R. Brent Murphy, M.Sc., P.Geo., VP Environmental Affairs Seabridge Gold Inc.

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1 Memoandum Date: Decembe 22, 2017 To: Fom: Cc: Subject: R. Bent Muphy, M.Sc., P.Geo., VP Envionmental Affais Seabidge Gold nc. Amy Elliott Ph.D., and Gaeth Wolff, B.Sc., P.Geo. Deboah Muggli, Ph.D., M.Sc., R.P.Bio. Pedicted Wate Quality and Loadings to the Unuk Rive 1. NTRODUCTON The poposed KSM Poject the Poject) will develop a lage gold eseve in the coastal mountains of nothwesten Bitish Columbia B.C.). The noth and west aeas of the Poject, which include the Mine Site aea and poposed Wate Teatment Plant WTP), ae within the Unuk Rive wateshed, which cosses into Alaska and dischages into Buoughs Bay and eventually the Pacific Ocean. The Poject has successfully gone though the Povincial and Fedeal pocesses and the appopiate cetificates/appovals have been obtained. Pemits fo ealy stage constuction activities have also been obtained. was equested to povide a compaison of pedicted wate quality and metal loadings of wates flowing into Alaska unde existing baseline) conditions and duing development of the Poject, when the poposed WTP is opeating and dischaging to hell C. The WTP is located at the poposed Mine Site, which is located south of the closed Eskay C Mine, within the hell, McTagg, and Sulphuets C valleys Figue 1). Sulphuets C is a main tibutay of the Unuk Rive. Along its flow path to its confluence with the Unuk Rive, Sulphuets C flows eceive inputs fom seveal tibutaies, the lagest being hell C. 2. METAL LOADNGS & WATER QUALTY TO ALASKA High concentations of metals natually occu in suface wates aound the Poject aea, paticulaly in hell C, due to the extensive natual sulphide minealization in the aea. Mining activity would incease the potential fo metal leaching and acid ock dainage at the Mine Site by exposing sulphide-ich ock. Fo this eason, Seabidge will manage not only wate that has been in contact with mining activities, but othe natually poo wate quality in the Mine Site aea. An extensive wate management system will divet clean wate away fom the Mine Site, and collect contact wate to be stoed and teated by the WTP, which, in tun, will be eleased to hell C. A compaison of WTP effluent quality, existing wate quality of hell C, and wate quality guidelines is pesented in Table 1. These data highlight that:

2 Page 2 a) existing wates of hell C cuently flowing into the Unuk Rive via Sulphuets C ae natually high in metals; b) existing concentations of wate quality paametes in hell C ae above both applicable B.C. and Alaskan guidelines fo the Potection of Aquatic Life; and c) WTP effluent is of bette quality than the existing wate quality of hell C, indicating that Poject effluent epesents an impovement ove natual backgound conditions. That is, WTP dischages to hell C thoughout the life of the KSM Poject will impove wate quality dilution) and lagely decease metal loadings in wates flowing into Alaska via hell C, Sulphuets C and the Unuk Rive. Table 1. Compaison of Wate Teatment Plant WTP) Effluent Quality, Existing Wate Quality of hell C, and Wate Quality Guidelines mg/l) Wate Quality Paamete B.C. Wate Quality Citeia -- Fesh Wate a Shot- Tem Acute) Long- Tem Chonic) Alaska Wate Quality Citeia -- Fesh Wate b Acute Chonic Aveage Annual Wate Quality, hell C WTP Effluent Quality Coppe Lead Selenium c on Cadmium Zinc Notes: Hadness-dependent guidelines ae calculated using aveage annual hadness of hell C 173 mg CaCO3 /L ; MC1B) a epesent woking and appoved BC MOE guidelines fo the Potection of Aquatic Life BC MOE 2015; BC MOE 2016). Applicable guidelines fo dissolved concentations ae pesented fo ion and cadmium. b Alaska State Metals Guidelines adapted fom Panell and Hatig 2008) c. Se concentations epesent dischages fom the Se-X Plant mg/l), which ae at o below existing concentations fo total Se in hell C. Red font indicates that baseline wate quality of hell C is geate than Alaska Wate Quality Citeia fo Fesh Wate Figue 2 and Figue 3 expand on bullet c), above, to futhe demonstate that WTP dischages thoughout the life of the Poject will lagely impove wate quality and decease metal loadings of wates flowing into Alaska via Sulphuets C and the Unuk Rive. A compaison of metal loadings lb/yea) and wate quality mg/l) of Sulphuets C wates flowing into the Unuk Rive unde existing baseline) conditions and duing development of the Poject is pesented in Figue 1. Shown ae annual aveages fo existing conditions and fo Poject Yeas 5, 20, 40, and the end of mine life, Yea 57+). Similaly, Figue 2 pesents a compaison of metal loadings and wate quality of the Unuk Rive wates flowing into Alaska unde existing

3 Page 3 baseline) conditions. These figues show that when the poposed WTP is dischaging to hell C Yeas, 5, 20, 40, and ), downsteam metal loadings in Sulphuets C, the Unuk Rive, and though to Alaska ae lagely educed and pedicted wate quality impoves elative to existing conditions. Note, selenium concentations ae pedicted to slightly incease elative to existing conditions, paticulaly in a localized, non-fish beaing aea immediately downsteam of the Mine Site in Sulphuets C SC2, and extending 1.5 km downsteam to a monitoing site in the Unuk Rive). Howeve, selenium concentations ae expected to meet eceiving envionment wate quality standads at a egional scale, including at the B.C./Alaska bode, 35 kilometes downsteam of the Mine Site. Specifically, the concentation of selenium pedicted downsteam of the Poject is lowe than applicable guidelines: less than 5 µg/l Alaskan guideline, Table 1) in the Unuk Rive just downsteam of Sulphuets C, and less than 2 µg/l B.C. guideline, Table 1) in the Unuk Rive nea the Alaska bode. The eason fo the slight incease in selenium concentations elative to existing conditions is that concentations in the contact wates collected, stoed, and teated by the WTP ae pedicted to incease ove opeations of the Poject. This is elated to the pogession of open pit mining and block caving; selenium concentations decease again as the undegound and pit flood at closue Figue 1, Figue 2). The selenium teatment plant Se-X) teats up to 500 L/s of these contact wates to mg/l, pefeentially teating contact wates with the highest selenium concentations, but does not teat all of the contact wates collected, stoed, and teated by the WTP. While selenium concentations will be minimized in the Unuk Rive by staging the WTP dischage to seasonal flows, pedicted WTP effluent concentations can be geate than existing concentations of hell C, which esults in slight inceases downsteam. Selenium concentations in hell C, Sulphuets C and the Unuk Rive wee the focus of the wate quality effects assessment duing the Application/ES eview. The educed concentations as a esult of the 500 L/s Se-X esulted in Poject effects that wee deemed by the povincial and fedeal agencies to be not significant and the Poject eceived both povincial and fedeal appovals. Similaly, dissolved ion concentations ae pedicted to vey slightly incease elative to existing conditions. This is elated to high degee of consevatism incopoated into the model pedictions and ion concentations ae likely to be oveestimated. Specifically, unlike what is obseved natually in suface wates aound the Poject aea, no attenuation o pecipitation is incopoated into these pedictions, which will educe pedicted ion loadings and concentations along hell C, Sulphuets and Unuk ive flow pathway. n this case, ion loadings ae esult of consevative assumptions assigned to divesion tunnels that will oute the majoity of the non-contact unoff and glacial meltwate aound the Mine Aea, as well as uncaptued seepage beyond the seepage collection dams.

4 Page 4 REFERENCES: BC MOE Woking Wate Quality Guidelines fo Bitish Columbia 2015). Bitish Columbia Ministy of Envionment, Wate Potection & Sustainability Banch: Victoia, BC. BC MOE Bitish Columbia Appoved Wate Quality Guidelines: Aquatic Life, Wildlife & Agicultue: Summay Repot. Bitish Columbia Ministy of Envionment, Wate Potection & Sustainability Banch: Victoia, BC. Panell S., Hatig L Alaska Wate Quality Citeia Manual fo Toxic and Othe Deleteious Oganic and noganic Substances. State of Alaska, Depatment of Envionmental Consevation.

5 uk Un McT ag g R SF h ell R SF u So k R iv e Unu th Sulph u ets Pit Bowse Lake Ke Pit UR2 T em po a yf ank Mackie GlacieAcc ess R oad WateQualityMonito ing Station Hig h way R esou c er oad nf ast uctu e a, bi m lu Co ada h n itis a SA B C,U ka as Al SEABRDGE GOLD on Cap Unde g ound Wo ks h ellpit T eatyc Ac cess R oad T eat yc ee k h ellt eaty Saddle A ea CoulteC CoulteC Ac cess R oad h ellt eaty Twinned Tunnels SC2 T ailing Manag em ent Facility ve Ri Eskay C Mine. ets C Sulph u u Un T eatyopc B T om Mackay Lake iv e kr R iv e Hodkin Lake Es ka Mi yc ne e R o ek ad g ± Contains inf o m ation licensedundeth eopen Gov e nm ent Licenc e B itish Colum biaandcanada ncludes m ate ial CNES2004,Dist ibution Ast ium Se v ic es /Spot m ag eco po ation,usa,all ig h ts ese v ed. Sou c e:es i,dig italglobe,geoey e,ea th stageog aph ic s, CNES/ Ai bus DS,USDA,USGS,Ae ogr D, GN,andth eg SUse Com m unity : 320, Kilom et es v in llbe Figue 1 KSM Mine Site Aea and Select Monitoing Locations on Sulphuets C and the Unuk Rive Date:Dec em be20,2017 P ojec tion:nad1983utm Zone9N Poj # GS # KSM

6 Figue 2 Annual and Pedicted Loads lb/yea) at uppe Sulphuets C, at the confluence of hell C Station: SC2) 1,000, ,000 Loads lb/yea) 10,000 1, Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Coppe Lead Selenium on Cadmium Zinc Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 1 Mean Concentation mg/l) Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Coppe Lead Selenium on Cadmium Zinc Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Note: Coppe loads ae pesented as /100 fo figue claity puposes. SEABRDGE GOLD NC. Poj # Gaphics # KSM-17MML-014a

7 Figue 3 Annual and Pedicted Loads lb/yea) at Unuk Rive though to the Alaska Bode Station: UR2) 10,000,000 1,000, ,000 Loads lb/yea) 10,000 1, Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Coppe Lead Selenium on Cadmium Zinc Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea mg/l Mean Concentation mg/l) Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Coppe Lead Selenium on Cadmium Zinc Yea 5 Yea 15 Yea 40 Yea 5 Yea 15 Yea 40 Note: Coppe loads ae pesented as /100 fo figue claity puposes. SEABRDGE GOLD NC. Poj # Gaphics # KSM-17MML-014b