................................................................3-27 3.5 WATER FLOW PATH CHANGES...................................................................................3-29 3.5.1 Description........................................................................................................3-29 3.5.2 Locations ..........................................................................................................3-29 3.5.3 Monitoring Requirements................................................................................3-30 3.5.4 Specific Thresholds .........................................................................................3-30 3.5.5 Approach to Responses ..................................................................................3-30 3.5.6 AMP Summary for Change in Water Flow Path.............................................3-31 4. WASTE ROCK SEEPAGE EXHIBITS AML....................................................................4-1 4.1 WASTE ROCK SEEPAGE/RUN-OFF TRENDING TO AML CONDITIONS .............................4-1 4.1.1 Description..........................................................................................................4-1 4.1.2 Locations ............................................................................................................4-1 4.1.3 Monitoring Requirements..................................................................................4-2 4.1.4 Specific Thresholds ...........................................................................................4-2 4.1.5 Approach to Responses ....................................................................................4-3 ACCESS CONSULTING GROUP FEBRUARY 2009 ii ALEXCO RESOURCE CORP. KENO HILL SILVER DISTRICT ADAPTIVE MANAGEMENT PLAN – 2009 UPDATE 4.1.6 AMP Summary for Waste Rock Seepage/Run-Off Trending to AML Conditions ........................................................................................................................4-3 5. SLUDGE STORAGE AREA EFFECTIVENESS COMPROMISED .................................5-1 5.1 SEEPAGE OBSERVED NEAR SLUDGE STORAGE AREA ..................................................5-1 5.1.1 Description..........................................................................................................5-1 5.1.2 Locations ............................................................................................................5-1 5.1.3 Monitoring Requirements..................................................................................5-1 5.1.4 Specific Thresholds ...........................................................................................5-1 5.1.5 Approach to Responses ....................................................................................5-2 5.1.6 AMP Summary for Seepage Near a Sludge Storage Area ..............................5-2 5.2 SLUDGE STORAGE AREA APPROACHING CAPACITY......................................................5-4 5.2.1 Description..........................................................................................................5-4 5.2.2 Locations ............................................................................................................5-4 5.2.3 Monitoring Requirements..................................................................................5-4 5.2.4 Specific Thresholds ...........................................................................................5-4