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Additional Sheets 2004 Annual Report Coal Creek Resources M-1988-044 Schmidt Construction Company Anniversary Date: March 28 RECEIVED MAR 2 9 2004 Division ~1 Minerals and Geology Overview of Permit Yeat: During the 2003/2004 operating year all of the mining activity occurred in the Upland Mining area. Mining in the South Lowland Mining area was completed early in 2003. Final reclamation of the last mining area in the South Lowland Mining is being implemented. Mining in the upland areas expanded considerably. Very near the end of the permit year a technical revision requesting additional bonded land was submitted, but had not been acted upon by the time of the annual report. Annual Report Maps: There axe two annual report maps included in this report. One map provides the information for the South Lowland area which is basically a stream bed operation. All affected land in the South Lowland area is now in reclamation status. The other map shows the entire affected land area in the Upland Mining Axea. Reclaimed and released land as well as reclaimed but not yet released land axe shown in shades of green. The current operational areas axe shown. Affected Lands: The maps contain the necessary information regarding the amount of affected land and land not yet released. Please note that in the large mining area between the road and the SSE/NNW powexline and located toward the south end of the operation has about 75% of its area in various stages of final grading. Significant portions of this land have been completed with grading, but have not yet been topsoded ox seeded. A lease extension totaling about 2000 acres has been applied fox. The area requested fox new leasing is based upon the results of previous exploration performed under two notices of intent. If the lease extension is approved, a major amendment to this permit will likely be submitted in the next permit year, otherwise the operation will close and all disturbances reclaimed. There is little sand left to be mined within the existing permit/lease area and new deposits within that area are becoming increasingly difficult to locate. Revegetation: No additional xevegetation work was done in the last year other than a couple of small, older disturbances in the vicinity of the plant. Revegetation on the South Lowland areas progressed well in the last year, although the intensely sandy soil has limited cover in some areas. The open range management approach used fox a lessee (State Land Board lease on top of the mining leases) is continuing to have some negative impacts on xevegetation success, particularly for woody species. Compaction and extraordinarily high amounts of cattle droppings under some trees will likely have a negative effect on the long term survival of those particular trees. Schmidt, in their application fox an extension to the lease, has addressed this matter of a need fox altering grazing management approach and the negative effects of grazing on xevegetation success, particularly the long term survival and perpetuation of the cottonwood dominated riparian forests. Bonding: This operation is covered under a self bonding arrangement. Schmidt Construction 2004 Annual Repoli M-1988-044 Coal Creek Resources Page 1 of 1