40-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x	ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For year period ended December 31, 2018

Commission file number: 001-33621

ALEXCO RESOURCE CORP.

(Exact Name of Registrant as Specified in its Charter)

British Columbia, Canada	1040	91-0742812
(Province or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code)	(I.R.S. Employer Identification No.)
Suite 1225, Two Bentall Centre, 555 Burrard Street, Box 216
Vancouver, British Columbia, Canada V7X 1M9
(604) 633-4888
(Address and Telephone Number of Registrant’s Principal Executive Offices)

Alexco Water and Environment Inc. 12150 E. Briarwood Ave, Ste #135 Centennial, CO 80112 (303) 862-3929	Copies to: Jason K. Brenkert Dorsey & Whitney LLP 1400 Wewatta Street, Suite 400 Denver, Colorado 80202 (303) 352-1133
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class:	Name of Each Exchange On Which Registered:
Common Shares, no par value	NYSE American

Securities registered or to be registered pursuant to Section 12(g) of the Act: N/A

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: N/A

For annual reports, indicate by check mark the information filed with this form:

x Annual Information Form                                      x Audited Annual Financial Statements

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: As at December 31, 2018, 107,998,902 common shares of the Registrant were issued and outstanding.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.       x Yes       ¨ No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). x Yes o No

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act .

¨ Emerging growth company.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ 

EXPLANATORY NOTE

Alexco Resource Corp. (the “Corporation” or the “Registrant”) is a Canadian issuer eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form 40-F pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The Corporation is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. Equity securities of the Corporation are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.

FORWARD-LOOKING STATEMENTS

This annual report on Form 40-F and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern the Corporation's business plans, including but not limited to anticipated results and developments in the Corporation’s operations in future periods, planned exploration and development of its mineral properties, plans related to its business and other matters that may occur in the future, made as of the date of this annual report. Forward-looking statements may include, but are not limited to, statements with respect to amendments to the silver purchase agreement (“SPA” or the “Silver Purchase Agreement”) with Wheaton Precious Metals Corp. (“Wheaton”) and its impact on the Corporation, and the resulting effect on pricing and other terms of the SPA, additional capital requirements to fund further exploration and development work on the Corporation's properties, future remediation and reclamation activities, future mineral exploration, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, future mine construction and development activities, future mine operation and production, the timing of activities, the amount of estimated revenues and expenses, the success of exploration activities, permitting time lines, requirements for additional capital and sources and uses of funds. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “estimates”, “intends”, “strategy”, “goals”, “objectives” or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be “forward-looking statements”.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements. Such factors include, but are not limited to, risks related to actual results and timing of exploration and development activities; actual results and timing of mining activities; actual results and timing of environmental services operations; actual results and timing of remediation and reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of silver, gold, lead, zinc and other commodities; possible variations in resources, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; First Nation rights and title; continued capitalization and commercial viability; global economic conditions; competition; delays in obtaining governmental approvals or financing or in the completion of development activities, and inability of the Corporation to obtain additional financing needed to fund certain contingent payment obligations on reasonable terms or at all. Furthermore, forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Corporation or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to those referred to in the exhibits attached to this annual report on Form 40-F, including the Corporation’s Annual Information Form filed as Exhibit 99.1 and elsewhere.

Forward-looking statements are based on certain assumptions that management believes are reasonable at the time they are made. In making the forward-looking statements included in this annual report, the Corporation has applied several material assumptions, including, but not limited to, the assumption that: (1) additional financing needed to fund certain contingent payment obligations to Wheaton; (2) additional financing needed for the capacity related refund under the amended SPA with Wheaton will be available on reasonable terms; (3) additional financing needed for further exploration and development work on the Corporation's properties will be available on reasonable terms; (4) the proposed development of its mineral projects will be viable operationally and economically and proceed as planned; (5) market fundamentals will result in sustained silver, gold, lead and zinc demand and prices, and such prices will not be materially lower than those estimated by management in preparing the annual financial statements for the year ended December 31, 2018; (6) market fundamentals will result in sustained silver, gold, lead and zinc demand and prices, and such prices will be materially consistent with or more favourable than those anticipated in the Preliminary Economic Assessment (“PEA”) (as defined under "Description of the Business – KHSD Property"); (7) the actual nature, size and grade of its mineral resources are materially consistent with the resource estimates reported in the supporting technical reports; (8) labor and other industry services will be available to the Corporation at prices consistent with internal estimates; (9) the continuances of existing and, in certain circumstances, proposed tax and royalty regimes; and (10) that other parties will continue to meet and satisfy their contractual obligations to the Corporation. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered if the property is developed. Other material factors and assumptions are discussed throughout the exhibits attached to this annual report on Form 40-F, including the Corporation’s Annual Information Form filed as Exhibit 99.1.

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The Corporation's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and should not be relied on as representing the Corporation's views on any subsequent date. While the Corporation anticipates that subsequent events may cause its views to change, the Corporation specifically disclaims any intention or any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change, except as required by applicable law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

NOTES TO UNITED STATES READERS

DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES

The Corporation is permitted, under the multi-jurisdictional disclosure system adopted by the United States Securities and Exchange Commission (the “SEC”), to prepare this annual report on Form 40-F in accordance with Canadian disclosure requirements, which differ from those of the United States. The Corporation has prepared its financial statements, which are filed as Exhibit 99.2 to this annual report on Form 40-F, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), and they are also subject to international auditing and auditor independence standards and SEC / Public Company Accounting Oversight Board (“PCAOB”) independence standards. The Corporation’s financial statements may not be comparable to financial statements of United States companies. Since the Corporation has prepared its financial statements in accordance with IFRS, it is not required to provide a reconciliation to United States generally accepted accounting principles.

CURRENCY

Unless otherwise indicated, all dollar amounts in this annual report on Form 40-F and the documents incorporated herein by reference are in Canadian dollars. The exchange rate of Canadian dollars into United States dollars, on December 31, 2018, based upon the close rate of exchange of Canadian dollars into United States dollars as quoted by the Bank of Canada was CAD$1.00 = US$1.3642.

RESOURCE AND RESERVE ESTIMATES

The Corporation’s Annual Information Form for the fiscal year ended December 31, 2018 filed as Exhibit 99.1 to this annual report on Form 40-F and management’s discussion and analysis for the fiscal year ended December 31, 2018 filed as Exhibit 99.3 to this annual report on Form 40-F have been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ materially from the definitions in SEC Industry Guide 7 (“SEC Industry Guide 7”) under the United States Securities Act of 1933, as amended. Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves, and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into SEC Industry Guide 7 reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this annual report on Form 40-F and the documents incorporated by reference herein that contain descriptions of the Corporation’s mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder, including SEC Industry Guide 7.

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ANNUAL INFORMATION FORM

The Corporation’s Annual Information Form for the fiscal year ended December 31, 2018 is filed as Exhibit 99.1 to this annual report on Form 40-F and is incorporated by reference herein.

AUDITED ANNUAL FINANCIAL STATEMENTS

The audited consolidated financial statements of the Corporation as at and for the years ended December 31, 2018 and 2017, Management’s Report on Internal Control over Financial Reporting, including the report of the Independent Registered Public Accounting Firm with respect thereto, are filed as Exhibit 99.2 to this annual report on Form 40-F and incorporated by reference herein

Management’s Discussion and Analysis

The Corporation’s management’s discussion and analysis for the year ended December 31, 2018 is filed as Exhibit 99.3 to this annual report on Form 40-F and incorporated by reference herein.

Tax Matters

Purchasing, holding, or disposing of securities of the Corporation may have tax consequences under the laws of the United States and Canada that are not described in this annual report on Form 40-F. Holders of the Corporation’s common shares should consult their own tax advisors regarding the tax consequences of purchasing, holding or disposing of securities of the Corporation.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

At the end of the period covered by this annual report on Form 40-F, an evaluation was carried out under the supervision of and with the participation of the Corporation’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of the Corporation’s disclosure controls and procedures, as defined in Rule 13a–15(e) under the Exchange Act. Based upon that evaluation, the Corporation’s CEO and CFO have concluded that, as of the end the period covered by this annual report on Form 40-F, the Corporation’s disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed by the Corporation in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including its CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. A company’s internal control over financial reporting is a process designed by, or under the supervision of, the CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. It should be noted that a control system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance, that the objectives of the control system are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

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Management, including the CEO and CFO, assessed the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2018, based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway. Based on this assessment, management has concluded that Alexco’s internal control over financial reporting was effective as at December 31, 2018.

Attestation Report of Independent Registered Accounting Firm

The effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2018 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, included in Exhibit 99.2 to this Annual Report on Form 40-F.

Changes in Internal Control over Financial Reporting

There have been no changes in the Corporation’s internal control over financial reporting during the year ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

CORPORATE GOVERNANCE

The Corporation is listed on the Toronto Stock Exchange (“TSX”) and is required to describe its practices and policies with regards to corporate governance with specific reference to TSX guidelines by way of an annual corporate governance statement in the Corporation’s annual report or information circular filed with the appropriate securities regulators in Canada. The Corporation is also listed on the NYSE American (“NYSE American”) and additionally complies as necessary with the rules and guidelines of the NYSE American as well as the SEC. The Corporation reviews its governance practices on an ongoing basis to ensure it is in compliance with all applicable requirements.

The Corporation’s Board of Directors is responsible for the Corporation’s Corporate Governance policies and has separately designated standing Audit, Compensation, Nominating & Corporate Governance, and Environmental, Health, Safety & Technical Committees. The Corporation’s Board of Directors has determined that all the members of the Audit and Compensation Committees are independent and that two out of three members of the Nominating & Corporate Governance Committees are independent, based on the criteria for independence and unrelatedness prescribed by the TSX and Section 803A of the NYSE American Company Guide.

Compensation Committee

Compensation of the Corporation’s CEO and all other officers is recommended to the Board of Directors for determination by the Compensation Committee. The Compensation Committee develops, reviews and monitors director and executive officer compensation and policies. The Compensation Committee is also responsible for annually reviewing the adequacy of compensation to directors, officers, and other consultants and the composition of compensation packages. The Corporation’s CEO cannot be present during the Compensation Committee’s deliberations or vote on the CEO’s compensation.

The Compensation Committee is composed of Elaine Sanders, Terry Krepiakevich and Richard Zimmer, each of whom, in the opinion of the Board of Directors, is independent under the rules of the TSX and pursuant to Sections 803A and 805(c)(1) of the NYSE American Company Guide. The Corporation’s Compensation Committee Charter is available on the Company’s website at www.alexcoresource.com.

Nominating & Corporate Governance Committee

Nominees for the election to the Corporation’s Board of Directors are recommended by the Nominating & Corporate Governance Committee. The Corporation has adopted a formal written board resolution addressing the nomination process and such related matters as may be required under the rules of the TSX and the NYSE American and any applicable securities laws.

The Nominating & Corporate Governance Committee is composed of Rick Van Nieuwenhuyse, Elaine Sanders and Karen McMaster, each of whom, in the opinion of the Board of Directors, is independent under the rules of the TSX and the NYSE American. During the fiscal year covered by this report, Michael Winn served on the Nominating and Corporate Governance Committee from January 1, 2018 through June 7, 2018 when Karen McMaster replaced Michael Winn on the Committee. The Board has determined that Mr. Winn was independent under the rules of the NYSE American and not considered independent under the rules of the TSX during the time he served on the Nominating and Corporate Governance Committee. The Corporation’s Nominating and Corporate Governance Committee Charter is available on the Company’s website at www.alexcoresource.com.

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AUDIT COMMITTEE

Composition and Responsibilities

The Corporation’s Board of Directors has a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act and Section 803B of the NYSE American Company Guide. During the Corporation’s year ended December 31, 2018, the Corporation’s Audit Committee was composed of Terry Krepiakevich, Elaine Sanders and Richard Zimmer, each of whom, in the opinion of the Corporation’s Board of Directors, is independent (as determined under Rule 10A-3 of the Exchange Act, Section 803A of the NYSE American Company Guide, and the rules of the TSX) and each of whom is financially literate. The Audit Committee meets the composition requirements set forth by Section 803B(2) of NYSE American Company Guide.

Mr. Krepiakevich is a member of the Board of Directors of several publicly-listed and private companies since July 2011. From June 2006 to July 2011, Mr. Krepiakevich was the Chief Financial Officer of SouthGobi Resources Ltd., a publicly-listed mining company focused on exploring and developing coal deposits in Mongolia’s South Gobi Region. Previously, Mr. Krepiakevich was Chief Financial Officer for Extreme CCTV Inc., a publicly traded company on the TSX involved in manufacturing high tech surveillance equipment, and Vice-President Finance and Chief Financial Officer of Maynards Industries Ltd., a private firm specializing in retailing, auctioneering, liquidating, and mergers and acquisition services. Prior to his position with Maynards, Mr. Krepiakevich was a senior officer in a number of private and public issuers. He is a Canadian qualified Chartered Professional Accountant and was employed with the international accounting firm Peat Marwick Thorne (KPMG), where he worked with a number of companies in mining and related industries.

Ms. Sanders is the Vice President, Chief Financial Officer and Corporate Secretary for Trilogy Metals Inc. Prior to Trilogy Metals Inc., Ms. Sanders served as Vice President, Chief Financial Officer and Corporate Secretary was for NovaGold Resources Inc., Ms. Sanders has over 20 years of experience in audit, finance, and accounting with public and private companies and Bachelor of Commerce degree from the University of Alberta, is a Canadian qualified Chartered Professional Accountant and a Certified Public Accountant in the United States.

Mr. Zimmer is a corporate director and is the former President and Chief Executive Officer of Far West Mining Ltd., which was acquired by Capstone Mining Corp. in 2011. Prior to Far West, Mr. Zimmer worked for Teck Corporation, Teck-Cominco and Teck-Pogo Inc. From 1992 to 2007 he served in various engineering and operating roles and from 1998 to 2007, as Vice President and Project Manager for Teck-Pogo. on the design and construction of the Pogo Mine near Fairbanks, Alaska. Before joining Teck, Mr. Zimmer was employed with Bow Valley Industries as Senior Staff Engineer responsible for evaluation of new mining ventures. Mr. Zimmer has over 40 years of experience in the mining industry and has a B.Sc. degree, B. Eng., MBA and is a P.Eng in the Province of British Columbia.

The members of the Audit Committee do not have fixed terms and are appointed and replaced from time to time by resolution of the Board of Directors.

The Audit Committee meets with the Corporation’s CEO, President and CFO, and the Corporation’s independent auditors to review and inquire into matters affecting financial reporting, the system of internal accounting and financial controls, and the Corporation’s audit procedures and audit plans. The Audit Committee also recommends to the Board of Directors the independent auditors to be appointed for each fiscal year. In addition, the Audit Committee reviews and recommends to the Board of Directors for approval the annual and quarterly financial statements and management’s discussion and analysis. Finally, the Audit Committee undertakes other activities as required by the rules and regulations of the TSX and the NYSE American and other governing regulatory authorities.

The full text of the Audit Committee Charter is set forth in the Corporation’s Annual Information Form, filed as Exhibit 99.1 and incorporated by reference in this annual report on Form 40-F.

Audit Committee Financial Expert

During the Corporation’s year ended December 31, 2018, the Board of Directors determined that Mr. Terry Krepiakevich qualifies as the Audit Committee’s “financial expert,” as defined in Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act and is “financially sophisticated” as determined under Section 803(B)(2)(iii) of the NYSE Company Guide.

Mr. Krepiakevich qualifies as a financial expert and is financially sophisticated, in that he has an understanding of Canadian and United States generally accepted accounting principles and financial statements; is able to assess the general application of accounting principles in connection with the accounting for estimates, accruals and reserves; has experience analyzing or evaluating financial statements that entail accounting issues of equal complexity to the Corporation's financial statements (or actively supervising another person who did so); and has a general understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions.

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PRINCIPAL ACCOUNTING FEES AND SERVICES

PricewaterhouseCoopers LLP serves as our Independent Registered Public Accounting Firm for the Corporation in each of the last two years. The chart below sets forth the aggregate fees billed to the Corporation by PwC for services performed in these periods and breaks down these amounts by category of service (for audit fees, audit-related fees, tax fees and all other fees):

External Auditor Service Fees (By Category)

Financial Period	Audit Fees(a)	Audit Related Fees	Tax Fees	All Other Fees
Year ended December 31, 2018	$377,311	$Nil	$Nil	$Nil
Year ended December 31, 2017	$272,075	$Nil	$Nil	$Nil

a) “Audit Fees” are the aggregate fees billed by PwC for the following:

· Audits of the Corporation’s consolidated annual financial statements;

· Audits of internal control over financial reporting that are provided in connection with statutory and regulatory filings or engagements;

· Reviews of the Corporations quarterly financial statements; and

· Comfort letter, consents, and other services related to the SEC.

PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY
INDEPENDENT AUDITORS

The Audit Committee nominates and engages the independent auditors to audit the financial statements, and approves all audit, audit-related services, tax services and other services provided by PwC. Any services provided by PwC that are not specifically included within the scope of the audit must be pre-approved by the Audit Committee prior to any engagement. The Audit Committee is permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimus exception before the completion of the engagement. In the year ended December 31, 2018, no fees paid to PwC were approved pursuant to the de minimus exception.

OFF-BALANCE SHEET TRANSACTIONS

The Corporation does not have any off-balance sheet financing arrangements or relationships with unconsolidated special purpose entities.

CODE OF ETHICS

The Corporation’s Board of Directors has adopted a written Code of Business Conduct and Ethics by which it and all officers and employees of the Corporation abide. In addition, the Board of Directors, through its meetings with management and other informal discussions with management, encourages a culture of ethical business conduct and believes the Corporation's high caliber management team promotes a culture of ethical business conduct throughout the Corporation's operations and is expected to monitor the activities of the Corporation’s employees, consultants and agents in that regard. The Board of Directors encourages any concerns regarding ethical conduct in respect of the Corporation’s operations to be raised, on an anonymous basis, with the Chairman and CEO, the Lead Director, or another Board member as appropriate.

It is a requirement of applicable corporate law that directors and senior officers who have an interest in a transaction or agreement with the Corporation promptly disclose that interest at any meeting of the Board at which the transaction or agreement will be discussed and, in the case of directors, abstain from discussions and voting in respect to the same if the interest is material. These requirements are also contained in the Corporation's Articles, which are made available to the directors and senior officers of the Corporation. All related party transactions are subject to the review of the Corporation’s Audit Committee.

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All amendments to the Code of Business Conduct and Ethics, and all waivers of the Code with respect to any of the officers covered by it, will be posted on the Corporation’s website (as provided below) and provided in print to any shareholder who requests them. The Corporation’s Code of Business Conduct and Ethics is located on its website at www.alexcoresource.com.

CONTRACTUAL OBLIGATIONS

The following table lists as of December 31, 2018 information with respect to the Corporation’s known contractual obligations.

	Payments due by Period  (in thousands of Canadian dollars)
Contractual Obligations	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
Operating Leases	$1,440	$390	$703	$347	$Nil
Purchase obligations	730	430	180	120	Nil
Decommissioning and rehabilitation provision (undiscounted basis)	6,573	-	733	298	5,542
TOTAL	$8,743	$820	$1,616	$765	$5,542

NOTICES PURSUANT TO REGULATION BTR

There were no notices required by Rule 104 of Regulation BTR that the Registrant sent during the year ended December 31, 2018 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.

NYSE AMERICAN CORPORATE GOVERNANCE

The Corporation’s common shares are listed on the NYSE American under the trading symbol “AXU”. Section 110 of the NYSE American Company Guide permits the NYSE American to consider the laws, customs and practices of foreign issuers in relaxing certain NYSE American listing criteria, and to grant exemptions from NYSE American listing criteria based on these considerations. A company seeking relief under these provisions is required to provide written certification from independent local counsel that the non-complying practice is not prohibited by home country law. A description of the significant ways in which the Corporation’s governance practices differ from those followed by domestic companies pursuant to NYSE American standards is as follows:

Shareholder Meeting Quorum Requirement: The NYSE American minimum quorum requirement for a shareholder meeting is one-third of the outstanding shares of common stock. In addition, a company listed on the NYSE American is required to state its quorum requirement in its bylaws. The Corporation’s quorum requirement is set forth in its charter documents under the laws of the Province of British Columbia, Canada. A quorum for a meeting of shareholders of the Corporation is one person present or represented by proxy.

Proxy Delivery Requirement: The NYSE American requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings, and requires that these proxies shall be solicited pursuant to a proxy statement that conforms to SEC proxy rules. The Corporation is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act, and the equity securities of the Corporation are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Corporation solicits proxies in accordance with applicable rules and regulations in Canada.

The foregoing are consistent with the laws, customs and practices in Canada.

In addition, the Corporation may from time-to-time seek relief from NYSE American corporate governance requirements on specific transactions under Section 110 of the NYSE American Company Guide by providing written certification from independent local counsel that the non-complying practice is not prohibited by our home country law, in which case, the Corporation shall make the disclosure of such transactions available on its website at www.alexcoresource.com. Information contained on the Corporation’s website is not part of this annual report on Form 40-F.

MINE SAFETY DISCLOSURE

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (“Mine Act”). During the year ended December 31, 2018, neither the Corporation nor its subsidiaries operated a mine in the United States, and were not subject to regulation by MSHA under the Mine Act.

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UNDERTAKING

The Corporation undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

CONSENT TO SERVICE OF PROCESS

Concurrently herewith, the Corporation is filing an updated Appointment of Agent for Service of Process and Undertaking on Form F-X with the SEC with respect to the class of securities in relation to which the obligation to file this annual report on Form 40-F arises. Any change to the name or address of the agent for service of process will be communicated promptly to the SEC by amendment to Form F-X referencing the Company’s file number.

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EXHIBIT INDEX

The following exhibits have been filed as part of this Annual Report on Form 40-F.

EXHIBITS
99.1	Annual Information Form of the Corporation for the year ended December 31, 2018
99.2	Consolidated Financial Statements for the years ended December 31, 2018 and 2017
99.3	Management’s Discussion and Analysis for the year ended December 31, 2018
CERTIFICATIONS
99.4	Certificate of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act
99.5	Certificate of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act
99.6	Certificate of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.7	Certificate of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
CONSENTS
99.8	Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm
99.9	Consent of Gilles Arseneau, Ph.D., P.Geo.
99.10	Consent of Jeffrey B. Austin, P.Eng.
99.11	Consent of Torben Jensen, P. Eng.
99.12	Consent of R. Dennis Bergen, P.Eng.
99.13	Consent of David Farrow, Pr.Sci.Nat, P.Geo.
99.14	Consent of Alan McOnie, FAusIMM
99.15	Consent of Neil Chambers
101,INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

9

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

ALEXCO RESOURCE CORP.
By:	/s/ Clynton R. Nauman
Name:	Clynton R. Nauman
Title:	Chairman and Chief Executive Officer

Date: March 13, 2019

10

EX-99.1

Exhibit 99.1

ANNUAL INFORMATION FORM

ALEXCO RESOURCE CORP.

Suite 1225, Two Bentall Centre, 555 Burrard Street, Box 216

Vancouver, British Columbia, V7X 1M9

Telephone: (604) 633-4888

Facsimile: (604) 633-4887

E-Mail: info@alexcoresource.com

Website: www.alexcoresource.com

For the year ended December 31, 2018

Dated as of March 13, 2019

TABLE OF CONTENTS

PRELIMINARY NOTES	3
GLOSSARY OF TECHNICAL TERMS	5
Metric Equivalents	8
CORPORATE STRUCTURE	9
GENERAL DEVELOPMENT OF THE BUSINESS	9
Formation of the Corporation	9
Three Year History and Significant Acquisitions	9
DESCRIPTION OF THE BUSINESS	12
Mining Business	12
KHSD Property	13
Environmental Services	13
General	13
Keno Hill Project	14
Social and Environmental Policies	15
RISK FACTORS	15
Negative Cash Flow From Operating Activities	15
Forward-Looking Statements May Prove Inaccurate	15
Dilution	15
Exploration, Evaluation and Development	16
Figures for the Corporation's Resources are Estimates Based on Interpretation and Assumptions and May Yield Less Mineral Production Under Actual Conditions than is Currently Estimated	16
Amendments to Share Purchase Agreement with Wheaton	17
Keno Hill District	17
Mining Operations	17
Employee Recruitment and Retention	18
Dependence on Management	18
Permitting and Environmental Risks and Other Regulatory Requirements	18
Environmental Services	19
Potential Profitability of Mineral Properties Depends Upon Factors Beyond the Control of the Corporation	20
First Nation Rights and Title	20
Title to Mineral Properties	20
Capitalization and Commercial Viability	20
Critical Accounting Estimates and Judgments	21
General Economic Conditions May Adversely Affect the Corporation’s Growth and Profitability	21
Operating Hazards and Risks	22
Competition	22
Certain of the Corporation’s Directors and Officers are involved with Other Natural Resource Companies, Which May Create Conflicts of Interest from Time to Time	22
The Corporation May Fail to Maintain Adequate Internal Control Over Financial Reporting Pursuant to the Requirements of the Sarbanes-Oxley Act	22
As a “foreign private issuer”, the Corporation is exempt from Section 14 proxy rules and Section 16 of the Securities Exchange Act of 1934	22
It may be difficult to enforce judgments or bring actions outside the United States against the Corporation and certain of our directors	23
DIVIDENDS	23
DESCRIPTION OF CAPITAL STRUCTURE	23
MARKET FOR SECURITIES	23
Trading Price and Volume	23

Securities Not Listed or Quoted	24
Prior Sales	24
DIRECTORS AND OFFICERS	25
Name, Occupation and Security Holding	25
Cease Trade Orders, Bankruptcies, Penalties or Sanctions	26
Conflicts of Interest	27
AUDIT COMMITTEE INFORMATION	28
Audit Committee Charter	28
Composition of the Audit Committee	33
Reliance on Certain Exemptions	34
Audit Committee Oversight	34
Pre-Approval Policies and Procedures	34
External Auditor Service Fees (By Category)	34
LEGAL PROCEEDINGS AND REGULATORY ACTIONS	35
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS	35
TRANSFER AGENTS AND REGISTRARS	35
MATERIAL CONTRACTS	35
INTERESTS OF EXPERTS	35
Names of Experts	35
Interests of Experts	36
ADDITIONAL INFORMATION	36
SCHEDULE "A"	37

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PRELIMINARY NOTES

In this Annual Information Form (“AIF”), Alexco Resource Corp. is referred to as the “Corporation” or “Alexco”. All information contained herein is as at and for the year ended December 31, 2018, unless otherwise specified. All dollar amounts in this AIF are expressed in Canadian dollars unless otherwise indicated.

Cautionary Statement Regarding Forward-Looking Statements

This AIF contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws (together, “forward-looking statements”) concerning the Corporation's business plans, including but not limited to anticipated results and developments in the Corporation’s operations in future periods, planned exploration and development of its mineral properties, plans related to its business and other matters that may occur in the future, made as of the date of this AIF. Forward-looking statements may include, but are not limited to, statements with respect to amendments to the silver purchase agreement (“SPA” or the “Silver Purchase Agreement”) with Wheaton Precious Metals Corp. (“Wheaton”) and its impact on the Corporation, the resulting effect on pricing and other terms of the SPA, additional capital requirements to fund further exploration and development work on the Corporation's properties, future remediation and reclamation activities, future mineral exploration, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, future mine construction and development activities, future mine operation and production, the timing of activities, the amount of estimated revenues and expenses, the success of exploration activities, permitting time lines, requirements for additional capital and sources and uses of funds. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “estimates”, “intends”, “strategy”, “goals”, “objectives” or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be “forward-looking statements”.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements. Such factors include, but are not limited to, risks related to actual results and timing of exploration and development activities; actual results and timing of mining activities; actual results and timing of environmental services operations; actual results and timing of remediation and reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of silver, gold, lead, zinc and other commodities; possible variations in resources, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; First Nation rights and title; continued capitalization and commercial viability; global economic conditions; competition; delays in obtaining governmental approvals or financing or in the completion of development activities, and inability of the Corporation to obtain additional financing needed to fund certain contingent payment obligations on reasonable terms or at all. Furthermore, forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Corporation or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to those referred to in this AIF under the heading “Risk Factors” and elsewhere.

Forward-looking statements are based on certain assumptions that management believes are reasonable at the time they are made. In making the forward-looking statements included in this AIF, the Corporation has applied several material assumptions, including, but not limited to, the assumption that: (1) additional financing needed to fund certain contingent payment obligations to Wheaton; (2) additional financing needed for the capacity related refund under the SPA with Wheaton will be available on reasonable terms; (3) additional financing needed for further exploration and development work on the Corporation's properties will be available on reasonable terms; (4) the proposed development of its mineral projects will be viable operationally and economically and proceed as planned; (5) market fundamentals will result in sustained silver, gold, lead and zinc demand and prices, and such prices will not be materially lower than those estimated by management in preparing the annual financial statements for the year ended December 31, 2018; (6) market fundamentals will result in sustained silver, gold, lead and zinc demand and prices, and such prices will be materially consistent with or more favourable than those anticipated in the Preliminary Economic Assessment (“PEA”) (as defined under "Description of the Business – KHSD Property"); (7) the actual nature, size and grade of its mineral resources are materially consistent with the resource estimates reported in the supporting technical reports; (8) labor and other industry services will be available to the Corporation at prices consistent with internal estimates; (9) the continuances of existing and, in certain circumstances, proposed tax and royalty regimes; and (10) that other parties will continue to meet and satisfy their contractual obligations to the Corporation. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered if the property is developed. Other material factors and assumptions are discussed throughout this AIF and, in particular, under the heading “Risk Factors”.

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The Corporation's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and should not be relied on as representing the Corporation's views on any subsequent date. While the Corporation anticipates that subsequent events may cause its views to change, the Corporation specifically disclaims any intention or any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change, except as required by applicable law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

Cautionary Note to U.S. Investors – Information Concerning Preparation of Resource Estimates

This AIF has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ materially from the definitions in the United States Securities and Exchange Commission’s (“SEC”) Industry Guide 7 under the United States Securities Act of 1933, as amended. Under SEC Industry Guide 7 standards, mineralization cannot be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally extracted at the time the reserve determination is made. As applied under SEC Industry Guide 7, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves, and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into SEC Industry Guide 7 reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information concerning mineral deposits contained in this AIF may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder, including SEC Industry Guide 7.

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Qualified Person Under NI 43-101

Except where specifically indicated otherwise, the disclosure in this AIF of scientific and technical information regarding exploration projects on Alexco’s mineral properties has been reviewed and approved by Alan McOnie, FAusIMM, Vice President, Exploration, while that regarding mine development and operations has been reviewed and approved by Neil Chambers, P.Eng., Mine Superintendent, both of whom are Qualified Persons as defined by NI 43-101.

GLOSSARY OF TECHNICAL TERMS

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

Acre	An area of 4,840 square yards or 43,560 square feet.
Ag	Silver.
Assay	In economic geology, to analyze the proportions of metal in a rock or overburden sample; to test an ore or mineral for composition, purity, weight or other properties of commercial interest.
Au	Gold.
CIM	Canadian Institute of Mining, Metallurgy and Petroleum.
Deposit	A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures; such a deposit does not qualify as a commercially mineable ore body or as containing ore reserves, until final legal, technical, and economic factors have been resolved.
Dip	The angle at which a stratum or vein is inclined from the horizontal.
Fold	A bend in strata or any planar structure.
g/t	Grams per tonne
Grade	The amount of valuable metal in each tonne of mineralized rock, expressed as grams per tonne (“g/t”) for precious metals, as percent (%) for copper, lead and zinc.
Hectare	An area equal to 100 meters by 100 meters.
km	Kilometers.
m	Meters.
Mineral Reserve, Proven Mineral Reserve, Probable Mineral Reserve	Under CIM 2014 standards, a Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by a pre-feasibility study or a feasibility study as appropriate that includes application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. Mineral Reserves under CIM standards are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the qualified person(s) making the estimates, is the basis of an economically viable project after taking account of all Modifying Factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term ‘Mineral Reserve’ need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals.

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Under CIM standards, Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve. The terms “Mineral Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve” used in this AIF are mining terms defined under CIM standards and used in accordance with NI 43-101. Mineral Reserves, Proven Mineral Reserves and Probable Mineral Reserves presented under CIM standards may not conform with the definitions of “reserves” or “proven reserves” or “probable reserves” under United States Industry Guide 7. See “Preliminary Notes – Cautionary Note to U.S. Investors – Information Concerning Preparation of Resource Estimates”. Proven Mineral Reserve: 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. Probable Mineral Reserve: A Probable Mineral Reserve is the economically mineable part of an Indicated Mineral Resource 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.

Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource, Inferred Mineral Resource

Under CIM standards, 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. Under CIM standards, Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource. The terms “mineral resource”, “measured mineral resource”, “indicated mineral resource”, and “inferred mineral resource” used in this AIF are mining terms defined under CIM standards and used in accordance with NI 43-101. They are not defined terms under United States Industry Guide 7 and generally may not be used in documents filed with the SEC by U.S. companies. See “Preliminary Notes – Cautionary Note to U.S. Investors – Information Concerning Preparation of Resource Estimates”. Inferred Mineral Resource: Under CIM standards, an Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

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	Indicated Mineral Resource: Under CIM standards, an Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve. Measured Mineral Resource: Under CIM standards, a Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.
Mineralization	The concentration of metals and their chemical compounds within a body of rock.
Modifying Factors	The factors used to convert Mineral Resources to Mineral Reserves.  These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.
Ore	A metal or mineral or a combination of these of sufficient value as to quality and quantity to enable it to be mined at a profit.
Ounce or oz	A troy ounce or twenty penny weights or 480 grains or 31.103 grams.
Outcrop	An exposure of bedrock at the surface.
Pb	Lead.
Quartz	A mineral composed of silicon dioxide.
Strike	Direction or trend of a geologic structure as it intersects the horizontal.
Ton	Also referred to as “short ton”, a United States unit of weight equivalent to 2,000 pounds.
Tonne	A metric unit of weight equivalent to volume multiplied by specific gravity; equivalent to 1.102 tons or 1,000 kilograms (2,204.6 pounds).
Tpd	Tonnes per day
Vein	Thin sheet-like intrusion into a fissure or crack, commonly bearing quartz.
Zn	Zinc.

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Metric Equivalents

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

To Convert From	To	Multiply By
Feet	Meters	0.3048
Meters	Feet	3.281
Miles	Kilometers (“km”)	1.609
Kilometers	Miles	0.6214
Acres	Hectares (“ha”)	0.405
Hectares	Acres	2.471
Grams	Ounces (Troy)	0.03215
Grams/Tonnes	Ounces (Troy)/Short Ton	0.02917
Tonnes (metric)	Pounds	2,205
Tonnes (metric)	Short Tons	1.1023

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CORPORATE STRUCTURE

The Corporation was incorporated under the Business Corporations Act (Yukon) on December 3, 2004 under the name “Alexco Resource Corp.” Effective December 28, 2007, it was continued under the Business Corporations Act (British Columbia).

The Corporation's head office is located at Suite 1225, Two Bentall Centre, 555 Burrard Street, Box 216, Vancouver, British Columbia, V7X 1M9, Canada, and its registered and records office is located at 10th Floor, 595 Howe Street, Vancouver, British Columbia, V6C 2T5, Canada.

At the end of its most recently completed financial year, the Corporation had the following wholly-owned subsidiaries:

· Alexco Keno Hill Mining Corp., organized under the laws of British Columbia (“AKHM”);

· Alexco Exploration Canada Corp., organized under the laws of British Columbia (“AECC”);

· Elsa Reclamation & Development Company Ltd., organized under the laws of Yukon (“ERDC”);

· Alexco Environmental Group Inc., organized under the laws of Yukon (“AEG Canada”);

· Alexco Water and Environment Inc., organized under the laws of Colorado (“AWE”);

· Alexco Environmental Group Holdings Inc., organized under the laws of British Columbia (“AEG Holdings”); and

· Contango Strategies Ltd., organized under the laws of Saskatoon (“Contango”).

Unless otherwise indicated or the context otherwise requires, reference to the term the “Corporation” or “Alexco” in this AIF includes Alexco Resource Corp. and its subsidiaries.

GENERAL DEVELOPMENT OF THE BUSINESS

Formation of the Corporation

In 2005, the Corporation completed a series of transactions pursuant to which it acquired a number of mineral property interests and rights to certain operating contracts in Yukon Territory and British Columbia, the most significant of which properties are located in Yukon Territory’s Keno Hill Silver District.

Alexco operates two principal businesses: (i) a mining business, comprised of mineral exploration and mine development and operation in Canada, primarily in Yukon Territory; and (ii) through its Alexco Environmental Group Division (through AEG Canada, AWE and Contango), provision of a variety of mine and industrial site related environmental services including management of the regulatory and environmental permitting process, environmental assessments, and reclamation and closure planning in Canada, the United States and elsewhere.

Three Year History and Significant Acquisitions

In June 2005, the Corporation was selected as the preferred purchaser of the assets of United Keno Hill Mines Limited and UKH Minerals Limited (collectively, “UKHM”) by a court appointed interim receiver and receiver-manager of UKHM. In February 2006, following negotiation of a subsidiary agreement (the “Subsidiary Agreement”) between the Government of Canada, the Government of Yukon (collectively, the “Government Group”) and the Corporation, the Supreme Court of Yukon conditionally approved the purchase of the assets of UKHM by Alexco through its wholly-owned subsidiary, ERDC, final closing of which acquisition was effected in December 2007. Under the terms of the Subsidiary Agreement, the Corporation is indemnified by the Government of Canada for all liabilities, including environmental liabilities, arising directly or indirectly as a result of the pre-existing condition of the Keno Hill mineral rights and other assets acquired from UKHM. The Subsidiary Agreement provides that ERDC may bring any mine into production on the UKHM Mineral Rights (as hereinafter defined) by designating a production unit from the mineral rights relevant to that purpose and then assuming responsibility for all costs of the production unit’s water related care and maintenance and water related components of closure reclamation. The Subsidiary Agreement further requires ERDC to pay into a separate reclamation trust a 1.5% net smelter return royalty, up to an aggregate maximum of $4 million for all production units, from any future production from the UKHM Mineral Rights, commencing once earnings from mining before interest, taxes and depreciation exceed actual exploration costs, up to a maximum of $6.2 million, plus actual development and construction capital.

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Also under the Subsidiary Agreement, ERDC is retained through the Government Group as a paid contractor responsible on a continuing basis for the environmental care and maintenance and ultimate closure reclamation of the former UKHM Mineral Rights. The original Subsidiary Agreement provided that ERDC was responsible for the development of the ultimate closure reclamation plan for fees of 65% of agreed commercial contractor rates, and this plan development is currently ongoing. Upon acceptance and regulatory approval, the closure reclamation plan will be implemented by ERDC at full agreed commercial contractor rates. During the period required to develop the plan, the original Subsidiary Agreement also provided that ERDC was responsible for carrying out the environmental care and maintenance of the UKHM Mineral Rights for a reducing fixed annual fee adjusted each year for certain operating and inflationary factors.

In July 2013, an amended and restated Subsidiary Agreement (the “ARSA”) was executed with the Government of Canada. Recognizing that developing the closure reclamation plan is more complicated than originally anticipated, the ARSA provides for the Government of Canada to contribute a higher proportion of closure plan development costs than provided for under the Subsidiary Agreement, retroactive to 2009. Going forward, ERDC will receive 95% of agreed commercial contractor rates for ongoing development of the closure reclamation plan. Furthermore, with respect to care and maintenance activity during the closure reclamation planning phase, the original reducing fee scale is replaced by a fixed fee of $850,000 per year, representing approximately 50% of estimated fully-billable care and maintenance fees.

Since 2006, the Corporation has carried out exploration activities on several of its properties within the Keno Hill District, with a significant component of that activity having been focused on the Bellekeno property and the Bellekeno mine, which commenced commercial production effective January 1, 2011.

Under terms of the original Silver Purchase Agreement (entered into on October 2, 2008 and subsequently amended on October 20, 2008, December 10, 2008, December 22, 2009, March 31, 2010, January 15, 2013, March 11, 2014 and June 16, 2014, respectively):

· the Corporation and certain of its subsidiaries received up-front deposit payments from Wheaton totaling US$50 million, and received further payments of the lesser of US $3.90 (increasing by 1% per annum after the third year of full production) and the prevailing market price for each ounce of payable silver delivered, if as and when delivered;

· Wheaton would receive 25% of the life of mine silver produced by the Corporation from its Keno Hill Silver District properties; and

· the initial silver deliveries were to come from the Bellekeno mine.

In light of a sharply reduced silver price environment, Bellekeno mining operations were suspended as of September 30, 2013.

On March 29, 2017 the Corporation and certain of its subsidiaries and Wheaton entered into an amendment agreement to the Silver Purchase Agreement (the “Amended SPA”) pursuant to which, among other things, the following amendments were made to the Silver Purchase Agreement:

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· Wheaton will continue to receive 25% of the life of mine payable silver from the KHSD. The production payment (originally US$3.90 per ounce) will be based on monthly average silver head grade from the mill and monthly average silver spot 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) according to the following formula:

(Ceiling Grade – Deemed Shipment Head Grade)	X	(Ceiling Price – Deemed Shipment Silver Price)	X	Market Price
(Ceiling Grade – Floor Grade)		(Ceiling Price – Floor Price)

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 date for completion of the 400 tonne per day mine and mill completion test date was extended to December 31, 2019, which in December 2018 was further extended out to December 31, 2020;

· The Wheaton area of interest remains one (1) km around existing Alexco holdings in the KHSD.

In consideration of the foregoing amendments, the Corporation issued 3,000,000 shares to Wheaton with a fair value of US$4,934,948.

In addition to the mining business described above, the Corporation also operates an environmental services business through its Alexco Environmental Group division (“AEG”). Primarily through AEG Canada, AWE, Contango and ERDC, AEG provides a variety of mine and industrial site related environmental services including management of the regulatory and environmental permitting process, environmental assessments and reclamation and closure planning. AEG operations also include the care and maintenance and closure reclamation activities being conducted by the Corporation in the Keno Hill District under the Subsidiary Agreement. Alexco also owns certain patents (the “Patents”) registered or in the process of being registered in the U.S., Canada and various other countries around the world, with terms that expire variously between 2019 and 2020. The Patents generally pertain to the in-situ immobilization of metals, and are specifically suited to mine closure related remediation.

On June 15, 2018 AEG Holdings acquired Contango, a private company based in Saskatoon, Saskatchewan, for consideration of $1,388,000 comprising $971,600 in cash and 237,999 common shares of Alexco at a value of $416,400. Settlement of the consideration is in two tranches with $1,018,000 (comprising $601,600 in cash and $416,400 in Alexco common shares) paid on closing with the remaining $370,000 cash payment to be made on the first anniversary of the closing of the transaction.

Further particulars relating to the business of AEG, including activities being conducted under the Subsidiary Agreement, are described below under “Description of the Business – Environmental Services”.

On May 17, 2016, the Corporation completed a non-brokered private placement of 10,839,972 units at a price of $1.20 per unit for aggregate gross proceeds of $13,007,966. Each unit consisted of one common share and one-half of one non-transferable common share purchase warrant, each whole such warrant entitling the holder to purchase one additional common share of the Corporation at a price of $1.75 per share until May 17, 2018The Corporation paid Sprott Private Wealth LP and certain of its affiliates a cash commission equal to the 5% of the gross proceeds from the sale of 7.51 million units and issued an aggregate of 225,300 finder’s warrants, each of which is exercisable for one common share of the Corporation at a price of $1.49 until May 17, 2018. The Corporation also paid finder’s fees in the aggregate amount of $176,110 to other arm’s length finders, representing a cash commission equal to 5% of the gross proceeds received in respect of the sale of 2.94 million units to purchasers introduced to the Corporation by such finders.

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On May 30, 2017, the Corporation completed an underwritten private placement of 4,205,820 “flow-through” common shares at a price of $2.15 per share for gross proceeds of $9,042,513. The underwriter, Canaccord Genuity Corp., received a cash commission of $542,550 representing 6% of the gross proceeds, as well as 126,174 underwriter’s warrants, with each underwriter’s warrant entitling the holder to purchase one common share at a price of $2.15 until May 30, 2019.

On February 26, 2018, the Corporation announced that it had entered into a credit agreement with Sprott Private Resource Lending (Collector), L.P. to provide a US$15,000,000 credit facility to be used for the development of the Keno Hill Project. The facility is available for drawdown for a period of 12 months and matures February 23, 2021 and bears an interest rate on the funds drawn down equal to the greater of (a) a fixed rate of 8% per annum, calculated daily and compounded monthly; and (b) a floating rate equal to 7% per annum plus LIBOR, calculated and compounded monthly. In consideration for providing the credit facility, the Corporation issued to the lender 1,000,000 warrants, each warrant exercisable for one common share of the Corporation at an exercise price of $2.25 until February 23, 2023, subject to the Corporation’s right to accelerate the expiry date of the warrants on not less than 30 days’ notice in the event that the closing price of the Corporation’s common shares on the Toronto Stock Exchange is greater than $5.625 for a period of more than 20 consecutive trading days. On February 14, 2019 the Corporation extended the availability period for draw down by six months (the expiry date was extended to August 23, 2019 from the previous expiry date of February 23, 2019) by issuing 171,480 common shares of the Corporation to the lender.

On June 14, 2018, the Corporation completed an offering, on a bought deal basis, of 4,703,000 flow-through common shares at a blended price of approximately $1.92 per share for gross proceeds of $9,041,150. The securities issued under the offering were compromised of (i) 966,500 flow-through shares with respect to "Canadian exploration expenses" issued at $2.05 per share; (ii) 1,736,500 flow-through shares with respect to "Canadian exploration expenses" that also qualify as "flow-through mining expenditures" issued at $2.05 per share; and (iii) 2,000,000 flow-through shares with respect to "Canadian development expenses" issued at $1.75.

DESCRIPTION OF THE BUSINESS

The Corporation operates two principal businesses: a mining business, comprised of mineral exploration and mine development and operation in Canada, primarily in Yukon Territory; and through AEG an environmental services business, providing consulting, remediation solutions and project management services in respect of environmental permitting and compliance and site remediation, in Canada, the United States and elsewhere.

At December 31, 2018, the Corporation had 113 permanent and seasonal employees. A total of 13 were employed in the care and maintenance of the Bellekeno mine and mill site care and maintenance, a further 9 were employed in mineral exploration and evaluation activities. A total of 79 were employed in the environmental services business, with the remaining 12 employed in respect of executive management and administrative support. Significant aspects of both the mining business and the environmental services business require specialized skills and knowledge in areas that include geology, mining, metallurgy, engineering, environmental contamination treatment, permitting and regulatory compliance, as well as environmental and social policy issues. Any re-start of Alexco’s mining operations will necessitate the hiring of additional mine and mill personnel.

Mining Business

The Corporation's principal mining business activities are currently being carried out within the Keno Hill District in Yukon Territory. The Keno Hill District (the "District") is a storied silver mining region in Canada, encompassing over 35 former mines that produced variously from approximately 1918 through 1988, with published information from the Yukon Government’s Minfile database reporting more than 214 million ounces of silver produced at average grades of 44.7 ounces per tonne silver, 5.6% lead and 3.1% zinc.

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The Corporation’s mineral property holdings within the Keno Hill district cover the most prospective geological areas to host silver mineralization, including all of the significant historic producing former mines and most of the other mineral occurrences. In addition to the deposits described below that are within the Keno Hill Silver District (“KHSD”) as detailed in the PEA, the Corporation holds several other less advanced property interests within the District, including but not limited to the Silver King, Elsa, Husky, Sadie Ladue and McQuesten properties, which potentially could become material properties depending on the results of exploration programs the Corporation may carry out on them in the future, as well as the separate Elsa Tailings Property (see technical report dated June 16, 2010, entitled “Mineral Resource Estimation, Elsa Tailings Project ,Yukon, Canada”).  In aggregate, Alexco’s mineral rights and holdings within the Keno Hill District currently comprise 725 surveyed quartz mining leases, 846 unsurveyed quartz mining claims, eight (8) placer claims and two (2) crown grants, in addition to five (5) fee simple lots and seven (7) surface leases.  Of those, the mineral rights acquired from UKHM (the “UKHM Mineral Rights”) and therefore subject to the capped 1.5% net smelter return royalty provided for under the Subsidiary Agreement (see “General Development of the Business – Three Year History and Significant Acquisitions”) total 676 quartz mining leases, 121 quartz mining claims and two crown grants.

Other non-material mineral property interests of the Corporation include Harlan properties in the Yukon, and certain net smelter return royalties in respect of the Brewery Creek, Ida-Oro (formerly Klondike) and Sprogge properties in the Yukon and the Telegraph Creek, Iskut River, Kiniskan Lake and Manson Creek properties in British Columbia.

KHSD Property

The Corporation’s KHSD property (as detailed in the PEA) encompasses the Flame & Moth, Bermingham, Lucky Queen, Bellekeno and Onek deposits.

An independent technical report dated March 29, 2017 with an effective date of January 3, 2017 as amended on September 14, 2018 prepared by Roscoe Postle Associates Inc. ("RPA") entitled "Preliminary Economic Assessment of the Keno Hill Silver District Project, Yukon, Canada" was filed and is available on SEDAR under the Corporation's profile at www.sedar.com.

Attached as Schedule "A" to this AIF is the summary contained in the PEA, which summary has been updated and conformed to be consistent with other disclosure within this AIF.

The detailed disclosure contained in the PEA is hereby incorporated by reference. It is noted that the PEA contains references and/or assumptions relating to the dates for re-starting or continuing mining operations or development work at certain of Alexco's mineral properties. Notwithstanding the incorporation by reference herein of the PEA and reproduction of the summary section in Schedule “A” hereto, such dates were projections made at the time the PEA was prepared and are not necessarily reflective of Alexco's current plans. Re-start of mining operations and/or development work is dependent on a number of factors, including sustained improvements in silver markets and the effectiveness of cost structure reduction measures. Accordingly, there is no certainty as to when these factors will be achieved.

Environmental Services

General

The Corporation’s environmental services division, AEG, is in the business of managing risk and unlocking value at mature, closed or abandoned sites through integration and implementation of the Corporation's core competencies, which include management of environmental services, implementation of innovative treatment technologies, execution of site reclamation and closure operations, and, if appropriate, rejuvenation of exploration and development activity. The Corporation’s principal markets for these services are in Canada, the United States and the Americas, with the Canadian market serviced primarily through AEG Canada, Contango and ERDC, the U.S. market through AWE, and the balance of the Americas through either AEG Canada, Contango or AWE. The Corporation provides its services to a range of industrial sectors, but with a particular focus on current and former mine sites.

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The Corporation offers its clients a unique combination of environmental remediation expertise in the area of site reclamation and closure, an ability to manage complex permitting and regulatory programs on a turnkey basis, and strong operations management. In addition, the Corporation seeks to strategically leverage off its environmental services group, accessing opportunities to enhance asset value through effective liability risk management and efficient site operations. This is accomplished through unlocking potential exploration and development opportunities at contaminated or abandoned sites through cost effective and responsible environmental remediation and liability transfer.

The Corporation executes its environmental services business plan by using and applying the intellectual property assets, including the Patents, and the specialized skill sets and knowledge it maintains in-house. While there are a significant number of firms providing environmental services in North America, these assets, skill sets and knowledge provide Alexco with a strong competitive advantage. Consolidated revenue from environmental services for the year ended December 31, 2018 totaled $19,880,000, compared to $10,732,000 in 2017, all of which was derived from sales to external unrelated parties. During the year ended December 31, 2018, the Corporation recorded revenues from three customers representing 10% or more of total environmental services revenue, in the amounts of $4,780,000, $4,020,000 and $3,780,000. During 2017, AEG had three customers representing 10% or more of total revenue, in the amounts of $3,419,000, 1,702,000 and $1,473,000.

Keno Hill Project

As described above (see “General Development of the Business – Three Year History and Significant Acquisitions”), under the Subsidiary Agreement, Alexco’s subsidiary ERDC was retained through the Government Group as a paid contractor responsible on a continuing basis for the environmental care and maintenance and ultimate closure reclamation of the former UKHM Mineral Rights.

Pursuant to the Subsidiary Agreement, ERDC shares the responsibility for the development of the ultimate closure reclamation plan with the Government of Canada, for which it would receive fees of 65% of agreed commercial contractor rates, and this plan development is currently ongoing. Upon acceptance and regulatory approval, the closure reclamation plan will be implemented by ERDC at full agreed contractor rates. During the period required to develop the plan and until the closure plan is executed, ERDC is also responsible for carrying out the environmental care and maintenance at various sites within the UKHM Mineral Rights, for a fixed annual fee adjusted each year for certain operating and inflationary factors and determined on a site-by-site basis. Under the Subsidiary Agreement, the portion of the annual fee amount so determined which was billable by ERDC in respect of each site reduced by 15% each year until all site-specific care and maintenance activities were replaced by closure reclamation activities; provided however that should a closure reclamation plan be prepared but not accepted and approved, the portion of annual fees billable by ERDC would revert to 85% until the Subsidiary Agreement was either amended or terminated. ERDC receives agreed commercial contractor rates when retained by the Government Group to provide environmental services in the Keno Hill District outside the scope of care and maintenance and closure reclamation planning under the Subsidiary Agreement. As a result of these terms, the Corporation has previously recognized an environmental services contract loss provision to reflect aggregate future losses estimated to be realized with respect to care and maintenance activity during the closure planning phase.

In July 2013, the Corporation executed an amended and restated Subsidiary Agreement, the ARSA, with the Government of Canada. Recognizing that developing the closure reclamation plan is more complicated than originally anticipated, the ARSA provides for the Government of Canada to contribute a higher proportion of those costs than provided for under the Subsidiary Agreement. Going forward, ERDC receives 95% of agreed commercial contractor rates for ongoing development of the closure reclamation plan. Furthermore, with respect to care and maintenance activity during the closure planning phase, the original reducing fee scale was replaced by a fixed fee of $850,000 per year, representing approximately 50% of estimated fully-billable fees.

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Social and Environmental Policies

The Corporation maintains a written Code of Business Conduct and Ethics (the “Code”), compliance with which is mandatory for all directors, officers and employees, and the full text of which may be viewed at the Corporation’s web site. Included within the Code is a requirement that all directors, officers and employees comply with all laws and governmental regulations applicable to Alexco’s activities, including but not limited to maintaining a safe and healthy work environment, promoting a workplace that is free from discrimination or harassment and conducting all activities in full compliance with all applicable environmental laws. All directors, officers and employees are required to certify in writing their acknowledgement of and compliance with the Code, at the time of hiring and at least annually thereafter. A senior executive of the Corporation is formally appointed the role of Company Ethics Officer, responsible for ensuring adherence to the Code, investigating any reported violations, and ensuring appropriate responses, including corrective action and preventative measures, are taken when required.

RISK FACTORS

The following are major risk factors management has identified which relate to the Corporation’s business activities. Such risk factors, as well as risks not currently known to the Corporation or that the Corporation currently deems to be immaterial, could materially affect the Corporation's future business, financial condition, results of operations, earnings and prospects, and could cause events to differ materially from those described in forward-looking statements relating to the Corporation. Though the following are major risk factors identified by management, they do not comprise a definitive list of all risk factors related to the Corporation's business and operations. Readers are encouraged to review other specific risk factors which are discussed elsewhere in this AIF, as well as in the Corporation’s consolidated financial statements (under the headings “Description of Business and Nature of Operations”, “Significant Accounting Policies” and “Financial Instruments” and elsewhere within that document) and in the Corporation’s annual and quarterly management’s discussion and analysis (under the headings “Critical Accounting Estimates” and “Risk Factors” and elsewhere within that document) for its most recently completed financial year, being the year ended December 31, 2018, and its other disclosure documents, all as filed on the SEDAR website at www.sedar.com.

Negative Cash Flow From Operating Activities

The Corporation has not yet consistently achieved positive operating cash flow, and there are no assurances that the Corporation will not experience negative cash flow from operations in the future. The Corporation has incurred net losses in the past and may incur losses in the future and will continue to incur losses until and unless it can derive sufficient revenues from its mineral projects. Such future losses could have an adverse effect on the market price of the Corporation's common shares, which could cause investors to lose part or all of their investment.

Forward-Looking Statements May Prove Inaccurate

Readers are cautioned not to place undue reliance on forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, of both a general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking statements. See "Preliminary Notes – Cautionary Statement Regarding Forward-Looking Statements".

Dilution

The Corporation expects to require additional funds to finance its growth and development strategy. If the Corporation elects to raise additional funds by issuing additional equity securities, such financing may substantially dilute the interests of the Corporation's shareholders. The Corporation may also issue additional securities in the future pursuant to existing and new agreements in respect of its projects or other acquisitions and pursuant to existing securities of the Corporation.

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Exploration, Evaluation and Development

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

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

Infrastructure

Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploitation and or development of the Corporation’s properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploitation and or development of the Corporation’s properties will be commenced or completed on a timely basis, if at all; that the resulting operations will achieve the anticipated production volume; or that the construction costs and ongoing operating costs associated with the exploitation and or development of the Corporation’s properties will not be higher than anticipated. In addition, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Corporation’s operations and profitability.

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

In making determinations about whether to advance any of its projects to development, the Corporation must rely upon estimated calculations as to the mineral resources and grades of mineralization on its properties. Until ore is actually mined and processed, mineral resources and grades of mineralization must be considered as estimates only. The determination of the Corporation’s estimated mineral resources by appropriately qualified persons requires significant judgements regarding the interpretation of complex geological and engineering data including the size, depth, shape and nature of the deposit and anticipated plans for mining, as well as estimates of future commodity prices, foreign exchange rates, capital requirements and production costs. These geological interpretations and statistical inferences used to develop the mineral resource estimates are imprecise and are drawn from drilling and sampling which may prove to be unreliable. Alexco cannot be certain that:

· reserve, resource or other mineralization estimates will be accurate; or

· mineralization can be mined or processed profitably.

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

Amendments to Share Purchase Agreement with Wheaton

The amendments to the SPA with Wheaton, requires that to satisfy the completion test under the Amended SPA, the Corporation will need to recommence operations on the KHSD Property and operate the mine and mill at 400 tonnes per day on or before December 31, 2020. If the completion test is not satisfied by December 31, 2020, the outcome could materially adversely affect the Corporation as it would be required to pay a capacity related refund to Wheaton in the maximum amount of US$8.8 million. The Corporation would need to raise additional capital to finance the capacity related refund and there is no guarantee that the Corporation will be able to raise such additional capital. In the event that the Corporation cannot raise such additional capital, the Corporation will default under the terms of the Amended SPA. The valuation model for the embedded derivative asset related to the SPA with Wheaton is based on a number of assumptions. The value of the derivative asset as at December 31, 2018 is $9,671,000. If, for example, the silver price were to increase to US$25.00 per ounce, and all other assumptions remained the same, the approximate derivative asset value would be negative $1,379,000 and could be classified as a derivative liability.

Keno Hill District

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

Mining Operations

The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into mineral deposits with significant value. Decisions by the Corporation to proceed with the construction and development of mines, including Bellekeno, are based on development plans which include estimates for metal production and capital and operating costs. Until completely mined and processed, no assurance can be given that such estimates will be achieved. Failure to achieve such production and capital and operating cost estimates or material increases in costs could have an adverse impact on the Corporation’s future cash flows, profitability, results of operations and financial condition. The Corporation’s actual production and capital and operating costs may vary from estimates for a variety of reasons, including: actual resources mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors, such as the need for sequential development of resource bodies and the processing of new or different resource grades; revisions to mine plans; risks and hazards associated with mining; natural phenomena, such as inclement weather conditions, water availability, floods, fire, rock falls and earthquakes, unusual or unexpected ground conditions, geological formation pressures, equipment failure and failure of retaining dams around tailings disposal areas which may result in, among other adverse effects, environmental pollution and consequent liability; and unexpected labour shortages or strikes. Costs of production may also be affected by a variety of factors, including changing waste ratios, metallurgical recoveries, labour costs, commodity costs, general inflationary pressures and currency rates. In addition, the risks arising from these factors are further increased while any such mine is progressing through the ramp-up phase of its operations and has not yet established a consistent production track record. No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.

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Furthermore, mining operations at the Bellekeno mine project were suspended as of early September 2013 as a result of sharp and significant declines in precious metals prices during the second quarter of 2013. Re-start of mining operations at Keno Hill is dependent on a number of factors, including sustained improvements in silver markets, the effectiveness of cost structure reduction measures, the maintenance of current metal prices and the fluctuation of foreign exchange rates and the uncertainties around the results of these factors are significant. A re-start of underground production operations will require additional capital investment in excess of the capital resources currently on hand. There can be no assurance of a re-start of mining operations or continued access to financing in the future, and an inability to generate or secure such funding may require the Corporation to substantially curtail and/or defer its planned exploration and development activities.

Employee Recruitment and Retention

Recruitment and retention of skilled and experienced employees is a challenge facing the mining sector as a whole. During the late 1990s and early 2000s, with unprecedented growth in the technology sector and an extended cyclical downturn in the mining sector, the number of new workers entering the mining sector was depressed and significant number of existing workers departed, leading to a so-called “generational gap” within the industry. Since the mid-2000s, this factor was exacerbated by competitive pressures as the mining sector experienced an extended cyclical upturn..Any re-start of mining operations will necessitate the re-hiring of mine and mill personnel. It may be difficult for Alexco to find and hire qualified people in the mining industry who are situated in the Yukon, or to obtain all of the necessary services or expertise in Yukon or to conduct operations on Alexco’s projects at reasonable rates. If qualified people and services or expertise cannot be obtained in the Yukon, we may need to seek and obtain those services from people located outside of this area, which may require work permits and compliance with applicable laws and could result in delays and higher costs.

Dependence on Management

The success of the operations and activities of the Corporation is dependent to a significant extent on the efforts and abilities of its management team. The Corporation does not maintain key employee insurance on any of its employees. The Corporation depends on key personnel and cannot provide assurance that it will be able to retain such personnel. Failure to retain such key personnel could have a material adverse effect on the Corporation’s business and financial condition.

Permitting and Environmental Risks and Other Regulatory Requirements

The current or future operations of the Corporation, including development activities, commencement of production on its properties and activities associated with the Corporation's mine reclamation and remediation business, require permits, approvals, authorizations, or licenses from various federal, territorial and other governmental authorities, and such operations are and will be governed by laws, regulations and agreements governing prospecting, development, mining, production, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities and in mine reclamation and remediation activities generally experience increased costs and delays as a result of the need to comply with the applicable laws, regulations and permits. There can be no assurance that all permits, permit modifications, approvals, authorizations, licenses, and license modifications which the Corporation may require for the conduct of its operations will be obtainable on reasonable terms or that such laws and regulations would not have an adverse effect on any project which the Corporation might undertake. Specifically, the Corporation requires an amendment to its Quartz Mining License and a renewal of its Water Use License (the “WUL”) in order for it to be fully permitted for the ore production and processing from the Bermingham deposit and the Flame & Moth, Lucky Queen, Bellekeno and Onek deposits. Additionally, subsequent to completion of the environment assessment of the Corporation’s Existing State of Mine Reclamation Plan at Keno Hill by the Yukon Environmental and Social-Economic Assessment Board, the Corporation will need an amendment to its WUL by the Yukon Water Board to authorize the activities necessary to effect closure of the site. There can be no guarantee that the Corporation will receive the amendments and the renewal. Additionally, delays in receiving any requisite license amendments and renewals could adversely affect the Corporation’s profitability. The Corporation had originally expected to receive the requisite amendments and renewal by Q1 2019. However subsequent delays in the permitting process have extended the time expected for award of the final licenses to the third quarter of 2019.

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

Amendments to current laws, regulations and permits governing operations and activities of mining companies and mine reclamation and remediation activities could have a material adverse impact on the Corporation. As well, policy changes and political pressures within and on federal, territorial and First Nation governments having jurisdiction over or dealings with the Corporation could change the implementation and interpretation of such laws, regulations and permits, also having a material adverse impact on the Corporation. Such impacts could result in one or more of increases in capital expenditures or production costs, reductions in levels of production at producing properties or abandonment or delays in the development of new mining properties.

Surety Bonding Risks

Alexco secures its obligations for reclamation and closure costs with surety bonds provided by leading global insurance companies in favour of regulatory authorities in the Yukon. These surety bonds include the right of the surety bond provider to terminate the relationship with Alexco on providing notice of up to 90 days. The surety bond provider would, however, remain liable to the regulatory authorities for all bonded obligations existing prior to the termination of the bond in the event Alexco failed to deliver alternative security satisfactory to the regulator. Alexco may require substantial additional capital to accomplish its exploration and development plans and fund strategic growth and there can be no assurance that financing will be available on terms acceptable to Alexco, or at all. Alexco may require substantial additional financing to advance the Keno Hill Silver District to production. These financing requirements could adversely affect Alexco’s ability to access the capital markets in the future. Failure to obtain sufficient financing, or financing on terms acceptable to Alexco, may result in a delay or indefinite postponement of exploration, development or production at its properties. Additional financing may not be available when needed and the terms of any agreement could impose restrictions on the operation of our business. Failure to raise financing when needed could have a material adverse effect on our business, financial condition, results of operations and prospects.

Environmental Services

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

Three of AEG’s customers accounted for 24.0%, 20.2% and 19.0%, respectively, of environmental services revenues in the 2018 fiscal year. The loss of, or a significant reduction in the volume of business conducted with, either of these customers could have a significant detrimental effect on AEG environmental services business and the Corporation.

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

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

AEG is dependent on the professional skill sets of its employees, some of whom would be difficult to replace. The loss of any such employees could significantly affect AEG’s ability to service existing clients, its profitability and its ability to grow its business.

Potential Profitability of Mineral Properties Depends Upon Factors Beyond the Control of the Corporation

The potential profitability of mineral properties is dependent upon many factors beyond the Corporation’s control. For instance, world prices of and markets for gold, silver, lead and zinc are unpredictable, highly volatile, potentially subject to governmental fixing, pegging and/or controls and respond to changes in domestic, international, political, social and economic environments – including international trade restrictions. During the year ended December 31, 2018, the prices of silver, lead and zinc have steadily declined. Another factor is that rates of recovery may vary from the rate experienced in tests and a reduction in the recovery rate will adversely affect profitability and, possibly, the economic viability of a property. Profitability also depends on the costs of operations, including costs of labour, materials, equipment, electricity, environmental compliance or other production inputs. Such costs will fluctuate in ways the Corporation cannot predict and are beyond the Corporation’s control, and such fluctuations will impact on profitability and may eliminate profitability altogether. Mine site care and maintenance costs during 2018 totaled $2,603,000 compared with $1,888,000 for 2017. The increase in costs was mainly due to site-based expenditures and mill maintenance and refurbishment initiatives in 2018. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for development and other costs have become increasingly difficult, if not impossible, to project. These changes and events may materially affect the financial performance of the Corporation.

First Nation Rights and Title

The nature and extent of First Nation rights and title remains the subject of active debate, claims and litigation in Canada, including in the Yukon and including with respect to intergovernmental relations between First Nation authorities and federal, provincial and territorial authorities. There can be no guarantee that such claims will not cause permitting delays, unexpected interruptions or additional costs for the Corporation’s projects. These risks may have increased after the Supreme Court of Canada decision of June 26, 2014 in Tsilhqot'in Nation v. British Columbia.

Title to Mineral Properties

The acquisition of title to mineral properties is a complicated and uncertain process. The properties may be subject to prior unregistered agreements of transfer, unregistered liens, or land claims, and title may be affected by undetected defects. Although the Corporation has made efforts to ensure that legal title to its properties is properly recorded in the name of the Corporation, there can be no assurance that such title will ultimately be secured. Title insurance generally is not available for mining claims in Canada. As a result, the Corporation may be constrained in its ability to operate its mineral properties or unable to enforce its rights with respect to its mineral properties. An impairment to or defect in the Corporation’s title to its mineral properties would adversely affect the Corporation’ business and financial condition.

Capitalization and Commercial Viability

The Corporation will require additional funds to further explore, develop and mine its properties. The Corporation has limited financial resources, and there is no assurance that additional funding will be available to the Corporation to carry out the completion of all proposed activities, for additional exploration or for the substantial capital that is typically required in order to place a property into commercial production. Although the Corporation has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that the Corporation will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in the delay or indefinite postponement of further exploration and development of its properties.

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Critical Accounting Estimates and Judgments

The preparation of financial statements in conformity with International Financial Reporting Standards requires management to make estimates and assumptions that affect the reported amounts and the valuation of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the period reported. Actual outcomes could differ from these estimates. The Corporation's consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Significant judgments about the future and other sources of estimation uncertainty at the financial position reporting date, including those that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made include, but are not limited to, uncertainties and assumptions with respect to mineral resources, impairment and impairment reversals of non-current non-financial assets, decommissioning and rehabilitation provision, and the fair value of derivatives. If the Corporation’s management rely on the information in the financial statements in making certain decisions, which information later proves to be inaccurate, it could have an adverse effect on the operating results of the Corporation.

The Corporation prepares budgets and estimates of cash costs and capital costs for its operations. Despite the Corporation’s best efforts to budget and estimate such costs, the costs required by the Corporation’s projects may be significantly higher than anticipated. The Corporation’s actual costs may vary from estimates for a variety of reasons, including: short-term operating factors; risk and hazards associated with mining; natural phenomena, such as inclement weather conditions and unexpected labour shortages or strikes. Operational costs may also be affected by a variety of factors, including: ore grade metallurgy, labour costs, the cost of commodities, general inflationary pressures and currency exchange rates. Many of these factors are beyond the Corporation’s control. Failure to achieve estimates or material increases in costs could have an adverse impact on the Corporation’s business, results of operations and financial condition. Furthermore, delays in mining projects or other technical difficulties may result in even further capital expenditures being required. Any delays or costs overruns or operational difficulties could have a material adverse effect on the Corporation’s business, results of operations and financial condition.

General Economic Conditions May Adversely Affect the Corporation’s Growth and Profitability

The unprecedented events in global financial markets since 2008 have had a profound impact on the global economy and led to increased levels of volatility. Many industries, including the mining industry, are impacted by these market conditions. Some of the impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign currency exchange and precious metal markets, and a lack of market liquidity. If the current turmoil and volatility levels continue they may adversely affect the Corporation's growth and profitability. Specifically:

• a global credit/liquidity or foreign currency exchange crisis could impact the cost and availability of financing and the Corporation’s overall liquidity;

• the volatility of silver and other commodity prices would impact the Corporation’s revenues, profits, losses and cash flow;

• volatile energy prices, commodity and consumables prices and currency exchange rates would impact the Corporation’s operating costs; and

• the devaluation and volatility of global stock markets could impact the valuation of the Corporation’s equity and other securities.

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

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Operating Hazards and Risks

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

Adverse weather conditions could also disrupt the Corporation’s environmental services business and/or reduce demand for the Corporation’s services.

Competition

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

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

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

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

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

As a “foreign private issuer”, the Corporation is exempt from Section 14 proxy rules and Section 16 of the Securities Exchange Act of 1934

The Corporation is a “foreign private issuer” as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”). Equity securities of the Corporation are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the U.S. Exchange Act pursuant to Rule 3a12-3 of the U.S. Exchange Act. Therefore, the Corporation is not required to file a Schedule 14A proxy statement in relation to the annual meeting of shareholders. The submission of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders’ activities in our securities.

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It may be difficult to enforce judgments or bring actions outside the United States against the Corporation and certain of our directors

The Corporation is a Canadian corporation and certain of its directors, officers and experts are neither citizens nor residents of the United States. A substantial part of the assets of the Corporation and of certain of these persons are located outside the United States. As a result, it may be difficult or impossible for an investor:

· to enforce in courts outside the United States judgments obtained in United States courts based upon the civil liability provisions of United States federal securities laws against these persons and the Corporation; or

· to bring in courts outside the United States an original action to enforce liabilities based upon United States federal securities laws against these persons and the Corporation.

DIVIDENDS

The Corporation has not paid any dividends on its common shares since its incorporation. Any decision to pay dividends on common shares in the future will be made by the board of directors on the basis of the earnings, financial requirements and other conditions existing at such time.

DESCRIPTION OF CAPITAL STRUCTURE

The authorized capital of the Corporation consists of an unlimited number of common shares, without par value. As at the close of business on March 13, 2019, 108,647,037 common shares of the Corporation were issued and outstanding.

The holders of the common shares are entitled to vote at all meetings of holders of common shares, to receive dividends if, as and when declared by the directors and to participate rateably in any distribution of property or assets upon the liquidation, winding-up or other dissolution of the Corporation. The common shares carry no pre-emptive rights, conversion or exchange rights, or redemption, retraction, repurchase, sinking fund or purchase fund provisions. There are no provisions requiring a holder of common shares to contribute additional capital and no restrictions on the issuance of additional securities by the Corporation. There are no restrictions on the repurchase or redemption of common shares by the Corporation except to the extent that any such repurchase or redemption would render the Corporation insolvent.

MARKET FOR SECURITIES

Trading Price and Volume

The common shares of the Corporation are listed and posted for trading on the Toronto Stock Exchange (the “TSX”) under the symbol “AXR”, and on the NYSE American Equities Exchange (the “NYSE American”) under the symbol “AXU”. The following tables set forth the market price range and trading volumes of the Corporation’s common shares on each of the TSX and NYSE American for the periods indicated.

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TSX

Period	Volume	High (C$)	Low (C$)
December 2018	1,291,000	1.34	0.99
November 2018	1,623,400	1.33	0.92
October 2018	1,480,600	1.49	1.30
September 2018	1,046,000	1.49	1.31
August 2018	1,179,700	1.62	1.36
July 2018	906,500	1.94	1.52
June 2018	1,285,300	1.84	1.67
May 2018	1,656,100	2.00	1.70
April 2018	1,695,600	2.14	1.68
March 2018	1,327,300	1.90	1.63
February 2018	1,307,000	1.89	1.56
January 2018	2,359,800	2.18	1.78

NYSE American

Period	Volume	High (US$)	Low (US$)
December 2018	3,601,700	0.97	0.75
November 2018	3,966,200	1.02	0.68
October 2018	4,490,100	1.15	0.90
September 2018	3,284,500	1.15	1.00
August 2018	4,551,900	1.25	1.00
July 2018	4,943,900	1.48	1.16
June 2018	6,175,000	1.42	1.25
May 2018	4,663,000	1.59	1.31
April 2018	5,894,400	1.70	1.32
March 2018	5,464,400	1.48	1.27
February 2018	5,669,000	1.53	1.24
January 2018	7,604,900	1.79	1.43

Securities Not Listed or Quoted

The only classes of securities of the Corporation that are not listed or quoted on a marketplace are stock options, restricted shares units (“RSUs”) and warrants. As of December 31, 2018, 7,738,833 stock options, 273,989 RSUs and 1,126,174 warrants outstanding.

Prior Sales

The following table sets forth, for the financial year ended December 31, 2018, details of the price at which securities have been issued or are to be issued by the Corporation, the number of securities issued at that price and the date on which the securities were issued:

Date of Issue	Type of Securities	No. of Common Shares	Issue or Exercise Price per Security	Reason for Issue
January 8, 2018	Common Shares	10,000	$1.75	Exercise of Warrants
January 24, 2018	Common Shares	4,200	$1.75	Exercise of Warrants
January 26, 2018	Stock Options	2,464,000	$2.07	Grant of Stock Options
January 29, 2018	Restricted Share Units	177,700	$2.07	Grant of Restricted Share Units
January 29, 2018	Restricted Share Units	91,035	$1.90	Vesting of Restricted Share Units
February 1, 2018	Restricted Share Units	78,336	$1.85	Vesting of Restricted Share Units
February 11, 2018	Restricted Share Units	44,998	$1.68	Vesting of Restricted Share Units
February 12, 2018	Restricted Share Units	98,333	$1.68	Vesting of Restricted Share Units
February 13, 2018	Stock Options	10,000	$0.84	Exercise of Stock Options
February 23, 2018	Warrants	1,000,000	$2.25	Credit Facility(1)
February 23, 2018	Stock Options	25,000	$0.84	Exercise of Stock Options
April 1 to 30, 2018	Common Shares	112,650	$1.75	Exercise of Warrants
April 16, 2018	Stock Options	30,000	$0.60	Exercise of Stock Options
April 20, 2018	Stock Options	50,000	$0.60	Exercise of Stock Options
April 20, 2018	Stock Options	166,666	$0.84	Exercise of Stock Options
May 1 to 31, 2018	Common Shares	979,601	$1.75	Exercise of Warrants
May 7, 2018	Common Shares	60,900	$1.49	Exercise of Warrants
May 10, 2018	Restricted Share Units	16,000	$1.93	Grant of Restricted Share Units
May 10, 2018	Restricted Share Units	5,334	$1.93	Vesting of Restricted Share Units
May 10, 2018	Stock Options	60,000	$1.93	Grant of Stock Options
June 14, 2018	Common Shares	966,500	$2.05	Offering of Flow-Through Shares
June 14, 2018	Common Shares	1,736,500	$2.05	Offering of Flow-Through Shares
June 14, 2018	Common Shares	2,000,000	$1.75	Offering of Flow-Through Shares

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Date of Issue	Type of Securities	No. of Common Shares	Issue or Exercise Price per Security	Reason for Issue
June 20, 2018	Common Shares	237,999	$1.7495	Acquisition of Contango(2)
July 30, 2018	Common Shares	10,000	$1.35	Mineral property option agreement

Notes:

(1) Issued to Sprott Private Resource Lending (Collector), LP in consideration for providing a US$15 million credit facility (see above under the heading "General Development of the Business").

(2) The total purchase price was $1,388,000, of which $971,600 was paid in cash and $416,400 was paid through the issuance of 237,999 common shares of Alexco.

DIRECTORS AND OFFICERS

Name, Occupation and Security Holding

The name, province or state, country of residence, position or office held with the Corporation and principal occupation during the past five years of each director and executive officer of the Corporation as at December 31, 2018 and as at the date hereof are described as follows:

Name and Address(1)	Office or Position Held	Principal Occupation During the Past Five Years	Previous Service as a Director
Clynton R. Nauman Washington, USA	Chairman, Chief Executive Officer and Director (7)	Chairman and Chief Executive Officer of the Corporation, since December 2004.	Since December 3, 2004
Elaine Sanders British Columbia, Canada	Director(2)(3)(5)(6)	VP and Chief Financial Officer of Trilogy Metals Inc., a mineral exploration and development company, since November 2011; Former Vice President and Chief Financial Officer of NovaGold Resources Inc.	Since June 28, 2016
Karen McMaster British Columbia, Canada	Director (3)(4)(7)	Since 2003, Ms. McMaster, BA, LLB, MBA has worked as an independent consultant focusing on strategic and economic development of organizations including risk assessment, contact management, EHS excellence, governance and capacity building at the community level.	Since April 11, 2018
Michael D. Winn California, USA	Director(3)(4)(7)	President of Seabord Capital Corp., providing investment analysis and financial services to companies in the oil & gas, mining and energy sectors, since January 2013; President of Terrasearch Inc., a consulting company providing analysis on mining and energy companies, from 1997 through 2012.	Since January 11, 2005
Richard N. Zimmer British Columbia, Canada	Lead Director(2)(4)(5)(6)	Member of the Board of Directors of two other publicly-listed and two private companies since June 2011; President and Chief Executive Officer of Far West Mining Ltd., a mining company, from 2008 to June 2011.	Since May 2, 2012
Rick Van Nieuwenhuyse British Columbia, Canada	Director(3)(4)(6)	President and Chief Executive Officer of Trilogy Metals Inc., a mineral exploration and development company, since November 2011; President and Chief Executive Officer of NovaGold Resources Inc., a mineral exploration and development company, from May 1999 to November 2011.	Since January 11, 2005

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Name and Address(1)	Office or Position Held	Principal Occupation During the Past Five Years	Previous Service as a Director
Terry Krepiakevich British Columbia, Canada	Director(2)(5)(6)	Member of the Board of Directors of several publicly-listed and private companies since July 2011; Chief Financial Officer of SouthGobi Resources Ltd., a mining company, from June 2006 to July 2011.	Since July 22, 2009
Alan McOnie Bay of Plenty, New Zealand	Vice President, Exploration	Vice President, Exploration of the Corporation, since December 2010; consulting geologist from 2002 to December 2010.	N/A
Bradley Thrall Washington, USA	President	President of the Corporation, since December 2004.	N/A
Jim Harrington Colorado, USA	AEG President(7)	AEG President of the Corporation since February 16, 2007 (which includes time served as Vice President of AEG.	N/A
Michael Clark British Columbia, Canada	Chief Financial Officer, Corporate Secretary and Company Ethics Officer	Chief Financial Officer of the Corporation, since December 2014.	N/A

(1) The information as to the jurisdiction of residence and principal occupation, not being within the knowledge of the Corporation, has been furnished by the respective individuals individually.

(2) Member of the Audit Committee.

(3) Member of the Nominating & Corporate Governance Committee.

(4) Member of the Environmental, Health, Safety & Technical Committee.

(5) Member of the Compensation Committee.

(6) Member of Special Committee for the period June 27, 2017 to April 11, 2018.

(7) Member of Board of Directors of AEG, which was formed June 7, 2018.

Each of the Corporation’s directors is elected by the Corporation’s shareholders at an annual meeting to serve until the next annual meeting of shareholders or until a successor is elected or appointed. The board of directors appoints the Corporation’s executive officers annually after each annual meeting, to serve at the discretion of the board of directors.

Based on information provided by such persons, as at the date hereof the directors and executive officers of the Corporation as a group beneficially owned, directly or indirectly, or exercised control or direction over, an aggregate of 5,537,638 common shares of the Corporation (including 1,940,299 shares owned by ALM Investments ULC (formerly Asset Liability Management Group ULC), a company controlled by Mr. Nauman), representing 5.1% of the issued and outstanding common shares of the Corporation. In addition, the directors and executive officers of the Corporation as a group also hold stock options for the purchase of an aggregate of 7,021,000 common shares in the capital of the Corporation, representing 76% of all outstanding options of the Corporation. Lastly, the directors and executive officers of the Corporation as a group held RSUs that can be settled by way of shares issued from treasury for a further 407,333 common shares.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the knowledge of the Corporation, none of the Corporation's directors or executive officers is, as at the date of this AIF, or has been, within ten years before the date of this AIF, a director, chief executive officer or chief financial officer of any Corporation (including the Corporation) that:

(a) was subject to an Order (as defined below) that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or

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(b) was subject to an Order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer;

“Order” means a cease trade order, an order similar to a cease trade order, or an order that denied the relevant Corporation access to any exemption under securities legislation and, in each case, that was in effect for a period of more than 30 consecutive days.

None of the Corporation's directors or executive officers or, to the Corporation's knowledge, any shareholder holding a sufficient number of securities of the Corporation to affect materially the control of the Corporation:

(a) is, as at the date of this AIF, or has been within the 10 years before the date of this AIF, a director or executive officer of any Corporation (including the Corporation) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

(b) has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director; or

(c) has been subject to:

(i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

(ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest

The directors of the Corporation are required by law to act honestly and in good faith with a view to the best interest of the Corporation and to disclose any interests which they may have in any project or opportunity of the Corporation. If a conflict of interest arises at a meeting of the board of directors, any director in a conflict will disclose his interest and abstain from voting on such matter. In determining whether or not the Corporation will participate in any project or opportunity, that director will primarily consider the degree of risk to which the Corporation may be exposed and its financial position at that time.

To the best of the Corporation's knowledge, other than disclosed below, there are no known existing or potential conflicts of interest among the Corporation, its promoters, directors, officers or other members of management of the Corporation as a result of their outside business interests except that certain of the directors, officers, promoters and other members of management serve as directors, officers, promoters and members of management of other public companies, and therefore it is possible that a conflict may arise between their duties as a director, officer, promoter or member of management of such other companies.

James Harrington, MSc., the Senior Vice President and Chief Technical Officer of AEG Canada (a subsidiary of the Corporation), owns a holding company (“Arete”) which holds all of the shares of Alexco Environmental Group (US) Inc., a former subsidiary of the Corporation (“AEG US”). The sale of AEG US to Mr. Harrington’s holding company is not considered a material transaction and was reviewed and approved by a special committee of independent directors, as well as the board of directors, of the Corporation prior to completion of the transaction. The purpose of the transaction was to enable Arete to complete the purchase of a redevelopment project which involves significant environmental work, which could, if purchased, provide an opportunity for the Corporation’s environmental group with respect to the environmental work without exposing the Corporation to environmental risk from ownership of such project.

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The directors and officers of the Corporation are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors of conflicts of interest and the Corporation relies upon such laws in respect of any directors’ and officers’ conflicts of interest or in respect of any breaches of duty by any of its directors or officers. Such directors or officers in accordance with the Business Corporations Act (British Columbia) are required to disclose all such conflicts and to govern themselves in respect thereof to the best of their ability in accordance with the obligations imposed upon them by law.

AUDIT COMMITTEE INFORMATION

Audit Committee Charter

The following is the text of the Audit Committee’s Charter:

"GENERAL

The primary function of the Audit Committee, under the supervision of the Board of Directors of the Company (the “Board”), is to assist the Board in fulfilling its oversight responsibilities regarding the integrity of the Company's accounting and financial reporting processes and provision of financial information to the shareholders and others, the systems of internal controls and disclosure controls, the Company's internal and external audit process, the Company's policies with regard to ethics and business practices, and monitoring compliance with the Company's legal and regulatory requirements with respect to its financial statements.

The Audit Committee is accountable to the Board. In the course of fulfilling its specific responsibilities hereunder, the Audit Committee is expected to maintain open communications between the Company's external auditor, senior management and the Board.

The Audit Committee does not plan or perform audits or warrant or attest to the accuracy or completeness of the Company's financial statements or financial disclosure or compliance with generally accepted accounting procedures as these are the responsibilities of management and the external auditor.

COMPOSITION

The Audit Committee shall be comprised of at least three directors of the Company, who generally shall be appointed or confirmed by the Board annually. The Chair of the Audit Committee shall be appointed by the Board, failing which the members of the Audit Committee may designate a Chair by a majority vote of the full Audit Committee membership. All members of the Audit Committee shall be directors and shall meet the independence, financial literacy and experience requirements under applicable laws, rules and regulations binding on the Company from time to time, including without limitation the applicable rules of any stock exchanges upon which the Company's shares are listed and the requirements for independence and financial literacy under National Instrument 52-110 – Audit Committees (“NI 52-110”) in Canada, Section 803A of the NYSE Amex Company Guide and Rule 10A-3 of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Subject to certain exemptions outlined in NI 52-110, every member of the Audit Committee must be “independent” and “financially literate”, as such terms are defined in NI 52-110. Furthermore, at least one member of the Audit Committee shall qualify as a “financial expert” as such term is defined in Item 407 of Regulation S-K under the Exchange Act.

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PROCEDURAL MATTERS

The Audit Committee:

(a) Shall meet at least four times per year on a quarterly basis, either by telephone conference or in person. Any member of the Audit Committee may call such a meeting. A majority of the members appointed to the Audit Committee shall constitute a quorum. For clarity, quorum may be reached in person, or by telephone, video conference, or other communication facilities acceptable to the Board. Matters decided by the Audit Committee shall be decided by majority votes, and the Chair of the Audit Committee shall only have an ordinary vote with no additional tie-breaking powers.

(b) May invite the Company's external auditor, the CFO, and such other persons as deemed appropriate by the Audit Committee to attend meetings of the Audit Committee. As part of its mandate to foster open communication, the Audit Committee shall meet at least annually with the CFO and the external auditor in separate sessions, and to that end the Audit Committee generally shall have as a standing agenda item an in-camera meeting with the external auditors for any meeting at which they attend.

(c) Shall report material decisions and actions of the Audit Committee to the Board, together with such recommendations as the Audit Committee may deem appropriate, at the next Board meeting.

(d) Shall review the performance of the Audit Committee on an annual basis and report the results of such review to the Nominating & Corporate Governance Committee.

(e) Shall review and assess this Charter for the Audit Committee at least annually and submit any proposed revisions to the Board for approval.

(f) Shall review from time to time as required and recommend to the Board for approval as necessary the indemnification policies, and director and officer insurance policy, if any, of the Company.

(g) Has the power to conduct or authorize investigations into any matter within the scope of its responsibilities. The Audit Committee has the right to engage independent counsel and other advisors as it determines necessary to carry out its duties, and the right to set and pay, without restriction, the compensation for any such counsel or advisors engaged by the Audit Committee.

(h) Has the right to communicate directly with the CFO and other members of management who have responsibility for the audit process (“Internal Audit Management”), as well as directly with the external auditor.

(i) Has the right to require payment of (i) compensation to any external auditor engaged for the purpose of preparing or issuing an audit report or performing audit, review or attest services for the Company and (ii) all ordinary expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

RESPONSIBILITIES

Subject to the powers and duties of the Board, the Board hereby delegates to the Audit Committee the following powers and duties to be performed by the Audit Committee on behalf of and for the Board.

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Financial Reporting, Accounting and Financial Management

The Audit Committee has primary responsibility for overseeing the actions of management in all aspects of financial management and reporting. The Audit Committee shall:

(a) Review and recommend to the Board for approval the Company's annual and interim financial statements, annual and interim Management's Discussion and Analysis, Annual Information Form, annual report filed pursuant to the Exchange Act on Form 40-F (or such other form as may apply), future-oriented financial information or pro-forma information, and other financial disclosure in continuous disclosure documents, including within any annual or interim profit or loss press releases, and any certification, report, opinion or review rendered by the external auditor, before the Company publicly discloses such information. (See also “Interim Financial Statements” below.)

(b) Ensure that it is satisfied that adequate procedures are in place for the review of the Company's public disclosure of financial information extracted or derived from the Company's financial statements (other than public disclosure referred to in subsection (a) immediately above) and periodically assess the adequacy of those procedures as necessary.

(c) Review material financial risks with management, the plan that management has implemented to monitor and deal with such risks, and the success of management in following such plan.

(d) Consult annually, and otherwise as required, with the Company's CEO and CFO respecting the adequacy of the internal controls and review any breaches or deficiencies.

(e) Review as necessary the process with regard to certifications, and ensure certifications by the CEO and CFO attesting to disclosure controls and procedures and internal control over financial reporting are obtained and filed as required under National Instrument 52-109 – Certification of Disclosure In Issuers’ Annual and Interim Filings and the Exchange Act in connection with the Company's annual and interim financial reporting filings.

(f) Review management's response to significant written reports and recommendations issued by the external auditor and the extent to which such recommendations have been implemented by management. Review such responses with the external auditor as necessary.

(g) Review with management the Company's compliance with applicable laws and regulations respecting financial matters.

(h) Review with management proposed regulatory changes and their impact on the Company.

(i) Review with management and approve public disclosure of the Audit Committee Charter.

External Auditor

The Audit Committee has primary responsibility for the selection, appointment, dismissal, compensation and oversight of the external auditor, subject to the overall approval of the Board. For this purpose, the Audit Committee may consult with management, but the external auditor shall report directly to the Audit Committee. The specific responsibilities of the Audit Committee with regard to the external auditor are to:

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(a) Recommend to the Board annually:

(i) the external auditor to be nominated (whether the current external auditor or a suitable alternative) for the purpose of preparing or issuing an auditor's report or performing other audit, review, or attest services for the Company; and

(ii) the compensation of the external auditor.

(b) Oversee the work of the external auditor engaged for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Company.

(c) Resolve disagreements, if any, between management and the external auditor regarding financial reporting. To resolve such disagreements, the Audit Committee shall query management and the external auditor and take other steps as necessary. The Audit Committee shall provide the Board with such recommendations and reports with respect to the financial statements of the Company as it deems advisable.

(d) Take reasonable steps to confirm the independence of the external auditor, including but not limited to ensuring receipt from the external auditor of a formal written statement delineating all relationships between the external auditor and the Company, actively engaging in a dialogue with the auditor with respect to any disclosed relationship or services and pre-approving any non-audit related services provided by the external auditor to the Company or the Company's subsidiaries, if any, with a view to ensuring independence of the auditor. If necessary, recommend to the Board to take appropriate corrective action to ensure the independence of the external auditor.

(e) Review and pre-approve all audit and audit-related services and the fees related thereto, provided by the Company's external auditor.

(f) Review and pre-approve all non-audit services to be performed by the Company's external auditor in accordance with any applicable regulatory requirements, including but not limited to NI 52-110, the Exchange Act and the requirements of any stock exchange upon which the Company's shares are listed. The Audit Committee may delegate pre-approval authority for non-audit services to one or more independent members of the Audit Committee provided that any such pre-approval decisions must be presented to the full Audit Committee at its next meeting thereafter. The Audit Committee may also satisfy this pre-approval requirement if it first adopts specific policies and procedures respecting same in accordance with NI 52-110 such that the pre-approval policies and procedures are detailed as to the particular service, the Audit Committee is informed of each such non-audit service, and the procedures do not include delegation of the Audit Committee’s responsibilities to management.

(g) Obtain from the external auditor confirmation that the external auditor is a 'participating audit' firm for the purpose of National Instrument 52-108 – Auditor Oversight and is registered with the Public Company Accounting Oversight Board in the United States, and is otherwise in compliance with all applicable governing regulations.

(h) Review and evaluate the performance of the external auditor.

(i) Review and approve the Company's hiring policies regarding partners, employees and former partners and employees of the Company's present and former external auditors.

Audit and Financial Reporting Process

The Audit Committee has a duty to receive, review and make any inquiry regarding the completeness, accuracy and presentation of the Company's financial statements to ensure that the financial statements fairly present the financial position and risks of the organization and are prepared in accordance with the applicable generally accepted accounting principles. To accomplish this, the Audit Committee shall:

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(a) Review at least annually the Company's internal system of audit and financial controls, internal audit procedures and results of such audits, and receive regular, generally quarterly, updates from management on such controls, procedures and audit activities.

(b) Prior to the annual audit by the external auditor, consider the scope and general extent of the external auditor's review, including its engagement letter. Review with management the external auditor's audit plan and intended template for financial statements.

(c) Ensure the external auditor has full, unrestricted access to required information and has the cooperation of management.

(d) Review with the external auditor, in advance of the audit, the audit process and standards, as well as regulatory or Company-initiated changes in accounting practices and policies and the financial impact thereof, and selection or application of appropriate accounting principles.

(e) Review with the external auditor and, if necessary, legal counsel, any litigation, claim or contingency, including tax assessments, or significant judgments made by management that could have a material effect upon the financial position of the Company and the manner in which these matters are being disclosed in the financial statements. Review the appropriateness and disclosure of any off-balance sheet matters. Review disclosure of any related-party transactions.

(f) Receive and review with the external auditor the external auditor's audit report and the audited financial statements. Make recommendations to the Board respecting approval of the audited financial statements.

(g) Review annually the integrity of the Company's internal and external financial reporting and accounting principles, including the clarity, completeness and accuracy of financial disclosure and the degree of conservatism or aggressiveness of the accounting policies and estimates, performance of Internal Audit Management, any significant disagreements or difficulties in obtaining information, adequacy of internal controls over financial reporting and the degree of compliance of the Company with prior recommendations of the external auditor. The Audit Committee shall direct management to implement such changes as the Audit Committee considers appropriate, subject to any required approvals of the Board arising out of the review.

(h) Meet at least annually with the external auditor, independent of management, consider external auditor's judgments about the quality and appropriateness of the Company's accounting principles and practices, and report to the Board on such meetings.

Interim Financial Statements

Pursuant to its mandate, the Board shall generally approve the Company's annual and interim financial statements. Notwithstanding the foregoing, on an exceptions basis the Board may from time to time delegate to the Audit Committee the power to approve the Company's interim financial statements.

The Audit Committee shall:

(a) Review on an annual basis the Company's practice with respect to review of interim financial statements by the external auditor.

(b) Review the interim financial statements with the external auditor if the external auditor conducts a review of the interim financial statements.

(c) Conduct all such reviews and discussions with the external auditor and management as the Audit Committee deems appropriate.

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(d) Review and, if such authority has been delegated to the Audit Committee by the Board, approve the interim financial statements.

(e) If authority to approve the interim financial statements has not been delegated to the Audit Committee, make appropriate recommendation to the Board respecting approval of the interim financial statements.

Code of Ethics

The Audit Committee has primary responsibility for overseeing the application of, and compliance with, the Company's Code of Business Conduct and Ethics (the “Code”). The Audit Committee shall review at least annually:

(a) the Code,

(b) management's approach to business ethics and corporate conduct; and

(c) programs used by management to monitor compliance with the Code.

COMPLAINTS UNDER WHISTLEBLOWER POLICY

To ensure that the Company has adequate procedures in place for the confidential and anonymous (where permitted by law) receipt, retention, and treatment of complaints received by the Company regarding (a) accounting, internal accounting controls, or auditing matters, and (b) compliance with the Code and all applicable government laws, rules and regulations, the Audit Committee has recommended, established procedures for and the Board has adopted a Company Whistleblower Policy. All such complaints shall be dealt with under the terms of that Policy.”

Composition of the Audit Committee

As at December 31, 2018 and the date of this AIF, the members of the Audit Committee are Terry Krepiakevich, Elaine Sanders and Richard Zimmer, with Mr. Krepiakevich serving as the Chair of the Audit Committee. All of these members are financially literate and independent for the purposes of National Instrument 52-110 (“NI 52-110”).

Mr. Krepiakevich qualifies as a financial expert and is financially sophisticated, in that he has an understanding of generally accepted accounting principles and financial statements; is able to assess the general application of accounting principles in connection with the accounting for estimates, accruals and reserves; has experience analyzing or evaluating financial statements that entail accounting issues of equal complexity to the Corporation's financial statements (or actively supervising another person who did so); and has a general understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions.

Mr. Krepiakevich is a member of the board of directors of several publicly-listed and private companies since July 2011. From June 2006 to July 2011, Mr. Krepiakevich was the Chief Financial Officer of SouthGobi Resources Ltd., a publicly-listed mining company focused on exploring and developing coal deposits in Mongolia’s South Gobi Region. Previously, Mr. Krepiakevich was Chief Financial Officer for Extreme CCTV Inc., a publicly traded company on the TSX involved in manufacturing high tech surveillance equipment, and Vice-President Finance and Chief Financial Officer of Maynards Industries Ltd., a private firm specializing in retailing, auctioneering, liquidating, and mergers and acquisition services. Prior to his position with Maynards, Mr. Krepiakevich was a senior officer in a number of private and public issuers. He is a Canadian qualified Chartered Professional Accountant and was employed with the international accounting firm Peat Marwick Thorne (KPMG), where he worked with a number of companies in mining and related industries.

Ms. Sanders is the Vice President, Chief Financial Officer and Corporate Secretary for Trilogy Metals Inc. Prior to Trilogy Metals Inc. Ms. Sanders served as Vice President, Chief Financial Officer and Corporate Secretary for NovaGold Resources Inc. Ms. Sanders has over 20 years of experience in audit, finance, and accounting with public and private companies and Bachelor of Commerce degree from the University of Alberta, is a Canadian qualified Chartered Professional Accountant and a Certified Public Accountant in the United States.

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Mr. Zimmer is a corporate director and is the former President and Chief Executive Officer of Far West Mining Ltd., which was acquired by Capstone Mining Corp. in 2011. Prior to Far West, Mr. Zimmer worked for Teck Corporation, Teck-Cominco and Teck-Pogo Inc. From 1992 to 2007 he served in various engineering and operating roles and from 1998 to 2007, as Vice President and Project Manager for Teck-Pogo Inc. on the design and construction of the Pogo Mine near Fairbanks, Alaska. Before joining Teck, Mr. Zimmer was employed with Bow Valley Industries as Senior Staff Engineer responsible for evaluation of new mining ventures. Mr. Zimmer has over 40 years of experience in the mining industry and has a B.Sc. degree, B. Eng., MBA and is a P.Eng in the Province of British Columbia.

Reliance on Certain Exemptions

At no time since the commencement of the Corporation's most recently completed financial year has the Corporation relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-audit Services), Section 3.2 of NI 52-110 (Initial Public Offerings), Section 3.3(2) of NI 52-110 (Controlled Companies), Section 3.4 of NI 52-110 (Events Outside Control of Member), Section 3.5 of NI 52-110 (Death, Disability or Resignation of Audit Committee Member), Section 3.6 of NI 52-110 (Temporary Exemption for Limited and Exceptional Circumstances) or Section 3.8 of NI 52-110 (Acquisition of Financial Literacy), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110 (Exemptions).

Audit Committee Oversight

At no time since the commencement of the Corporation's most recently completed financial year was a recommendation of the Committee to nominate or compensate an external auditor not adopted by the board of directors.

Pre-Approval Policies and Procedures

The Audit Committee nominates and engages the independent auditors to audit the financial statements, and approves all audit, audit-related services, tax services and other services provided by the Corporation’s independent registered public accounting firm, PricewaterhouseCoopers LLP, Chartered Professional Accountants (“PwC”). Any services provided by PwC that are not specifically included within the scope of the audit must be pre-approved by the audit committee prior to any engagement. The audit committee is permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimus exception before the completion of the engagement. No fees paid to PwC in either of the fiscal years ended December 31, 2018 or 2017 were approved pursuant to the de minimus exception.

External Auditor Service Fees (By Category)

PwC, is the independent registered public accounting firm for the Corporation and have acted as the Corporation's independent auditor for the years ended December 31, 2018 and 2017. The chart below sets forth the total amount billed the Corporation by PwC for services performed in these periods and breaks down these amounts by category of service (for audit fees, audit-related fees, tax fees and all other fees):

External Auditor Service Fees (By Category)

Financial Period	Audit Fees(a)	Audit Related Fees	Tax Fees	All Other Fees
Year ended December 31, 2018	$377,311	$Nil	$Nil	$Nil
Year ended December 31, 2017	$272,075	$Nil	$Nil	$Nil

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a) “Audit Fees” are the aggregate fees billed by PwC for the following:

· Audits of the Corporation’s consolidated annual financial statements;

· Audits of internal control over financial reporting that are provided in connection with statutory and regulatory filings or engagements;

· Reviews of the Corporations quarterly financial statements; and

· Comfort letter, consents, and other services related to the SEC.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

The Corporation is not a party to any legal proceedings involving a claim for damages in excess of ten percent of the Corporation’s current assets, nor is a party to any regulatory actions, and is not aware of any such proceedings or actions known to be contemplated.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

The directors, executive officers and principal shareholders of the Corporation or any associate or affiliate of the foregoing have had no material interest, direct or indirect, in any transactions in which the Corporation has participated within the three most recently completed financial periods prior to the date of this AIF or in the current financial year, and do not have any material interest in any proposed transaction, which has materially affected or is reasonably expected to materially affect the Corporation, except as set out elsewhere in this AIF or as follows:

Certain directors and/or officers of the Corporation have subscribed for common shares of the Corporation pursuant to the public and private placement financings of the Corporation.

TRANSFER AGENTS AND REGISTRARS

The registrar and transfer agent for the common shares of the Corporation in British Columbia and Ontario is Computershare Investor Services Inc., Vancouver, British Columbia.

MATERIAL CONTRACTS

The Wheaton SPA, as amended (as described under the heading “General Development of the Business – Three Year History and Significant Acquisitions”), is the only material contracts entered into by the Corporation within the year ended December 31, 2018 or before such time that are still in effect, other than in the ordinary course of business. The Wheaton SPA and subsequent amendments are available on the SEDAR website at www.sedar.com under the Corporation’s profile.

INTERESTS OF EXPERTS

Names of Experts

The following sets forth each person named as having prepared or certified a report, valuation, statement or opinion described or included in a filing (including this AIF), or referred to in a filing, made under National Instrument 51-102 by the Corporation during, or relating to, its most recently completed financial year and whose profession or business gives authority to the report, valuation, statement or opinion made by the person or company:

· Torben Jensen, P.Eng. and R. Dennis Bergen, P.Eng. of Roscoe Postle Associates Inc., Jeff Austin, P. Eng of International Metallurgical and Environmental Inc., Gilles Arseneau, Ph.D., P.Geo. of SRK Consulting (Canada) Inc. and David Farrow, Pr.Sci.Nat, P.Geo. of Geostrat Consulting Inc. prepared the PEA described under "Description of the Business – KHSD Property".

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· Alan McOnie, FAusIMM, Vice President, Exploration of the Corporation, and Neil Chambers, P.Eng., an employee of the Corporation, are responsible for certain information of a scientific or technical nature relating to the Corporation's properties in this AIF.

The Corporation’s independent auditors are PwC, who have issued the ​Report of Independent Registered Public Accounting Firm dated March 13, 2019 in respect of the Corporation’s annual financial statements as at December 31, 2018 and December 31, 2017 and for each of the years ended December 31, 2018 and December 31, 2017 and the Corporation’s internal control over financial reporting as at December 31, 2018.

Interests of Experts

Based on information provided by the experts named above, other than with respect to Alan McOnie, Neil Chambers and PwC as described below, none of the experts named under “Names of Experts”, when or after they prepared the statement, report or valuation, has received any registered or beneficial interests, direct or indirect, in any securities or other property of the Corporation or of one of the Corporation's associates or affiliates (based on information provided to the Corporation by the experts) or is or is expected to be elected, appointed or employed as a director, officer or employee of the Corporation or of any associate or affiliate of the Corporation.

Alan McOnie is currently an executive officer and Neil Chambers is currently an employee of the Corporation, as described above. Both Alan McOnie and Neil Chambers have been granted stock options of the Corporation through the course of their respective employments; however, the individual interests held by each of them throughout their respective employment terms at all times represented less than one percent of the issued and outstanding common shares of the Corporation.

The Corporation’s independent auditors are PwC. PwC has advised the Corporation that they are independent with respect to the Corporation within the meaning of the Chartered Professional Accountants of British Columbia Code of Professional Conduct and within the meaning of the Public Company Accounting Oversight Board Rule 3520, Auditor Independence.

ADDITIONAL INFORMATION

Additional information relating to the Corporation may be found on SEDAR at www.sedar.com, as well as at the Corporation’s web site at www.alexcoresource.com.

Additional information, including directors' and officers' remuneration and indebtedness, principal holders of the Corporation's securities, and securities authorized for issuance under equity compensation plans, where applicable, is contained in the Corporation's information circular for its most recent annual general meeting of securityholders that involved the election of directors.

Additional financial information is provided in the Corporation's consolidated financial statements and management's discussion and analysis for its most recently completed financial period, being the year ended December 31, 2018.

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SCHEDULE "A"

Summary from PEA

"1 Summary

EXECUTIVE SUMMARY

Roscoe Postle Associates Inc. (RPA) was retained by Alexco Resource Corp. (Alexco) to prepare a Preliminary Economic Assessment (PEA or the Study) on the Keno Hill Silver District Project (the Project), located in the Yukon Territory, Canada. The purpose of this report is to disclose the results of the PEA. This Technical Report conforms to National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101). RPA carried out a site visit from September 12 to 14, 2016.

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 obtained the properties with all pre-existing liabilities subject to indemnification. Alexco also owns an environmental consulting company, Alexco Environmental Group (AEG), which provides environmental services to Alexco and the mining and mineral exploration industry.

The Project comprises:

· A network of public and private roads connecting the mines, process plants and other facilities.

· Crushing plant and flotation processing plant with a design capacity of 408 tpd.

· Dry stack tailings facility (DSTF) located adjacent to the process plant.

· Process and potable water sources.

· Electrical power available from the Yukon Electric grid.

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

· Mobile equipment to support activity at the site.

· Mine workings at the Bellekeno Mine.

· Collar of a portal for Flame & Moth.

· Mine workings and minor surface buildings at the Lucky Queen.

· Waste rock storage facility at Lucky Queen.

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

· Waste rock storage at the Bellekeno mine.

In 2008, Alexco entered into a Silver Purchase Agreement (SPA) with Silver Wheaton Corp. (Silver Wheaton) 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 Silver Wheaton in exchange for a payment of US$3.90 per ounce as well as a payment by Silver Wheaton of US$50 million. The SPA has been renegotiated on several occasions and effective March 29, 2017, the Company entered into an agreement with Silver Wheaton to amend the SPA whereby Silver Wheaton will continue to receive 25% of the LOM payable silver from the KHSD with the production payment (originally US$3.90 per ounce) 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)

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

Mining at Bellekeno was suspended in September 2013, before all of the conditions of the SPA were met by Alexco.

Alexco used the funds from the SPA for development on the property, the 2010 construction of a 408 tonne per day (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. Since 2013, Alexco has maintained the Project on a care and maintenance status and focussed on additional exploration leading to increases in the Mineral Resources for the Bermingham and Flame & Moth deposits. The revised Bermingham Mineral Resource has been included in this PEA study for a 400 tpd operation including the Flame & Moth, Bellekeno, Bermingham, and Lucky Queen deposits.

In addition to the development of the PEA, 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 RPA to meet the requirements of a Preliminary Economic Assessment as defined in Canadian NI 43-101 regulations. The economic analysis contained in this report is based, in part, on Inferred Mineral Resources, and is preliminary in nature. Inferred Mineral Resources are considered to be too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves. There is no certainty that economic forecasts on which this PEA is based will be realized.

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

Table 1-1   Summary of Mineral Resource Estimates as at January 3, 2017

Alexco Resource Corp. – Keno Hill Silver District Project

			Ag	Pb	Zn	Au
Deposit	Classification	Tonnes	(g/t)	(%)	(%)	g/t
Bellekeno	Indicated	262,000	585	3.50	5.30	n/a
	Inferred	243,000	428	4.10	5.10	n/a
Lucky Queen	Indicated	132,300	1,167	2.43	1.63	0.16
	Inferred	257,900	473	1.04	0.80	0.13
Flame & Moth	Indicated	1,679,000	498	1.85	5.33	0.42
	Inferred	365,200	356	0.47	4.25	0.26

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			Ag	Pb	Zn	Au
Deposit	Classification	Tonnes	(g/t)	(%)	(%)	g/t
Onek	Indicated	700,200	191	1.24	11.85	0.6
	Inferred	285,100	118	1.15	8.26	0.42
Bermingham	Indicated	858,000	628	2.40	1.65	0.13
	Inferred	220,000	770	2.13	2.21	0.15
Total	Indicated	3,631,500	500	2.00	5.60	0.30
	Inferred	1,371,200	408	1.63	4.26	0.21

Notes:

1. Bellekeno estimate is at September 30, 2013 and reflects the September 30, 2012 estimate less estimated depletion from mining to September 30, 2013.

2. CIM definitions were followed for Mineral Resources.

3. Mineral Resources are estimated at a net smelter return (NSR) cut-off value of $185/tonne.

4. Bellekeno Mineral Resources are estimated using metal prices of US$22.50/oz Ag, US$0.85/lb Pb, US$0.95/lb Zn, and US$1,300/oz Au and a US$/C$ exchange rate of 0.96.

5. Lucky Queen, Onek, Flame & Moth and Bermingham Mineral Resources are estimated using metal prices of US$20.00/oz Ag, US$0.95/lb Pb, US$1.00/lb Zn and US$1,300/oz Au and a US$/C$ exchange rate of 0.80.

6. Bulk density estimated by regression analysis for Bellekeno, Lucky Queen, and Onek and from core and pulp sampling for Flame & Moth and Bermingham.

7. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

8. Numbers may not add due to rounding.

CONCLUSIONS

RPA offers the following conclusions:

· The Mineral Resources at the KHSD have been estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum Standard Definitions for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM definitions).

· The resource evaluations reported herein are a reasonable representation of the global polymetallic Mineral Resources for the listed deposits at the current level of sampling. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability and there is no certainty that the results described in the PEA will be realized.

· This study has been completed to a PEA level of study. The mine designs, mine dewatering designs, mining plans, and processing assumptions are based upon preliminary evaluations.

· The areas requiring further study and design are:

o Geotechnical conditions.

o Hydrological conditions.

o Mine access design.

o Mine ventilation design.

o Stope designs and pillar recovery alternatives.

o Metallurgical testing of samples and a blend of samples.

o Waste rock characterization to determine the quantities of potential acid generation (PAG) waste.

o Design of waste storage facilities for the PAG waste.

o Expansion of the DSTF.

· The Project has the potential to generate an after tax 5% NPV of $79 million and a 75% IRR from the mining and processing of 1.02 million tonnes of mineralization grading 843 g/t Ag, 4.6% Zn, 3.3% Pb and 0.4 g/t Au over a nine year mine life using an exchange rate C$1.00 = US$0.76 in years 1 to 3 and C$1.00 = US$0.79 thereafter; metal prices of US$18.60/oz for silver in year 2 and US$19.35/oz thereafter; US$ 1.20/lb zinc for years 2 to 4 and US$1.00 thereafter, US$1.00/lb lead for years 2 to 4 and US$0.94/lb thereafter and US$1,300.00/oz for gold. There is 25% of silver sold to Silver Wheaton under a streaming agreement at prices ranging from US$3.54/oz to US$8.18/oz silver. The economic analysis contained in this report is based, in part, on Inferred Mineral Resources, and is preliminary in nature. Inferred Mineral Resources are considered to be too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves. There is no certainty that economic forecasts on which this PEA is based will be realized.

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· The estimated economic returns based upon the PEA support further study to restart the plant and mine from the Bellekeno, Flame & Moth, Bermingham, and Lucky Queen deposits.

· The planned exploration drive to the Bermingham deposit will provide additional resource information as well as geotechnical and hydrologic information related to the deposit.

· Initial studies should focus on the expected conditions along the planned Flame & Moth and Bermingham access development and ventilation raises.

· 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 conceptual mine planning context.

· The Lucky Queen mining rate in 2024 is considered to be a high production rate for the planned extent of the Lucky Queen mining.

· The current PEA study assumes the mill facility production will increase to a nominal rate of 400 tpd once an additional ball mill is commissioned.

· Metallurgical recoveries are not based on testing of blending samples from the different deposits.

· Only one composite sample has been metallurgically tested with variable results.

· Additional metallurgical testing on the Flame & Moth mineralization is warranted.

· A model of the overall recovery was generated using open circuit flotation tests.

o The life of mine silver recovery is estimated at 93%.

o The life of mine zinc recovery is estimated at 88%.

o The life of mine lead recovery is estimated at 94%.

· Blending of various zones prior to processing is not expected to impact the metallurgical performance of the blended mill feed. Metallurgical test work has not been completed to confirm the performance of a blended mill feed.

· Zinc losses in the lead circuit are expected to be the only significant metallurgical shortfall.

· Completion of the installation of the additional grinding mill is planned to achieve the 400 tpd operating rate.

· The construction of the DSTF expansion will be required for the Project.

· The processing of the Flame & Moth mineralization requires an amendment to the Water Licence and the mining and processing of the Bermingham mineralization will require amendments to the Quartz Mining Licence and to the Water Licence.

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RECOMMENDATIONS

RPA provides the following recommendations:

· Carry out investigation of the ground conditions expected along the Flame & Moth ventilation raise and Bermingham access ramps and ventilation raises before development commences.

· Undertake the planned exploration development and drilling at the Bermingham deposit.

· Complete geotechnical studies of the Flame & Moth, Bermingham, and Lucky Queen deposits as development advances to refine the conceptual mine plans, stope dimension recommendations, and ground support requirements.

· Study the hydrology of the Flame & Moth and Bermingham deposits to confirm the expected ground water inflows and ground water chemistry.

· Update the ground support criteria to reflect localized conditions at the Flame & Moth, Bermingham, and Lucky Queen deposits as those deposits are advanced.

· Advance the conceptual mine planning, optimize the designs and review stope plans to ensure a positive economic benefit from each stope.

· Review the planned Lucky Queen mining rate well in advance of the commencement of mining operations at Lucky Queen.

· Review the LOM production schedule with a view to reducing the variations in feed tonnage in the later years of the plan.

· Undertake metallurgical test work to confirm:

o The metallurgical performance of the Flame & Moth mineralization.

o The expected good performance of a blended mill feed.

o Options to reduce expected zinc losses in the lead circuit.

o Settling and geochemical characteristics of the mineralization.

· Use the results of the recommended work to advance the Project level of study.

ECONOMIC ANALYSIS

The economic analysis contained in this report is based, in part, on Inferred Resources, and is preliminary in nature. Inferred Resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves. There is no certainty that economic forecasts on which this PEA is based will be realized. Inferred Mineral Resources form the basis of 2% of the Indicated and Inferred Mineral Resources included in the conceptual plant feed schedule of this PEA.

A pre-tax Cash Flow Projection (base case) has been generated from the LOM production schedule and capital and operating cost estimates, and is summarized in Table 1-2. A summary of the key criteria is provided below.

ECONOMIC CRITERIA

REVENUE

· 400 tonnes per day mining from underground (146,000 tonnes per year).

· Mill recovery based on experience and as indicated by testwork, averaging 97.1% silver, 88.4% zinc, 94.6% lead, and 50% gold recovered in two concentrates.

· Lead – silver concentrate and zinc concentrate shipped to smelter for treatment.

· Exchange rate C$1.00 = US$0.76 in years 1 to 3 and C$1.00 = US$0.79 thereafter.

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· Long term metal prices of US$18.60/oz for silver in year 2 and US$19.35/oz thereafter, US$ 1.20/lb zinc for years 2 to 4 and US$1.00 thereafter, US$1.00/lb lead for years 2 to 4 and US$0.94/lb thereafter and US$1300.00/oz for gold.

· 25% of silver is sold to Silver Wheaton under a streaming agreement at prices ranging from US$3.54/oz to US$8.18/oz silver.

· NSR includes shipping, treatment and refining costs.

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

· Revenue is recognized at the time of production.

COSTS

· Pre-production period: 20 months (March 2017 to December 2018).

· Mine life: nine years.

· LOM production plan as summarized in Table 1-2.

· Pre-production capital of $27 million (accounting for revenue generated in 2018) and sustaining capital of $62.9 million.

· Average operating cost over the mine life is $324.93 per tonne milled.

RPA has relied upon Alexco and its tax advisors for the calculation of the taxes in the economic model.

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TABLE 1-2   CASH FLOW SUMMARY

Alexco Resource Corp. – Keno Hill Silver District Project

Date:				2017	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028
		UNITS	TOTAL	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10	Year 11	Year 12
Underground
	Operating Days	days	3,150	350	350	350	350	350	350	350	350	350
	Tonnes milled per day	tonnes / day	324	-	185	417	417	417	417	319	407	338
	Production	'000 tonnes	1,021	-	65	146	146	146	146	112	142	118
	Waste	'000 tonnes	811	25	187	161	108	123	53	95	33	26
	Total Moved	'000 tonnes	1,832	25	252	307	254	269	199	207	175	145
PROCESSING
Mill Feed		'000 tonnes	1,021	-	65	146	146	146	146	112	142	118
	Au Grade	g/t	0.4	-	0.1	0.4	0.4	0.5	0.3	0.4	0.4	0.5
	Ag Grade	g/t	843.00	-	931	1,089	919	788	681	743	812	798
	Pb Grade	%	3.3%	-	7.7%	3.3%	3.1%	3.3%	2.8%	3.6%	2.2%	2.9%
	Zn Grade	%	4.6%	-	5.7%	4.5%	4.7%	4.8%	5.2%	4.7%	3.3%	4.7%
Recovery
	Pb Concentrate	%
	Au		50%	-	50.0%	50.0%	50.0%	50.0%	50.0%	50.0%	50.0%	50.0%
	Ag		93.6%	-	94.3%	95.5%	94.2%	93.0%	91.9%	92.5%	93.2%	93.1%
	Pb		94.5%	-	95.9%	94.6%	94.5%	94.6%	94.4%	94.7%	94.0%	94.4%
	Zn Concentrate	%
	Ag		3.6%	-	2.7%	1.5%	2.8%	4.0%	5.1%	4.5%	3.8%	3.9%
	Zn		88.4%	-	87.6%	88.4%	88.5%	88.5%	88.6%	88.4%	88.5%	88.5%
Recovered Metal
	Pb Concentrate
	Au	oz	6,350	-	131	847	999	1,064	766	767	918	857
	Ag	oz (000)	25,906	-	1,825	4,884	4,063	3,438	2,938	2,468	3,464	2,825
	Pb	tonnes	32,008	-	4,792	4,544	4,226	4,608	3,908	3,778	2,886	3,266
	Zn	tonnes	4,058	-	349	568	585	601	640	448	397	470
	Zn Concentrate
	Au	oz	2,540	-	52	339	400	426	306	307	367	343
	Ag	oz	937,571	-	52,175	74,800	120,590	148,042	164,394	119,102	139,944	118,524
	Pb	tonnes	779	-	56	115	112	116	108	91	93	89
	Zn	tonnes	41,726	-	3,247	5,859	6,076	6,221	6,712	4,598	4,121	4,892
REVENUE
	Metal Prices
	Au	US$/oz Au	$1,300		$1,300	$1,300	$1,300	$1,300	$1,300	$1,300	$1,300	$1,300
	Ag	US$/oz Ag	$19.30		$18.60	$19.35	$19.35	$19.35	$19.35	$19.35	$19.35	$19.35
	Ag (SW)	US$/oz Ag	$6.37		$5.82	$3.54	$5.48	$6.97	$8.18	$7.49	$6.70	$6.86
	Pb	US$/lb Pb	$0.96		$1.00	$1.00	$1.00	$0.94	$0.94	$0.94	$0.94	$0.94
	Zn	US$/lb Zn	$1.07		$1.20	$1.20	$1.20	$1.00	$1.00	$1.00	$1.00	$1.00
	Exchange Rate	US$:C$	$0.78		$0.76	$0.76	$0.79	$0.79	$0.79	$0.79	$0.79	$0.79
Concentrate Payable
	Pb Concentrate Payable
	Payable Au	oz	4,872		-	622	790	837	572	580	775	696
	Payable Ag	oz	24,611,086		1,734,015	4,639,857	3,859,875	3,266,001	2,791,275	2,345,027	3,291,058	2,683,978
	Payable Pb	tonnes	30,408		4,552	4,317	4,014	4,377	3,713	3,589	2,742	3,102
	Zn Concentrate Payable
	Payable Ag	oz	446,688		21,250	25,770	54,687	71,965	80,681	59,483	74,891	57,961
	Payable Zn	tonnes	35,050		2,728	4,922	5,104	5,226	5,638	3,863	3,462	4,110

43

Date:				2017	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028
		UNITS	TOTAL	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10	Year 11	Year 12
Gross Revenue
	Au Gross Revenue	US$ '000	$6,334		$0	$809	$1,027	$1,088	$744	$755	$1,008	$904
	Ag Gross Revenue	US$ '000	$401,242		$27,040	$71,839	$62,172	$54,262	$47,555	$39,395	$54,484	$44,495
	Pb Gross Revenue	US$ '000	$64,719	$        -	$10,036	$9,518	$8,850	$9,071	$7,694	$7,438	$5,682	$6,429
	Zn Gross Revenue	US$ '000	$82,895	$        -	$7,216	$13,020	$13,502	$11,521	$12,429	$8,516	$7,632	$9,060
	Total Gross Revenue	US$ '000	$555,191	$        -	$44,291	$95,187	$85,552	$75,941	$68,422	$56,104	$68,806	$60,888
Total Charges
	Total Charges	US$ '000	$102,924	$        -	$9,610	$16,523	$15,247	$14,481	$13,727	$10,878	$11,164	$11,295
	Net Smelter Return	US$ '000	$452,266	$        -	$34,682	$78,664	$70,305	$61,460	$54,695	$45,226	$57,642	$49,593
	Royalty NSR	US$ '000	$3,113	$        -	$0	$1,180	$1,055	$879	$0	$0	$0	$0
	Net Revenue	US$ '000	$449,153	$        -	$34,682	$77,484	$69,250	$60,581	$54,695	$45,226	$57,642	$49,593
	Unit NSR	US$/t milled	$440	$        -	$536	$531	$474	$415	$375	$405	$405	$419
OPERATING COST
	Mining (Underground)	C$/t milled	$193.25		$273.76	$185.29	$189.01	$186.35	$166.88	$239.71	$168.61	$191.14
	Processing	C$/t milled	$61.96		$71.17	$58.17	$58.15	$58.12	$58.12	$72.46	$59.36	$69.00
	G&A	C$/t milled	$69.79		$134.88	$58.89	$59.06	$59.23	$59.41	$81.18	$60.80	$70.57
	Total Operating Cost	C$/t milled	$325.00		$479.81	$302.34	$306.22	$303.70	$284.40	$393.35	$288.77	$330.71
	Mining (Underground)	C$ '000	$197,320	$0	$17,708	$27,050	$27,594	$27,206	$24,363	$26,779	$24,001	$22,620
	Processing	C$ '000	$63,263	$0	$4,603	$8,492	$8,489	$8,484	$8,484	$8,095	$8,449	$8,166
	G&A	C$ '000	$71,258	$1,918	$8,724	$8,597	$8,623	$8,648	$8,673	$9,069	$8,655	$8,351
	Total Operating Cost	C$ '000	$331,841	$1,918	$31,035	$44,140	$44,705	$44,338	$41,520	$43,943	$41,104	$39,137
	Unit Operating Cost	C$/t milled	$325	$0	$480	$302	$306	$304	$284	$393	$289	$331
	Operating Cashflow	C$ '000	$242,311	($1,918)	$14,598	$57,813	$42,953	$32,347	$27,714	$13,305	$31,860	$23,639
CAPITAL COST
	Direct Cost
	Mining	C$ '000	$75,754	$8,663	$19,323	$10,392	$6,369	$7,231	$4,940	$10,457	$5,429	$2,949
	Processing	C$ '000	$951	$205	$746	$0	$0	$0	$0	$0	$0	$0
	Infrastructure	C$ '000	$7,947	$364	$3,691	$1,386	$210	$298	$0	$1,998	$0	$0
	Tailings	C$ '000	$821	$0	$47	$119	$118	$118	$116	$89	$120	$95
	Total Direct Cost	C$ '000	$85,473	$9,232	$23,808	$11,897	$6,697	$7,647	$5,056	$12,543	$5,548	$3,044
	Contingency	C$ '000	$17,095	$1,846	$4,762	$2,379	$1,339	$1,529	$1,011	$2,509	$1,110	$609
	Total Capital Cost	C$ '000	$102,568	$11,078	$28,569	$14,277	$8,037	$9,176	$6,068	$15,052	$6,658	$3,653
CASH FLOW
	Net Pre-Tax Cashflow	C$ '000	$139,744	($12,996)	($13,971)	$43,536	$34,916	$23,170	$21,647	($1,747)	$25,202	$19,986	$0	$0	$0
	Cum. Pre-Tax Cashflow	C$ '000		($12,996)	($26,967)	$16,569	$51,485	$74,656	$96,302	$94,555	$119,758	$139,744	$139,744	$139,744	$139,744
	Taxes	C$ '000	$32,074	$0	$764	$3,522	$6,176	$8,027	$5,746	$663	$7,301	$3,385	($1,896)	($949)	($664)
	After-Tax Cashflow	C$ '000	$107,670	($12,996)	($14,735)	$40,014	$28,740	$15,143	$15,901	($2,410)	$17,901	$16,601	$1,896	$949	$664
	Cum After-Tax Cashflow	C$ '000		($12,996)	($27,731)	$12,283	$41,024	$56,167	$72,068	$69,658	$87,560	$104,161	$106,057	$107,006	$107,670
PROJECT ECONOMICS
	Pre-Tax IRR	%	89%
	Pre-tax NPV 5%	C$ '000	$104,292
	Pre-tax NPV 10%	C$ '000	$79,139
	After Tax IRR	%	75%
	After tax NPV 5%	C$ '000	$79,393
	After tax NPV 10%	C$ '000	$59,510

44

CASH FLOW ANALYSIS

Considering the Project on a stand-alone basis, the undiscounted after tax cash flow totals $107.7 million over the mine life, and simple payback occurs approximately one year from start of production.

The after-tax Net Present Value (NPV) at a 5% discount rate is $79.4 million, and the after-tax Internal Rate of Return (IRR) is 75%.

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

· Capital costs

IRR sensitivity over the base case has been calculated for a range of variations. The after tax sensitivities are shown in Table 1-3, Figures 1-1 and 1-2.

Table 1-3   After-Tax Sensitivity

Alexco Resource Corp. – Keno Hill Silver District Project

Factor	Silver Grade (g/t)	5% NPV ($M)	IRR (%)
0.8	674	37	40%
0.9	759	59	59%
1.0	843	79	75%
1.1	927	99	90%
1.2	1,012	117	103%
Factor	Recovery (%)	5% NPV ($M)	IRR (%)
0.80	74.9%	68	66%
0.90	84.3%	74	71%
1.00	93.6%	79	75%
1.01	94.6	80	76%
1.02	95.5	81	76%
Factor	Silver Price (US$/oz)	5% NPV ($M)	IRR (%)
0.8	15.41	41	41%
0.9	17.33	61	59%
1.0	19.26	79	75%
1.1	21.18	96	89%
1.2	23.11	110	102%
Factor	Exchange Rate	5% NPV ($M)	IRR (%)
0.8	0.63	150	133%
0.9	0.71	111	101%
1.0	0.78	79	75%
1.1	0.86	53	53%
1.2	0.94	29	32%

45

Factor	Operating Cost ($/t)	5% NPV ($M)	IRR (%)
0.85	276	118	104%
0.93	301	97	88%
1.00	325	79	75%
1.18	382	34	40%
1.35	439	(10)	(12%)
Factor	Capital Cost ($M)	5% NPV ($M)	IRR (%)
0.85	87	92	97%
0.93	95	85	85%
1.00	103	79	75%
1.18	121	64	55%
1.35	138	50	40%

46

Figure 1-1 After-Tax 5% NPV Sensitivity

 

Figure 1-2 After-Tax IRR Sensitivity

 

TECHNICAL SUMMARY

PROPERTY DESCRIPTION AND LOCATION

The Project is located approximately 350 km north of Whitehorse, Yukon, Canada near Elsa and Keno City. Alexco has exploration, maintenance, and camp facilities near Elsa, and administration, mill and mine facilities at the mill complex located near Keno City. The area is covered by NTS map sheets 105M/13 and 105M/14.

The KHSD Project consists of a 237.44 km² property package consisting of claims and leases. There are numerous silver, lead, and zinc deposits and mines on the property. There are Mineral Resource estimates on the Bellekeno mine and the Onek, Flame & Moth, Bermingham and Lucky Queen deposits. This PEA is based upon underground mining and processing of mineralization from the Bellekeno, Flame & Moth, Bermingham, and Lucky Queen deposits.

47

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES AND PHYSIOGRAPHY

The closest sizable town is Mayo, located 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. 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.

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 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.

Local resources in terms of manpower, rental equipment, materials, and supplies are very limited. Electrical power is available from Yukon utility.

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.

HISTORY

The Keno Hill mining camp area has a rich history of exploration and mining dating back to the beginning of the 1900s. Key dates include:

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

· The first silver was found in 1903, with assay from 1905 yielding more than 11 kilograms per tonne (kg/t) silver.

· Small-scale mining commenced in 1913 with the first shipment of 50 t of vein material to a smelter in San Francisco.

· The end of the First World War and high silver prices led to successful exploration activity in the area with the Yukon Gold Company and later Keno Hill Limited as the first truly commercial operators. Success at the Keno mine led to a staking rush, resulting in the discovery of a number of rich deposits.

· In the early 1920s, the Treadwell Yukon Company Limited (TYC) started mining. After the Second World War a new company, Keno Hill Mining Company Ltd. (later UKHM), purchased all TYC properties and started production. Very good results led to another staking rush and the formation of a large number of junior exploration companies, many of which were purchased by UKHM.

· 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.

· The Husky underground mine went into production in 1972, with open pit operations introduced in 1977 to recover crown pillars. From 1982 to 1985 (Sadie-Ladue and Shamrock mines) and 1989 to 1990 (Shamrock, Silver King, Hector-Calumet, Lucky Queen, and Keno mines) were mined on a small scale basis.

48

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

· 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.

GEOLOGICAL SETTING AND MINERALIZATION

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 Keno Hill Silver District 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.

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 Keno Hill Silver District, 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.

DEPOSIT TYPES

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 Keno Hill Silver District, 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.

EXPLORATION

The exploration conducted by Alexco since 2005 is the first comprehensive exploration effort in the Keno Hill Silver District since 1997. The work has included a program of geologic data compilation, aerial geophysical surveying, geological mapping, 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.

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.

49

DRILLING

Alexco has completed several core drilling campaigns using Canadian diamond drilling contractors. The campaigns resulted in a total of 661 surface drill holes for a total of 158,619 m. In addition, a total of 407 underground holes for 25,460 m was also completed mainly at Bellekeno. Apart from 34 RC holes and some minor RC pre-collaring at Flame & Moth, drill holes have essentially all been diamond cored in HQ size.

Surface drill hole collars were surveyed with either an Ashtech GPS device utilizing post-processing software or a Sokkia GRX1 RTK GPS. All underground collars and drill stations were surveyed by underground surveyors. 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.

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 and then entered into an electronic database. 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: rock type, faults and mineralized vein-faults, and textural modifiers

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

· Mineralization type, intensity of oxidation, phases and abundance of veining

· Alteration

· Stratigraphy: units consistent with the surface mapping

· Geotechnical: percentage recovery and rock quality determination and fracture intensity.

Alexco systematically measured core bulk density (CBD) of mineralized material as well as basic rock types. Pulp bulk density (PBD) measurements were obtained by pycnometry on select assay intervals of mineralized zones by ALS Laboratories and AGAT Laboratories.

2006–2013 ALEXCO DRILLING AT THE BELLEKENO MINE

A total of 43,784 m of drilling from both surface and underground (excluding service holes) was completed at the Bellekeno deposit between 2006 and 2013.

The 2006 drilling was to confirm and test the historical mineral inventory and block model, as well as to extend the known mineralization. Between 2006 and 2009, 200 drill holes focussed on the 48 and 49 vein structures from underground and surface platforms. Later core drilling on the Bellekeno property has focussed on resource definition, and to a lesser degree exploration programs.

2006–2012 ALEXCO DRILLING AT LUCKY QUEEN

Alexco conducted surface core drilling programs at Lucky Queen from 2006 to 2010 with 47 core drill holes totalling 11,104 m drilled. The drilling was designed to test along strike and down-plunge of the historical workings.

2010–2014 ALEXCO DRILLING AT ONEK

Alexco conducted surface diamond drilling programs at Onek in 2007, 2008, 2010, and 2011 with 78 core holes totalling 11,981 m drilled. The drilling was designed to confirm and test historic reserve/resource blocks and extend known mineralization along strike and down plunge.

A 220 m decline was driven towards the Onek deposit in 2012 and 2013. In 2013, twelve underground core holes (975 m) were drilled.

50

2010–2016 ALEXCO DRILLING AT FLAME & MOTH

Alexco conducted surface core drilling programs at Flame & Moth in from 2010 to 2014, for a total of 151 holes for 35,244 m for resource estimation. The exploration drilling was initially designed to test geologically derived targets in the vicinity of the historical Flame & Moth workings. Following new discoveries, additional drilling was successful in outlining two zones on the Flame vein.

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

2009–2016 ALEXCO DRILLING AT BERMINGHAM

Alexco conducted surface diamond drilling programs at Bermingham between 2009 and 2011 with 36 core holes totalling 10,456.2 m drilled to test along strike and down plunge of historic resource, open pit workings, and around the historic underground mine workings. Drilling was successful in outlining an area of silver-lead-zinc mineralization developed in the hangingwall of the Mastiff Fault.

Drilling between 2012 and 2016 of 28,220.4 m in 83 holes led to the discovery and definition of high grade vein deposits. To date the interpretation of the consolidated drilling results has identified four mineralized veins that splay and change orientation along strike within the north-northeast striking and moderately to steeply southeast dipping Bermingham vein-fault 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 footwall. The main through-going Bermingham and Bermingham Footwall veins occur in both the Etta and Arctic zones, while the Bear vein and associated newly identified conjugate West Dipper vein set occur only within the Arctic Zone in a position controlled by a flexure in the Bermingham vein-fault.

SAMPLE PREPARATION, ANALYSES AND SECURITY

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 sawn in half lengthwise using a diamond saw where possible. One half is returned to the core box for storage at the site and the other bagged for sample shipment.

Each 20-sample batch sent for assaying includes three control samples: a commercial standard reference material (SRM), a blank, and a duplicate. The blank is commercially purchased “landscape rock”. 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.

DATA VERIFICATION

Dr. Gilles Arseneau and Chris Elliott of SRK carried out a visit to examine the Lucky Queen, Bellekeno, and Onek deposits. In total, SRK spent two and 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 SRK 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.

MINERAL PROCESSING AND METALLURGICAL TESTING

Metallurgical testwork has been conducted independently on each of the three deposits included in the production plan. 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 PEA LOM schedule indicates that significant blending of the different deposits is planned. To date, no testwork has been conducted on a blended sample from any of the three deposits. While there is little information related to the blending and processing of different mineralized zones, there is no expectation that blending of ores will harm the metallurgical response of individual materials. The deposits vary widely in terms of base and precious metals and all samples have responded well to flotation processes for the potential production of saleable concentrates.

51

MINERAL RESOURCE ESTIMATE

Definitions for resource categories used in this report are consistent with the CIM definitions incorporated by reference into NI 43-101. A summary of the Mineral Resource at the Project is shown in Table 1-1.

Mineral Resources are not Mineral Reserves and have not demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserve.

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.

RESOURCE ESTIMATION PROCEDURES

The resource evaluation 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 eventual economic extraction” and selection of appropriate cut-off grades.

· Preparation of the Mineral Resource Statement.

SOLID BODY MODELLING

3D wireframe solids were constructed by Alexco to accurately represent the geometry of the Bellekeno mine, Lucky Queen, Flame & Moth, Onek, and Bermingham vein structures. These wireframes were reviewed and validated by the QP before Mineral Resource estimation.

MINERAL RESOURCE CLASSIFICATION

Blocks estimated during the first estimation run considering full variogram ranges can be classified in the Indicated category. Blocks estimated during the second pass considering search neighbourhoods set at twice the variogram ranges should be appropriately classified in the Inferred category.

MINERAL RESERVE ESTIMATE

There are no Mineral Reserve estimates at the KHSD.

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MINING METHODS

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 mining life, the most successful method was square set stoping with timber.

The deposits considered for production in this PEA are the Flame & Moth, Bermingham, Bellekeno, and Lucky Queen deposits. All of the mining in this PEA is planned to be underground mining using rubber tired mobile equipment and adit entries. The dominant recommended mining method is mechanized overhand cut and fill (MCF) or drift and fill in wider areas. Longhole stoping with backfill has been recommended in wider areas interpreted to have intact hangingwall and footwall intersections.

The backfill is planned to be a mixture of waste rock fill and tailings from the DSTF with cement added as required.

GEOTECHNICAL EVALUATION

SRK completed preliminary geotechnical evaluations for the Bellekeno, Lucky Queen, Flame & Moth, and Bermingham deposits. The evaluations considered the mineralized veins, hangingwall and footwall zones adjacent to planned mining, and general areas for proposed infrastructure development. Based on these assessments, recommendations for mining methods, stope design, and support requirements have been provided.

Information available for the evaluations included drill hole databases, core photographs, Gemcom models, and information collected by SRK during various site visits. Only the Bellekeno review has the benefit of underground observations.

Further geotechnical studies are recommended to confirm the pillar requirements and the mine design details. RPA recommends that the initial geotechnical reviews focus on the Flame & Moth and Bermingham access drives and ventilation raises to assess conditions along the planned alignments.

HYDROGEOLOGICAL CONDITIONS

The Bellekeno and Lucky Queen proposed mining zones are located above the valley floor, which tends to limit the occurrence and impact of adverse hydrogeological conditions. In contrast, the Flame & Moth deposit is situated such that there is a possibility of water inflow to the planned workings. Preliminary investigations have been used to estimate inflows for the Flame & Moth deposits.

CONCEPTUAL MINE PLAN

In the first pass of conceptual mine planning, the stope shapes and mining areas were reviewed based upon an NSR value per tonne cut-off of $290. The stopes were then reviewed based upon the revised operating cost estimate of $325/tonne. This review removed from stopes and some stoping areas that were either unprofitable, had a very low overall margin, and/or required significant additional development for access to the area. Mining recovery was applied at 95% for Bellekeno, Flame & Moth, and Lucky Queen which is in line with Alexco’s historic operational experience. For Bermingham, mining recovery was applied at 90%, which is in recognition of anticipated challenging ground conditions.

A mining recovery of 50% was applied to the geotechnical pillars at Flame & Moth. A different approach was used for geotechnical pillars at Bermingham, where ground support costs were doubled for excavations located within 5m of large faults (in addition to the 90% mining recovery outlined above). These different approaches reflect the level of geotechnical understanding at these deposits.

Estimated Indicated and Inferred Mineral Resources in the conceptual mine plan were tabulated for each deposit and arranged to support production scheduling. Table 1-4 shows the estimate of Indicated and Inferred Mineral Resources in the conceptual mine plan for the four deposits contributing to the updated PEA plant feed.

53

Table 1-4 INDICATED AND INFERRED MINERAL RESOURCES in the CONCEPTUAL PEA Plant Feed

Alexco Resource Corp. – Keno Hill Silver District Project

Mine	Diluted (‘000 t)	Ag (g/t)	Au (g/t)	Pb (%)	Zn (%)
Bellekeno	37	747	n/a	10.6	5.9
Lucky Queen	81	1,206	0.1	2.6	1.63
Flame & Moth	683	666	0.5	2.8	5.8
Bermingham	220	1,276	0.2	4.1	2.1
Total PEA Conceptual Plant Feed	1,021	843	0.4	3.3	4.6

RPA worked with Alexco on an overall strategy to guide the development of the PEA production plan. This involved considering various combinations of the four deposits, that would achieve a sustainable conceptual plant feed rate of 400 tpd as early as possible and give priority to the highest grade and largest potential tonnage deposits.

Planned Production Rates

RPA and Alexco estimated maximum production rates to be respected during production scheduling. They were estimated based on mining method, vein thickness, mining shape geometry, and the layout of the vein access crosscut. The overall scheduling was based upon taking the Bellekeno material first as readily accessible material to create a stockpile for the initial mill start up.

The balance of the conceptual mine plan was based upon operating two mines most of the time and limiting the time spent trying to run three mines at one time. The schedule was set based upon the planned timing of the permits for Bermingham so that the Bermingham and Flame & Moth deposits commence mill feed production at the same time.

The KHSD mill processing rate is limited by permits to 400 tpd.

DEVELOPMENT AND PRODUCTION SCHEDULES

A development and production schedule was prepared for each deposit using Deswik software.

For the Flame & Moth and Bermingham, the main ramp from surface has been scheduled at advance rates of three to four metres per day line advance, based upon rates that are considered to be achievable by well-organized owner’s crews.

The production schedule includes some time allowances for vein water drainage after the vein has been intersected by access crosscuts. Production stoping is not scheduled to begin until a second route out of the mine has been established to that location.

RECOVERY METHODS

PROCESS FLOWSHEET

The process facility is based on traditional unit operations for the recovery of silver, lead, and zinc into sulphide mineral concentrates. The lead concentrates typically contain approximately 90 to 95 percent of the mill feed silver values. Detailed analysis of test work results indicates that lead and silver recoveries are typically dependent on the respective head grades for these two metals. Zinc recovery is typically defined or affected by the ratio of lead to zinc.

54

Unit operations within the Alexco facilities include crushing of run-of-mine material, grinding for preparation of flotation feed, selective flotation for the production of lead and zinc concentrates, concentrate dewatering and tailings thickening and filtration. Concentrates are shipped off site for smelting and tailings are stored in the DSTF.

DESIGN CRITERIA

The mill facility was designed to process 408 tpd at an overall plant availability of 92%. The target grind size was at P80 size of 174 µm and the 2010 Project design included the option of a regrind mill before the lead cleaner circuit. The plant was built without the lead regrind mill.

2012 MILL PERFORMANCE

In 2012, the mill facility processed 94,800 t of Bellekeno vein material generating 13,000 t of lead-silver concentrate and 5,700 t of zinc concentrate. The average daily throughput was 260 tpd at 89% availability. The maximum monthly throughput for the year was 320 tpd, with peak production in September and October.

The 2012 mill facility lead recoveries 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.

The zinc recovery to zinc concentrate ranged from 46% to 64% with a final zinc grade of 40% to 49% zinc. Zinc metallurgical performance did not meet design criteria nor was it comparable to test work results.

PLANT MODIFICATIONS

With the current equipment, the mill facility has not demonstrated the ability to achieve the target throughput of 400 tpd. Based on plant testing, the installation of a second ball mill in series after the existing mill was recommended. Installation commenced in 2013 but was not completed. As part of the Project the mill installation is to be completed along with modifications to the classification circuit.

On-going evaluation of the flotation process will be required as the plant is optimized and operated on a long term basis. Technical support should include a flotation engineer and a metallurgical technician to support the operating staff.

PROJECT INFRASTRUCTURE

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.

FLAT CREEK 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.

55

Alexco is licensed to draw water from Flat Creek and an existing groundwater well for domestic use. Alexco has two sewage disposal permits at Elsa: one for the Flat Creek camp and one for the houses.

MILL FACILITY

The current facilities at the mill facility include mine and mill offices and dry, an assay lab, first aid facilities, and the mill and DSTF complex. 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-foot shipping containers converted into laboratory modules. The laboratory is equipped with the necessary analytical instruments to provide all routine assays for the mine, plant, and environmental quality control monitoring.

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 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.

ELECTRICAL POWER

Electrical power is available at the Project from the Yukon electrical utility.

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.

CONCENTRATE SALES CONTRACTS

Previously, the production of both the silver/lead concentrate and the zinc concentrate from the mill facility was being sold under contract with Glencore Ltd. The terms of the contract were reviewed and renegotiated annually to reflect current market conditions.

The terms of the current contract are included in the economic model in order to generate NSR values for the LOM plan.

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 Bellekeno mine and mill facility.

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

56

ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

The Project area includes a number of historical mines and processing operations within the Keno Hill Silver District spread out over 237.44 km². These include nine major mines, three tailings disposal areas, and dozens of different shafts and adits. 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 District Mill.

Alexco and its subsidiary, ERDC, have a unique arrangement 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. 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. Some high priority activities have already been implemented. Currently, active water treatment is carried out at five locations in the Keno Hill Silver District.

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. 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.

ENVIRONMENTAL ASSESSMENT AND PERMITTING

Existing approvals for the care and maintenance, exploration, and mine development activities cover all aspects of the mine development at the Bellekeno, Lucky Queen, and Flame & Moth mines.

The Bellekeno and Lucky Queen mines have all permits and authorizations in place to commence full scale mine production. The Flame & Moth deposit has in place an amended Quartz Mining License QML-0009 which authorizes mine development to commence. Before milling of material from the Flame & Moth deposit, an amendment to Water Use Licence QZ09-092 is required. Additional minor approvals will also be required.

The terms and conditions for the Flame & Moth development, outlined in the Decision Document, include additional water treatment requirements, provision for a liner under the DSTF, additional equipment to reduce noise from the mill area crusher, and increased air quality and noise monitoring, and community consultation to address community concerns regarding air quality and noise related issues. The water license amendment process is well advanced and the final permitting phase for Flame & Moth is to hold a public hearing. The public hearing process is expected in early Q2 2017 followed by issuance of the water license amendment in Q2 2017.

The Bermingham deposit has in place a Class IV Mining Land Use permit that authorizes surface exploration to occur. Underground development and advanced exploration drilling, will commence under an amendment to the current Class IV authorizations. It is assumed that underground development will need to be assessed through YESAB and that the water license will be amended to allow commercial milling of material from the Bermingham deposit. The Bermingham permitting timeline includes a two-step process which includes first permitting Bermingham to allow underground decline construction and bulk sampling followed by permitting to allow milling and tailings storage in the DSTF.

A 21 month period is estimated for the Bermingham deposit environmental assessment, permitting, and water licence amendment so that processing could begin in Q4 2018.

57

NOISE, VIBRATION, DUST AND TRAFFIC CONSIDERATIONS

Several specific issues were raised during the review process, and have been included in the Quartz Mining Licence. Mitigation measures that have been implemented or proposed by the company include limiting certain activities (e.g. crusher operations) and types of traffic to the hours of 7 am to 7 pm, constructing a building around the crusher and installing a sound dampening enclosure around the Flame & Moth ventilation fan.

Traffic-related issues have resulted in the construction of bypass roads and signage to separate public traffic from mine operations in key areas.

LAND, RESOURCE USE AND HERITAGE RESOURCES

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.

COMMUNITY AND FIRST NATIONS RELATIONS

The Keno Hill Silver District is situated in the traditional territory of the First Nation of Na-cho Nyak Dun (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.

WASTE AND WATER MANAGEMENT PLANS

Waste rock from the deposits can have the potential for acid generation and/or metal leaching (P-AML). The P-AML rock is stored in specific designed facilities. Non P-AML is stored on surface or is used for construction as needed.

Water from mining operations is discharged to ponds and if necessary treated before discharge.

TAILINGS

Tailings will continue to be deposited in the licensed DSTF or used as backfill in the operating mines. Geochemical testing on tailings from Bermingham have not been completed, however, for the purpose of this PEA, it is assumed that the Flame & Moth and Bermingham tailings will be geochemically similar to the already licensed tailings and that no additional measures will be required to control metal leaching/acid rock drainage.

MINE RECLAMATION AND CLOSURE

An updated Reclamation and Closure Plan was approved by the Government of Yukon in 2016 that encompasses all of the active mining and processing activities in the Keno Hill Silver District. Some key aspects of the closure plan are listed as below:

· P-AML waste rock will either 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.

58

· N-AML waste rock storage facilities will be regraded, scarified, and revegetated.

· Adits and raises will be sealed to prevent access.

· At the Bellekeno mine, in-pool treatment measures will be implemented to reduce metal loadings if required. The active treatment system will be converted to a passive bioreactor system.

· All buildings and equipment will be removed from the portal areas.

· Linear disturbances (roads) will be subject to standard decommissioning measures.

· 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 removed.

· The DSTF will be covered. 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.

CAPITAL AND OPERATING COSTS

The capital cost estimate for the Project is summarized in Table 1-5. The capital costs include the restart of the Bellekeno mine, development of the Flame & Moth deposit, development of the Bermingham deposit and the reopening of the Lucky Queen mine plus the necessary process plant and infrastructure for the restart of operations. Pre-production is considered to be year 1 and year 2 (2017 and 2018) of the plan. The capital costs are based on Q4 2016 estimates.

Table 1-5 Capital Cost Summary

Alexco Resource Corp. – Keno Hill Silver District Project

		Total	Year 1	Year 2	Year 3	Year 4	Year 5	Yr 6-9
Mining	C$ '000	75,754	8,663	19,323	10,392	6,369	7,231	23,775
Processing	C$ '000	951	205	746	-	-	-	-
Infrastructure	C$ '000	7,947	364	3,691	1,386	210	298	1,998
Tailings	C$ '000	821	-	47	119	118	118	419
Total Capital Cost	C$ '000	85,473	9,232	23,808	11,897	6,697	7,647	26,192
								-
Contingency	C$ '000	17,095	1,846	4,762	2,379	1,339	1,529	5,238
Total Capital Cost	C$ '000	102,568	11,078	28,569	14,277	8,037	9,176	31,431

The capital cost estimates were generated by Alexco and were reviewed and modified based upon detailed review by RPA. RPA considers the accuracy of capital cost estimate components to be at a scoping level. A 20% contingency has been included in the capital cost estimate based upon a review of the capital details.

59

The sustaining capital is mainly the major mine development in the deposits to be mined.

Exclusions from the capital cost estimate include, but are not limited to, the following:

· Study costs to advance the Project engineering.

· All sunk costs to the end of 2016.

· Project financing and interest charges.

· Working capital.

· Escalation during construction and operation.

Table 1-6 shows the LOM site operating cost estimate. It is based on conceptual LOM plant feed of 1,021 kt and operating at a rate of 146,000 tpa.

Table 1-6 LOM Site Operating Cost Summary

Alexco Resource Corp. – Keno Hill Silver District Project

Area	LOM Site Opex ($M)	Unit Cost ($/t)
Mine	197.3	193.25
Mill	61.9	61.89
G&A	69.8	69.79
LOM Total Site	331.8	324.93

The operation is planned to be a fly-in fly out operation with employees remaining in camp for their work rotation. The manpower will range from 197 to 235 persons over the Project life."

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EX-99.2

 Exhibit 99.2

 

ALEXCO RESOURCE CORP.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Alexco Resource Corp. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Chief Executive Officer and the Chief Financial Officer and effected by the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. It includes those policies and procedures that:

(i) pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions related to acquisitions and dispositions of Alexco’s assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards, and that Alexco receipts and expenditures are made only in accordance with authorizations of management and Alexco’s directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Alexco assets that could have a material effect on Alexco’s financial statements.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The effectiveness of Alexco’s internal control over financial reporting as at December 31, 2018 has been audited by PricewaterhouseCoopers LLP, Alexco’s independent registered public accounting firm.

Management assessed the effectiveness of Alexco’s internal control over financial reporting as at December 31, 2018, based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that Alexco’s internal control over financial reporting was effective as at December 31, 2018.

“Clynton R. Nauman” (signed)	“Michael Clark” (signed)
Clynton R. Nauman Chairman and Chief Executive Officer March 13, 2019	Michael Clark Chief Financial Officer

 

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Alexco Resource Corp.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Alexco Resource Corp. and its subsidiaries, (together, the Company) as of December 31, 2018 and 2017, and the related consolidated statements of loss and comprehensive loss, shareholders’ equity and cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and their financial performance and their cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 3 and 6 to the consolidated financial statements, the Company changed the manner in which it accounts for exploration and evaluation assets in 2018.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

 

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

(Signed) “PricewaterhouseCoopers LLP”

Chartered Professional Accountants

Vancouver, Canada

March 13, 2019

We have served as the Company's auditor since 2005.

ALEXCO RESOURCE CORP.

CONSOLIDATED BALANCE SHEETS

AS AT DECEMBER 31, 2018

(expressed in thousands of Canadian dollars)	Note		December 31 2018		December 31 2017 (restated - note 6)		January 1 2017 (restated - note 6)
Current Assets
Cash and cash equivalents		8	$	8,576	$	17,906	$	20,382
Accounts and other receivables		9		6,811		2,086		2,938
Restricted cash and deposits		10		-		499		-
Investments		11		351		728		1,691
Inventories		12		818		646		151
Prepaid expenses and other				878		538		401
				17,434		22,403		25,563
Non-Current Assets
Restricted cash and deposits		10		2,725		6,593		6,948
Investments		11		409		1,027		-
Inventories		12		4,699		4,743		5,110
Property, plant and equipment		13		15,233		16,256		16,250
Mineral properties		14		82,226		64,587		55,620
Embedded derivative asset		15		9,671		6,600		-
Intangible assets and other				621		115		195
Total Assets			$	133,018	$	122,324	$	109,686
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued liabilities		16	$	7,210	$	3,601	$	1,832
Environmental services contract loss provision				36		126		277
Deferred revenue				109		196		337
Flow-through share premium pending renunciation				649		276		-
				8,004		4,199		2,446
Non-Current Liabilities
Decommissioning and rehabilitation provision		18		5,286		5,055		4,955
Deferred income tax liabilities		24		3,098		614		-
Total Liabilities				16,388		9,868		7,401
Shareholders' Equity				116,630		112,456		102,285
Total Liabilities and Shareholders' Equity			$	133,018	$	122,324	$	109,686
COMMITMENTS		30

APPROVED ON BEHALF OF

THE BOARD OF DIRECTORS

“Terry Krepiakevich”	“Elaine Sanders”
(signed)	(signed)
Director	Director

The accompanying notes are an integral part of these interim condensed consolidated financial statements

ALEXCO RESOURCE CORP.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31

(expressed in thousands of Canadian dollars, except per share and share amounts)	Note	2018			2017 (restated - note 6)
Revenues
Environmental Services Revenue	20		19,880			10,732
Cost of Sales
Environmental Services Costs			13,828			6,732
Total Gross Profit			6,052			4,000
General and administrative expenses	21		12,170			10,942
Mine site care and maintenance	22		2,603			1,888
			14,773			12,830
Operating Loss			(8,721	)		(8,830	)
Other Income (Expenses)
Other income and expenses	23		(772	)		1,148
Gain (loss) on investments	11		(572	)		1,341
Gain on embedded derivative	16		3,071			-
Loss Before Taxes			(6,994	)		(6,341	)
Income Tax Provision
Current	24		3			-
Deferred	24		1,504			1,472
Net Loss			(8,501	)		(7,813	)
Other Comprehensive Income (Loss)
Gain (loss) on FVTOCI investments, net of tax			(798	)		253
Items that may be reclassified subsequently to net loss
Cumulative translation adjustments, net of tax			213			(564	)
Recycle of loss on previously recorded available-for-sale to income, net of tax			-			(356	)
Other Comprehensive Loss			(585	)		(667	)
Total Comprehensive Loss		$	(9,086	)	$	(8,480	)
Basic and diluted loss per common share		$	(0.08	)	$	(0.09	)
Weighted average number of common shares outstanding			105,034,345			98,486,437

The accompanying notes are an integral part of these interim condensed consolidated financial statements

ALEXCO RESOURCE CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

				2017
(expressed in thousands of Canadian dollars)	2018			(restated-note 6)
Cash Flows used in Operating Activities
Net loss	$	(8,501	)	$	(7,813	)
Items not affecting cash from operations:
Environmental services contract loss provision		(90	)		(152	)
Depreciation of property, plant and equipment		1,601			1,723
Amortization of intangible assets		51			76
Share-based compensation expense		2,580			2,359
Finance costs, foreign exchange and other		(2,799	)		(1,418	)
Realized gain on disposition of investments		-			(1,204	)
Unrealized loss (gain) on investments		573			(632	)
Advisory fees paid in shares		-			500
Deferred income tax provision		1,504			1,472
Changes in non-cash working capital balances related to operations
(Increase) decrease in accounts and other receivables		(4,107	)		849
Increase in inventories		(26	)		(129	)
(Increase) decrease in prepaid expenses and other current assets		650			(140	)
Decrease in deferred revenue		(88	)		(142	)
Increase in accounts payable and accrued liabilities		3,162			597
		(5,490	)		(4,054	)
Cash Flows (used in) from Investing Activities
Expenditures on mineral properties		(17,115	)		(7,155	)
Purchase or disposal of property, plant and equipment		(486	)		(1,982	)
Decrease in restricted cash		4,383			(195	)
Acquisition of subsidiary		(536	)		-
Purchase (disposal) of investments		(407	)		2,003
		(14,161	)		(7,329	)
Cash Flows from (used in) Financing Activities
Proceeds from issuance of shares		9,042			9,043
Issuance costs		(966	)		(716	)
Proceeds from exercise of warrants		2,027			418
Proceeds from exercise of stock options		218			162
		10,321			8,907
Decrease in Cash and Cash Equivalents		(9,330	)		(2,476	)
Cash and Cash Equivalents - Beginning of Year		17,906			20,382
Cash and Cash Equivalents - End of Year	$	8,576		$	17,906

SUPPLEMENTAL CASH FLOW INFORMATION (see note 27)

The accompanying notes are an integral part of these interim condensed consolidated financial statements

ALEXCO RESOURCE CORP.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

								Share								Accumulated Other
	Common Shares							Options			Contributed		Accumulated			Comprehensive
(expressed in thousands of Canadian dollars)	Number of Shares		Amount		Warrants			and RSU's			Surplus		Deficit			Loss			Total
Balance - December 31, 2017 (restated - note 6)		101,280,850	$	202,389	$	2,092		$	6,660		$	15,743	$	(113,297	)	$	(1,131	)	$	112,456
Net loss		-		-		-			-			-		(8,501	)		-			(8,501	)
Other comprehensive loss		-		-		-			-			-		-			(585	)		(585	)
Share-based compensation expense recognized		-		-		-			2,947			-		-			-			2,947
Flow-through shares equity offering, net of issuance costs and tax		4,703,000		6,701		-			-			-		-			-			6,701
Credit Facility fee - warrants		-		-		938			-			-		-			-			938
Acquistion of Contango Strategies		237,999		416		-			-			-		-			-			416
Exercise of share options		281,666		323		-			(106	)		-		-			-			217
Exercise of warrants		1,167,351		2,563		(536	)		-			-		-			-			2,027
Shares issued on Option Agreement		10,000		14																14
Share options forfeited or expired		-		-		-			(3,163	)		3,163		-			-			-
Release of RSU settlement shares		318,036		497		-			(497	)		-		-			-			-
Balance - December 31, 2018		107,998,902	$	212,903	$	2,494		$	5,841		$	18,906	$	(121,798	)	$	(1,716	)	$	116,630
Balance - December 31, 2016 (restated - note 6)		92,950,194	$	186,952	$	2,134		$	7,216		$	12,880	$	(105,483	)	$	(464	)	$	103,235
Net loss		-		-		-			-			-		(7,813	)		-			(7,813	)
Other comprehensive income		-		-		-			-			-		-			(667	)		(667	)
Equity offering, net of issuance costs		4,205,820		7,222		72			-			-		-			-			7,294
Shares issued - advisory fees		250,000		500		-			-			-		-			-			500
Shares issued - consideration for Wheaton		3,000,000		6,600		-			-			-		-			-			6,600
Share-based compensation expense recognized		-		-		-			2,728			-		-			-			2,728
Exercise of share options		126,340		240		-			(78	)		-		-			-			162
Exercise of warrants		458,878		531		(114	)		-			-		-			-			417
Share options forfeited or expired		-		-		-			(2,863	)		2,863		-			-			-
Release of RSU settlement shares		289,618		343		-			(343	)		-		-			-			-
Balance - December 31, 2017 (restated - note 6)		101,280,850		202,388		2,092			6,660			15,743		(113,296	)		(1,131	)		112,456

The accompanying notes are an integral part of these interim condensed consolidated financial statements

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

1. Description of Business and Nature of Operations

Alexco Resource Corp. (“Alexco” or the “Corporation”) was incorporated under the Business Corporations Act (Yukon) on December 3, 2004 and commenced operations on March 15, 2005. Effective December 28, 2007, it was continued under the Business Corporations Act (British Columbia). The Corporation operates two principal businesses: a mining business, comprising mineral exploration and mine development in Yukon Territory; and through Alexco Environmental Group (“AEG”), an environmental services business, providing consulting, remediation solutions and project management services in respect of environmental permitting and compliance and site remediation, primarily in Canada and the United States.

The Corporation is in the process of exploring and developing its mineral properties. The recoverability of the amounts shown for mineral properties is dependent upon the existence of economically recoverable mineral resources or reserves, successful permitting, the ability of the Corporation to obtain necessary financing to complete exploration and development, and upon future profitable production or proceeds from disposition of each mineral property. The carrying amounts of mineral properties are based on a disposal of part of a mineral property interest, costs incurred to date, adjusted for depletion and impairments and do not necessarily represent present or future values.

Alexco is a public company which is listed on the Toronto Stock Exchange (under the symbol AXR) and the NYSE American Stock Exchange (under the symbol AXU). The Corporation’s corporate head office is located at Suite 1225, Two Bentall Centre, 555 Burrard Street, Box 216, Vancouver, BC, Canada, V7X 1M9.

2. Basis of Preparation and Statement of Compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, and were approved for issue by the Board of Directors on March 13, 2019.

These consolidated financial statements have been prepared under the historical cost method, except for derivative financial instruments, share-based compensation and certain financial assets which have been measured at fair value. All figures are expressed in Canadian dollars unless otherwise indicated.

3. Summary of Significant Accounting Policies

The significant accounting policies used in the preparation of these financial statements are summarized below.

(a) Basis of Consolidation

The Corporation’s consolidated financial statements include the accounts of the Corporation and its subsidiaries. Subsidiaries are entities controlled by the Corporation, where control is achieved by the Corporation being exposed to, or having rights to, variable returns from its involvement with the entity and having the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is obtained by Alexco, and are de-consolidated from the date that control ceases.

The following subsidiaries have been consolidated for all dates presented within these financial statements, and are wholly owned: Alexco Keno Hill Mining Corp., Elsa Reclamation & Development Corporation Ltd. (“ERDC”), Alexco Exploration Canada Corp., Alexco Environmental Group Inc., Alexco Environmental Group Holdings Inc., Alexco Water and Environment Inc. (“AWE”) and Contango Strategies Ltd. During the period January 1, 2017 through December 28, 2017, the date of the sale, amounts from Alexco Environmental (US) Group Inc. (“AEG US”) and Alexco Financial Guarantee Corp. (“AFGC”) (together referred to as “AEG US Group”) were consolidated by the Corporation. All significant inter-company transactions, balances, income and expenses are eliminated on consolidation.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

(b) Cash and Cash Equivalents

Cash and cash equivalents are unrestricted as to use and consist of cash on hand, demand deposits and short term interest-bearing investments with maturities of 90 days or less from the original date of acquisition and which can readily be liquidated to known amounts of cash. Redeemable interest bearing investments with maturities of up to one year are considered cash equivalents if they can readily be liquidated at any point in time to known amounts of cash and they are redeemable thereafter until maturity for invested value plus accrued interest.

(c) Inventories

Inventories include ore in stockpiles, concentrate and materials and supplies. Ore in stockpiles and concentrate are recorded at the lower of weighted average cost and net realizable value. Cost comprises all mining and processing costs incurred, including labor, consumables, production-related overheads, depreciation of production-related property, plant and equipment and depletion of related mineral properties. Net realizable value is estimated at the selling price in the ordinary course of business less applicable variable selling expenses. Materials and supplies are valued at the lower of cost and replacement cost, costs based on landed cost of purchase, net of a provision for obsolescence where applicable.

When inventories have been written down to net realizable value, a new assessment of net realizable value is made in each subsequent period. When circumstances that caused the write-down no longer exist or when there is clear evidence of an increase in net realizable value, the amount of the write down is reversed.

(d) Property, Plant and Equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment write-downs. The cost capitalized is determined by the fair value of consideration given to acquire the asset at the time of acquisition or construction, the direct cost of bringing the asset to the condition necessary for operation, and the estimated future cost of decommissioning and removing the asset. Repairs and maintenance expenditures are charged to operations, while major improvements and replacements which extend the useful life of an asset are capitalized.

Depreciation of property, plant and equipment is calculated using the following methods:

Heavy machinery and equipment	5 years straight-line
Land and buildings	20 years straight-line
Leasehold improvements & Other	Over the term of lease, and 2 – 5 years straight-line
Roads, Camp and other site infrastructure	5 -10 years straight-line
Ore-processing mill components	Variously between 5 and 30 years straight-line

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within other gains or losses in earnings.

(e) Mineral Properties

Exploration and Evaluation Properties

The Corporation capitalizes exploration and evaluation expenses at cost for expenditures incurred after it has obtained legal rights to explore a specific area and before technical feasibility and commercial viability of extracting mineral resources are demonstrable.

All direct and indirect costs relating to the exploration of specific properties with the objective of locating, defining and delineating the resource potential of the mineral interests on specific properties are capitalized as exploration and evaluation assets, net of any directly attributable recoveries recognized, such as exploration or investment tax credits.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

The Corporation has elected to follow a policy of applying the proceeds received from the silver streaming arrangement with Wheaton Precious Metals (“Wheaton”) explained further in Note 15, as a credit to the carrying value of the Exploration and Evaluation Property. Accordingly, this has been applied retrospectively and the initial deposit has been applied as an offset against the mineral interest asset, with the cumulative catch up adjustment in the amount of $12,396,000 recognized in January 1, 2017 opening retained earnings (Note 6).

At each reporting date, exploration and evaluation assets are evaluated and may be classified as mining operations assets upon achieving technical feasibility and determination of commercial viability.

Mining Operations Properties

Mining operations properties are recorded at cost on a property-by-property basis. The recorded cost of mining operations properties is based on acquisition costs incurred to date, including capitalized exploration and evaluation costs and capitalized development costs, less depletion, recoveries and write-offs. Capitalized development costs include costs incurred to establish access to mineable resources where such costs are expected to provide a long-term economic benefit, as well as operating costs incurred, net of the proceeds from any sales generated, prior to the time the property achieves commercial production.

Depletion of mining operations properties is calculated on the units-of-production basis using estimated mine plan resources, such resources being those defined in the mine plan on which the applicable mining activity is based. The mine plan resources for such purpose are generally as described in an economic analysis supported by a technical report compliant with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects.

(f) Intangible Assets

Customer relationships, rights to provide services and database assets acquired through business combinations, and acquired patents, are recorded at fair value at acquisition date. All of the Corporation’s intangible assets have finite useful lives, and are amortized using the straight-line method over their expected useful lives.

(g) Impairment of Non-Current Non-Financial Assets

The carrying amounts of non-current non-financial assets are reviewed and evaluated for impairment when events or changes in circumstances indicate that the carrying amounts of the related asset may not be recoverable. Non-current non-financial assets include property, plant, equipment, mineral properties and finite-life intangible assets. If the recoverable amount is less than the carrying amount of the asset, an impairment loss is recognized and the asset is written down to recoverable value.

The recoverable amount is the higher of an asset’s “fair value less cost of disposal” and “value-in-use”. Where the asset does not generate cash flows that are independent from other assets, the recoverable amount of the cash-generating unit to which the asset belongs is determined, with a cash-generating unit being the smallest identifiable group of assets and liabilities that generate cash inflows independent from other assets. Exploration and evaluation assets are each separately assessed for impairment, and are not allocated by the Corporation to a cash generating unit (“CGU”) for impairment assessment purposes. “Fair value less cost of disposal” is determined as the amount that would be obtained from the sale of the asset or cash-generating unit in an arm’s length transaction between knowledgeable and willing parties. In assessing “value-in-use”, the future cash flows expected to arise from the continuing use of the asset or cash-generating unit in its present form are estimated using assumptions that an independent market participant would consider appropriate, and are then discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset or unit.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

Where conditions that gave rise to a recognized impairment loss are subsequently reversed, the amount of such reversal is recognized into earnings immediately, though is limited such that the revised carrying amount of the asset or cash-generating unit does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash generating unit.

(h) Provisions

General

Provisions are recorded when a present legal or constructive obligation exists as a result of past events, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

The expense relating to any provision is presented in profit or loss net of any reimbursement. Provisions are discounted using a current risk-free pre-tax rate that reflects where appropriate the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Decommissioning and Rehabilitation Provision

The Corporation recognizes a decommissioning and rehabilitation provision for statutory, contractual, constructive or legal obligations to undertake reclamation and closure activities associated with property, plant, equipment and mineral properties, generally at the time that an environmental or other site disturbance occurs or a constructive obligation for reclamation and closure activities is determined. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Provisions are measured at the present value of the expected future expenditures required to settle the obligation, using a risk-free pre-tax discount rate reflecting the time value of money and risks specific to the liability. The liability is increased for the passage of time, and adjusted for changes to the current market-based risk-free discount rate as well as changes in the estimated amount or timing of the expected future expenditures. The associated restoration costs are capitalized as part of the carrying amount of the related asset and then depreciated accordingly.

(i) Revenue Recognition

Revenue from environmental services are recognized upon the transfer of promised services or goods based on the output appropriate to the particular service contract and when a customer has the ability to direct the use and obtain the benefits from the service or good. The Corporation provides environmental services related to permitting and remediation activities, generally in the mining industry, as well provide engineering, design, construction and operational services related to water treatment systems. The Corporation identifies the performance obligations in the contract, and the obligations are measured by reference to the transaction price. The transaction price is established in the agreement as either a fixed price or rate per hour. If the contract has multiple performance obligations, the Corporation will assign the transaction price to the various performance obligations. The stand-alone selling price for services identified within the contract are determined based on detailed billing schedules included within the underlying contract with the customer or based on comparable projects where relevant. Generally, performance obligations for environmental services are satisfied over time as the service is provided. Revenue is recognized using the input method with the inputs being costs incurred on related projects. The general payment terms are 30 to 60 days once the performance obligations have been satisfied. Typical payments are received 30 days after the invoice has been received by the client.

Management will assess and use significant judgement to determine whether the Corporation has promised to provide the specified good and service itself (as a principal) or to arrange for those specified goods or services to be provided by another party (as an agent). In those arrangements where the Corporation obtains control of the specified good or service before they are transferred to the customer, they will be deemed to act as a principal. In those arrangements were the Corporation is deemed to be the principal, the Corporation will recognize as revenue the “gross” amount paid by the customer for the specified good or service. If the Corporation acts an agent, it will record revenue as the net consideration that it retains for the specified good or service that was provided to the customer.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

(j) Share-Based Compensation and Payments

The cost of incentive share options and other equity-settled share-based compensation and payment arrangements is recorded based on the estimated fair value at the grant date and charged to earnings over the vesting period. With respect to incentive share options, grant-date fair value is measured using the Black-Scholes option pricing model. With respect to restricted share units, grant-date fair value is determined by reference to the share price of the Corporation at the date of grant. Where share-based compensation awards are subject to vesting, each vesting tranche is considered a separate award with its own vesting period and grant-date fair value. Share-based compensation expense is recognized over the tranche’s vesting period by a charge to earnings, based on the number of awards expected to vest. The number of awards expected to vest is reviewed at least annually, with any impact being recognized immediately.

(k) Flow-Through Shares

The proceeds from the offering of flow-through shares are allocated between the shares and the sale of tax benefits when the shares are offered. The allocation is made based on the difference between the market value of the shares and the amount the investors pay for the flow-through shares. A liability is recognized for the premium paid by the investors and is then recognized in the results of operations in the period the eligible exploration expenditures are incurred.

(l) Warrants

When the Corporation issues units that are comprised of a combination of shares and warrants, the value is assigned to shares and warrants based on their relative fair values. The fair value of the shares is determined by the closing price on the date of the transaction and the fair value of the warrants is determined based on a Black-Scholes option pricing model.

(m) Current and Deferred Income Taxes

Income tax expense comprises current and deferred income taxes. Current and deferred income taxes are recognized in profit or loss except to the extent that they relate to a business combination or to items recognized directly in equity or in other comprehensive income.

Current income taxes are the expected taxes payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous periods.

Deferred income taxes are recognized using the liability method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. However, deferred income taxes are not recognized if they arise from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit nor loss. Deferred income taxes are determined using tax rates and laws that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets and liabilities are presented as non-current in the financial statements.

Deferred income tax assets and liabilities are offset if there is a legally enforceable right of offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. Deferred income tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the assets can be utilized.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

(n) Translation of Foreign Currencies

The financial statements of each entity in the group are measured using the currency of the primary economic environment in which each entity operates (the “functional currency”). The consolidated financial statements are presented in Canadian dollars.

The functional currency of all entities in the Corporation group other than AWE is the Canadian dollar, while the functional currency of AWE is the United States dollar. The financial statements of AWE are translated into the Canadian dollar presentation currency using the current rate method as follows:

· Assets and liabilities – at the closing rate at the date of the statement of financial position.

· Income and expenses – at the average rate of the period (as this is considered a reasonable approximation to actual rates).

· All resulting changes are recognized in other comprehensive income as cumulative translation adjustments.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognized in other comprehensive income.

When an entity disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary is reallocated between controlling and non-controlling interests.

(o) Earnings or Loss Per Share

Basic earnings per share is calculated by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period.

Diluted earnings (loss) per share is calculated using the treasury share method whereby all “in the money” options, warrants and equivalents are assumed to have been exercised at the beginning of the period and the proceeds from the exercise are assumed to have been used to purchase common shares at the average market price during the period.

(p) Financial Instruments

Financial assets and financial liabilities, including derivative instruments, are initially recognized at fair value on the balance sheet when the Corporation becomes a party to the relevant contractual provisions. Measurement in subsequent periods depends on the financial instrument’s classification.

The Corporation classifies the financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), fair value through other comprehensive income (“FVTOCI”) or at amortized cost.

(i) Classification

The Corporation determines the classification of financial instruments at initial recognition.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

Financial assets

a) Debt - The classification of debt instruments is driven by the Corporation’s business model for managing the financial assets and the relevant contractual cash flow characteristics. A debt instrument is measured at amortized cost if the objective of the business model is to hold the debt instrument for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest.

b) Equity - On the day of acquisition the Corporation may make an irrevocable election (on an instrument-by- instrument basis) to designate them as at FVTOCI. Investments in common shares are held for longterm strategic purposes and not for trading. Upon the adoption of IFRS 9, the Company made an irrevocable election to designate these investments as FVTOCI in order to provide a more meaningful presentation based on management’s intention, rather than reflecting changes in fair value in net income.

Financial liabilities

Financial liabilities are measured at amortized cost; unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or the Corporation has opted to measure at FVTPL.

(ii) Measurement

Financial assets and liabilities at FVTPL

Financial assets and liabilities at FVTPL are initially recognized at fair value and transaction costs are expensed in the consolidated statement of income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets or liabilities held at FVTPL are included in the consolidated statement of income (loss) in the period in which they occur. Where the Corporation has opted to designate a financial liability at FVTPL, any changes associated with our own credit risk will be recognized in Other Comprehensive Income (“OCI”).

Financial assets at FVTOCI

Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently, the investments are measured at fair value, with gains and losses arising from changes from initial recognition recognized in OCI.

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value net of transaction costs, and subsequently carried at amortized cost adjusted by any impairment.

Derivative financial instruments

When the Corporation enters into derivative contracts, these are intended to reduce the exposures related to assets and liabilities, or forecast transactions. Derivatives are classified as FVTPL.

Derivatives embedded in financial liabilities are treated as separate derivatives when their risks and characteristics are not closely related to the host contracts. However, the classification approach described above is applied to all financial assets, including those that contain embedded derivatives, without the need to separate the embedded derivative from the host contract.

(iii) Impairment of financial assets

Impairment of financial assets at amortized cost

The Corporation recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

The Corporation is applying the simplified method for trade receivables and is calculating expected credit losses at an amount equal to the lifetime expected credit loss.

Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the expected credit losses are reversed after the impairment was recognized.

(iv) Derecognition

Derecognition of financial assets and liabilities

Financial assets are derecognized when the investments mature or are sold, and substantially all the risks and rewards of ownership have been transferred. A financial liability is derecognized when the obligation under the liability is discharged, canceled or expired. Gains and losses on derecognition are recognized within finance income and finance costs, respectively. Gains or losses on equity financial assets designated as FVTOCI remain within accumulated OCI.

(v) Fair value of financial instruments

The fair values of quoted investments are based on current prices. If the market for a financial asset is not active, the Corporation establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the financial asset’s specific circumstances.

(q) Fair Value Measurement

Where fair value is used to measure assets and liabilities in preparing these financial statements, it is estimated at the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. Fair values are determined from inputs that are classified within the fair value hierarchy defined under IFRS as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Inputs for the asset or liability that are unobservable

(r) Goodwill

The Corporation recognizes goodwill relating to a business combination when the total purchase price exceeds the fair value of the identifiable assets and liabilities of the acquired business. Goodwill is tested annually for impairment of when there is an indication that the goodwill may be impaired. Any impairment is recognized as an expense immediately. Should there be a recovery in value, there is no reversal of previous impairments of Goodwill.

4. New and Revised Accounting Standards

New accounting standard not yet effective

A new standard has been issued and is relevant to the Corporation but is not yet effective and therefore not reflected in these consolidated financial statements:

IFRS 16 relates to accounting for leases and lease obligations. It replaces the existing lease guidance in IAS 17, Leases. The purpose of the new standard is to report all leases on the statement of financial position and to define how leases and lease obligations are measured. IFRS 16 is effective from January 1, 2019 and must be applied retrospectively, subject to certain practical expedients, using either a full retrospective approach or modified retrospective approach.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

The Corporation is currently involved in various lease obligations as part of its normal course of business. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset being leased. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees. All leases will be recorded on the statement of financial position, except short-term leases and low-value leases. This is expected to result in a material increase in both rights of use assets and lease liabilities upon adoption of the standard, and changes to the timing of recognition and classification of expenses associated to such lease arrangements. The Corporation anticipates an increase in cash flow from operating activities as lease payments will be recorded as financing outflows in the statement of cash flows. The Corporation also anticipates an increase in depreciation and finance expenses and a decrease in operating expenses.

The Corporation plans to adopt the modified retrospective approach and not restate balances for the comparative period. On initial adoption, the Corporation has elected to use the following practical expedients permitted under the standard:

· Apply a single discount rate to a portfolio of leases with similar characteristics;

· Account for leases with a remaining term of less than twelve (12) months as at January 1, 2019 as short-term leases; and

· Account for lease payments as an expense and not recognize a right-of-use (“ROU”) asset if the underlying asset is of low dollar value.

On adoption of IFRS 16, the Corporation will recognize lease liabilities in relation to leases under the principles of the new standard measured at the present value of the remaining lease payments, discounted using the interest rate implicit in the lease or the Corporation’s incremental borrowing rate as at January 1, 2019. The associated ROU assets will be measured at the amount equal to the lease liability on January 1, 2019. The Corporation has completed its review of all existing operating leases and service contracts to identify contracts in scope for IFRS 16 and assessed contracts for embedded leases. Adoption of the new standard is expected to result in the recognition of additional lease liabilities and ROU assets of approximately $1,000,000 each.

There are no other IFRS’s or International Financial Reporting Interpretations Committee (“IFRIC”) interpretations that are not yet effective that are expected to have a material impact on the Corporation.

5. Critical Judgements and Major Sources of Estimation Uncertainty

The preparation of the consolidated financial statements requires management to select accounting policies and make estimates and judgments that may have a significant impact on the consolidated financial statements. Estimates are continuously evaluated and are based on management’s experience and expectations of future events that are believed to be reasonable under the circumstances. The estimates management makes in this regard include those regarding future commodity prices and foreign currency exchange rates, which are an important component of several estimates and assumptions management must make in preparing the financial statements, including but not limited to estimations and assumptions regarding the evaluation of the carrying amount of mineral properties and other assets, the estimation of decommissioning and rehabilitation provisions, the estimation of revenues and the value of the embedded derivative related to sales of concentrate, and the estimation of the net realizable value of inventories. Management bases its estimates of future commodity prices and foreign currency exchange rates primarily on consensus investment analyst forecasts, which are tracked and updated as published on generally a quarterly basis. Actual outcomes can differ from these estimates.

The most significant judgments and estimates made by management in preparing the Corporation’s financial statements are described as follows:

· Mineral Resources

The determination of the Corporation’s estimated mineral resources by appropriately qualified persons requires significant judgements regarding the interpretation of complex geological and engineering data including the size, depth, shape and nature of the deposit and anticipated plans for mining, as well as estimates of future commodity prices, foreign exchange rates, capital requirements and production costs. These mineral resource estimates are used in many determinations required to prepare the Corporation’s financial statements, including evaluating the recoverability of the carrying amount of its non-current non-financial assets and estimating amounts of future taxable income in determining whether to record a deferred tax asset.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

· Impairment and Impairment Reversals of Non-Current Non-Financial Assets

The Corporation reviews and evaluates the carrying value of each of its non-current non-financial assets for impairment and impairment reversals when events or changes in circumstances indicate that the carrying amounts of the related asset may not be recoverable or previous impairment losses may become recoverable. The identification of such events or changes and the performance of the assessment requires significant judgment. Furthermore, management’s estimates of many of the factors relevant to completing this assessment, including commodity prices, foreign currency exchange rates, mineral resources, and operating, capital and reclamation costs, are subject to risks and estimation uncertainties that may further affect the determination of the recoverability of the carrying amounts of its non-current non-financial assets.

Management has assessed indicators of impairment and impairment reversals on the Corporation’s non-current non-financial assets and has concluded that no impairment or impairment reversal indicators exists as of December 31, 2018.

· Decommissioning and Rehabilitation Provision

Management’s determination of the Corporation’s decommissioning and rehabilitation provision is based on the reclamation and closure activities it anticipates as being required, the additional contingent mitigation measures it identifies as potentially being required and its assessment of the likelihood of such contingent measures being required, and its estimate of the probable costs and timing of such activities and measures. Significant judgements must be made when determining such reclamation and closure activities and measures required and potentially required.

· Mineral Properties - Silver Stream Arrangement

Upon entering into a long-term streaming arrangement linked to production at operations, Management’s judgment was required in assessing the appropriate accounting treatment for the transaction on the closing date and in future periods. We consider the specific terms of the arrangement to determine whether we have disposed of an interest in the reserves and resources of the operation or executed some other form of arrangement. This assessment considers what the counterparty is entitled to and the associated risks and rewards attributable to them over the life of the operation. These include the contractual terms related to the total production over the life of the arrangement as compared to the expected production over the life of the mine, the percentage being sold, the percentage of payable metals produced, the commodity price referred to in the ongoing payment and any guarantee relating to the upfront payment if production ceases.

· Fair value of derivatives

The fair values of financial instruments that are not traded in an active market are determined using valuation techniques. Management uses its judgment to select a method of valuation and makes estimates of specific model inputs that are based on conditions existing at the end of each reporting period. Refer to Note 15 for further details on the methods and assumptions associated with the measurement of the embedded derivative within the Silver Streaming Interest. Management has applied judgement in concluding that the completion test as discussed in Note 15 will be met prior to December 31, 2020 or extended to a later date, therefore the capacity related refund is not likely to be owed to Wheaton Precious Metals Corp.

6. Impacts of Change in Accounting Policy and Adoption of New IFRS Pronouncements

The Corporation has adopted the new IFRS pronouncements listed below as at January 1, 2018, in accordance with the transitional provisions outlined in the respective standards and described below. In light of the changes to the revenue standard to IFRS 15, management has changed their treatment under IFRS 6 for the partial distribution of the mineral interest.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

Adjustments to Consolidated Financial Statements

The table below summarizes the adjustments to previously reported figures related to the policy change pertaining to IFRS 6, which is more fully described below:

Adjustments to Condensed Consolidated Balance Sheets

	December 31 2017			January 1 2017
Equity before accounting changes	$	100,060		$	90,673
Adjustments to equity relating to:
Property plant and equipment		2,117			2,283
Mineral properties		(10,229	)		(10,229	)
Deferred income tax liabilities		2,390			1,440
Silver streaming interest		18,118			18,118
Equity after accounting changes	$	112,456		$	102,285

Adjustments to Condensed Consolidated Statements of Loss and Comprehensive Loss

	Year ended December 31 2017			Year ended January 1 2017
Loss before accounting changes	$	(7,648	)	$	(4,359	)
Adjustments to loss relating to:
Depreciation and amortization		(165	)		(165	)
Loss after accounting changes	$	(7,813	)	$	(4,524	)
Loss per share before accounting changes:
Basic and diluted	$	(0.08	)	$	(0.04	)
Loss per share after accounting changes:
Basic and diluted	$	(0.09	)	$	(0.05	)

The Corporation has assessed the impact of IFRS 15 on its silver streaming arrangement with Wheaton, as described in Note 15.  At the date the initial transaction was completed, the Corporation determined that the contract was a disposal of part of a mineral interest and a related contract to provide extraction services.  Under its existing policy, the Corporation applies the provisions of IFRS 6, which allows for an accounting policy choice to either apply the proceeds received as a credit to the carrying value of the exploration and evaluation (“E&E”) asset, or account for the transaction as a partial sale, with deferral of the gain, to be recognized on a units-of-production sold basis. Upon the effective date of IFRS 15, the Corporation will continue to apply IFRS 6 guidance for the partial sale of the mineral interest, but has elected to change the policy to apply the proceeds received as a credit to the carrying value of the E&E asset. Management believes this approach to be more relevant and reliable.

Specifically, the USD $50,000,000 initial deposit recorded as consideration was applied against the carrying value of the mineral interest, with a gain being recognized to the extent that the value of the consideration exceeds the value of the mineral interest.

Overview of Changes to IFRS

The Corporation adopted IFRS 15 on January 1, 2018 in accordance with the transitional provisions of the standard, applying a modified retrospective approach in restating our prior period financial information.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

IFRS 15, Revenue from Contracts with Customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18, Revenue and IAS 11, Construction contracts and related interpretations. Management’s primary focus was evaluating contracts under our Environmental Services business, as this is currently the Corporation’s primary source of revenue. Based on this analysis, the Corporation does not have significant changes to the timing and amount of its revenue recognition related to environmental services under IFRS 15, as the majority of its contracts contain a series of same or similar performance obligations. Consequently, consistent with the Corporation’s existing policy, revenue is recognized “over time”, as the services are provided.

IFRS 9, Financial Instruments, addresses the classification, measurement and recognition of financial assets and financial liabilities. It replaces the guidance in IAS 39, Financial Instruments: Recognition and Measurement that relate to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income and fair value through profit or loss. The basis of classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change for liabilities is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in OCI rather than in net earnings. There was no change in the carrying amounts on the basis of their measurement categories or a measurement attribute on transition. The Corporation has made the irrevocable classification choice to record fair value changes on its equity investments in OCI (Note 24). This election resulted in a nil reclassification from the Corporation’s retained earnings to AOCI, on January 1, 2018.

Credit risk arises from cash and cash equivalents and trade receivables. While the Corporation is exposed to credit losses due to the non-performance of its counterparties, there are no significant concentrations of credit risk and the Corporation does not consider this to be a material risk. The Corporations customers with whom the current business operations are with include government bodies and reputable businesses.

The Corporation has implemented a process for managing expected credit loss provisions related to trade receivables going forward under IFRS 9. For its trade receivables, the Corporation applies the simplified approach for determining expected credit losses, which require the Corporation to determine the lifetime, expected losses for all its trade receivables. The expected lifetime credit loss provision for its trade receivables is based on historical counterparty default rates and adjusted for relevant forward looking information, when required. Because of factors including that the majority of its customers are considered to have low default risk and the Corporation does not extend credit to customers with a high default risk, the historical default rates are low and the lifetime expected credit loss allowance for trade receivables is nominal as at December 31, 2018. Accordingly, the Corporation did not record any adjustment relating to the implementation of the expected credit loss model for its trade receivables.

The Corporation has assessed the classification and measurement of our financial assets and financial liabilities under IFRS 9 and have summarized the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 in the following table:

	Original classification  IAS 39	New classification  IFRS 9
Financial Assets
Cash and cash equivalents	Amortized cost	Amortized cost
Short-term deposits	Amortized cost	Amortized cost
Equity securities	Available-for-sale	FVTOCI
Warrants	FVTPL	FVTPL
Trade accounts receivable	Amortized cost	Amortized cost
Other receivables	Amortized cost	Amortized cost
Derivative assets	FVTPL	FVTPL
Restricted cash	Amortized cost	Amortized cost
Financial Liabilities
Trade and other payables	Amortized cost	Amortized cost
Derivative liabilities	FVTPL	FVTPL

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

7. Acquisition of Contango Strategies Ltd.

On June 15, 2018 the Corporation’s wholly owned subsidiary, AEG, completed the acquisition of Contango Strategies Ltd. (“Contango”), a private Corporation based in Saskatoon, Saskatchewan. The acquisition of Contango is considered a business combination under IFRS 3.

Contango has developed technologies beneficial to the Corporation with synergies formed that will allow the Corporation to pursue new opportunities. AEG acquired 100% of the outstanding common shares of Contango in exchange for consideration of $1,388,000 comprising $971,600 in cash and 237,999common shares of Alexco at a value of $416,400. The common shares were valued at $1.75per share reflecting the market price on the date of issuance. Settlement of the consideration is in two tranches with $1,018,000 (comprising $601,600 in cash and $416,400 in Alexco common shares) having been paid on closing with the remaining $370,000 cash payment to be made on the first anniversary of the closing of the transaction. The acquisition includes all of Contango’s operations including $450,000 in working capital and property, plant and equipment.

Acquisition related costs in the amount of $28,000 were incurred and have been recognized as an expense in the consolidated statement of loss, as part of other expenses.

Goodwill of $550,000 is recognized and is primarily related to growth expectation, expected future profitability and the substantial skill and expertise of Contango’s employees. Goodwill is reflected on the Balance Sheet under intangible assets and is not expected to be deductible for tax purposes.

The allocation of the purchase price is preliminary and may vary based upon the completion of additional valuation procedures and finalization of working capital adjustments pursuant to the purchase agreement.

The date of the acquisition for accounting purposes is June 15, 2018 being the closing date of the share purchase agreement and the date the consideration was settled. The preliminary allocation of the purchase price of Contango based on management’s estimate of fair values is as follows:

Fair value of consideration
Amount settled in cash	$	602
Fair value of common shares issued		416
Fair value of cash to be settled in one year		370
Total fair value of consideration	$	1,388
Fair value of identifiable assets acquired and liabilities assumed from Contango:
Cash and cash equivalents		66
Accounts and other receivables		618
Inventory		102
Prepaid expenses		54
Property, plant and equipment		333
Accounts payable and accrued liabilities		(335	)
Net identifiable assets acquired and liabilities assumed	$	838
Goodwill on acquisition	$	550
Net cash outflow on acquisition	$	536
Acquisition costs charged to expenses	$	28

Below is a proforma summary of the revenues, cost of sales and net income (loss) incurred by Contango for the period January 1, 2018 to June 14, 2018 combined with the revenue, cost of sales and net loss for Alexco for the year ended December 31, 2018. Revenue since the date of acquisition was $1.4 million:

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

	Contango Strategies Ltd.		Alexco Resource Corp.			Proforma Combined Entities
Selected Financial Information	For the period January 1, 2018 to June 14, 2018		For the year ended December 31, 2018			For the year ended December 31, 2018
Environmental services revenue	$	1,162	$	19,880		$	21,042
Costs of sales and other expenses		1,026		28,381			29,407
Net income (loss)	$	136	$	(8,501	)	$	(8,365	)

8. Cash and Cash Equivalents

	December 31 2018		December 31 2017
Cash at bank and on hand	$	3,629	$	6,019
Short-term bank deposits		4,947		11,887
	$	8,576	$	17,906

9. Accounts and Other Receivables

	December 31 2018		December 31 2017
Trade receivables 1	$	6,689	$	1,988
Interest and other		122		98
	$	6,811	$	2,086

1. Trade receivables are derived primarily from the environmental consulting business (AEG).

10. Restricted Cash and Deposits

	December 31 2018		December 31 2017
Security for decommissioning obligations	$	2,569	$	6,507
Security for remediation services agreement		-		499
Other		156		86
Restricted cash and deposits		2,725		7,092
Less: current portion		-		499
	$	2,725	$	6,593

Security for decommissioning obligations of $2,569,000 as at December 31, 2018 (December 31, 2017 - $6,507,000) includes cash collateral and a surety bond representing security for future reclamation and closure activities for the Bellekeno, Bermingham, Flame & Moth, Lucky Queen and Onek deposits. During the second quarter of 2018, security in the amount of $6,305,000 was replaced with a surety bond collateralized with $2,364,191, with the balance of $3,940,809 being reclassified as unrestricted cash and cash equivalents. The remaining security under a remediation services agreement was released back to the Corporation in the amount of $499,000 (US$398,000) in 2018 as the Corporation had satisfied the requirements under that agreement.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

11. Investments

	December 31 2018		December 31 2017
Common shares held	$	736	$	673
Warrants held		24		1,082
Investments		760		1,755
Less: current portion		351		728
	$	409	$	1,027

As of December 31, 2018, the Corporation held 8,736,644 common shares of Banyan Gold Corp. (“Banyan”) (December 31, 2017 – 4,775,000) and 1,320,500 common shares of Golden Predator Mining Corp. (“Golden Predator”) (December 31, 2017 – 300,000). As of December 31, 2018, the Corporation also held 6,155,822 warrants of Banyan (December 31, 2017 – 4,375,000) with an exercise price ranging from $0.115 to $0.15 and 300,000 warrants of Golden Predator (December 31, 2017 – 1,425,000) with an exercise price of $1.00 per share.

During the year ended December 31, 2018, the Corporation recorded a pre-tax loss on investments in the amount of the $572,000 (2017 – pre tax gain of $1,341,000). The loss on investments for the year ended December 31, 2018 consisted of a fair value measurement adjustment on warrants held in Banyan and Golden Predator, through the statement of loss. During the year, the Corporation also recorded in other comprehensive income a fair value adjustment loss adjustment, net of tax of $798,000 (2017 – fair value gain adjustment of $253,000) on common shares held in Banyan and Golden Predator.

12. Inventories

	December 31 2018		December 31 2017
Ore in stockpiles and mill supplies	$	4,699	$	4,743
Materials and supplies		818		646
Inventory		5,517		5,389
Less: current portion		818		646
	$	4,699	$	4,743

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

13. Property, Plant and Equipment

Cost	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	1,709	$	5,343	$	22,749	$	8,475	$	1,335	$	39,611
Additions (includes business combinations)		-		226		-		837		168		1,231
Decommission change in estimate		-		-		85		-		-		85
December 31, 2018	$	1,709	$	5,569	$	22,834	$	9,312	$	1,503	$	40,927

Accumulated Depreciation	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	351	$	4,692	$	10,270	$	6,767	$	1,275	$	23,355
Depreciation (includes business combinations)		78		177		1,178		766		140		2,339
Disposal		-		-		-		-		-		-
December 31, 2018	$	429	$	4,869	$	11,448	$	7,533	$	1,415	$	25,694

Net book Value	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	1,358	$	651	$	12,479	$	1,708	$	60	$	16,256
December 31, 2018	$	1,280	$	700	$	11,386	$	1,779	$	88	$	15,233

During the year ended December 31, 2018, the Corporation recorded total depreciation of property, plant and equipment of $2,339,000 (2017 – $1,993,000) of which $1,964,000 (2017 – $1,728,000) has been charged to income with $85,000 (2017 – $142,000) recorded in environmental services cost of sales and $1,879,000 (2017 – $1,586,000) reflected under general expenses and mine site care and maintenance.

Of the depreciation recorded for the year ended December 31, 2018, $375,000 (2017 – $265,000) were related to property, plant and equipment used in exploration activities and has been capitalized to mineral properties.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

14. Mineral Properties

	December 31 2017 (restated – note 6)		Expenditures Incurred		December 31 2018
Mineral Properties
Keno Hill District Properties
Bellekeno	$	6,885	$	238	$	7,123
Lucky Queen		693		131		824
Onek		1,034		31		1,065
McQuesteni		1,997		-		1,997
Silver King		4,464		-		4,464
Flame & Moth		22,455		5,856		28,311
Bermingham		23,376		8,708		32,084
Elsa Tailings		884		-		884
Other Keno Hill Properties		2,799		2,675		5,474
Total	$	64,587	$	17,639	$	82,226

	December 31 2016 (restated – note 6)		Expenditures Incurred		December 31 2017 (restated - note 6)
Mineral Properties
Keno Hill District Properties
Bellekeno	$	6,809	$	76	$	6,885
Lucky Queen		563		130		693
Onek		1,018		16		1,034
McQuesteni		1,924		73		1,997
Silver King		4,464		-		4,464
Flame & Moth		21,966		489		22,455
Bermingham		15,193		8,183		23,376
Elsa Tailings		884		-		884
Other Keno Hill Properties		2,799		-		2,799
Total	$	55,620	$	8,967	$	64,587

(i) Effective May 24, 2017, the Corporation entered into an Option Agreement with Banyan Gold Corp. (“Banyan”) to option up to 100% the McQuesten property. In three stages, Banyan may earn up to 100% of the McQuesten property, by incurring a minimum $2,600,000 in exploration expenditures ($717,000 incurred to December 31, 2018), issue 1,600,000 shares (800,000 shares received to December 31, 2018), pay a total of $2,600,000 in cash or shares and grant Alexco a 6% net smelter return (“NSR”) royalty with buybacks totalling $7,000,000 to reduce to a 1% NSR royalty on gold and 3% NSR royalty on silver.

	Mining Operations Properties			Exploration and Evaluation Properties		Total
December 31, 2018
Cost	$	99,472		$	73,213	$	172,685
Accumulated depletion and write-downs		(90,459	)		-		(90,459	)
Net book value	$	9,013		$	73,213	$	82,226
December 31, 2017 (restated – note 6)
Cost	$	99,071		$	55,975	$	155,046
Accumulated depletion and write-downs		(90,459	)		-		(90,459	)
Net book value	$	8,612		$	55,975	$	64,587

(a) Keno Hill District Properties

The Corporation’s mineral interest holdings in the Keno Hill District, located in Canada’s Yukon Territory, are comprised of a number of properties.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

The majority of the Corporation’s mineral rights within the Keno Hill District were purchased from the interim receiver of United Keno Hill Mines Limited and UKH Minerals Limited (collectively, “UKHM”) in 2006 and are held by ERDC. As a condition of that purchase, a separate agreement was entered into between Alexco, ERDC, the Government of Canada and the Government of Yukon (the “Subsidiary Agreement”), under which the Government of Canada indemnified ERDC and Alexco from and against all liabilities arising directly or indirectly from the pre-existing environmental condition of the former UKHM mineral rights. The Subsidiary Agreement also provided that ERDC may bring any mine into production on the former UKHM mineral rights by designating a production unit from the mineral rights relevant to that purpose and then assuming responsibility for all costs of the production unit’s water related care and maintenance and water related components of closure reclamation.

Other Subsidiary Agreement terms unchanged by the amended and restated Subsidiary Agreement (“ARSA”) include that ERDC is required to pay into a separate reclamation trust a 1.5% net smelter return royalty, to an aggregate maximum of $4 million for all production units, from any future production from the former UKHM mineral rights, commencing once earnings from mining before interest, taxes and depreciation exceed actual exploration costs, to a maximum of $6.2 million, plus actual development and construction capital. That commencement threshold was achieved during the year ended December 31, 2013, and as at December 31, 2018 a total of $37,000 in such royalties had been paid. Additionally, a portion of any future proceeds from sales of the acquired UKHM assets must also be paid into the separate reclamation trust. Also substantially unchanged by the ARSA are the indemnification of pre-existing conditions and the right to bring any mine into production on the former UKHM mineral rights. The rights of the Government of Canada under the Subsidiary Agreement and the ARSA are supported by a general security agreement over all of the assets of ERDC.

The ARSA can be terminated at ERDC’s election should a closure reclamation plan be prepared but not accepted and approved, and at the Government’s election should ERDC be declared in default under the ARSA.

(b) Mining Operations on care and maintenance

The Corporation’s historical mining operations reflected production from one mine, Bellekeno, a primary silver mine with lead, zinc and gold by-products. During the second quarter of 2013, both the Lucky Queen and Onek properties were reclassified from exploration and evaluation assets to mining operations assets as a result of the receipt of remaining operating permits, though neither property has as yet been placed into production.

From September 2013, Bellekeno mining operations have been suspended in light of a low silver price environment.

Keno Hill Royalty Encumbrances

As noted above, under the Subsidiary Agreement and unchanged by the ARSA, the former UKHM mineral rights are subject to a 1.5% net smelter return royalty, to an aggregate maximum of $4 million for all production units. Certain of the Corporation’s non-UKHM mineral rights located within or proximal to the McQuesten property are subject to a net smelter return royalty ranging from 0.5% to 2%. Certain other of the non-UKHM mineral rights located within the McQuesten property are subject to a separate net smelter return royalty of 2% all of which are incorporated under the Option Agreement with Banyan. A limited number of the Corporation’s non-UKHM mineral rights located throughout the remainder of the Keno Hill District are subject to net smelter return royalties ranging from 1% to 1.5%.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

15. Embedded Derivative Asset and Silver Stream

	December 31 2018		December 31 2017 (restated – note 6)
Embedded derivative asset – Beginning of year	$	6,600	$	-
Embedded derivative asset - Addition		-		6,600
Fair value adjustment		3,071		-
Embedded derivative asset – End of year	$	9,671	$	6,600

On October 2, 2008 (with subsequent amendments on October 20, 2008, December 10, 2008, December 22, 2009, March 31, 2010, January 15, 2013, March 11, 2014 and June 16, 2014), the Corporation entered into a silver purchase agreement (the "SPA") with Wheaton under which Wheaton will receive 25% of the life of mine payable silver produced by the Corporation from its Keno Hill Silver District properties. The SPA anticipated that the initial silver deliveries would come from the Bellekeno property. Under the SPA, the Corporation received up-front deposit payments from Wheaton totaling US$50,000,000, and received further payments of the lesser of US$3.90 (increasing by 1% per annum after the third year of full production) and the prevailing market price for each ounce of payable silver delivered, if as and when delivered. After the initial 40 year term of the SPA, the Corporation is required to refund the balance of any advance payments received and not yet notionally reduced through silver deliveries. The Corporation would also be required to refund the balance of advance payments received and not yet reduced if Wheaton exercised its right to terminate the SPA in an event of default by the Corporation. As of September 2013, Bellekeno mining operations were suspended in light of a low silver price environment.

On March 29, 2017 the Corporation and Wheaton amended the SPA (the “Amended SPA, such that Wheaton will continue to receive 25% of the life of mine payable silver from the Keno Hill Silver District with a variable production payment based on monthly silver head grade and monthly silver spot price. The actual monthly production payment from Wheaton will be determined based on the monthly average silver head grade at the mill and the monthly average silver spot price, as determined by a grade and pricing curve with an upper ceiling grade of 1,400 grams per tonne (“g/t”) silver and price of US$25 per ounce of silver and a floor grade of 600 g/t silver and price of US$13 per ounce of silver. Additional terms of the amendment include a date for completion of the 400 tonne per day mine and mill completion test, which is reset to December 31, 2020. If the completion test is not satisfied by December 31, 2020, the Corporation will be required to pay a capacity related refund to Wheaton in the maximum amount of US$8,788,000, which can be further proportionately reduced by mine production and mill throughput exceeding 322 tonnes per day for a 30 day period prior to December 31, 2020. The Amended SPA is secured against the Corporation’s mineral properties until repayment of the original deposit of US$50,000,000.

In consideration of the foregoing amendments, the Corporation issued 3,000,000 shares to Wheaton with a fair value of $6,600,000 (US$4,934,948). Under the terms of the Amended SPA, the original US$50,000,000 deposit was notionally reduced by this amount. The variability in the future cash flows to be received from Wheaton upon extraction and delivery of their 25% interest of future production is considered an embedded derivative within this host contract under IFRS 9, Financial Instruments. The embedded derivative asset was initially recorded at fair value based on the value of the consideration paid to Wheaton and is to be re-measured at fair value on a recurring basis at each period end with changes in value being recorded within the Statement of Loss.

As at December 31, 2018, the fair value of the embedded derivative was calculated based on the discounted future cash flows associated with the difference between the original US$3.90 per ounce production payment Wheaton would pay for each payable ounce delivered under the SPA and the new production payment under the Amended SPA which varies depending on the monthly silver head grade and monthly silver price. The model currently relies upon inputs from the preliminary economic assessment (the “PEA”), such as payable ounces delivered and head grade, but will be updated in the future as a result of updated studies, mine plans and actual production. The valuation model for the embedded derivative has been updated to utilize a probability-based dynamic pricing structure as opposed to a static pricing structure. As such, the discount rate used and silver price assumptions are updated quarterly based on the risk-free yield curve and silver price forward curve at quarter end.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

16. Accounts payable and accrued liabilities

	December 31 2018		December 31 2017
Trade payables	$	3,567	$	1,468
Accrued liabilities and other		3,643		2,133
	$	7,210	$	3,601

17. Credit Facility

On February 23, 2018 the Corporation entered into a definitive credit agreement with Sprott Private Resource Lending (Collector), L.P. (“Sprott”) to provide a US$15,000,000 credit facility (the “Credit Facility”). The Credit Facility has the following key terms:

· Term of 3 years, Maturity Date – February 23, 2021

· Interest rate on funds drawn down: the greater of

o 7% plus US Dollar 3 month LIBOR and

o 8% per annum, payable monthly

· Repayable in quarterly installments from October 31, 2019 through to the Maturity Date

· Upon draw down of funds a 3% draw down fee is charged

· 1,000,000 share purchase warrants were issued to Sprott with a five-year term, an exercise price of $2.25 per share and a right by the Corporation to accelerate the expiry date to 30 days following the closing price of the shares exceeding $5.63 for more than 20 consecutive trading days

· Repayable in whole or in part, without penalty, provided not less than twelve (12) months of interest has been paid on any outstanding amount

· On February 14, 2019 the Corporation extended the availability period of draw down to August 23, 2019 from February 23, 2019 by issuing to Sprott 171,480 Alexco common shares.

As of December 31, 2018, no amounts have been drawn down on the Credit Facility.

18. Decommissioning and Rehabilitation Provision

	December 31 2018		December 31 2017
Balance – beginning of year	$	5,055	$	4,955
Increase due to re-estimation		163		37
Accretion expense, included in finance costs		68		63
Balance – end of year	$	5,286	$	5,055

The Corporation’s decommissioning and rehabilitation provision consists of costs expected to be incurred in respect of future reclamation and closure activities at the end of the life of the Bellekeno, Flame & Moth, Bermingham, Lucky Queen and Onek mines. These activities include water treatment, land rehabilitation, ongoing care and maintenance and other reclamation and closure related requirements.

The total inflation adjusted estimated cash flows required to settle the decommissioning and rehabilitation provision is estimated to be $6,561,000 (2017 – $6,187,000), with the expenditures expected to be incurred substantially over the course of the next 20 years. In determining the carrying value of the decommissioning and rehabilitation provision as at December 31, 2018, the Corporation has used a risk-free discount rate of 2.08% (2017 – 2.11%) and an inflation rate of 2.0% (2017 – 2.0%) resulting in a discounted amount of $5,204,000 (2017 – $5,055,000).

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

19. Capital and Reserves

Shareholders’ Equity

The Corporation is authorized to issue an unlimited number of common shares without par value.

The following share transactions took place during the year ended December 31, 2018:

1. On June 13, 2018, the Corporation completed a bought deal public offering and issued 4,703,000 flow-through common shares at a blended price of $1.92 per share for aggregate gross proceeds of $9,041,150. The Corporation incurred share issuance costs of $989,000.

2. 281,666 stock options were exercised for proceeds of $217,000.

3. 1,167,351 warrants were exercised for proceeds of $2,027,000.

4. 318,036 common shares were issued from treasury on the vesting of restricted share units (“RSUs”).

5. 10,000 common shares were issued from treasury in accordance with an option agreement.

6. 237,999 common shares were issued from treasury as consideration for the acquisition of Contango.

On September 21, 2018 the Corporation filed a short form base shelf prospectus with the securities commissions in each of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and a corresponding amendment to its registration statement on Form F-10 (Registration Statement) with the United States Securities and Exchange Commission (SEC) under the U.S./Canada Multijurisdictional Disclosure System, which would allow the Corporation to make offerings of common shares, warrants, subscription receipts and/or units up to an aggregate total of $50,000,000 during the 25-month period following September 21, 2018.

Warrants

The changes in warrants outstanding are summarized as follows:

Expiry Date	Exercise Price		Balance at December 31, 2017		Issued		Exercised			Expired			Balance at December 31, 2018
May 17, 2018	$	1.75		4,868,620		-		(1,106,451	)		(3,762,169	)		-
May 17, 2018	$	1.49		60,900		-		(60,900	)		-			-
May 30, 2019	$	2.15		126,174		-		-			-			126,174
Feb 23, 2023	$	2.25		-		1,000,000		-			-			1,000,000
				5,055,694		1,000,000		(1,167,351	)		(3,762,169	)		1,126,174

On February 23, 2018 1,000,000 warrants were issued as a fee for the Credit Facility with Sprott (Note 17). The warrants were capitalized as a pre-payment for services, and are being amortized over the availability period of the facility to which it relates. The fair value of the warrants at the date of issuance was estimated using the Black-Scholes option pricing model, assuming a risk-free rate of 1.94% per annum, an expected life of options of 5 years, an expected volatility of 73% based on historical volatility, and no expected dividends.

Equity Incentive Plan

Under the Corporations equity incentive plan (the “Equity Incentive Plan”), the aggregate number of common shares issuable on the exercise of stock options or issuance of RSUs cannot exceed 10% of the number of common shares issued and outstanding. As at December 31, 2018, a total of 7,738,833 stock options and 273,989 RSUs were outstanding under the New Plan and a total of 2,787,068 remain available for future grants.

Incentive Stock Options

Generally stock options under the Equity Incentive Plan have a maximum term of five years, vesting 25% upon granting and 25% each six months thereafter. The exercise price may not be less than the immediately preceding five day volume weighted average price of the Corporation’s common shares traded through the facilities of the exchange on which the Corporation’s common shares are listed.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

The changes in incentive share options outstanding are summarized as follows:

	Weighted average exercise price		Number of shares issued or issuable on exercise			Amount
Balance – December 31, 2017	$	2.06		6,546,666		$	6,258
Stock options granted	$	2.07		2,524,000			-
Share-based compensation expense		-		-			2,480
Options exercised	$	0.77		(281,666	)		(106	)
Options forfeited or expired	$	5.39		(1,050,167	)		(3,163	)
Balance – December 31, 2018	$	1.66		7,738,833		$	5,469
Balance – December 31, 2016	$	2.48		6,175,995		$	6,996
Stock options granted	$	2.31		1,645,500			-
Share-based compensation expense		-		-			2,204
Options exercised	$	1.28		(126,332	)		(78	)
Options forfeited or expired	$	4.78		(1,148,497	)		(2,864	)
Balance – December 31, 2017	$	2.06		6,546,666		$	6,258

During the year ended December 31, 2018, the fair value of options at the date of grant was estimated using the Black-Scholes option pricing model, assuming a risk-free rate ranging from 2.01% to 2.16% (2017 – 1.02%) per annum, an expected life of options of 4 years (2017 – 4 years), an expected volatility average of 73% based on historical volatility (2017 – 73%), an expected forfeiture rate average of 2% (2017 – 4%) and no expected dividends (2017 – nil).

Incentive share options outstanding and exercisable at December 31, 2018 are summarized as follows:

	Options Outstanding						Options Exercisable
Exercise Price	Number of Shares Issuable on Exercise		Average Remaining Life (Years)		Average Exercise Price		Number of Shares Issuable on Exercise		Average Exercise Price
$0.60		35,000		0.96	$	0.60		35,000	$	0.60
$0.60		989,333		1.12	$	0.60		989,333	$	0.60
$0.84		1,422,500		2.12	$	0.84		1,422,500	$	0.84
$1.73		600,000		2.44	$	1.73		600,000	$	1.73
$1.75		42,000		3.63	$	1.75		42,000	$	1.75
$1.78		150,000		2.49	$	1.78		150,000	$	1.78
$1.93		60,000		4.36	$	1.93		30,000	$	1.93
$1.94		475,000		0.12	$	1.94		475,000	$	1.94
$2.07		1,834,000		4.08	$	2.07		917,000	$	2.07
$2.07		587,000		4.08	$	2.07		-	$	2.07
$2.32		1,544,000		3.09	$	2.32		1,544,000	$	2.32
		7,738,833		2.73	$	1.66		6,204,833	$	1.55

The weighted average share price at the date of exercise for options exercised during the year ended December 31, 2018 was $1.96 (2017 – $2.26).

During the year ended December 31, 2018, the Corporation recorded total share-based compensation expense of $2,480,000 (2017 – $2,204,000), which related to incentive share options, of which $368,000 (2017 – $369,000) was recorded to mineral properties and $2,112,000 (2017 – $1,835,000) has been charged to income.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

Subsequent to December 31, 2018, a further 2,029,000 incentive stock options have been granted with an exercise price of $1.27, 70,000 stock options were exercised, 475,000 stock options expired unexercised and nil stock options were forfeited.

Restricted Share Units

Generally RSUs vest one-third upon issuance and one third on each of the first and second anniversary dates of the issuance date. As at December 31, 2018, a total of 273,989 RSUs were outstanding.

The changes in RSUs outstanding are summarized as follows:

	Number of shares issued or issuable on vesting			Amount
Balance – December 31, 2017		398,325		$	401
RSUs granted		193,700			-
Share-based compensation expense recognized		-			467
RSUs vested		(318,036	)		(497	)
Balance – December 31, 2018		273,989		$	371
Balance – December 31, 2016		452,950		$	220
RSUs granted		235,000			-
Share-based compensation expense recognized		-			524
RSUs vested		(289,625	)		(343	)
Balance – December 31, 2017		398,325		$	401

During the year ended December 31, 2018 the Corporation granted a total of 193,700 RSUs (2017 – 235,000) with a total grant-date fair value determined to be $399,000 (2017 - $545,000). Included in general and administrative expenses for the year ended December 31, 2018 is share-based compensation expense of $467,000 (2017 –$524,000) related to RSU awards.

The weighted average share price at the date of vesting for RSUs during the year ended December 31, 2018 was $1.72 (2017 - $2.31).

Subsequent to December 31, 2018, a total of 625,000 RSUs were granted and 386,655 RSUs vested.

20. Revenue from Environmental Services

The Corporation recorded environmental services revenue for the years ending December 31, 2018 and 2017 as follows:

Environmental Services	2018		2017
Environmental services revenue
Fee for service	$	15,007	$	9,882
Fixed price agreements		4,873		850
	$	19,880	$	10,732

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

21. General and Administrative Expenses by Nature of Expense

The Corporation recorded general and administrative expenses for the years ending December 31, 2018 and 2017 as follows:

Corporate	2018		2017
General and administrative expenses
Depreciation	$	94	$	89
Amortization of intangible assets		11		13
Business development and investor relations		451		567
Office, operating and non-operating overheads		788		682
Professional		832		433
Regulatory		184		309
Restructuring costs		92		1,353
Salaries and contractors		2,262		2,112
Share-based compensation		2,544		2,305
Travel		240		301
	$	7,498	$	8,164

Environmental Services	2018		2017
General and administrative expenses
Depreciation	$	126	$	19
Amortization of intangible assets		39		59
Business development		370		164
Office, operating and non-operating overheads		1,262		756
Professional		142		29
Salaries and contractors		2,556		1,657
Travel		177		94
	$	4,672		2,778
Total General and Administrative Expenses	$	12,170	$	10,942

22. Mine Site Care and Maintenance

The Corporation recorded mine site care and maintenance expenses for the years ended December 31, 2018 and 2017 as follows:

	2018		2017 (restated–note 6)
Mine site care and maintenance
Depreciation	$	1,292	$	1,531
Salaries and contractors1		913		357
Materials and equipment1		346		-
Other expenses1		52		-
	$	2,603	$	1,888

1. Included in mine site care and maintenance costs are refurbishment and mill maintance costs.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

23. Other Income and expenses

The Corporation recorded other income and expenses for the years ended December 31, 2018 and 2017 as follows:

	2018			2017
Credit Facility fee – warrants	$	(930	)	$	-
Interest income		241			188
Foreign exchange gain (loss)		(15	)		964
Other income (expenses)		(68	)		(4	)
	$	(772	)	$	1,148

24. Income Tax Expense

The major components of income tax expense for the years ended December 31, 2018 and 2017 are as follows:

(a) The income tax provision differs from the amount that would result from applying the Canadian federal and provincial tax rate to income before taxes. These differences result from the following items:

	2018			2017
Accounting loss before taxes	$	(6,994	)	$	(6,341	)
Federal and provincial income tax rate of 27% (2017 – 26%)		(1,888	)		(1,648	)
Non-deductible permanent differences		1,064			495
Differences in foreign exchange rates		-			-
Effect of difference in tax rates		2			2,488
Change in deferred tax asset not recognized		1,100			(1,075	)
Flow-through share renunciation		1,656			1,040
Change in estimate		(427	)		(72	)
Other		-			244
		1,507			1,472
Income tax provision	$	1,507		$	1,472

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

(b) The movement in deferred tax assets and liabilities during the year by type of temporary difference, without taking into consideration the offsetting balances within the same tax jurisdiction, is as follows:

Deferred tax liabilities	Mineral Property Interest			Inventory			Property, Plant and Equipment			Other			Total
December 31, 2016 (restated Note 6)	$	(1,483	)	$	(126	)	$	(1,505	)	$	(3,415	)	$	(6,529	)
(Charged) credit to the income statement		(1,390	)		13			41			41			(1,295	)
Charged to OCI		-			-			-			-			-
December 31, 2017	$	(2,873	)	$	(113	)	$	(1,464	)	$	(3,374	)	$	(7,824	)
(Charged) credited to the income statement		(5,046	)		-			(598	)		(2,930	)		(8,554	)
Charged to OCI		-			-			-			20			20
December 31, 2018	$	(7,919	)	$	(113	)	$	(2,062	)	$	(6,284	)	$	(16,378	)

Deferred tax assets	Mineral Property Interest		Loss Carry Forward			Property, Plant and Equipment			Decommissioning and Rehabilitation Provision			Other			Total
December 31, 2016	$	770	$	4,281		$	143		$	1,485		$	799		$	7,478
Credited (charged) to the income statement		69		(13	)		(66	)		(121	)		(775	)		(906	)
Charged to OCI		-		-			-			-			637			637
December 31, 2017	$	839	$	4,268		$	77		$	1,364		$	661		$	7,209
Credited (charged) to the income statement		3,632		2,997			(5	)		63			(612	)		(6,075	)
December 31, 2018	$	4,471	$	7,265		$	72		$	1,427		$	49		$	13,284

Net deferred tax liabilities
December 31, 2017 (restated Note 6)	$	(614	)
Charged to the income statement		(2,504	)
Charged to OCI		20
December 31, 2018	$	(3,098	)

(c) At December 31, 2018, the Corporation has unrecognized tax attributes, noted below, that are available to offset future taxable income. The Corporation has not recognized the deferred tax asset on these temporary differences because they relate to entities within the group that have a history of losses and there is not yet adequately convincing evidence that these entities will generate sufficient future taxable income to enable offset.

Tax loss carry forwards	$	40,650
Mineral property interest		11,150
Other		8,587
	$	60,387

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

As at December 31, 2018, the Corporation has available non-capital losses for income tax purposes in Canada which are available to be carried forward to reduce taxable income in future years and for which no deferred income tax asset has been recognized, and which expire as follows:

	Total
2033	$	1,952
2034		9,351
2035		6,685
2036		6,643
2037		8,302
2038		7,717
	$	40,650

25. Financial Instruments

Financial Assets and Liabilities

Information regarding the carrying amounts of the Corporation’s financial assets and liabilities is summarized as follows:

	Fair Value Hierarchy Classification	December 31 2018		December 31 2017
Fair value through profit or loss
Warrants	Level 2	$	24	$	1,082
Embedded derivative - Wheaton agreement	Level 3	$	9,671	$	6,600
Fair value through other comprehensive loss
Investment in marketable securities	Level 1	$	736	$	673
		$	10,431	$	8,355

During the year ended December 31, 2018, the fair value of warrants were estimated using the Black-Scholes option pricing model, assuming a risk-free interest rate of 1.85% (2017 – 1.66%) per annum, an expected life of options of 0.62 to 1.98 years (2017 – 0.17 to 2.98 years), an expected volatility of 72% to 93% (2017 – 84%) based on historical volatility and no expected dividends (2017 – nil).

During the year ended December 31, 2018, the fair value of the embedded derivative related to the Wheaton agreement was estimated using a probability-based dynamic pricing structure resulting in a mark-to-market adjustment of $3,071,000 (2017 – nil). The model currently relies upon inputs from the preliminary economic assessment dated March 29, 2017, and considers payable ounces delivered and head grade. The model is updated quarterly for the discount rate used and silver price assumptions based on the risk-free yield curve and silver price forward curve at quarter end.

The carrying amounts of all of the Corporation’s other financial assets and liabilities, carried at amortized cost, reasonably approximate their fair values due to their short-term nature.

Financial Instrument Risk Exposure

The Corporation’s activities expose it to a variety of financial risks: market risk (currency risk), credit risk and liquidity risk. Risk management is carried out by management under policies approved by the Board of Directors. Management identifies and evaluates the financial risks in co-operation with the Corporation’s operating units. The Corporation’s overall risk management program seeks to minimize potential adverse effects on the Corporation’s financial performance, in the context of its general capital management objectives as further described in Note 6.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

Currency Risk

Substantially all of the Corporation’s property, plant and equipment and mineral properties are located in Canada; all of its mining operations occur in Canada; and a significant majority of its environmental services revenues are earned in Canada. However, if commercial production recommences at the Keno Hill Silver District, the Corporation’s exposure to US dollar currency risk significantly increases as sales of concentrate and the settlement of the Wheaton streaming payments will be effected in US dollars. In addition, a portion of its environmental services revenues, and receivables arising therefrom, are also denominated in US dollars. As well, while a significant majority of the Corporation’s operating costs are denominated in Canadian dollars, it does have some exposure to costs, as some accounts payable and accrued liabilities are denominated in US dollars. The Corporation is exposed to currency risk at the balance sheet date through the following financial assets and liabilities, which are denominated in US dollars:

	December 31 2018			December 31 2017
Cash and cash equivalents	$	1,374		$	1,336
Accounts and other receivable		917			510
Accounts payable and accrued liabilities		(649	)		(298	)
Net exposure	$	1,642		$	1,548

Based on the above net exposure at December 31, 2018, a 10% depreciation or appreciation of the US dollar against the Canadian dollar would result in an approximately $164,000 decrease or increase respectively in both net and comprehensive loss (2017 – $158,000). The Corporation has not employed any currency hedging programs during the current period.

Credit Risk

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its obligations. The Corporation’s maximum exposure to credit risk at the balance sheet date under its financial instruments is summarized as follows:

	December 31		December 31
	2018		2017
Trade receivables
Currently due	$	5,228	$	1,035
Past due by 90 days or less, not impaired		1,375		940
Past due by greater than 90 days, not impaired		86		13
		6,689		1,988
Cash		3,629		6,019
Demand deposits		4,947		11,887
Term deposits		2,725		7,092
	$	17,990	$	26,986

Substantially all of the Corporation’s cash, cash equivalents and term deposits are held with major financial institutions in Canada, and management believes the exposure to credit risk with respect to such institutions is not significant. Those financial assets that potentially subject the Corporation to credit risk are primarily receivables. Management actively monitors the Corporation’s exposure to credit risk under its financial instruments, particularly with respect to receivables. The Corporation considers the risk of material loss to be significantly mitigated due to the financial strength of the parties from whom the receivables are due, including with respect to trade accounts receivable as the Corporation’s major customers include government organizations as well as substantial corporate entities. Receivables that are past due by greater than 90 days have been subsequently collected.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

Liquidity Risk

Liquidity risk is the risk that the Corporation will not be able to meet its obligations associated with financial liabilities. The Corporation has a planning and budgeting process in place by which it anticipates and determines the funds required to support its normal operating requirements as well as the growth and development of its mining projects. The Corporation coordinates this planning and budgeting process with its financing activities through the capital management process described in Note 26. The Corporation’s financial liabilities are comprised of its accounts payable and accrued liabilities, the contractual maturities of which at the balance sheet date are summarized as follows:

	December 31		December 31
	2018		2017
Accounts payable and accrued liabilities with contractual maturities
Within 90 days or less	$	7,210	$	3,601
In later than 90 days, not later than one year		-		-
	$	7,210	$	3,601

26. Management of Capital

The capital managed by the Corporation includes the components of shareholders’ equity as described in the consolidated statements of shareholders’ equity. The Corporation is not subject to externally imposed capital requirements.

The Corporation’s objectives of capital management are to create long-term value and economic returns for its shareholders. It does this by seeking to maximize the availability of finance to fund the growth and development of its mining projects, and to support the working capital required to maintain its ability to continue as a going concern. The Corporation manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of its assets, seeking to limit shareholder dilution and optimize its cost of capital while maintaining an acceptable level of risk. To maintain or adjust its capital structure, the Corporation considers all sources of finance reasonably available to it, including but not limited to issuance of new capital, issuance of new debt and the sale of assets in whole or in part, including mineral property interests. The Corporation’s overall strategy with respect to management of capital at December 31, 2018 remains fundamentally unchanged from the year ended December 31, 2017.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

27. Supplemental Cash Flow Information

Supplemental cash flow information with respect to the year ended December 31, 2018 and 2017 is summarized as follows:

	2018		2017
Operating Cash Flows Arising From Interest and Taxes
Interest received	$	129	$	221
Non-Cash Investing and Financing Transactions
Capitalization of share-based compensation to mineral properties	$	368	$	369
Capitalization of depreciation to mineral properties	$	375	$	265
Capitalization of re-estimation of decommissioning and rehabilitation provision	$	163	$	37
Issuance of shares related to acquistion of subsidiary	$	416	$	-
Increase in non-cash working capital related to:
Mining operations properties	$	6	$	(23	)
Exploration and evaluation properties	$	305	$	(1,130	)

28. Segmented Information

The Corporation had two operating segments during the years ended December 31, 2018 and 2017, being firstly mining operations, including care and maintenance of the formerly operating Bellekeno mine, producing silver, lead and zinc in the form of concentrates (suspended in September 2013), as well as exploration, underground development and evaluation activities; and secondly environmental services carried out through AEG, providing consulting and project management services in respect of environmental permitting and compliance and site remediation and reclamation. The Corporation’s executive head office and general corporate administration are included within ‘Corporate and other’ to reconcile the reportable segments to the consolidated financial statements. An operating segment is a component of an entity that engages in business activities, operating results are reviewed by the chief operating decision maker with respect to resource allocation and for which discrete financial information is available. The chief operating decision maker for the Corporation is the Chief Executive Officer. Inter-segment transactions are recorded at amounts that reflect normal third-party terms and conditions, with inter-segment profits eliminated from the cost base of the segment incurring the charge. Revenue from non-Canadian customers of both operating segments was derived primarily from the United States.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

Segmented information as at and for the year ended December 31, 2018 and 2017 is summarized as follows: 

As at and for year ended December 31, 2018	Environmental Services			Mining			Corporate and Other			Total
Segment revenues
External customers
Canadian	$	13,105		$	-		$	-		$	13,105
Non-Canadian		6,775			-			-			6,775
Total revenues as reported		19,880			-			-			19,880
Cost of sales		13,828			-			-			13,828
Depreciation and amortization		165			1,292			105			1,562
Share-based compensation		-			-			2,544			2,544
Other G&A expenses		4,507			86			5,701			10,294
Mine site care and maintenance		-			1,311			-			1,311
Foreign exchange (gain) loss		35			9			(29	)		15
Loss on investments					113			459			572
Gain on derivative asset		-			(3,071	)		-			(3,071	)
Other (income) loss		(8	)		68			(241	)		(181	)
Segment income (loss) before taxes	$	1,353		$	192		$	(8,539	)	$	(6,994	)(i)
Total assets	$	11,462		$	113,341		$	8,215		$	133,018
Total liabilities	$	4,116		$	10,284		$	1,988		$	16,388

As at and for year ended December 31, 2017 (restated – Note 6)	Environmental Services			Mining			Corporate and Other			Total
Segment revenues
External customers
Canadian	$	5,881		$	-		$	-		$	5,881
Non-Canadian		4,851			-			-			4,851
Total revenues as reported		10,732			-			-			10,732
Cost of sales		6,732			-			-			6,732
Depreciation and amortization		79			1,531			101			1,711
Share-based compensation		-			-			2,305			2,305
Other G&A expenses		2,700			-			4,404			7,104
Mine site care and maintenance		-			357			-			357
Restructuring costs		-			-			1,353			1,353
Foreign exchange loss		(1,080	)		(4	)		120			(964	)
Gain on investments		-			-			(1,341	)		(1,341	)
Other loss (income)		250			(247	)		(187	)		(184	)
Segment income (loss) before taxes	$	2,051		$	(1,637	)	$	(6,755	)	$	(6,341	)(i)
Total assets	$	6,198		$	98,303		$	17,823		$	122,324
Total liabilities	$	1,642		$	6,762		$	1,464		$	9,868

(i) Represents consolidated loss before taxes.

For the year ended December 31, 2018, revenue from three customers of the Corporation’s Environmental Services segment represents approximately $12,580,000 of the Corporation’s consolidated revenue.

ALEXCO RESOURCE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(figures in tables are expressed in thousands of Canadian dollars, except per share amounts)

29. Related Party Transactions

The Corporation’s related parties include its subsidiaries and key management personnel. Key management personnel compensation for the years ended December 31, 2018 and 2017 was as follows:

(a) Key Management Personnel Compensation

	2018		2017
Salaries and other short-term benefits	$	2,130	$	2,246
Share-based compensation		2,513		2,072
	$	4,643	$	4,318

Key management includes the Corporation’s Board of Directors and members of senior management.

30. Commitments

As at December 31, 2018, the Corporation’s contractual obligations are as follows:

(a) The Corporation has entered into various operating lease contracts for office space, motor vehicles and office equipment. The future minimum payments under these leases as are as follows:

2019	$	391
2020		283
2021		210
2022		210
2023		190
Thereafter		156
	$	1,440

(b) The Corporation’s other contractual obligations, including with respect to capital asset expenditures, totaled approximately $360,000.

(c) As a consequence of its commitment to renounce deductible exploration expenditures to the purchasers of flow-through shares, the Corporation is required to incur further renounceable exploration expenditures totaling $3,170,000 by December 31, 2019.

EX-99.3

Exhibit 99.3

ALEXCO RESOURCE CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2018

This Management’s Discussion and Analysis (“MD&A”) of Alexco Resource Corp. (“Alexco” or the “Corporation”) is dated March 13, 2019 and provides an analysis of Alexco’s consolidated financial results for the year ended December 31, 2018 compared to those of the previous year.

The following information should be read in conjunction with the Corporation’s December 31, 2018 consolidated financial statements with accompanying notes, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. All dollar figures are expressed in Canadian dollars unless otherwise stated. These documents and additional information on the Corporation are available on the Corporation’s website at www.alexcoresource.com, the SEDAR website at www.sedar.com and the Edgar website at www.sec.gov.

Except where specifically indicated otherwise, the disclosure in this MD&A of scientific and technical information regarding exploration projects on Alexco’s mineral properties has been reviewed and approved by Alan McOnie, FAusIMM, Vice President, Exploration, while that regarding mine development and operations has been reviewed and approved by Neil Chambers, P.Eng., Mine Superintendent, both of whom are Qualified Persons as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).

All dollar figures are expressed in Canadian dollars unless otherwise stated.

2018 HIGHLIGHTS AND OVERALL PERFORMANCE

CORPORATE

· Overall, Alexco reported a net loss of $8,501,000 ($0.08 per share) for the year ended December 31, 2018 and a loss before tax expense of $6,994,000 including non-cash adjustments totalling $2,597,000. The loss before taxes for 2017 was $6,341,000 including non-cash costs of $4,658,000. The increase in the net loss in 2018 compared to 2017 was mainly attributed a non-cash credit facility fee ($797,000), increased mine-site care and maintenance costs (increase of $715,000) and an investment loss incurred in 2018 ($572,000) partially offset with the Corporation’s fair value gain on the embedded derivative related to the Wheaton streaming agreement ($3,071,000). Furthermore, in 2017 the Corporation incurred a foreign exchange gain ($963,000) and gains on investments ($1,341,000).

· The Corporation’s cash and cash equivalents at December 31, 2018 totaled $8,576,000 compared to $17,906,000 at December 31, 2017, while net working capital (see Non-GAPP Measures on page 23) totaled $10,188,000 compared to $18,676,000 at December 31, 2017. The Corporation’s restricted cash and deposits at December 31, 2018 totalled $2,725,000 compared to $7,092,000 at December 31, 2017.

· On February 23, 2018 Alexco entered into a definitive credit agreement with Sprott Private Resource Lending (Collector), L.P. (“Sprott”) to provide a US$15,000,000 credit facility (the “Credit Facility”), which remains undrawn.

· On April 30, 2018 Alexco replaced $6,305,000 of cash placed as security for its Keno Hill property with a surety bond. The surety instrument is collateralized with $2,364,191 of cash with the resulting $3,941,000 plus accrued interest being reclassified to unrestricted cash. In addition on April 25, 2018 security posted in cash in the amount of $499,000 (US$398,000) was also released to the Corporation on issuance of a State of Colorado “No Further Active Remediation” filing which represents the final step in the successful completion of the Globeville Smelter Project.

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· On June 14, 2018, the Corporation completed an offering, on a bought deal basis, of 4,703,000 flow-through common shares at a blended price of approximately $1.92 per share for gross proceeds of $9,041,150. The securities issued under the offering were compromised of (i) 966,500 flow-through shares with respect to "Canadian exploration expenses" issued at $2.05 per share; (ii) 1,736,500 flow-through shares with respect to "Canadian exploration expenses" that also qualify as "flow-through mining expenditures" issued at $2.05 per share; and (iii) 2,000,000 flow-through shares with respect to "Canadian development expenses" issued at $1.75.

· During the year, 1,167,351 warrants were exercised for proceeds to Alexco of $2,027,000.

· On April 12, 2018 Alexco announced the appointment of Karen McMaster to the Board of Directors. Ms. McMaster’s extensive history in the mining industry has been primarily focused on legal counsel for environmental matters as well as exploration and mine development.

MINE OPERATIONS AND EXPLORATION

· On May 2, 2018, Alexco announced completion of 550 meters (“m”) on the Bermingham underground advanced exploration decline, initially collared in August 2017, and subsequently completed a 4,230 m underground exploration drill program from the decline. Results from this drilling program were released on August 9, 2018 and September 17, 2018.

· Following completion of underground advanced exploration work at Bermingham, Alexco commenced the underground ramping system at the Flame & Moth deposit. Alexco completed the targeted Flame & Moth underground development program for 2018 with 452 m driven in total, comprising 371 m of linear decline advance and 81 m included in support infrastructure.

· During 2018, the Corporation completed a total of 15,314 m of surface exploration drilling in 55 completed holes including 7,687 m in 26 drill holes in a new reconnaissance program, and 3,756 m in 11 holes in the Bermingham in-fill drilling program, as well as 1,179 m in ten holes at Flame & Moth for metallurgical and geotechnical purposes. A further 2,692 m was drilled on third party properties within the district complex. Results from the surface drilling programs were released on August 9, 2018, September 17, 2018 and January 29, 2019.

· On September 20, 2018 Alexco announced an updated and expanded mineral resource estimate for the Bermingham deposit (see news release dated September 20, 2018, entitled “Alexco Updates Bermingham Resource”). The indicated mineral resources expanded from 17.3 million ounces to 33.3 million ounces of contained silver at an average silver grade of 628 g/t, while inferred mineral resources increased from 5.4 million ounces to 10.4 million ounces of contained silver at an average silver grade of 526 g/t.

· In the fourth quarter of 2018 the Corporation determined that the likely timeline to renew the currently active Water Use Licence (“WUL”) (which includes authorization for water use and waste deposition related to development and processing of Bermingham ores) would be near the end of the second quarter of 2019. With this information in hand and the announcement of an expanded mineral resource at Bermingham (above), the Corporation elected to extend the pre-feasibility study (“PFS”) completion timeline to the end Q1 2019. With respect to the outstanding renewal of the WUL originally expected in Q2 2019, the Corporation believes it prudent to guide toward a third quarter issuance of this final WUL, due to continued backlog pressure in the Yukon Water Board process.

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· On December 6, 2018 the Association for Mineral Exploration (“AME”) announced the recipients of their 2018 Celebration of Excellence Award winners. Alexco’s Al McOnie (VP, Exploration), Seymour Iles (District Exploration Manager) and Jared Chipman (Sr. Geologist) were honored with the H.H. ‘Spud’ Huestis Award for Excellence in Prospecting and Mineral Exploration. This award is a result of their work on the recent discovery and delineation of more than 60 million ounces of silver in the Flame & Moth and Bermingham deposits in the Keno Hill Silver District.

ALEXCO ENVIRONMENTAL GROUP

· Alexco Environmental Group (“AEG”), recognized revenues of $19,880,000 for the year ended December 31, 2018 for a gross profit of $6,052,000 achieving a gross margin of 30% compared to revenues of $10,732,000 for the year ended December 31, 2017 for a gross profit of $4,000,000 achieving a gross margin of 37%. AEG operating income before taxes for 2018 was $1,518,000 excluding non-cash costs of $165,000 (see Note 28 in the financial statements for the year ended December 31, 2018).

· On April 3, 2018 Alexco’s wholly owned US subsidiary, Alexco Water and Environment Inc. (“AWE”), entered into a Master Services Agreement (“MSA”) with Colorado Legacy Land LLC (“CLL”) to become the Operator of Responsible Charge for the Schwartzwalder Mine and the former Cañon City Uranium Mill reclamation and cleanup projects. These long-term arrangements are expected to take more than ten years to complete and are expected to generate revenue in excess of US$20,000,000 for AWE.

· On June 15, 2018 AEG acquired Contango Strategies Ltd. (“Contango”), a private company based in Saskatoon, Saskatchewan, for consideration of $1,388,000 comprising $971,600 in cash and 237,999 common shares of Alexco at a value of $416,400. Settlement of the consideration is in two tranches with $1,018,000 (comprising $601,600 in cash and $416,400 in Alexco common shares) paid on closing with the remaining $370,000 cash payment to be made on the first anniversary of the closing of the transaction. The acquisition includes all of Contango’s operations including $450,000 in working capital, and property, plant and equipment.

SELECTED ANNUAL CONSOLIDATED CORPORATE INFORMATION

	As at and for the year ended December 31
(expressed in thousands of Canadian dollars, except per share amounts)	2018			2017			2016
Revenue		19,880			10,732			11,361
Gross profit		6,052			4,000			2,866
Net loss		(8,501	)		(7,813	)		(4,524	)
Loss per share:
Basic	($	0.08	)	($	0.08	)	($	0.05	)
Diluted	($	0.08	)	($	0.08	)	($	0.05	)
Total assets		133,018			122,324			109,686
Total long-term liabilities		8,384			5,669			4,332
Dividends declared		Nil			Nil			Nil

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OVERVIEW OF THE BUSINESS

Alexco owns substantially all of the historic Keno Hill Silver District (“KHSD”), located in Canada's Yukon Territory. The Bellekeno silver mine, one of the world's highest-grade silver mines with a production grade averaging 779 g/t, commenced commercial production at the beginning of 2011 and was Canada's only operating primary silver mine from 2011 to 2013, producing a total of 5.6 million ounces of silver during that time. In September 2013 Alexco suspended Bellekeno mining operations in light of a sharply reduced silver and base metal prices. Since the suspension Alexco has focused on evaluating the Flame & Moth and the Bermingham deposits, renegotiating third party contracts and reviewing other opportunities to reduce future mining operating costs for future operations at Keno Hill. This work culminated with the publication of an updated preliminary economic assessment (“PEA”) in 2017. With the PEA study in hand, Alexco has moved forward to development of a PFS focused on potential KHSD economics related to the return of KHSD to commercial operations including production from the Flame & Moth, Bermingham, Lucky Queen and Bellekeno silver deposits.

Alexco also owns and operates an environmental consulting business, AEG, which provides a variety of mine and industrial related environmental services, including management of the regulatory and environmental permitting process, remediation technologies and reclamation and mine closure services. AEG provides these services to both government and industry clients through its wholly owned subsidiaries, Alexco Environmental Group Inc. (“AEG Canada”), Alexco Water and Environment Inc. (“AWE”) and Contango Strategies Ltd. (“Contango”). Alexco also owns certain patent rights related to mine reclamation and closure processes including the in-situ immobilization of metals in groundwater, soils, waste stacks and pit lakes.

Alexco is a public company which is listed on the NYSE American Stock Exchange (under the symbol AXU) and the Toronto Stock Exchange (under the symbol AXR).

OUTLOOK AND STRATEGY

Keno Hill Silver District

Alexco’s current primary focus is to re-start mining operations at Keno Hill, commodity prices, commercial arrangements and markets considered. Alexco has the requisite permits and authorizations for future ore production from the Flame & Moth, Lucky Queen, Bellekeno and Onek deposits. In November 2017 a project proposal for environmental assessment was submitted to Yukon Environmental and Socio-economic Assessment Board (“YESAB”) for future production and processing of ore from the Bermingham deposit. A positive Decision Document was issued by the Yukon Government on July 27, 2018. Completion of the amendments to Alexco’s Quartz Mining Licence (“QML”) is now expected in Q2 2019, and a renewal of the WUL is expected in Q3 2019. At that point Alexco will be fully permitted for ore production and processing from the Bermingham deposit in addition to the previously mentioned Flame & Moth, Lucky Queen, Bellekeno and Onek deposits.

The KHSD is located in the Yukon Territory approximately 330 kilometers north of Whitehorse in the vicinity of the villages of Mayo and Keno City and lies within the traditional territory of the First Nation of Na-Cho Nyak Dun (“FNNND”). Alexco is party to a Comprehensive Cooperation and Benefits Agreement (“CCBA”) with the FNNND, setting out common understandings, obligations and opportunities arising from all of Alexco’s activities within the Keno Hill District including exploration, care and maintenance, District closure activities and mine production.

Alexco Environmental Group

Alexco owns and operates AEG which carries out a variety of fee for service and turnkey project activities related to environmental management and assessment, project permitting, remediation, water treatment and project closure mandates in North America and elsewhere. AEG has developed a strong client base within the mining industry and has also been able to establish new lines of business related to industrial site soil remediation, water treatment and historical mine pool remediation as well as emergency water treatment services. With the acquisition of Contango in June 2018, AEG has expanded its business lines into specialized biological water treatment systems for mining, oil and gas, and industrial operations.

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AEG provides consulting services to Alexco’s wholly owned subsidiary, Elsa Reclamation and Development Ltd. (“ERDC”), on the on-going environmental care and maintenance program and reclamation and closure projects at Keno Hill with the Federal Government of Canada (“Canada”) and in accordance with the amended and restated Subsidiary Agreement (“ARSA”).

ERDC

As part of Alexco’s 2006 acquisition of the United Keno Hill Mines (“UKHM”) mineral rights in the Keno Hill District, ERDC is party to the ARSA with Canada. Under the ARSA, ERDC is retained by Canada as a paid contractor responsible on a continuing basis for the environmental care and maintenance and ultimate closure reclamation of the former UKHM mineral properties. The ARSA provides that ERDC share the responsibility for the development of the ultimate closure plan with Canada. Upon regulatory approval, the closure plan will be implemented by ERDC. During the period required to develop the plan and until the closure plan is executed, ERDC is also responsible for carrying out the environmental care and maintenance at various sites within the UKHM mineral rights, for a fixed annual fee established on a per-site basis totaling $850,000, adjustable for material changes in scope. ERDC receives agreed-to commercial contractor rates when retained by Canada to provide environmental services in the Keno Hill District outside the scope of care and maintenance and closure and reclamation planning under the ARSA.

ERDC currently holds a Type B WUL under the Yukon Waters Act to undertake care and maintenance activities in the Keno Hill area. The final Existing State of Mine (“ESM”) Reclamation Plan at Keno Hill was completed in September 2018 and was subsequently submitted for environmental assessment by the YESAB. The ESM Project Proposal to YESAB was declared adequate in February 2019. Subsequent to completion of the YESAB environmental assessment process, a WUL amendment will be required from the Yukon Water Board to authorize the activities necessary to effect closure of the site. After licencing, funding approval from Crown-Indigenous Relations and Northern Affairs Canada (“CIRNAC”) for the final cleanup project will be subject to review and acceptance of the project by the Treasury Board of Canada. The final ESM Reclamation Plan is subject to amendment that may result from requirements during the assessment, licencing, and funding approval processes.

Economic Climate

Silver, lead and zinc are the primary metals found within the Keno Hill District historically. With respect to the economic climate during 2018, prices have steadily declined with an average silver price of US$15.71 during the year. Silver traded from a high of US$17.52 on January 25, 2018 to a low of US$13.97 on November 14, 2018, while lead traded between US$1.22 to US$0.87 and zinc traded between US$1.64 to US$1.04 per pound. As at the date of this MD&A, spot commodity prices are approximately US$15.50 per ounce silver, US$0.95 per pound for lead and US$1.29 per pound for zinc and the Canadian-US exchange rate is approximately US$0.75 per CAD. Consensus investment analyst forecasts over the next two years for silver average approximately US$16.25 per ounce, for lead average approximately US$1.05 per pound, and for zinc US$1.18 per pound, with the Canadian-US exchange rate forecast at US$0.76 per CAD (see “Risk Factors” in the MD&A for the year ended December 31, 2018, including but not limited to “Potential Profitability Of Mineral Properties Depends Upon Other Factors Beyond the Control of the Corporation” and “General Economic Conditions May Adversely Affect the Corporation’s Growth and Profitability” thereunder).

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RESULTS OF OPERATIONS

Keno Hill Silver District

2018 Flame & Moth Development

During 2018 Alexco commenced the underground ramping system at the Flame & Moth deposit. Alexco completed the targeted Flame & Moth underground development program for 2018 with 452 m driven in total, comprising 371 m of linear decline advance and 81 m included in support infrastructure. Approximately 336 m of ramp and infrastructure development remains to reach the first ore level access at the Lightning Zone. In addition, a 100 m ventilation raise to surface will be required before commercial ore production can be achieved. Completion of the remaining ramp development, raise and infrastructure is pending completion of the PFS and a positive production decision.

The Flame & Moth decline is being constructed at a design of 15% grade and sized 3.7 m wide x 4.0 m high and will accommodate new underground drilling headings as well as haulage up to 250 to 400 tonnes of ore per day to the primary crusher which is located within 200 m of the mine portal.

Exploration

i. 2018 Advanced Exploration Program - Bermingham

In May 2018 the Corporation completed the 550 m advanced exploration decline and from established underground drilling stations, completed an underground drilling program designed to provide 10 – 15 m spaced intercepts in the upper portion of the high grade Bear Vein.

The underground drilling program was completed in September 2018 with 4,230 m in 24 holes, with most holes being extended beyond the Bear Vein to also intersect the adjacent mineralized Bermingham and Bermingham Footwall veins.

At the same time, surface drilling continued to infill and extend mineralization in areas peripheral to the Bermingham resources with a total of 3,756 m completed in 11 holes.

Initial 2018 results from this underground drilling campaign were announced on August 9, 2018 (see news release dated August 9, 2018, entitled “Alexco Drills up to 12 Meters (true width) of 1,019 grams per tonne Silver at Bermingham Deposit, Provides Update on Permitting and Underground Development”) and further results were announced on September 17, 2018 (see news release dated September 17, 2018, entitled “Alexco Drills Intersects 4.3 Meters (Tue Width) of 3,605 Grams per Tonne Silver at Bermingham, Completes Underground Infill/Exploration Drill Program”).

The in-drill results confirmed the previously anticipated silver grades and vein thickness with significant intercepts reported such as the Bear Vein over a 4.29 m true width grading 3,605 g/t (115.91 oz/t) silver in hole BMUG18-018 and 12.28 m true width grading 1,019 g/t (32.8 oz/t) silver in hole BMUG18-012. Other significant intercepts were reported from the associated Bermingham and Bermingham Footwall veins including 4.17 m true width grading 5,373 g/t (172.8 oz/t) Ag in hole BMUG18-015.

ii. Updated Mineral Resource Estimate - Bermingham

The results from the 2017 and 2018 exploration drilling programs were incorporated into the updated and expanded mineral resource estimate for the Bermingham deposit prepared by SRK Consulting (Canada) Inc. (“SRK”) and announced on September 20, 2018 (see news release dated September 20, 2018 entitled, “Alexco Updates Bermingham Mineral Resource”).

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The indicated mineral resources expanded from 17.3 million ounces to 33.3 million ounces of contained silver at an average grade of 628 g/t silver, while inferred mineral resources have increased from 5.4 million ounces to 10.4 million ounces of contained silver at an average grade of 526 g/t silver. This updated and expanded mineral resource estimate will be used as the basis for the PFS currently being prepared.

iii. 2018 Other Exploration Areas

In October 2018 the Corporation completed its 2018 surface exploration program as planned, drilling a total of 15,314 m in 55 completed drill holes (including the 3,756 m in 11 surface holes at Bermingham noted above).

In addition to the exploration drilling that was focused on the Bermingham prospect, other generative programs were undertaken on historically mined sites at the Husky, No Cash, Townsite, Eagle, Bellekeno South and Black Cap occurrences with 26 holes completed in 7,687 m. The assay results from these holes were announced on January 21, 2019 (see news release dated January 21, 2019, entitled “Alexco 2018 Reconnaissance Drilling Confirms Continuation of Bermingham Mineralization at Depth and Identifies an Offset Extension, Identifies New Gold Targets”). This included:

· A new exploration initiative was undertaken on third party properties within the district complex with 2,692 m completed in eight drill holes.

· 11 drill holes for 1,179 m completed at the Flame & Moth deposit, for metallurgical and geotechnical purposes.

During the fourth quarter the Corporation completed a high resolution helicopter EM-magnetic geophysical survey totalling 1,100 line kilometers over the Galena Hill area. The data is currently being processed and when available will assist with geological interpretation and correlation of known mineralized structures to identify new prospective zones.

Permitting Update

Alexco has the requisite permits and authorizations for future ore production from the Bellekeno, Flame & Moth, Lucky Queen, and Onek deposits. Permitting for production from the Bermingham deposit is ongoing with a positive Decision Document issued by the Yukon Government on July 27, 2018. The Decision Document outlines a number of standard terms and conditions for development and mine production from the Bermingham deposit.

With the issuance of the Decision Document, Alexco submitted a water license amendment and renewal application to the Yukon Water Board for processing and milling ore and discharging treated water from the Bermingham mine.

Completion of the amendments to Alexco’s QML are expected Q2 2019, and a renewal of the WUL is expected in Q3 2019.

Pre-feasibility Study

During the fourth quarter of 2018 the Corporation continued to work with independent consultants on the PFS. As a result of the announcement of an expanded mineral resource at Bermingham and a delay of the permitting timeline for the Bermingham deposit, completion of the PFS is anticipated late in the first quarter of 2019. The PFS will address optimization of underground development and mining strategies for the restart of commercial mining operations in the KHSD, including strategies related to extraction of the recently expanded Bermingham resource.

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Mine Site Care and Maintenance

Mine site care and maintenance costs for 2018 totaled $2,603,000 compared to $1,888,000 in 2017. The increase in costs is mainly due to site-based expenditures and mill maintenance and refurbishment initiatives related to future recommissioning of the mill and related plant. Included in mine site care and maintenance costs is depreciation expense of $1,292,000 for 2018 compared to $1,366,000 for 2017.

General and Administrative Expenses

Corporate:

Corporate general and administrative expenses during 2018 totaled $7,498,000 compared to $8,164,000 for 2017. This includes non-cash costs of $2,649,000 in 2018 and $2,407,000 in 2017. The corporate general and administrative expenses decreased in 2018 primarily as a result of the Corporation incurring higher costs in 2017 related to restructuring the Amended SPA with Wheaton and professional and consulting fees for restructuring AEG.

Environmental Services:

Environmental Services general and administrative expenses during 2018 totaled $4,672,000 compared to $2,778,000 for 2017. The increase in general and administrative expenses in 2018 is attributable to the additional overheads associated with operation of the Contango business and additional investment in professional employees and support functions required to meet demand and growth in the business.

Alexco Environmental Group (AEG) and ERDC

Highlights during 2018:

· AEG recognized revenues of $19,880,000 in 2018 for a gross profit of $6,052,000 achieving a gross margin of 30% compared to revenues of $10,732,000 for a gross profit of $4,000,000 achieving a gross margin of 37% in 2017. The increase in gross profit during the 2018 period was primarily due to new projects from both Canadian and US customers.

· During the year, under the contract with Canada on the historical cleanup at Keno Hill, ERDC submitted the ESM Reclamation Plan for environmental assessment by YESAB. In addition, ERDC continued with detailed engineering related to the closure plan.

· AEG is successfully operating two water treatment facilities in the US, the Gladstone Interim Water Treatment Plant (“IWTP”) near Silverton Colorado and the Schwartzwalder industrial water treatment plant near Golden Colorado, as well as four smaller water treatment facilities within the Keno Hill District in the Yukon Territory, Canada. 

Acquisition of Contango Strategies Ltd.

On June 15, 2018 AEG acquired Contango, a private company based in Saskatoon, Saskatchewan, for consideration of $1,388,000 comprising $971,600 in cash and 237,999 common shares of Alexco at a value of $416,400. Settlement of the consideration is in two tranches with $1,018,000 (comprising $601,600 in cash and $416,400 in Alexco common shares) paid on closing with the remaining $370,000 cash payment to be made on the first anniversary of the closing of the transaction. The acquisition included all of Contango’s operations including $450,000 in working capital, and property, plant and equipment.

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Contango specializes in biological (passive, semi-passive and active) water treatment systems for mining, oil and gas, and industrial operations. Contango operates a year-round environmentally controlled pilot-scale facility, which allows for the development, testing and optimization of technologies such as bioreactors and constructed treatment wetlands. Additionally, genetic profiling using Contango’s in-house DNA sequencing facility and microbiology laboratories can detect and identify microbes for applications including bioreactor optimization, corrosion and fouling correction, and environmental remediation.

FOURTH QUARTER

For the quarter ended December 31, 2018 Alexco reported a net loss of $1,795,000 on total revenues of $8,902,000 compared to a net loss of $1,790,000 on total revenues of $2,507,000 in 2017. AEG recognized revenues of $8,902,000 in the fourth quarter of 2018 for a gross profit of $2,152,000 achieving a gross margin of 24% compared to revenues of $2,507,000 in the fourth quarter of 2017 for a gross profit of $993,000 achieving a gross margin of 40%. The higher 2018 period revenue was attributed to commencement of a new project requiring construction of a Water Treatment Plant, which included lower margin work on the front end of the project.

Mine site care and maintenance costs in fourth quarter of 2018 totaled $319,000 compared to $453,000 for the same period in 2017. The decrease in costs is mainly due to a lower depreciation charge in the 2018 period.

Corporate general and administrative expenses in the fourth quarter of 2018 totaled $1,671,000 compared to $1,895,000 in the fourth quarter of 2017. The decrease in the 2018 period relates primarily to AEG restructuring costs incurred in the 2017 period.

Environmental Services general and administrative expenses in the fourth quarter of 2018 totaled $1,576,000 compared to $585,000 in the fourth quarter of 2017. The increase in general and administrative expenses in the 2018 period is attributable to an approximate 125% expansion of the professional and operating workforce to 82 employees to meet increased client-based demand and additional overheads associated with operation of the Contango business.

SUMMARY OF QUARTERLY RESULTS

Key financial information for the most recent eight quarters is summarized as follows, reported in thousands of Canadian dollars except for per share amounts:

Period	Revenue	Gross Profit	Net Income (Loss)	Basic Income (Loss) per Share	Diluted Income (Loss) per Share	Expenditures Capitalized on Mineral Properties
2017-Q1	1,935	549	(973)	$(0.01)	$(0.01)	885
2017-Q2	2,504	913	(2,736)	$(0.03)	$(0.03)	1,782
2017-Q3	3,786	1,545	(2,313)	$(0.02)	$(0.02)	3,491
2017-Q4	2,507	993	(1,791)	$(0.03)	$(0.03)	2,809
2017 Total (restated)	10,732	4,000	(7,813)	$(0.09)	$(0.09)	8,967
2018-Q1	2,764	830	(3,261)	$(0.03)	$(0.03)	3,147
2018-Q2	3,545	1,368	(1,896)	$(0.02)	$(0.02)	4,812
2018-Q3	4,669	1,702	(1,548)	$(0.01)	$(0.01)	6,517
2018-Q4	8,902	2,152	(1,795)	$(0.02)	$(0.02)	3,163
2018 Total	19,880	6,052	(8,501)	$(0.08)	$(0.08)	17,639

Note: Sum of all the quarters may not add up to the yearly totals due to rounding

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The net loss for 2017 quarters reflect site based expenditures along with general and administrative expenses, costs related to restructuring the Wheaton streaming agreement partially offset by AEG profits, a foreign exchange gain and a gain on investments. The net loss from the 2018 quarters reflect fair value adjustment losses from the Corporation’s available-for-sale investments, site based expenditures, mill maintenance initiatives and general and administrative expenses offset by a non-cash fair value gain related to the embedded derivative on the Wheaton streaming agreement.

The mineral property expenditures in 2017 reflect the resource estimation work being completed on the Bermingham and Flame & Moth deposits and completion of the PEA during the first quarter followed by the surface exploration program and commencement of the advanced underground exploration program at the Bermingham deposit. The mineral property expenditures in the first quarter of 2018 mainly reflect the continued advancement of the underground exploration decline at the Bermingham deposit and the expenditures incurred in the second, third and fourth quarters of 2018 reflect completion of the advanced exploration decline, completion of the underground drilling program at the Bermingham deposit, commencement of the underground development decline at the Flame & Moth deposit and commencement of a 15,000 m surface drilling program. The Corporation is continuing to work on a pre-feasibility study, which will include the drill results from the 2017 surface drill program along with the 2018 drill program at the Bermingham deposit.

Liquidity, Cash Flows and Capital Resources

Liquidity

At December 31, 2018 the Corporation had cash and cash equivalents of $8,576,000, and net working capital of $10,188,000 compared to cash and cash equivalents of $17,906,000 and net working capital of $18,676,000 at December 31, 2017. The Corporation faces no known liquidity issues or is aware of any significant credit risks in any of its financial assets. In addition, the Corporation’s restricted cash and deposits at December 31, 2018 totalled $2,725,000 compared to $7,092,000 at December 31, 2017.

With its cash resources and net working capital on hand at December 31, 2018, and assuming no re-start of full scale mining operations, Alexco anticipates it will have sufficient capital resources to service the working capital requirements of its mine site care and maintenance, exploration activities, environmental services business and corporate offices and administration, for at least the next 12 month period. As noted elsewhere in this MD&A, re-start of mining operations is dependent on a number of factors, including a supportive silver market, maintaining current metal prices and foreign exchange rates. A re-start of underground production operations will require additional capital investment, in excess of the capital resources currently on hand. Because of these factors, combined with its long term objectives for the exploration and development of its mineral properties, the Corporation is likely to require future additional funding.

Historically, Alexco’s main sources of funding have been from mining operations, AEG and equity issuances. All sources of finance reasonably available will be considered to fund future requirements, including but not limited to issuance of new capital, issuance of new debt and the sale of assets in whole or in part, including mineral property interests. There can be no assurance of a re-start of mining operations or continued access to finance in the future, and an inability to generate or secure such funding may require the Corporation to substantially curtail and defer its planned exploration and development activities.

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Cash Flows

	Three Months Ended December 31						Year Ended December 31
	2018			2017			2018			2017
Cash flow from (used) in operating activities	$	(657	)	$	478		$	(5,490	)	$	(4,054	)
Cash flow from investing activities		(4,840	)		(3,965	)		(14,161	)		(7,329	)
Cash flow provided by financing activities		23			29			10,321			8,907
	$	(5,474	)	$	(3,458	)	$	(9,330	)	$	(2,476	)

Cash outflow in operating activities was $657,000 for the fourth quarter of 2018 versus cash inflow of $478,000 for the fourth quarter of 2017. The majority of cash outflow from operating activities during the 2018 period were expended on site-based care and maintenance costs and general and administrative costs offset by profits from AEG. Cash outflow from investing activities were $4,840,000 for the fourth quarter of 2018 versus a cash outflow of $3,965,000 for the fourth quarter of 2017. The cash outflow during the fourth quarter of 2018 related to the surface exploration program and work on a pre-feasibility study. The cash inflow from financing activities was $23,000 for the fourth quarter of 2018 versus a cash inflow of $29,000 for the fourth quarter of 2017.

Cash used in operating activities was $5,490,000 for 2018 versus $4,054,000 for 2017. The majority of cash consumed in operating activities during the 2018 and 2017 periods were expended on site-based care and maintenance costs and general and administrative costs offset by profits from AEG. Cash outflow from investing activities were $14,161,000 for 2018 versus $7,329,000 for 2017. The increased cash outflow in 2018 primarily related to the Bermingham underground advanced exploration program, increased surface exploration programs, underground development work at Flame & Moth deposit and work on the prefeasibility study. Furthermore, the Corporation acquired Contango in 2018. The outflows in 2018 were partially offset with the release of restricted funds in place of a surety bond. During 2017, the Corporation received $2,003,000 from the proceeds on the disposal of investments compared to $207,000 outflow from purchasing investments in 2018. Cash inflow from financing activities were $10,321,000 for 2018 compared to $8,907,000 for 2017. The 2018 cash inflow relates to proceeds from a completed public offering consisting of 4,703,000 flow-through shares at a blended price of $1.92 per share along with $2,245,000 from the exercise of warrants and stock options. In 2017 the Corporation had cash inflow from proceeds totalling $8,907,000 from a private placement and the exercise of warrants and stock options.

Silver Purchase Agreement (“SPA”) with Wheaton

On October 2, 2008 (with subsequent amendments on October 20, 2008, December 10, 2008, December 22, 2009, March 31, 2010, January 15, 2013, March 11, 2014 and June 16, 2014), the Corporation entered into a SPA with Wheaton under which Wheaton will receive 25% of the life of mine payable silver produced by the Corporation from its Keno Hill Silver District properties. The SPA anticipated that the initial silver deliveries would come from the Bellekeno property. Under the SPA, the Corporation received up-front deposit payments from Wheaton totaling US$50,000,000 and received further payments of the lesser of US$3.90 (increasing by 1% per annum after the third year of full production) and the prevailing market price for each ounce of payable silver delivered, if as and when delivered. After the initial 40 year term of the streaming interest, the Corporation is required to refund the balance of any advance payments received and not yet notionally reduced through silver deliveries. The Corporation would also be required to refund the balance of advance payments received and not yet reduced if Wheaton exercised its right to terminate the streaming interest in an event of default by the Corporation. As of September 2013, Bellekeno mining operations were suspended in light of a reduced silver price environment.

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On March 29, 2017 the Corporation and Wheaton amended the SPA such that Wheaton will continue to receive 25% of the life of mine payable silver from the Keno Hill Silver District with a variable production payment based on monthly silver head grade and monthly silver spot price. The actual monthly production payment from Wheaton is determined based on the monthly average silver head grade at the mill and the monthly average spot price, as determined by a grade and pricing curve with an upper ceiling grade of 1,400 g/t silver and price of US$25 per ounce of silver and a floor grade of 600 g/t silver and price of US$13 per ounce of silver. Additional terms of the amendment include a date for completion of the 400 tonne per day mine and mill completion test, which has now been extended to December 31, 2020. If the completion test is not satisfied by December 31, 2020, the Corporation will be required to pay a capacity related refund to Wheaton in the maximum amount of US$8,788,000, which can be further proportionately reduced by mine production and mill throughput exceeding 322 tonnes per day for a 30 day period prior to December 31, 2020. The Amended SPA is secured against the Corporation’s mineral properties until repayment of the original deposit of US$50,000,000.

As at December 31, 2018, the fair value of the embedded derivative was calculated based on the discounted future cash flows associated with the difference between the original US$3.90 per ounce production payment Wheaton would pay for each payable ounce delivered under the SPA and the new production payment under the Amended SPA which varies depending on the monthly silver head grade and silver price. The model relies upon inputs from the PEA, such as payable ounces delivered, head grade and silver price and will be updated as a result of updated studies, mine plans and actual production. A discount rate of 13%, representing the implied discount rate applied to the payment made under the Amended SPA was used to calculate the net present value. There were adjustments totalling $3,071,000 recorded during 2018 (2017 - $nil) primarily as a result of a reduction in silver price and reduction in value of the Canadian dollar during the period. See Guidance on Embedded Derivative below.

Capital Resources

On June 14, 2018, the Corporation completed an offering, on a bought deal basis, of 4,703,000 flow-through common shares at a blended price of approximately $1.92 per share for gross proceeds of $9,041,150. The securities issued under the offering were compromised of (i) 966,500 flow-through shares with respect to "Canadian exploration expenses" issued at $2.05 per share; (ii) 1,736,500 flow-through shares with respect to "Canadian exploration expenses" that also qualify as "flow-through mining expenditures" issued at $2.05 per share; and (iii) 2,000,000 flow-through shares with respect to "Canadian development expenses" issued at $1.75. As of December 31, 2018 the Corporation had $3,170,000 to be spent prior to December 31, 2019.

On May 30, 2017, the Corporation completed a bought deal financing and issued 4,205,820 flow-through common shares on a private placement basis at a price of $2.15 per share for aggregate gross proceeds of $9,042,513. As of December 31, 2018 the Corporation had incurred all $9,042,513 of these flow-through funds.

On February 23, 2018 the Corporation entered into a definitive credit agreement with Sprott to provide a US$15,000,000 Credit Facility. The Credit Facility remains undrawn and has the following key terms:

· Term of 3 years, Maturity Date – February 23, 2021

· Interest rate on funds drawn down: the greater of

o 7% plus US Dollar 3 month LIBOR and

o 8% per annum, payable monthly

· Repayable in quarterly installments from October 31, 2019 through to the Maturity Date

· Upon draw down of funds a 3% charge of the draw down is charged

· 1,000,000 share purchase warrants were issued to Sprott with a five-year term, an exercise price of $2.25 per share and a right by the Corporation to accelerate the expiry date to 30 days following the closing price of the shares exceeding $5.63 for more than 20 consecutive trading days

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· Repayable in whole or in part, without penalty, provided not less than twelve (12) months of interest has been paid on any outstanding amount

· On February 14, 2019 the Corporation extended the availability period of draw down to August 23, 2019 from February 23, 2019 by issuing to Sprott 171,480 Alexco common shares.

On September 21, 2018 the Corporation filed a short form base shelf prospectus with the securities commissions in each of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and a corresponding amendment to its registration statement on Form F-10 (Registration Statement) with the United States Securities and Exchange Commission (SEC) under the U.S./Canada Multijurisdictional Disclosure System, which would allow the Corporation to make offerings of common shares, warrants, subscription receipts and/or units up to an aggregate total of $50,000,000 during the 25-month period following September 21, 2018.

The following table summarizes the current contractual obligations of the Corporation and associated payment requirements over the next five years and thereafter:

Contractual Obligations (expressed in thousands of dollars)	Payments Due by Period
	Total		Less than 1 year		1 – 3 years		3 – 5 years		After 5 years
Operating leases	$	1,440	$	390	$	703	$	347	$	Nil
Purchase obligations		360		60		180		120		Nil
Decommissioning and rehabilitationprovision (undiscounted basis)		6,573		-		733		298		5,542
Total	$	8,373	$	450	$	1,616	$	765	$	5,542

Guidance on Embedded Derivative

As discussed above, the valuation model for the embedded derivative related to the Wheaton SPA currently relies upon inputs from the PEA, such as payable ounces delivered and head grade, and will be updated as a result of updated studies, mine plans and actual production. Upon completion of the PFS, the valuation model will replace the inputs from the PEA with inputs from the PFS. Furthermore the valuation model for the embedded derivative has been updated to utilize a probability based dynamic pricing structure as opposed to a static pricing structure. As such, the discount rate used and silver price assumptions are updated quarterly based on the risk-free yield curve and silver price forward curve at quarter end.

Based on assumptions used in the dynamic valuation model the value of the derivative asset as at December 31, 2018 is $9,671,000. If, for example, the silver price were to decline to US$13 per ounce and all other assumptions remained the same, the approximate derivative asset value would be $11,230,000. Similarly, if the silver price were to increase to US$25 per ounce and all other assumptions remained the same, the approximate derivative asset value would be negative $1,379,000, and could be classified as a derivative liability. The impacts of these swings in derivative asset value are recorded on the Statement of Profit and Loss through Other Income (Expenses) (see note 15 in the consolidated financial statements for years ended December 31, 2018 and 2017).

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The following table summarizes the expected stand-alone impact on the embedded derivative asset value based on changes in model inputs:

Dynamic Model Input Change	Expected Impact on Embedded Derivative Asset Value
Silver Price Increase	Decrease
Silver Price Volatility Increase	Decrease
Mill Silver Head Grade Increase	Decrease
Decrease in timeframe to reach production	Increase
Foreign Exchange: US dollar appreciates compared to CDN dollar	Increase
Risk Free Yield Increase	Decrease
Expected Silver Ounces Mined Increase	Increase

Management expects that changes in the fair market value of the embedded derivative asset prior to mine production will largely be driven by the risk-free yield curve and silver price forward curve as well as proximity to production date. In a market where the price of silver is static, these changes are expected to be nominal relative to a production scenario, at which time management expects the variability of the fair value adjustments to increase significantly as silver ounces are mined and delivered to Wheaton.

Share Data

As at the date of this MD&A, the Corporation has 108,647,037 common shares issued and outstanding. In addition, there are outstanding incentive share options for a further 9,202,833 common shares, restricted share units that can be settled by way of shares issued from treasury for a further 512,334 common shares, and purchase warrants for a further 1,126,174 common shares.

Use of Financial Instruments

All of Alexco’s cash and cash equivalents at December 31, 2018 were held in the form of demand deposits. Alexco’s restricted cash and deposits were held in the form of term deposits and demand deposits. Alexco’s other financial instruments were its trade and other accounts receivable, its accounts payable and accrued liabilities, and its investment in marketable securities.

At December 31, 2018, a total of $2,725,000 of Alexco’s restricted cash and deposits represents cash collateral posted with a surety company to underwrite surety bonds for security in respect of mine-site reclamation at certain of Alexco’s mineral properties. The balance of Alexco’s restricted cash and deposits represent security provided in respect of certain long-term operating lease commitments. The term deposits held at December 31, 2018 as individual financial instruments carry initial maturity periods of one year or less. They have been classified as investments held to maturity and accordingly are carried at amortized cost using the effective interest method. All term deposits held are high grade, low risk investments, generally yielding between 1% and 2% per annum, and their carrying amounts approximate their fair values given their short terms and low yields.

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The carrying amounts of Alexco’s trade and other accounts receivable and accounts payable and accrued liabilities are estimated to reasonably approximate their fair values, while the carrying amount of investments in marketable securities and embedded derivative are marked to fair value at each balance sheet date. The fair values of all of Alexco’s financial instruments measured at December 31, 2018, other than the marketable securities that are included in investments, constitute Level 2 and Level 3 measurements within the fair value hierarchy defined under IFRS. The fair value of the investments in marketable securities constitute as Level 1 measurements.

Substantially all of Alexco’s cash, demand deposits and term deposits are held with major financial institutions in Canada. With respect to these instruments, management believes the exposure to credit risk is insignificant due to the nature of the institutions with which they are held, and that the exposure to liquidity and interest rate risk is similarly insignificant given the low-risk-premium yields and the demand or short-maturity-period character of the deposits.

Alexco’s accounts and other receivables at December 31, 2018 total $6,811,000, comprised primarily of AEG trade receivables and goods and services tax refunds receivable from government. Alexco’s maximum credit risk exposure in respect of its receivables is represented by their carrying amount. Management actively monitors exposure to credit risk under its receivables, particularly AEG trade receivables, and considers the risk of loss to be significantly mitigated due to the financial strength of AEG’s major customers which include government organizations as well as substantial corporate entities.

Substantially all of Alexco’s property, plant and equipment and mineral properties are located in Canada; all of its mining operations and mineral exploration occur in Canada; and a significant portion of AEG’s revenues are earned in Canada. However, a significant portion of AEG’s revenues are in US dollars, and receivables arising therefrom are accordingly denominated in US dollars. Also, while a significant majority of the Corporation’s operating costs are denominated in Canadian dollars, it does have some exposure to costs, and therefore accounts payable and accrued liabilities, denominated in US dollars.

The Corporation has not employed any hedging activities in respect of the prices for its payable metals or for its exposure to fluctuations in the value of the US dollar.

Off-Balance Sheet Arrangements

Alexco has no off-balance sheet arrangements as defined by National Instrument 52-109.

Related Party Transactions

The Corporation’s related parties include its subsidiaries and key management personnel:

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Key Management Personnel Compensation

(a) Key Management Personnel Compensation

	Three Months Ended December 31				Year Ended December 31
	2018		2017		2018		2017
Salaries and other short-term benefits	$	520	$	485	$	2,130	$	2,246
Share-based compensation		498		285		2,513		2,072
	$	1,018	$	770	$	4,643	$	4,318

Key management includes the Corporation’s Board of Directors and members of senior management.

Critical Accounting Estimates and Judgments

The preparation of the consolidated financial statements requires management to select accounting policies and make estimates and judgments that may have a significant impact on the consolidated financial statements. Estimates are continuously evaluated and are based on management’s experience and expectations of future events that are believed to be reasonable under the circumstances. The estimates management makes in this regard include those regarding future commodity prices and foreign currency exchange rates, which are an important component of several estimates and assumptions management must make in preparing the financial statements, including but not limited to estimations and assumptions regarding the evaluation of the carrying amount of mineral properties and other assets, the estimation of decommissioning and rehabilitation provisions, the estimation of revenues and the value of the embedded derivative related to sales of concentrate, and the estimation of the net realizable value of inventories. Management bases its estimates of future commodity prices and foreign currency exchange rates primarily on consensus investment analyst forecasts, which are tracked and updated as published on generally a quarterly basis. Actual outcomes can differ from these estimates.

The most significant judgments and estimates made by management in preparing the Corporation’s financial statements are described as follows:

· Mineral Resources

The determination of the Corporation’s estimated mineral resources by appropriately qualified persons requires significant judgements regarding the interpretation of complex geological and engineering data including the size, depth, shape and nature of the deposit and anticipated plans for mining, as well as estimates of future commodity prices, foreign exchange rates, capital requirements and production costs. These mineral resource estimates are used in many determinations required to prepare the Corporation’s financial statements, including evaluating the recoverability of the carrying amount of its non-current non-financial assets and estimating amounts of future taxable income in determining whether to record a deferred tax asset.

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· Impairment and Impairment Reversals of Non-Current Non-Financial Assets

The Corporation reviews and evaluates the carrying value of each of its non-current non-financial assets for impairment and impairment reversals when events or changes in circumstances indicate that the carrying amounts of the related asset may not be recoverable or previous impairment losses may become recoverable. The identification of such events or changes and the performance of the assessment requires significant judgment. Furthermore, management’s estimates of many of the factors relevant to completing this assessment, including commodity prices, foreign currency exchange rates, mineral resources, and operating, capital and reclamation costs, are subject to risks and estimation uncertainties that may further affect the determination of the recoverability of the carrying amounts of its non-current non-financial assets.

Management has assessed indicators of impairment and impairment reversals on the Corporation’s non-current non-financial assets and has concluded that no impairment or impairment reversal indicators exists as of December 31, 2018.

· Decommissioning and Rehabilitation Provision

Management’s determination of the Corporation’s decommissioning and rehabilitation provision is based on the reclamation and closure activities it anticipates as being required, the additional contingent mitigation measures it identifies as potentially being required and its assessment of the likelihood of such contingent measures being required, and its estimate of the probable costs and timing of such activities and measures. Significant judgements must be made when determining such reclamation and closure activities and measures required and potentially required.

· Mineral Properties - Silver Stream Arrangement

Upon entering into a long-term streaming arrangement linked to production at operations, Management’s judgment was required in assessing the appropriate accounting treatment for the transaction on the closing date and in future periods. We consider the specific terms of the arrangement to determine whether we have disposed of an interest in the reserves and resources of the operation or executed some other form of arrangement. This assessment considers what the counterparty is entitled to and the associated risks and rewards attributable to them over the life of the operation. These include the contractual terms related to the total production over the life of the arrangement as compared to the expected production over the life of the mine, the percentage being sold, the percentage of payable metals produced, the commodity price referred to in the ongoing payment and any guarantee relating to the upfront payment if production ceases.

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· Fair value of derivatives

The fair values of financial instruments that are not traded in an active market are determined using valuation techniques. Management uses its judgment to select a method of valuation and makes estimates of specific model inputs that are based on conditions existing at the end of each reporting period. Refer to Note 15 for further details on the methods and assumptions associated with the measurement of the embedded derivative within the Silver Streaming Interest. Management has applied judgement in concluding that the completion test as discussed in Note 15 will be met prior to December 31, 2020 or extended to a later date, therefore the capacity related refund is not likely to be owed to Wheaton Precious Metals Corp.

Changes In and Initial Adoption of Accounting Standards and Policies

The Corporation has adopted the new IFRS pronouncements listed below as at January 1, 2018, in accordance with the transitional provisions outlined in the respective standards and described below. In light of the changes to the revenue standard to IFRS 15, management has changed their treatment under IFRS 6 for the partial distribution of the mineral interest.

a) Adjustments to Consolidated Financial Statements

The table below summarizes the adjustments to previously reported figures related to the policy change from IFRS 6:

Adjustments to Condensed Consolidated Balance Sheets

	December 31 2017			January 1 2017
Equity before accounting changes	$	100,060		$	90,673
Adjustments to equity relating to:
Property plant and equipment		2,117			2,283
Mineral properties		(10,229	)		(10,229	)
Deferred income tax liabilities		2,390			1,440
Silver streaming interest		18,118			18,118
Equity after accounting changes	$	112,456		$	102,285

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Adjustments to Condensed Consolidated Statements of Loss and Comprehensive Loss

	Year ended December 31 2017			Year ended January 1 2017
Loss before accounting changes	$	(7,648	)	$	(4,359	)
Adjustments to loss relating to:
Depreciation and amortization		(165	)		(165	)
Loss after accounting changes	$	(7,813	)	$	(4,524	)
Loss per share before accounting changes:
Basic and diluted	$	(0.08	)	$	(0.04	)
Loss per share after accounting changes:
Basic and diluted	$	(0.09	)	$	(0.05	)

The Corporation has assessed the impact of IFRS 15 on its silver streaming arrangement with Wheaton. At the date the transaction was completed, the Corporation determined that the contract is a sale of a mineral interest and a related contract to provide extraction services. At the time of the arrangement, the related property was E&E and thus we have retrospectively applied a different policy under IFRS 6 to the receipt of that deposit at that point in time, in order to avoid any complications under IFRS 15. Under its existing policy, the Corporation applies the provisions of IFRS 6, which allows for an accounting policy choice to either apply the proceeds received as a credit to the carrying value of the exploration and evaluation (“E&E”) asset, or account for the transaction as a partial sale, with deferral of the gain, to be recognized on a units-of-production sold basis. Upon the effective date of IFRS 15, the Corporation will continue to apply the accounting for the Wheaton arrangement under IFRS 6 but has elected to change the policy to apply the proceeds received as a credit to the carrying value of the E&E asset. Management believes this approach to be more relevant and reliable.

Specifically, the USD $50,000,000 initial deposit recorded as consideration was applied against the carrying value of the mineral interest, with a gain being recognized to the extent that the value of the consideration exceeds the value of the mineral interest.

Overview of Changes to IFRS

The Corporation adopted IFRS 15 on January 1, 2018 in accordance with the transitional provisions of the standard, applying a modified retrospective approach in restating our prior period financial information.

IFRS 15, Revenue from Contracts with Customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18, Revenue and IAS 11, Construction contracts and related interpretations. Management’s primary focus was evaluating contracts under its Environmental Services business, as this is currently the Corporation’s primary source of revenue. Based on this analysis, the Corporation does not have significant changes to the timing and amount of its revenue recognition related to environmental services under IFRS 15, as the majority of its contracts contain a series of same or similar performance obligations. Consequently, consistent with the Corporation’s existing policy, revenue is recognized “over time”, as the services are provided.

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IFRS 9, Financial Instruments, addresses the classification, measurement and recognition of financial assets and financial liabilities. It replaces the guidance in IAS 39, Financial Instruments: Recognition and Measurement that relate to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income (“OCI”) and fair value through profit or loss (“FVTPL”). The basis of classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change for liabilities is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in OCI rather than in net earnings. The Corporation has made the irrevocable classification choice to record fair value changes on its equity investments in OCI (See Note 4 of the 2018 annual financial statements). This election resulted in a nil reclassification from the Corporation’s retained earnings to accumulated OCI, on January 1, 2018.

Credit risk arises from cash and cash equivalents and trade receivables. While the Corporation is exposed to credit losses due to the non-performance of its counterparties, there are no significant concentrations of credit risk and the Corporation does not consider this to be a material risk. The Corporations customers with whom the current business operations are with include government bodies and reputable businesses.

The Corporation has reviewed its expected credit losses on its trade receivables carried at fair value through other comprehensive income (“FVOCI”) on transition to IFRS 9. The Corporation has also implemented a process for managing provisions related to trade receivables going forward under IFRS 9. For its trade receivables, the Corporation applies the simplified approach for determining expected credit losses, which require the Corporation to determine the lifetime, expected losses for all its trade receivables. The expected lifetime credit loss provision for its trade receivables is based on historical counterparty default rates and adjusted for relevant forward looking information, when required. As the majority of its customers are considered to have low default risk and the Corporation does not extend credit to customers with a high default risk, the historical default rates are low and the lifetime expected credit loss allowance for trade receivables is nominal as at January 1, 2018 and December 31, 2018. Accordingly, the Corporation did not record any adjustment relating to the implementation of the expected credit loss model for its trade receivables.

The Corporation has assessed the classification and measurement of its financial assets and financial liabilities under IFRS 9 and have summarized the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 in the following table:

	Original classification  IAS 39	New classification  IFRS 9
Financial Assets
Cash and cash equivalents	Amortized cost	Amortized cost
Short-term deposits	Amortized cost	Amortized cost
Equity securities	Available-for-sale	FVTOCI
Warrants	FVTPL	FVTPL
Trade accounts receivable	Amortized cost	Amortized cost
Other receivables	Amortized cost	Amortized cost
Derivative assets	FVTPL	FVTPL
Restricted cash	Amortized cost	Amortized cost
Financial Liabilities
Trade and other payables	Amortized cost	Amortized cost
Derivative liabilities	FVTPL	FVTPL

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New accounting standard not yet effective

A new standard has been issued and is relevant to the Corporation but is not yet effective and therefore not reflected in these consolidated financial statements:

IFRS 16 relates to accounting for leases and lease obligations. It replaces the existing lease guidance in IAS 17, Leases. The purpose of the new standard is to report all leases on the statement of financial position and to define how leases and lease obligations are measured. IFRS 16 is effective from January 1, 2019 and must be applied retrospectively, subject to certain practical expedients, using either a full retrospective approach or modified retrospective approach.

The Corporation is currently involved in various lease obligations as part of its normal course of business. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset being leased. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees. All leases will be recorded on the statement of financial position, except short-term leases and low-value leases. This is expected to result in a material increase in both rights of use assets and lease liabilities upon adoption of the standard, and changes to the timing of recognition and classification of expenses associated to such lease arrangements. The Corporation anticipates an increase in cash flow from operating activities as lease payments will be recorded as financing outflows in the statement of cash flows. The Corporation also anticipates an increase in depreciation and finance expenses and a decrease in operating expenses.

The Corporation plans to adopt the modified retrospective approach and not restate balances for the comparative period. On initial adoption, the Corporation has elected to use the following practical expedients permitted under the standard:

· Apply a single discount rate to a portfolio of leases with similar characteristics;

· Account for leases with a remaining term of less than twelve (12) months as at January 1, 2019 as short-term leases; and

· Account for lease payments as an expense and not recognize a right-of-use (“ROU”) asset if the underlying asset is of low dollar value.

On adoption of IFRS 16, the Corporation will recognize lease liabilities in relation to leases under the principles of the new standard measured at the present value of the remaining lease payments, discounted using the interest rate implicit in the lease or the Corporation’s incremental borrowing rate as at January 1, 2019. The associated ROU assets will be measured at the amount equal to the lease liability on January 1, 2019. The Corporation has completed its review of all existing operating leases and service contracts to identify contracts in scope for IFRS 16 and assessed contracts for embedded leases. Adoption of the new standard is expected to result in the recognition of additional lease liabilities and ROU assets of approximately $1,000,000 each.

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There are no other IFRS’s or International Financial Reporting Interpretations Committee (“IFRIC”) interpretations that are not yet effective that are expected to have a material impact on the Corporation.

Non-GAAP Measures

The Corporation presents non-GAAP measures, which are not defined in IFRS. A description and calculation of the measure is given below and may differ from similarly named measures provided by other issuers. We disclose this measure because we believe it assists readers in understanding Alexco’s financial position. This measure should not be considered in isolation or used in substitute for other measures prepared in accordance with IFRS.

Net Working Capital

Consolidated net working capital comprises those components of current assets and liabilities which support and results from the Corporation’s ongoing running of its current operations. It is provided to give a quantifiable indication of the Corporation’s short-term cash generation ability and business efficiency. As a measure linked to current operations and sustainability of the business, net working capital excludes: deferred revenue and flow-through share premium pending renunciation.

Internal Control Over Disclosure Controls and Procedures and Financial Reporting

Disclosure Controls and Procedures

Alexco’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Corporation’s disclosure controls and procedures. Based upon the results of that evaluation, the Alexco’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the date of this MD&A, Alexco’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by Alexco in reports it files under applicable securities legislation is recorded, processed, summarized and reported within the appropriate time periods and forms specified in those rules and include controls and procedures designed to ensure that information required to be disclosed by Alexco in reports it files under applicable securities legislation is accumulated and communicated to Alexco’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

The management of Alexco is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Chief Executive Officer and the Chief Financial Officer and effected by the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the accounting principles under which the Alexco’s financial statements are prepared. It includes those policies and procedures that:

(i) pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions related to and dispositions of Alexco’s assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards, and that Alexco receipts and expenditures are made only in accordance with authorizations of management and Alexco’s directors; and

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(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Alexco assets that could have a material effect on Alexco’s financial statements.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of Alexco’s internal control over financial reporting as at December 31, 2018, based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that Alexco’s internal control over financial reporting was effective as at December 31, 2018.

The effectiveness of Alexco’s internal control over financial reporting as at December 31, 2018 has been audited by PricewaterhouseCoopers LLP, Alexco’s independent registered public accounting firm.

There has been no change in Alexco’s internal control over financial reporting during Alexco’s fiscal year ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, Alexco’s internal control over financial reporting.

Risk Factors

The following are major risk factors management has identified which relate to Alexco’s business activities. Such risk factors, as well as risks not currently known to the Corporation or that the Corporation currently deems to be immaterial, could materially affect the Corporation's future business, financial condition, results of operations, earnings and prospects, and could cause events to differ materially from those described in forward-looking statements relating to the Corporation. Though the following are major risk factors identified by management, they do not comprise a definitive list of all risk factors related to the Corporation's business and operations. Readers are encouraged to review other specific risk factors which are discussed elsewhere in this MD&A, as well as in the Corporation’s consolidated financial statements (under the headings “Description of Business and Nature of Operations”, “Significant Accounting Policies” and “Financial Instruments” and elsewhere within that document) and in Alexco’s Annual Information Form for the year ended December 31, 2018.

Negative Cash Flow From Operating Activities

The Corporation has not yet consistently achieved positive operating cash flow, and there are no assurances that the Corporation will not experience negative cash flow from operations in the future. The Corporation has incurred net losses in the past and may incur losses in the future and will continue to incur losses until and unless it can derive sufficient revenues from its mineral projects. Such future losses could have an adverse effect on the market price of the Corporation's common shares, which could cause investors to lose part or all of their investment.

Forward-Looking Statements May Prove Inaccurate

Readers are cautioned not to place undue reliance on forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, of both a general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking statements. See "Preliminary Notes – Cautionary Statement Regarding Forward-Looking Statements".

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Dilution

The Corporation expects to require additional funds to finance its growth and development strategy. If the Corporation elects to raise additional funds by issuing additional equity securities, such financing may substantially dilute the interests of the Corporation's shareholders. The Corporation may also issue additional securities in the future pursuant to existing and new agreements in respect of its projects or other acquisitions and pursuant to existing securities of the Corporation.

Exploration, Evaluation and Development

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

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

Infrastructure

Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploitation and or development of the Corporation’s properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploitation and or development of the Corporation’s properties will be commenced or completed on a timely basis, if at all; that the resulting operations will achieve the anticipated production volume; or that the construction costs and ongoing operating costs associated with the exploitation and or development of the Corporation’s properties will not be higher than anticipated. In addition, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Corporation’s operations and profitability.

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

In making determinations about whether to advance any of its projects to development, the Corporation must rely upon estimated calculations as to the mineral resources and grades of mineralization on its properties. Until ore is actually mined and processed, mineral resources and grades of mineralization must be considered as estimates only. The determination of the Corporation’s estimated mineral resources by appropriately qualified persons requires significant judgements regarding the interpretation of complex geological and engineering data including the size, depth, shape and nature of the deposit and anticipated plans for mining, as well as estimates of future commodity prices, foreign exchange rates, capital requirements and production costs. These geological interpretations and statistical inferences used to develop the mineral resource estimates are imprecise and are drawn from drilling and sampling which may prove to be unreliable. Alexco cannot be certain that:

· reserve, resource or other mineralization estimates will be accurate; or

· mineralization can be mined or processed profitably.

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

Amendments to Silver Purchase Agreement with Wheaton

The March 29, 2017 Amended SPA with Wheaton, requires that to satisfy the completion test under the Amended SPA, the Corporation will need to recommence operations on the KHSD Property and operate the mine and mill at 400 tonnes per day on or before December 31, 2020. If the completion test is not satisfied by December 31, 2020, the outcome could materially adversely affect the Corporation as it would be required to pay a capacity related refund to Wheaton in the maximum amount of US$8,788,000, which can be further reduced by mill throughput exceeding 322 tonnes per day prior to December 31, 2020. The Corporation would need to raise additional capital to finance the capacity related refund and there is no guarantee that the Corporation will be able to raise such additional capital. In the event that the Corporation cannot raise such additional capital, the Corporation will default under the terms of the Amended SPA. The valuation model for the embedded derivative asset related to the SPA with Wheaton is based on a number of assumptions. The value of the derivative asset as at December 31, 2018 is $9,671,000. If, for example, the silver price were to increase to US$25.00 per ounce, and all other assumptions remained the same, the approximate derivative asset value would be negative $1,379,000 and could be classified as a derivative liability.

Keno Hill Silver District

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

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Mining Operations

The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into mineral deposits with significant value. Decisions by the Corporation to proceed with the construction and development of mines, including Bellekeno, are based on development plans which include estimates for metal production and capital and operating costs. Until completely mined and processed, no assurance can be given that such estimates will be achieved. Failure to achieve such production and capital and operating cost estimates or material increases in costs could have an adverse impact on the Corporation’s future cash flows, profitability, results of operations and financial condition. The Corporation’s actual production and capital and operating costs may vary from estimates for a variety of reasons, including: actual resources mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors, such as the need for sequential development of resource bodies and the processing of new or different resource grades; revisions to mine plans; risks and hazards associated with mining; natural phenomena, such as inclement weather conditions, water availability, floods, fire, rock falls and earthquakes, unusual or unexpected ground conditions, geological formation pressures, equipment failure and failure of retaining dams around tailings disposal areas which may result in, among other adverse effects, environmental pollution and consequent liability; and unexpected labour shortages or strikes. Costs of production may also be affected by a variety of factors, including changing waste ratios, metallurgical recoveries, labour costs, commodity costs, general inflationary pressures and currency rates. In addition, the risks arising from these factors are further increased while any such mine is progressing through the ramp-up phase of its operations and has not yet established a consistent production track record. No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.

Furthermore, mining operations at the Bellekeno mine project were suspended as of early September 2013 as a result of sharp and significant declines in precious metals prices during the second quarter of 2013. Re-start of mining operations is dependent on a number of factors, including sustained improvements in silver markets, the effectiveness of cost structure reduction measures, the maintenance of current metal prices and the fluctuation of foreign exchange rates and the uncertainties around the results of these factors are significant. A re-start of underground production operations will require additional capital investment in excess of the capital resources currently on hand. There can be no assurance of a re-start of mining operations or continued access to financing in the future, and an inability to generate or secure such funding may require the Corporation to substantially curtail and/or defer its planned exploration and development activities.

Employee Recruitment and Retention

Recruitment and retention of skilled and experienced employees is a challenge facing the mining sector as a whole. During the late 1990s and early 2000s, with unprecedented growth in the technology sector and an extended cyclical downturn in the mining sector, the number of new workers entering the mining sector was depressed and significant number of existing workers departed, leading to a so-called “generational gap” within the industry. Since the mid-2000s, this factor was exacerbated by competitive pressures as the mining sector experienced an extended cyclical upturn. Any re-start of mining operations will necessitate the re-hiring of mine and mill personnel. It may be difficult for Alexco to find and hire qualified people in the mining industry who are situated in the Yukon, or to obtain all of the necessary services or expertise in Yukon or to conduct operations on Alexco’s projects at reasonable rates. If qualified people and services or expertise cannot be obtained in the Yukon, we may need to seek and obtain those services from people located outside of this area, which may require work permits and compliance with applicable laws and could result in delays and higher costs.

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Dependence on Management

The success of the operations and activities of the Corporation is dependent to a significant extent on the efforts and abilities of its management team. The Corporation does not maintain key employee insurance on any of its employees. The Corporation depends on key personnel and cannot provide assurance that it will be able to retain such personnel. Failure to retain such key personnel could have a material adverse effect on the Corporation’s business and financial condition.

Permitting and Environmental Risks and Other Regulatory Requirements

The current or future operations of the Corporation, including development activities, commencement of production on its properties and activities associated with the Corporation's mine reclamation and remediation business, require permits, approvals, authorizations, or licenses from various federal, territorial and other governmental authorities, and such operations are and will be governed by laws, regulations and agreements governing prospecting, development, mining, production, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities and in mine reclamation and remediation activities generally experience increased costs and delays as a result of the need to comply with the applicable laws, regulations and permits. There can be no assurance that all permits, permit modifications, approvals, authorizations, licenses, and license modifications which the Corporation may require for the conduct of its operations will be obtainable on reasonable terms or that such laws and regulations would not have an adverse effect on any project which the Corporation might undertake. Specifically, the Corporation requires an amendment to its Quartz Mining License and a renewal of its Water Use License in order for it to be fully permitted for the ore production and processing from the Bermingham deposit and the Flame & Moth, Lucky Queen, Bellekeno and Onek deposits. Additionally, subsequent to completion of the environment assessment of the Corporation’s Existing State of Mine Reclamation Plan at Keno Hill by the Yukon Environmental and Social-Economic Assessment Board, the Corporation will need an amendment to its WUL by the Yukon Water Board to authorize the activities necessary to effect closure of the site. There can be no guarantee that the Corporation will receive the amendments and the renewal. Additionally, delays in receiving any requisite license amendments and renewals could adversely affect the Corporation’s profitability. The Corporation had originally expected to receive the requisite amendments and renewal by Q1 2019. However subsequent delays in the permitting process have extended the time expected for award of the final licenses to the third quarter of 2019.

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

Amendments to current laws, regulations and permits governing operations and activities of mining companies and mine reclamation and remediation activities could have a material adverse impact on the Corporation. As well, policy changes and political pressures within and on federal, territorial and First Nation governments having jurisdiction over or dealings with Alexco could change the implementation and interpretation of such laws, regulations and permits, also having a material adverse impact on Alexco. Such impacts could result in one or more of increases in capital expenditures or production costs, reductions in levels of production at producing properties or abandonment or delays in the development of new mining properties.

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Surety Bonding Risks

Alexco secures its obligations for reclamation and closure costs with surety bonds provided by leading global insurance companies in favour of regulatory authorities in the Yukon. These surety bonds include the right of the surety bond provider to terminate the relationship with Alexco on providing notice of up to 90 days. The surety bond provider would, however, remain liable to the regulatory authorities for all bonded obligations existing prior to the termination of the bond in the event Alexco failed to deliver alternative security satisfactory to the regulator. Alexco may require substantial additional capital to accomplish its exploration and development plans and fund strategic growth and there can be no assurance that financing will be available on terms acceptable to Alexco, or at all. Alexco may require substantial additional financing to advance the Keno Hill Silver District to production. These financing requirements could adversely affect Alexco’s ability to access the capital markets in the future. Failure to obtain sufficient financing, or financing on terms acceptable to Alexco, may result in a delay or indefinite postponement of exploration, development or production at its properties. Additional financing may not be available when needed and the terms of any agreement could impose restrictions on the operation of our business. Failure to raise financing when needed could have a material adverse effect on our business, financial condition, results of operations and prospects.

Environmental Services

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

Three of AEG’s customers accounted for 24.0%, 20.2% and 19.0%, respectively, of environmental services revenues in the 2018 fiscal year. The loss of, or a significant reduction in the volume of business conducted with, either of these customers could have a significant detrimental effect on AEG environmental services business and the Corporation.

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

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

AEG is dependent on the professional skill sets of its employees, some of whom would be difficult to replace. The loss of any such employees could significantly affect AEG’s ability to service existing clients, its profitability and its ability to grow its business.

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

The potential profitability of mineral properties is dependent upon many factors beyond the Corporation’s control. For instance, world prices of and markets for gold, silver, lead and zinc are unpredictable, highly volatile, potentially subject to governmental fixing, pegging and/or controls and respond to changes in domestic, international, political, social and economic environments – including international trade restrictions. During the year ended December 31, 2018, the prices of silver, lead and zinc have steadily declined. Another factor is that rates of recovery may vary from the rate experienced in tests and a reduction in the recovery rate will adversely affect profitability and, possibly, the economic viability of a property. Profitability also depends on the costs of operations, including costs of labour, materials, equipment, electricity, environmental compliance or other production inputs. Such costs will fluctuate in ways the Corporation cannot predict and are beyond the Corporation’s control, and such fluctuations will impact on profitability and may eliminate profitability altogether. Mine site care and maintenance costs during 2018 totaled $2,603,000 compared with $1,888,000 for 2017. The increase in costs was mainly due to site-based expenditures and mill maintenance and refurbishment initiatives in 2018. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for development and other costs have become increasingly difficult, if not impossible, to project. These changes and events may materially affect the financial performance of the Corporation.

First Nation Rights and Title

The nature and extent of First Nation rights and title remains the subject of active debate, claims and litigation in Canada, including in the Yukon and including with respect to intergovernmental relations between First Nation authorities and federal, provincial and territorial authorities. There can be no guarantee that such claims will not cause permitting delays, unexpected interruptions or additional costs for Alexco’s projects. These risks may have increased after the Supreme Court of Canada decision of June 26, 2014 in Tsilhqot'in Nation v. British Columbia.

Title to Mineral Properties

The acquisition of title to mineral properties is a complicated and uncertain process. The properties may be subject to prior unregistered agreements of transfer, unregistered liens, or land claims, and title may be affected by undetected defects. Although the Corporation has made efforts to ensure that legal title to its properties is properly recorded in the name of the Corporation, there can be no assurance that such title will ultimately be secured. Title insurance generally is not available for mining claims in Canada. As a result, the Corporation may be constrained in its ability to operate its mineral properties or unable to enforce its rights with respect to its mineral properties. An impairment to or defect in the Corporation’s title to its mineral properties would adversely affect the Corporation’ business and financial condition.

Capitalization and Commercial Viability

Alexco will require additional funds to further explore, develop and mine its properties. Alexco has limited financial resources, and there is no assurance that additional funding will be available to Alexco to carry out the completion of all proposed activities, for additional exploration or for the substantial capital that is typically required in order to place a property into commercial production. Although Alexco has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that Alexco will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in the delay or indefinite postponement of further exploration and development of its properties.

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

The unprecedented events in global financial markets since 2008 have had a profound impact on the global economy and led to increased levels of volatility. Many industries, including the mining industry, are impacted by these market conditions. Some of the impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign currency exchange and precious metal markets, and a lack of market liquidity. If the current turmoil and volatility levels continue they may adversely affect Alexco's growth and profitability. Specifically:

• a global credit/liquidity or foreign currency exchange crisis could impact the cost and availability of financing and Alexco’s overall liquidity;

• the volatility of silver and other commodity prices would impact Alexco’s revenues, profits, losses and cash flow;

• volatile energy prices, commodity and consumables prices and currency exchange rates would impact Alexco’s operating costs; and

• the devaluation and volatility of global stock markets could impact the valuation of Alexco’s equity and other securities.

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

Operating Hazards and Risks

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

Adverse weather conditions could also disrupt the Corporation’s environmental services business and/or reduce demand for the Corporation’s services.

Competition

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

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

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

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

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

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Summary of Resources

The following table sets forth the estimated resources for the Corporation’s mineral properties:

Category1,2,9	Property	Tonnes		Ag (g/t)		Au (g/t)		Pb (%)			Zn (%)			Contained Ag (oz)
Indicated	Bellekeno Deposit3&4		262,000		585		n/a		3.5	%		5.3	%		4,927,000
	Lucky Queen Deposit3&5		132,300		1,167		0.2		2.4	%		1.6	%		4,964,000
	Flame & Moth Deposit3&5		1,679,000		498		0.4		1.9	%		5.3	%		26,883,000
	Onek3&5		700,200		191		0.6		1.2	%		11.9	%		4,300,000
	Bermingham3&6		1,651,500		628		0.1		1.6	%		1.3	%		33,350,300
	Total Indicated – Sub-Surface		4,425,000		523		0.3		1.8	%		4.7	%		74,424,300
	Elsa Tailings7		2,490,000		119		0.1		1.0	%		0.7	%		9,527,000
	Total Indicated – All Deposits		6,915,000		378		0.2		1.5	%		3.3	%		83,952,300
Inferred	Bellekeno Deposit3&4		243,000		428		n/a		4.1	%		5.1	%		3,344,000
	Lucky Queen Deposit3&5		257,900		473		0.1		1.0	%		0.8	%		3,922,000
	Flame & Moth Deposit3&5		365,200		356		0.3		0.5	%		4.3	%		4,180,000
	Onek3&5		285,100		118		0.4		1.2	%		8.3	%		1,082,000
	Bermingham3&6		616,550		526		0.1		1.1	%		0.9	%		10,438,700
	Total Inferred		1,767,750		404		0.2		1.4	%		3.4	%		22,966,700
Historical	Silver King8
Resources	- Proven, probable and indicated		99,000		1,354		n/a		1.6	%		0.1	%		4,310,000
	- Inferred		22,500		1,456		n/a		0.1	%		n/a			1,057,000

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. 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.

3. The Keno Hill Silver District is comprised of five deposits: Bellekeno, Lucky Queen and Flame & Moth, Onek and Bermingham, of which Bellekeno, Lucky Queen, Flame & Moth and Bermingham are incorporated into the current mine plan outlined in the technical report filed on SEDAR dated March 29, 2017 with an effective date of January 3, 2017, as amended on September 14, 2018, entitled “Preliminary Economic Assessment of the Keno Hill Silver District Project, Yukon, Canada” (the “PEA”). The mineral resource estimates for the project are supported by disclosure in the news release dated March 29, 2017 entitled “Alexco and Silver Wheaton Amend Silver Purchase Agreement and Alexco Announces Positive Preliminary Economic Assessment for Expanded Silver Production at Keno Hill” and the PEA. The mineral resource estimate for Bermingham has been updated by disclosure in note 6 below.

4. The mineral resource estimate for the Bellekeno deposit is based on a geologic resource estimate having an effective date of September 30, 2012. The Bellekeno indicated mineral resources are as at September 30, 2013, and reflect the geologic resource less estimated subsequent depletion from mine production.

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

6. The resource estimate for the Bermingham deposit has an effective date of September 17, 2018 and is supported by disclosure in the news release dated September 20, 2018 entitled “Alexco Updates Bermingham Mineral Resource”.

7. The mineral resource estimate for the Elsa Tailings has an effective date of April 22, 2010, and is supported by the technical report dated June 16, 2010 entitled “Mineral Resource Estimation, Elsa Tailings Project, Yukon, Canada”.

8. Historical resources for Silver King were estimated by UKHM, as documented in an internal report entitled “Mineral Resources and Mineable Ore Reserves” dated March 9, 1997. The historical 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. 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.

9. The disclosure regarding the summary of estimated mineral resources for Alexco’s mineral properties within the Keno Hill District has been reviewed and approved by Neil Chambers, P.Eng., Mine Superintendent and a Qualified Person as defined by NI 43-101.

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Cautionary Statement Regarding Forward-Looking Statements

This MD&A contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws (together, “forward-looking statements”) concerning the Corporation's business plans, including but not limited to anticipated results and developments in the Corporation’s operations in future periods, planned exploration and development of its mineral properties, plans related to its business and other matters that may occur in the future, made as of the date of this MD&A.

Forward-looking statements may include, but are not limited to, statements with respect to future remediation and reclamation activities, future mineral exploration, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, future mine construction and development activities, future mine operation and production, the timing of activities, the requirements for additional capital and sources and uses of funds. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “estimates”, “intends”, “strategy”, “goals”, “objectives” or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be “forward-looking statements”.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements. Such factors include, but are not limited to, risks related to actual results and timing of exploration and development activities; actual results and timing of mining activities; actual results and timing of environmental services operations; actual results and timing of remediation and reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of silver, gold, lead, zinc and other commodities; possible variations in mineable resources, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; First Nation rights and title; continued capitalization and commercial viability; global economic conditions; competition; and delays in obtaining governmental approvals or financing or in the completion of development activities. Furthermore, forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Corporation or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to those referred to in this MD&A under the heading “Risk Factors” and elsewhere.

Forward-looking statements are based on certain assumptions that management believes are reasonable at the time they are made. In making the forward-looking statements included in this AIF, the Corporation has applied several material assumptions, including, but not limited to, the assumption that: (1) additional financing needed for the capacity related refund under the silver purchase agreement with Wheaton will be available on reasonable terms; (2) additional financing needed for further exploration and development work on the Corporation's properties will be available on reasonable terms; (3) the proposed development of its mineral projects will be viable operationally and economically and proceed as planned; (4) market fundamentals will result in sustained silver, gold, lead and zinc demand and prices, and such prices will not be materially lower than those estimated by management in preparing the annual financial statements for the year ended December 31, 2018; (5) market fundamentals will result in sustained silver, gold, lead and zinc demand and prices, and such prices will be materially consistent with or more favourable than those anticipated in the PEA (as defined under "Description of the Business – KHSD Property"); (6) the actual nature, size and grade of its mineral resources are materially consistent with the resource estimates reported in the supporting technical reports; (7) labor and other industry services will be available to the Corporation at prices consistent with internal estimates; (8) the continuances of existing and, in certain circumstances, proposed tax and royalty regimes; and (9) that other parties will continue to meet and satisfy their contractual obligations to the Corporation. Statements concerning mineral reserve and mineral resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered if the property is developed. Other material factors and assumptions are discussed throughout this MD&A and, in particular, under both “Critical Accounting Estimates” and “Risk Factors”.

- 34 -

The Corporation's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and should not be relied on as representing the Corporation's views on any subsequent date. While the Corporation anticipates that subsequent events may cause its views to change, the Corporation specifically disclaims any intention or any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change, except as required by applicable law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

Cautionary Note to U.S. Investors – Information Concerning Preparation of Resource Estimates

This MD&A has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in the United States Securities and Exchange Commission’s (“SEC”) Industry Guide 7 under the United States Securities Act of 1933, as amended. Under SEC Industry Guide 7 standards, mineralization cannot be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally extracted at the time the reserve determination is made. As applied under SEC Industry Guide 7, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves, and all necessary permits and government authorizations must be filed with the appropriate governmental authority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information concerning mineral deposits contained in this MD&A may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

- 35 -

EX-99.4

EXHIBIT 99.4

CERTIFICATION

I, Clynton R. Nauman, certify that:

1. I have reviewed this annual report on Form 40-F of Alexco Resource Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date:   March 13, 2019	By:	/s/ Clynton R. Nauman
		Clynton R. Nauman
		Chief Executive Officer

EX-99.5

EXHIBIT 99.5

CERTIFICATION

I, Michael Clark, certify that:

1. I have reviewed this annual report on Form 40-F of Alexco Resource Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date:    March 13, 2019	By:	/s/ Michael Clark
		Michael Clark
		Chief Financial Officer

EX-99.6

EXHIBIT 99.6

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Alexco Resource Corp. (the “Corporation”) on Form 40-F for the year ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Clynton R. Nauman, Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

March 13, 2019	/s/ Clynton R. Nauman
	Clynton R. Nauman
	Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Alexco Resource Corp. and will be retained by Alexco Resource Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.7

EXHIBIT 99.7

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Alexco Resource Corp. (the “Corporation”) on Form 40-F for the year ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Clark, Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

March 13, 2019	/s/ Michael Clark
	Michael Clark
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Alexco Resource Corp. and will be retained by Alexco Resource Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.8

Exhibit 99.8

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in this Annual Report on Form 40-F for the year ended December 31, 2018 of Alexco Resource Corp. of our report dated March 13, 2019, relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in the Exhibit incorporated by reference in this Annual Report.

We also consent to the incorporation by reference in the Registration Statement on Form F-10/A (No. 333-227024) of Alexco Resource Corp. of our report dated March 13, 2019 referred to above.

We also consent to reference to us under the heading “Interests of Experts,” which appears in the Annual Information Form included in the Exhibit incorporated by reference in this Annual Report on Form 40-F, which is incorporated by reference in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

(Signed) “PricewaterhouseCoopers LLP”

Chartered Professional Accountants

Vancouver, Canada

March 13, 2019

EX-99.9

Exhibit 99.9

SRK Consulting (Canada) Inc.

March 13, 2019

TO: Alexco Resource Corp.

British Columbia Securities Commission

Ontario Securities Commission

Alberta Securities Commission

Saskatchewan Financial Services Commission

Manitoba Securities Commission

United States Securities and Exchange Commission

Toronto Stock Exchange

Re: Alexco Resource Corp. (the "Company")

Consent of Expert

Reference is made to the technical report entitled "Preliminary Economic Assessment of the Keno Hill Silver District Project, Yukon, Canada" dated March 29, 2017 with an effective date of January 3, 2017 and amended on September 14, 2018 (the "Report").

In connection with the Company's annual information form dated March 13, 2019 for the year ended December 31, 2018 (the "AIF"), I, Gilles Arseneau, Ph.D., P. Geo., on behalf of myself and SRK Consulting (Canada) Inc., consent to the use of my name and SRK Consulting (Canada) Inc.'s name and references to the Report, or portions thereof, in the AIF and to the inclusion or incorporation by reference of information derived from the Report in the AIF(collectively, the "AIF Information").

I also consent to the use of my name and the AIF Information in the Company’s Form 40-F and Form F-10 (File No. 333-227024) through the incorporation by reference of the AIF.

I confirm that I have read the AIF and have no reason to believe that there are any misrepresentations in the information contained therein that are derived from the Report or that are within my knowledge as a result of the services performed by me in connection with the Report.

Yours truly,

/s/ Gilles Arseneau

Gilles Arseneau, Ph.D., P. Geo.

EX-99.10

Exhibit 99.10

International Metallurgical and Environmental Inc.

March 13, 2019

TO: Alexco Resource Corp.

British Columbia Securities Commission

Ontario Securities Commission

Alberta Securities Commission

Saskatchewan Financial Services Commission

Manitoba Securities Commission

United States Securities and Exchange Commission

Toronto Stock Exchange

Re: Alexco Resource Corp. (the "Company")

Consent of Expert

Reference is made to the technical report entitled "Preliminary Economic Assessment of the Keno Hill Silver District Project, Yukon, Canada" dated March 29, 2017 with an effective date of January 3, 2017 and amended on September 14, 2018 (the "Report").

In connection with the Company's annual information form dated March 13, 2019 for the year ended December 31, 2018 (the "AIF"), I, Jeff Austin, P.Eng., on behalf of myself and International Metallurgical and Environmental Inc., consent to the use of my name and International Metallurgical and Environmental Inc.'s name and references to the Report, or portions thereof, in the AIF and to the inclusion or incorporation by reference of information derived from the Report in the AIF (collectively, the "AIF Information").

I also consent to the use of my name and the AIF Information in the Company’s Form 40-F and Form F-10 (File No. 333-227024) through the incorporation by reference of the AIF.

I confirm that I have read the AIF and have no reason to believe that there are any misrepresentations in the information contained therein that are derived from the Report or that are within my knowledge as a result of the services performed by me in connection with the Report.

Yours truly,

/s/ Jeff Austin

Jeff Austin, P.Eng.

EX-99.11

Exhibit 99.11

Roscoe Postle Associates Inc.

March 13, 2019

TO: Alexco Resource Corp.

British Columbia Securities Commission

Ontario Securities Commission

Alberta Securities Commission

Saskatchewan Financial Services Commission

Manitoba Securities Commission

United States Securities and Exchange Commission

Toronto Stock Exchange

Re: Alexco Resource Corp. (the "Company")

Consent of Expert

Reference is made to the technical report entitled "Preliminary Economic Assessment of the Keno Hill Silver District Project, Yukon, Canada" dated March 29, 2017 with an effective date of January 3, 2017 and amended on September 14, 2018 (the "Report").

In connection with the Company's annual information form dated March 13, 2019 for the year ended December 31, 2018 (the "AIF"), I, Torben Jensen, P.Eng., on behalf of myself and Roscoe Postle Associates Inc., consent to the use of my name and Roscoe Postle Associates Inc.'s name and references to the Report, or portions thereof, in the AIF and to the inclusion or incorporation by reference of information derived from the Report in the AIF (collectively, the "AIF Information").

I also consent to the use of my name and the AIF Information in the Company’s Form 40-F and Form F-10 (File No. 333-227024) through the incorporation by reference of the AIF.

I confirm that I have read the AIF and have no reason to believe that there are any misrepresentations in the information contained therein that are derived from the Report or that are within my knowledge as a result of the services performed by me in connection with the Report.

Yours truly,

/s/ Torben Jensen

Torben Jensen, P.Eng.

EX-99.12

Exhibit 99.12

Roscoe Postle Associates Inc.

March 13, 2019

TO: Alexco Resource Corp.

British Columbia Securities Commission

Ontario Securities Commission

Alberta Securities Commission

Saskatchewan Financial Services Commission

Manitoba Securities Commission

United States Securities and Exchange Commission

Toronto Stock Exchange

Re: Alexco Resource Corp. (the "Company")

Consent of Expert

Reference is made to the technical report entitled "Preliminary Economic Assessment of the Keno Hill Silver District Project, Yukon, Canada" dated March 29, 2017 with an effective date of January 3, 2017 and amended on September 14, 2018 (the "Report").

In connection with the Company's annual information form dated March 13, 2019 for the year ended December 31, 2018 (the "AIF"), I, R. Dennis Bergen, P.Eng., on behalf of myself and Roscoe Postle Associates Inc., consent to the use of my name and Roscoe Postle Associates Inc.'s name and references to the Report, or portions thereof, in the AIF and to the inclusion or incorporation by reference of information derived from the Report in the AIF (collectively, the "AIF Information").

I also consent to the use of my name and the AIF Information in the Company’s Form 40-F and Form F-10 (File No. 333-227024) through the incorporation by reference of the AIF.

I confirm that I have read the AIF and have no reason to believe that there are any misrepresentations in the information contained therein that are derived from the Report or that are within my knowledge as a result of the services performed by me in connection with the Report.

Yours truly,

/s/ R. Dennis Bergen

R. Dennis Bergen, P.Eng.

EX-99.13

Exhibit 99.13

Geostrat Consulting Inc.

March 13, 2019

TO: Alexco Resource Corp.

British Columbia Securities Commission

Ontario Securities Commission

Alberta Securities Commission

Saskatchewan Financial Services Commission

Manitoba Securities Commission

United States Securities and Exchange Commission

Toronto Stock Exchange

Re: Alexco Resource Corp. (the "Company")

Consent of Expert

Reference is made to the technical report entitled "Preliminary Economic Assessment of the Keno Hill Silver District Project, Yukon, Canada" dated March 29, 2017 with an effective date of January 3, 2017 and amended on September 14, 2018 (the "Report").

In connection with the Company's annual information form dated March 13, 2019 for the year ended December 31, 2018 (the "AIF"), I, David Farrow, Pr.Sci.Nat, P.Geo., on behalf of myself and Geostrat Consulting Inc., consent to the use of my name and Geostrat Consulting Inc.'s name and references to the Report, or portions thereof, in the AIF and to the inclusion or incorporation by reference of information derived from the Report in the AIF (collectively, the "AIF Information").

I also consent to the use of my name and the AIF Information in the Company’s Form 40-F and Form F-10 (File No. 333-227024) through the incorporation by reference of the AIF.

I confirm that I have read the AIF and have no reason to believe that there are any misrepresentations in the information contained therein that are derived from the Report or that are within my knowledge as a result of the services performed by me in connection with the Report.

Yours truly,

/s/ David Farrow

David Farrow, Pr.Sci.Nat, P.Geo.

EX-99.14

Exhibit 99.14

CONSENT

TO: United States Securities and Exchange Commission
Alexco Resource Corp.
British Columbia Securities Commission
Alberta Securities Commission

Ontario Securities Commission

Saskatchewan Financial Services Commission

Manitoba Securities Commission

United States Securities and Exchange Commission

Toronto Stock Exchange

Dear Sirs/Mesdames:

RE: Technical Information in Annual Information Form

Reference is made to the annual information form of the Company for the year ended December 31, 2018 (the “AIF”).

I consent to being named as a qualified person in the AIF and authorize the use of the information represented in the AIF as having been prepared by me or under my supervision. I confirm that I have read the AIF and have no reason to believe that there are any misrepresentations in the information contained therein that are: (i) derived from the information represented in the AIF as having been prepared by me or under my supervision; or (ii) within my knowledge as a result of the services performed by me in connection with such information.

I consent to the use of my name and the incorporation by reference in the Company’s Form 40-F and Form F-10 (File No. 333-227024) of the AIF.

Dated this __13__ day of March, 2019.

Yours truly,

/s/ Alan McOnie

Alan McOnie, FAusIMM

EX-99.15

Exhibit 99.15

CONSENT

TO: United States Securities and Exchange Commission
Alexco Resource Corp.
British Columbia Securities Commission
Alberta Securities Commission

Ontario Securities Commission

Saskatchewan Financial Services Commission

Manitoba Securities Commission

United States Securities and Exchange Commission

Toronto Stock Exchange

Dear Sirs/Mesdames:

RE: Technical Information in Annual Information Form

Reference is made to the annual information form of the Company for the year ended December 31, 2018 (the “AIF”).

I consent to being named as a qualified person in the AIF and authorize the use of the information represented in the AIF as having been prepared by me or under my supervision. I confirm that I have read the AIF and have no reason to believe that there are any misrepresentations in the information contained therein that are: (i) derived from the information represented in the AIF as having been prepared by me or under my supervision; or (ii) within my knowledge as a result of the services performed by me in connection with such information.

I consent to the use of my name and the incorporation by reference in the Company’s Form 40-F and Form F-10 (File No. 333-227024) of the AIF.

Dated this 13^th day of March, 2019.

Yours truly,

/s/ Neil Chambers

Neil Chambers, P.Eng.

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Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	ALEXCO RESOURCE CORP
Entity Central Index Key	0001364128
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding	107,998,902
Entity Emerging Growth Company	false

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CONSOLIDATED BALANCE SHEETS - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 8,576	$ 17,906	$ 20,382
Accounts and other receivables	6,811	2,086	2,938
Restricted cash and deposits	0	499	0
Investments	351	728	1,691
Inventories	818	646	151
Prepaid expenses and other	878	538	401
Current assets	17,434	22,403	25,563
Non-Current Assets
Restricted cash and deposits	2,725	6,593	6,948
Investments	409	1,027	0
Inventories	4,699	4,743	5,110
Property, plant and equipment	15,233	16,256	16,250
Mineral properties	82,226	64,587	55,620
Embedded derivative asset	9,671	6,600	0
Intangible assets and other	621	115	195
Total Assets	133,018	122,324	109,686
Current Liabilities
Accounts payable and accrued liabilities	7,210	3,601	1,832
Environmental services contract loss provision	36	126	277
Deferred revenue	109	196	337
Flow-through share premium pending renunciation	649	276	0
Current Liabilities	8,004	4,199	2,446
Non-Current Liabilities
Decommissioning and rehabilitation provision	5,286	5,055	4,955
Deferred income tax liabilities	3,098	614	0
Total Liabilities	16,388	9,868	7,401
Shareholders' Equity	116,630	112,456	102,285
Total Liabilities and Shareholders' Equity	$ 133,018	$ 122,324	$ 109,686

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CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS - CAD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2018	Dec. 31, 2017
Revenues
Environmental Services Revenue		$ 19,880	$ 10,732
Cost of Sales
Environmental Services Costs		13,828	6,732
Total Gross Profit		6,052	4,000
General and administrative expenses		12,170	10,942
Mine site care and maintenance		2,603	1,888
Operating expense		14,773	12,830
Operating Loss		(8,721)	(8,830)
Other Income (Expenses)
Other income and expenses		(772)	1,148
Gain (loss) on investments		(572)	1,341
Gain on embedded derivative		3,071	0
Loss Before Taxes	[1]	(6,994)	(6,341)
Income Tax Provision
Current		3	0
Deferred		1,504	1,472
Net Loss		(8,501)	(7,813)
Other Comprehensive Income (Loss)
Gain (loss) on FVTOCI investments, net of tax		(798)	253
Items that may be reclassified subsequently to net loss
Cumulative translation adjustments, net of tax		213	(564)
Recycle of loss on previously recorded available-for-sale to income, net of tax		0	(356)
Other Comprehensive Loss		(585)	(667)
Total Comprehensive Loss		$ (9,086)	$ (8,480)
Basic and diluted loss per common share		$ (0.08)	$ (0.09)
Weighted average number of common shares outstanding		105,034,345	98,486,437

[1] Represents consolidated loss before taxes.

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CONSOLIDATED STATEMENTS OF CASH FLOWS - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash Flows used in Operating Activities
Net loss	$ (8,501)	$ (7,813)
Items not affecting cash from operations:
Environmental services contract loss provision	(90)	(152)
Depreciation of property, plant and equipment	1,601	1,723
Amortization of intangible assets	51	76
Share-based compensation expense	2,580	2,359
Finance costs, foreign exchange and other	(2,799)	(1,418)
Realized gain on disposition of investments	0	(1,204)
Unrealized loss (gain) on investments	573	(632)
Advisory fees paid in shares	0	500
Deferred income tax provision	1,504	1,472
Changes in non-cash working capital balances related to operations
(Increase) decrease in accounts and other receivables	(4,107)	849
Increase in inventories	(26)	(129)
(Increase) decrease in prepaid expenses and other current assets	650	(140)
Decrease in deferred revenue	(88)	(142)
Increase in accounts payable and accrued liabilities	3,162	597
Cash flows used in operating activities	(5,490)	(4,054)
Cash Flows (used in) from Investing Activities
Expenditures on mineral properties	(17,115)	(7,155)
Purchase or disposal of property, plant and equipment	(486)	(1,982)
Decrease (Increase) in restricted cash	4,383	(195)
Acquisition of subsidiary	(536)	0
Purchase (disposal) of investments	(407)	2,003
Cash flows from (used in) investing activities	(14,161)	(7,329)
Cash Flows from (used in) Financing Activities
Proceeds from issuance of shares	9,042	9,043
Issuance costs	(966)	(716)
Proceeds from exercise of warrants	2,027	418
Proceeds from exercise of stock options	218	162
Cash flows from (used in) financing activities	10,321	8,907
Decrease in Cash and Cash Equivalents	(9,330)	(2,476)
Cash and Cash Equivalents - Beginning of Year	17,906	20,382
Cash and Cash Equivalents - End of Year	$ 8,576	$ 17,906

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - CAD ($) $ in Thousands	Total	Ordinary shares [member]	Warrants [Member]	Share options and RSU [Member]	Contributed surplus [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]
Balance at Dec. 31, 2016	$ 102,285	$ 186,952	$ 2,134	$ 7,216	$ 12,880	$ (105,483)	$ (464)
Balance (in shares) at Dec. 31, 2016		92,950,194
Statement of equity [Line Items]
Net loss	(7,813)	$ 0	0	0	0	(7,813)	0
Other comprehensive income (loss)	(667)	0	0	0	0	0	(667)
Share-based compensation expense recognized	2,728	0	0	2,728	0	0	0
Flow-through shares equity offering, net of issuance costs and tax	7,294	$ 7,222	72	0	0	0	0
Flow-through shares equity offering, net of issuance costs and tax (in shares)		4,205,820
Shares issued - advisory fees	500	$ 500	0	0	0	0	0
Shares issued - advisory fees (in shares)		250,000
Shares issued - consideration for Wheaton	6,600	$ 6,600	0	0	0	0	0
Shares issued - consideration for Wheaton (in shares)		3,000,000
Exercise of share options	162	$ 240	0	(78)	0	0	0
Exercise of share options (in shares)		126,340
Exercise of warrants	417	$ 531	(114)	0	0	0	0
Exercise of warrants (in shares)		458,878
Share options forfeited or expired	0	$ 0	0	(2,863)	2,863	0	0
Release of RSU settlement shares	0	$ 343	0	(343)	0	0	0
Release of RSU settlement shares (in shares)		289,618
Balance at Dec. 31, 2017	112,456	$ 202,389	2,092	6,660	15,743	(113,297)	(1,131)
Balance (in shares) at Dec. 31, 2017		101,280,850
Statement of equity [Line Items]
Net loss	(8,501)	$ 0	0	0	0	(8,501)	0
Other comprehensive income (loss)	(585)	0	0	0	0	0	(585)
Share-based compensation expense recognized	2,947	0	0	2,947	0	0	0
Flow-through shares equity offering, net of issuance costs and tax	6,701	$ 6,701	0	0	0	0	0
Flow-through shares equity offering, net of issuance costs and tax (in shares)		4,703,000
Credit Facility fee - warrants	938	$ 0	938	0	0	0	0
Acquistion of Contango Strategies	$ 416	$ 416	0	0	0	0	0
Acquistion of Contango Strategies (in shares)		237,999
Shares issued - consideration for Wheaton (in shares)	10,000
Exercise of share options	$ 217	$ 323	0	(106)	0	0	0
Exercise of share options (in shares)		281,666
Exercise of warrants	2,027	$ 2,563	(536)	0	0	0	0
Exercise of warrants (in shares)		1,167,351
Shares issued on Option Agreement	14	$ 14
Shares issued on Option Agreement (in shares)		10,000
Share options forfeited or expired	0	$ 0	0	(3,163)	3,163	0	0
Release of RSU settlement shares	0	$ 497	0	(497)	0	0	0
Release of RSU settlement shares (in shares)		318,036
Balance at Dec. 31, 2018	$ 116,630	$ 212,903	$ 2,494	$ 5,841	$ 18,906	$ (121,798)	$ (1,716)
Balance (in shares) at Dec. 31, 2018		107,998,902

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Description of Business and Nature of Operations

12 Months Ended

Dec. 31, 2018

Description of Business and Nature of Operations [Abstract]

Description of Business and Nature of Operations [Text Block]

1. Description of Business and Nature of Operations

Alexco Resource Corp. (“Alexco” or the “Corporation”) was incorporated under the Business Corporations Act (Yukon) on December 3, 2004 and commenced operations on March 15, 2005. Effective December 28, 2007, it was continued under the Business Corporations Act (British Columbia). The Corporation operates two principal businesses: a mining business, comprising mineral exploration and mine development in Yukon Territory; and through Alexco Environmental Group (“AEG”), an environmental services business, providing consulting, remediation solutions and project management services in respect of environmental permitting and compliance and site remediation, primarily in Canada and the United States.

The Corporation is in the process of exploring and developing its mineral properties. The recoverability of the amounts shown for mineral properties is dependent upon the existence of economically recoverable mineral resources or reserves, successful permitting, the ability of the Corporation to obtain necessary financing to complete exploration and development, and upon future profitable production or proceeds from disposition of each mineral property. The carrying amounts of mineral properties are based on a disposal of part of a mineral property interest, costs incurred to date, adjusted for depletion and impairments and do not necessarily represent present or future values.

Alexco is a public company which is listed on the Toronto Stock Exchange (under the symbol AXR) and the NYSE American Stock Exchange (under the symbol AXU). The Corporation’s corporate head office is located at Suite 1225, Two Bentall Centre, 555 Burrard Street, Box 216, Vancouver, BC, Canada, V7X 1M9.

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Basis of Preparation and Statement of Compliance

12 Months Ended

Dec. 31, 2018

Basis of Preparation and Statement of Compliance [Abstract]

Disclosure of basis of preparation of financial statements [text block]

2. Basis of Preparation and Statement of Compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, and were approved for issue by the Board of Directors on March 13, 2019.

These consolidated financial statements have been prepared under the historical cost method, except for derivative financial instruments, share-based compensation and certain financial assets which have been measured at fair value. All figures are expressed in Canadian dollars unless otherwise indicated.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies [Abstract]

Disclosure of significant accounting policies [text block]

3. Summary of Significant Accounting Policies

The significant accounting policies used in the preparation of these financial statements are summarized below.

(a) Basis of Consolidation

The Corporation’s consolidated financial statements include the accounts of the Corporation and its subsidiaries. Subsidiaries are entities controlled by the Corporation, where control is achieved by the Corporation being exposed to, or having rights to, variable returns from its involvement with the entity and having the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is obtained by Alexco, and are de-consolidated from the date that control ceases.

The following subsidiaries have been consolidated for all dates presented within these financial statements, and are wholly owned: Alexco Keno Hill Mining Corp., Elsa Reclamation & Development Corporation Ltd. (“ERDC”), Alexco Exploration Canada Corp., Alexco Environmental Group Inc., Alexco Environmental Group Holdings Inc., Alexco Water and Environment Inc. (“AWE”) and Contango Strategies Ltd. During the period January 1, 2017 through December 28, 2017, the date of the sale, amounts from Alexco Environmental (US) Group Inc. (“AEG US”) and Alexco Financial Guarantee Corp. (“AFGC”) (together referred to as “AEG US Group”) were consolidated by the Corporation. All significant inter-company transactions, balances, income and expenses are eliminated on consolidation.

(b) Cash and Cash Equivalents

Cash and cash equivalents are unrestricted as to use and consist of cash on hand, demand deposits and short term interest-bearing investments with maturities of 90 days or less from the original date of acquisition and which can readily be liquidated to known amounts of cash. Redeemable interest bearing investments with maturities of up to one year are considered cash equivalents if they can readily be liquidated at any point in time to known amounts of cash and they are redeemable thereafter until maturity for invested value plus accrued interest.

(c) Inventories

Inventories include ore in stockpiles, concentrate and materials and supplies. Ore in stockpiles and concentrate are recorded at the lower of weighted average cost and net realizable value. Cost comprises all mining and processing costs incurred, including labor, consumables, production-related overheads, depreciation of production-related property, plant and equipment and depletion of related mineral properties. Net realizable value is estimated at the selling price in the ordinary course of business less applicable variable selling expenses. Materials and supplies are valued at the lower of cost and replacement cost, costs based on landed cost of purchase, net of a provision for obsolescence where applicable.

When inventories have been written down to net realizable value, a new assessment of net realizable value is made in each subsequent period. When circumstances that caused the write-down no longer exist or when there is clear evidence of an increase in net realizable value, the amount of the write down is reversed.

(d) Property, Plant and Equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment write-downs. The cost capitalized is determined by the fair value of consideration given to acquire the asset at the time of acquisition or construction, the direct cost of bringing the asset to the condition necessary for operation, and the estimated future cost of decommissioning and removing the asset. Repairs and maintenance expenditures are charged to operations, while major improvements and replacements which extend the useful life of an asset are capitalized.

Depreciation of property, plant and equipment is calculated using the following methods:

Heavy machinery and equipment	5 years straight-line
Land and buildings	20 years straight-line
Leasehold improvements & Other	Over the term of lease, and 2 – 5 years straight-line
Roads, Camp and other site infrastructure	5 -10 years straight-line
Ore-processing mill components	Variously between 5 and 30 years straight-line

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within other gains or losses in earnings.

(e) Mineral Properties

Exploration and Evaluation Properties

The Corporation capitalizes exploration and evaluation expenses at cost for expenditures incurred after it has obtained legal rights to explore a specific area and before technical feasibility and commercial viability of extracting mineral resources are demonstrable.

All direct and indirect costs relating to the exploration of specific properties with the objective of locating, defining and delineating the resource potential of the mineral interests on specific properties are capitalized as exploration and evaluation assets, net of any directly attributable recoveries recognized, such as exploration or investment tax credits.

The Corporation has elected to follow a policy of applying the proceeds received from the silver streaming arrangement with Wheaton Precious Metals (“Wheaton”) explained further in Note 15, as a credit to the carrying value of the Exploration and Evaluation Property. Accordingly, this has been applied retrospectively and the initial deposit has been applied as an offset against the mineral interest asset, with the cumulative catch up adjustment in the amount of $12,396,000 recognized in January 1, 2017 opening retained earnings (Note 6).

At each reporting date, exploration and evaluation assets are evaluated and may be classified as mining operations assets upon achieving technical feasibility and determination of commercial viability.

Mining Operations Properties

Mining operations properties are recorded at cost on a property-by-property basis. The recorded cost of mining operations properties is based on acquisition costs incurred to date, including capitalized exploration and evaluation costs and capitalized development costs, less depletion, recoveries and write-offs. Capitalized development costs include costs incurred to establish access to mineable resources where such costs are expected to provide a long-term economic benefit, as well as operating costs incurred, net of the proceeds from any sales generated, prior to the time the property achieves commercial production.

Depletion of mining operations properties is calculated on the units-of-production basis using estimated mine plan resources, such resources being those defined in the mine plan on which the applicable mining activity is based. The mine plan resources for such purpose are generally as described in an economic analysis supported by a technical report compliant with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects.

(f) Intangible Assets

Customer relationships, rights to provide services and database assets acquired through business combinations, and acquired patents, are recorded at fair value at acquisition date. All of the Corporation’s intangible assets have finite useful lives, and are amortized using the straight-line method over their expected useful lives.

(g) Impairment of Non-Current Non-Financial Assets

The carrying amounts of non-current non-financial assets are reviewed and evaluated for impairment when events or changes in circumstances indicate that the carrying amounts of the related asset may not be recoverable. Non-current non-financial assets include property, plant, equipment, mineral properties and finite-life intangible assets. If the recoverable amount is less than the carrying amount of the asset, an impairment loss is recognized and the asset is written down to recoverable value.

The recoverable amount is the higher of an asset’s “fair value less cost of disposal” and “value-in-use”. Where the asset does not generate cash flows that are independent from other assets, the recoverable amount of the cash-generating unit to which the asset belongs is determined, with a cash-generating unit being the smallest identifiable group of assets and liabilities that generate cash inflows independent from other assets. Exploration and evaluation assets are each separately assessed for impairment, and are not allocated by the Corporation to a cash generating unit (“CGU”) for impairment assessment purposes. “Fair value less cost of disposal” is determined as the amount that would be obtained from the sale of the asset or cash-generating unit in an arm’s length transaction between knowledgeable and willing parties. In assessing “value-in-use”, the future cash flows expected to arise from the continuing use of the asset or cash-generating unit in its present form are estimated using assumptions that an independent market participant would consider appropriate, and are then discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset or unit.

Where conditions that gave rise to a recognized impairment loss are subsequently reversed, the amount of such reversal is recognized into earnings immediately, though is limited such that the revised carrying amount of the asset or cash-generating unit does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash generating unit.

(h) Provisions

General

Provisions are recorded when a present legal or constructive obligation exists as a result of past events, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

The expense relating to any provision is presented in profit or loss net of any reimbursement. Provisions are discounted using a current risk-free pre-tax rate that reflects where appropriate the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Decommissioning and Rehabilitation Provision

The Corporation recognizes a decommissioning and rehabilitation provision for statutory, contractual, constructive or legal obligations to undertake reclamation and closure activities associated with property, plant, equipment and mineral properties, generally at the time that an environmental or other site disturbance occurs or a constructive obligation for reclamation and closure activities is determined. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Provisions are measured at the present value of the expected future expenditures required to settle the obligation, using a risk-free pre-tax discount rate reflecting the time value of money and risks specific to the liability. The liability is increased for the passage of time, and adjusted for changes to the current market-based risk-free discount rate as well as changes in the estimated amount or timing of the expected future expenditures. The associated restoration costs are capitalized as part of the carrying amount of the related asset and then depreciated accordingly.

(i) Revenue Recognition

Revenue from environmental services are recognized upon the transfer of promised services or goods based on the output appropriate to the particular service contract and when a customer has the ability to direct the use and obtain the benefits from the service or good. The Corporation provides environmental services related to permitting and remediation activities, generally in the mining industry, as well provide engineering, design, construction and operational services related to water treatment systems. The Corporation identifies the performance obligations in the contract, and the obligations are measured by reference to the transaction price. The transaction price is established in the agreement as either a fixed price or rate per hour. If the contract has multiple performance obligations, the Corporation will assign the transaction price to the various performance obligations. The stand-alone selling price for services identified within the contract are determined based on detailed billing schedules included within the underlying contract with the customer or based on comparable projects where relevant. Generally, performance obligations for environmental services are satisfied over time as the service is provided. Revenue is recognized using the input method with the inputs being costs incurred on related projects. The general payment terms are 30 to 60 days once the performance obligations have been satisfied. Typical payments are received 30 days after the invoice has been received by the client.

Management will assess and use significant judgement to determine whether the Corporation has promised to provide the specified good and service itself (as a principal) or to arrange for those specified goods or services to be provided by another party (as an agent). In those arrangements where the Corporation obtains control of the specified good or service before they are transferred to the customer, they will be deemed to act as a principal. In those arrangements were the Corporation is deemed to be the principal, the Corporation will recognize as revenue the “gross” amount paid by the customer for the specified good or service. If the Corporation acts an agent, it will record revenue as the net consideration that it retains for the specified good or service that was provided to the customer.

(j) Share-Based Compensation and Payments

The cost of incentive share options and other equity-settled share-based compensation and payment arrangements is recorded based on the estimated fair value at the grant date and charged to earnings over the vesting period. With respect to incentive share options, grant-date fair value is measured using the Black-Scholes option pricing model. With respect to restricted share units, grant-date fair value is determined by reference to the share price of the Corporation at the date of grant. Where share-based compensation awards are subject to vesting, each vesting tranche is considered a separate award with its own vesting period and grant-date fair value. Share-based compensation expense is recognized over the tranche’s vesting period by a charge to earnings, based on the number of awards expected to vest. The number of awards expected to vest is reviewed at least annually, with any impact being recognized immediately.

(k) Flow-Through Shares

The proceeds from the offering of flow-through shares are allocated between the shares and the sale of tax benefits when the shares are offered. The allocation is made based on the difference between the market value of the shares and the amount the investors pay for the flow-through shares. A liability is recognized for the premium paid by the investors and is then recognized in the results of operations in the period the eligible exploration expenditures are incurred.

(l) Warrants

When the Corporation issues units that are comprised of a combination of shares and warrants, the value is assigned to shares and warrants based on their relative fair values. The fair value of the shares is determined by the closing price on the date of the transaction and the fair value of the warrants is determined based on a Black-Scholes option pricing model.

(m) Current and Deferred Income Taxes

Income tax expense comprises current and deferred income taxes. Current and deferred income taxes are recognized in profit or loss except to the extent that they relate to a business combination or to items recognized directly in equity or in other comprehensive income.

Current income taxes are the expected taxes payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous periods.

Deferred income taxes are recognized using the liability method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. However, deferred income taxes are not recognized if they arise from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit nor loss. Deferred income taxes are determined using tax rates and laws that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets and liabilities are presented as non-current in the financial statements.

Deferred income tax assets and liabilities are offset if there is a legally enforceable right of offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. Deferred income tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the assets can be utilized.

(n) Translation of Foreign Currencies

The financial statements of each entity in the group are measured using the currency of the primary economic environment in which each entity operates (the “functional currency”). The consolidated financial statements are presented in Canadian dollars.

The functional currency of all entities in the Corporation group other than AWE is the Canadian dollar, while the functional currency of AWE is the United States dollar. The financial statements of AWE are translated into the Canadian dollar presentation currency using the current rate method as follows:

· Assets and liabilities – at the closing rate at the date of the statement of financial position.

· Income and expenses – at the average rate of the period (as this is considered a reasonable approximation to actual rates).

· All resulting changes are recognized in other comprehensive income as cumulative translation adjustments.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognized in other comprehensive income.

When an entity disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary is reallocated between controlling and non-controlling interests.

(o) Earnings or Loss Per Share

Basic earnings per share is calculated by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period.

Diluted earnings (loss) per share is calculated using the treasury share method whereby all “in the money” options, warrants and equivalents are assumed to have been exercised at the beginning of the period and the proceeds from the exercise are assumed to have been used to purchase common shares at the average market price during the period.

(p) Financial Instruments

Financial assets and financial liabilities, including derivative instruments, are initially recognized at fair value on the balance sheet when the Corporation becomes a party to the relevant contractual provisions. Measurement in subsequent periods depends on the financial instrument’s classification.

The Corporation classifies the financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), fair value through other comprehensive income (“FVTOCI”) or at amortized cost.

(i) Classification

The Corporation determines the classification of financial instruments at initial recognition.

Financial assets

a) Debt - The classification of debt instruments is driven by the Corporation’s business model for managing the financial assets and the relevant contractual cash flow characteristics. A debt instrument is measured at amortized cost if the objective of the business model is to hold the debt instrument for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest.

b) Equity - On the day of acquisition the Corporation may make an irrevocable election (on an instrument-by- instrument basis) to designate them as at FVTOCI. Investments in common shares are held for longterm strategic purposes and not for trading. Upon the adoption of IFRS 9, the Company made an irrevocable election to designate these investments as FVTOCI in order to provide a more meaningful presentation based on management’s intention, rather than reflecting changes in fair value in net income.

Financial liabilities

Financial liabilities are measured at amortized cost; unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or the Corporation has opted to measure at FVTPL.

(ii) Measurement

Financial assets and liabilities at FVTPL

Financial assets and liabilities at FVTPL are initially recognized at fair value and transaction costs are expensed in the consolidated statement of income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets or liabilities held at FVTPL are included in the consolidated statement of income (loss) in the period in which they occur. Where the Corporation has opted to designate a financial liability at FVTPL, any changes associated with our own credit risk will be recognized in Other Comprehensive Income (“OCI”).

Financial assets at FVTOCI

Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently, the investments are measured at fair value, with gains and losses arising from changes from initial recognition recognized in OCI.

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value net of transaction costs, and subsequently carried at amortized cost adjusted by any impairment.

Derivative financial instruments

When the Corporation enters into derivative contracts, these are intended to reduce the exposures related to assets and liabilities, or forecast transactions. Derivatives are classified as FVTPL.

Derivatives embedded in financial liabilities are treated as separate derivatives when their risks and characteristics are not closely related to the host contracts. However, the classification approach described above is applied to all financial assets, including those that contain embedded derivatives, without the need to separate the embedded derivative from the host contract.

(iii) Impairment of financial assets

Impairment of financial assets at amortized cost

The Corporation recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost.

The Corporation is applying the simplified method for trade receivables and is calculating expected credit losses at an amount equal to the lifetime expected credit loss.

Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the expected credit losses are reversed after the impairment was recognized.

(iv) Derecognition

Derecognition of financial assets and liabilities

Financial assets are derecognized when the investments mature or are sold, and substantially all the risks and rewards of ownership have been transferred. A financial liability is derecognized when the obligation under the liability is discharged, canceled or expired. Gains and losses on derecognition are recognized within finance income and finance costs, respectively. Gains or losses on equity financial assets designated as FVTOCI remain within accumulated OCI.

(v) Fair value of financial instruments

The fair values of quoted investments are based on current prices. If the market for a financial asset is not active, the Corporation establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the financial asset’s specific circumstances.

(q) Fair Value Measurement

Where fair value is used to measure assets and liabilities in preparing these financial statements, it is estimated at the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. Fair values are determined from inputs that are classified within the fair value hierarchy defined under IFRS as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Inputs for the asset or liability that are unobservable

(r) Goodwill

The Corporation recognizes goodwill relating to a business combination when the total purchase price exceeds the fair value of the identifiable assets and liabilities of the acquired business. Goodwill is tested annually for impairment of when there is an indication that the goodwill may be impaired. Any impairment is recognized as an expense immediately. Should there be a recovery in value, there is no reversal of previous impairments of Goodwill.

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New and Revised Accounting Standards

12 Months Ended

Dec. 31, 2018

New and Revised Accounting Standards Adopted [Abstract]

Disclosure of changes in accounting policies, accounting estimates and errors [text block]

4. New and Revised Accounting Standards

New accounting standard not yet effective

A new standard has been issued and is relevant to the Corporation but is not yet effective and therefore not reflected in these consolidated financial statements:

IFRS 16 relates to accounting for leases and lease obligations. It replaces the existing lease guidance in IAS 17, Leases. The purpose of the new standard is to report all leases on the statement of financial position and to define how leases and lease obligations are measured. IFRS 16 is effective from January 1, 2019 and must be applied retrospectively, subject to certain practical expedients, using either a full retrospective approach or modified retrospective approach.

The Corporation is currently involved in various lease obligations as part of its normal course of business. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset being leased. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees. All leases will be recorded on the statement of financial position, except short-term leases and low-value leases. This is expected to result in a material increase in both rights of use assets and lease liabilities upon adoption of the standard, and changes to the timing of recognition and classification of expenses associated to such lease arrangements. The Corporation anticipates an increase in cash flow from operating activities as lease payments will be recorded as financing outflows in the statement of cash flows. The Corporation also anticipates an increase in depreciation and finance expenses and a decrease in operating expenses.

The Corporation plans to adopt the modified retrospective approach and not restate balances for the comparative period. On initial adoption, the Corporation has elected to use the following practical expedients permitted under the standard:

● Apply a single discount rate to a portfolio of leases with similar characteristics;

● Account for leases with a remaining term of less than twelve (12) months as at January 1, 2019 as short-term leases; and

● Account for lease payments as an expense and not recognize a right-of-use (“ROU”) asset if the underlying asset is of low dollar value.

On adoption of IFRS 16, the Corporation will recognize lease liabilities in relation to leases under the principles of the new standard measured at the present value of the remaining lease payments, discounted using the interest rate implicit in the lease or the Corporation’s incremental borrowing rate as at January 1, 2019. The associated ROU assets will be measured at the amount equal to the lease liability on January 1, 2019. The Corporation has completed its review of all existing operating leases and service contracts to identify contracts in scope for IFRS 16 and assessed contracts for embedded leases. Adoption of the new standard is expected to result in the recognition of additional lease liabilities and ROU assets of approximately $1,000,000 each.

There are no other IFRS’s or International Financial Reporting Interpretations Committee (“IFRIC”) interpretations that are not yet effective that are expected to have a material impact on the Corporation.

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Critical Judgements and Major Sources of Estimation Uncertainty

12 Months Ended

Dec. 31, 2018

Critical Judgements and Major Sources of Estimation Uncertainty [Abstract]

Disclosure of accounting judgements and estimates [text block]

5. Critical Judgements and Major Sources of Estimation Uncertainty

The preparation of the consolidated financial statements requires management to select accounting policies and make estimates and judgments that may have a significant impact on the consolidated financial statements. Estimates are continuously evaluated and are based on management’s experience and expectations of future events that are believed to be reasonable under the circumstances. The estimates management makes in this regard include those regarding future commodity prices and foreign currency exchange rates, which are an important component of several estimates and assumptions management must make in preparing the financial statements, including but not limited to estimations and assumptions regarding the evaluation of the carrying amount of mineral properties and other assets, the estimation of decommissioning and rehabilitation provisions, the estimation of revenues and the value of the embedded derivative related to sales of concentrate, and the estimation of the net realizable value of inventories. Management bases its estimates of future commodity prices and foreign currency exchange rates primarily on consensus investment analyst forecasts, which are tracked and updated as published on generally a quarterly basis. Actual outcomes can differ from these estimates.

The most significant judgments and estimates made by management in preparing the Corporation’s financial statements are described as follows:

 Mineral Resources

The determination of the Corporation’s estimated mineral resources by appropriately qualified persons requires significant judgements regarding the interpretation of complex geological and engineering data including the size, depth, shape and nature of the deposit and anticipated plans for mining, as well as estimates of future commodity prices, foreign exchange rates, capital requirements and production costs. These mineral resource estimates are used in many determinations required to prepare the Corporation’s financial statements, including evaluating the recoverability of the carrying amount of its non-current non-financial assets and estimating amounts of future taxable income in determining whether to record a deferred tax asset.

 Impairment and Impairment Reversals of Non-Current Non-Financial Assets

The Corporation reviews and evaluates the carrying value of each of its non-current non-financial assets for impairment and impairment reversals when events or changes in circumstances indicate that the carrying amounts of the related asset may not be recoverable or previous impairment losses may become recoverable. The identification of such events or changes and the performance of the assessment requires significant judgment. Furthermore, management’s estimates of many of the factors relevant to completing this assessment, including commodity prices, foreign currency exchange rates, mineral resources, and operating, capital and reclamation costs, are subject to risks and estimation uncertainties that may further affect the determination of the recoverability of the carrying amounts of its non-current non-financial assets.

Management has assessed indicators of impairment and impairment reversals on the Corporation’s non-current non-financial assets and has concluded that no impairment or impairment reversal indicators exists as of December 31, 2018.

· Decommissioning and Rehabilitation Provision

Management’s determination of the Corporation’s decommissioning and rehabilitation provision is based on the reclamation and closure activities it anticipates as being required, the additional contingent mitigation measures it identifies as potentially being required and its assessment of the likelihood of such contingent measures being required, and its estimate of the probable costs and timing of such activities and measures. Significant judgements must be made when determining such reclamation and closure activities and measures required and potentially required.

· Mineral Properties - Silver Stream Arrangement

Upon entering into a long-term streaming arrangement linked to production at operations, Management’s judgment was required in assessing the appropriate accounting treatment for the transaction on the closing date and in future periods. We consider the specific terms of the arrangement to determine whether we have disposed of an interest in the reserves and resources of the operation or executed some other form of arrangement. This assessment considers what the counterparty is entitled to and the associated risks and rewards attributable to them over the life of the operation. These include the contractual terms related to the total production over the life of the arrangement as compared to the expected production over the life of the mine, the percentage being sold, the percentage of payable metals produced, the commodity price referred to in the ongoing payment and any guarantee relating to the upfront payment if production ceases.

 Fair value of derivatives

The fair values of financial instruments that are not traded in an active market are determined using valuation techniques. Management uses its judgment to select a method of valuation and makes estimates of specific model inputs that are based on conditions existing at the end of each reporting period. Refer to Note 15 for further details on the methods and assumptions associated with the measurement of the embedded derivative within the Silver Streaming Interest. Management has applied judgement in concluding that the completion test as discussed in Note 15 will be met prior to December 31, 2020 or extended to a later date, therefore the capacity related refund is not likely to be owed to Wheaton Precious Metals Corp.

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Impacts of Change in Accounting Policy and Adoption of New IFRS Pronouncements

12 Months Ended

Dec. 31, 2018

Disclosure of information about consolidated structured entities [abstract]

Impacts of Change in Accounting Policy and Adoption of New IFRS Pronouncements [text block]

6. Impacts of Change in Accounting Policy and Adoption of New IFRS Pronouncements

The Corporation has adopted the new IFRS pronouncements listed below as at January 1, 2018, in accordance with the transitional provisions outlined in the respective standards and described below. In light of the changes to the revenue standard to IFRS 15, management has changed their treatment under IFRS 6 for the partial distribution of the mineral interest.

Adjustments to Consolidated Financial Statements

The table below summarizes the adjustments to previously reported figures related to the policy change pertaining to IFRS 6, which is more fully described below:

Adjustments to Condensed Consolidated Balance Sheets

	December 31 2017			January 1 2017
Equity before accounting changes	$	100,060		$	90,673
Adjustments to equity relating to:
Property plant and equipment		2,117			2,283
Mineral properties		(10,229	)		(10,229	)
Deferred income tax liabilities		2,390			1,440
Silver streaming interest		18,118			18,118
Equity after accounting changes	$	112,456		$	102,285

Adjustments to Condensed Consolidated Statements of Loss and Comprehensive Loss

	Year ended December 31 2017			Year ended January 1 2017
Loss before accounting changes	$	(7,648	)	$	(4,359	)
Adjustments to loss relating to:
Depreciation and amortization		(165	)		(165	)
Loss after accounting changes	$	(7,813	)	$	(4,524	)
Loss per share before accounting changes:
Basic and diluted	$	(0.08	)	$	(0.04	)
Loss per share after accounting changes:
Basic and diluted	$	(0.09	)	$	(0.05	)

The Corporation has assessed the impact of IFRS 15 on its silver streaming arrangement with Wheaton, as described in Note 15.  At the date the initial transaction was completed, the Corporation determined that the contract was a disposal of part of a mineral interest and a related contract to provide extraction services.  Under its existing policy, the Corporation applies the provisions of IFRS 6, which allows for an accounting policy choice to either apply the proceeds received as a credit to the carrying value of the exploration and evaluation (“E&E”) asset, or account for the transaction as a partial sale, with deferral of the gain, to be recognized on a units-of-production sold basis. Upon the effective date of IFRS 15, the Corporation will continue to apply IFRS 6 guidance for the partial sale of the mineral interest, but has elected to change the policy to apply the proceeds received as a credit to the carrying value of the E&E asset. Management believes this approach to be more relevant and reliable.

Specifically, the USD $50,000,000 initial deposit recorded as consideration was applied against the carrying value of the mineral interest, with a gain being recognized to the extent that the value of the consideration exceeds the value of the mineral interest.

Overview of Changes to IFRS

The Corporation adopted IFRS 15 on January 1, 2018 in accordance with the transitional provisions of the standard, applying a modified retrospective approach in restating our prior period financial information.

IFRS 15, Revenue from Contracts with Customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18, Revenue and IAS 11, Construction contracts and related interpretations. Management’s primary focus was evaluating contracts under our Environmental Services business, as this is currently the Corporation’s primary source of revenue. Based on this analysis, the Corporation does not have significant changes to the timing and amount of its revenue recognition related to environmental services under IFRS 15, as the majority of its contracts contain a series of same or similar performance obligations. Consequently, consistent with the Corporation’s existing policy, revenue is recognized “over time”, as the services are provided.

IFRS 9, Financial Instruments, addresses the classification, measurement and recognition of financial assets and financial liabilities. It replaces the guidance in IAS 39, Financial Instruments: Recognition and Measurement that relate to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income and fair value through profit or loss. The basis of classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change for liabilities is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in OCI rather than in net earnings. There was no change in the carrying amounts on the basis of their measurement categories or a measurement attribute on transition. The Corporation has made the irrevocable classification choice to record fair value changes on its equity investments in OCI (Note 24). This election resulted in a nil reclassification from the Corporation’s retained earnings to AOCI, on January 1, 2018.

Credit risk arises from cash and cash equivalents and trade receivables. While the Corporation is exposed to credit losses due to the non-performance of its counterparties, there are no significant concentrations of credit risk and the Corporation does not consider this to be a material risk. The Corporations customers with whom the current business operations are with include government bodies and reputable businesses.

The Corporation has implemented a process for managing expected credit loss provisions related to trade receivables going forward under IFRS 9. For its trade receivables, the Corporation applies the simplified approach for determining expected credit losses, which require the Corporation to determine the lifetime, expected losses for all its trade receivables. The expected lifetime credit loss provision for its trade receivables is based on historical counterparty default rates and adjusted for relevant forward looking information, when required. Because of factors including that the majority of its customers are considered to have low default risk and the Corporation does not extend credit to customers with a high default risk, the historical default rates are low and the lifetime expected credit loss allowance for trade receivables is nominal as at December 31, 2018. Accordingly, the Corporation did not record any adjustment relating to the implementation of the expected credit loss model for its trade receivables.

The Corporation has assessed the classification and measurement of our financial assets and financial liabilities under IFRS 9 and have summarized the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 in the following table:

	Original classification  IAS 39	New classification  IFRS 9
Financial Assets
Cash and cash equivalents	Amortized cost	Amortized cost
Short-term deposits	Amortized cost	Amortized cost
Equity securities	Available-for-sale	FVTOCI
Warrants	FVTPL	FVTPL
Trade accounts receivable	Amortized cost	Amortized cost
Other receivables	Amortized cost	Amortized cost
Derivative assets	FVTPL	FVTPL
Restricted cash	Amortized cost	Amortized cost
Financial Liabilities
Trade and other payables	Amortized cost	Amortized cost
Derivative liabilities	FVTPL	FVTPL

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Acquisition of Contango Strategies Ltd

12 Months Ended

Dec. 31, 2018

Disclosure of detailed information about business combination [abstract]

Disclosure Of Acquisition Of Contango Strategies Ltd [Text Block]

7. Acquisition of Contango Strategies Ltd.

On June 15, 2018 the Corporation’s wholly owned subsidiary, AEG, completed the acquisition of Contango Strategies Ltd. (“Contango”), a private Corporation based in Saskatoon, Saskatchewan. The acquisition of Contango is considered a business combination under IFRS 3.

Contango has developed technologies beneficial to the Corporation with synergies formed that will allow the Corporation to pursue new opportunities. AEG acquired 100% of the outstanding common shares of Contango in exchange for consideration of $1,388,000 comprising $971,600 in cash and 237,999 common shares of Alexco at a value of $416,400. The common shares were valued at $1.75 per share reflecting the market price on the date of issuance. Settlement of the consideration is in two tranches with $1,018,000 (comprising $601,600 in cash and $416,400 in Alexco common shares) having been paid on closing with the remaining $370,000 cash payment to be made on the first anniversary of the closing of the transaction. The acquisition includes all of Contango’s operations including $450,000 in working capital and property, plant and equipment.

Acquisition related costs in the amount of $28,000 were incurred and have been recognized as an expense in the consolidated statement of loss, as part of other expenses.

Goodwill of $550,000 is recognized and is primarily related to growth expectation, expected future profitability and the substantial skill and expertise of Contango’s employees. Goodwill is reflected on the Balance Sheet under intangible assets and is not expected to be deductible for tax purposes.

The allocation of the purchase price is preliminary and may vary based upon the completion of additional valuation procedures and finalization of working capital adjustments pursuant to the purchase agreement.

The date of the acquisition for accounting purposes is June 15, 2018 being the closing date of the share purchase agreement and the date the consideration was settled. The preliminary allocation of the purchase price of Contango based on management’s estimate of fair values is as follows:

Fair value of consideration
Amount settled in cash	$	602
Fair value of common shares issued		416
Fair value of cash to be settled in one year		370
Total fair value of consideration	$	1,388
Fair value of identifiable assets acquired and liabilities assumed from Contango:
Cash and cash equivalents		66
Accounts and other receivables		618
Inventory		102
Prepaid expenses		54
Property, plant and equipment		333
Accounts payable and accrued liabilities		(335	)
Net identifiable assets acquired and liabilities assumed	$	838
Goodwill on acquisition	$	550
Net cash outflow on acquisition	$	536
Acquisition costs charged to expenses	$	28

Below is a proforma summary of the revenues, cost of sales and net income (loss) incurred by Contango for the period January 1, 2018 to June 14, 2018 combined with the revenue, cost of sales and net loss for Alexco for the year ended December 31, 2018. Revenue since the date of acquisition was $1.4 million:

	Contango Strategies Ltd.		Alexco Resource Corp.			Proforma Combined Entities
Selected Financial Information	For the period January 1, 2018 to June 14, 2018		For the year ended December 31, 2018			For the year ended December 31, 2018
Environmental services revenue	$	1,162	$	19,880		$	21,042
Costs of sales and other expenses		1,026		28,381			29,407
Net income (loss)	$	136	$	(8,501	)	$	(8,365	)

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Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2018

Cash and Cash Equivalents [Abstract]

Disclosure of cash and cash equivalents [text block]

8. Cash and Cash Equivalents

	December 31 2018		December 31 2017
Cash at bank and on hand	$	3,629	$	6,019
Short-term bank deposits		4,947		11,887
	$	8,576	$	17,906

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Accounts and Other Receivables

12 Months Ended

Dec. 31, 2018

Accounts and Other Receivables [Abstract]

Disclosure of trade and other receivables [text block]

9. Accounts and Other Receivables

	December 31 2018		December 31 2017
Trade receivables 1	$	6,689	$	1,988
Interest and other		122		98
	$	6,811	$	2,086

1. Trade receivables are derived primarily from the environmental consulting business (AEG).

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Restricted Cash and Deposits

12 Months Ended

Dec. 31, 2018

Restricted Cash and Deposits [Abstract]

Disclosure of restricted cash and cash equivalents [text block]

10. Restricted Cash and Deposits

	December 31 2018		December 31 2017
Security for decommissioning obligations	$	2,569	$	6,507
Security for remediation services agreement		-		499
Other		156		86
Restricted cash and deposits		2,725		7,092
Less: current portion		-		499
	$	2,725	$	6,593

Security for decommissioning obligations of $2,569,000 as at December 31, 2018 (December 31, 2017 - $6,507,000) includes cash collateral and a surety bond representing security for future reclamation and closure activities for the Bellekeno, Bermingham, Flame & Moth, Lucky Queen and Onek deposits. During the second quarter of 2018, security in the amount of $6,305,000 was replaced with a surety bond collateralized with $2,364,191, with the balance of $3,940,809 being reclassified as unrestricted cash and cash equivalents. The remaining security under a remediation services agreement was released back to the Corporation in the amount of $499,000 (US$398,000) in 2018 as the Corporation had satisfied the requirements under that agreement.

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Investments

12 Months Ended

Dec. 31, 2018

Disclosure of Investments [Abstract]

Disclosure of Investments [Text Block]

11. Investments

	December 31 2018		December 31 2017
Common shares held	$	736	$	673
Warrants held		24		1,082
Investments		760		1,755
Less: current portion		351		728
	$	409	$	1,027

As of December 31, 2018, the Corporation held 8,736,644 common shares of Banyan Gold Corp. (“Banyan”) (December 31, 2017 – 4,775,000) and 1,320,500 common shares of Golden Predator Mining Corp. (“Golden Predator”) (December 31, 2017 – 300,000). As of December 31, 2018, the Corporation also held 6,155,822 warrants of Banyan (December 31, 2017 – 4,375,000) with an exercise price ranging from $0.115 to $0.15 and 300,000 warrants of Golden Predator (December 31, 2017 – 1,425,000) with an exercise price of $1.00 per share.

During the year ended December 31, 2018, the Corporation recorded a pre-tax loss on investments in the amount of the $572,000 (2017 – pre tax gain of $1,341,000). The loss on investments for the year ended December 31, 2018 consisted of a fair value measurement adjustment on warrants held in Banyan and Golden Predator, through the statement of loss. During the year, the Corporation also recorded in other comprehensive income a fair value adjustment loss adjustment, net of tax of $798,000 (2017 – fair value gain adjustment of $253,000) on common shares held in Banyan and Golden Predator.

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Inventories

12 Months Ended

Dec. 31, 2018

Classes of current inventories [abstract]

Disclosure of inventories [text block]

12. Inventories

	December 31 2018		December 31 2017
Ore in stockpiles and mill supplies	$	4,699	$	4,743
Materials and supplies		818		646
Inventory		5,517		5,389
Less: current portion		818		646
	$	4,699	$	4,743

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Disclosure of property, plant and equipment [text block]

13. Property, Plant and Equipment

Cost	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	1,709	$	5,343	$	22,749	$	8,475	$	1,335	$	39,611
Additions (includes business combinations)		-		226		-		837		168		1,231
Decommission change in estimate		-		-		85		-		-		85
December 31, 2018	$	1,709	$	5,569	$	22,834	$	9,312	$	1,503	$	40,927

Accumulated Depreciation	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	351	$	4,692	$	10,270	$	6,767	$	1,275	$	23,355
Depreciation (includes business combinations)		78		177		1,178		766		140		2,339
Disposal		-		-		-		-		-		-
December 31, 2018	$	429	$	4,869	$	11,448	$	7,533	$	1,415	$	25,694

Net book Value	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	1,358	$	651	$	12,479	$	1,708	$	60	$	16,256
December 31, 2018	$	1,280	$	700	$	11,386	$	1,779	$	88	$	15,233

During the year ended December 31, 2018, the Corporation recorded total depreciation of property, plant and equipment of $2,339,000 (2017 – $1,993,000) of which $1,964,000 (2017 – $1,728,000) has been charged to income with $85,000 (2017 – $142,000) recorded in environmental services cost of sales and $1,879,000 (2017 – $1,586,000) reflected under general expenses and mine site care and maintenance.

Of the depreciation recorded for the year ended December 31, 2018, $375,000 (2017 – $265,000) were related to property, plant and equipment used in exploration activities and has been capitalized to mineral properties.

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Mineral Properties

12 Months Ended

Dec. 31, 2018

Mining assets [member]

Disclosure of detailed information about property, plant and equipment [line items]

Disclosure Of Mineral Properties [Text Block]

14. Mineral Properties

	December 31 2017 (restated – note 6)		Expenditures Incurred		December 31 2018
Mineral Properties
Keno Hill District Properties
Bellekeno	$	6,885	$	238	$	7,123
Lucky Queen		693		131		824
Onek		1,034		31		1,065
McQuesteni		1,997		-		1,997
Silver King		4,464		-		4,464
Flame & Moth		22,455		5,856		28,311
Bermingham		23,376		8,708		32,084
Elsa Tailings		884		-		884
Other Keno Hill Properties		2,799		2,675		5,474
Total	$	64,587	$	17,639	$	82,226

	December 31 2016 (restated – note 6)		Expenditures Incurred		December 31 2017 (restated - note 6)
Mineral Properties
Keno Hill District Properties
Bellekeno	$	6,809	$	76	$	6,885
Lucky Queen		563		130		693
Onek		1,018		16		1,034
McQuesteni		1,924		73		1,997
Silver King		4,464		-		4,464
Flame & Moth		21,966		489		22,455
Bermingham		15,193		8,183		23,376
Elsa Tailings		884		-		884
Other Keno Hill Properties		2,799		-		2,799
Total	$	55,620	$	8,967	$	64,587

(i) Effective May 24, 2017, the Corporation entered into an Option Agreement with Banyan Gold Corp. (“Banyan”) to option up to 100% the McQuesten property. In three stages, Banyan may earn up to 100% of the McQuesten property, by incurring a minimum $2,600,000 in exploration expenditures ($717,000 incurred to December 31, 2018), issue 1,600,000 shares (800,000 shares received to December 31, 2018), pay a total of $2,600,000 in cash or shares and grant Alexco a 6% net smelter return (“NSR”) royalty with buybacks totalling $7,000,000 to reduce to a 1% NSR royalty on gold and 3% NSR royalty on silver.

	Mining Operations Properties			Exploration and Evaluation Properties		Total
December 31, 2018
Cost	$	99,472		$	73,213	$	172,685
Accumulated depletion and write-downs		(90,459	)		-		(90,459	)
Net book value	$	9,013		$	73,213	$	82,226
December 31, 2017 (restated – note 6)
Cost	$	99,071		$	55,975	$	155,046
Accumulated depletion and write-downs		(90,459	)		-		(90,459	)
Net book value	$	8,612		$	55,975	$	64,587

(a) Keno Hill District Properties

The Corporation’s mineral interest holdings in the Keno Hill District, located in Canada’s Yukon Territory, are comprised of a number of properties.

The majority of the Corporation’s mineral rights within the Keno Hill District were purchased from the interim receiver of United Keno Hill Mines Limited and UKH Minerals Limited (collectively, “UKHM”) in 2006 and are held by ERDC. As a condition of that purchase, a separate agreement was entered into between Alexco, ERDC, the Government of Canada and the Government of Yukon (the “Subsidiary Agreement”), under which the Government of Canada indemnified ERDC and Alexco from and against all liabilities arising directly or indirectly from the pre-existing environmental condition of the former UKHM mineral rights. The Subsidiary Agreement also provided that ERDC may bring any mine into production on the former UKHM mineral rights by designating a production unit from the mineral rights relevant to that purpose and then assuming responsibility for all costs of the production unit’s water related care and maintenance and water related components of closure reclamation.

Other Subsidiary Agreement terms unchanged by the amended and restated Subsidiary Agreement (“ARSA”) include that ERDC is required to pay into a separate reclamation trust a 1.5% net smelter return royalty, to an aggregate maximum of $4 million for all production units, from any future production from the former UKHM mineral rights, commencing once earnings from mining before interest, taxes and depreciation exceed actual exploration costs, to a maximum of $6.2 million, plus actual development and construction capital. That commencement threshold was achieved during the year ended December 31, 2013, and as at December 31, 2018 a total of $37,000 in such royalties had been paid. Additionally, a portion of any future proceeds from sales of the acquired UKHM assets must also be paid into the separate reclamation trust. Also substantially unchanged by the ARSA are the indemnification of pre-existing conditions and the right to bring any mine into production on the former UKHM mineral rights. The rights of the Government of Canada under the Subsidiary Agreement and the ARSA are supported by a general security agreement over all of the assets of ERDC.

The ARSA can be terminated at ERDC’s election should a closure reclamation plan be prepared but not accepted and approved, and at the Government’s election should ERDC be declared in default under the ARSA.

(b) Mining Operations on care and maintenance

The Corporation’s historical mining operations reflected production from one mine, Bellekeno, a primary silver mine with lead, zinc and gold by-products. During the second quarter of 2013, both the Lucky Queen and Onek properties were reclassified from exploration and evaluation assets to mining operations assets as a result of the receipt of remaining operating permits, though neither property has as yet been placed into production.

From September 2013, Bellekeno mining operations have been suspended in light of a low silver price environment.

Keno Hill Royalty Encumbrances

As noted above, under the Subsidiary Agreement and unchanged by the ARSA, the former UKHM mineral rights are subject to a 1.5% net smelter return royalty, to an aggregate maximum of $4 million for all production units. Certain of the Corporation’s non-UKHM mineral rights located within or proximal to the McQuesten property are subject to a net smelter return royalty ranging from 0.5% to 2%. Certain other of the non-UKHM mineral rights located within the McQuesten property are subject to a separate net smelter return royalty of 2% all of which are incorporated under the Option Agreement with Banyan. A limited number of the Corporation’s non-UKHM mineral rights located throughout the remainder of the Keno Hill District are subject to net smelter return royalties ranging from 1% to 1.5%.

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Embedded Derivative Asset and Silver Stream

12 Months Ended

Dec. 31, 2018

Embedded Derivative Asset and Silver Stream [Abstract]

Disclosure Of Embedded Derivative Asset and Silver Stream [Text Block]

15. Embedded Derivative Asset and Silver Stream

	December 31 2018		December 31 2017 (restated – note 6)
Embedded derivative asset – Beginning of year	$	6,600	$	-
Embedded derivative asset - Addition		-		6,600
Fair value adjustment		3,071		-
Embedded derivative asset – End of year	$	9,671	$	6,600

On October 2, 2008 (with subsequent amendments on October 20, 2008, December 10, 2008, December 22, 2009, March 31, 2010, January 15, 2013, March 11, 2014 and June 16, 2014), the Corporation entered into a silver purchase agreement (the "SPA") with Wheaton under which Wheaton will receive 25% of the life of mine payable silver produced by the Corporation from its Keno Hill Silver District properties. The SPA anticipated that the initial silver deliveries would come from the Bellekeno property. Under the SPA, the Corporation received up-front deposit payments from Wheaton totaling US$50,000,000, and received further payments of the lesser of US$3.90 (increasing by 1% per annum after the third year of full production) and the prevailing market price for each ounce of payable silver delivered, if as and when delivered. After the initial 40 year term of the SPA, the Corporation is required to refund the balance of any advance payments received and not yet notionally reduced through silver deliveries. The Corporation would also be required to refund the balance of advance payments received and not yet reduced if Wheaton exercised its right to terminate the SPA in an event of default by the Corporation. As of September 2013, Bellekeno mining operations were suspended in light of a low silver price environment.

On March 29, 2017 the Corporation and Wheaton amended the SPA (the “Amended SPA, such that Wheaton will continue to receive 25% of the life of mine payable silver from the Keno Hill Silver District with a variable production payment based on monthly silver head grade and monthly silver spot price. The actual monthly production payment from Wheaton will be determined based on the monthly average silver head grade at the mill and the monthly average silver spot price, as determined by a grade and pricing curve with an upper ceiling grade of 1,400 grams per tonne (“g/t”) silver and price of US$25 per ounce of silver and a floor grade of 600 g/t silver and price of US$13 per ounce of silver. Additional terms of the amendment include a date for completion of the 400 tonne per day mine and mill completion test, which is reset to December 31, 2020. If the completion test is not satisfied by December 31, 2020, the Corporation will be required to pay a capacity related refund to Wheaton in the maximum amount of US$8,788,000, which can be further proportionately reduced by mine production and mill throughput exceeding 322 tonnes per day for a 30 day period prior to December 31, 2020. The Amended SPA is secured against the Corporation’s mineral properties until repayment of the original deposit of US$50,000,000.

In consideration of the foregoing amendments, the Corporation issued 3,000,000 shares to Wheaton with a fair value of $6,600,000 (US$4,934,948). Under the terms of the Amended SPA, the original US$50,000,000 deposit was notionally reduced by this amount. The variability in the future cash flows to be received from Wheaton upon extraction and delivery of their 25% interest of future production is considered an embedded derivative within this host contract under IFRS 9, Financial Instruments. The embedded derivative asset was initially recorded at fair value based on the value of the consideration paid to Wheaton and is to be re-measured at fair value on a recurring basis at each period end with changes in value being recorded within the Statement of Loss.

As at December 31, 2018, the fair value of the embedded derivative was calculated based on the discounted future cash flows associated with the difference between the original US$3.90 per ounce production payment Wheaton would pay for each payable ounce delivered under the SPA and the new production payment under the Amended SPA which varies depending on the monthly silver head grade and monthly silver price. The model currently relies upon inputs from the preliminary economic assessment (the “PEA”), such as payable ounces delivered and head grade, but will be updated in the future as a result of updated studies, mine plans and actual production. The valuation model for the embedded derivative has been updated to utilize a probability-based dynamic pricing structure as opposed to a static pricing structure. As such, the discount rate used and silver price assumptions are updated quarterly based on the risk-free yield curve and silver price forward curve at quarter end. 

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Accounts payable and accrued liabilities

12 Months Ended

Dec. 31, 2018

Accounts Payables And Accrued Liabilities [Abstract]

Disclosure of accrued expenses and other liabilities [text block]

16. Accounts payable and accrued liabilities

	December 31 2018		December 31 2017
Trade payables	$	3,567	$	1,468
Accrued liabilities and other		3,643		2,133
	$	7,210	$	3,601

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Credit Facility

12 Months Ended

Dec. 31, 2018

Disclosure Of Credit Facility [Abstract]

Disclosure Of Credit Facility [Text Block]

17. Credit Facility

On February 23, 2018 the Corporation entered into a definitive credit agreement with Sprott Private Resource Lending (Collector), L.P. (“Sprott”) to provide a US$15,000,000 credit facility (the “Credit Facility”). The Credit Facility has the following key terms:

· Term of 3 years, Maturity Date – February 23, 2021

· Interest rate on funds drawn down: the greater of

o 7% plus US Dollar 3 month LIBOR and

o 8% per annum, payable monthly

· Repayable in quarterly installments from October 31, 2019 through to the Maturity Date

· Upon draw down of funds a 3% draw down fee is charged

· 1,000,000 share purchase warrants were issued to Sprott with a five-year term, an exercise price of $2.25 per share and a right by the Corporation to accelerate the expiry date to 30 days following the closing price of the shares exceeding $5.63 for more than 20 consecutive trading days

· Repayable in whole or in part, without penalty, provided not less than twelve (12) months of interest has been paid on any outstanding amount

· On February 14, 2019 the Corporation extended the availability period of draw down to August 23, 2019 from February 23, 2019 by issuing to Sprott 171,480 Alexco common shares.

As of December 31, 2018, no amounts have been drawn down on the Credit Facility.

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Decommissioning and Rehabilitation Provision

12 Months Ended

Dec. 31, 2018

Disclosure of other provisions [abstract]

Disclosure of other provisions [text block]

18. Decommissioning and Rehabilitation Provision

	December 31 2018		December 31 2017
Balance – beginning of year	$	5,055	$	4,955
Increase due to re-estimation		163		37
Accretion expense, included in finance costs		68		63
Balance – end of year	$	5,286	$	5,055

The Corporation’s decommissioning and rehabilitation provision consists of costs expected to be incurred in respect of future reclamation and closure activities at the end of the life of the Bellekeno, Flame & Moth, Bermingham, Lucky Queen and Onek mines. These activities include water treatment, land rehabilitation, ongoing care and maintenance and other reclamation and closure related requirements.

The total inflation adjusted estimated cash flows required to settle the decommissioning and rehabilitation provision is estimated to be $6,561,000 (2017 – $6,187,000), with the expenditures expected to be incurred substantially over the course of the next 20 years. In determining the carrying value of the decommissioning and rehabilitation provision as at December 31, 2018, the Corporation has used a risk-free discount rate of 2.08% (2017 – 2.11%) and an inflation rate of 2.0% (2017 – 2.0%) resulting in a discounted amount of $5,204,000 (2017 – $5,055,000).

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Capital and Reserves

12 Months Ended

Dec. 31, 2018

Capital and reserves [Abstract]

Disclosure Of Share Capital Reserves And Other EquityInterest Explanatory [Text Block]

19. Capital and Reserves

Shareholders’ Equity

The Corporation is authorized to issue an unlimited number of common shares without par value.

The following share transactions took place during the year ended December 31, 2018:

1.	On June 13, 2018, the Corporation completed a bought deal public offering and issued 4,703,000 flow-through common shares at a blended price of $1.92 per share for aggregate gross proceeds of $9,041,150. The Corporation incurred share issuance costs of $989,000.
2.	281,666 stock options were exercised for proceeds of $217,000.
3.	1,167,351 warrants were exercised for proceeds of $2,027,000.
4.	318,036 common shares were issued from treasury on the vesting of restricted share units (“RSUs”).
5.	10,000 common shares were issued from treasury in accordance with an option agreement.
6.	237,999 common shares were issued from treasury as consideration for the acquisition of Contango.

On September 21, 2018 the Corporation filed a short form base shelf prospectus with the securities commissions in each of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and a corresponding amendment to its registration statement on Form F-10 (Registration Statement) with the United States Securities and Exchange Commission (SEC) under the U.S./Canada Multijurisdictional Disclosure System, which would allow the Corporation to make offerings of common shares, warrants, subscription receipts and/or units up to an aggregate total of $50,000,000 during the 25-month period following September 21, 2018.

Warrants

The changes in warrants outstanding are summarized as follows:

Expiry Date	Exercise Price		Balance at December 31, 2017		Issued		Exercised			Expired			Balance at December 31, 2018
May 17, 2018	$	1.75		4,868,620		-		(1,106,451	)		(3,762,169	)		-
May 17, 2018	$	1.49		60,900		-		(60,900	)		-			-
May 30, 2019	$	2.15		126,174		-		-			-			126,174
Feb 23, 2023	$	2.25		-		1,000,000		-			-			1,000,000
				5,055,694		1,000,000		(1,167,351	)		(3,762,169	)		1,126,174

On February 23, 2018 1,000,000 warrants were issued as a fee for the Credit Facility with Sprott (Note 17). The warrants were capitalized as a pre-payment for services, and are being amortized over the availability period of the facility to which it relates. The fair value of the warrants at the date of issuance was estimated using the Black-Scholes option pricing model, assuming a risk-free rate of 1.94% per annum, an expected life of options of 5 years, an expected volatility of 73% based on historical volatility, and no expected dividends.

Equity Incentive Plan

Under the Corporations equity incentive plan (the “Equity Incentive Plan”), the aggregate number of common shares issuable on the exercise of stock options or issuance of RSUs cannot exceed 10% of the number of common shares issued and outstanding. As at December 31, 2018, a total of 7,738,833 stock options and 273,989 RSUs were outstanding under the New Plan and a total of 2,787,068 remain available for future grants.

Incentive Stock Options

Generally stock options under the Equity Incentive Plan have a maximum term of five years, vesting 25% upon granting and 25% each six months thereafter. The exercise price may not be less than the immediately preceding five day volume weighted average price of the Corporation’s common shares traded through the facilities of the exchange on which the Corporation’s common shares are listed.

The changes in incentive share options outstanding are summarized as follows:

	Weighted average exercise price		Number of shares issued or issuable on exercise			Amount
Balance – December 31, 2017	$	2.06		6,546,666		$	6,258
Stock options granted	$	2.07		2,524,000			-
Share-based compensation expense		-		-			2,480
Options exercised	$	0.77		(281,666	)		(106	)
Options forfeited or expired	$	5.39		(1,050,167	)		(3,163	)
Balance – December 31, 2018	$	1.66		7,738,833		$	5,469
Balance – December 31, 2016	$	2.48		6,175,995		$	6,996
Stock options granted	$	2.31		1,645,500			-
Share-based compensation expense		-		-			2,204
Options exercised	$	1.28		(126,332	)		(78	)
Options forfeited or expired	$	4.78		(1,148,497	)		(2,864	)
Balance – December 31, 2017	$	2.06		6,546,666		$	6,258

During the year ended December 31, 2018, the fair value of options at the date of grant was estimated using the Black-Scholes option pricing model, assuming a risk-free rate ranging from 2.01% to 2.16% (2017 – 1.02%) per annum, an expected life of options of 4 years (2017 – 4 years), an expected volatility average of 73% based on historical volatility (2017 – 73%), an expected forfeiture rate average of 2% (2017 – 4%) and no expected dividends (2017 – nil).

Incentive share options outstanding and exercisable at December 31, 2018 are summarized as follows:

	Options Outstanding						Options Exercisable
Exercise Price	Number of Shares Issuable on Exercise		Average Remaining Life (Years)		Average Exercise Price		Number of Shares Issuable on Exercise		Average Exercise Price
$0.60		35,000		0.96	$	0.60		35,000	$	0.60
$0.60		989,333		1.12	$	0.60		989,333	$	0.60
$0.84		1,422,500		2.12	$	0.84		1,422,500	$	0.84
$1.73		600,000		2.44	$	1.73		600,000	$	1.73
$1.75		42,000		3.63	$	1.75		42,000	$	1.75
$1.78		150,000		2.49	$	1.78		150,000	$	1.78
$1.93		60,000		4.36	$	1.93		30,000	$	1.93
$1.94		475,000		0.12	$	1.94		475,000	$	1.94
$2.07		1,834,000		4.08	$	2.07		917,000	$	2.07
$2.07		587,000		4.08	$	2.07		-	$	2.07
$2.32		1,544,000		3.09	$	2.32		1,544,000	$	2.32
		7,738,833		2.73	$	1.66		6,204,833	$	1.55

The weighted average share price at the date of exercise for options exercised during the year ended December 31, 2018 was $1.96 (2017 – $2.26).

During the year ended December 31, 2018, the Corporation recorded total share-based compensation expense of $2,480,000 (2017 – $2,204,000), which related to incentive share options, of which $368,000 (2017 – $369,000) was recorded to mineral properties and $2,112,000 (2017 – $1,835,000) has been charged to income.

Subsequent to December 31, 2018, a further 2,029,000 incentive stock options have been granted with an exercise price of $1.27, 70,000 stock options were exercised, 475,000 stock options expired unexercised and nil stock options were forfeited.

Restricted Share Units

Generally RSUs vest one-third upon issuance and one third on each of the first and second anniversary dates of the issuance date. As at December 31, 2018, a total of 273,989 RSUs were outstanding.

The changes in RSUs outstanding are summarized as follows:

	Number of shares issued or issuable on vesting			Amount
Balance – December 31, 2017		398,325		$	401
RSUs granted		193,700			-
Share-based compensation expense recognized		-			467
RSUs vested		(318,036	)		(497	)
Balance – December 31, 2018		273,989		$	371
Balance – December 31, 2016		452,950		$	220
RSUs granted		235,000			-
Share-based compensation expense recognized		-			524
RSUs vested		(289,625	)		(343	)
Balance – December 31, 2017		398,325		$	401

During the year ended December 31, 2018 the Corporation granted a total of 193,700 RSUs (2017 – 235,000) with a total grant-date fair value determined to be $399,000 (2017 - $545,000). Included in general and administrative expenses for the year ended December 31, 2018 is share-based compensation expense of $467,000 (2017 –$524,000) related to RSU awards.

The weighted average share price at the date of vesting for RSUs during the year ended December 31, 2018 was $1.72 (2017 - $2.31).

Subsequent to December 31, 2018, a total of 625,000 RSUs were granted and 386,655 RSUs vested.

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Revenue from Environmental Services

12 Months Ended

Dec. 31, 2018

Disclosure of revenue [Abstract]

Disclosure Of Revenue From Environmental Services [Text Block]

20. Revenue from Environmental Services

The Corporation recorded environmental services revenue for the years ending December 31, 2018 and 2017 as follows:

Environmental Services	2018		2017
Environmental services revenue
Fee for service	$	15,007	$	9,882
Fixed price agreements		4,873		850
	$	19,880	$	10,732

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General and Administrative Expenses by Nature of Expense

12 Months Ended

Dec. 31, 2018

Disclosure Of General And Administrative Expenses [Abstract]

Disclosure of general and administrative expense [text block]

21. General and Administrative Expenses by Nature of Expense

The Corporation recorded general and administrative expenses for the years ending December 31, 2018 and 2017 as follows:

Corporate	2018		2017
General and administrative expenses
Depreciation	$	94	$	89
Amortization of intangible assets		11		13
Business development and investor relations		451		567
Office, operating and non-operating overheads		788		682
Professional		832		433
Regulatory		184		309
Restructuring costs		92		1,353
Salaries and contractors		2,262		2,112
Share-based compensation		2,544		2,305
Travel		240		301
	$	7,498	$	8,164

Environmental Services	2018		2017
General and administrative expenses
Depreciation	$	126	$	19
Amortization of intangible assets		39		59
Business development		370		164
Office, operating and non-operating overheads		1,262		756
Professional		142		29
Salaries and contractors		2,556		1,657
Travel		177		94
	$	4,672		2,778
Total General and Administrative Expenses	$	12,170	$	10,942

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Mine Site Care and Maintenance

12 Months Ended

Dec. 31, 2018

Disclosure of Exploration and evaluation Assets [Line Items]

Disclosure of exploration and evaluation assets [text block]

22. Mine Site Care and Maintenance

The Corporation recorded mine site care and maintenance expenses for the years ended December 31, 2018 and 2017 as follows:

	2018		2017 (restated–note 6)
Mine site care and maintenance
Depreciation	$	1,292	$	1,531
Salaries and contractors1		913		357
Materials and equipment1		346		-
Other expenses1		52		-
	$	2,603	$	1,888

1. Included in mine site care and maintenance costs are refurbishment and mill maintance costs.

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Other Income and expenses

12 Months Ended

Dec. 31, 2018

Disclosure of Other Operating Income Expense [Abstract]

Disclosure of other operating income (expense) [text block]

23. Other Income and expenses

The Corporation recorded other income and expenses for the years ended December 31, 2018 and 2017 as follows:

	2018			2017
Credit Facility fee – warrants	$	(930	)	$	-
Interest income		241			188
Foreign exchange gain (loss)		(15	)		964
Other income (expenses)		(68	)		(4	)
	$	(772	)	$	1,148

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Income Tax Expense

12 Months Ended

Dec. 31, 2018

Disclosure of income tax [Abstract]

Disclosure of income tax [text block]

24. Income Tax Expense

The major components of income tax expense for the years ended December 31, 2018 and 2017 are as follows:

(a) The income tax provision differs from the amount that would result from applying the Canadian federal and provincial tax rate to income before taxes. These differences result from the following items:

	2018			2017
Accounting loss before taxes	$	(6,994	)	$	(6,341	)
Federal and provincial income tax rate of 27% (2017 – 26%)		(1,888	)		(1,648	)
Non-deductible permanent differences		1,064			495
Differences in foreign exchange rates		-			-
Effect of difference in tax rates		2			2,488
Change in deferred tax asset not recognized		1,100			(1,075	)
Flow-through share renunciation		1,656			1,040
Change in estimate		(427	)		(72	)
Other		-			244
		1,507			1,472
Income tax provision	$	1,507		$	1,472

(b) The movement in deferred tax assets and liabilities during the year by type of temporary difference, without taking into consideration the offsetting balances within the same tax jurisdiction, is as follows:

Deferred tax liabilities	Mineral Property Interest			Inventory			Property, Plant and Equipment			Other			Total
December 31, 2016 (restated Note 6)	$	(1,483	)	$	(126	)	$	(1,505	)	$	(3,415	)	$	(6,529	)
(Charged) credit to the income statement		(1,390	)		13			41			41			(1,295	)
Charged to OCI		-			-			-			-			-
December 31, 2017	$	(2,873	)	$	(113	)	$	(1,464	)	$	(3,374	)	$	(7,824	)
(Charged) credited to the income statement		(5,046	)		-			(598	)		(2,930	)		(8,554	)
Charged to OCI		-			-			-			20			20
December 31, 2018	$	(7,919	)	$	(113	)	$	(2,062	)	$	(6,284	)	$	(16,378	)

Deferred tax assets	Mineral Property Interest		Loss Carry Forward			Property, Plant and Equipment			Decommissioning and Rehabilitation Provision			Other			Total
December 31, 2016	$	770	$	4,281		$	143		$	1,485		$	799		$	7,478
Credited (charged) to the income statement		69		(13	)		(66	)		(121	)		(775	)		(906	)
Charged to OCI		-		-			-			-			637			637
December 31, 2017	$	839	$	4,268		$	77		$	1,364		$	661		$	7,209
Credited (charged) to the income statement		3,632		2,997			(5	)		63			(612	)		(6,075	)
December 31, 2018	$	4,471	$	7,265		$	72		$	1,427		$	49		$	13,284

Net deferred tax liabilities
December 31, 2017 (restated Note 6)	$	(614	)
Charged to the income statement		(2,504	)
Charged to OCI		20
December 31, 2018	$	(3,098	)

(c) At December 31, 2018, the Corporation has unrecognized tax attributes, noted below, that are available to offset future taxable income. The Corporation has not recognized the deferred tax asset on these temporary differences because they relate to entities within the group that have a history of losses and there is not yet adequately convincing evidence that these entities will generate sufficient future taxable income to enable offset.

Tax loss carry forwards	$	40,650
Mineral property interest		11,150
Other		8,587
	$	60,387

As at December 31, 2018, the Corporation has available non-capital losses for income tax purposes in Canada which are available to be carried forward to reduce taxable income in future years and for which no deferred income tax asset has been recognized, and which expire as follows:

	Total
2033	$	1,952
2034		9,351
2035		6,685
2036		6,643
2037		8,302
2038		7,717
	$	40,650

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Financial Instruments

12 Months Ended

Dec. 31, 2018

Disclosure of Financial Instrument [Abstract]

Disclosure of financial instruments [text block]

25. Financial Instruments

Financial Assets and Liabilities

Information regarding the carrying amounts of the Corporation’s financial assets and liabilities is summarized as follows:

	Fair Value Hierarchy Classification		December 31 2018		December 31 2017
Fair value through profit or loss
Warrants		Level 2	$	24	$	1,082
Embedded derivative - Wheaton agreement		Level 3	$	9,671	$	6,600
Fair value through other comprehensive loss
Investment in marketable securities		Level 1	$	736	$	673
			$	10,431	$	8,355

During the year ended December 31, 2018, the fair value of warrants were estimated using the Black-Scholes option pricing model, assuming a risk-free interest rate of 1.85% (2017 – 1.66%) per annum, an expected life of options of 0.62 to 1.98 years (2017 – 0.17 to 2.98 years), an expected volatility of 72% to 93% (2017 – 84%) based on historical volatility and no expected dividends (2017 – nil).

During the year ended December 31, 2018, the fair value of the embedded derivative related to the Wheaton agreement was estimated using a probability-based dynamic pricing structure resulting in a mark-to-market adjustment of $3,071,000 (2017 – nil). The model currently relies upon inputs from the preliminary economic assessment dated March 29, 2017, and considers payable ounces delivered and head grade. The model is updated quarterly for the discount rate used and silver price assumptions based on the risk-free yield curve and silver price forward curve at quarter end.

The carrying amounts of all of the Corporation’s other financial assets and liabilities, carried at amortized cost, reasonably approximate their fair values due to their short-term nature.

Financial Instrument Risk Exposure

The Corporation’s activities expose it to a variety of financial risks: market risk (currency risk), credit risk and liquidity risk. Risk management is carried out by management under policies approved by the Board of Directors. Management identifies and evaluates the financial risks in co-operation with the Corporation’s operating units. The Corporation’s overall risk management program seeks to minimize potential adverse effects on the Corporation’s financial performance, in the context of its general capital management objectives as further described in Note 6.

Currency Risk

Substantially all of the Corporation’s property, plant and equipment and mineral properties are located in Canada; all of its mining operations occur in Canada; and a significant majority of its environmental services revenues are earned in Canada. However, if commercial production recommences at the Keno Hill Silver District, the Corporation’s exposure to US dollar currency risk significantly increases as sales of concentrate and the settlement of the Wheaton streaming payments will be effected in US dollars. In addition, a portion of its environmental services revenues, and receivables arising therefrom, are also denominated in US dollars. As well, while a significant majority of the Corporation’s operating costs are denominated in Canadian dollars, it does have some exposure to costs, as some accounts payable and accrued liabilities are denominated in US dollars. The Corporation is exposed to currency risk at the balance sheet date through the following financial assets and liabilities, which are denominated in US dollars:

	December 31 2018			December 31 2017
Cash and cash equivalents	$	1,374		$	1,336
Accounts and other receivable		917			510
Accounts payable and accrued liabilities		(649	)		(298	)
Net exposure	$	1,642		$	1,548

Based on the above net exposure at December 31, 2018, a 10% depreciation or appreciation of the US dollar against the Canadian dollar would result in an approximately $164,000 decrease or increase respectively in both net and comprehensive loss (2017 – $158,000). The Corporation has not employed any currency hedging programs during the current period.

Credit Risk

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its obligations. The Corporation’s maximum exposure to credit risk at the balance sheet date under its financial instruments is summarized as follows:

	December 31 2018		December 31 2017
Trade receivables
Currently due	$	5,228	$	1,035
Past due by 90 days or less, not impaired		1,375		940
Past due by greater than 90 days, not impaired		86		13
		6,689		1,988
Cash		3,629		6,019
Demand deposits		4,947		11,887
Term deposits		2,725		7,092
	$	17,990	$	26,986

Substantially all of the Corporation’s cash, cash equivalents and term deposits are held with major financial institutions in Canada, and management believes the exposure to credit risk with respect to such institutions is not significant. Those financial assets that potentially subject the Corporation to credit risk are primarily receivables. Management actively monitors the Corporation’s exposure to credit risk under its financial instruments, particularly with respect to receivables. The Corporation considers the risk of material loss to be significantly mitigated due to the financial strength of the parties from whom the receivables are due, including with respect to trade accounts receivable as the Corporation’s major customers include government organizations as well as substantial corporate entities. Receivables that are past due by greater than 90 days have been subsequently collected.

Liquidity Risk

Liquidity risk is the risk that the Corporation will not be able to meet its obligations associated with financial liabilities. The Corporation has a planning and budgeting process in place by which it anticipates and determines the funds required to support its normal operating requirements as well as the growth and development of its mining projects. The Corporation coordinates this planning and budgeting process with its financing activities through the capital management process described in Note 26. The Corporation’s financial liabilities are comprised of its accounts payable and accrued liabilities, the contractual maturities of which at the balance sheet date are summarized as follows:

	December 31 2018		December 31 2017
Accounts payable and accrued  liabilities with contractual maturities
Within 90 days or less	$	7,210	$	3,601
In later than 90 days, not later than one year		-		-
	$	7,210	$	3,601

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Management of Capital

12 Months Ended

Dec. 31, 2018

Disclosure of share capital, reserves and other equity interest [Abstract]

Disclosure of objectives, policies and processes for managing capital [text block]

26. Management of Capital

The capital managed by the Corporation includes the components of shareholders’ equity as described in the consolidated statements of shareholders’ equity. The Corporation is not subject to externally imposed capital requirements.

The Corporation’s objectives of capital management are to create long-term value and economic returns for its shareholders. It does this by seeking to maximize the availability of finance to fund the growth and development of its mining projects, and to support the working capital required to maintain its ability to continue as a going concern. The Corporation manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of its assets, seeking to limit shareholder dilution and optimize its cost of capital while maintaining an acceptable level of risk. To maintain or adjust its capital structure, the Corporation considers all sources of finance reasonably available to it, including but not limited to issuance of new capital, issuance of new debt and the sale of assets in whole or in part, including mineral property interests. The Corporation’s overall strategy with respect to management of capital at December 31, 2018 remains fundamentally unchanged from the year ended December 31, 2017.

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2018

Disclosure Of Cash Flow Statement Explanatory [Abstract]

Disclosure of cash flow statement [text block]

27. Supplemental Cash Flow Information

Supplemental cash flow information with respect to the year ended December 31, 2018 and 2017 is summarized as follows:

	2018		2017
Operating Cash Flows Arising From Interest and Taxes
Interest received	$	129	$	221
Non-Cash Investing and Financing Transactions
Capitalization of share-based compensation to mineral properties	$	368	$	369
Capitalization of depreciation to mineral properties	$	375	$	265
Capitalization of re-estimation of decommissioning and rehabilitation provision	$	163	$	37
Issuance of shares related to acquistion of subsidiary	$	416	$	-
Increase in non-cash working capital related to:
Mining operations properties	$	6	$	(23	)
Exploration and evaluation properties	$	305	$	(1,130	)

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Segmented Information

12 Months Ended

Dec. 31, 2018

Disclosure of operating segments [abstract]

Disclosure of entity's operating segments [text block]

28. Segmented Information

The Corporation had two operating segments during the years ended December 31, 2018 and 2017, being firstly mining operations, including care and maintenance of the formerly operating Bellekeno mine, producing silver, lead and zinc in the form of concentrates (suspended in September 2013), as well as exploration, underground development and evaluation activities; and secondly environmental services carried out through AEG, providing consulting and project management services in respect of environmental permitting and compliance and site remediation and reclamation. The Corporation’s executive head office and general corporate administration are included within ‘Corporate and other’ to reconcile the reportable segments to the consolidated financial statements. An operating segment is a component of an entity that engages in business activities, operating results are reviewed by the chief operating decision maker with respect to resource allocation and for which discrete financial information is available. The chief operating decision maker for the Corporation is the Chief Executive Officer. Inter-segment transactions are recorded at amounts that reflect normal third-party terms and conditions, with inter-segment profits eliminated from the cost base of the segment incurring the charge. Revenue from non-Canadian customers of both operating segments was derived primarily from the United States.

Segmented information as at and for the year ended December 31, 2018 and 2017 is summarized as follows:

As at and for year ended December 31, 2018	Environmental Services			Mining			Corporate and Other			Total
Segment revenues
External customers
Canadian	$	13,105		$	-		$	-		$	13,105
Non-Canadian		6,775			-			-			6,775
Total revenues as reported		19,880			-			-			19,880
Cost of sales		13,828			-			-			13,828
Depreciation and amortization		165			1,292			105			1,562
Share-based compensation		-			-			2,544			2,544
Other G&A expenses		4,507			86			5,701			10,294
Mine site care and maintenance		-			1,311			-			1,311
Foreign exchange (gain) loss		35			9			(29	)		15
Loss on investments					113			459			572
Gain on derivative asset		-			(3,071	)		-			(3,071	)
Other (income) loss		(8	)		68			(241	)		(181	)
Segment income (loss) before taxes	$	1,353		$	192		$	(8,539	)	$	(6,994	)(i)
Total assets	$	11,462		$	113,341		$	8,215		$	133,018
Total liabilities	$	4,116		$	10,284		$	1,988		$	16,388

As at and for year ended December 31, 2017 (restated – Note 6)	Environmental Services			Mining			Corporate and Other			Total
Segment revenues
External customers
Canadian	$	5,881		$	-		$	-		$	5,881
Non-Canadian		4,851			-			-			4,851
Total revenues as reported		10,732			-			-			10,732
Cost of sales		6,732			-			-			6,732
Depreciation and amortization		79			1,531			101			1,711
Share-based compensation		-			-			2,305			2,305
Other G&A expenses		2,700			-			4,404			7,104
Mine site care and maintenance		-			357			-			357
Restructuring costs		-			-			1,353			1,353
Foreign exchange loss		(1,080	)		(4	)		120			(964	)
Gain on investments		-			-			(1,341	)		(1,341	)
Other loss (income)		250			(247	)		(187	)		(184	)
Segment income (loss) before taxes	$	2,051		$	(1,637	)	$	(6,755	)	$	(6,341	)(i)
Total assets	$	6,198		$	98,303		$	17,823		$	122,324
Total liabilities	$	1,642		$	6,762		$	1,464		$	9,868

(i) Represents consolidated loss before taxes.

For the year ended December 31, 2018, revenue from three customers of the Corporation’s Environmental Services segment represents approximately $12,580,000 of the Corporation’s consolidated revenue.

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Related Party Transactions

12 Months Ended

Dec. 31, 2018

Disclosure of transactions between related parties [abstract]

Disclosure of related party [text block]

29. Related Party Transactions

The Corporation’s related parties include its subsidiaries and key management personnel. Key management personnel compensation for the years ended December 31, 2018 and 2017 was as follows:

(a) Key Management Personnel Compensation

	2018		2017
Salaries and other short-term benefits	$	2,130	$	2,246
Share-based compensation		2,513		2,072
	$	4,643	$	4,318

Key management includes the Corporation’s Board of Directors and members of senior management.

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Commitments

12 Months Ended

Dec. 31, 2018

Disclosure Of Commitments And Contingencies [Abstract]

Disclosure of commitments [text block]

30. Commitments

As at December 31, 2018, the Corporation’s contractual obligations are as follows:

(a) The Corporation has entered into various operating lease contracts for office space, motor vehicles and office equipment. The future minimum payments under these leases as are as follows:

2019	$	391
2020		283
2021		210
2022		210
2023		190
Thereafter		156
	$	1,440

(b) The Corporation’s other contractual obligations, including with respect to capital asset expenditures, totaled approximately $360,000.

(c) As a consequence of its commitment to renounce deductible exploration expenditures to the purchasers of flow-through shares, the Corporation is required to incur further renounceable exploration expenditures totaling $3,170,000 by December 31, 2019.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies [Abstract]

Description of accounting policy for basis of consolidation [Text Block]

(a) Basis of Consolidation

The Corporation’s consolidated financial statements include the accounts of the Corporation and its subsidiaries. Subsidiaries are entities controlled by the Corporation, where control is achieved by the Corporation being exposed to, or having rights to, variable returns from its involvement with the entity and having the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is obtained by Alexco, and are de-consolidated from the date that control ceases.

The following subsidiaries have been consolidated for all dates presented within these financial statements, and are wholly owned: Alexco Keno Hill Mining Corp., Elsa Reclamation & Development Corporation Ltd. (“ERDC”), Alexco Exploration Canada Corp., Alexco Environmental Group Inc., Alexco Environmental Group Holdings Inc., Alexco Water and Environment Inc. (“AWE”) and Contango Strategies Ltd. During the period January 1, 2017 through December 28, 2017, the date of the sale, amounts from Alexco Environmental (US) Group Inc. (“AEG US”) and Alexco Financial Guarantee Corp. (“AFGC”) (together referred to as “AEG US Group”) were consolidated by the Corporation. All significant inter-company transactions, balances, income and expenses are eliminated on consolidation.

Description of accounting policy for determining components of cash and cash equivalents [text block]

(b) Cash and Cash Equivalents

Cash and cash equivalents are unrestricted as to use and consist of cash on hand, demand deposits and short term interest-bearing investments with maturities of 90 days or less from the original date of acquisition and which can readily be liquidated to known amounts of cash. Redeemable interest bearing investments with maturities of up to one year are considered cash equivalents if they can readily be liquidated at any point in time to known amounts of cash and they are redeemable thereafter until maturity for invested value plus accrued interest.

Description of accounting policy for inventories [Text Block]

(c) Inventories

Inventories include ore in stockpiles, concentrate and materials and supplies. Ore in stockpiles and concentrate are recorded at the lower of weighted average cost and net realizable value. Cost comprises all mining and processing costs incurred, including labor, consumables, production-related overheads, depreciation of production-related property, plant and equipment and depletion of related mineral properties. Net realizable value is estimated at the selling price in the ordinary course of business less applicable variable selling expenses. Materials and supplies are valued at the lower of cost and replacement cost, costs based on landed cost of purchase, net of a provision for obsolescence where applicable.

When inventories have been written down to net realizable value, a new assessment of net realizable value is made in each subsequent period. When circumstances that caused the write-down no longer exist or when there is clear evidence of an increase in net realizable value, the amount of the write down is reversed.

Description of accounting policy for property, plant and equipment [text block]

(d) Property, Plant and Equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment write-downs. The cost capitalized is determined by the fair value of consideration given to acquire the asset at the time of acquisition or construction, the direct cost of bringing the asset to the condition necessary for operation, and the estimated future cost of decommissioning and removing the asset. Repairs and maintenance expenditures are charged to operations, while major improvements and replacements which extend the useful life of an asset are capitalized.

Depreciation of property, plant and equipment is calculated using the following methods:

Heavy machinery and equipment	5 years straight-line
Land and buildings	20 years straight-line
Leasehold improvements & Other	Over the term of lease, and 2 – 5 years straight-line
Roads, Camp and other site infrastructure	5 -10 years straight-line
Ore-processing mill components	Variously between 5 and 30 years straight-line

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within other gains or losses in earnings.

Description of accounting policy for mineral properties [Text Block]

(e) Mineral Properties

Exploration and Evaluation Properties

The Corporation capitalizes exploration and evaluation expenses at cost for expenditures incurred after it has obtained legal rights to explore a specific area and before technical feasibility and commercial viability of extracting mineral resources are demonstrable.

All direct and indirect costs relating to the exploration of specific properties with the objective of locating, defining and delineating the resource potential of the mineral interests on specific properties are capitalized as exploration and evaluation assets, net of any directly attributable recoveries recognized, such as exploration or investment tax credits.

The Corporation has elected to follow a policy of applying the proceeds received from the silver streaming arrangement with Wheaton Precious Metals (“Wheaton”) explained further in Note 15, as a credit to the carrying value of the Exploration and Evaluation Property. Accordingly, this has been applied retrospectively and the initial deposit has been applied as an offset against the mineral interest asset, with the cumulative catch up adjustment in the amount of $12,396,000 recognized in January 1, 2017 opening retained earnings (Note 6).

At each reporting date, exploration and evaluation assets are evaluated and may be classified as mining operations assets upon achieving technical feasibility and determination of commercial viability.

Mining Operations Properties

Mining operations properties are recorded at cost on a property-by-property basis. The recorded cost of mining operations properties is based on acquisition costs incurred to date, including capitalized exploration and evaluation costs and capitalized development costs, less depletion, recoveries and write-offs. Capitalized development costs include costs incurred to establish access to mineable resources where such costs are expected to provide a long-term economic benefit, as well as operating costs incurred, net of the proceeds from any sales generated, prior to the time the property achieves commercial production.

Depletion of mining operations properties is calculated on the units-of-production basis using estimated mine plan resources, such resources being those defined in the mine plan on which the applicable mining activity is based. The mine plan resources for such purpose are generally as described in an economic analysis supported by a technical report compliant with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects.

Description of accounting policy for intangible assets other than goodwill [text block]

(f) Intangible Assets

Customer relationships, rights to provide services and database assets acquired through business combinations, and acquired patents, are recorded at fair value at acquisition date. All of the Corporation’s intangible assets have finite useful lives, and are amortized using the straight-line method over their expected useful lives.

Description of accounting policy for impairment of non-financial assets [text block]

(g) Impairment of Non-Current Non-Financial Assets

The carrying amounts of non-current non-financial assets are reviewed and evaluated for impairment when events or changes in circumstances indicate that the carrying amounts of the related asset may not be recoverable. Non-current non-financial assets include property, plant, equipment, mineral properties and finite-life intangible assets. If the recoverable amount is less than the carrying amount of the asset, an impairment loss is recognized and the asset is written down to recoverable value.

The recoverable amount is the higher of an asset’s “fair value less cost of disposal” and “value-in-use”. Where the asset does not generate cash flows that are independent from other assets, the recoverable amount of the cash-generating unit to which the asset belongs is determined, with a cash-generating unit being the smallest identifiable group of assets and liabilities that generate cash inflows independent from other assets. Exploration and evaluation assets are each separately assessed for impairment, and are not allocated by the Corporation to a cash generating unit (“CGU”) for impairment assessment purposes. “Fair value less cost of disposal” is determined as the amount that would be obtained from the sale of the asset or cash-generating unit in an arm’s length transaction between knowledgeable and willing parties. In assessing “value-in-use”, the future cash flows expected to arise from the continuing use of the asset or cash-generating unit in its present form are estimated using assumptions that an independent market participant would consider appropriate, and are then discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset or unit.

Where conditions that gave rise to a recognized impairment loss are subsequently reversed, the amount of such reversal is recognized into earnings immediately, though is limited such that the revised carrying amount of the asset or cash-generating unit does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash generating unit.

Description of accounting policy for provisions [text block]

(h) Provisions

General

Provisions are recorded when a present legal or constructive obligation exists as a result of past events, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

The expense relating to any provision is presented in profit or loss net of any reimbursement. Provisions are discounted using a current risk-free pre-tax rate that reflects where appropriate the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Decommissioning and Rehabilitation Provision

The Corporation recognizes a decommissioning and rehabilitation provision for statutory, contractual, constructive or legal obligations to undertake reclamation and closure activities associated with property, plant, equipment and mineral properties, generally at the time that an environmental or other site disturbance occurs or a constructive obligation for reclamation and closure activities is determined. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Provisions are measured at the present value of the expected future expenditures required to settle the obligation, using a risk-free pre-tax discount rate reflecting the time value of money and risks specific to the liability. The liability is increased for the passage of time, and adjusted for changes to the current market-based risk-free discount rate as well as changes in the estimated amount or timing of the expected future expenditures. The associated restoration costs are capitalized as part of the carrying amount of the related asset and then depreciated accordingly.

Description of accounting policy for recognition of revenue [text block]

(i) Revenue Recognition

Revenue from environmental services are recognized upon the transfer of promised services or goods based on the output appropriate to the particular service contract and when a customer has the ability to direct the use and obtain the benefits from the service or good. The Corporation provides environmental services related to permitting and remediation activities, generally in the mining industry, as well provide engineering, design, construction and operational services related to water treatment systems. The Corporation identifies the performance obligations in the contract, and the obligations are measured by reference to the transaction price. The transaction price is established in the agreement as either a fixed price or rate per hour. If the contract has multiple performance obligations, the Corporation will assign the transaction price to the various performance obligations. The stand-alone selling price for services identified within the contract are determined based on detailed billing schedules included within the underlying contract with the customer or based on comparable projects where relevant. Generally, performance obligations for environmental services are satisfied over time as the service is provided. Revenue is recognized using the input method with the inputs being costs incurred on related projects. The general payment terms are 30 to 60 days once the performance obligations have been satisfied. Typical payments are received 30 days after the invoice has been received by the client.

Management will assess and use significant judgement to determine whether the Corporation has promised to provide the specified good and service itself (as a principal) or to arrange for those specified goods or services to be provided by another party (as an agent). In those arrangements where the Corporation obtains control of the specified good or service before they are transferred to the customer, they will be deemed to act as a principal. In those arrangements were the Corporation is deemed to be the principal, the Corporation will recognize as revenue the “gross” amount paid by the customer for the specified good or service. If the Corporation acts an agent, it will record revenue as the net consideration that it retains for the specified good or service that was provided to the customer.

Description of accounting policy for share-based payment transactions [text block]

(j) Share-Based Compensation and Payments

The cost of incentive share options and other equity-settled share-based compensation and payment arrangements is recorded based on the estimated fair value at the grant date and charged to earnings over the vesting period. With respect to incentive share options, grant-date fair value is measured using the Black-Scholes option pricing model. With respect to restricted share units, grant-date fair value is determined by reference to the share price of the Corporation at the date of grant. Where share-based compensation awards are subject to vesting, each vesting tranche is considered a separate award with its own vesting period and grant-date fair value. Share-based compensation expense is recognized over the tranche’s vesting period by a charge to earnings, based on the number of awards expected to vest. The number of awards expected to vest is reviewed at least annually, with any impact being recognized immediately.

Description of accounting policy for flow through shares [Text Block]

(k) Flow-Through Shares

The proceeds from the offering of flow-through shares are allocated between the shares and the sale of tax benefits when the shares are offered. The allocation is made based on the difference between the market value of the shares and the amount the investors pay for the flow-through shares. A liability is recognized for the premium paid by the investors and is then recognized in the results of operations in the period the eligible exploration expenditures are incurred.

Description of accounting policy for warrants [text block]

(l) Warrants

When the Corporation issues units that are comprised of a combination of shares and warrants, the value is assigned to shares and warrants based on their relative fair values. The fair value of the shares is determined by the closing price on the date of the transaction and the fair value of the warrants is determined based on a Black-Scholes option pricing model.

Description of accounting policy for income tax [text block]

(m) Current and Deferred Income Taxes

Income tax expense comprises current and deferred income taxes. Current and deferred income taxes are recognized in profit or loss except to the extent that they relate to a business combination or to items recognized directly in equity or in other comprehensive income.

Current income taxes are the expected taxes payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous periods.

Deferred income taxes are recognized using the liability method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. However, deferred income taxes are not recognized if they arise from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit nor loss. Deferred income taxes are determined using tax rates and laws that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets and liabilities are presented as non-current in the financial statements.

Deferred income tax assets and liabilities are offset if there is a legally enforceable right of offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. Deferred income tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the assets can be utilized.

Description of accounting policy for foreign currency translation [text block]

(n) Translation of Foreign Currencies

The financial statements of each entity in the group are measured using the currency of the primary economic environment in which each entity operates (the “functional currency”). The consolidated financial statements are presented in Canadian dollars.

The functional currency of all entities in the Corporation group other than AWE is the Canadian dollar, while the functional currency of AWE is the United States dollar. The financial statements of AWE are translated into the Canadian dollar presentation currency using the current rate method as follows:

 Assets and liabilities – at the closing rate at the date of the statement of financial position.

 Income and expenses – at the average rate of the period (as this is considered a reasonable approximation to actual rates).

 All resulting changes are recognized in other comprehensive income as cumulative translation adjustments.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognized in other comprehensive income.

When an entity disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary is reallocated between controlling and non-controlling interests.

Description of accounting policy for earnings per share [text block]

(o) Earnings or Loss Per Share

Basic earnings per share is calculated by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period.

Diluted earnings (loss) per share is calculated using the treasury share method whereby all “in the money” options, warrants and equivalents are assumed to have been exercised at the beginning of the period and the proceeds from the exercise are assumed to have been used to purchase common shares at the average market price during the period.

Description of accounting policy for financial instruments [text block]

(p) Financial Instruments

Financial assets and financial liabilities, including derivative instruments, are initially recognized at fair value on the balance sheet when the Corporation becomes a party to the relevant contractual provisions. Measurement in subsequent periods depends on the financial instrument’s classification.

The Corporation classifies the financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), fair value through other comprehensive income (“FVTOCI”) or at amortized cost.

(i) Classification

The Corporation determines the classification of financial instruments at initial recognition.

Financial assets

a) Debt - The classification of debt instruments is driven by the Corporation’s business model for managing the financial assets and the relevant contractual cash flow characteristics. A debt instrument is measured at amortized cost if the objective of the business model is to hold the debt instrument for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest.

b) Equity - On the day of acquisition the Corporation may make an irrevocable election (on an instrument-by- instrument basis) to designate them as at FVTOCI. Investments in common shares are held for longterm strategic purposes and not for trading. Upon the adoption of IFRS 9, the Company made an irrevocable election to designate these investments as FVTOCI in order to provide a more meaningful presentation based on management’s intention, rather than reflecting changes in fair value in net income.

Financial liabilities

Financial liabilities are measured at amortized cost; unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or the Corporation has opted to measure at FVTPL.

(ii) Measurement

Financial assets and liabilities at FVTPL

Financial assets and liabilities at FVTPL are initially recognized at fair value and transaction costs are expensed in the consolidated statement of income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets or liabilities held at FVTPL are included in the consolidated statement of income (loss) in the period in which they occur. Where the Corporation has opted to designate a financial liability at FVTPL, any changes associated with our own credit risk will be recognized in Other Comprehensive Income (“OCI”).

Financial assets at FVTOCI

Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently, the investments are measured at fair value, with gains and losses arising from changes from initial recognition recognized in OCI.

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value net of transaction costs, and subsequently carried at amortized cost adjusted by any impairment.

Derivative financial instruments

When the Corporation enters into derivative contracts, these are intended to reduce the exposures related to assets and liabilities, or forecast transactions. Derivatives are classified as FVTPL.

Derivatives embedded in financial liabilities are treated as separate derivatives when their risks and characteristics are not closely related to the host contracts. However, the classification approach described above is applied to all financial assets, including those that contain embedded derivatives, without the need to separate the embedded derivative from the host contract.

(iii) Impairment of financial assets

Impairment of financial assets at amortized cost

The Corporation recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost.

The Corporation is applying the simplified method for trade receivables and is calculating expected credit losses at an amount equal to the lifetime expected credit loss.

Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the expected credit losses are reversed after the impairment was recognized.

(iv) Derecognition

Derecognition of financial assets and liabilities

Financial assets are derecognized when the investments mature or are sold, and substantially all the risks and rewards of ownership have been transferred. A financial liability is derecognized when the obligation under the liability is discharged, canceled or expired. Gains and losses on derecognition are recognized within finance income and finance costs, respectively. Gains or losses on equity financial assets designated as FVTOCI remain within accumulated OCI.

(v) Fair value of financial instruments

The fair values of quoted investments are based on current prices. If the market for a financial asset is not active, the Corporation establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the financial asset’s specific circumstances.

Description of accounting policy for fair value measurement [text block]

(q) Fair Value Measurement

Where fair value is used to measure assets and liabilities in preparing these financial statements, it is estimated at the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. Fair values are determined from inputs that are classified within the fair value hierarchy defined under IFRS as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Inputs for the asset or liability that are unobservable

Description of accounting policy for goodwill [text block]

(r) Goodwill

The Corporation recognizes goodwill relating to a business combination when the total purchase price exceeds the fair value of the identifiable assets and liabilities of the acquired business. Goodwill is tested annually for impairment of when there is an indication that the goodwill may be impaired. Any impairment is recognized as an expense immediately. Should there be a recovery in value, there is no reversal of previous impairments of Goodwill.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies [Abstract]

Disclosure of detailed information about property, plant and equipment Useful Life [Text Block]

Depreciation of property, plant and equipment is calculated using the following methods:

Heavy machinery and equipment	5 years straight-line
Land and buildings	20 years straight-line
Leasehold improvements & Other	Over the term of lease, and 2 – 5 years straight-line
Roads, Camp and other site infrastructure	5 -10 years straight-line
Ore-processing mill components	Variously between 5 and 30 years straight-line

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Impacts of Change in Accounting Policy and Adoption of New IFRS Pronouncements (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of information about consolidated structured entities [abstract]

Disclosure Of Information About Consolidated Consolidated Balance Sheets [Table Text Block]

The table below summarizes the adjustments to previously reported figures related to the policy change pertaining to IFRS 6, which is more fully described below:

Adjustments to Condensed Consolidated Balance Sheets

	December 31 2017			January 1 2017
Equity before accounting changes	$	100,060		$	90,673
Adjustments to equity relating to:
Property plant and equipment		2,117			2,283
Mineral properties		(10,229	)		(10,229	)
Deferred income tax liabilities		2,390			1,440
Silver streaming interest		18,118			18,118
Equity after accounting changes	$	112,456		$	102,285

Disclosure Of Information About Consolidated Consolidated Statements Of Loss and Comprehensive [Table Text Block]

Adjustments to Condensed Consolidated Statements of Loss and Comprehensive Loss

	Year ended December 31 2017			Year ended January 1 2017
Loss before accounting changes	$	(7,648	)	$	(4,359	)
Adjustments to loss relating to:
Depreciation and amortization		(165	)		(165	)
Loss after accounting changes	$	(7,813	)	$	(4,524	)
Loss per share before accounting changes:
Basic and diluted	$	(0.08	)	$	(0.04	)
Loss per share after accounting changes:
Basic and diluted	$	(0.09	)	$	(0.05	)

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Acquisition of Contango Strategies Ltd (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of detailed information about business combination [abstract]

Disclosure of detailed information about business combination [text block]

The preliminary allocation of the purchase price of Contango based on management’s estimate of fair values is as follows:

Fair value of consideration
Amount settled in cash	$	602
Fair value of common shares issued		416
Fair value of cash to be settled in one year		370
Total fair value of consideration	$	1,388
Fair value of identifiable assets acquired and liabilities assumed from Contango:
Cash and cash equivalents		66
Accounts and other receivables		618
Inventory		102
Prepaid expenses		54
Property, plant and equipment		333
Accounts payable and accrued liabilities		(335	)
Net identifiable assets acquired and liabilities assumed	$	838
Goodwill on acquisition	$	550
Net cash outflow on acquisition	$	536
Acquisition costs charged to expenses	$	28

Summary of the revenues, cost of sales and net income (loss) [Text Block]

Below is a proforma summary of the revenues, cost of sales and net income (loss) incurred by Contango for the period January 1, 2018 to June 14, 2018 combined with the revenue, cost of sales and net loss for Alexco for the year ended December 31, 2018. Revenue since the date of acquisition was $1.4 million:

	Contango Strategies Ltd.		Alexco Resource Corp.			Proforma Combined Entities
Selected Financial Information	For the period January 1, 2018 to June 14, 2018		For the year ended December 31, 2018			For the year ended December 31, 2018
Environmental services revenue	$	1,162	$	19,880		$	21,042
Costs of sales and other expenses		1,026		28,381			29,407
Net income (loss)	$	136	$	(8,501	)	$	(8,365	)

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Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2018

Cash and Cash Equivalents [Abstract]

Disclosure of cash and bank balances at central banks [text block]

	December 31 2018		December 31 2017
Cash at bank and on hand	$	3,629	$	6,019
Short-term bank deposits		4,947		11,887
	$	8,576	$	17,906

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Accounts and Other Receivables (Tables)

12 Months Ended

Dec. 31, 2018

Accounts and Other Receivables [Abstract]

Schedule Of Accounts And Other Receivables [Text Block]

	December 31 2018		December 31 2017
Trade receivables 1	$	6,689	$	1,988
Interest and other		122		98
	$	6,811	$	2,086

1. Trade receivables are derived primarily from the environmental consulting business (AEG).

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Restricted Cash and Deposits (Tables)

12 Months Ended

Dec. 31, 2018

Restricted Cash and Deposits [Abstract]

Schedule Of Restricted Cash And Cash Equivalent [Text Block]

	December 31 2018		December 31 2017
Security for decommissioning obligations	$	2,569	$	6,507
Security for remediation services agreement		-		499
Other		156		86
Restricted cash and deposits		2,725		7,092
Less: current portion		-		499
	$	2,725	$	6,593

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Investments (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Investments [Abstract]

Schedule of Investments [Text Block]

	December 31 2018		December 31 2017
Common shares held	$	736	$	673
Warrants held		24		1,082
Investments		760		1,755
Less: current portion		351		728
	$	409	$	1,027

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Inventories (Tables)

12 Months Ended

Dec. 31, 2018

Classes of current inventories [abstract]

Disclosure of Detailed Information on inventories [Text Block]

	December 31 2018		December 31 2017
Ore in stockpiles and mill supplies	$	4,699	$	4,743
Materials and supplies		818		646
Inventory		5,517		5,389
Less: current portion		818		646
	$	4,699	$	4,743

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Disclosure of detailed information about property, plant and equipment [text block]

Cost	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	1,709	$	5,343	$	22,749	$	8,475	$	1,335	$	39,611
Additions (includes business combinations)		-		226		-		837		168		1,231
Decommission change in estimate		-		-		85		-		-		85
December 31, 2018	$	1,709	$	5,569	$	22,834	$	9,312	$	1,503	$	40,927

Accumulated Depreciation	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	351	$	4,692	$	10,270	$	6,767	$	1,275	$	23,355
Depreciation (includes business combinations)		78		177		1,178		766		140		2,339
Disposal		-		-		-		-		-		-
December 31, 2018	$	429	$	4,869	$	11,448	$	7,533	$	1,415	$	25,694

Net book Value	Land and Buildings		Camp, Roads, and Other Site		Ore Processing Mill		Heavy Machinery and Equipment		Leasehold Improvements & Other		Total
December 31, 2017 (restated – note 6)	$	1,358	$	651	$	12,479	$	1,708	$	60	$	16,256
December 31, 2018	$	1,280	$	700	$	11,386	$	1,779	$	88	$	15,233

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Mineral Properties (Tables)

12 Months Ended

Dec. 31, 2018

Mineral Properties [Abstract]

Disclosure of detailed information about investment property [text block]

	December 31 2017 (restated – note 6)		Expenditures Incurred		December 31 2018
Mineral Properties
Keno Hill District Properties
Bellekeno	$	6,885	$	238	$	7,123
Lucky Queen		693		131		824
Onek		1,034		31		1,065
McQuesteni		1,997		-		1,997
Silver King		4,464		-		4,464
Flame & Moth		22,455		5,856		28,311
Bermingham		23,376		8,708		32,084
Elsa Tailings		884		-		884
Other Keno Hill Properties		2,799		2,675		5,474
Total	$	64,587	$	17,639	$	82,226

	December 31 2016 (restated – note 6)		Expenditures Incurred		December 31 2017 (restated - note 6)
Mineral Properties
Keno Hill District Properties
Bellekeno	$	6,809	$	76	$	6,885
Lucky Queen		563		130		693
Onek		1,018		16		1,034
McQuesteni		1,924		73		1,997
Silver King		4,464		-		4,464
Flame & Moth		21,966		489		22,455
Bermingham		15,193		8,183		23,376
Elsa Tailings		884		-		884
Other Keno Hill Properties		2,799		-		2,799
Total	$	55,620	$	8,967	$	64,587

(i) Effective May 24, 2017, the Corporation entered into an Option Agreement with Banyan Gold Corp. (“Banyan”) to option up to 100% the McQuesten property. In three stages, Banyan may earn up to 100% of the McQuesten property, by incurring a minimum $2,600,000 in exploration expenditures ($717,000 incurred to December 31, 2018), issue 1,600,000 shares (800,000 shares received to December 31, 2018), pay a total of $2,600,000 in cash or shares and grant Alexco a 6% net smelter return (“NSR”) royalty with buybacks totalling $7,000,000 to reduce to a 1% NSR royalty on gold and 3% NSR royalty on silver.

Schedule Of Changes In Mineral Properties [Text Block]

	Mining Operations Properties			Exploration and Evaluation Properties		Total
December 31, 2018
Cost	$	99,472		$	73,213	$	172,685
Accumulated depletion and write-downs		(90,459	)		-		(90,459	)
Net book value	$	9,013		$	73,213	$	82,226
December 31, 2017 (restated – note 6)
Cost	$	99,071		$	55,975	$	155,046
Accumulated depletion and write-downs		(90,459	)		-		(90,459	)
Net book value	$	8,612		$	55,975	$	64,587

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Embedded Derivative Asset and Silver Stream (Table)

12 Months Ended

Dec. 31, 2018

Disclosure of Derivative Financial Instrument [Abstract]

Disclosure Of Derivative Financial Instruments

	December 31 2018		December 31 2017 (restated – note 6)
Embedded derivative asset – Beginning of year	$	6,600	$	-
Embedded derivative asset - Addition		-		6,600
Fair value adjustment		3,071		-
Embedded derivative asset – End of year	$	9,671	$	6,600

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Accounts payable and accrued liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Accounts Payables And Accrued Liabilities [Abstract]

Schedule Of Accounts Payable And Accrued Liabilities [Text Block]

	December 31 2018		December 31 2017
Trade payables	$	3,567	$	1,468
Accrued liabilities and other		3,643		2,133
	$	7,210	$	3,601

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Decommissioning and Rehabilitation Provision (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of other provisions [abstract]

Disclosure of detailed information about decommissioning and rehabilitation provision [Text Block]

	December 31 2018		December 31 2017
Balance – beginning of year	$	5,055	$	4,955
Increase due to re-estimation		163		37
Accretion expense, included in finance costs		68		63
Balance – end of year	$	5,286	$	5,055

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Capital and Reserves (Tables)

12 Months Ended

Dec. 31, 2018

Capital and reserves [Line Items]

Disclosure of number and weighted average exercise prices of share options [text block]

The changes in incentive share options outstanding are summarized as follows:

	Weighted average exercise price		Number of shares issued or issuable on exercise			Amount
Balance – December 31, 2017	$	2.06		6,546,666		$	6,258
Stock options granted	$	2.07		2,524,000			-
Share-based compensation expense		-		-			2,480
Options exercised	$	0.77		(281,666	)		(106	)
Options forfeited or expired	$	5.39		(1,050,167	)		(3,163	)
Balance – December 31, 2018	$	1.66		7,738,833		$	5,469
Balance – December 31, 2016	$	2.48		6,175,995		$	6,996
Stock options granted	$	2.31		1,645,500			-
Share-based compensation expense		-		-			2,204
Options exercised	$	1.28		(126,332	)		(78	)
Options forfeited or expired	$	4.78		(1,148,497	)		(2,864	)
Balance – December 31, 2017	$	2.06		6,546,666		$	6,258

Disclosure of range of exercise prices of outstanding share options [text block]

Incentive share options outstanding and exercisable at December 31, 2018 are summarized as follows:

	Options Outstanding						Options Exercisable
Exercise Price	Number of Shares Issuable on Exercise		Average Remaining Life (Years)		Average Exercise Price		Number of Shares Issuable on Exercise		Average Exercise Price
$0.60		35,000		0.96	$	0.60		35,000	$	0.60
$0.60		989,333		1.12	$	0.60		989,333	$	0.60
$0.84		1,422,500		2.12	$	0.84		1,422,500	$	0.84
$1.73		600,000		2.44	$	1.73		600,000	$	1.73
$1.75		42,000		3.63	$	1.75		42,000	$	1.75
$1.78		150,000		2.49	$	1.78		150,000	$	1.78
$1.93		60,000		4.36	$	1.93		30,000	$	1.93
$1.94		475,000		0.12	$	1.94		475,000	$	1.94
$2.07		1,834,000		4.08	$	2.07		917,000	$	2.07
$2.07		587,000		4.08	$	2.07		-	$	2.07
$2.32		1,544,000		3.09	$	2.32		1,544,000	$	2.32
		7,738,833		2.73	$	1.66		6,204,833	$	1.55

Warrants [Member]

Capital and reserves [Line Items]

Disclosure of number and weighted average exercise prices of other equity instruments [text block]

The changes in warrants outstanding are summarized as follows:

Expiry Date	Exercise Price		Balance at December 31, 2017		Issued		Exercised			Expired			Balance at December 31, 2018
May 17, 2018	$	1.75		4,868,620		-		(1,106,451	)		(3,762,169	)		-
May 17, 2018	$	1.49		60,900		-		(60,900	)		-			-
May 30, 2019	$	2.15		126,174		-		-			-			126,174
Feb 23, 2023	$	2.25		-		1,000,000		-			-			1,000,000
				5,055,694		1,000,000		(1,167,351	)		(3,762,169	)		1,126,174

Restricted Share Units [Member]

Capital and reserves [Line Items]

Disclosure of number and weighted average exercise prices of other equity instruments [text block]

The changes in RSUs outstanding are summarized as follows:

	Number of shares issued or issuable on vesting			Amount
Balance – December 31, 2017		398,325		$	401
RSUs granted		193,700			-
Share-based compensation expense recognized		-			467
RSUs vested		(318,036	)		(497	)
Balance – December 31, 2018		273,989		$	371
Balance – December 31, 2016		452,950		$	220
RSUs granted		235,000			-
Share-based compensation expense recognized		-			524
RSUs vested		(289,625	)		(343	)
Balance – December 31, 2017		398,325		$	401

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Revenue from Environmental Services (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of revenue [Abstract]

Disclosure Of Detailed Information About Revenue From Services text block [Text Block]

The Corporation recorded environmental services revenue for the years ending December 31, 2018 and 2017 as follows:

Environmental Services	2018		2017
Environmental services revenue
Fee for service	$	15,007	$	9,882
Fixed price agreements		4,873		850
	$	19,880	$	10,732

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General and Administrative Expenses by Nature of Expense (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure Of General And Administrative Expenses [Abstract]

Schedule Of General And Administrative Expenses [Text Block]

The Corporation recorded general and administrative expenses for the years ending December 31, 2018 and 2017 as follows:

Corporate	2018		2017
General and administrative expenses
Depreciation	$	94	$	89
Amortization of intangible assets		11		13
Business development and investor relations		451		567
Office, operating and non-operating overheads		788		682
Professional		832		433
Regulatory		184		309
Restructuring costs		92		1,353
Salaries and contractors		2,262		2,112
Share-based compensation		2,544		2,305
Travel		240		301
	$	7,498	$	8,164

Environmental Services	2018		2017
General and administrative expenses
Depreciation	$	126	$	19
Amortization of intangible assets		39		59
Business development		370		164
Office, operating and non-operating overheads		1,262		756
Professional		142		29
Salaries and contractors		2,556		1,657
Travel		177		94
	$	4,672		2,778
Total General and Administrative Expenses	$	12,170	$	10,942

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Mine Site Care and Maintenance (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of exploration and evaluation assets [Abstract]

Schedule of mine site care and maintenance expenses [Text Block]

The Corporation recorded mine site care and maintenance expenses for the years ended December 31, 2018 and 2017 as follows:

	2018		2017 (restated–note 6)
Mine site care and maintenance
Depreciation	$	1,292	$	1,531
Salaries and contractors1		913		357
Materials and equipment1		346		-
Other expenses1		52		-
	$	2,603	$	1,888

1. Included in mine site care and maintenance costs are refurbishment and mill maintance costs.

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Other Income and expenses (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Other Operating Income Expense [Abstract]

Disclosure Of Other Operating Income Expense

The Corporation recorded other income and expenses for the years ended December 31, 2018 and 2017 as follows:

	2018			2017
Credit Facility fee – warrants	$	(930	)	$	-
Interest income		241			188
Foreign exchange gain (loss)		(15	)		964
Other income (expenses)		(68	)		(4	)
	$	(772	)	$	1,148

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Income Tax Expense (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of income tax [Abstract]

Detailed Information for Reconciliation Of Income Tax Provision [Text Block]

(a) The income tax provision differs from the amount that would result from applying the Canadian federal and provincial tax rate to income before taxes. These differences result from the following items:

	2018			2017
Accounting loss before taxes	$	(6,994	)	$	(6,341	)
Federal and provincial income tax rate of 27% (2017 – 26%)		(1,888	)		(1,648	)
Non-deductible permanent differences		1,064			495
Differences in foreign exchange rates		-			-
Effect of difference in tax rates		2			2,488
Change in deferred tax asset not recognized		1,100			(1,075	)
Flow-through share renunciation		1,656			1,040
Change in estimate		(427	)		(72	)
Other		-			244
		1,507			1,472
Income tax provision	$	1,507		$	1,472

Disclosure of temporary difference, unused tax losses and unused tax credits [text block]

(b) The movement in deferred tax assets and liabilities during the year by type of temporary difference, without taking into consideration the offsetting balances within the same tax jurisdiction, is as follows:

Deferred tax liabilities	Mineral Property Interest			Inventory			Property, Plant and Equipment			Other			Total
December 31, 2016 (restated Note 6)	$	(1,483	)	$	(126	)	$	(1,505	)	$	(3,415	)	$	(6,529	)
(Charged) credit to the income statement		(1,390	)		13			41			41			(1,295	)
Charged to OCI		-			-			-			-			-
December 31, 2017	$	(2,873	)	$	(113	)	$	(1,464	)	$	(3,374	)	$	(7,824	)
(Charged) credited to the income statement		(5,046	)		-			(598	)		(2,930	)		(8,554	)
Charged to OCI		-			-			-			20			20
December 31, 2018	$	(7,919	)	$	(113	)	$	(2,062	)	$	(6,284	)	$	(16,378	)

Deferred tax assets	Mineral Property Interest		Loss Carry Forward			Property, Plant and Equipment			Decommissioning and Rehabilitation Provision			Other			Total
December 31, 2016	$	770	$	4,281		$	143		$	1,485		$	799		$	7,478
Credited (charged) to the income statement		69		(13	)		(66	)		(121	)		(775	)		(906	)
Charged to OCI		-		-			-			-			637			637
December 31, 2017	$	839	$	4,268		$	77		$	1,364		$	661		$	7,209
Credited (charged) to the income statement		3,632		2,997			(5	)		63			(612	)		(6,075	)
December 31, 2018	$	4,471	$	7,265		$	72		$	1,427		$	49		$	13,284

Net deferred tax liabilities
December 31, 2017 (restated Note 6)	$	(614	)
Charged to the income statement		(2,504	)
Charged to OCI		20
December 31, 2018	$	(3,098	)

Detailed Information Of Unrecognised Tax Attributes [Text Block]

(c) At December 31, 2018, the Corporation has unrecognized tax attributes, noted below, that are available to offset future taxable income. The Corporation has not recognized the deferred tax asset on these temporary differences because they relate to entities within the group that have a history of losses and there is not yet adequately convincing evidence that these entities will generate sufficient future taxable income to enable offset.

Tax loss carry forwards	$	40,650
Mineral property interest		11,150
Other		8,587
	$	60,387

Disclosure Of Detailed Information Of Unrecognised And Unused Tax Losses [Text Block]

As at December 31, 2018, the Corporation has available non-capital losses for income tax purposes in Canada which are available to be carried forward to reduce taxable income in future years and for which no deferred income tax asset has been recognized, and which expire as follows:

	Total
2033	$	1,952
2034		9,351
2035		6,685
2036		6,643
2037		8,302
2038		7,717
	$	40,650

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Financial Instrument [Abstract]

Disclosure of fair value measurement of assets [text block]

Information regarding the carrying amounts of the Corporation’s financial assets and liabilities is summarized as follows:

	Fair Value Hierarchy Classification		December 31 2018		December 31 2017
Fair value through profit or loss
Warrants		Level 2	$	24	$	1,082
Embedded derivative - Wheaton agreement		Level 3	$	9,671	$	6,600
Fair value through other comprehensive loss
Investment in marketable securities		Level 1	$	736	$	673
			$	10,431	$	8,355

Disclosure of internal credit grades [text block]

The Corporation is exposed to currency risk at the balance sheet date through the following financial assets and liabilities, which are denominated in US dollars:

	December 31 2018			December 31 2017
Cash and cash equivalents	$	1,374		$	1,336
Accounts and other receivable		917			510
Accounts payable and accrued liabilities		(649	)		(298	)
Net exposure	$	1,642		$	1,548

Disclosure of credit risk exposure [text block]

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its obligations. The Corporation’s maximum exposure to credit risk at the balance sheet date under its financial instruments is summarized as follows:

	December 31 2018		December 31 2017
Trade receivables
Currently due	$	5,228	$	1,035
Past due by 90 days or less, not impaired		1,375		940
Past due by greater than 90 days, not impaired		86		13
		6,689		1,988
Cash		3,629		6,019
Demand deposits		4,947		11,887
Term deposits		2,725		7,092
	$	17,990	$	26,986

Disclosure of maturity analysis for non-derivative financial liabilities [text block]

The Corporation’s financial liabilities are comprised of its accounts payable and accrued liabilities, the contractual maturities of which at the balance sheet date are summarized as follows:

	December 31 2018		December 31 2017
Accounts payable and accrued  liabilities with contractual maturities
Within 90 days or less	$	7,210	$	3,601
In later than 90 days, not later than one year		-		-
	$	7,210	$	3,601

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure Of Cash Flow Statement Explanatory [Abstract]

Schedule Of Supplimental Cash Flow Information [Text Block]

Supplemental cash flow information with respect to the year ended December 31, 2018 and 2017 is summarized as follows:

	2018		2017
Operating Cash Flows Arising From Interest and Taxes
Interest received	$	129	$	221
Non-Cash Investing and Financing Transactions
Capitalization of share-based compensation to mineral properties	$	368	$	369
Capitalization of depreciation to mineral properties	$	375	$	265
Capitalization of re-estimation of decommissioning and rehabilitation provision	$	163	$	37
Issuance of shares related to acquistion of subsidiary	$	416	$	-
Increase in non-cash working capital related to:
Mining operations properties	$	6	$	(23	)
Exploration and evaluation properties	$	305	$	(1,130	)

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Segmented Information (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of operating segments [abstract]

Disclosure of operating segments [text block]

Segmented information as at and for the year ended December 31, 2018 and 2017 is summarized as follows:

As at and for year ended December 31, 2018	Environmental Services			Mining			Corporate and Other			Total
Segment revenues
External customers
Canadian	$	13,105		$	-		$	-		$	13,105
Non-Canadian		6,775			-			-			6,775
Total revenues as reported		19,880			-			-			19,880
Cost of sales		13,828			-			-			13,828
Depreciation and amortization		165			1,292			105			1,562
Share-based compensation		-			-			2,544			2,544
Other G&A expenses		4,507			86			5,701			10,294
Mine site care and maintenance		-			1,311			-			1,311
Foreign exchange (gain) loss		35			9			(29	)		15
Loss on investments					113			459			572
Gain on derivative asset		-			(3,071	)		-			(3,071	)
Other (income) loss		(8	)		68			(241	)		(181	)
Segment income (loss) before taxes	$	1,353		$	192		$	(8,539	)	$	(6,994	)(i)
Total assets	$	11,462		$	113,341		$	8,215		$	133,018
Total liabilities	$	4,116		$	10,284		$	1,988		$	16,388

As at and for year ended December 31, 2017 (restated – Note 6)	Environmental Services			Mining			Corporate and Other			Total
Segment revenues
External customers
Canadian	$	5,881		$	-		$	-		$	5,881
Non-Canadian		4,851			-			-			4,851
Total revenues as reported		10,732			-			-			10,732
Cost of sales		6,732			-			-			6,732
Depreciation and amortization		79			1,531			101			1,711
Share-based compensation		-			-			2,305			2,305
Other G&A expenses		2,700			-			4,404			7,104
Mine site care and maintenance		-			357			-			357
Restructuring costs		-			-			1,353			1,353
Foreign exchange loss		(1,080	)		(4	)		120			(964	)
Gain on investments		-			-			(1,341	)		(1,341	)
Other loss (income)		250			(247	)		(187	)		(184	)
Segment income (loss) before taxes	$	2,051		$	(1,637	)	$	(6,755	)	$	(6,341	)(i)
Total assets	$	6,198		$	98,303		$	17,823		$	122,324
Total liabilities	$	1,642		$	6,762		$	1,464		$	9,868

(i) Represents consolidated loss before taxes.

XML

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of transactions between related parties [abstract]

Disclosure of amounts incurred by entity for provision of key management personnel services provided by separate management entities [text block]

The Corporation’s related parties include its subsidiaries and key management personnel. Key management personnel compensation for the years ended December 31, 2018 and 2017 was as follows:

(a) Key Management Personnel Compensation

	2018		2017
Salaries and other short-term benefits	$	2,130	$	2,246
Share-based compensation		2,513		2,072
	$	4,643	$	4,318

XML

Commitments (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure Of Commitments And Contingencies [Abstract]

Disclosure of finance lease and operating lease by lessee [text block]

As at December 31, 2018, the Corporation’s contractual obligations are as follows:

(a) The Corporation has entered into various operating lease contracts for office space, motor vehicles and office equipment. The future minimum payments under these leases as are as follows:

2019	$	391
2020		283
2021		210
2022		210
2023		190
Thereafter		156
	$	1,440

XML

Summary of Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2018
Land and buildings [member]
Disclosure of significant accounting policies [Line Items]
Useful lives or depreciation rates, property, plant and equipment	20 years straight-line
Leasehold Improvements [Member]
Disclosure of significant accounting policies [Line Items]
Useful lives or depreciation rates, property, plant and equipment	Over the term of lease, and 2 – 5 years straight-line
Heavy machinery and equipment [Member]
Disclosure of significant accounting policies [Line Items]
Useful lives or depreciation rates, property, plant and equipment	5 years straight-line
Roads, Camp and other site infrastructure [Member]
Disclosure of significant accounting policies [Line Items]
Useful lives or depreciation rates, property, plant and equipment	5 -10 years straight-line
Ore-processing mill components [Member]
Disclosure of significant accounting policies [Line Items]
Useful lives or depreciation rates, property, plant and equipment	Variously between 5 and 30 years straight-line

XML

Summary of Significant Accounting Policies (Details Textual)	Jan. 01, 2017 USD ($)
Summary of Significant Accounting Policies [Abstract]
Initial Deposit On Mineral Asset	$ 12,396,000

XML

New and Revised Accounting Standards (Details Textual) - Jan. 01, 2019 $ in Thousands	CAD ($)	USD ($)
New and Revised Accounting Standards [Line Items]
Lease liabilities		$ 1,000,000
Right-of-use assets	$ 1,000,000

XML

Impacts of Change in Accounting Policy and Adoption of New IFRS Pronouncements (Details) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Adjustments to equity [Abstract]
Deferred income tax liabilities	$ 3,098	$ 614	$ 0
Equity after accounting changes	$ 116,630	112,456	102,285
IFRS 6 [Member]
Equity before accounting changes		100,060	90,673
Adjustments to equity [Abstract]
Property plant and equipment		2,117	2,283
Mineral properties		(10,229)	(10,229)
Deferred income tax liabilities		2,390	1,440
Silver streaming interest		18,118	18,118
Equity after accounting changes		$ 112,456	$ 102,285

XML

Impacts of Change in Accounting Policy and Adoption of New IFRS Pronouncements (Details 1) - CAD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Loss before accounting changes		$ (7,648)	$ (4,359)
Adjustments to loss relating to:
Depreciation and amortization		(165)	(165)
Loss after accounting changes	$ (8,501)	$ (7,813)	$ (4,524)
Loss per share before accounting changes:
Basic and diluted	$ (0.08)	$ (0.09)	$ (0.05)
Loss per share after accounting changes:
Basic and diluted	$ (0.08)	$ (0.09)	$ (0.05)

XML

Impacts of Change in Accounting Policy and Adoption of New IFRS Pronouncements (Details Textual)	12 Months Ended
	Dec. 31, 2018 USD ($)
Adjustments Of Initial Deposits Agains Mineral Interest	$ 50,000,000

XML

Acquisition of Contango Strategies Ltd. (Details) $ in Thousands	Jun. 15, 2018 CAD ($)
Disclosure of detailed information about business combination [abstract]
Amount settled in cash	$ 602
Fair value of common shares issued	416
Fair value of cash to be settled in one year	370
Total fair value of consideration	1,388
Cash and cash equivalents	66
Accounts and other receivables	618
Inventory	102
Prepaid Expenses	54
Property, plant and equipment	333
Accounts payable and accrued liabilities	(335)
Net identifiable assets acquired and liabilities assumed	838
Goodwill on acquisition	550
Net cash outflow on acquisition	536
Acquisition costs charged to expenses	$ 28

XML

Acquisition of Contango Strategies Ltd. (Details 1) - CAD ($) $ in Thousands	5 Months Ended	12 Months Ended
	Jun. 14, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about business combination [abstract]
Revenue of acquiree since acquisition date	$ 1,162	$ 1,400
Cost of Sales And Other Expenses Of Acquiree	1,026
Profit (loss) of acquiree since acquisition date	$ 136
Revenue of combined entity as if combination occurred at beginning of period		21,042
Cost Of Sales And Other Expenses combined entity		28,381
Profit (loss) of combined entity as if combination occurred at beginning of period		(8,365)
Profit (loss)		(8,501)	$ (7,813)	$ (4,524)
Cost Of Sales And Other Expenses combined entity		29,407
Revenue from rendering of services		$ 19,880	$ 10,732

XML

Acquisition of Contango Strategies Ltd. (Details Textual)		5 Months Ended	12 Months Ended
	Jun. 15, 2018 CAD ($) Number $ / shares	Jun. 14, 2018 CAD ($)	Dec. 31, 2018 CAD ($)
Percentage of voting equity interests acquired	100.00%
Consideration transferred, acquisition-date fair value	$ 1,388,000
Cash transferred	602,000
Equity interests of acquirer	$ 416,000
Share Issue Price | $ / shares	$ 1.75
Business Acquisition Fair Value Of Cash Payable	$ 370,000
Identifiable assets acquired (liabilities assumed)	838,000
Acquisition-related costs recognised as expense for transaction recognised separately from acquisition of assets and assumption of liabilities in business combination	28,000
Goodwill recognised as of acquisition date	550,000
Revenue of acquiree since acquisition date		$ 1,162,000	$ 1,400,000
Tranche One [Member]
Cash transferred	$ 971,600
Number of instruments or interests issued or issuable | Number	237,999
Equity interests of acquirer	$ 416,400
Tranche Two [Member]
Consideration transferred, acquisition-date fair value	1,018,000
Cash transferred	601,600
Equity interests of acquirer	$ 416,400

XML

Cash and Cash Equivalents (Details) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash and Cash Equivalents [Abstract]
Cash at bank and on hand	$ 3,629	$ 6,019
Short-term bank deposits	4,947	11,887
Cash and cash equivalents	$ 8,576	$ 17,906	$ 20,382

XML

Accounts and Other Receivables (Details) - CAD ($) $ in Thousands		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounts and Other Receivables [Abstract]
Trade receivables	[1]	$ 6,689	$ 1,988
Interest and other		122	98
Trade and other current receivables		$ 6,811	$ 2,086	$ 2,938

[1] Trade receivables are derived primarily from the environmental consulting business (AEG).

XML

Restricted Cash and Deposits (Details)	Dec. 31, 2018 CAD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 CAD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 CAD ($)
Restricted Cash and Deposits [Abstract]
Security for decommissioning obligations	$ 2,569,000		$ 6,305,000	$ 6,507,000
Security for remediation services agreement	0	$ 398,000		499,000
Other	156,000			86,000
Restricted cash and deposits	2,725,000			7,092,000
Less: Current portion	0			499,000	$ 0
Non-current restricted cash and cash equivalents	$ 2,725,000			$ 6,593,000	$ 6,948,000

XML

Restricted Cash and Deposits (Details Textual)	Dec. 31, 2018 CAD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 CAD ($)	Dec. 31, 2017 CAD ($)
Disclosure of restricted cash and deposits [Line Items]
Security for remediation services agreement	$ 0	$ 398,000		$ 499,000
Security for decommissioning obligations	$ 2,569,000		$ 6,305,000	$ 6,507,000
Surety Bond Collateralized			2,364,191
Unrestricted Cash and Cash Equivalents			$ 3,940,809

XML

Investments (Details) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of Investments [Line Items]
Investments other than investments accounted for using equity method	$ 760	$ 1,755
Current investments	351	728	$ 1,691
Non-current investments other than investments accounted for using equity method	409	1,027	$ 0
Common shares held [member]
Disclosure of Investments [Line Items]
Investments other than investments accounted for using equity method	736	673
Warrants held [member]
Disclosure of Investments [Line Items]
Investments other than investments accounted for using equity method	$ 24	$ 1,082

XML

Investments (Details Textual) - CAD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Jun. 13, 2018
Disclosure of Investments [Line Items]
Number of shares issued			4,703,000
Losses on disposals of investments	$ 572,000	$ 1,341,000
Gains (losses) recognised in profit or loss, fair value measurement, assets	$ 798,000	$ 253,000
Golden Predator Mining Corp [Member]
Disclosure of Investments [Line Items]
Number of shares issued	1,320,500	300,000
Banyan Gold corp [Member]
Disclosure of Investments [Line Items]
Number of shares issued	8,736,644	4,775,000
Warrants [Member] | Golden Predator Mining Corp [Member]
Disclosure of Investments [Line Items]
Weighted average exercise price of other equity instruments exercisable in share-based payment arrangement	$ 1.00
Number of shares issued	300,000	1,425,000
Warrants [Member] | Banyan Gold corp [Member]
Disclosure of Investments [Line Items]
Number of shares issued	6,155,822	4,375,000
Warrants [Member] | Banyan Gold corp [Member] | Bottom of range [member]
Disclosure of Investments [Line Items]
Weighted average exercise price of other equity instruments exercisable in share-based payment arrangement	$ 0.115
Warrants [Member] | Banyan Gold corp [Member] | Top of range [member]
Disclosure of Investments [Line Items]
Weighted average exercise price of other equity instruments exercisable in share-based payment arrangement	$ 0.15

XML

Inventories (Details) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Classes of current inventories [abstract]
Ore in stockpiles and mill supplies	$ 4,699	$ 4,743
Materials and supplies	818	646
Inventory	5,517	5,389
Less: current portion	818	646	$ 151
Non-current inventories	$ 4,699	$ 4,743	$ 5,110

XML

Property, Plant and Equipment (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	$ 16,256,000	$ 16,250,000
Depreciation, property, plant and equipment	2,339,000	1,993,000
Property, plant and equipment, Ending Balance	15,233,000	16,256,000	$ 16,250,000
Cost [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	39,611,000
Additions other than through business combinations, property, plant and equipment	1,231,000
Increase (decrease) through other changes, property, plant and equipment	85,000
Property, plant and equipment, Ending Balance	40,927,000	39,611,000
Accumulated Depreciation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	23,355,000
Disposals, property, plant and equipment	0
Depreciation, property, plant and equipment	2,339,000
Property, plant and equipment, Ending Balance	25,694,000	23,355,000
Net book value [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	16,256,000
Property, plant and equipment, Ending Balance	15,233,000	16,256,000
Land and Buildings [Member] | Cost [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	1,709,000
Additions other than through business combinations, property, plant and equipment	0
Increase (decrease) through other changes, property, plant and equipment	0
Property, plant and equipment, Ending Balance	1,709,000	1,709,000
Land and Buildings [Member] | Accumulated Depreciation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	351,000
Disposals, property, plant and equipment	0
Depreciation, property, plant and equipment	78,000
Property, plant and equipment, Ending Balance	429,000	351,000
Land and Buildings [Member] | Net book value [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance		1,358,000
Property, plant and equipment, Ending Balance	1,280,000		1,358,000
Camp, Roads, and Other Site [Member] | Cost [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	5,343,000
Additions other than through business combinations, property, plant and equipment	226,000
Increase (decrease) through other changes, property, plant and equipment	0
Property, plant and equipment, Ending Balance	5,569,000	5,343,000
Camp, Roads, and Other Site [Member] | Accumulated Depreciation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	4,692,000
Disposals, property, plant and equipment	0
Depreciation, property, plant and equipment	177,000
Property, plant and equipment, Ending Balance	4,869,000	4,692,000
Camp, Roads, and Other Site [Member] | Net book value [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance		651,000
Property, plant and equipment, Ending Balance	700,000		651,000
Ore-Processing Mill [Member] | Cost [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	22,749,000
Additions other than through business combinations, property, plant and equipment	0
Increase (decrease) through other changes, property, plant and equipment	85,000
Property, plant and equipment, Ending Balance	22,834,000	22,749,000
Ore-Processing Mill [Member] | Accumulated Depreciation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	10,270,000
Disposals, property, plant and equipment	0
Depreciation, property, plant and equipment	1,178,000
Property, plant and equipment, Ending Balance	11,448,000	10,270,000
Ore-Processing Mill [Member] | Net book value [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance		12,479,000
Property, plant and equipment, Ending Balance	11,386,000		12,479,000
Heavy machinery and equipment [Member] | Cost [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	8,475,000
Additions other than through business combinations, property, plant and equipment	837,000
Increase (decrease) through other changes, property, plant and equipment	0
Property, plant and equipment, Ending Balance	9,312,000	8,475,000
Heavy machinery and equipment [Member] | Accumulated Depreciation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	6,767,000
Disposals, property, plant and equipment	0
Depreciation, property, plant and equipment	766,000
Property, plant and equipment, Ending Balance	7,533,000	6,767,000
Heavy machinery and equipment [Member] | Net book value [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance		1,708,000
Property, plant and equipment, Ending Balance	1,779,000		1,708,000
Leasehold Improvements & Other [Member] | Cost [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance		1,503,000	1,335,000
Additions other than through business combinations, property, plant and equipment	168,000
Increase (decrease) through other changes, property, plant and equipment			0
Property, plant and equipment, Ending Balance			1,503,000
Leasehold Improvements & Other [Member] | Accumulated Depreciation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance	1,275,000
Disposals, property, plant and equipment	0
Depreciation, property, plant and equipment	140,000
Property, plant and equipment, Ending Balance	1,415,000	1,275,000
Leasehold Improvements & Other [Member] | Net book value [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment, Beginning Balance		$ 60,000
Property, plant and equipment, Ending Balance	$ 88,000		$ 60,000

XML

Property, Plant and Equipment (Details Textual) - CAD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation, property, plant and equipment	$ 2,339,000	$ 1,993,000
Depreciation expense	1,964,000	1,728,000
Mining property [member]
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation, property, plant and equipment	375,000	265,000
Cost of Sales [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation expense	85,000	142,000
General Expenses And Site Maintenance [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation expense	$ 1,879,000	$ 1,586,000

XML

Mineral Properties (Details) - CAD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2018	Dec. 31, 2017
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		$ 64,587	$ 55,620
Mineral Properties, Expenditures Incurred		17,639	8,967
Mineral Properties, Ending Balance		82,226	64,587
Bellekeno [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		6,885	6,809
Mineral Properties, Expenditures Incurred		238	76
Mineral Properties, Ending Balance		7,123	6,885
Lucky Queen [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		693	563
Mineral Properties, Expenditures Incurred		131	130
Mineral Properties, Ending Balance		824	693
Onek [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		1,034	1,018
Mineral Properties, Expenditures Incurred		31	16
Mineral Properties, Ending Balance		1,065	1,034
McQuesten [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance	[1]	1,997	1,924
Mineral Properties, Expenditures Incurred	[1]	0	73
Mineral Properties, Ending Balance	[1]	1,997	1,997
Silver King [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		4,464	4,464
Mineral Properties, Expenditures Incurred		0	0
Mineral Properties, Ending Balance		4,464	4,464
Flame And Moth [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		22,455	21,966
Mineral Properties, Expenditures Incurred		5,856	489
Mineral Properties, Ending Balance		28,311	22,455
Bermingham [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		23,376	15,193
Mineral Properties, Expenditures Incurred		8,708	8,183
Mineral Properties, Ending Balance		32,084	23,376
Elsa Tailings [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		884	884
Mineral Properties, Expenditures Incurred		0	0
Mineral Properties, Ending Balance		884	884
Other Keno Hill Properties [Member] | Mining property [member]
Disclosure of mineral properties [Line Items]
Mineral Properties, Beginning Balance		2,799	2,799
Mineral Properties, Expenditures Incurred		2,675	0
Mineral Properties, Ending Balance		$ 5,474	$ 2,799

[1] Effective May 24, 2017, the Corporation entered into an Option Agreement with Banyan Gold Corp. (“Banyan”) to option up to 100% the McQuesten property. In three stages, Banyan may earn up to 100% of the McQuesten property, by incurring a minimum $2,600,000 in exploration expenditures ($717,000 incurred to December 31, 2018), issue 1,600,000 shares (800,000 shares received to December 31, 2018), pay a total of $2,600,000 in cash or shares and grant Alexco a 6% net smelter return (“NSR”) royalty with buybacks totalling $7,000,000 to reduce to a 1% NSR royalty on gold and 3% NSR royalty on silver.

XML

Mineral Properties (Details 1) - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of mineral properties [Line Items]
Accumulated depletion and write-downs		$ (90,459)
Assets arising from exploration for and evaluation of mineral resources	$ 82,226	64,587	$ 55,620
Gross carrying amount [member]
Disclosure of mineral properties [Line Items]
Assets arising from exploration for and evaluation of mineral resources	172,685	155,046
Accumulated depreciation and amortisation [member]
Disclosure of mineral properties [Line Items]
Accumulated depletion and write-downs	(90,459)
Exploration and Evaluation Properties [Member]
Disclosure of mineral properties [Line Items]
Assets arising from exploration for and evaluation of mineral resources	73,213	55,975
Exploration and Evaluation Properties [Member] | Gross carrying amount [member]
Disclosure of mineral properties [Line Items]
Assets arising from exploration for and evaluation of mineral resources	73,213	55,975
Exploration and Evaluation Properties [Member] | Accumulated depreciation and amortisation [member]
Disclosure of mineral properties [Line Items]
Accumulated depletion and write-downs	0	0
Mining Operations Properties [Member]
Disclosure of mineral properties [Line Items]
Assets arising from exploration for and evaluation of mineral resources	9,013	8,612
Mining Operations Properties [Member] | Gross carrying amount [member]
Disclosure of mineral properties [Line Items]
Assets arising from exploration for and evaluation of mineral resources	99,472	99,071
Mining Operations Properties [Member] | Accumulated depreciation and amortisation [member]
Disclosure of mineral properties [Line Items]
Accumulated depletion and write-downs	$ (90,459)	$ (90,459)

XML

Mineral Properties (Details Textual) - CAD ($)	1 Months Ended	12 Months Ended
	May 24, 2017	Dec. 31, 2018	Dec. 31, 2017
Disclosure of mineral properties [Line Items]
Percentage Of Mineral Property Ownership Acquisition	100.00%
Percentage of ownership interest in property offerred	100.00%
Expense arising from exploration for and evaluation of mineral resources		$ 17,639,000	$ 8,967,000
McQuesten [Member] | Banyan Gold corp [Member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage	6.00%
Expense arising from exploration for and evaluation of mineral resources		$ 717,000,000
Consideration receivable in the form of shares	1,600,000	800,000
Total consideration receivable in cash or shares	$ 2,600,000,000
Value of treasury stock investment	$ 7,000,000,000
McQuesten [Member] | Banyan Gold corp [Member] | Gold [Member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage	1.00%
McQuesten [Member] | Banyan Gold corp [Member] | Silver [Member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage	3.00%
Top of range [member] | Other Keno Hill Properties [Member]
Disclosure of mineral properties [Line Items]
Royalty Expense		$ 4,000,000
Bottom of range [member] | McQuesten [Member] | Banyan Gold corp [Member]
Disclosure of mineral properties [Line Items]
Expense arising from exploration for and evaluation of mineral resources	$ 2,600,000,000
UKHM mineral rights [Member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage		1.50%
Royalty Expenses Paid		$ 37,000
UKHM mineral rights [Member] | Top of range [member]
Disclosure of mineral properties [Line Items]
Royalty Expense		4,000,000
Income arising from exploration for and evaluation of mineral resources		$ 6,200,000
Non-UKHM mineral rights [Member] | McQuesten [Member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage		2.00%
Non-UKHM mineral rights [Member] | Top of range [member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage		2.00%
Non-UKHM mineral rights [Member] | Top of range [member] | Other Keno Hill Properties [Member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage		1.50%
Non-UKHM mineral rights [Member] | Bottom of range [member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage		0.50%
Non-UKHM mineral rights [Member] | Bottom of range [member] | Other Keno Hill Properties [Member]
Disclosure of mineral properties [Line Items]
Smelter Return Royalty Percentage		1.00%

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Embedded Derivative Asset and Silver Stream (Details) - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disclosure of Derivative Financial Instrument [Abstract]
Embedded derivative asset – Beginning of year	$ 6,600	$ 0
Embedded derivative asset - Addition	0	6,600
Fair value adjustment	3,071	0
Embedded derivative asset – End of year	$ 9,671	$ 6,600

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Embedded Derivative Asset and Silver Stream (Details Textual)	1 Months Ended			12 Months Ended
	Mar. 29, 2017 CAD ($) shares	Mar. 29, 2017 USD ($) t $ / Ounce-oz shares	Oct. 02, 2008 USD ($)	Dec. 31, 2018 $ / Ounce-oz shares	Dec. 31, 2017 CAD ($)
Percentage of Life of Mine Silver		25.00%	25.00%
Proceeds From Up-front Deposit Payments			$ 50,000,000
Proceeds From Further Up-front Deposit Payments			$ 3.90
Silver Purchase Agreement, initial Term			40 years
Number Of Shares Issued as a consideration to wheaton | shares	3,000,000	3,000,000		10,000
Value Of Shares Issued as a consideration to wheaton	$ 6,600,000	$ 4,934,948			$ 6,600,000
Up front deposit amount		50,000,000
Percentage Of Interest Representing Future Production				25.00%
Production payment per ounce | $ / Ounce-oz				3.90
Repayment Of Original Deposit		$ 50,000,000
Events Occurred After Reporting Period [Member]
Mine and mill Completion per day | t		400
Reduction of mill throughput per day | t		322
Obligation to pay capacity related refund		$ 8,788,000
Bottom of range [member] | Events Occurred After Reporting Period [Member]
Actual monthly production payment,upper ceiling grade	600 g/t	600 g/t
Price of silver | $ / Ounce-oz		13
Top of range [member] | Events Occurred After Reporting Period [Member]
Actual monthly production payment,upper ceiling grade	1,400 grams per tonne (“g/t”)	1,400 grams per tonne (“g/t”)
Price of silver | $ / Ounce-oz		25

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Accounts payable and accrued liabilities (Details) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounts Payables And Accrued Liabilities [Abstract]
Trade payables	$ 3,567	$ 1,468
Accrued liabilities and other	3,643	2,133
Trade and other current payables	$ 7,210	$ 3,601	$ 1,832

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Credit Facility (Details Textual) - USD ($)	1 Months Ended
	Feb. 23, 2018	Feb. 14, 2019	Jun. 13, 2018
Number of shares issued			4,703,000
Borrowings, maturity	5
Borrowings, interest rate	8.00%
Description of maximum term of options granted for share-based payment arrangement	Sprott with a five-year term
Warrant Exercise Price Per Share	$ 2.25
Warrant Closing Price Per Share	$ 5.63
Warrants [Member]
Number of shares issued	1,000,000
Loans to corporate entities [member]
Notional amount	$ 15,000,000
Later than one year [member]
Borrowings maturity term	3 years
Borrowings Maturity Date	Feb. 23, 2021
Subsequent Events [Member]
Number of shares issued		171,480
Rate of charge on funds drawn	3.00%
Subsequent Events [Member] | Floating interest rate [member]
Libor rate	7.00%

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Decommissioning and Rehabilitation Provision (Details) - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Provision for decommissioning, restoration and rehabilitation costs [abstract]
Balance - beginning of year	$ 5,055	$ 4,955
Increase due to re-estimation	163	37
Accretion expense, included in finance costs	68	63
Balance - end of year	$ 5,286	$ 5,055

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Decommissioning and Rehabilitation Provision (Details Textual) - CAD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2016
Disclosure of decommissioning and rehabilitation provision [Line Items]
Discount rate used in current estimate of value in use	2.08%	2.11%
Actuarial assumption of expected rates of inflation	2.00%	2.00%
Non-current provision for decommissioning, restoration and rehabilitation costs	$ 6,561,000	$ 6,187,000
Expenditures to be incurred over certain years	20 years
Provision for decommissioning, restoration and rehabilitation costs	$ 5,286,000	$ 5,055,000	$ 4,955,000	$ 4,955,000

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Capital and Reserves (Details)	12 Months Ended
	Dec. 31, 2018 CAD ($) $ / Ounce-oz
Capital and reserves [Line Items]
Exercised | $ / Ounce-oz	386,655
Warrants [Member]
Capital and reserves [Line Items]
Balance at December 31, 2017	5,055,694
Issued	1,000,000
Exercised	(1,167,351)
Expired	(3,762,169)
Balance at December 31, 2018	1,126,174
Warrants [Member] | Expiry Date, May 17, 2018
Capital and reserves [Line Items]
Exercise Price	$ 1.75
Balance at December 31, 2017	4,868,620
Issued	0
Exercised	(1,106,451)
Expired	(3,762,169)
Balance at December 31, 2018	0
Warrants [Member] | Expiry Date, May 17, 2018
Capital and reserves [Line Items]
Exercise Price	$ 1.49
Balance at December 31, 2017	60,900
Issued	0
Exercised	(60,900)
Expired	0
Balance at December 31, 2018	0
Warrants [Member] | Expiry Date, May 30, 2019
Capital and reserves [Line Items]
Exercise Price	$ 2.15
Balance at December 31, 2017	126,174
Issued	0
Exercised	0
Expired	0
Balance at December 31, 2018	126,174
Warrants [Member] | Expiry Date, Feb 23, 2023
Capital and reserves [Line Items]
Exercise Price	$ 2.25
Balance at December 31, 2017	0
Issued	1,000,000
Exercised	0
Expired	0
Balance at December 31, 2018	1,000,000

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Capital and Reserves (Details 1)	12 Months Ended
	Dec. 31, 2018 CAD ($)	Dec. 31, 2018	Dec. 31, 2018 $ / Ounce-oz	Dec. 31, 2017 CAD ($)	Dec. 31, 2017 CAD ($)
Capital and reserves [Line Items]
Weighted average exercise price - options forfeited or expired	$ 0				$ 0
Weighted average exercise price - Balance Ending	1.66
Number of shares issued or issuable on exercise - Options exercised (in shares)		281,666
Number of shares issued or issuable on exercise - Balance End (in shares)		7,738,833,000
Balance - Share based compensation expense	2,480,000				2,204,000
Incentive Stock Options [Member]
Capital and reserves [Line Items]
Weighted average exercise price - Balance Opening	2.06			$ 2.48
Weighted average exercise price - stock options granted	2.07			2.31
Weighted average exercise price - options exercised	0.77			1.28
Weighted average exercise price - options forfeited or expired	5.39			4.78
Weighted average exercise price - Balance Ending				$ 2.06	$ 2.06
Number of shares issued or issuable on exercise - Balance Opening (in shares)		6,546,666		6,175,995
Number of shares issued or issuable on exercise - Stock options granted (in shares)		2,524,000		1,645,500
Number of shares issued or issuable on exercise - Options exercised (in shares)		(281,666)		(126,332)
Number of shares issued or issuable on exercise - Options forfeited or expired (in shares)		(1,050,167)		(1,148,497)
Number of shares issued or issuable on exercise - Balance End (in shares)		7,738,833	7,738,833	6,546,666	6,546,666
Opening Balance	6,258,000			$ 6,996,000
Balance - Stock options granted	0			0
Balance - Share based compensation expense	2,480,000				$ 2,204,000
Balance - Options exercised	(106,000)			(78,000)
Balance - Options forfeited or expired	(3,163,000)			(2,864,000)
Ending Balance	$ 5,469,000			$ 6,258,000	$ 6,258,000

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Capital and Reserves (Details 2)	Dec. 31, 2018 CAD ($)
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	7,738,833,000
Options Outstanding, Average Remaining Life (Years)	2.73
Options Outstanding, Average Exercise Price	$ 1.66
Options Exercisable, Number of Shares Issuable on Exercise	6,204,833,000
Options Exercisable, Average Exercise Price	$ 1.55
Exercise Price - 0.60 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	35,000,000
Options Outstanding, Average Remaining Life (Years)	0.96
Options Outstanding, Average Exercise Price	$ 0.60
Options Exercisable, Number of Shares Issuable on Exercise	35,000,000
Options Exercisable, Average Exercise Price	$ 0.60
Exercise Price - 0.60 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	989,333,000
Options Outstanding, Average Remaining Life (Years)	1.12
Options Outstanding, Average Exercise Price	$ 0.60
Options Exercisable, Number of Shares Issuable on Exercise	989,333,000
Options Exercisable, Average Exercise Price	$ 0.60
Exercise Price - 0.84 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	1,422,500,000
Options Outstanding, Average Remaining Life (Years)	2.12
Options Outstanding, Average Exercise Price	$ 0.84
Options Exercisable, Number of Shares Issuable on Exercise	1,422,500,000
Options Exercisable, Average Exercise Price	$ 0.84
Exercise Price - 1.73 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	600,000,000
Options Outstanding, Average Remaining Life (Years)	2.44
Options Outstanding, Average Exercise Price	$ 1.73
Options Exercisable, Number of Shares Issuable on Exercise	600,000,000
Options Exercisable, Average Exercise Price	$ 1.73
Exercise Price - 1.75 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	42,000,000
Options Outstanding, Average Remaining Life (Years)	3.63
Options Outstanding, Average Exercise Price	$ 1.75
Options Exercisable, Number of Shares Issuable on Exercise	42,000,000
Options Exercisable, Average Exercise Price	$ 1.75
Exercise Price - 1.78 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	150,000,000
Options Outstanding, Average Remaining Life (Years)	2.49
Options Outstanding, Average Exercise Price	$ 1.78
Options Exercisable, Number of Shares Issuable on Exercise	150,000,000
Options Exercisable, Average Exercise Price	$ 1.78
Exercise Price - 1.93 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	60,000,000
Options Outstanding, Average Remaining Life (Years)	4.36
Options Outstanding, Average Exercise Price	$ 1.93
Options Exercisable, Number of Shares Issuable on Exercise	30,000,000
Options Exercisable, Average Exercise Price	$ 1.93
Exercise Price - 1.94 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	475,000,000
Options Outstanding, Average Remaining Life (Years)	0.12
Options Outstanding, Average Exercise Price	$ 1.94
Options Exercisable, Number of Shares Issuable on Exercise	475,000,000
Options Exercisable, Average Exercise Price	$ 1.94
Exercise Price - 2.07 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	1,834,000,000
Options Outstanding, Average Remaining Life (Years)	4.08
Options Outstanding, Average Exercise Price	$ 2.07
Options Exercisable, Number of Shares Issuable on Exercise	917,000,000
Options Exercisable, Average Exercise Price	$ 2.07
Exercise Price - 2.07 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	587,000,000
Options Outstanding, Average Remaining Life (Years)	4.08
Options Outstanding, Average Exercise Price	$ 2.07
Options Exercisable, Number of Shares Issuable on Exercise	0
Options Exercisable, Average Exercise Price	$ 2.07
Exercise Price - 2.32 [Member]
Capital and reserves [Line Items]
Options Outstanding, Number of Shares Issuable on Exercise	1,544,000,000
Options Outstanding, Average Remaining Life (Years)	3.09
Options Outstanding, Average Exercise Price	$ 2.32
Options Exercisable, Number of Shares Issuable on Exercise	1,544,000,000
Options Exercisable, Average Exercise Price	$ 2.32

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Capital and Reserves (Details 3) $ in Thousands	12 Months Ended
	Dec. 31, 2018 CAD ($)	Dec. 31, 2018 Number	Dec. 31, 2018 $ / Ounce-oz	Dec. 31, 2017 CAD ($) Number	Dec. 31, 2017 CAD ($) Number
Capital and reserves [Line Items]
RSUs vested | $ / Ounce-oz			386,655
Share-based compensation expense recognized	$ 2,480				$ 2,204
Restricted Share Units [Member]
Capital and reserves [Line Items]
Balance at December 31, 2017 | Number		273,989		452,950
RSUs granted		193,700	625,000	235,000
RSUs vested | Number		(318,036)		(289,625)
Balance at December 31, 2018 | Number		398,325		273,989	273,989
Opening Balance	371			$ 220
RSUs granted	0			0
Share-based compensation expense recognized	467				$ 524
RSUs vested	(497)			(343)
Ending Balance	$ 401			$ 371	$ 371

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Capital and Reserves (Details Textual)		1 Months Ended		12 Months Ended
	Jun. 13, 2018 CAD ($)	Feb. 23, 2018 $ / Ounce-oz shares	Mar. 29, 2017 shares	Dec. 31, 2018 CAD ($)	Dec. 31, 2018 CAD ($)	Dec. 31, 2018 CAD ($)	Dec. 31, 2018 CAD ($) shares	Dec. 31, 2018 CAD ($) Number	Dec. 31, 2018 CAD ($) $ / Ounce-oz	Dec. 31, 2017 CAD ($) Number	Dec. 31, 2017 CAD ($) Number	Dec. 31, 2018	Dec. 31, 2018 shares	Dec. 31, 2018 Number	Dec. 31, 2018 $ / Ounce-oz	Dec. 31, 2018 $ / shares	Sep. 21, 2018 CAD ($)	Jun. 13, 2018 $ / shares shares	Jan. 01, 2017 Number
Capital and reserves [Line Items]
Number of shares issued | shares																		4,703,000
Proceeds from issuing shares					$ 9,042,000						$ 9,043,000
Par value per share | $ / shares																		$ 1.92
Share issue related cost	$ 989,000
Number of share options exercised in share-based payment arrangement						281,666
Proceeds from exercise of options					218,000						162,000
Number of other equity instruments exercised or vested in share-based payment arrangement | $ / Ounce-oz									386,655
Proceeds from exercise of warrants					2,027,000
Value of shares and warrants authorised																	$ 50,000,000
Risk free interest rate, share options granted										1.02%
Expected volatility, share options granted						73.00%				73.00%
Number of share options outstanding in share-based payment arrangement												7,738,833,000
Number of options available for future grants | shares													2,787,068
Description of vesting requirements for share-based payment arrangement				vesting 25% upon granting and 25% each six months thereafter
Option life, share options granted (Years) | Number								4		4
Expected forfeiture rate, share options forfeited						2.00%				4.00%
Weighted average share price for share options in share-based payment arrangement exercised during period at date of exercise					1.96					$ 2.26
Expense from share-based payment transactions with employees					2,480,000						$ 2,204,000
Number Of Shares Issued as a consideration to wheaton | shares			3,000,000				10,000
Top of range [member]
Capital and reserves [Line Items]
Risk free interest rate, share options granted						2.16%
Bottom of range [member]
Capital and reserves [Line Items]
Risk free interest rate, share options granted						2.01%
Ordinary shares [member]
Capital and reserves [Line Items]
Number of shares issued for exercise of warrants | shares							1,167,351
Number of shares issued for advisory fees | shares							237,999
Incentive Stock Options [Member]
Capital and reserves [Line Items]
Number of share options exercised in share-based payment arrangement						(281,666)				(126,332)
Number of share options outstanding in share-based payment arrangement										6,546,666	6,546,666	7,738,833			7,738,833				6,175,995
Expense from share-based payment transactions with employees					2,480,000						$ 2,204,000
Number of share options granted in share-based payment arrangement						2,524,000				1,645,500
Weighted average exercise price of share options granted in share-based payment arrangement					2.07					$ 2.31
Incentive Stock Options [Member] | Mining property [member]
Capital and reserves [Line Items]
Expense from share-based payment transactions with employees					368,000						369,000
Incentive Stock Options [Member] | Charged to Income [Member]
Capital and reserves [Line Items]
Expense from share-based payment transactions with employees					2,112,000						$ 1,835,000
Incentive Stock Options [Member] | Events Occurred After Reporting Period [Member]
Capital and reserves [Line Items]
Warrants exercise price per share | $ / shares																$ 1.27
Number of share options exercised in share-based payment arrangement | shares							70,000
Number of share options granted in share-based payment arrangement | shares							2,029,000
Number of other equity instruments granted in share-based payment arrangement | shares							475,000
Restricted Share Units [Member]
Capital and reserves [Line Items]
Number of share options exercised in share-based payment arrangement						273,989
Number of other equity instruments exercised or vested in share-based payment arrangement | Number								(318,036)		(289,625)
Number of shares issued for release of RSU settlement shares | shares							318,036
Number of other equity instruments outstanding in share-based payment arrangement | Number										273,989	273,989			398,325					452,950
Expense from share-based payment transactions with employees					467,000						$ 524,000
Weighted average exercise price of share options granted in share-based payment arrangement					1.72					$ 2.31
Number of other equity instruments granted in share-based payment arrangement								193,700	625,000	235,000
Weighted average fair value at measurement date, other equity instruments granted				$ 399,000	399,000	$ 399,000	$ 399,000	$ 399,000	$ 399,000	$ 545,000	545,000
Restricted Share Units [Member] | General and administrative expenses [Member]
Capital and reserves [Line Items]
Expense from share-based payment transactions with employees					$ 467,000						$ 524,000
Warrant [Member] | Sprott Private Resource Lending [Member]
Capital and reserves [Line Items]
Number of shares issued | shares		1,000,000
Risk free interest rate, share options granted		1.94%
Expected volatility, share options granted		73.00%
Option life, share options granted (Years) | $ / Ounce-oz		5

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Revenue from Environmental Services (Details) - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2017
Revenue from rendering of services	$ 19,880		$ 10,732
Environmental Services [Member]
Fee for service	15,007	$ 9,882
Fixed price agreements		$ 850
Environmental Services [Member] | Fixed-price contracts [member]
Fixed price agreements	$ 4,873

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General and Administrative Expenses by Nature of Expense (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Genral And Administrative Expenses [Line Items]
Depreciation	$ 1,964,000	$ 1,728,000
Office, operating and non-operating overheads	14,773,000	12,830,000
Restructuring costs		1,353,000
Share-based compensation	2,480,000	2,204,000
Total General and Administrative Expenses	12,170,000	10,942,000
Corporate Level [Member]
Genral And Administrative Expenses [Line Items]
Depreciation	94,000	89,000
Amortization of intangible assets	11,000	13,000
Business development and investor relations	451,000	567,000
Office, operating and non-operating overheads	788,000	682,000
Professional	832,000	433,000
Regulatory	184,000	309,000
Restructuring costs	92,000	1,353,000
Salaries and contractors	2,262,000	2,112,000
Share-based compensation	2,544,000	2,305,000
Travel	240,000	301,000
Expenses, by nature	7,498,000	8,164,000
Environmental Services [Member]
Genral And Administrative Expenses [Line Items]
Depreciation	126,000	19,000
Amortization of intangible assets	39,000	59,000
Business development and investor relations	370,000	164,000
Office, operating and non-operating overheads	1,262,000	756,000
Professional	142,000	29,000
Salaries and contractors	2,556,000	1,657,000
Travel	177,000	94,000
Expenses, by nature	4,672,000	2,778,000
Total General and Administrative Expenses	$ 12,170,000	$ 10,942,000

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Mine Site Care and Maintenance (Details) - CAD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2018	Dec. 31, 2017
Schedule of mine site care and maintenance expenses [Line Items]
Repairs and maintenance expense		$ 2,603	$ 1,888
Depreciation [Member]
Schedule of mine site care and maintenance expenses [Line Items]
Repairs and maintenance expense		1,292	1,531
Salaries And Contractors [Member]
Schedule of mine site care and maintenance expenses [Line Items]
Repairs and maintenance expense	[1]	913	357
Materials and Equipment [Member]
Schedule of mine site care and maintenance expenses [Line Items]
Repairs and maintenance expense	[1]	346	0
Other expenses [Member]
Schedule of mine site care and maintenance expenses [Line Items]
Repairs and maintenance expense	[1]	$ 52	$ 0

[1] Included in mine site care and maintenance costs are refurbishment and mill maintenance costs.

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Other Income and expenses (Detail) - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Credit Facility fee – warrants	$ (930)	$ 0
Interest income	241	188
Foreign exchange gain (loss)	(15)	964
Other income (expenses)	(68)	(4)
Other finance income (cost)	$ (772)	$ 1,148

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Income Tax Expense (Details) - CAD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2018	Dec. 31, 2017
Disclosure of income tax [Abstract]
Accounting loss before taxes	[1]	$ (6,994)	$ (6,341)
Federal and provincial income tax rate of 27% (2017 – 26%)		(1,888)	(1,648)
Non-deductible permanent differences		1,064	495
Differences in foreign exchange rates		0	0
Effect of difference in tax rates		2	2,488
Change in deferred tax asset not recognized		1,100	(1,075)
Flow-through share renunciation		1,656	1,040
Change in estimate		(427)	(72)
Other		0	244
Income Tax Provision Recovery Adjustments		1,507	1,472
Income tax provision		$ 1,507	$ 1,472

[1] Represents consolidated loss before taxes.

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Income Tax Expense (Details) [Parenthetical]	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disclosure of income tax [Abstract]
Applicable tax rate	27.00%	26.00%

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Income Tax Expense (Details 1) - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities	$ (614)
Credited (charged) to the income statement	(2,504)
Charged to OCI	20
Deferred tax liabilities	(3,098)	$ (614)
Deferred Tax Liabilities [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities	(7,824)	(6,529)
Credited (charged) to the income statement	(8,554)	(1,295)
Charged to OCI	20	0
Deferred tax liabilities	(16,378)	(7,824)
Deferred Tax Assets [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	7,209	7,478
Credited (charged) to the income statement	(6,075)	(906)
Charged to OCI		637
Deferred tax assets	13,284	7,209
Mineral Property Interest [Member] | Deferred Tax Liabilities [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities	(2,873)	(1,483)
Credited (charged) to the income statement	(5,046)	(1,390)
Charged to OCI		0
Deferred tax liabilities	(7,919)	(2,873)
Mineral Property Interest [Member] | Deferred Tax Assets [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	839	770
Credited (charged) to the income statement	3,632	69
Charged to OCI		0
Deferred tax assets	4,471	839
Inventory [Member] | Deferred Tax Liabilities [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities	(113)	(126)
Credited (charged) to the income statement	0	13
Charged to OCI		0
Deferred tax liabilities	(113)	(113)
Loss Carryforward [Member] | Deferred Tax Assets [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	4,268	4,281
Credited (charged) to the income statement	2,997	(13)
Charged to OCI		0
Deferred tax assets	7,265	4,268
Property, Plant And Equipments [Member] | Deferred Tax Liabilities [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities	(1,464)	(1,505)
Credited (charged) to the income statement	(598)	41
Charged to OCI		0
Deferred tax liabilities	(2,062)	(1,464)
Property, Plant And Equipments [Member] | Deferred Tax Assets [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	77	143
Credited (charged) to the income statement	(5)	(66)
Charged to OCI		0
Deferred tax assets	72	77
Decommissioning and Rehabilitation Provision [member] | Deferred Tax Assets [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	1,364	1,485
Credited (charged) to the income statement	63	(121)
Charged to OCI		0
Deferred tax assets	1,427	1,364
Other [member] | Deferred Tax Liabilities [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities	(3,374)	(3,415)
Credited (charged) to the income statement	(2,930)	41
Charged to OCI	20	0
Deferred tax liabilities	(6,284)	(3,374)
Other [member] | Deferred Tax Assets [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	661	799
Credited (charged) to the income statement	(612)	(775)
Charged to OCI		637
Deferred tax assets	$ 49	$ 661

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Income Tax Expense (Details 2) $ in Thousands	Dec. 31, 2018 CAD ($)
Disclosure of income tax [Abstract]
Tax loss carry forwards	$ 40,650
Mineral property interest	11,150
Other	8,587
Unrecognised Tax Benefit	$ 60,387

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Income Tax Expense (Details 3) $ in Thousands	Dec. 31, 2018 CAD ($)
Schedule Of Deferred Tax Assets And Liabilities [Line Items]
Unused tax losses for which no deferred tax asset recognised	$ 40,650
Canada [Member]
Schedule Of Deferred Tax Assets And Liabilities [Line Items]
Unused tax losses for which no deferred tax asset recognised	40,650
Canada [Member] | 2033
Schedule Of Deferred Tax Assets And Liabilities [Line Items]
Unused tax losses for which no deferred tax asset recognised	1,952
Canada [Member] | 2034
Schedule Of Deferred Tax Assets And Liabilities [Line Items]
Unused tax losses for which no deferred tax asset recognised	9,351
Canada [Member] | 2035
Schedule Of Deferred Tax Assets And Liabilities [Line Items]
Unused tax losses for which no deferred tax asset recognised	6,685
Canada [Member] | 2036
Schedule Of Deferred Tax Assets And Liabilities [Line Items]
Unused tax losses for which no deferred tax asset recognised	6,643
Canada [Member] | 2037
Schedule Of Deferred Tax Assets And Liabilities [Line Items]
Unused tax losses for which no deferred tax asset recognised	8,302
Canada [Member] | 2038
Schedule Of Deferred Tax Assets And Liabilities [Line Items]
Unused tax losses for which no deferred tax asset recognised	$ 7,717

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Financial Instruments (Details) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of Financial Instrument [Abstract]
Fair value through profit or loss Warrants held-for-trading	$ 24	$ 1,082
Embedded derivative asset	9,671	6,600	$ 0
Available-for-sale Investment in marketable securities	736	673
Financial assets	$ 10,431	$ 8,355

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Financial Instruments (Details 1) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Disclosure of internal credit grades [line items]
Cash and demand deposits	$ 1,642	$ 1,548
Accounts Payable and Accrued Liabilities [Member]
Disclosure of internal credit grades [line items]
Cash and demand deposits	(649)	(298)
Accounts and other receivable [Member]
Disclosure of internal credit grades [line items]
Cash and demand deposits	917	510
Cash and Cash Equivalents [Member]
Disclosure of internal credit grades [line items]
Cash and demand deposits	$ 1,374	$ 1,336

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Financial Instruments (Details 2) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	$ 17,990	$ 26,986
Cash [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	3,629	6,019
Demand Deposits [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	4,947	11,887
Term Deposits [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	2,725	7,092
Trade receivables, net of provision [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	6,689	1,988
Trade receivables, net of provision [Member] | Currently due [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	5,228	1,035
Trade receivables, net of provision [Member] | Past due by 90 days or less, not impaired [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	1,375	940
Trade receivables, net of provision [Member] | Past due by greater than 90 days, not impaired [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk	$ 86	$ 13

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Financial Instruments (Details 3) - CAD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade and other payables, undiscounted cash flows	$ 7,210	$ 3,601
Within 90 days or less [Member]
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade and other payables, undiscounted cash flows	7,210	3,601
In later than 90 days, not later than one year [Member]
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade and other payables, undiscounted cash flows	$ 0	$ 0

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Financial Instruments (Details Textual) - CAD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disclosure of Financial Instruments [Line Items]
Increase in fair value measurement due to change in one or more unobservable inputs to reflect reasonably possible alternative assumptions, assets	$ 164,000	$ 158,000
Percentage of depreciation or appreciation of foreign exchange	10.00%
Fair Value Of Embedded Derivative	$ 3,071,000	$ 0
Option pricing model [member]
Disclosure of Financial Instruments [Line Items]
Interest rate, significant unobservable inputs, assets	1.85%	1.66%
Historical volatility for shares, significant unobservable inputs, assets		84.00%
Option pricing model [member] | Top of range [member]
Disclosure of Financial Instruments [Line Items]
Expected Life, Significant Unabservable Input Assets	7 months 13 days	2 years 11 months 23 days
Historical volatility for shares, significant unobservable inputs, assets	93.00%
Option pricing model [member] | Bottom of range [member]
Disclosure of Financial Instruments [Line Items]
Expected Life, Significant Unabservable Input Assets	1 year 11 months 23 days	2 months 1 day
Historical volatility for shares, significant unobservable inputs, assets	72.00%

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Supplemental Cash Flow Information (Details) - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from (used in) operating activities [abstract]
Interest received	$ 129	$ 221
Non-Cash Investing and Financing Transactions
Capitalization of share-based compensation to mineral properties	368	369
Capitalization of depreciation to mineral properties	375	265
Capitalization of re-estimation of decommissioning and rehabilitation provision	163	37
Issuance of shares related to acquistion of subsidiary	416	0
Increase in non-cash working capital related to:
Mining operations properties	6	(23)
Exploration and evaluation properties	$ 305	$ (1,130)

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Segmented Information (Details) - CAD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of operating segments [line items]
Total revenues as reported		$ 19,880	$ 10,732
Cost of sales		13,828	6,732
Depreciation and amortization		1,562	1,711
Share-based compensation		2,580	2,359
Other G&A expenses		10,294	7,104
Mine site care and maintenance		2,603	1,888
Restructuring Costs			1,353
Foreign exchange (gain) loss		15	(964)
Gain (Loss) on investments		572	(1,341)
Gain on derivative asset		(3,071)
Other (income) loss		(181)	(184)
Segment income (loss) before taxes	[1]	(6,994)	(6,341)
Total assets		133,018	122,324	$ 109,686
Total liabilities		16,388	9,868	$ 7,401
Environmental Services [Member]
Disclosure of operating segments [line items]
Total revenues as reported		19,880	10,732
Cost of sales		13,828	6,732
Depreciation and amortization		165	79
Share-based compensation		0	0
Other G&A expenses		4,507	2,700
Mine site care and maintenance		0	0
Restructuring Costs			0
Foreign exchange (gain) loss		35	(1,080)
Gain (Loss) on investments			0
Gain on derivative asset		0
Other (income) loss		(8)	250
Segment income (loss) before taxes		1,353	2,051
Total assets		11,462	6,198
Total liabilities		4,116	1,642
Mining [Member]
Disclosure of operating segments [line items]
Total revenues as reported		0	0
Cost of sales		0	0
Depreciation and amortization		1,292	1,531
Share-based compensation		0	0
Other G&A expenses		86	0
Mine site care and maintenance		1,311	357
Restructuring Costs			0
Foreign exchange (gain) loss		9	(4)
Gain (Loss) on investments		113	0
Gain on derivative asset		(3,071)
Other (income) loss		68	(247)
Segment income (loss) before taxes		192	(1,637)
Total assets		113,341	98,303
Total liabilities		10,284	6,762
Corporate And Other [Member]
Disclosure of operating segments [line items]
Total revenues as reported		0	0
Cost of sales		0	0
Depreciation and amortization		105	101
Share-based compensation		2,544	2,305
Other G&A expenses		5,701	4,404
Mine site care and maintenance		0	0
Restructuring Costs			1,353
Foreign exchange (gain) loss		(29)	120
Gain (Loss) on investments		459	(1,341)
Gain on derivative asset		0
Other (income) loss		(241)	(187)
Segment income (loss) before taxes		(8,539)	(6,755)
Total assets		8,215	17,823
Total liabilities		1,988	1,464
Canadian [Member]
Disclosure of operating segments [line items]
Total revenues as reported		13,105	5,881
Canadian [Member] | Environmental Services [Member]
Disclosure of operating segments [line items]
Total revenues as reported		13,105	5,881
Canadian [Member] | Mining [Member]
Disclosure of operating segments [line items]
Total revenues as reported		0	0
Canadian [Member] | Corporate And Other [Member]
Disclosure of operating segments [line items]
Total revenues as reported		0	0
Non-Canadian [Member]
Disclosure of operating segments [line items]
Total revenues as reported		6,775	4,851
Non-Canadian [Member] | Environmental Services [Member]
Disclosure of operating segments [line items]
Total revenues as reported		6,775	4,851
Non-Canadian [Member] | Mining [Member]
Disclosure of operating segments [line items]
Total revenues as reported		0	0
Non-Canadian [Member] | Corporate And Other [Member]
Disclosure of operating segments [line items]
Total revenues as reported		$ 0	$ 0

[1] Represents consolidated loss before taxes.

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Segmented Information (Details Textual)	12 Months Ended
	Dec. 31, 2018 CAD ($)
Three Customers [Member]
Disclosure of operating segments [line items]
Revenue	$ 12,580,000

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Related Party Transactions (Details) - Related parties [member] - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disclosure of transactions between related parties [line items]
Salaries and other short-term benefits	$ 2,130	$ 2,246
Share-based compensation	2,513	2,072
Key management personnel compensation	$ 4,643	$ 4,318

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Commitments (Details) $ in Thousands	Dec. 31, 2018 CAD ($)
Disclosure of finance lease and operating lease by lessee [line items]
Minimum finance lease payments payable	$ 1,440
2019
Disclosure of finance lease and operating lease by lessee [line items]
Minimum finance lease payments payable	391
2020
Disclosure of finance lease and operating lease by lessee [line items]
Minimum finance lease payments payable	283
2021
Disclosure of finance lease and operating lease by lessee [line items]
Minimum finance lease payments payable	210
2022
Disclosure of finance lease and operating lease by lessee [line items]
Minimum finance lease payments payable	210
2023
Disclosure of finance lease and operating lease by lessee [line items]
Minimum finance lease payments payable	190
Thereafter
Disclosure of finance lease and operating lease by lessee [line items]
Minimum finance lease payments payable	$ 156

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Commitments (Details Textual) - CAD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Commitments And Contingencies [Line Items]
Contractual capital commitments		$ 360,000
Subsequent Events [Member] | Flow-through common stock[] [Member]
Disclosure Of Commitments And Contingencies [Line Items]
Payments for exploration and evaluation expenses	$ 3,170,000