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• 3.0 Surface Water Information The data collected from Oxbow Mining, LLC (OMLLC) surface water monitoring sites along with the results of laboratory analyses are presented in Exhibit 1-Surface Water Information. The following site discussions are presented from west to east through the OMLLC property. H-1 -Lower Hubbard Creek Surface water monitoring point H-1 is located on Hubbazd Creek, where this perennial stream flows through the western edge of the OMLLC permit area associated with the abandoned but reclaimed Somerset Mine facility area. The most recent surface activity in the area was the reclamation of the lower Hubbazd Creek site in 1996. The H-1 site is utilized as a down gradient site to detect potential changes in stream quality or quantity as a result of mining activities. Hubbard Creek point H-1 was monitored in accordance with the permit requirements. Due to the severe drought conditions, Hubbard Creek continues to exhibit much reduced flow volumes. Other than reduced flow, no significant difference in the 2004 monitoring results from baseline or historical measurements was noted. B-1, B-2 and B-3 -Bear Creek • BB=1 -- Surface water monitoring point B-I -Lower Bear Creek, an ephemeral drainage, is monitored to verify that the Elk Creek mine does not have an adverse affect on the quality of runoff in the drainage. Due to the prevailing drought conditions, during 2004 there was, again, only minimal flow at B-1. No additional retreat mining of D seam occurred under the Bear Creek drainage during 2004. The status of the Bear Creek road is assessed as part of ongoing subsidence monitoring. No adverse effects as a result of mining activities were observed to have occurred to the Bear Creek road. From a historical perspective it is important to remember that the Bear Creek drainage was also undermined by extensive historic mine workings in the B and C seam of the Somerset mine. B-2 and B-3 -- In accordance with the Elk Creek Federal coal lease "Water Replacement Plan" stipulation, surface water monitoring points B-2 and B-3 are monitored for flow twice annually after tributary flow from side channels between the two points has ceased. B-2 corresponds to a mid-Bear creek location roughly corresponding to the south limit of the Elk Creek Federal Coal lease. B-3 corresponds to an upper Bear Creek location roughly corresponding to the north limit of the Elk Creek Federal Coal Lease. Generally, due to the ephemeral nature of Bear Creek and the propensity for flows to cease by late June, flow measurements are obtained in mid-June. The information is collected in order to aid in analyzing 1) potential water depletions and 2) potential for injury to any Bear Creek water rights. Bear Creek flows were very minimal and typically variable. 6