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FLAG SAND AND GRAVEL CD. <br />NOVEMBER 22. 2006 <br />PAGE 2 <br />shaped as mining progresses. Topsoil is stored along the <br />north slope between the mined area and the river for use in <br />recoiling the slopes. <br />(3) Mining will continue east of the Plant Site in the area <br />colored purple. We expect to continue to mine on the floor <br />of the previously mined and disturb an additional 2.00 acres <br />± next year. We will continue to monitor the west lake <br />slopes and do remedial work if it is necessary. <br />(4) No reclamation is required next year in the Plant Site area <br />or in the mining area east of it. The western parcel may be <br />seeded on the above water slopes next year. <br />(5) The bond was evaluated in 1999 and set at $55,400. Review <br />of that evaluation and this annual report show that less <br />area is disturbed at this time than existed in 1999. Recla- <br />mation, except seeding, is complete on the western 59.81 <br />acres ± of the site so the total disturbance at this time is <br />28.13 acres ±, which is less then allowed under the current <br />bond. We feel it is adequate to cover all reclamation <br />requirements for this year. <br />The effective date of all information contained in this <br />report is November 13, 2006. If you have any questions please <br />call me. <br />Sincerely, <br />~~~ <br />/-.e6"77 ~.~,El <br />Fred Frei <br />President <br />cc file <br />Environment, Inc. <br />enclosure <br />