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WATER REPLACEMENT PLAN The Water Replacement Plan consists of two phases. Phase I is already completed and currently in effect. The Phase I plan provides a plan for the hydrologic resources identified in the Phase I surface and groundwater inventory noted above. The Phase II Water Replacement Plan will be developed as a result of the findings and discussions taking place during the reassessment of the lease area hydrologic features conducted during the summer of 2003. The Water Replacement Plan Timeline is summarized in the table at the end of this section. PHASEI Protection of Existing Water Rights and Use Because the latest CDWR records indicate a lack of adjudicated water rights located within the Elk Creek lease, the permit section titled "Potential for Interruption, Diminution or Contamination of Water Supply Sources" located on permit page 2.05-97 (also Appendix 2 herein), states: "mining and related operations are not expected to adversely impact any surface or ground water sources or water rights. Consequently there is no need to explicitly address provisions for replacement of impacted water ~7~If rights at this time. In the unlikely event however, that proximate contamination, diminution or interruption does occur and can be documented as resulting from existing or proposed mining and related operations, OMLLC will mitigate the associated water rights impacts through discussion and development of a cooperative agreement with any affected water rights holder(s). " Further, per the commitments made on CDMG permit page 2.05-88 (Appendix 2 herein): Protection of Water Rights and Use - As previously noted under Protection of Surface Water Quantity and Quality (Mine Water Supply Withdrawals), OMLLC's water supply withdrawals will not exceed their water rights. In addition, mine drainage will have little or no impact on water rights or use since only ground water will be directly impacted and beneficial ground water use in the area is very limited. There is some potential that subsidence effects may impact surface seeps and springs in the area which are non-adjudicated water sources used on an informal and occasional (when flowing during part of the year) basis by livestock. OMLLC is committed to working with area landowners to restore, replace, or provide reasonable compensation for any significant livestock watering sources that are adversely impacted. Mitigation could include repairs to surfzcial tension cracks in stock ponds and ditches, construction • of additional stock ponds, cleaning of existing stock ponds, and providing 8