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404 PERMIT STATUS: The 404 permit, after considerable discussion, on-site visits and proposals has finally been amended to address the additional concerns of the Corps. Resolution of the issues was achieved using two modifications. Issues regarding islands: Although the issue of islands was a contentious one because most of the islands do not interfere with the stream flow, it was finally agreed to implement some actions to mitigate the fact that a few islands were left when the permit specifically prohibited islands being created. One of the major areas of concern was on the stream just north of the south boundary of Section 25. Mining in this area had created a nazrow peninsula containing mature cottonwoods that were receiving poor water supplies. It was decided to reorient the stream channel, fill an older created channel to reduce erosion, and modify the crossing of the road just north of the area of concern. A great deal of earthmoving was done to reconfigure the stream channel, but the result should provide an excellent area for the development of wetland vegetation which can support the adjacent trees better through the retention of water. Even with the extremely dry and hot June, some recovery of wetland species was occurring and new suckers of cottonwood were appearing along and in the newly configured stream. Nevertheless, the extensive seeding done in May showed no signs of germination as of June 30, 2006. Recent rains though will likely result in a rapid development of vegetation along and in the new channel. More upland areas of the earthwork will likely take much longer to develop. The road crossing had become a problem after the mining of the sand south of the crossing. The original culvert now only carried water during extreme flows. Deep and prolonged ponding of water behind the road crossing prevented vegetation development and retained water that was supposed to pass on down the stream. At first a culvert or series of culverts was proposed, but it was finally decided to install a low water crossing instead. Culverts can cause a severe maintenance problem and because the road is not used very much a low water crossing was considered, by Land Board personnel, to not be a problem. Early in the construction of the crossing, a high pressure, fiberglass gas line was discovered in the shoulder of the road and it was installed so shallowly that installing culverts or a low water crossing was impossible. The gas line blocked the construction. At Schmidt's expense the gas line was lowered to a point where it was well below the elevation of the stream bed and the crossing. The low water crossing was then installed. The crossing itself was over-excavated. The pit was then lined with fabric and seven truck loads of rhyolite rip rap were used to fill the pit. This was then topped with fabric and the road bed created. Thus, the crossing was constructed to be strong and hopefully capable of withstanding the very strong flows that sometimes occur on Coal Creek. Schmidt spent about $35,000, including design and consulting fees, to construct the crossing and realign the stream. This included the cost of lowering the gas line so the crossing could be constructed. Although requested, to date the gas line still has not been officially mazked by the owner of the line. Schmidt installed two temporary markers at each side of the low water crossing. It is recommended that this gas line be fully marked so any future excavations will not have the difficulty that Schmidt encountered. Schmidt employees came within a few inches of breaking the unmazked line and because it was fiberglass with no wire there was no way to know there was a gas line there. It is very fortunate that nobody got injured or killed. Status report for 2006 (July 15, 2006) Page 5 of 13