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March 2006 <br />Flag Creek Mine <br />Rio Blanco County Colorado <br />2005 Mining Season Annual Report <br />DMG Permit # M-1997-098 <br />The site continues to produce flagstone used primarily in construction and landscaping. Mining <br />occurs on a relatively small scale and increased slightly in the past year with about one acre of <br />new disturbance. During the past year, rock was removed from existing exposed faces by mining <br />down vertically a few feet. <br />Once the snow melts this spring, a map will be prepared outlining the area of disturbance. We <br />anticipate submitting that map to the DMG in June of 2006. <br />Surface mining involving the use of an excavator, haul truck, front-end loader and dozer <br />continues. No drilling or blasting has taken place. Mined flagstone is transported from the <br />mining area to the staging area in preparation for shipment. The mine produces very little waste, <br />just a small pile of odd shaped rocks, which are currently being sold. No new roads were <br />required or constructed. Due to the limited production at the mine, only one to two truckloads of <br />material was shipped from the yard each day during the mining season. <br />The plan for the 2006 mining season is very similar to the past. The area of disturbance will be <br />similar and is anticipated to increase only slightly. Mining down vertically a few more feet <br />within the disturbance area will produce additional rock. The quantity of rock mined may <br />increase to approximately three or four truck loads each day {5-6 days/week during the mining <br />season). <br />No specific reclamation plans are proposed for 2006 at this time. General site housekeeping will <br />occur as prudent. <br />The Flag Creek operation will remain a small scale, clean, well controlled mine. <br />