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Home My WebLink AboutFort Yukon Gwitchyaa Zhee Biomass for Energy 2008 Integrated Systems Approach for Biomass Utilization In Fort Yukon Background Rural Alaska is currently experiencing the highest heating and electrical power generation costs in North America. This is due to the high price of the diesel and heating fuels, as well as the delivery of these products to remote regions in Alaska. Millions of gallons of fuel are shipped to rural Alaska annually with millions of dollars of subsidies for support. Economical alternative energy sources are needed for these communities if their current standard of living is to become sustainable. Many communities in the Interior have accessible supplies of wood suitable for cordwood and wood chip production. Appropriate woody biomass fueled heaters, boilers, and gasification installations have the potential to reduce fossil fuel consumption by 50% or more. Collaborative Effort Economically converting a community’s use from diesel fuels to woody biomass is a significant undertaking and requires collaboration among local Native Corporations, local non-profits, foresters, mechanical engineers, community leadership, federal and state agencies, and funding " sources in order to be successful. Gwitchyaa Zhee Corporation is currently taking a leadership role in Fort Yukon to develop an integrated approach for displacing diesel with woody biomass. Key partners include the Tribe, Council for Athabascan Tribal Governments (CATG), Alaska Village Initiatives (AVI), Denali Commission, Alaska Energy Authority, USDA Rural Development, USDA . NRCS, Department of Energy, National Renewable Energy Lab Tribal Program, and Alaska State ' Division of Forestry. : ees. eerie j Biomd ae Habitat Savaieyatsy eee Enhancement Improvern Vrlefeciy) Gwitchyaa Zhee Corporation Biomass for ‘Energy Program Page 2 LNALT Cnmisser faiwaté ENT prise CACY t COUAMALT OF PRUE PYPOSE, ® Uae thoy - PO UGE E SA Lorn (0 aati ar DAS No toffee ene aera! Com Al FES COCO —— y 2 L Lay kee C-14, (5 Pump, Tank, Pipeline 2 Filtration RENTALS Complete Solutions. Proven Results. 800-742-7246 - rainforrent.com Alternative Energy Grant Proposal Construction Application Gwitchyaa Zhee Corporation Date of Application: February 7, 2008 Application prepared by: William A. Wall, PhD Brief Project Description: Gwitchyaa Zhee has been working for two years with partners including Alaska Village Initiatives, CATG Resource Department and consultants on the development of an Integrated Biomass Energy Program for Fort Yukon. This integrated approach links sustainable forest management with an in- village, for-profit wood harvest and delivery business to displace diesel energy with wood energy for heat and power. Other communities have become very interested in this program. Key Program Components include: e Forest Management Program; e Installation of a for-Profit Wood Harvest System; ¢ Installation of a For-Profit Wood Yard Processing and Delivery System; e Purchase and installation of Wood Boilers for heating fuel reduction in commercial and public buildings; ¢ Development and installation of a Biomass Diesel Hybrid Power Plant; e Installation of systems for each project component The project is based on the concept of ecological, economic and social sustainability with a goal of displacing as much diesel and fuel oil as is technically feasible and sustainable; essentially addressing a systematic conversion a village to significant amounts of wood utilization. A key to the success of a biomass energy and economic development project of this magnitude in a remote village is to develop the wood supply infrastructure and install systems of the project, simultaneously with the installation of infrastructure and systems for conversion of biomass to heat, commercial boilers in the school buildings and clinic. AVI has secured DOE funding for boilers for _ the clinic and school/gym and has been asked by the State to submit a proposal for installation of the wood yard. This proposal request to the Denali Commission AEA Alternative Energy Program will address the purchase of harvest equipment and system installation to develop the local capacity to efficiently and effectively harvest cord wood, supply split fire wood and produce chips for heat and power. USDA RD is very supportive of the project and has indicated support for grants and guaranteed loans. Application will be submitted. Total Capital Cost Estimate: $2,057,610 Remaining Project Costs: $1,355,610 Requested: $ 995,610 1. Applicant Information: Gwitchyaa Zhee Corporation PO Box 389 Fort Yukon, AK 99740 907-662-2502 Dunn & Bradstreet Number: 079250148 Gwitchyaa Zhee Corporation Biomass for Energy Program Gwitchyaa Zhee Corporation Biomass for Energy Program 2. Utility Certificate: Gwitchyaa Zhee Corporation (the applicant) is not a utility and the subsidy to be created to produce woody biomass will not be a utility. However, Gwitchyaa Zhee Corporation does have a wholly owned subsidiary, Gwitchyaa Zhee Utility Corporation, which will purchase wood for a planned biomass diesel hybrid power plant. The Certificate is not enclosed but available if needed in the future. 3. Representative: William A. Wall, PhD Consultant PO Box 988 Seeley Lake, MT 59868 williamwalll 1@gmail.com 907-227-6327 4. Resolution: Attached under Appendix A 5. Eligible Applicant: The applicant’s intent is to own and operate the GZ Wood Fuel Corporation over the useful life of the project and into a more sustainable energy future for the community. A. The applicant is Gwitchyaa Zhee Corporation and is not itself a utility. GZ does wholly own Gwitchyaa Zhee Utility Corporation, a utility that provides electricity to Fort Yukon. Phase 2 of the Fort Yukon woody biomass program is to build a biomass diesel hybrid power plant which will be owned by the Utility. This business model will create a vertically integrated company utilizing it own local resources for energy production. B. This business will have the capacity to produce wood fuel in three forms: split firewood for home use, round cord wood for use in commercial boilers such as Garn Boilers, and wood chips for use in commercial boilers and in a future biomass diesel hybrid power plant. Potential end users include local households, schools, clinic, all commercial and government buildings and the local electric utility. The strongest business scenario is that the GZ subsidiary Gwitchyaa Zhee Wood Fuel will harvest and deliver wood to a wood yard and then sell to the public and/or contract to fuel and maintain commercial boilers in the schools and Clinic. The intent meets the criteria for sale to or use by the public. Letters of intent for fuel purchase are attached under Appendix A. C. NA D. Gwitchyaa Zhee Native Corporation is in good standing with respect to its credit and federal tax obligations. The 2006 Financial Statement as well as 2005 and 2006 tax forms are attached in Appendix D. 6. Eligibility of Project: A. Project is being developed as a model for conversion of hub communities to significant amount of wood energy for heat and power. The project will serve as a proof of concept model for all of interior Alaska where enough wood can be grown to support sustainable utilization. B. The portion of the project for which funds are requested will install harvest equipment systems to produce fuel from woody biomass to displace diesel fuel for heat and power. 7A. (i) Statement of Grants and Loans committed to the project: Development of this model program has been ongoing for several years with resources provided from multiple partners and through primary support from Alaska Village Initiatives. Since the development of a fully sustainable and integrated woody biomass utilization program to convert a village to wood energy is a revolutionary undertaking; significant development work has been achieved prior to the implementation project proposed. Thus two lists of funding are provided. The first list is of funds expended in the development of the background information to make the current implementation proposal feasible and substantial. The second list is current grants that support the implementation project. a. Statement of State or Federal grants already expended on the project for development of the model program. Funds have been received by Alaska Village Initiatives Council of Athabascan Governments. These funds are not considered in current funding calculations, but are meant to demonstrate work already accomplished. Funds were expended on development and continued refinement of the model approach. A sampling of current work being conducted include development of wood delivery methods for summer (water) and winter (ice), a heat and electrical use survey in Fort Yukon, development of model, culturally relevant contracts to be used in transfer of wood through the system, review of various boiler manufacturers for use at the school and clinic, and a review of specific harvest equip components for purchase under the implementation project. Source Amount Committed Amount Spent USDA — NRCS 2005 to 2008 $670,000 $660,000 DNR Forestry Stewardship $ 40,000 $ 40,000 DOE/NREL Tribal Grant 2007 $148,000 $60,000 USDA RD RBEG 2007 $ 75,000 $15,000 TOTAL $933,000 $775,000 b. Statement of State or Federal Funds currently committed to the implementation phase of this project received by AVI. Source Amount Committed Amount Spent DOE Earmark 2008 AVI $492,000 $0 GZ Corporation in-Kind Match $310,000 $0 TA(ii). Project Sustainability a. Resumes of key support personnel; consultants, and CATG are attached under Appendix B. Consultants will provide systems installation for at least the first two years of implementation. This will include the following: a) Installation of all aspects of the wood harvesting and delivery systems to insure development of best practices for safety, effective equipment operation and maintenance, development of safe efficient travel corridors and methodologies, loading and unloading, movement of equipment, wood handling etc. This will be done for both summer and winter harvesting. Systems manuals will be produced; b) Installation of best harvest practices for harvest treatment of various types of forest stands to insure sustainable forest regeneration; Gwitchyaa Zhee Corporation Biomass for Energy Program c) Installation of harvest planning and harvest site layout systems via CATG Resource Department to support sustainable management of GZ lands; CATG will house the forestry, land management and harvest planning program within their Natural Resource Department. This Service will initially be installed by consultants and once internalized in the Resource Departments capacity will be financially supported by GZ as a cost of business. The CATG Resource Department capacity is reviewed in the attached GZ Forest Stewardship Plan attached. Key to the sustainability of the harvest operation is skilled equipment operators with local knowledge of weather terrain and river conditions. Fortunately, the President of GZ Corporation is a certified heavy equipment operator. He has supervisory and leadership experience and fully understands all aspects of safety, equipment maintenance, and equipment operations. Several key people in the village have experience from the North Slope on hauling heavy loads across ice and working in winter conditions. b. Team Approach: Installation of this project is a team effort. Reviews of the short list of resumes demonstrate a strong technical team dedicated to creating positive community supported change in Fort Yukon. Equipment operation and construction is a strong suit of Fort Yukon labor pool. c. Financial documentation is attached under Appendix D. 7A (iii). Exportability of project to rural Alaska. This program was conceived three years ago to develop an integrated template for converting a village from total reliance on diesel fuel to a reliable system of wood utilization. It will require identifying all of the barriers to success and developing ways to systematically eliminate the barriers. The most important barrier to overcome is local capacity to implement and manage an integrated business, and to successfully operate each of its components. Success will require installation of well designed systems for each component. Some villages may not be able to develop the capacity for this venture themselves. Once the model is proven; many villages will have the ability and interest to successfully implement a form of this model. Success of any energy and economic development program of this magnitude is dependent on recognition of the need for systems development and installation support for several years after the equipment is purchased and infrastructure is developed. The most important features of a template include developing a sustainable business model for producing, converting and delivering wood reliably to end users while simultaneously developing the end user market for wood heat and, in phase two, electrical power. Linkages between sustainable forest management, an economically viable wood harvest and delivery system, and end users of heat and power must be seamless. Developing and demonstrating the feasibility of this model requires installing and interconnecting these systems simultaneously. Once demonstrated, the model can be adapted in other villages based on local circumstances, capacities and needs. This process is quite a bit different than installing a boiler at one location and paying people to bring wood to feed it, but the benefits Gwitchyaa Zhee Corporation for rural Alaska are significant. The model with its component technical parts is being designed and developed specifically to export to other villages. 7B. Business History GZ Corporation is an ANCSA Native Corporation formed under the State and Federal Law. The corporation owns 161,280 acres under 12a land entitlement and 53,199 under 12b land entitlement. Currently GZ has two primary businesses; the only operating gas station in Fort Yukon and a wholly owned electrical utility. The gas station is a relatively new venture and is operating well with a profit. The utility has been operating for over twenty years. It has been profitable, but is currently very old and inefficient. New electrical demands, including a new sewage system, are taxing capacity. The generators are extremely old and have been rebuilt multiple times. These conditions, in conjunction with increasing fuel prices, will cause a cost increase to the consumers who are currently paying $0.46 per kWh. Recent financials are attached. 7D. Feasibility Information As supplemental information the Forest Stewardship Plan supported by DNR Forestry Department and developed through AVI for GZ lands is provided in Appendix E. This document addresses the technical and sustainability issues for forest management and production of woody biomass from GZ lands. The document contains maps of the land base and photos of some of the original harvest equipment thought to be used. Since initiation of this plan, type, size and configuration of appropriate equipment have been constantly updated. The objective for the equipment is to be sized appropriately to meet conditions on the river system near Fort Yukon simultaneously with, production capacity to provide enough woody biomass to operate a biomass diesel hybrid power plant. See Table | below for equipment list. (i) Project Narrative The project develops the infrastructure and installs systems for woody biomass fuel harvest and distribution in Fort Yukon as well as the installation of wood boilers in the School, Gym, and new clinic (AWEDTG Prefeasibility Data Sheets Appendix C). Phase two of the project includes development of a biomass diesel hybrid electrical power plant. The focus of this application is the procurement of the biomass harvest and delivery system capital costs and capacity building technical support. Supply & Demand One of the key challenges to developing a sustainable biomass system in a rural community is the need to develop both supply and demand concurrently. If the supply of biomass is made available, but there is no developed market, then the harvest system will not be sustainable, let alone profitable. If the demand is developed without a reliable cost effective supply, then the project will fail for lack of biomass to provide heat and/or power (someone has to feed the boiler: Lessons Learned AEA). By vertically integrating land and resource ownership with supply and distribution, appropriate profit incentives and economies of scale can be created. This is the case in Fort Yukon where Gwitchyaa Zhee (the local Alaska Native Corporation) owns the resource and the electrical utility. GZ can effectively produce and supply woody biomass at the lowest cost achievable, based on equipment and local conditions. A 2008 grant from DOE will be used to purchase boilers for the three largest fuel oil users in Fort Yukon; the school, gym, and clinic which use approximately Gwitchyaa Zhee Corporation Biomass for Energy Program 50,000 gallons annually. With the implementation of the Gwitchyaa Zhee Fuel Wood Company, supply and demand is both achieved. Supply — A Model for Remote Woody Biomass Harvest Systems Any harvest system intended to be replicated in rural Alaska must meet certain criteria if it is to have a high probability of success. Such a system is a micro-version of commercial logging enterprises that have harvested larger timber volumes in Southeast and Southcentral Alaska for many years. A prototype harvest operation that can serve as a template for rural communities is required. A prototype includes not only the equipment, but the installation of systems and capacity to move wood safely on both water and ice. Initially, this prototype may need to be capable of serving several communities during summer and winter. While at each community, the operation would produce enough wood for the communities’ projected annual needs. Once the annual need of one community is met, the operation will move to the next community to fulfill their annual need. The regional harvest approach is another potential variation for the model. Each community must have the capacity to take the responsibility for processing and distributing the wood produced by the harvest operation. This will require labor from each community, as well as some capital for firewood processing, chipping and transportation equipment. Those communities that handle the firewood processing and distribution tasks well will automatically become candidates for operating their own harvest program when demand for fuel wood in their area increases. The equipment and personnel that make up the harvest operation must be able to efficiently function in remote, off-road conditions. This requires crew and equipment that are reliable and low maintenance. In most situations, at least some of the fuel wood logs will have to be hauled off road for up to 4 miles. Some of this hauling will occur on snow or ice, requiring a vehicle that has a proven record of successfully operating under such conditions. Both round logs and chips will be produced. In the future, chip production will occur both in the woods and in the wood yard depending on materials utilized. Large willows (see Forest Stewardship Plan Appendix E) will be most efficiently chipped at harvest location and cord wood can be chipped at either location. A critical issue is matching the equipment to the wood products and is driven by the type of boilers installed. Small automated chip boilers require chips to be delivered and the well-known Garn Boiler requires hand fed stick round wood. Both types of boilers may be installed in Fort Yukon, as well as the need for split firewood for public purchase. Tradeoff analysis for Garn Boilers (stick fed) vs. modularized European gasifier boilers (chip automated) is underway. Chip production is a critical component of the harvest system as it is the only fuel that can be used to feed a biomass/diesel hybrid power plant. The set of equipment listed in Table | can be operated by a crew of two in both summer and portions of winter. The crew will deliver the trees from the forest to a wood yard inside a rural community. Any number of modifications can be made to this system to fit a community’s special circumstance and can be made as more experience is gained. Gwitchyaa Zhee Corporation Biomass for Energy Program Table 1. Biomass Harvest Start Up Equipment 2008 WOOD HARVEST EQUIPMENT TO BE PURCHASED Large Scale Fecon FTX100L $130,000 Hahn Processor head $55,000 Fecon Attachments Bucket $2,500 Tree Shear $14,000 Brush Rake $3,800 cool $5,800 Backhoe $7,000 | Equipment Trailer $8,000 John Deere 810D Forwarder $250,000 Track trailer (W/Dump) $18,000 20 foot skiff $24,000 Morbark 2036 Track Chipper $180,000 Freight $25,000 Total Equipment Cost $723,100 Fort Yukon Biomass Harvest Economics The spreadsheet in Table 2 is a model based on production estimates using the above equipment configuration. It is believed to be a reasonable estimate, but it is as yet untested. The yellow cells represent data input assumptions, and the blue cells represent the resultant calculations of high interest. Maintenance and Operation costs are listed and built into the production model. For demonstration purposes, an assumed volume of 2,000 tons of seasoned wood is to be produced annually for firewood and stick or chip boilers. This would take approximately 89 fully productive working days. Additional labor will be required to move equipment from one community to another, as well as transportation expenses if done by barge if this scenario were implemented. A Fort Yukon contractor with a river freight boat will be used to move equipment and wood chips during summer. The boat can handle a load of 20,000 pounds in it current configuration and has been in business for three years. Theoretically, the entire annual production could be done within 120 days (4 months) at this production level. Under these conditions and the assumptions displayed in the spreadsheet, approximately 2,000 tons or 1,657 cords of spruce can be produced. When burned in wood boilers with an equal efficiency as oil boilers, approximately $500,000 of diesel at $3.55 per gallon can be displaced with a total savings of $244, 370. These numbers are based on a calculated delivered wood cost of $155 per cord that has been marked up 25% above actual production costs. Additional markup is possible depending on the customer. Fire wood will sell for $200-$250 a cord delivered. Chips or round-wood delivered to the boiler are modeled at $200 per cord. However, if GZ operates Gwitchyaa Zhee Corporation Biomass for Energy Program the boiler on contract vertical integration may allow a differential in price. The model displays production cost estimates and includes an annual capital equipment cost of $132,000. Table 2. Calculated Harvest Costs and Revenue Data in Tons and Cords Cost and Revenue Data In Tons and Cordwood Units Cordwood Production Cost Summa [Spruct 15,900,000 138,000 115.22 103.26 154.9 Annual = Te From Cordwood Biomass Acreage Requirements Wood Yard This project addresses the purchase of equipment and installation of a wood yard and delivery systems in Fort Yukon. The wood yard will be designed to have a heated shop for maintenance of equipment, a wood storage area, an equipment storage area, an automated firewood processor, and perhaps a small sawmill for producing house logs and dimension lumber. A chipper for chip production will be used in the wood yard and in the woods. There are two potential sites located for the wood yard and marked on the map (Figure 4). Fire wood production in the village is currently by various individuals with a “village cord” selling for approximately $150. This is far less than an actual cord. By adding another $25-50 per cord for processing, firewood could be sold for $200-250 per full cord. Gwitchyaa Zhee Corporation Biomass for Energy Program Figures 1 and 2. Economies of scale for chips and cord wood production. Annual Chip Production Effect on Cost $800.00 $700.00 —— Cost/ton $600.00 $500.00 $400.00 | $300.00 $200.00 $100.00 250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000 Tons Produced Annually@23 Tons Daily Production Annual Cordwood Production Effect on Cost $1,000.00 4 SS $900.00 3 $800.00 —-— Cost Per Cord $700.00 $600.00 $500.00 $400.00 $300.00 $200.00 $100.00 250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000 Tons Produced Annually @ 23 Tons Daily Production Economies of Scale Generally speaking, the more volume that is produced using the same equipment, the less expensive the wood per unit is to produce. See Figures | and 2 above. The inflection point for reasonably Gwitchyaa Zhee Corporation Biomass for Energy Program Page 11 | ' priced wood produced with an automated system is around 2000 tons per year. Expected annual wood utilization for firewood and boilers at all major buildings will be approximately 15-1800 cords or 1815-2178 tons per year. Installation of a biomass diesel hybrid power plant will increase the tonnage to 8-10,000 tons of wood chips. Thus, there is considerable opportunity to capture the ' harvest capacity of the proposed system as wood volume demand increases. When electrical generation is considered, the economies of scale become fully economically viable in a village the size of Fort Yukon. , Species mix will shift with the need to produce large quantities of chips from spruce to various deciduous species. A 20-25 year willow rotation is quite possible for chips producing approximately 15 tons per acre See page 40 in GZ FS Plan. Willow harvest and other deciduous species such as cottonwood, and aspen have the potential to reduce the overall harvest of spruce. Figure 3. Break Even Analysis for Cord Wood Production. Total Cost/Revenue Breakeven Analysis 4 Total Production Costs —— Revenue At $200/Cord Break even analysis Figure 3 above, also demonstrates that with the proposed harvest equipment configuration, 2000 tons need to be sold annually at a price of $200 per ton. There are two scenarios " which make this level of production feasible. The first is to move the harvest equipment to additional villages in the region as they convert to more wood usage; the second is the intent of this program is to build a biomass diesel hybrid power plant. Displacing 50-70,000 gallons of fuel oil for heat in wood boilers and producing firewood is a mid size economy of scale and could be : achieved with some smaller equipment and less capital costs, but production is slower and operations and maintenance costs remain very similar. However, displacing an additional 200,000 Gwitchyaa Zhee Corporation Biomass for Energy Program Page 12 gallons of diesel in a power plant with a vertically integrated business model is the end target of this project. Table 3. Village Heating Analysis Fort Yukon Village Heating Analysis $180,000 $106,500§ 270.00 $54,000 $41,350 ICATG Clinic $150,000 $71,000§ 180.00 $36,000 $27, 4 District Systems $320,000 $136,320§ 345.60 $69,120 $53,563 $120,000 $328,000§ 438.53 $87,706§ $141.8 $2,000 $3,280 $87 $1,41 | _Total —_{f $772,000 | 169200] $3.55 [$645,100 | sd $247,703] $266,631 Village heating analysis: The school and gym use 30,000 gallons of fuel annually for heat at a fuel cost of $106,000 at $3.55 per gallon. Gasification boilers either stick fed or automated chip fed with similar efficiencies as fuel oil boilers can be fed for $200-250 per cord of wood and would require approximately 270 cords per year to displace 90% of the fuel oil currently consumed. Total wood costs at $200/cord are $54,000. There are four fuel oil boilers (data from AWEDTG field survey) with the capacity to produce a total of 2.36MMBTU per hour at the school and gym. It would take up to three Garn boilers to supply that much heat capacity or one 2.7MMBTU per hour chip fed boiler. Comparative analysis of costs and benefits of each system are being explored. Key to this analysis is consideration of all aspects of the entire process from the harvest to end product delivery and linking these systems. The issue becomes which is the most efficient and effective system. Payback ona boiler installation is expected to be 4-6 years. District heating for neighborhoods is also being explored. See the Fort Yukon map for a new HUD neighbor hood that has fuel oil boilers as well as wood stoves in each house. This analysis has not progressed, but feasibility will be explored. Heating an individual house using high efficiency wood stoves has by far the quickest payback. Bulk fuel oil when this analysis was done was at $3.55, but delivered to the house was $4.10. It is currently $5.00. The above analysis assumes installation of a new low end, high efficiency wood stove at a cost of $1200 and higher end at a cost of $2000. Ata use of 800 gallons per year and displacing 70% of the fuel with wood pays back the first year and a higher end stove pays back in 2 years. Annual fuel saving is almost $1500 per household. Although plenty of fire wood is consumed annually by most homes, a conversion to primarily wood heat will take about 4.5-6 cords of split firewood per season. This much wood is not readily available in the community, especially to folks who cannot do the work to gather and split wood. Commercial production is the only way that a major shift from fuel oil to wood heating of homes will occur. At the same time, firewood use annually will only consume 500-800 cords. Home use of firewood will be the smallest production portion of the company and as a stand alone business does not create the economy of scale needed to produce firewood at $200 per cord. Fort Yukon Site Map A map of Fort Yukon (below) has the location of key boiler installations and two sites for the wood yard. One of the locations is closest to the planned abutment for ease of wood delivery during Gwitchyaa Zhee Corporation Biomass for Energy Program 5,000 Feet Fort Yukon Central Wood Heating Construction Grant Agreement #2195445 Attachment1 Financial Report/Request for Reimbursement Form Grantee: Gwitchyaa Zhee Corporation Project: Fort Yukon Central Wood Heating Construction Period: to Grant Number: 2195445 A B c D=B+C BUDGET SUMMARY TOTAL GRANT PRIOR EXPENDITURES TOTAL BUDGET EXPENDITURES THIS PERIOD EXPENDITURES BY TASK OR MILESTONE TOTAL $808,805 BY BUDGET CATEGORIES Direct Labor and Benefits Travel Equipment Engineering Contractual Construction Materials/Freight Other TOTAL $808,805 BY FUND SOURCES Grant Funds Grantee Match — Cash Grantee Match — In-Kind Other Contributions TOTAL $808,805 CERTIFICATION Form requires two original signatures. The person certifying must be different from the person preparing the report. One signature should be the authorized representative of the Grantee organization or highest ranking officer; the other should be the person who prepared the report. | certify to the best of my knowledge and belief the information above is correct and funds were spent in accordance with grant agreement terms and conditions. Certified By: Prepared By: Title: Date: Title: Date: Page 28 of 32 summer. However, a wood yard associated with the hybrid power plant will be most efficient for chip production and storage. A neighborhood that has high potential for district heating is labeled. District heating of downtown is being explored as is capturing the most heat possible from the biomass diesel hybrid power plant. A real issue is type and cost of piping hot water. Investigations are underway to learn more of CHP and district heating methods in Europe. Currently, European plants are piping water over 30 km with a heat loss of .6C every 10 km, but not in artic conditions Permitting and Environmental Issues: Forest Practices Regulations apply for harvesting wood on private native corporation lands. A permit for putting in the abutment for unloading wood at the town landing will need to be secured from the Army Corp of Engineers. Moving wood across natural ice does not require permitting; however development of any ice roads for movement will require permits. Rafting wood at large scales may require a permit from DNR, however it is not anticipated that this will be a primary method for moving wood during the ice free season. If rafting becomes a preferred method, the Alaska State DNR will be contacted. Permitting for small commercial wood boilers is not anticipated, but wood smoke particulates in the air during severe cold weather inversions is of concern. All boilers that are being considered are of the gasification types which are the cleanest burning possible. Phase two, development of a biomass diesel hybrid power plant, will require permitting. The power plant is part of the biomass conversion process but is not dealt with in this proposal. Budget: Funds requested from Denali/AEA Alternative Energy Program Harvest Equipment $723,100 Technical Support $162,000 Travel $ 20,000 Subtotal $905,100 Indirect @ 10% $ 90,510 Total Capital AEA/Denali $995,610 Secured Funds: DOE 2008 Boilers $492,000 Gwitchyaa Zhee in-Kind Match $310,000 Total Secured $702,000 Additional Capital Requested Funds: Alaska State Legislative Request Wood Yard Equipment $360,000 USDA RD Guaranteed Loan GZ Corporation $200,000 Total Capital Budget: $2,057,610 Remaining Funds: $1,355,610 Requested Funds: $ 995,610 Budget Narrative Harvest Equipment Denali AEA Request: Table | is a list of the equipment configuration being requested in this proposal for the supply component of the implementation project. This configuration is still under development and some future changes may be made to the final list. This equipment is adequate to produce 10,000 tons annually under conditions anticipated in both summer and winter in Fort Yukon. The budget includes 6 months time for two personnel for installation of the harvest and delivery systems. The installation process will include: 1. Purchase and delivery of harvest equipment; 2. Installation of the wood harvesting and delivery systems to insure development of best practices for safety, effective equipment operation and maintenance, development of safe efficient hauling corridors and methodologies, loading and unloading, movement of equipment, wood handling etc. System installation will occur during two seasons, summer and winter. System manuals will be produced specifically for GZ, but will serve as templates for other villages; 3. Installation of best harvest practices for treatment of various types of forest stands to insure sustainable forest regeneration. Stand treatment manuals will be developed. 4. Installation of harvest planning and harvest site layout system via CATG Resource Department to support sustainable management of GZ lands; The travel budget will cover 4-6 people months during systems installation, summer and winter, in Fort Yukon and for traveling to and from Fort Yukon. Secured Funds: In 2007 Alaska Village Initiatives applied, through the Alaska Washington Delegation, for funds to continue the development of biomass program support for Fort Yukon. These funds have been awarded through DOE and these funds have been preliminarily targeted to engineer, purchase, and install wood boilers for the Fort Yukon School/Gym complex and the CATG Regional Clinic. This will initiate the wood use side of the implementation project. The Gwitchyaa Zhee match at this point is focused on wood yard development and includes land, site clearing and preparation, gravel, shop construction, fence installation, equipment storage sheds and installation of the landing abutment. Additional in-kind match may include construction of buildings for boilers at the school and clinic. Additional Funds Requested: Alaska Village Initiatives has submitted a request through the State Legislature for funds to purchase equipment for the wood yard and materials for fencing and abutment installation. An application will be made to USDA RD to secure a guaranteed loan for a minimum of $200,000 in operating capital to initiate the harvest and delivery company. Gwitchyaa Zhee Corporation Biomass for Energy Program Appendix A Gwitchyaa Zhee Application Authorization Resolution Letters of Intent to Purchase Fuel CATG Yukon Flats School District Gwitchyaa Zhee Corporation Biomass for Energy Program GWITCHYAA ZHEE CORPORATION P.O. BOX 329 FORT YUKON, ALASKA 99740 PH: 907-662-2933 FAX: 907-662-3056 RESOLUTION 08-03 A Resolution to approve the Alternative Energy application through the Denali Commission and to name Bill Wall and Peter Olsen as the representatives for the application and review process. WHEREAS: WHEREAS: WHEREAS: WHEREAS: WHEREAS: WHEREAS: WHEREAS: The Corporation is the Federally recognized Native Corporation for the Village of Fort Yukon, Alaska, pursuant to the Alaska Native Claims Act of 1971, and, As the only utility company In Fort Yukon The Gwitchyaa Zhee Corporation understands the need for alternative energy for the Residents of Fort Yukon, and, With the rising high energy costs we are at a point where we have a serious need for alternative energy sources, and, The Gwitchyaa Zhee Corporation identified the Denali Commission as a dependable reliable source of funds for various economic projects in Alaska, and, The Gwitchyaa Zhee Corporation approves the Alternative Energy Application to be submitted to the Denali Commission before the deadline of February 12, 2008, and, The Gwitchyaa Zhee Corporation is in good standing and has no outstanding debts with the State of Alaska and the United States Government, and, The Gwitchyaa Zhee Corporation authorizes Bill Wall and Peter Olsen as their official representatives for the application and review process. THEREFORE BE IT RESOLVED, the Gwitchyaa Zhee Corporation Board of Directors approves the Alternative Energy Application and authorizes Bill Wal! and Peter Olsen to be the official representatives for the application and for the review process. ADOPTED AND DATED the i day of. 2008, at Fort Yukon, Alaska by a vote of ATTEST: Gwitchyaa Zhee Corporation Biomass for Energy Program COUNCIL OF ATHABASCAN TRIBAL GOVERNMENTS P.O. Box 33 Fort Yukon, AK 99740 907-662-2587 fax 907-662-3333 tt February 7, 2008 RE: Letter of Intent to Use Wood Heat for Clinic To Whom It May Concern: The Council of Athabascan Tribal Governments (CATG), through its Natural Resource Department, was the initiator of the development of an integrated woody biomass program in the Yukon Flats region recognizing that Fort Yukon would be the initial village. The cooperative program includes specifically, Alaska Village Initiatives (AVI), Gwitchyaa Zhee Native Corporation (GZ) and the Gwitchyaa Zhee Gwich’in Tribal Council. AVI has provided the technical support to develop the program and GZ has accepted the role of business operator. We fully expect that the business will be include not only wood for heat of major buildings and houses but also a biomass diesel hybrid power plant with implementation occurring over the next two years. CATG is fully supportive of this effort and an active partner through our Natural Resource Department. CATG is the owner and operator of a new Health Clinic scheduled to open soon. Through a Statement of Interest to the Alaska Wood Energy Development Task Group, a pre-feasibility study conducted this past summer which demonstrated that the Clinic would use 20,000 gallons of fuel oil at a current price of over $4.00 per gallon and an annual cost of $80,000 dollars. We are working with AVI to conduct feasibility and payback analysis on installing either a Garn boiler or an automated chip fed boiler. We expect that this installation and purchase of wood fuel offer significant savings over the life of the project with a payback of five years. Pending final CATG Board approval of final design and funding, it is our intent to utilize woody biomass for heat and to purchase this fuel from GZ Corporation. CATG fully supports this application for funds to help “jump start” the integrated woody biomass program in Fort Yukon and the Yukon Flats Region Thao Z Ben Stevens Executive Director CATG Gwitchyaa Zhee Corporation Biomass for Energy Program Arctic Village Yukon Flats School Beaver . . Central District Ctalkyitsik '. Circle P. O. Box 350 Fort Yukon ‘ Fort Yukon, AK 99740 Stevens Village P: (907) 662-2515 or 1.800.322.2515 Venetie F: (907) 662-3094 or 2519 www.yukonflats.net February 8, 2008 William R. Walz, Superintendent Yukon Flats School District RE: Letter of Intent to Use Wood Heat for School and Gym in Fort Yukon To Whom It May Concern: The Yukon Flats School District is fully supportive of the woody biomass energy program being developed in Fort Yukon and Yukon Flats Region. I personally am aware of the community benefits of a woody biomass program as an economic development project as well as the potential cost savings on fuel to heat our school and gym. I have experience with the ‘fuels for schools’ programs in the lower 48 and have an understanding of what is involved in a project such as this. Through a Statement of Interest, the district applied to the Alaska Wood Energy Development Task Group last summer. A pre-feasibility study demonstrated that the Fort Yukon School and Gym use over 30,000 gallons of fuel oil annually for heat at $4.00 per gallon and an annual cost of $120,000 dollars. We are working with AVI to conduct feasibility and payback analysis on installing either a Garn boiler or an automated chip fed boiler. We expect that this installation and purchase of wood fuel offer significant savings over the life of the project. ' Pending Yukon Flats School Board approval of final design and securing funding, it is our intent to utilize woody biomass for heat and to purchase this fuel from GZ Corporation. I fully support this application for funds to help “jump start” the integrated woody biomass program in Fort Yukon and the Yukon Flats Region. ‘ Sincerely; William R. Walz ’ Superintendent By Permission thle flu Gwitchyaa Zhee Corporation Biomass for Energy Program Appendix B Resumes Key Personnel CATG Consultants Gwitchyaa Zhee Corporation Biomass for Energy Program GERALD CARROLL, PRESIDENT GWITCHYAA ZHEE CORPORATION PARTIAL WORK HISTORY COMMUNITY LEADERSHIP: GERALD CARROLL IS CURRENTLY SERVING HIS SECOND TERM AS PRESIDENT OF GWITCHYAA ZHEE NATIVE CORPORATION. HE IS SERVING HIS THIRD TERM AS MAYOR OF FORT YUKON AND IN HIS SECOND SEASON AS GIRLS HIGH SCHOOL BASKETBALL COACH. GERALD HAS 7 CHILDREN. WORK EXPERIENCE: TEAMSTER UNION SINCE 1998----- 9000 HOURS BUILDING ICE ROADS, GRAVEL ROADS, OPERATORS UNION 2003 ----2000 HOURS BUILDING HOUSES, BUILDING ICE ROADS ANTHC CITY OF FORT YUKON 2004--2007 ---- HEAVY EQUIPMENT OPERATOR 3,500 HOURS BUILDING GRAVEL ROADS, RUNNING SCREENING PLANT GERALD CARROLL IS A CONCERNED COMMUNITY LEADER AND FATHER WITH AN INTEREST TO MAKE FORT YUKON SUSTAINABLE AND AFFORDABLE FOR THE COMMUNITY AND HIS FAMILY. HE HAS TAKEN A LEADERSHIP ROLE TO MAKE THIS HAPPEN. GERALD HAS THE WORK HISTORY, LEADERSHIP SKILLS, LOCAL UNDERSTANDING OF WEATHER AND RIVER CONDITIONS TO LEAD THE PROCESS OF DEVELOPING A COMMUNITY INTEGRATED WOOD UTILIZATION PROGRAM FOR FORT YUKON. Gwitchyaa Zhee Corporation Biomass for Energy Program BENJAMIN L. STEVENS P.O. Box 25 * Fort Yukon, AK 99740 ¢ bstevens@catg.org PROFESSIONAL EXPERIENCE Council of Athabascan Tribal Governments, 1998-present EXECUTIVE DIRECTOR, 2007-PRESENT ¢ Managed ~50 employees and ~6.5 million dollar annual budgets in Administration, Health, Education, and Natural Resources Departments. ¢ Conducted organizational analysis with Board of Directors and Management Team. SPECIAL PROJECTS COORDINATOR, 2005-2007 ¢ Administered ~$220,000 US EPA Energy Planning Special Project. ¢ Facilitated Tribal Leadership Energy Summits to address rural energy condition. POLICY ANALYST /SELF-GOVERNANCE COORDINATOR, 2001-2005 * Managed $300,000 program grant to expand regional Self-Governance Program. * Lead 1* successful Tribal self-governance negotiations in the nation with USFWS’ Yukon Flats National Wildlife Refuge and CATG for assumption of programs/services. TRIBAL AIR QUALITY COORDINATOR, 1998-2001 * Managed $180,000 US EPA Tribal Air Quality grant project. * Assisted Tribes plan, design and implement Air Quality programs in the Yukon Flats region. * Facilitated/conducted tribal air quality technician training in monitoring and assessment. * Served as liaison between Tribes, State Dept. of Environmental Conservation and US EPA. Alaska Inter-Tribal Council, 1997-1998 DIRECTOR, NATURAL RESOURCES MANAGEMENT PROGRAM * Facilitated statewide Tribal Government Natural Resource Management Strategic Planning. * Provided hands-on-training to Tribal Leaders and technicians in Natural Resources Management. Stevens Village Tribal Council, 1994-1997 DIRECTOR, NATURAL RESOURCES PROGRAM, 1995-1997 * Planned, developed, and implemented successful Tribal Natural Resource Program. * Designed and implemented fish and wildlife management projects for protection of Tribal resources, including: Dall River Northern Pike Assessment and No-Trespass Enforcement. * Negotiated Tribal position with state and federal resource management officials. COORDINATOR (ACTING), INDIAN CHILD WELFARE PROGRAM, 1994-1996 * Planned, developed and implemented Tribal child protective services program. ¢ Served as Program Director until position was filled. Tanana Chiefs Conference, 1990-1993 SPECIAL PROJECTS DIRECTOR * Planned and developed various special projects at request of Health Board. Mt. Edgecumbe Hospital, Southeast Alaska Regional Health Consortium, 1988-1990 DEPUTY DIRECTOR ¢ Assisted in management and administration of 78-bed medical-surgical facility serving Alaska Natives. EDUCATION Bachelor of Arts in Business Administration Fort Lewis College, Durango, Colorado, July 1988 Gwitchyaa Zhee Corporation Biomass for Energy Program Page 23 Peter J. Olsen 11801 Middle Bay Drive Kodiak, Alaska 99615 Home (907) 487-2291 pjolsen@alaska.net SUMMARY OF QUALIFICATIONS Lands Manager: Seven years administration of progressive Lands Department for ANCSA village corporation, two years Lands and natural resource manager with regional native corporation. Contract Administrator: Seven years administering long term, multi-million dollar industrial logging contract. Board of Director: Five years on Koniag Inc. Board of Directors including term as Vice President. Small Business Owner: Owned and operated small excavating and specialty wood business. Experienced Boat Operator: Thousands of hours experience on small salmon seiner and other small (32 foot and less) boats. SUMMARY OF ACCOMPLISHMENTS Secured Critical Permits for Timber Operation: Secured a log transfer facility permit within the Alaska Maritime National Wildlife Refuge. Large Land and Timber Transactions: Team member involved with several large land and timber transactions, including a $77 million land and timber transaction. Implemented GIS Program: Responsible for designing and implementation of Geographic Information System for owner/manager of over 200,000 acres of land. Lands Security Program: Designed and implemented lands security program that manages and monitors public access to private Native owned lands. Remote fishing and bear viewing program: Responsible for design and start-up of remote fishing and bear-viewing operation. Owner of Small Business: Owner/operator of small tonewood supplier business named Quayanna Spruce Company. EDUCATION ¢ Kodiak High School Graduate 1979 ¢ Oregon State University College of Forestry, Corvallis, Oregon B.S., Forest Management, 1984 ¢ Completed Various Certified Courses in AutoCAD and ArcView, and boat skipper licensing. Gwitchyaa Zhee Corporation Biomass for Energy Program PROFESSIONAL EXPERIENCE Afognak Native Corporation, Kodiak, Alaska Intern, 1979 — 1984 Worked under Senior Forester as apprentice in timber cruising, timber harvest layout, fire control, and small boat operation. Forester 1984-1988 Secured various permits for timber harvest operation start up. Secondary role in timber tax base establishment. Constructed 2 recreational cabins. Chief Forester 1988-1995 Contract administrator for ANC. Responsibilities included securing permits, logging engineering including roads and log stringer bridges, quality control of over 40 million board feet annually of Sitka spruce logs, and evaluation of large land and timber tracts for the Afognak Joint Venture. Fostered cooperative relationships with regulatory agencies. Field/raw materials/technical representative for sales efforts of $77 million land and timber tract. Lands Manager 1995-2002 Member of senior management team. Oversight of all lands related activities. Developed and implemented land use permit program, including establishment of land security. Initiated reforestation efforts. Team member for establishing timberland tax basis. Implemented Geographical Information System for over 200,000 acres of land. Administered 5 acre lease program. Implemented use of GPS for 5 acre parcels, timber harvest units, roads, 17b easements. Extensively researched private land wildlife management application on ANCSA lands. Koniag Incorporated, Kodiak, Alaska Lands and Natural resource Manager 2002-2004 Responsible for creation of commercial sport fishing and bear viewing program on Kodiak Island including remote camp establishment, marketing, and website development. Administered conservation easement with the USFWS.. Executive Field Director, Village Wildlife Conservation Systems Division of Alaska Village Initiatives 2005-Present Assisted development of integrated resource management principles, including biomass utilization for heat and electrical generation, moose habitat enhancement, and timber harvest economic models for rural Alaska. Private Lands and Natural Resource Consulting 2005-Present Own and operate small consulting company focusing on providing services and consultation to the private landowner in Alaska Personal Data Age: 45 Marital Status: Married to Jessica Olsen Children: Aaron, age 21, Jeremiah age 18 Other Interests: Outdoor activities including operation of small boats, fishing, hunting, photography, ATV riding. Local Church ministry. Owner/operator of 30’ vessel “Sea Dawg”. Gwitchyaa Zhee Corporation Biomass for Energy Program William A. Wall, PhD PO Box 988 406-677-5006 Seeley Lake, MT 59868 Cell: 907-2276327 Born: San Antonio, TX. September 30, 1951 williamwall11@gmail.com Marital Status: Married, | child, Citizenship: USA Academic History BS. Wildlife Biology—LA Tech University, Ruston, LA. 1974. M.S. Zoology-LA Tech University, Ruston, LA. 1982. PhD __ Doctorate of Forest Wildlife Management-Stephen F. Austin University, Nacogdoches, TX. 1989 Summary of Qualifications: Development of integrated natural resource management programs both nationally and internationally for private sector corporations, non-profit organizations and major landowners. Development and management of specific natural resource projects to implement programs. Integration of natural resource management policy, management program implementation and science based research. Development and management of collaborative stakeholder processes. Recent Employment History: Alaska Village Initiatives, Anchorage, AK 2004-7 ED Village Wildlife Conservation Systems Responsibility: Directing the development of Private Lands Wildlife Management Program Models for Native Corporation Lands in Alaska. This entails conceiving the methodologies, conducting the planning and analysis, and supporting the implementation of subsistence based or for profit wildlife management programs for Alaska native Corporations. Accomplishments: Conceived and managed development of a tribal integrated biomass utilization program model that links environmental, subsistence, economic, social and cultural benefits with stabilized and reduced energy costs through wood heat first and electrical power second. SCI Foundation, Washington, DC 1998-2004, Director of International Wildlife Conservation Responsibilities: e Director of Wildlife Conservation Programs manages all aspects of the conservation program for SCI Foundation in the 3 program areas of Asia, Africa and North America e Director serves as SCIF expert on ESA policy as well as public and private lands management in the US; e Director represents SCIF in such forums as CITES and Convention on Biodiversity; e Director liaises with a diverse group of international, federal and state governments and conservation organizations and builds partnership opportunities for the programs; Accomplishments: e Developed the concept of Conservation Hunting Programs to support conservation of wildlife through science based wildlife management and hunting programs that yield benefits to local people and are both legal within the range state and meet all international regulatory mechanisms; e Developed and successfully implemented organizational conservation strategies for Africa, Russia/Central Asia and North America programs; e Hosted a successful symposium at the 3" International Wildlife Management Congress on Conservation Hunting Programs with worldwide examples. e Initiated a new strategic approach to implementation of the SCIF international conservation programs. e Promoted to Director of Wildlife Conservation Programs in July of 2002. Gwitchyaa Zhee Corporation Biomass for Energy Program Potlatch Corporation, Lewiston, ID 1992-98 Region Manager Wildlife Ecology Responsibilities: e Served as the regional wildlife biologist for Potlatch Corporation’s Western Wood Products Division’s in Northern Idaho, the largest private landowner in Idaho; e Responsible for development and management of wildlife policy, management, research and monitoring programs and cooperatives with non-profits, state and federal agencies; e Served as both regional and national liaison to federal land management agencies, environmental groups and sportsman associations as well as to Idaho Fish and Game. e Serves as the company expert on ESA and focuses on policy issues regarding wildlife and land management regulatory strategies. Accomplishments: e Managed the development of an ecological approach to landscape management e Developed partnership agreements with national sportsman groups e Developed a Conservation Agreement on forest management effects on riparian and stream habitats with USFWS; e Lead the development of the Conservation Agreement Policy for prelisting agreements for ESA candidate species through a diverse group of environmentalists and timber industry biologists called the Conservation Network. This policy concept initiated the establishment of the current national policy with USFWS; e — Testified before the US House Resource Committee on implementation of ecosystem management on private lands. International Paper, Shreveport, LA 1990-92 Manager of Wildlife Ecology Responsibilities: e The Manager of Wildlife Ecology for the Mid-south Region of International Paper manages all aspects of wildlife management including a hunting program and endangered species program on a managed forest land base of 2.2 million acres in Arkansas, Louisiana and Texas; e Served as company liaison to the three state Fish and Game Agencies (LA, TX, and AR), environmental groups, sportsman organizations, industry associations and cooperative research efforts with academia and USFS; e Managed the administration of the Forest Environmental Quality Guidelines (a forest stewardship program), a wildlife management business, a hunting lease operation. Accomplishments: e Organized and conducted eight workshops for employees on environmental issues and implementation of the Corporation’s Environmental Quality Guidelines. e Facilitated the management of four cooperative wildlife management areas with three state agencies; e Initiated cooperative agreements and projects with private conservation groups including The Nature Conservancy, Ducks Unlimited, Waterfowl Habitat Alliance of Texas and the National Wild Turkey Federation; Awards: 1997 Chuck Yeager Award — National Fish and Wildlife Foundation — Outstanding accomplishments on behalf of our nation’s wildlife and fisheries. 1995 Region Forester Award — Northern Region USFS, Missoula, MT — Outstanding leadership, cooperation and contributions to the land bird-monitoring program. 1992 Chairman’s Award — Black Bear Conservation Committee — Outstanding service in the development of the BBCC and as chair of the habitat and management committee. This was an innovative partnership between forest industry, environmental groups, academia and federal and state agencies. Gwitchyaa Zhee Corporation Biomass for Energy Program Additional Training and Certification e Certified Wildlife Biologist — The Wildlife Society Leadership Training for Supervisors Managing Process Improvement Grassroots Political Education Program News Media Training Business Presentations Workshop Negotiation —- MIT-Harvard Program on conflict resolution and negotiation from Harvard Law School Recent Sampling of Projects & Activities: 2004 Jaguar Ecology & conservation strategy in Northern Guatemala: Principle Investigator — Partners: Unidos para la Conservaciones, SCI Foundation, National Fish and Wildlife Foundation (NFWF) 2004 = Argali Sheep Science and Management Program in Kyrgyz Republic: Investigator — Partners: Ministry of Forestry, Glavahota; Institute of Biology; Russian Academy of Sciences; SCI Foundation 2004 Development of Brown bear Management Workshop in Kamchatka Russia: Collaborators: Wildlife Conservation Society; SCI Foundation; Russian Academy of Sciences. 2003 = African Wildlife Consultative Forum: Workshop for all Southern Africa Development Community (SADC) Directors of Wildlife and staff to discuss CITES and wildlife management issues in Livingston Zambia. Participants: CITES Secretariat; USFWS; Zambia, Zimbabwe, Malawi, Botswana, Namibia, South Africa, Mozambique, Sponsors: SCI Foundation. IUCN SA Sustainable Use Specialist Group, ZAWA. 2003 Jaguar Ecology & Conservation Strategy in the Mayan Jungle of Mexico: Investigator — Partners: Unidos para la Conservaciones, CONABIO, NFWF, USFWS, and SCI Foundation. Multi-year project initiated in 1998. 2003 Project Scoping Session: Carnivore Ungulate management in Idaho, Montana, and Wyoming: Wolves, Grizzly Bears, Black Bears and Mountain Lions. Sponsor: SCI Foundation; Participants: Idaho Fish and Game, Montana Fish Wildlife and Parks, Wyoming Fish and Game, USFWS, USFS, University of Montana, University of Idaho. 2003. ZIMOZA Transboundary Area — Community Quota Setting Workshop for Communities within the area in Zimbabwe, Mozambique and Zambia. Sponsor: IUCN, SCI Foundation, WWF 2003 Symposium defining Conservation Hunting Programs with participants from 4 continents held at the 3° International Wildlife Management Congress in Christchurch, NZ. Chair Honoraria: 2004 Appointed Research Associate Denver Museum of Natural History 2003 Chair Symposium @ 3” International Wildlife Management Congress Conservation Hunting Programs Worldwide 2000-07 Board of Directors - Ecosystem Management Research Institute 2000-04 International Association of Fish & Wildlife Agencies (IAFWA) — Endangered Species Committee 2000-04 IAFWA - International Resources Committee 2000-04 IAFWA - Wildlife Policy Committee 1997-98 Chair, American Forest & Paper Association Wildlife Committee 1995 Chair Special Session @ The 60" North American Wildlife Conference: The Need for Partnerships for Ecosystem Management 1995-97 Chair-elect AF&PA Wildlife Committee 1994 Appointed Adjunct Professor to the Department of Biological Sciences Lewis and Clark State College 1993 Appointed Adjunct Professor to the College of Forest, Wildlife and Range University of Idaho 1992 Chairman, Biodiversity and Ecosystem Management Subgroup of the AFPA Wildlife Committee 1990 Executive Committee & Chair of the Habitat & Management Subcommittee of the Black Bear Conservation Committee 1989-1991 Board of Directors, Texas Wildlife Association 1990-1991 Chairman, The Wildlife Management Excellence Award Committee for the Southeastern Section of the Wildlife Society 1989 Texas Deer Management Advisory Panel for Texas Parks and Wildlife 1988 Research Advisory Panel for the US Forest Service Wildlife Research Lab in Nacogdoches, TX Gwitchyaa Zhee Corporation Biomass for Energy Program } oO / @ oO oO N ao Current Experience Education Interests Gwitchyaa Zhee Corporation Biomass for Energy Program Bruce H. Thomas CATG Natural Resources Director 1980 — 1990 Arco Alaska Prudhoe Bay, AK Welder- Pipe Fitter e Worked In Welding fabrication Shop on the North Slope. 1992 — 1995 Yukon Fuel Co. Fort Yukon, AK Manager Yukon Fuel Co. e Managed Fuel Company in Fort Yukon Alaska. 1997- 1998 Alaska Petroleum Contractors Prudhoe Bay, AK Welder- Pipe fitter e Worked In Welding Fabrication Shop on the North Slope. 1999- 2000 Interior Regional Housing Authority Fairbanks Alaska Welder, Labor ¢ Worked on housing projects in Fairbanks area. 2001- Current Council of Athabascan Tribal Gov Fort Yukon, Alaska Natural Resources Director e Develop Environmental programs in the Yukon Flats. e Supervise Natural Resources Staff , manage grants, conduct trainings, proposal development. e Negotiate contracts with State and Federal agencies. e Graduated 1977 Fort Yukon High School e 1978-1979 Vocational Welding School — Seattle Washington Computers, Hunting, Fishing. Appendix C AWEDTG Prefeasibility Data Forms Gwitchyaa Zhee Corporation Alaska Wood Energy Development Task Group Feasibility Assessment Data Collection Form Organization Name: | Council or Athabascan Tribal Governments (CATG) Contact Person(s): Ben Stevens Mailing Address: P.O. Box 33 City, State, Zip: Fort Yukon, AK 99740 Telephonel: 907-662-2587 i Fax: 907-662-3333 i E-mail: bstevens@catg.org i A. Facility Information (use separate sheet for additional buildings) Facility (building) name: Fort Yukon/CATG Health Clinic, new, 15,000 s.f Annual Fuel Consumption (gallons/year): 20,000 gallons/year (estimated /projected) Type of Heating System (boiler, furnace, etc): (2) Weil McLain boilers, Model 1080 Boiler / Furnace BTU rating (MBH): 965 MBH gross output (both Boiler / Furnace burner rate (gallon/hr): 9.6 gph an AVF YN Pp Distance to other potential buildings: Clinic is not currently near other buildings. However, future development plans for the site include an ambulance garage, duplexes, and elder housing B. Fuel Cost: 1. Cost of electricity ($/kWh): $0.54/kWh 2. Type of Fuel (#1/#2 diesel, propane, etc.): #1 fuel oil 3 Fuel Cost ($/ gallon, etc.): $3.55 per gallon 4. Fuel Provider (name and number): Crowley C. Wood Supply: 1. Available wood (cord wood, mill waste, etc): cordwood: standing, green and dead; small independent producers; access to forest resources is limited; there may be land ownership/ trespass issues. 2. Type of wood (spruce, birch, cottonwood, etc.): mostly spruce, some birch and aspen 3. Cost of delivered wood ($/cord, $/ton, etc.): $200 - 250/cord D. Local Equipment and Labor: 1. Local labor (welder, pipe fitter, electrician, carpenter, plumber, equip operator, wood boiler operator) 2. Local labor rates for above categories: $20/hr +/-, or Davis-Bacon if applicable 3. Type of locally available heavy equipment (dozer, loader, dump, etc): all Gwitchyaa Zhee Corporation Biomass for Energy Program E. NOTES: Site was brought up to grade with a lot of gravel fill. Site is not particularly conducive to cheap OWB installation; boilers are being installed in mezzanine (upper floor/attic area) and adjacent ground slopes away from building. Adjacent ground is 6-10 feet lower on one side and rear of building and 2 to 3 feet lower on the other side (level at front). Future plans include duplexes, ambulance garage and elder housing. The ambulance garage, which is to be located at the rear of the clinic building, might be a logical place for a wood fired boiler. Gwitchyaa Zhee Corporation Biomass for Energy Program Alaska Wood Energy Development Task Group Feasibility Assessment Data Collection Form Organization Name: | Yukon Flats School District Contact Person(s): Samson Peter Mailing Address: P.O. Box 350 i City, State, Zip: Fort Yukon, AK 99740 i Telephonel: 907-662-2515 Fax: 907-662-2519 E-mail: speter@yukonflats.net \ A. Facility Information (use separate sheet for additional buildings) 7. Facility (building) name: Fort Yukon School, 130 students; approx. 100,000 sq ft (???) 8. Annual Fuel Consumption (gallons/ year): 17,000 gallons/year 9. Type of Heating System (boiler, furnace, etc): (2) Burnham boilers, 10. Boiler / Furnace BTU rating (MBH): 1777 MBH gross output (both); hot water (glycol) loop system, main lines run through false ceiling above 1 floor 11. Boiler / Furnace burner rate (gallon/hr): 15.6 gph 12. Distance to other potential buildings (provide sketch or aerial photo): B. Fuel Cost: 5. Cost of electricity ($/kWh): $0.54/kWh 6. Type of Fuel (#1/#2 diesel, propane, etc.): #1 fuel oil 7. Fuel Cost ($/ gallon, etc.): $3.55 per gallon 8. Fuel Provider (name and number): Crowley C. Wood Supply: 4. Available wood (cord wood, mill waste, etc): cordwood: standing, green and dead; small independent producers; access to forest resources is limited; there may be land ownership/trespass issues. 5. Type of wood (spruce, birch, cottonwood, etc.): mostly spruce, some birch and aspen 6. Cost of delivered wood ($/cord, $/ton, etc.): D. Local Equipment and Labor: 4. Local labor (welder, pipe fitter, electrician, carpenter, plumber, equip operator, wood boiler operator) 5. Local labor rates for above categories: $20/hr +/-, or Davis-Bacon if applicable 6. Type of locally available heavy equipment (dozer, loader, dump, etc): all E. NOTES: Gwitchyaa Zhee Corporation Biomass for Energy Program Alaska Wood Energy Development Task Group Feasibility Assessment Data Collection Form Organization Name: | Yukon Flats School District Contact Person(s): Samson Peter Mailing Address: P.O. Box 350 City, State, Zip: Fort Yukon, AK 99740 Telephone!: 907-662-2515 i Fax: 907-662-2519 E-mail: speter@yukonflats.net A. Facility Information (use separate sheet for additional buildings) 13. Facility (building) name: Fort Yukon School GYMNASIUM 14. Annual Fuel Consumption (gallons/year): 13,000 gallons/year 15. Type of Heating System (boiler, furnace, etc): (2) Burnham boilers, V904A, new 16. Boiler / Furnace BTU rating (MBH): 483 MBH gross output (both); hydronic system - baseboard and radiator-type heat exchangers 17. Boiler / Furnace burner rate (gallon/hr): 4.2 gph 18. Distance to other potential buildings: see sketch B. Fuel Cost: 9. Cost of electricity ($/kWh): $0.54/kWh 10. Type of Fuel (#1/#2 diesel, propane, etc.): #1 fuel oil 11. Fuel Cost ($/ gallon, etc.): $3.55 per gallon 12. Fuel Provider (name and number): Crowley C. Wood Supply: 7. Available wood (cord wood, mill waste, etc): cordwood: standing, green and dead; small independent producers; access to forest resources is limited; there may be land ownership/trespass issues. 8. Type of wood (spruce, birch, cottonwood, etc.): mostly spruce, some birch and aspen 9. Cost of delivered wood ($/cord, $/ton, etc.): D. Local Equipment and Labor: 7. Local labor (welder, pipe fitter, electrician, carpenter, plumber, equip operator, wood boiler operator) 8. Local labor rates for above categories: $20/hr +/-, or Davis-Bacon if applicable 9. Type of locally available heavy equipment (dozer, loader, dump, etc): all E. NOTES: Gwitchyaa Zhee Corporation Biomass for Energy Program Alaska Wood Energy Development Task Group Feasibility Assessment Data Collection Form Organization Name: | Yukon Flats School District Contact Person(s): Samson Peter i Mailing Address: P.O. Box 350 City, State, Zip: Fort Yukon, AK 99740 Telephone: 907-662-2515 Fax: 907-662-2519 i E-mail: speter@yukonflats.net i A. Facility Information (use separate sheet for additional buildings) 19. Facility (building) name: Fort Yukon School - Vocational Education Center 20. Annual Fuel Consumption (gallons/year): 16,000 gallons/ year 21. Type of Heating System (boiler, furnace, etc): (2) old (1982) Burnham boilers, V-35, appear to need replacement 22. Boiler / Furnace BTU rating (MBH): 240 MBH gross output (both). DHW supplied by separate electric water heaters 23. Boiler / Furnace burner rate (gallon/hr): 2.1 gph 24. Distance to other potential buildings: see sketch; (1) main building + student housing building with its own boiler + couple satellite buildings. B. Fuel Cost: 13. Cost of electricity ($/kWh): $0.33/ kWh (reported $0.54/kWh for the school & gym) 14. Type of Fuel (#1/#2 diesel, propane, etc.): #1 fuel oil 15. Fuel Cost ($/gallon, etc.): $3.55 per gallon 16. Fuel Provider (name and number): Crowley C. Wood Supply: 10. Available wood (cord wood, mill waste, etc): cordwood: standing, green and dead; small independent producers; access to forest resources is limited; there may be land ownership/ trespass issues. 11. Type of wood (spruce, birch, cottonwood, etc.): mostly spruce, some birch and aspen 12. Cost of delivered wood ($/cord, $/ton, etc.): $200 - 250 D. Local Equipment and Labor: 10. Local labor (welder, pipe fitter, electrician, carpenter, plumber, equip operator, wood boiler operator) 11. Local labor rates for above categories: $20/hr +/-, or Davis-Bacon if applicable 12. Type of locally available heavy equipment (dozer, loader, dump, etc): all Gwitchyaa Zhee Corporation Biomass for Energy Program Alaska Wood Energy Development Task Group Feasibility Assessment Data Collection Form UAF College of Rural and Community Development; Yukon Flats Center, Interior- Organization Name: Aleutians Campus Contact Person(s): Carrie Supik Mark Beck Mailing Address: P.O. Box 194 Assistant to Associate Dean of Academic Affairs City, State, Zip: Fort Yukon, AK 99740 | Fairbanks Telephone1: 907-662-2521 (w), 662-2587 (h) i 907-474-7143 Fax: 907-662-2657 i Dave Miller, Dir. Of Maintenance E-mail: Fncs1@uaf.edu { d.miller@fs.uaf.edu A. Facility Information (use separate sheet for additional buildings) 25. Facility (building) name: UAF Yukon Flats Center 26. Annual Fuel Consumption (gallons/year): 8,500 gallons/year 27. Type of Heating System (boiler, furnace, etc): (2) Weil McLain boilers, Model A/B-WGO-9 28. Boiler / Furnace BTU rating (MBH): 295 MBH gross output (both 29. Boiler / Furnace burner rate (gallon/hr): 2.55 gph 30. Distance to other potential buildings: NA Heat distribution is hot water baseboard. Separate Bock DHW tank, model 50ES, 50 gallon capacity, maximum input 140,000 Btuh, 1.0 gph, #1 or #2 fuel oil. There is a crawl space under the boiler room. B. Fuel Cost: 17. Cost of electricity ($/kWh): $0.54/kWh 18. Type of Fuel (#1/#2 diesel, propane, etc.): #1 fuel oil 19. Fuel Cost ($/gallon, etc.): $3.55 per gallon 20. Fuel Provider (name and number): Crowley C. Wood Supply: 13. Available wood (cord wood, mill waste, etc): cordwood: standing, green and dead; small independent producers; access to forest resources is limited; there may be land ownership/ trespass issues. 14. Type of wood (spruce, birch, cottonwood, etc.): mostly spruce, some birch and aspen 15. Cost of delivered wood ($/cord, $/ton, etc.): $200 - 250/cord D. Local Equipment and Labor: 13. Local labor (welder, pipe fitter, electrician, carpenter, plumber, equip operator, wood boiler operator) 14. Local labor rates for above categories: $20/hr +/-, or Davis-Bacon if applicable 15. Type of locally available heavy equipment (dozer, loader, dump, etc): all Gwitchyaa Zhee Corporation Biomass for Energy Program Gwitchyaa Zhee Corporation Appendix D Gwitchyaa Zhee 2005-2006 Tax Forms 2006 Financial Report Gwitchyaa Zhee Corporation and Gwitchyaa Zhee Utility Corporation Compilation Financial Statements April 30, 2006 GWITCHYAA ZHEE CORPORATION and GWITCHYAA ZHEE UTILITY COMPANY FINANCIAL STATEMENTS For the Year Ended April 30, 2006 ACCOUNTANT’S COMPILATION REPORT GWITCHYAA ZHEE CORPORATION Statement of Assets, Liabilities, and Stockholders’ Equity - Income Tax Basis Statement of Revenues, Expenses, and Retained Earnings - Income Tax Basis GWITCHYAA ZHEE UTILITY COMPANY Statement of Assets, Liabilities, and Owner's Equity - Income Tax Basis Statement of Revenues, Expenses, and Owner's Equity - Income Tax Basis WILSON a CERTIFIED PUBLIC "UBLIG ACCOUNTANTS off Rockne S. Wilson Sandra R. Wilson 344 MINNIE STREET * FAIRBANKS, AK 99701 (907) 456-8115 * FAX (907) 452-7491 The Board of Directors Gwitchyaa Zhee Corporation Fort Yukon, Alaska We have compiled the accompanying statement of assets, liabilities, and stockholders’ equity — income tax basis of the Gwitchyaa Zhee Corporation as of April 30, 2006, and the related statement of revenues, expenses and retained earnings — income tax basis for the year then ended. We have also compiled the accompanying statement of assets, liabilities, and owner’s equity ~ income tax basis of the Gwitchyaa Zhee Utility Company a corporation and wholly owned subsidiary of Gwitchyaa Zhee Corporation as of April 30, 2006, and the related statement of revenues, expenses and owner’s equity — income tax basis for the year then ended. The statements are in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The financial statements have been prepared on the accounting basis used by Gwitchyaa Zhee Corporation and Gwitchyaa Zhee Utility Company for income tax purposes, which is a comprehensive basis of accounting other than generally accepted accounting principles. A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them. Management has elected to omit substantially all of the disclosures ordinarily included in the financial statements prepared on the income tax basis of accounting. If the omitted disclosures were included in the financial statements, they might influence the user’s conclusions about the Corporation’s and Company’s assets, liabilities, equity, revenues, and expenses. Accordingly, these financial statements are not designed for those who are not informed about such matters. April 27, 2007 GWITCHYAA ZHEE CORPORATION STATEMENT OF ASSETS, LIABILITIES, AND STOCKHOLDERS' EQUITY - INCOME TAX BASIS April 30, 2006 ASSETS CURRENT ASSETS Investments $ 878,961 Accounts receivable 461,315 Prepaid expenses 10,068 Other current assets 21,295 TOTAL CURRENT ASSETS 1,371,639 PROPERTY AND EQUIPMENT Property and equipment, net 86,970 OTHER ASSETS Receivable from subsidiary 384,053 Investment in subsidiary 250,000 Note receivables 2,424 TOTAL ASSETS $ 2,095,086 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES Bank overdraft $ 3,072 Accounts payable 17,590 Employee advances 1,292 Income taxes payable 173,735 TOTAL CURRENT LIABILITIES 195,689 Long term liabilities 126,018 TOTAL LIABILITIES 321,707 STOCKHOLDERS' EQUITY Unrealized loss on investments (134,960) Capital stock 3,344,377 Accumulated deficit (1,436,038) TOTAL STOCKHOLDERS' EQUITY 1,773,379 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,095,086 See accountant's compilation report -2- GWITCHYAA ZHEE CORPORATION STATEMENT OF REVENUES, EXPENSES, AND RETAINED EARNINGS - INCOME TAX BASIS For the Year Ended April 30, 2006 REVENUE 7(i) revenue $ 438,216 Sales 190,841 Miscellaneous income 48,006 Rental income 24,936 Dividend income 23,050 Capital gain distribution 13,346 Interest income 8,277 State grant revenue 5,940 TOTAL REVENUE 752,612 EXPENSES Fuel expenses Freight on fuel 91,143 Fuel purchases 79,598 Concession food 4,817 Parts and vehicle products 3,935 Total fuel expenses 179,493 Other expenses Payroll expenses 101,277 Professional fees 39,331 Office building expenses 22,934 Lodge and cabins 15,716 Miscellaneous 14,251 Workman's comp insurance 11,513 Depreciation expense 6,792 Administration expenses 4,514 Taxes and licenses 4,460 Property insurance 2,589 Board expenses 2,500 Interest expense 2,212 Donations 1,500 Travel 1,198 Meeting fees 1,100 Shareholder relations 800 Advertising 500 Total other expenses 233,187 TOTAL EXPENSES 412,680 NET INCOME BEFORE INCOME TAX EXPENSE 339,932 Income tax expense (127,348) NET INCOME 212,584 ACCUMULATED DEFICIT, BEGINNING OF YEAR (1,648,622) ACCUMULATED DEFICIT, END OF YEAR $ (1,436,038) See accountant's compilation report =3- GWITCHYAA ZHEE UTILITY COMPANY STATEMENT OF ASSETS, LIABILITIES, AND OWNER'S EQUITY - INCOME TAX BASIS As of April 30, 2006 ASSETS CURRENT ASSETS Cash Accounts receivable net of allowance for doubtful accounts State assistance receivable Inventory Prepaid insurance expense TOTAL CURRENT ASSETS FIXED ASSETS Property and equipment construction Property and equipment utility Less: accumulated depreciation TOTAL FIXED ASSETS TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion long term debt Accrued liabilities Acrued interest payable construction Other current liabilities TOTAL CURRENT LIABILITIES LONG TERM LIABILITIES Due to Gwitchyaa Zee Corporation Construction notes payable Utility notes payable, less current portion TOTAL LONG TERM LIABILITIES TOTAL LIABILITIES OWNER'S EQUITY TOTAL LIABILITIES AND OWNER'S EQUITY See accountant's compilation report -4- 207,291 144,727 13,708 168,720 16,063 550,509 879,447 1,607,743 (2,028,904) 458,286 1,008,795 10,604 8,864 199,948 16,272 235,688 102,683 81,422 172,326 356,431 592,119 416,676 1,008,795 GWITCHYAA ZHEE UTILITY COMPANY STATEMENT OF REVENUES, EXPENSES AND OWNER'S EQUITY - INCOME TAX BASIS For the Year Ended April 30, 2006 REVENUE Utility revenue Contruction revenue Utility installation income TOTAL REVENUE EXPENSES Construction expenses Interest expense Depreciation expense Equipment rental - gravel Repairs Fuel Expense Total construction expenses Utility expenses Generator Depreciation expense Payroll expenses Insurance City water & sewer Direct labor expense Sales tax due New clinic Interest and principal expense Automobile expense Repairs and maintenance Professional fees Office supplies and postage Utilities Donation Telephone Shop supplies Other Board meeting fees Employee benefits Equipment rental Dues and subscriptions Licenses and permits Total utility expenses TOTAL EXPENSES NET INCOME BEFORE INCOME TAX Income tax NET INCOME OWNER'S EQUITY, BEGINNING OF YEAR OWNER'S EQUITY, END OF YEAR See accountant's compilation report -5- $ 1,073,363 146,426 78,375 1,298,164 8,142 5,566 1,680 1,364 150 16,902 650,136 113,437 112,296 78,264 63,428 40,692 17,308 12,037 11,642 10,971 7,724 5,540 5,195 4,887 4,750 4,246 2,594 1,919 1,800 1,748 309 244 110 1,151,277 1,168,179 129,985 (46,387) 83,598 333,078 $ 416,676 rom 7004 Application for Automatic 6-Month Extension of Time To File (Rev. December 2008) Certain Business Income Tax, Information, and Other Returns OMB No. 1545-0233 Deparment of the Treasury > File a separate application for each return. Type or a Identifying number Print | GWITCHYAA ZHEE CORPORATION _ 92-0044903 File by the due | Number, street, and room or suite no. (P.O. box, see instructions.) satofere | | PO BOX 329 return for which City, town, state, and ZIP code (If a foreign address, enter city, province or state, and country (follow the country's practice for entering an extension is requested. See | Postal code) instructic newer’ _| FORT YUKON, AK 99740 _ Note. See instructions before completing this form. 1 Enter the form code for the return that this application is for (see below) 12 2 Ifthe foreign corporation does not have an office or place of business in the United States, check here . ce > 3 Ifthe organization is a corporation or partnership that qualifies under Regulations section 1.6081-5, check here ests pesnisesee > CJ 4a The application is for calendar year __—S—_—, or tax year beginning MAY 1 2006 ,andendingAPRIL 30 2007 b Short tax year. If this tax year is less than 12 months, check the reason: Initial return Final return Change in accounting period Consolidated return to be filed 5 If the organization is a corporation and is the common parent of a group that intends to file a consolidated return, check here STMT 1. b> [x] If checked, attach a schedule, listing the name, address, and Employer Identification Number (EIN) for each member covered by this application. 6 Tentative total tax . 6 228,066. 7 Total payments and credits (see instructions) 7 255,895. 8 Balance due. Subtract line 7 from line 6. Generally, you must deposit this amount using the Electronic Federal Tax Payment System (EFTPS), a Federal Tax Deposit (FTD) Coupon, or Electronic Funds Withdrawal (EFW) (see instructions for exceptions) re see ada a. | 8 QO. Application Form Application Form Is For: Code Is For: Code Form 706-GS(D) 01 Form 1120-H 17 Form 706-GS(T) 02 Form 1120-L 18 Form 990-C (2005 fiscal year filers only) 03 Form 1120-ND 19 Form 1041 (estate) 04 Form 1120-ND (section 4951 taxes) 20 Form 1041 (trust) 05 Form 1120-PC 21 Form 1041-N 06 Form 1120-POL 22 Form 1041-QFT 07 Form 1120-REIT 23 Form 1042 08 Form 1120-RIC 24 Form 1065 09 Form 1120-S 25 Form 1065-B 10 Form 1120-SF 26 Form 1066 1 Form 3620-A 27 Form 1120 12 Form 8612 28 Form 1120 (sub T) (2005 fiscal year filers only) 13 Form 8613 29 Form 1120-A 14 Form 8725 30 Form 1120-C 34 Form 8804 31 Form 1120-F 15 Form 8834 32 Form 1120-FSC 16 Form 8876 33 LHA For Paperwork Reduction Act Notice, see instructions. Form 7004 (Rev. 12-2006) 619741 12-14-06 9Q2N112 TALNEQ AGAANTANT ANNE NAN1AN MaATMOAUVAARA TUBER AANDDADAMTANT OTAANTANI U.S. Corporation Income Tax Return cla aa Form 1 1 20 For calendar year 2006 or tax year senaimentotiereany | beginning MAY 1, 2006 vending APRIL 30, 2007 2006 Internal Revenue Service A Check if: Use Name B Employer identification number 1 Consolidated return IRS GWITCHYAA ZHEE CORPORATION 92-0044903 2 Persone) holding co. Other- Number, street, and room or suite no. If a P.O. box, see instructions. C Date incorporated 9 Personal service cor print PO BOX 329 _ 07/23/1973 a fee instruction i arype. City or town, state, and ZIP code D Total assets (see instructions) {attach Sch. M-3) 3 0 1 1 8 8 1 . E Check if: (1) Initialreturn (2) Final return _(3) Namechange (4 Address change 1 Gross receipts or sales 1,688, 253 4} bless returns and allowances - c Bal P| tc 1,688,253. 2 Cost of goods sold (Schedule A, line 8) 2 1,045,515. 3 Gross profit. Subtract line 2 fromlinetc 3 642,738. 4 Dividends (Schedule C, line 19) occ . . ; ae 4 8,489. @ | 5 Interest . . coos 5 19,288. 8 6 Grossrents | 6 | _ 85,881. £ 7 Gross royalties 7 8 Capital gain net income 2 (attach Schedule D (Form 4120)) . 8 24,476. 9 Net gain or (loss) from Form 4797, Part Il, line 17 (attach Form 4797) ee 9 10 Other income (attach schedule). SEE. CONSOLIDATED INCOME AND ‘DEDUCTIONS 10 690,338. 11 Total income. Add lines 3 through 10 ce EE a | 1,471,210. ¢ 12 Compensation of officers (Schedule E, line 4) . . . {12 _ & | 13 Salaries and wages (less employment credits) oe : . 13 229,486. 3 | 14 Repairs and maintenance. Oe ae 14 8,855. SB | 15 Baddebts . coos ceesestsevsves coo cteteteteteensees cee, [16 . & | 16 Rents ee . cesses ccesterivtasiivisesiiessvesteseveees 16 . 680. g 17 Taxesandlicenses ae oe . 17 72,913. = | 18 Interest ee . a 18 35,423. | 19 Charitable contributions eects 19 5,695. 5 20 Depreciation from Form 4562 not claimed on Schedule A or elsewhere on return attach Form 4562) ce a. [20 | 111,477. % | 21 Depletion 0, a a . . 21 _ & | 22 Advertising a : : . [22 __167. | 23 Pension, profit-sharing, etc., pans ne oe | 23 | & | 24 Employee benefit programs ne ee £24 14,291. £ 25 Domestic production activities deduction (attach Form 8903) a 25 . g 26 Other deductions (attach schedule) SEE CONSOLIDATED. INCOME. AND DEDUCTIONS 26 315,499. @ | 27 Total deductions. Add lines 12 through 26 a >| 27 794,486. 2 28 Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11 28 676,724. 3 | 29 Less:a Net operating loss deduction . _ (29a | : _| a b Special deductions (Schedule C, line 20) ............... cee | 290 «| 29¢ 5,942. 30 Taxable income. Subtract line 29c from line 28 (see instructions) oo 30 670,782. 31 Totaltax (Schedule J, line 10) . 31 228,066. 32a 2005 overpayment credited to 2006 | 32a 2 b 2006 estimated tax payments | $2b/ 255,895. £ ¢ 2006 refund applied for on Form 4466|_a2c |( )} d Bal B | 32d 255,895. é e Tax deposited with Form 7004 . 32e | 2 f Credits: (1) Form 2439 (2) Form 4136 32f S g Credit for federal telephone excise tax paid (attach Form 8913) 329 32h 255,895. © | 33. Estimated tax penalty (see instructions). Check if Form 2220 is attached . p> Lx]| 33 6,532. 34 Amount owed. If line 32h is smaller than the total of lines 31 and 33, enter amount owed Over | 84 QO. 35 Overpayment. If line 32h is larger than the total of lines 31 and 33, enter amount overpaid voces 35 21,297. 36_ Enter amount from line 35 you want: Credited to 2007 estimated tax. 21,297. Refunded P| 36 oO.” Under penaities of perjury, | declare that | have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, Sign correct, and complete. Declaration of preparer (other than ~ is based on all information of which preparer has any knowledge. Rays the F dsc De Here J Shown below? Damar of officer Pix [x] Yes No SUE SILO a ap ae Feuer frmsnane | WILSON & WILSON CPAS, INC. EIN 92 0135287 celersives. [)344 MINNIE STREET ronene. (907) 456-8115 ZIP code FAIRBANKS, ALASKA 99701 611801, JWA For Privacy/Paperwork Reduction Act Notice, see instructions. Form 1120 (2006) 7NAN112 TAENEQ AGVAANANT Form 1120(2008) GWITCHYAA ZHEE CORPORATION Schedule A| Cost of Goods Sold (see instructions) 92-0044903 Pager Inventory at beginning of year Purchases Cost of labor Additional section 263A costs (attach schedule) Deeseseeesees Other costs (attach schedule) SEE..CONSOLIDATED.. INCOME. AND DEDUCTIONS. Total. Add lines 1 through 5 Inventory at end of year Cost of goods sold. Subtract line 7 from line 6. Enter here and 0 on page 1, tine 2 a Check all methods used for valuing closing inventory: (i) Cost (ii) Lower of cost or market CONOAORwnr a 242,091. 803,291. 133. 1,045,515. loo JN | fon |e Joo [ro |= 1,045,515. (iii) Other (Specify method used and attach explanation.) B> b Check if there was a writedown of subnormal goods ¢ Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) d_ Ifthe LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed underLIFO e If property is produced or acquired for resale, do the rules of section 263A apply to the corporation? coves f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If Yes," attach explanation 9d vv LX] Yes [X] No Yes No (a) Dividends received Schedule C| Dividends and Special Deductions (see instructions) (b) % (c) Special deductions (a) x (b) 1 Dividends from less-than-20%-owned domestic corporations (other than debt-financed stock) 8,489. 70 5,942. 2 Dividends from 20%-or-more-owned domestic corporations (other than debt-financed Stock) ........ 80 Dividends on debt-financed stock of domestic and foreign corporations see instructions Dividends on certain preferred stock of less-than-20% -owned public utilities 42 Dividends on certain preferred stock of 20% -or-more-owned public utilities 48 Dividends from less-than-20% -owned foreign corporations and certain FSCs 70 Dividends from 20% -or-more-owned foreign corporations and certain FSCs 80 100 Dividends from wholly owned foreign subsidiaries = . Total. Add lines 1through8................... SEE. STATEMENT 2 10 Dividends from domestic corporations received by a small business investment company operating under the Small Business Investment Act of 1958 COON Bw 100 5,942. 11. Dividends from affiliated group members 100 12 Dividends from certain FSCs 100 13 Dividends from foreign corporations not included on lines 3, 6, 7, 8, 11, or 12 14 income from controlled foreign corporations under subpart F (attach Form(s) 547 1) 15 Foreign dividend gross-up 16 IC -DISC and former DISC dividends not included on lines 1, 2, or 3 17 Other dividends 18 Deduction for dividends paid on certain preferred stock of public utilities _ 19 Total dividends. Add lines 1 through 17. Enter here and on page 1, line 4 > 8,489. SEE STATEMENT OF CONSOLIDATED DIVIDEND INCOME 20 Total special deductions. Add lines 9, 10, 11, 12, and 18. Enter here and on page 1, line 29b 5,942, Schedule E | Compensation of Officers (s% instructions for page 1, line 12) Note: Complete Schedule E only if total receipts (line 1a plus lines 4 through 10 on page 1) are $500,000 or more. (b) Social security (9) Percent of (a) Name of officer ime devoted Percent of corporation stock owned (f) Amount of number to business (d) Common (e) Preferred compensation 2 Total compensation of officers 3 Compensation of officers claimed on Schedule Aand elsewhere 0 on n return 4 Subtract line 3 from line 2. Enter the result here and on page 1, line 12 orem 01-02-07 JWA QINNE NENAN ewTMoAUVAA TUBD ANDDADAMTAAT Form 1120 (2006) OTAANANIA Form 1120 (2006) GWITCHYAA ZHEE CORPORATION Schedule J Tax Computation (see instructions) 92-0044903 Pages 1 Check if the corporation is a member of a controlled group (attach Schedule O (Form 1120)) nn 2 Income tax. Check if a qualified personal service corporation STMT 3 (see instructions) ooo ccc tees sees > 2 228,066. 3 Alternative minimum tax (attach Form 4626) cc ceccceecceveveveeeiteveveces 3 4 Add lines 2 and 3 = oe 4 228,066. 5a_ Foreign tax credit (attach Form 1118) a 5a b Qualified electric vehicle credit (attach Form 8834) . 5b General business credit. Check applicable box(es): Form 3800 Form 6478 Form 8835, Section B Form 8844 5c d Credit for prior year minimum tax (attach Form 8827) 5d = e Bond credits from: Form 8860 Form 8912 Se 6 Total credits. Add lines 5athrough5e 6 7 Subtract line 6 from line 4 Oe ae 7 228,066. 8 Personal holding company tax (attach Schedule PH (Form 1120)) bose vee veveveeteveeeeveeeeees 8 9 Other taxes. Check if from: Form 4255 Form 8611 Form 8697 Form 8866 Form 8902 Other (attach schedule) =, 10__ Total tax. Add lines 7 through 9. Enter here and on page 14, line 31 10 228,066. Schedule K | Other Information (see instructions) _ _ 1 Check accounting method: a Cash b LX] Accrual Yes | No |7 Atany time during the tax year, did one foreign person Yes | No eC or ssc = eae one ae eee 2 See the instructions and enter the: entitled to vote or (b) the total value of all classes of stock a Business activity code no. 523900 of the corporation? a. 4 b Business activity PB NATIVE CORPORATION If "Yes," enter: (a) Percentage owned D> ¢ Product or service B INVESTMENTS, UTILITI and (b) Owner's country P> 3 At the end of the tax year, did the corporation own, directly or ¢ The corporation may have to file Form 5472, Information indirectly, 50% or more of the voting stock of a domestic Return of a 25% Foreign-Owned U.S. Corporation or a corporation? (For rules of attribution, see section 267(c).) x Foreign Corporation Engaged in a U.S. Trade or Business. If "Yes," attach a schedule showing: (a) name and Enter number of Forms 5472 attached D> ade, wale meorne or (ose) behes WO ond ea 8 Check this box if the corporation issued publicly offered deductions of such corporation for the tax year ending with or debt instruments with original issue discount _ > within your tax year. If checked, the corporation may have to file Form 8281, 4 Is the corporation a subsidiary in an affiliated group or a Information Return for Publicly Offered Original Issue parent-subsidiary controlled group? coc x Discount Instruments. If"Yes," enter name and EIN of the parent corporation P> 9 Enter the amount of tax-exempt interest received or accrued during the tax year > $ 7 7 7 10 Enter the number of shareholders at the end of the tax Ee year 100 re | 50% or more of the corporation's voting stock? (For rules 11 Ifthe corporation has an NOL for the tax year and is of attribution, see section 267(c).) . . x electing to forego the carryback period, check here > If Yes," attach a schedule showing name and identifying If the corporation is filing a consolidated return, the statement number. (Do not include any information already entered required by Temp rary Regulations sect be Vane 2 ON) in 4 above.) Enter percentage owned > 12 Enter the available NOL carryover from prior tax years 6 During this tax year, did the corporation pay dividends (other (Do not reduce it by any deduction on line than stock dividends and distributions in exchange for stock) 292.) > $ in excess of the corporation's current and accumulated earnings and profits? (See sections 301 and 316.) X_| 13 Are the corporation's total receipts (line 1a plus lines 4 through If Yes," file Form 5452, Corporate Report of 10 on page 1) for the tax year and its total assets at the end of the tax year less than $250,000? i ecccceeeeee x Nondividend Distributions. If this is a consolidated return, answer here for the parent corporation and on Form 851, Affiliations Schedule, for each subsidiary. M-1, and M-2 on page 4. Instead, enter the total amount of cash distributions and the book value of property distributions (other than cash) made during the tax year. P> $ Note: If the corporation, at any time during the tax year, had assets or operated a business in a foreign country or U.S. possession, it may be required to attach Schedule N (Form 1120), Foreign Operations of U.S. Corporations, to this return. See Schedule N for details. JWA 611621 42-29-06 YNN112 TAELNEQ APANANANT QNNE AQN1AN eaTMOUVAA TUE ANDDADAMTART Form 1120 (2006) 3 OTAANANI Form 1120 (2006) GWITCHYAA ZHEE CORPORATION 92-0044903 Pace 4 Schedule L | Balance Sheets per Books Beginning of tax year End of tax year Assets (a) __ (b) (c) (d) _ 1 CASA. a 204,219. | 336,668. 2a Trade notes and accounts receivable __ 677,987. __ 1,061,969. b Less allowance for bad debts ( 41,9764 636,011.\( 73,2004 988,769. 3 Inventories 3... 168,720. 74,777. 4 U.S. government obligations SEE __ SEE 5 Tax-exempt securities STATEMENT OF STATEMENT OF 6 Other current assets (att. sch.) .. CONSOLIDATED _903,800.CONSOLIDATED 1,050,138. 7 Loansto shareholders BEGINNING ENDING 8 Mortgage and realestate loans. BALANCE SHEET, IBALANCE SHEET. 9 Other investments (att. sch.) = 10a Buildings and other depreciab 3,016,052. 3,094,427. b Less accumulated depreciation ( 2,709,6884 306,364.|( 2,761,3664 333,061. 11a Depletable assets coe | b Less accumulated depletion ( yo ) 12 Land (net of any amortization) 218,296. 218,296. 13a Intangible assets (amortizable only) _ 18,673. 18,673. b Less accumulated amortization ( 18,6734 ( 18,6734 14 Other assets (att. sch.) 2,559. 10,172. 16 Totalassets eee 2,439,969. 3,011,881. Liabilities and Shareholders’ Equity 16 Accounts payable 17,590. 60,785. 17 Mortgages, notes, bonds payable in less than 1 year _ 18 Other current liabilities (att. sch.) 20,238. 60,403. 19 Loans from shareholders 20 Mortgages, notes, bonds payable in 1 year or more 308,948. 174,380. 21 Other liabilities (att. sch.) 171,065. -658. 22 Capital stock: a Preferred stock . b Common stock 3,344,377. 3,344,377. 3,344,377. 3,344,377. 23 Additional paid-incapital = 24 RSpropristed (tach schedule) can -34,875. | -34,875. 25 Retained earnings - Unappropriated -1,253,443. -502,793. 26 equity attach schedulo) | ~133,931. ___- 89,738. 27 Lesscostoftreasurystock = ( ) Lf ) 28 Total liabilities and shareholders’ equity. 2,439,969. 3,011,881. Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return Note: Schedule M-3 required instead of Schedule M-1 if total assets are $10 million or more - see instructions 1 Net income (loss) per books 2 Federal income taxperbooks = 3 Excess of capital losses over capital gains 4 Income subject to tax not recorded on books this year (itemize): 750,576 «| 7 Income recorded on books this year not 30,453 . included on this return (itemize): Tax-exempt interest $ 8 Deductions on this return not charged 5 Expenses recorded on books this year not deducted on this return (itemize): against book income this year (itemize): a Depreciation Charitable $ 59,798. a Depreciation $ D contributions $ b Sontisutions $ 61,221. C entertanment —... $ 121,019. 16,714. 16,714.) 9 Addlines7and8 _ eee eects 121,019. 6_Add lines 1 through 5 797, 743 .|10 Income (page 1, line 28) - line 6 less line 9 676,724. Schedule M-2 Analysis of Unapp ropriated Retained Earnings per Books (Line 25, Schedule L) 1 Balance atbeginning ofyear -1,253, 443%! 5 Distributions: a Cash 2 Netincome (loss) perbooks 750,576. b Stock . coc 3 Other increases (itemize): e Property 6 Other decreases (itemize) : 74.| 7 Add lines 5 and 6 4 Add lines 1,2,and3 -502,793 «| 8 Balance at end of year (line 4 less line 7) . =502,793. 611631 12-29-06 JWA SEE CONSOLIDATED SCHEDULES M-1 AND M-2 Form 1120 (2006) FORM ALASKA CORPORATION NET INCOME TAX RETURN 2006 0405-611 For the calendar year 2006 or the taxable year beginning FSN.SEQ seennee En OPER MAY 1 ,2006andending APR 30,2007 Federal EIN Alaska Corporation File # NAICS Code Alaska Business License # 92-0044903 - 523900 Name Telephone Number GWITCHYAA ZHEE CORPORATION _ ext Mailing Address Fax Number PO BOX 329 00 City State ZIP Code E-Mail Address FORT YUKON AK 99740 INA Contact Person Title Contact Telephone Number ext Check applicable boxes: Yes No (Check Yes or No) RETURN DATA LX J 1. Is a federal extension in effect? If yes, attach a copy of Form 7004. |__| First Alaska return LX] 2. 1s this an information report for a corporation that is inactive in Alaska? Final Alaska return LX 3. 1s this a non-affiliated corporation doing business only in Alaska with an Name or address change since last year apportionment factor of 1.00? Note: If yes, use Short Form 04-611SF. Limited Liability Company (LLC) LXJ 4. Is this a water's edge combination? See AS 43.20.0783. If yes, Schedule B, Exempt organization (see instructions) question #1 must be completed. S-Corporation (Attach 1120S) [x] 5. Is this a consolidated Alaska return including more than one corporation with Homeowners Association (Attach 1120H) Alaska business activity? If yes, complete Schedule B, question #1. LXJ 6. Are any business activities conducted by a member of the affiliated group excluded from the combined report as non-unitary business activities? SCHEDULE A - NET INCOME TAX SUMMARY DEPT USE ONLY 1. Alaska income (loss) from Schedule H oe 1 736,007. 2. Alaska net operating loss deduction (attach schedule) 2 NL 3. Alaska taxable income. Subtract line 2 from line 1 oe 3 736 ,007.| TI 4. Alaska income tax from Schedule D, line 7 ooo bebe a 4 65,225.|1x _ 5. Other taxes from Schedule E, line8 . 5 oT 6. Federal-based credits from Schedule F, line 16 eevee obec vee veevitbiebeeveteevces 6{( )| CR 7. Total Tax. Sum of lines 4, 5 and 6 7 65,225. 8. Incentive Credits (see instructions) 8 LIC 9. Education Credit from Schedule G, line 4 coe coco evevetbevevevevvevetvevevevees 9}¢ EC 10. Net Alaska income tax (line 7, net of lines 8 and 9) it More than $500, attach FOFM 04-708 oo cecccssssnsstsssstsessenssni esses sneniseniissiisenssetisenienssneeses 10 65,225.|NT 11. Payments from Page 3, Schedule C . 14 73,717.|PT 12. Tax due. If line 10 is larger than line 11, enter amount oftaxdue 12 13. Overpayment. If line 11 is larger than line 10, enter amount overpaid 13 8,492. 14, Penalty for underpayment of estimated tax (Form 04-708, line 18, see instructions) cone 14 uP. 15. Penalty for failure to file (see instructions) 15 PF 16. Penalty for failure to pay (see instructions) 16 PP. 17. Interest (see instructions) . a 17 IN 18. Total amount due (overpaid). ‘Line 12 plus lines 14- 17, or line 13 less lines 14- 7. 18 -8,492. 19. Overpayment credited to 2007 estimated tax 19] & 8,492 .|CF 20. Refund (line 18 reduced byline 19) ceueeessseeee 20 0 «| RF | declare, under penalties of perjury, that | have examined this return, including accompanying schedules and statements, and to the best of my knowledge DEPT USE ONLY and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. CFWD. Officer's Date Title Signature ZZ . REFUND Preparer's EE, Ofte Check if Preparer's SSN or PTIN | Signature ASO 3 self-employed 574-20-4985 APPROVED Firm's name (or EL. No. yours if self- WILSON & WILSON CPAS, INC. 92-0135287 DATE employed) 344 MINNIE STREET ZIP Code and address FAIRBANKS, ALASKA 99701 Saieo7 Form 0405-611 (Rev 02/07) Alaska Corporation Net Income Tax Return Page 1 —vaiaarey nse on” SCHEDULE B - TAXPAYER INFORMATION 1. Affiliated Taxpayer Information. Complete the following information for all Alaska taxpayers included in the affiliated group of the taxpayer(s): List only those corporations having nexus in Alaska. You may also use this schedule to satisfy information reporting requirements of affiliated corporations registered to do business in Alaska which have no business activity in the state. o16-07 Form 0405-611 (Rev 02/07) (a) (b) (©) (d) ) (0) (9) (h) 10) Is this an Year Included|included in asa Alaska corpo- | Began i ration | Doing | State of] federal | “tax- Name and Address of each Alaska taxpayer Federal Alaska Business report? Busi Com- |Consoli-| paye \ in the affiliated group Employer Corporation hal MN a | mercial ated inthis 0. Ge aus . . : umber cla") Return | return (Attach schedule if additional space is required) ID Number File Number | Alaska Domicile! Y/N VIN | | | | T | I 2. If any taxpayer included in this return is included in a federal 3. If this is the first return, indicate whether: 4. Name and address on your prior year's return if different consolidated return (Form 1120), provide the Name, Address, New business from page 1. State the reason for the change (e.g. merger, and Federal Employer Identification Number of the common name change, etc.) parent of the federal consolidated group: | _ | Successor to previously existing business Name: EIN: Address: Name: Enter name, address and federal Employer Identification Address: Number of previous business: EIN: Reason: Name: Address: Alaska Corporation N@t Income Tax Return Page 2 NAME: EIN: GWITCHYAA ZHEE CORPORATION 92-0044903 TAX RATE SCHEDULE (AS 43.20.01 1) If your Alaska taxable income is: (5) SCHEDULE C (2) Of The TAX PAYMENT RECORD (1) But Less (3) (4) Amount At least Than Your Tax Is Plus Over -0- 10,000 -0- 1% -0- Estimated Payments Date Amount 10,000 20,000 100 2% 10,000 1) 04-714 20,000 30,000 300 3% 20,000 30,000 40,000 600 4% 30,000 “ on 40,000 50,000 1,000 5% 40,000 (3) __04-711 50,000 60,000 1,500 6% 50,000 (4) 04-711 60,000 70,000 2,100 7% 60,000 Tentative Tax 04-709 70,000 80,000 2,800 8% 70,000 Overpayment From Prior Year 80,000 90,000 3,600 9% 80,000 Less: Quick Refund (Form 4466) ( _ ) 90,000 or More 4,500 9.4% 90,000 Total Payments to Schedule A, Line 14 ig 73,717. SCHEDULE D - ALASKA TAX COMPUTATION A B 1. Alaska taxable income from Schedule A, line3_ eevee 1 736,007. 736,007. 2. Net capital gain from Schedule J, line 18, but not more than line 1. If line 1 is a loss, enter zero oo | 2 - 3. Ordinary income. Subtract line 2 from line 1. If less than zero, enter zero 3 736,007. 736,007. 4. To compute the tax on ordinary income, apply the amount on line 3 to the Tax Rate Schedule (a) Tax from column 3 of the Tax Rate Schedule __ 4a 4,500. 4,500. (b) Ordinary income from line3above 4b 736,007.| 736,007. (c) Amount from column 5 of the Tax Rate Schedule 4c 90,000. 90,000. (d) Excess. Subtract line 4c from line 4b. voces 4d 646,007. 646,007. (e) Percent from column 4 of the Tax Rate Schedule 4e -094000 -094000 (f) Multiply line 4dbyline4e 4t 60,725. 60,725. (g) Tax on ordinary income. Add lines 4a and 4f 49 65,225. 65,225. 5. Tax on net capital gain. Multiply line 2 by 4.5% 5 6. Alaska income tax.Addlines4gand5 6 65,225. 65,225. 7. Enter the lesser of line 6, column A or B here and on Schedule A, line4 7 65,225. SCHEDULE E - OTHER TAXES (AS 43.20.021) 7 A B 1. Alternative minimum tax from federal Form 4626. Ja | X 18% tb ee 2. Credit for prior year minimum tax from Form 1120, Schedule J (see instructions) 2a X 18% 2b | ) 3. Other federal taxes (attach schedule) 3a X 18% 3b 4. Total other taxes. Add lines 1b through 3b 4 5. Alaska apportionment factor, from Schedule |, line 5 oe coco cee ee eevee eee 5 6. Multiply line 4 bylineS dessesessttsstseveeesviesaadeveasssees 6 7. S-Corporation corporate level taxes, see instructions (attach Schedule) 7 8. Add lines 6 and 7. Enter here and on Schedule A, line5 8 Form 0405-611 (Rev 02/07) Alaska Corporation Net Income Tax Return Page 3 636321 02-16-07 3 INNE ANQN1AN AWTMAUVAAR FUP ANDDADAMTARAT OTAMNTANI +21NN112 TAERNGQ ADAANANT Name: EIN: GWITCHYAA ZHEE CORPORATION 92-0044903 SCHEDULE F - CREDITS 1. Current year general business credit (a) Current year federal general business credit (line 2, federal Form 3800) ...... bose deiteetetseetttetttetteee | 18 (b) Passive activity credits includedinlineta. a. ib (c) Current year federal investment tax credit (line 6, federal Form 3468) ic (d) Current year credit for employer Social Security and Medicare taxes paid on certain employee tips (line 6 federal Form 8846) sasaueessesat id (e) Current year trans-Alaska pipeline liability fund credit included inline1a te (f) Unallowed credits from an electing large partnership included in line 1a (see instr) _. |_1f (9) Total of lines 1b through 1f oo. coos ceeeeesseeeesesese voce ee eee ceeeeene 1g (h) Current year Alaska general business credit (subtract line 1g from 1a). . i . th 2. Alaska apportionment factor from Schedule |, line 5 wooo eveeveeeeees ee . 2 3. Multiply line 1h byline 2 seostesreseesee sie nee ; a . ne woe LS 4. Multiply line 3 by 18% ee cose tees cesses eeesvesesvetesesvnavenvnees coceteetteee 4 _| 5. Alaska general business credit carryover, Alaska passive activity credits allowed for 2006 and Alaska investment credit (see instructions and attach schedules) =. ooo ooveeeee oo. a . 5 6. Tentative general business credit (addlines4and5) oooveececese . ooooeeececes 6 7. Alaska income tax from Schedule A, line4. pesstseretveresversesste cee cefetpereenaeereteeee LOE 8. Federal-based credits that reduce regular tax before the general business credit: Qualified electric vehicle credit (line 12c, federal Form 3800) Vids fede sdesvecseedeseseecessesecsessese 8 9. Multiply line 8 byline 2 evetesessesusueeesseacevesseayesseussssesvevesays . vote [9 10. Multiply line 9 by 18% ooo ccsesisesntetsiesenoes . . vtttteees [10 11. Enter smaller of line 7 or line 10 bo ceeetesveveeses . . voce eseeteseseseeesssseveneees LA 12. Subtractline 11 fromline7 oo. eevasessverseesue . eee Weeerieustesesesetes 12 13. Ifline 12 is greater than $4,500, enter 25% of the excess coe co oovecvveceeeeeee . . wo £18 14, Subtract line 13 fromline 12, co esssistessinsssiesssisssitesssssssssese eee 14 15. Enter lesser of line 6 orline 14. vecestecvevevevvevesvveeveveee [15 _| 16. 16 J 17. Alaska general business credit carryforward. Subtract line 15 from line 6 (but not less than zero) coe cette Se ceeeveveave vee LAP SCHEDULE G - EDUCATION CREDIT (AS 43.20.014) Taxpayers may claim as a credit a portion of contributions to qualifying Alaska colleges and universities. See Instructions for limitations and more detail. Contribution(s) Payor Name of College or University Date Amount 1. Total qualified contributions. See Instructions. if Enter here and on Schedule K, line 2 ___ sari ataevedaneusstienee Beet eentieisenteees [oo 2. Multiply the lesser of line 1 or $100,000 by 50% rn . 2 3. Enter 100% of the next $100,000 of contributions ooo coocccccccceeeseeenevevseese Tesssssusseesesaseescaveshevssceeesyseessesessses 3 4. Total allowable credit. Add lines 2 and 3. Enter here and Schedule A, line 9. See instructions for limitations =. L 4 Form 0405-611 (Rev 02/07) Alaska Corporation Net Income Tax Return 636322 02-16-07 4 --YNN112 TALNE@Q AWVAANMANT QNNE NANAN AtaTMOAUVAA FUER ANDDADAMTAIAT Page 4 ATAANAONIA NAME: EIN: GWITCHYAA ZHEE CORPORATION 92-0044903 SCHEDULE H - COMPUTATION OF ALASKA INCOME 1. Federal taxable income (loss), Form 1120, line 28, or Form 1120A, line 24, as actually filed by taxpayer or taxpayer's federal consolidated group ne 1 676,724.) 2. Adjustments for combined reporting. Affiliated taxpayers only. “(Attach schedules - by company): (a) Add: Form 1120, line 28 income (loss) of domestic unitary corporations not included in line 1 with 20% or greater U.S. factors . ooo veeeee eee . 2a (b) Add: Foreign unitary corporations with 20% or greater U.S. factors eee eceeey 2b (c) Add: Federally exempt qualifying foreign trade income, FSC profit before federal exemption, income from DISC's and tax haven corporations _. . . . 2c (d) Remove: Federal taxable (income) loss of nonunitary corporations ICIUGEM iM YIM ccccceeeeseeeetesssessteesessossesesvteisansnmetenens ae 2d (e) Remove: Federal taxable (income) loss of unitary corporations included in line 1 whose average U.S. factors are less than 20% ooo vee eevee vveeeveeeeeee 2e (f)_ Intercompany eliminations (see instructions) . cooeeeecee af (g) Total adjustments for combined reporting. Add lines 2a through 2 vo cbevveveeevevevevevevevvevevveveeeeee voce vevveteveevevveveees 29 3. Net income before state modifications and adjustments. Add lines 1 and 2g eo 3 676,724. 4. Additions for items deducted in line 3 above (Attach schedules - by company): (a) Taxes based on or measured by net income oo ae 4a 65,225.| (b) Expenses incurred to produce non-business income cocveveveveeeee eee 4b (c) Federal charitable contributions from federal Form 1120, line 19. coe, [40 5,695. (d) Net section 1231 losses from federal Form 4797, line 11 . vocseeeeee coe 4d (e) Other (attach detailed schedule by type) coscesesesesveess cee L 48 (f) Total additions (add lines 4a through 4e) cee ra . 4 70,920. 5. Total. Add lines 3.and 4f octet re a 5 747,644. 6. Subtractions for items included i in line 3 above (Attach schedules - by company): (a) Interest from obligations of the United States coeetestittstetvevetetteeee, [68 (b) Intercompany dividends between members of the water's edge group ooo bb bbe ebeeeee 6b (c) Section 78 gross-up dividends easqateatansestvssvergesaee sates vee cee sees 6c (d) 80% of dividends received from foreign corporations ne Oe 6d (e) 80% of royalties accrued or received from foreign corporations ee oe 6e (f) Non-business income (attach detailed schedule by type) re 6f (g) Federal Form 1120, line 8 capital gain income not included in line 6(f) ooo eee boo eeeeey 69 (h) Net section 1231 gains from federal Form 4797, line 12 oo ooeeeeeeccee coe 6h (i) Other (attach detailed schedule by type) eee = an 6i (j) Total subtractions (add lines 6athrough6i) coves . Sanssauiieseee 6j 7. Apportionable income (loss). Subtract line 6jfromline5 ae 7 747,644, 8. Apportionment factor from Schedule |, line5 oc Co : 8 1.000000 9. Income (loss) apportioned to Alaska (line 7 times line 8). = oo. 9 747,644. 10. Non-business income (loss) net of expenses allocable to Alaska (attach schedule by company and type) eee 10 11. Alaska items: (a) Alaska capital and section 1231 gain (loss) from Schedule J, line20. cee {Atay __ (b) Alaska charitable contribution deduction from ScheduleK, line10 41b | ( 5,695. ) (c) Alaska dividends-received deduction from Schedule L, line9 a coerce, LAte | ( 5,942. ) (4) Total (add lines 14a through 110) cc ccccceeeesesssesssssenssuummmneeens ccttisstiiien |Add -11,637. 12. Alaska taxable income (loss) before net operating loss. Add lines 9, 10 and 11d. Enter here and on Schedule A, line... a ne eee eee 12 736,007. SCHEDULE | - APPORTIONMENT FACTOR Compute to 6 Decimal Places A B c Total Within Alaska Total Within & Without Alaska A divided by B 1. Property sunvat ovesdtovssssetesestestrivets 1 2, Payrot a, . ee 2 — OS MOS rreereeecie ages eects eateeeee 4, Total of lines 1, 2and 3, column C a coo vceveeeeeee ce 4 5. Alaska apportionment factor. Divide line 4 by 3 (ifless than 3 factors are used, see instructions) coc . . 6 636431 / 02-16-07 Form 0405-611 (Rev 02/07) Alaska Corporation Net Income Tax Return Page 5 5 »IVNNI12 TAELENGA ADKAANWANT YNNE NQANWN waTMAUVvAAR FUE ANDDADAMTAAT AOTAANANI1 “NAME: / EIN: GWITCHYAA ZHEE CORPORATION 92-0044903 SCHEDULE J - ALASKA CAPITAL AND SECTION 1231 GAINS AND LOSSES Section 1231 Gains and Losses A Combined B AK Factor C Alaska Gain or (Loss) 1. Current section 1231 gains and (losses). If a loss enter the result on line 19. 1 2. Alaska non-recaptured net section 1231 losses from prior years. Enter as a positive number |. 2 3. Ifline 1C is a gain, subtract line 2 from line 1C, but not less than zero. Enter here and on line 15 _ 3 4. If line 1C is a gain, enter the lesser of line 1C or line 2 here and on line 19, otherwise enter zero 4 Short-Term Capital Gains and Losses 5. Total current short-term capital gains and (losses) . LS 6. Non-business short-term capital gains and (losses) coe 6 7. Apportionable STCG/(L). Subtract line 6 from line 5 and apportion 7 8. Non-business STCG/(L) allocable to Alaska 8 _| 9. Alaska unused capital loss carryover __ . 9 10. Net short-term capital gain or (loss), add lines 7¢, 8, and 9 10 Long-Term Capital Gains and Losses 11. Total current long-term capital gains and (losses) LAL 12. Non-business long-term capital gains and (losses) . voce, [12 13. Apportionable LTCG/(L). Subtract line 12 from line 11 and apportion a. L183 14. Non-business LTCG/(L) allocable to Alaska 14 15. Enteramountfromline3 15 16. Net long-term capital gain or (loss). Add lines 13C, 14,and15 16 Summary 17. Excess net short-term capital gain, line 10, over net long-term capital loss, line 16 17 18. Alaska net capital gain. Excess net long-term capital gain, line 16, over net short-term capital loss, line 10. Enter here and on Schedule D, line2 ......... 18 19. Ifline 1C is a loss, enter here, otherwise enter the amount from line 4 19 20. Add lines 17, 18, and 19. Enter here and on Schedule H, line1f7a 20 SCHEDULE K - ALASKA CHARITABLE CONTRIBUTION DEDUCTION 1. Current charitable contributions 1 5,695. 2. Contributions from Schedule G, line 1 included in line 1 above oe 2 3. Subtractling 2 from bie tooo cocccccsesssussssusssesesvevesssivesssissssssisismesssiitiessevnsesseeeeeses co esttsstsssssissasevevess 3 5,695. 4. Apportionment factor from Schedule I, line 5. Corporations operating only i in 1 Alaska, ‘enter 1.0 4 1.000000 5. Current Alaska charitable contributions. Multiply line 3byline4. ce 5 5,695. 6. Alaska excess charitable contribution carryover from prior years. Enter as a ‘a positive number co ee bv eevveebeveeebvveeevtetvtevvtevveees 6 7. AGG HINES 5 AND occ cccceeeseseesesssessssssssssssssssenssessesinisneeens cette 7 5,695. 8. Enter the sum of Schedule H, lines 9, 10, and 11a, but not less than zero. oe 8 747,644. 9. Multiply line 8times 10% 9 74,764. 40. Alaska charitable contribution deduction. Enter the lesser of line 7 or line § here and on Schedule H, line 11b 10 5,695. 11. Alaska excess charitable contribution carryover. Line 7 minus line 10 eee eee eee etter, LM SCHEDULE L - ALASKA DIVIDENDS-RECEIVED DEDUCTION (DRD) 1. Dividend income included in Schedule H, line3 oo an 1 8,489. 2. Less: Dividends not eligible for DRD (do not include any dividend in more than one line below): (a) Intercompany dividends from Schedule H, line6b oo . 2a (b) Section 78 gross-up dividends from Schedule H, line 6c 2b (c) 100% of dividends from foreign corporations. Divide Schedule H, line6dby.8 «2 (d) Dividends subtracted on Schedule H, line 6f as non-business income 2d (e) Total subtractions (add lines 2a through 24) oe coocseteesneeees coos 2e 3. Total. Subtract line 2e from line 3 8,489. 4. Apportionment factor from Schedule |, line 5. ‘Corporations operating only in ‘Alaska, enter 1.0 4 1.000000 5. Apportioned dividends (multiply line 3 by line 4) ee : 5 8,489. 6. Add dividends allocable to Alaska included on Schedule H, ‘line 10, Seder ent aise readied sens TEESE . 6 7. Total dividends included in taxable income (add lines 5 ANd 6) ooo... eee ccccccccceccspeesesesecsecesssessessesessessessssespesssiisevsseissess 7 8,489. 8. DRD prior to limitations (segregate dividends in line 7 and multiply by proper % A Apportioned Dividends B Percentage C _DRD (Ax B) (a) Dividends qualifying for 100% deduction = 8a 100% (b) Dividends qualifying for 80% deduction 8b 80% (c) Dividends qualifying for 70% deduction = a 8c 8,489. 70% 5,942. (d) Other, if applicable (enter% incolumnB) 8d 9. Tentative dividends-received deduction. Add lines 8a through 8d, column C. Enter here and carry the deduction, subject to IRC 246 limitation based upon Alaska taxable income, to Schedule H, line 11c (see instructions) 9 5,942. 02:16-07 Form 0405-611 (Rev 02/07) Alaska Corporation Net Income Tax Return Page 6 ron 1120 (Rev. December 2004) Department of the Treasury Internal Revenue Service Amended U.S. Corporation Income Tax Return Jiemed pile OMB No. 1545-0132 For tax year ending p _ APRIL 2006 (Enter month and year.) _ Name Employer identification number mess GWITCHYAA ZHEE CORPORATION _ 92-0044903 ye Number, street, and room or suite no. (if a P.O. box, see instructions.) pint |-PO BOX 329 - a Telephone number (optional) City or town, state, and ZIP code FORT YUKON, AK 99740 Enter name and address used on original return (If same as above, write “Same.") SAME Internal Revenue Service Center where original return was filed » OGDEN, UT Fill in applicable items and use Part Il to explain any changes Part! | Income and Deductions (a) As criginaly eller... (6) correct amount previously adjusted ___ explain in Part il 1 Totalincome (Form 1120 or 1120-A,line 11) dA 1,064,279. 13,436. 1,077,715. 2 Total deductions (total of lines 27 and 29c, Form 1120, or lines 23 and 25c, Form 1120-A) 2 665,423. 39,868. 705,291. 3 Taxable income. Subtract line 2 from line 1 3 398,856. -26,432. 372,424. 4 Tax (Form 1120, line 31, or Form 1120-A, line 27) A 135,611. -~8,987. 126,624. Payments and Credits 5a Overpayment in prior year allowed asacredit = 5a b Estimated tax payments ooo vceeeveeeee cece 5b c Refund applied for on Form 4466 . voveeevseecvevvesevesee 5c d Subtract line 5c from the sum oflines5aand5p . [Sd e Tax deposited with Form 7004 ee 11 __ f Credit from Form 2439 . coerce Sf) . g Credit for Federaltaxonfuels voces a | 59 6 Tax deposited or paid with (or after) the filing of the original return 6 141,337. 7 Add lines 5d through 6, column (c) , co. 7 141,337. 8 Overpayment, if any, as shown on original return or as later adjusted 8 9 Subtract line 8 from line 7 9 141,337. Tax Due or Overpayment 10 Taxdue. Subtract line 9 from line 4, column (c). If paying by check, make it payable to the “United States Treasury." >| 10 11 Overpayment. Subtract line 4, column (c), from lin 9 oo. eee ceceeeeeeeee : mi 14,713. 12___ Enter the amount of line 11 you want: Credited to2006 estimated tax Refunded >| 12 14,713. Under penalties of perjury, | declare that | have filed an original return and that | have examined this amended return, including accompanying schedules and ‘statements, and to the best of my knowledge and belief, this amended return is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Sign Here L | > Signature of officer \ 1 Date > Title Preparer's Date Check Preparer's SSN or PTIN some p MoE (BOD | ea 574-20-4985 Paid : Firm's name Preparers | Savempiyes, J)WILSON & WILSON CPAS, INC. aN 92-0135287 _ Use Only | syeszare "344 MINNIE STREET Phone no FAIRBANKS, ALASKA 99701 (907) 456-8115 JWA For Privacy Act and Paperwork Reduction Act Notice, see instructions on page 4. 510711 05-01-05 TN11NT TQAENQQ AGaAANANT 9NNeR nanni 1 OUITMOUIVA A FUE ANDDADAMTAAT Form 1120X (Rev. 12-2004) ATAANANI1 GWITCHYAA ZHEE CORPORATION 92-0044903 Form 1120X (Rev. 12-2004) Page 2 Part Il_| Explanation of Changes to Items in Part I (Enter the line number from page 1 for the items you are changing, and give the reason for each change. Show any computation in detail. Also, see What To Attach on page 3 of the instructions.) If the change is due to a net operating loss carryback, a capital loss carryback, or a general business credit carryback, see Carryback Claims on page 3, and check here oo... ae eee ee ee ORIGINAL RETURN PREPARED WITH ALL AVAILABLE INFORMATION AT THAT TIME. TOTAL INCOME INCREASES $13,436 DUE TO ACCOUNTS ORIGINALLY NOT BEING COUNTED AS INCOME. TOTAL DEDUCTIONS INCREASES $39,868 DUE TO ORIGINALLY UNREPORTED DEDUCTIONS. TAXABLE INCOME IS THEREFORE DECREASED BY $26,432 WITH A DECREASE OF TAX IN THE AMOUNT OF $8,987. dors UWA Form 1120X (Rev. 12-2004) 2 1N11N7 TARNRQ AWANANANT ANNE NONNA ewITMAIVAR TUDE ANDDADAMTAAT COTAANNAN1 Form For calendar year 2005 or tax year U.S. Corporation Income Tax Return 1120 P OMB No. 1545-0123 Department of the Treasury beginning MAY 1, 2005 ,ending APRIL 30, 2006 2005 Internal Revenue Service A Check if: Use Name B_ Employer identification number ‘ Gonsordategreun [XC] IRS GWITCHYAA ZHEE CORPORATION 92-0044903 2 Personal holding co Other- Number, street, and room or suite no. If a P.O. box, see instructions. © Date incorporated 3 Personal service corp.| wise, PO BOX 329 _ 07/23/1973 4 (20 instructions) sired aye. City or town, state, and ZIP code D Total assets (see instructions) {attach Sch. M-3) 2 4 3 9 8 3 4 . E_Check if: ia Initial return___(2) Finalreturn __(3) Namechange (4 Address change 1 a Gross receipts or sales 1,518 , 628 | bless retumns and allowances c Bal P| tc 1,518,628. 2 Cost of goods sold (Schedule A, line 8) 2 951,573. 3 Gross profit. Subtract line 2 from line 1c 3 567,055. 4 Dividends (Schedule C, line 19) | 4 | 23,050. o | 5 Interest 0. nee oss 5 135. 5 | 6 Gross rents ee ete uutteenientisentnsuiisisesi esas (6 | 24,936. B | 7 Grossroyalties eect 8 Capital gain net income (attach Schedule D (Form 1120)) . 9 Net gain or (loss) from Form 4797, Part Il, line 17 (attach Form 4797) a . 10 Other income (attach schedule) SEE CONSOLIDATED INCOME AND IONS|_10 462,539. 11_ Total income. Add lines 3 through 10 po | 1,077,715. 12 Compensation of officers (Schedule E,line4) 12 | 13 Salaries and wages (less employment credits) 13 172,999. 14 Repairsand maintenance 14 23,440. 15 Bad debts oe cesses eeseesseeee . ne cooceteetteeeeeree, [46 16 Rents... Seeteeedeseeceeeeeeesesstoseseeeencevieeenesteess deeseeceeteveceetestsveeeeesseeessnsesetenserecessuseeenntsveessct 16 309. 17 Taxes and licenses 17 40,359. 18 Interest 18 13,854. @ | 19 Charitable contributions . oo. 19 17,248. 5 | 20a Depreciation (attach Form 4562) . ae 20a 158,107. 8 b Less depreciation claimed on Schedule A and elsewhere onreturn . . 20b _ 20¢ 158,107. Bi 24 Depletion 21 © | 22 Advertising ctitnnne 22 500. 23 Pension, profit-sharing, etc, plans oo... cocevesesvesenveee bocce ee es eeves ees veestes cs veveaveatereeees 23 24 Employee benefit programs occ ccccceccecssesessssvssesesveses ooses tivivisssessisiisessissii suse . 24 13,391. 25 Domestic production activities deduction (attach Form 8903). . a voceceteeeeecee, [25 26 Other deductions (attach schedule) SEE CONSOLIDATED INCOME AND DEDUCTIONS) 26 234,340. 27 Total deductions. Add lines 12through26 ooo ee P| 27 674,547. 28 Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11 vovveeeees 28 403 1 168. 29 Less: a Net operating loss deduction . eee . 29a 14,609. b__ Special deductions (Schedule C, line 20) | 29D 16,135 ./ 29 30,744. 30 Taxable income. Subtract line 29c from line 28 (see instructions if Schedule C, line 12, was completed) 30 372,424. 31 Totaltax (ScheduledJ,line11) 31 126,624. 2 | se CRMEN, 2 smtowerermen Lazu 2 b 2005 estimated tax payments . | 82b 5 © on Form adso n> SPPNeS for 32¢ |( )| d Bal p> | 32d 2 e Tax deposited with Form 7004 . voces 32e S f Credits: (1) Form 2439 (2) Form 4136 32t 329 © | 33. Estimated tax penalty (see instructions). Check if Form 2220 is attached . . > [x1] 33 5,347. 34 Tax due. If line 32g is smaller than the total of lines 31. and 33, enteramountowed sss sstsi‘stsisiststsS 8 131,971. 35 Overpayment. If line 32g is larger than the total of lines 31 and 33, enter amount overpaid deis . 35 36_ Enter amount of line 35 you want: Credited to 2006 estimated tax > Refunded >| 36 Under penalties of perjury, | declare that | have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, Sign correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Maye ascuss, hs Here | L Shown below? > ‘Signature of officer Dis Yes No Paid Sigratare (3 OD sefempoyed "O74 “2 0 “4 985 Teer atens| cemsrare | WILSON & WILSON CPAS, INC. EIN 92 0135287 y sai-employed), >3 44 MINNIE STREET Phone no. 907 56-8115 ZIP code FAIRBANKS, ALASKA 99701 $3045 JWA For Privacy/Paperwork Reduction Act Notice, see instructions. 3 Form 1120 (2005) 1N11NT TARNEQ AGaAANANT INNER NANNA CwMTMOUVAA TUE ANDDADAMTARAT CTOANAN1 Form 1120 (2005) GWITCHYAA ZHEE CORPORATION 92-0044903 Page2 1N11N7T TELNEQ AWAAwWANT N9NNR nanni Schedule A| Cost of Goods Sold (see instructions) 1 Inventory atbeginning ofyear | 41} 2 Purchases cee 2 88,350. 3 Cost OFADOE i ceeceseeeeeeneeeeeeeenneee 3 40,692. 4 Additional section 263A costs (attach schedule) __ Oe : . | 4 | 731,388. 5 Other costs (attach schedule) SEE.. CONSOLIDATED... INCOME. AND. DEDUCTIONS 5 91,143. 6 Total. Add lines 1 through 5 6 951,573. 7 Inventory atend ofyear ow. . coccvesvesvaveveeveseee 7 8 — Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 8 951,573. 9a Check all methods used for valuing closing inventory: (i) Cost (ii) Lower of cost or market (iii) Other (Specify method used and attach explanation.) B> b Check if there was a writedown of subnormal goods eos > c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) > d_ Ifthe LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed underLIFO . a . 9d e If property is produced or acquired for resale, do the rules of section 263A apply to the corporation? Yes LXJ No f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If'Yes," attach explanation eevee eevee csseeesucessueecesussssvesisssisescissssisvsvecisiesseses ce Yes LX] No Schedule C} Dividends and Special Deductions (see instructions) Oa (b) % te) ea 1 Dividends from less-than-20%-owned domestic corporations (other than debt-financed stock) vo Seeeeeenees ieee 23,050.| 70 16,135. 2 Dividends from 20%-or-more-owned domestic corporations (other than debt-financed stock) oo... 80 - 3 Dividends on debt-financed stock of domestic and foreign corporations instructions 4 Dividends on certain preferred stock of less-than-20% -owned public utilities 42 5 Dividends on certain preferred stock of 20% -or-more-owned public utilities 48 6 Dividends from less-than-20% -owned foreign corporations and certain FSCs _ _70 7 Dividends from 20% -or-more-owned foreign corporations and certain FSCs 80 8 Dividends from wholly owned foreign subsidiaries 100 9 Total. Addiines 1through 8.0... SEE. STATEMENT. 2. 16,135. 10 Dividends from domestic corporations received by a small business investment company operating under the Small Business Investment Actof1958 100 11. Dividends from affiliated group members and certain FSCs 100 12 Dividends from controlled foreign corporations (attach Form 8805) 85 13 Dividends from foreign corporations not included on lines 3, 6, 7, 8, 11, or 12 14 income from controlled foreign corporations under subpart F (attach Form(s) 547 1) 15 Foreign dividend gross-up en 16 IC -DISC and former DISC dividends not included on lines 1, 2, or 3 17 Otherdividends 0... . sesseevtosecstverstvecesssseseeees 18 Deduction for dividends paid on certain preferred stock of public utilities 19 Total dividends. Add lines 1 through 17. Enter here and on page 1, line4 > 23,050. SEE STATEMENT OF CONSOLIDATED DIVIDEND INCOME 20 Total special deductions. Add lines 9, 10, 11, 12, and 18. Enter here and on page t,line29o > 16,135. Schedule E | Compensation of Officers iste! Complete schodute & only Hf total receipts (line 1a plus lines 4 through 10 on page 1) are $500,000 or more. (a) Name of officer (b) Social security (c} Percent of ero cK owned (f) Amount of number to business compensation (d) Common | (e) Preferred 1 2 Total compensation of officers ee Te ee ee ee ne Tee eee erent eee ‘3 Compensation of officers claimed on Schedule A and elsewhere on return 4 Subtract line 3 from line 2. Enter the result here and on page 1, line 12 Soros JWA Form 1120 (2005) no emmuvna TUE AADDADAMTALT AOTAANANIA Form 1120 (2005) GWITCHYAA ZHEE COR PORATION 92-0044903 Pages Schedule J | Tax Computation (see instructions) 1 Check if the corporation is a member of a controlled group > Important: Members of a controlled group, see instructions. 2a If the box on line 1 is checked, enter the corporation's share of the $50,000, $25,000, and $9,925,000 taxable income brackets (in that order): (1) (2) |$ | (3) |$ b Enter the corporation's share of: (1) Additional 5% tax (not more than $11,750) $ _ (2) Additional 3% tax (not more than $100,000) |$ 3 Income tax. Check if a qualified personal service corporation STMT 3 (see instructions) ooo cceeeceeeeereeeee > 3 126,624. 4 Alternative minimum tax (attach Form 4626) 4 5 Add lines 3 and 4 . cose 5 126,624. 6a Foreign tax credit (attach Form 1118) —= 6a _ b Possessions tax credit (attach Form 5735) cc cccececeveeveceeveceeeee 6b c Credits from: Form 8834 Form 8907, line23 6c d General business credit. Check box(es) and indicate which forms are attached: Form 3800 Form(s) (specify) D> ee 6d e Credit for prior year minimum tax (attach Form 8827) . 6e _ f Bond credits from: Form 8860 Form 8912 6f 7 Total credits. Add lines 6a through 6f 7 8 Subtractline 7 fromline5 oes 8 126,624. 9 Personal holding company tax (attach Schedule PH (Form 1120)) a. 9 10 Other taxes. Check if from: Form 4255 Form 8611 Form 8697 Form 8866 Form 8902 Other (attach schedule) 10 11 Total tax. Add lines 8 through 10. Enter here and on page 1, line 31 1 126,624. Schedule K | Other Information (see instructions) 1 Check accounting method: a Cash b LX] Accrual Yes | No _|7 Atany time during the tax year, did one foreign person Yes | No ¢ 1 Other (speci) Pe Vollg power ofall dasses of stock of te corporation 2 See the instructions and enter the: entitled to vote or (b) the total value of all classes of stock a Business activity code no.» 523900 of the corporation? x b Business activity BP» NATIVE CORPORATION INVESTMENTS, UTILITI 3 At the end of the tax year, did the corporation own, directly or © Product or service > indirectly, 50% or more of the voting stock of a domestic corporation? (For rules of attribution, see section 267(c).) If Yes," attach a schedule showing: (a) name and employer identification number (EIN), (b) percentage owned, and (c) taxable income or (loss) before NOL and special deductions of such corporation for the tax year ending wi within your tax year. 4 — |s the corporation a subsidiary in an affiliated group or a parent-subsidiary controlled group? If "Yes," enter name and EIN of the parent corporation > ith or 5 Atthe end of the tax year, did any individual, partnership, corporation, estate, or trust own, directly or indirectly, 50% or more of the corporation's voting stock? (For rules of attribution, see section 267(c).) ae If Yes," attach a schedule showing name and identifying number. (Do not include any information already entered in 4 above.) Enter percentage owned D> 6 During this tax year, did the corporation pay dividends (other than stock dividends and distributions in exchange for stock) in excess of the corporation's current and accumulated earnings and profits? (See sections 301 and 316.) If Yes," file Form 5452, Corporate Report of Nondividend Distributions. If this is a consolidated return, answer here for the parent corporation and on Form 851, Affiliations Schedule, for each subsidiary. If "Yes," enter: (a) Percentage owned > and (b) Owner's country > ¢ The corporation may have to file Form 6472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. Enter number of Forms 5472 attached P> 8 Check this box if the corporation issued publicly offered debt instruments with original issue discount ____ If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. 9 Enter the amount of tax-exempt interest received or accrued during the tax year B> $ 10 Enter the number of shareholders at the end of the tax year (if 100 or fewer) D> 11 If the corporation has an NOL for the tax year and is electing to forego the carryback period, check here > If the corporation is filing a consolidated return, the statement required by Temporary Regulations section 1.1502-21T(b)(3) must be attached or the election will not be valid. 12 Enter the available NOL carryover from prior tax years (Do not reduce it by any deduction on line 29.) B $ 14,609. 13 Are the corporation's total receipts (line 1a plus lines 4 through 10 on page 1) for the tax year and its total assets at the end of the > M-1, and M-2 on page 4. Instead, enter the total amount of cash distributions and the book value of property distributions (other than cash) made during the tax year. > $ Note: If the corporation, at any time during the tax year, had assets or operated a business in a foreign country or U.S. possession, it may be required to attach Schedule N (Form 1120), Foreign Operations of U.S. Corporations, to this return. See Schedule N for details. 511621 t2-12-05 JWA IN11NT TAECNR@Q AVWANNANT 9NNeR nanni 5 OWUTMAUVAA FUER ANDDADAMTART Form 1120 (2005) ATAANANI Form 1120 (2005) GWITCHYAA ZHEE CORPORATION 92-0044903 rage 4 Note: The corporation is not required to complete Schedules L, M-1, and M-2 if Question 13 on Schedule K is answered "Yes." [ Schedule L | Balance Sheets per Books Beginning of tax year ee End of tax year Assets (a) _(b) (c) _(d) 1 Cash. es = 79,015. | 204,219. 2a Trade notes and accounts receivable 502,742. 677,987. b Less allowance for bad debts __ ( 41,9764 460,766. 41,9764 636,011. Inventories _103,025. | 168,720. U.S. government obligations Tax-exempt securities Other current assets (att. sch.) Loans to shareholders Mortgage and real estate loans ONDA ed w 9 Other investments (att. sch.) . 10a Buildings and other depreciable assets b Less accumulated depreciation 11a Depletable assets b Less accumulated depletion 12 Land (net of any amortization) 1a Intangible assets (amortizable only) b Less accumulated amortization _. STATEMENT OF SEE ISEE STATEMENT OF _ (CONSOLIDATED 804, 697.(CONSOLIDATED 903,800. BEGINNING _____ ENDING BALANCE SHEET BALANCE SHEET 2,943,362. 3,016,052. (2,583,893, 359,469.|( 2,709,688 306,364. re ! ( } 218,296. 218,296. 18,673. 18,673. ( 18,6734 ( 18,6734 p22, aad, 14 Other assets (att. sch.) 2,425. 15 Totalassets ce 2,027,693. 2,439,834. Liabilities and Shareholders’ Equity 16 Accounts payable a 29,648. 17,590. 17 Mortgages, notes, bonds payable in less than 1 year 18 Other current liabilities (att. sch.) | 99,885.| 20,103. 19 Loans from shareholders 20 Mortgages, notes, bonds payable in 1 year or more 342,204. | 308,948. 21 Other liabilities (att. sch.) 14,280. 171,065. 22 Capital stock: a Preferred stock b Common stock 3,142,095. 3,142,095. 3,209,417. 3,209,417. 23 Additional paid-in capital . 24 Rppropriated tach schedule -34,875. | = 34,875. 25 Retained earnings - Unappropriated -1,573,915. -1,253,443. 26 equity (attach schedule) 8,371. 1,029. 27 Less costoftreasurystock ( ) Lt ) 28 Total liabilities and shareholders’ equity 2,027,693. 2,439,834. Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return (see instructions) 1 Net income (loss) per books 2 Federal income tax per books 3 Excess of capital losses over capital gains 4 Income subject to tax not recorded on books this year (itemize): 313,132. 126,624. 5 Expenses recorded on books this year not deducted on this return (itemize): 7 Income recorded on books this year not included on this return (itemize): Tax-exempt interest $ 8 Deductions on this return not charged against book income this year (itemize): a Depreciation $ 32,312. a Depreciation... $ b Chartanle $ 10,998. bSatibutions ...... $ 13,346. antertanment 56,656. 20,068. 20,068.) 9 Addlines7and8 56,656. 6_Add lines 1 through 5 _ _ 459,824 ./10 Income (page 1, line 28) - line 6 less line 9 403,168. Schedule M- > | Analysis of Unappropriated Retained Earnings per Books (Line 25, Schedule L) 1 Balance at beginning of year -1,573,915.| 5 Distributions: a Cash 2 Net income (loss) per books 313,132. b Stock 3 Other increases (itemize): ¢ Property =. 6 Other decreases (itemize) : 11,333. 18,674.) 7 AddlinesSand6 : | 11, 333. 4 Addlines1,2,and3 -1,242,109.| 8 Balance at end of year (line 4 less line 7) ~1,253,442. Sots UWA SEE CONSOLIDATED SCHEDULES M-1 AND M-2 Form 1120 (2005) IN11NT TALNQQ AyAnwaNnt INNR nanni je FUDD ANDDADAMTAAT COT AANANA DEPT USE ONLY FORM AMENDED ALASKA CORPORATION NET INCOME TAX RETURN 04-611X e Federal EIN EIN used on original return, if different For the tax year ended: 92-0044903 APRIL 30, 2006 Name Telephone Number GWITCHYAA ZHEE CORPORATION Mailing Address Fax Number PO BOX 329 City State ZIP Code E-Mail Address FORT YUKON AK 99740 NA a | Contact Person Title Contact Telephone Number Name used on original return, if different from above Is the corporation currently under audit YES NO by the Alaska Department of Revenue? x Note: Complete Part III only to carry back net operating losses and net capital losses PART I. ALASKA TAX SUMMARY | ,, originsly reported Net ange colect DEPT USE ONLY orasadjusied (Explain in Part II) amount 1. Apportionable income 439,227. 11,350. 450,577. 2. Alaska apportionment factor 1.000000 _ 1.000000 3. Alaska apportioned income. 439,227. 11,350. 450,577. 4, Non-business income (loss) 6,250. __-6,250. 5. Alaska items . -13,750. -13,750. 6. Alaska Income (Total of lines 3, 4,5). 445,477. -8,650. 436,827. 7. Alaska net operating loss deduction 73,842. 73,842. 8. Alaska Taxable Income 371,635. -8,650. 362,985. 9. Alaska Income Tax 30,386. -225. 30,161. 10. Other Taxes 11. Federal-based credits _ 12. Total Tax (Total of lines 9, 10,11) 30,386. -225. 30,161. 13. Incentive Credits . 14. Alaska Education Credit | 15. Net AK income tax. (Total of lines 12, 13, 14) 30,386. -225. 30,161. 16. Net payments. (Total previous payments less total previous refunds, credits, penalties and interest) 30,386. 17. (a) If tax on line 15, column (c) is larger than net payments on line 16, enter tax due... (b) Interest on amount on line 14(a) from to (See instructions for interest rates) (c) Total amount due occ : _ | 18. If prepayments on line 16 are larger than tax on line 15, column (c), enter overpayment _ 225. ADDITIONAL REQUIRED INFORMATION. a compiete copy of the federal amended return, if filed, must be provided to constitute a complete amended return. | declare, under penalties of perjury, that an original return has been filed for this corporation and that | have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief this amended return is true, correct, and complete. If prepared by a person other than the taxpayer, preparer's declaration is based on all information of which preparer has knowledge. — DEPT USE ONLY | Officer's Date Title CFWD Signature Preparer's Date Check if Preparer's SSN or PTIN = Signature LA self- (GO 6 employed 574-20-4985) APPROVED Firm's namé ( (or EIN yours ifsel WILSON & WILSON CPAS, INC. 92-0135287 DATE employed) 344 MINNIE STREET ZIP Code andaddress FAIRBANKS, ALASKA 99701 Forms 04-611X (Rev. 01/03) §36471 01-05-06 AN11NT TAENEQ ANAANANT Anneke nanni 1 ONITMOAIVA DA DEPT USE ONLY Validation Number: TUE ANDDNADAMTAN OTAANANIA PART Il. EXPLANATION OF CHANGES PART Ill. APPLICATION FOR TENTATIVE REFUND BASED ON CARRYBACK OF NET OPERATING LOSS OR CAPITAL LOSS Name Few! EIN Telephone Number Mailing Address Fax Number City State ZIP Code E-Mail Address Contact Person Title “| Contact Telephone Number Name used on original return, if different from above Is the corporation currently under audit by the Alaska Department of Revenue? YES | NO 1. This application is to carryback: a. Net operating loss b. Net capital loss 2. Loss year, Tax Year ended Computation of Decrease in Tax Taxable income from tax return Net capital loss deduction _ Subtract line 4 fromline3 Net operating loss deduction after carryback Taxable income. Subtract line 6 from line 5 Income Tax Credits cece Other taxes cl cceeeesseeseeeses Net inc tax. Subtract line 9 from line 8 and add line 10 Net payments. (Total previous payments less total previous refunds, credits, penalties and interest) Enter amounts from line 11, columns (b), (d) and (f) Net Overpayment. Subtract line 13 from line 12 Total refund claimed LPPNONEwW 10. 11. 12. 13. 14, 15. FSN: DEPARTMENT USE ONLY FSN: ESN: b> Taxpayer C ompletes The Following: W 3rd preceding tax year 2nd preceding tax year 1st preceding tax year (a) Before Carryback (c) Before (d) After (b) After Carryback Carryback Carryback (e) Before Carryback (f) After Carryback and to the best of my knowledge and belief it is true, correct, and complete. If prepared by a person other than the taxpayer, preparer's declaration is based on all information of which preparer has knowledge. DEPT USE ONLY Officer's Signature Date Title CFWD Preparer Signature ALANW A [3 Date ZOD Check if self-employed Preparer's SSN or PTIN REFUND Se APPROVED Firm's name (or yours if self- employed) and address EIN ZIP Code DATE Form 04-611N (Rev. 01/03) 536481 01-05-06 1N11NT TAENEQ AGAANMANT 9NNeR nanni1 DEPT USE ONLY Validation Number: 2 OWMTMAUVAA TUR AADDADAMTART COTAANONA FORM ALASKA CORPORATION NET INCOME TAX RETURN 2005 04-611 For the calendar year 2005 or the taxable year beginning FEN, SEQ Pesetnent Tate z MAY 1 ,2005andending APR 30,2006 Federal EIN Alaska Corporation File # NAICS Code Alaska Business License # 92-0044903 __| 523900 Name Telephone Number GWITCHYAA ZHEE CORPORATION _ Mailing Address Fax Number PO BOX 329 City State ZIP Code E-Mail Address FORT YUKON AK 99740 NA Contact Person Title Contact Telephone Number Check applicable boxes: Yes No (Check Yes or No) RETURN DATA LX] 1. |s a federal extension in effect? If yes, attach a copy of Form 7004. First Alaska return LX] 2. 1s this an information report for a corporation that is inactive in Alaska? Final Alaska return LX} 3. Is this a non-affiliated corporation doing business only in Alaska with an Name or address change since last year apportionment factor of 1.00? Note: If yes, use Short Form 04-611SF. Limited Liability Company (LLC) LX] 4. 1s this a water's edge combination? See AS 43.20.073. If yes, Schedule B, Exempt organization (see instructions) question #1 must be completed. S-Corporation (Attach 1120S) LX J 5. Is this a consolidated Alaska return including more than one corporation with Homeowners Association (Attach 1120H) Alaska business activity? If yes, complete Schedule B, question #1. LX] 6. Are any business activities conducted by a member of the affiliated group excluded from the combined report as non-unitary business activities? SCHEDULE A - NET INCOME TAX SUMMARY DEPT USE ONLY 1. Alaska income (loss) from ScheduleH 1 436,827. 2. Alaska net operating loss deduction (attach schedule) 73,842 ./NL 3. Alaska taxable income. Subtract line 2 from line 1 362,985./TI 4. Alaska income tax from Schedule D, line 7 30,161.|1x 5. Other taxes from Schedule E, line 8 ce OT 6. Federal-based credits from Schedule F, line 16 __ ( jjCR 7. Total Tax. Sum oflines 4,5and6 30,161. 8. Incentive Credits (see instructions) ( yc 9. Education Credit from Schedule G, line 4 |. . . | ( LEC 10. Net Alaska income tax (line 7, net of lines 8 and 9) if more than $500, attach Form 04-708 cpesutrituasiivttssviissiasevieees 10 30,161.(|NT 41. Payments from Page 3, ScheduleC i ccccceeeeeee 11 PT 12. Tax due. If line 10 is larger than line 11, enter amount of tax due 12 30,161. 13. Overpayment. If line 11 is larger than line 10, enter amount overpaid __ ee 13 14, Penalty for underpayment of estimated tax (Form 04-708, line 18, see instructions) 14 1,997.\uP 15. Penalty for failure to file (see instructions) cece 15 PF 16. Penalty for failure to pay (see instructions) 16 PP 17. Interest (see instructions) voces Se ITE ev IT NOT 17 IN 18. Total amount due (overpaid). Line 12 plus lines 14-17, or line 13 less lines 14-17 18 32,158. 19. Overpayment credited to 2006 estimated tax 19 CF 20. Refund (line 18 reduced by line 19) .... 20 RF | declare, under penalties of perjury, that | have examined this return, including accompanying schedules and statements, and to the best of my knowledge DEPT USE ONLY and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. CFWD Officer's Date Title Signature REFUND Preparer's Date Check if Preparer's SSN or PTIN | Signature self-employed 574-20-4985 APPROVED Firm's name (or E.I. No. yours if self- WILSON & WILSON CPAS, INC. 92-0135287 DATE employed) 344 MINNIE STREET ZIP Code and address FAIRBANKS, ALASKA 99701 Siitoe Form 04-611 Webform (Rev 12/05) Alaska Corp Net Income Tax Return 3 Dept Use Only Page 1 validation Number: 1N11NT TARNQQ AWAANANT QNNR NANNA AwTMAUVARA TURD ANDDADAMTARAT CTAANANI1 SCHEDULE B - TAXPAYER INFORMATION 1. Affiliated Taxpayer Information. Complete the following information for all Alaska taxpayers included in the affiliated group of the taxpayer(s): List only those corporations having nexus in Alaska. You may also use this schedule to satisfy information reporting requirements of affiliated corporations registered to do business in Alaska which have no business activity in the state. (a) (b) (c) (@) (e) ( (9) (h) ) Ws ths an Year Included|included| Alaska corpo- | Began State of federal ‘oe Name and Address of each Alaska taxpayer Federal Alaska Business ration, Doing a Consoli-| payer" N in the affiliated group Employer Corporation License YIN wns mercial fated in this 7 eid ; : i Number eturn | return (Attach schedule if additional space is required) !D Number File Number Alaska \Domicile| Y/N YIN | | 2. |f any taxpayer included in this return is included in a federal 3. If this is the first return, indicate whether: 4. Name and address on your prior year's return if different consolidated return (Form 1120), provide the Name, Address, New business from page 1. State the reason for the change (e.g., merger, and Federal Employer Identification Number of the common name change, etc.) parent of the federal consolidated group: . a | |__| Successor to previously existing business Name: EIN: Address: Name: Enter name, address and federal Employer Identification Address: Number of previous business: EIN: Reason: Name: Address: eoetee Form 04-611 Webform (Rev 12/05) 4 Alaska Corp Net Income Tax Return Page 2 NAME: EIN: GWITCHYAA ZHEE CORPORATION 92-0044903 TAX RATE SCHEDULE (AS 43.20.011) If your Alaska taxable income is: (5) SCHEDULE C (2) Of The TAX PAYMENT RECORD (1) But Less (3) (4) Amount At least Than Your Tax Is Plus Over -0- 10,000 -0- 1% -0- Estimated Payments Date Amount 40,000 20,000 100 2% 10,000 (1) 04-714 20,000 30,000 300 3% 20,000 (2) 04-714 30,000 40,000 600 4% 30,000 Toy 40,000 50,000 1,000 5% 40,000 (3) 04-714 50,000 60,000 1,500 6% 50,000 (4) 04-711 60,000 70,000 2,100 7% 60,000 Tentative Tax 04-709 ns ee y ’ ? ° . Less: Quick Refund (Form 4466) ( J 80,000 or More 4,500 “i 80,000 Total Payments to Schedule A, Line 11 $ SCHEDULE D - ALASKA TAX COMPUTATION A B 1. Alaska taxable income from ScheduleA, line3 1 362,985. 362,985. 2. Net capital gain from Schedule J, line 18, but not more than line 1. Ifline 1isaloss, enterzero voce voeveeveveee 2 3. Ordinary income. Subtract line 2 from line 4. If less than zero, enter zero __ 3 362,985. 362,985. 4. To compute the tax on ordinary income, apply the amount on line 3 to the Tax Rate Schedule (a) Tax from column 3 of the TaxRate Schedule 4a 4,500. 4,500. (b) Ordinary income from line 3 above coe 4b 362,985. 362,985. (c) Amount from column 5 of the Tax Rate Schedule 4c 90,000. 90,000. (d) Excess. Subtract line 4c fromline4b 4d 272,985. 272,985. (e) Percent from column 4 of the Tax Rate Schedule 4e -094000 -094000 (f) Multiply fine 44 by fine 4 ccc ceeeennenttsenennesnee at 25,661. 25,661. (g) Tax on ordinary income. Add lines 4a and 4f 4g 30,161. 30,161. 5. Tax on net capital gain. Multiply line2by4.5% 5 6. Alaska income tax.Addlines4gand5. 6 30,161. 30,161. 7. Enter the lesser of line 6, column A or B here and on Schedule A, line 4 7 30,161. SCHEDULE E - OTHER TAXES (AS 43.20.021) A B 1. Alternative minimum tax from federalForm 4626 ta X 18% tb 2. Credit for prior year minimum tax from Form 1120, Schedule J (see instructions) 2a x 18% 2b_|( ) 3. Other federal taxes (attach schedule) . 3a x 18% 3b 4. Total other taxes. Add lines 1b through 3b 4 5. Alaska apportionment factor, from Schedule |, line 5 5 6. Multiply line 4 by Hime ic cecaeessaees occ ce eevee vevestitesievessiesietessrisiititeneitevesitesseseseeeeeeavenes 6 7. S-Corporation corporate level taxes, see instructions (attach Schedule) 7 8. Add lines 6 and 7. Enter here and on Schedule A, line 5 occ ceceecceveveveveveveveveees 8 Form 04-611 Webform (Rev 12/05) Alaska Corp Net Income Tax Return Page 3 536321 01-11-06 5 OUITMATIVA DR FUE ANDDADAMTARAT OTAANANIA 1A11NT TAELENQQ AGNAAN,ANT NNNR nanni NAME: EIN: GWITCHYAA ZHEE CORPORATION 92-0044903 SCHEDULE F - CREDITS 1. Current year general business credit (a) Current year federal general business credit (Part |, federal Form 3800) ooo... occ ccccccusecseecsececsseeseesssssesevessesvseeees ja (b) Current year federal investment tax credit (line 5, Part |, federal Form 3468) tb (c) Current year credit for employer social security and Medicare taxes paid on certain employee tips (line 6, Part |, federal Form 8846) coveceevetettteteveeeee, {1 (d) Current year trans-Alaska pipeline liability fund credit (line 1g, Part \ federal Form 3800) a . {Ad _| (e) Unallowed credits froma an n electing large partnership ‘included in line ta (see instr) te If (f) Totaloflines 1b through te (g) Current year Alaska general business credit. (Subtract line if from 1a) Alaska apportionment factor from Schedule |, lineS Multiply line 1g by line 2 Multiply line3by 18% = Alaska general business credit carryover (attach schedule) and Alaska investment credit (see instructions) Tentative general business credit. Addlines4and5 = Alaska income tax from Schedule A, line 4 Dceereeyeeeteereee PNOO PWN Other federal-based credits that reduce regular tax before the general business credit (a) Nonconventional source fuel credit (line 12d, Part Il, federal Form 3800) «| 8a (b) Qualified electric vehicle credit (line 12e, Part II, federal Form 3800) 8b (c) Total other federal-based credits. Add lines 8a and 8b 9. Multiply line 8c by line 2 10. Multiply line 9 by 18% 41. Enter smaller ofline7orline10 12. Subtract line 11 fromline7 ee 13, Ifline 12 is greater than $4, 500, enter 25% of the excess 14. Subtract line 13 from line 12 15. Enter lesser ofline6orline 14 16. Total federal-based credits allowed. Add lines 1 and 15 and enter on Schedule A, line 6 8c 10 11 12 13 14 15 16 17. Alaska general business credit carryforward. Subtract line 15 from line 6 (but not less than zero) Secevenssevvsuigeteveseeureesueevewesevaveevasenueeeiieeeuseeys 7 SCHEDULE G - EDUCATION CREDIT (AS 43.20.014) Taxpayers may claim as a credit a portion of contributions to qualifying Alaska colleges and universities. See Instructions for limitations and more detail. Pa Ni Coll Universit Contribution(s yor lame of College or University pate ‘| Amount L_ 1. Total qualified contributions. See Instructions. Enter here and on Schedule Kine 20 ccteeeeeee ee 1 2. Multiply the lesser of line 1 or $100,000 by50% 2 2 3. Enter 100% of the next $100,000 of contributions 3 4, Total allowable credit. Add lines 2 and 3. Enter here and on line 9, Schedule A. See instructions for limitations 4 Form 04-611 Webform (Rev 12/05) Alaska Corp Net Income Tax Return 536322 01-11-06 6 1N11NT TERNGA AVWANNANT XONNR NANNA ewTMoUuVvAnR FURR ANDDADAMTOAN Page 4 ATAANAN1 NAME: EIN: GWITCHYAA ZHEE CORPORATION 92-0044903 SCHEDULE H - COMPUTATION OF ALASKA INCOME 1. Federal taxable income (loss), Form 1120, line 28, or Form 1120A, line 24, as actually filed by taxpayer or taxpayer's federal consolidated QrouD ooo ooo 1 403,168. 2. Adjustments for combined reporting. Affiliated taxpayers only. (Attach schedules - by company): (a) Add: Form 1120, line 28 income (loss) of domestic unitary corporations not included in line 1 with 20% or greater U.S. factors TI 2a (b) Add: Foreign unitary corporations with 20% or greater U.S. factors erie a 2b (c) Add: Federally exempt qualifying foreign trade income, FSC profit before federal exemption, income from DISC's and tax haven corporations esbecesectesbatles 2c (d) Remove: Federal taxable (income) loss of nonunitary corporations included ive ce cic cesss ees vessrsseesessessveseaereeseseesesevess Plctelhe 2d (e) Remove: Federal taxable (income) loss of unitary corporations included in line 1 whose average U.S. factors are less than 20% le 2e (f) _ Intercompany eliminations (see instructions) _. . me 2f (g) Total adjustments for combined reporting. Add lines 2a through af. oe 7 7 29 3. Net income before state modifications and adjustments. Add lines 1 and 2g , aa tI) lis: 403,168. 4. Additions for items deducted in line 3 above (Attach schedules - by company): (a) Taxes based on or measured by net income : aaaeenen 4a 30,161. (b) Expenses incurred to produce non-business income 7 . el . (4b (c) Federal charitable contributions from federalForm 1120,line19 L4e 17,248. (d) Net section 1231 losses from federal Form 4797, line 11 ee cl (iad (e) Other (attach detailed schedule by type) 4e (f) Total additions (add lines 4a through 4e) 4f 47,409. 5. Total. Add lines 3 and 4f Te raedtesectdleseetleatecealadeadae Lcletbctalectelecheledesleshetedestactetthaedestislosstoleelecestedel 5 450,577. 6. Subtractions for items included in line 3 above (Attach schedules - by company): (a) Interest from obligations of the United States Weebl teededhelostelabedecbells te [ULOd (b) Intercompany dividends between members of the water's edge group. 6b (c) Section 78 gross-up dividends u elle : 6c (d) 80% of dividends received from foreign corporations teeth! : 6d (e) 80% of royalties accrued or received from foreign corporations . Weelee 6e (f) Non-business income (attach detailed schedule by type) vocceceeeccseee, Lf (g) Federal Form 1120, line 8 capital gain income not included in line 6(f) : cee. {89 (h) Net section 1231 gains from federal Form 4797, line 12 I I 6h (i) Other (attach detailed schedule by type) le an . a 6i (j) Total subtractions (add lines 6a through 6i) elect tecesleteleetellcheceeledestsbelledestetleleches §j 7. Apportionable income (loss). Subtract line 6j from line 5 7 450,577. 8. Apportionment factor from Schedule |, lin@5 eee ee cee ee eee 8 1.000000 9. Income (loss) apportioned to Alaska (line 7 times line Be 9 450,577. 10. Non-business income (loss) net of expenses allocable to Alaska (attach schedule by company and type) 10 11. Alaska items: (a) Alaska capital and section 1231 gain (loss) from Schedule J, line20. : 11a (b) Alaska charitable contribution deduction from Schedule K, line 10. : vec. [11d | ( 13,750. ) (c) Alaska dividends-received deduction from Schedule L, lineQ vecceceeeeeeee, Ll1e [( ) (d) Total (add lines 14a through 140) ooo cccseseessttesstesestetesseesseeessees id -13,750. 12. Alaska taxable income (loss) before net operating loss. ‘Add lines 9, 10 and 11d. Enter here ‘and onScheduleA, linet = eee . 12 436,827. SCHEDULE | - APPORTIONMENT FACTOR Compute to 6 Decimal Places A B c Total Within Alaska Total Within & Without Alaska A divided by B 1. 1 2. 2 4, Total of ings 4,2 and 3,COWUMA Css sehededlerssheledeedeaplonsed 4 5. Alaska apportionment factor. Divide line 4 by 3 (if less than 3 factors. are 2 used, see instructions) Ae sbeledbelectadebeveate 5 536431 / 01-11-06 Form 04-611 Webform (Rev 12/05) Alaska Corp Net Income Tax Return Page 5 7 1N11NT TALNR@Q AGaAANMANT QANE NANN1A matTmMouUVvAA TUBE ANDDADAMTAAT CTONNAN1 NAME: GWITCHYAA ZHEE CORPORATION EIN: 92-0044903 Pensa OP PNDMN 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. FPFon>s 2g Pe Pnm +2 PNM Pw 9. 536331 01-11-06 TATINT TALNEQ AVGAANANT SCHEDULE J - ALASKA CAPITAL AND SECTION 1231 GAINS AND LOSSES Section 1231 Gains and Losses A Combined B_AK Factor C Alaska Gain or (Loss) Current section 1231 gains and (losses). If a loss enter the result on line 19 1 Alaska non-recaptured net section 1231 losses from prior years. Enter as a positive number . 2 If line 1C is a gain, subtract line 2 from line 1C, but not less than zero. Enter here and on line 15 3 If line 1C is a gain, enter the lesser of line 1C or line 2 here and on line 19, otherwise enter zero 4 Short-Term Capital Gains and Losses Total current short-term capital gains and (losses) 5 Non-business short-term capital gains and (losses) 6 Apportionable STCG/(L). Subtract line 6 from line 5 and apportion - 7 Non-business STCG/(L) allocable to Alaska 8 Alaska unused capital loss carryover ooo 9 ) Net short-term capital gain or (loss), add lines 7C, 8, and 9 coe 10 Long-Term Capital Gains and Losses Total current long-term capital gains and (losses) 11 Non-business long-term capital gains and (losses) 12 Apportionable LTCG/(L). Subtract line 12 from line 11 and apportion 13 _ Non-business LTCG/(L) allocable to Alaska 14 Enter amount from line 3 voc vevevueveveteteeee ete e bette eee EEE oo 15 Net long-term capital gain or (loss). Add lines 13C, 14, and 156 | 16 Summary Excess net short-term capital gain, line 10, over net long-term capital loss, line 16 17 Alaska net capital gain. Excess net long-term capital gain, line 16, over net short-term capital loss, line 10. Enter here and on Schedule D, line2 ........ [18 __| If line 1C is a loss, enter here, otherwise enter the amount fromline4 19 Add lines 17, 18, and 19. Enter here and on Schedule H, line11a 20 SCHEDULE K - ALASKA CHARITABLE CONTRIBUTION DEDUCTION Current charitable contributions eae TTT Oa 1 6,250. Contributions from Schedule G, line 1 included inline tabove 2 Subtract line 2 from linet co ete tent een 3 6,250. Apportionment factor from Schedule |, line 5. Corporations operating only in Alaska, enter 1.0 4 1.000000 Current Alaska charitable contributions. Multiply lineSbyline4 5 6,250. Alaska excess charitable contribution carryover from prior years. Enter as a positive number | 6 7,500. Add HINES 5 ANG 6 cocccccssssssssstssssntssssseensseensnssssinnssssniseseseusssesiuisssssussessenenes 7 13,750. Enter the sum of Schedule H, lines 9, 10, and 11a, but not less than zero. 8 450,577. Multiply line 8 times 10% 9 45,058. Alaska charitable contribution deduction. Enter the lesser of line 7 or line 9 here and on Schedule H, line tb. 10 13,750. Alaska excess charitable contribution carryover. Line 7 minusline10 11 SCHEDULE L - ALASKA DIVIDENDS-RECEIVED DEDUCTION (DRD) Dividend income included in Schedule H, Hine Bocce cccccsesessseesseessreverevssessressvevevessessssiveteresreesssssusaveeeviveee 1 Less: Dividends not eligible for DRD (do not include any dividend in more e than of one e line below): (a) Intercompany dividends from Schedule H, line6b 2a (b) Section 78 gross-up dividends from Schedule H, line 6c . . coe _. [2b (c) 100% of dividends from foreign corporations. Divide Schedule H, line 6d by .8 2c (d) Dividends subtracted on Schedule H, line 6fas non-business income 2d (e) Total subtractions (add lines 2a through 2d) 2e Total. Subtract line 2e fromline4 eee ses eee eenisssscessessesisesscsseessssiesinseietnieseees 3 Apportionment factor from Schedule |, line 5. Corporations operating only in Alaska, enter 1.0 4 Apportioned dividends (multiply line 3 by line 4). 5 Add dividends allocable to Alaska included on Schedule H, line 10 6 Total dividends included in taxable income (add lines 5 and 6) ooo... ecccecccceccoceeeeeceeee testes eeee pene teense 7 DRD prior to limitations (segregate dividends in line 7 and multiply by proper % A Apportioned Dividends B Percentage C_DRD (Ax 8) (a) Dividends qualifying for 100% deduction = 8a 100% (b) Dividends qualifying for 80% deduction __ 8b 80% (c) Dividends qualifying for 70% deduction 8c 70% (d) Other, if applicable (enter % incolumnB) 8d Tentative dividends-received deduction. Add lines 8a through 8d, column C. Enter here and carry the deduction, subject to IRC 246 limitation based upon Alaska taxable income, to Schedule H, line 11c (see instructions) 9 Form 04-611 Webform (Rev 12/05) Alaska Corp Net Income Tax Return Page 6 ANN nanni <n 7ULPHD ANDDADAMTNAAT OTAANAN1 NAME: GWITCHYAA ZHEE CORPORATION EIN: 92-0044903 UNDERPAYMENT OF ESTIMATED TAX BY CORPORATIONS Attach to your tax return PART 1. How to compute the underpayment. 4. Net income tax from Schedule A, line 10, Form 04-611, 04-611SF or 04-650 2. Personal holding company tax included in Schedule D, line 4g, Form 04-611 or 04-650, or line 4, Form 04-611SF 3. Subtract line 2 from line 1. If the result is less than $500, do not complete the rest of this form. No penalty is due 4, (a) Enter 100% of line 3 (b) Enter 100% of the tax shown on your return for the previous year if tax was reported. (See instructions) __ (c) Enter the lesser of line 4(a) or line 4(b) 5. Enter in columns A through D the installment due dates (the 15th day of the 4th, 6th, 9th and 12th months of thetaxyear) oo ves occ tesessseees 6. Enter 25% of line 4(c) in columns A through D unless (a) or (b) below applies to the corporation: (a) If you use the annualized income installment method and/or the adjusted seasonal installment method, check here! and enter the required installment. (Attach federal worksheet with Alaska numbers) (b) If you are a “large corporation," check this box and see the instructions for the amount to enter in each column of line 6 | 7. Amount paid or credited for each period. (For column A only, enter the amount from line 7 on line 11) Complete lines 8 through 14 for one column before completing the next column. 8. Enter the amount, if any, from line 14 of the previous column veces . 9. Addlines7and8 10. Add amounts on lines 12 and 13 of the preceding column |. voces 11, Subtract line 10 from line 9. If less than zero, enter zero. (For column A only, enter the amount from line 7) 12. Remaining underpayment from previous period. If the amount on line 11 is zero, subtract line 9 from line 10 and enter the result. Otherwise, enter zero Underpayment. If line 11 is less than or equal to line 6, subtract line 11 from line 6, enter the result, compute the penalty in Part 2, and then go to line 8 of the next column. Otherwise, go to line 14 13. 14. Overpayment. If line 6 is less than line 11, subtract line 6 from line 11 and enter the result. Then go to line 8 of the next column PART 2. How to compute the penalty. 15. Enter the date of payment or the 15th day of the 3rd month after the close of the tax year, whichever is earlier. (See instructions) cooccceeee Number of days from the due date of the installment on line 5 to the date shown on line 15 16. 17. Number of days on line 16 divided by the number of days in the tax year times the applicable rate (see instructions) times the amount on line 13 de21.05 Form 04-708 (Rev. 11/00) TNI1TNT TARNQQ AWAANANT 30,161. 30,161. 30,161. 30,161. A c D 08/15/05 10/17/05 01/17/06 04/17/06 7,540. 7,541. 7,540. 7,540. 7,540. 15,081. 22,621. Q. 7,540. 15,081. 22,621. 7,540. 7,541. 7,540. 7,540. $ 759 .|$ 620. $ 411./$ 207. ANNE nann1 SEE STATEMENT 2 18. Add amounts on line 17, columns A through D. Enter here and on Schedule A, line 14 of Form 04-611, 04-611SF or 04-650 9 1,997. OWUTMAUVAA FUER ANDDADAMTAAT ATAANANA GWITCHYAA ZHEE CORPORATION 92-0044903 ¢ 04-611 NET OPERATING LOSS DEDUCTION STATEMENT 1 LOSS PREVIOUSLY LOSS TAX YEAR LOSS SUSTAINED APPLIED REMAINING 04/30/05 73,842. 0. 73,842. TOTAL NET OPERATING LOSS CARRYOVER AVAILABLE THIS YEAR 73,842. -~JRM 04-708 COMPUTATION OF UNDERPAYMENT PENALTY STATEMENT 2 = EVENT REMAINING PERIOD OF DAYS INTEREST AMOUNT OF AMOUNT TYPE UNDERPAYMENT UNDERPAYMENT RATE PENALTY ~ Q 7,540. 08/15/2005 07/15/2006 334 11.00% 759. ~ Q 7,541. 10/15/2005 07/15/2006 273 11.00% 620. ~ Q 7,540. 01/15/2006 07/15/2006 181 11.00% 411. \ Q 7,540. 04/15/2006 07/15/2006 91 11.00% 207. «OTAL TO FORM 04-708, LINE 18 1,997. EVENT TYPE: Q AMOUNT UNDERPAID AT START OF QUARTER P = PAYMENT OR WITHHOLDING R = INTEREST RATE CHANGE L = SWITCH TO OR FROM A LEAP YEAR 10 1N11NT TAERNQ@Q AQANATANT QONNE nanni OWTMOAUVAA TUER ANDDADAMTAAT STATEMENT(S) 1, 2 CTAANANA Appendix E Gwitchyaa Zhee Forest Stewardship Plan Prepared by: Telephone: CSNrEie Se ete Se ee ; Alaska Village Initiatives 1577 C Street Anchorage, Alaska 99501 (907) 274-5400 @akvillage.com Table of Contents Introduction Property Description Plan Objectives 1. Integrated Resource Management 2. Timber Harvest 3. Reforestation and Silviculture 4, Private Lands Wildlife Management 5. Forest Health Resource Inventories 1. Forest Typing and Mapping 2. Soil Survey 10 Year Action Plan Maps Introduction Gwitchyaa Zhee Corporation is an Alaska Native Claims Settlement Act (ANCSA) village corporation for the village of Fort Yukon. The Corporation holds title to approximately 214,500 acres of surface estate in the Yukon Flats, while Doyon Limited, the areas Regional Corporation owns the subsurface estate of these lands. Gwitchyaa Zhee Corporation owns and operates Fort Yukon’s diesel generated electrical power company which constitutes a significant portion of its business activities. The corporation’s expansive forest holdings are largely untapped commercially. Like most of interior Alaska’s forests, little if any portion of it has had an economically viable market for it to supply. Subsistence and cultural values however are highly regarded on these lands. Many of the Corporations shareholders continue to live in the Fort Yukon/Yukon Flats area. Most jobs are government related Fort Yukon, Alaska as the area has little other commerce. Gwitchyaa Zhee Power Plant In contrast to the low income per capita the Yukon Flats area has some of the highest energy costs in North America. Gasoline, fuel oil, and electrical power prices have all seen dramatic increases since hurricane Katrina hit the Gulf Coast in 2005. The Gwich’en peoples have developed and maintained a strong tribal form of government. In many respects the tribes have a greater capacity to administer projects and programs than their ANCSA counterparts. There are ten tribes located within the Yukon Flats _ region. Recognizing that they are stronger together than separate these tribes came together in 1985 to form the Council of Athabascan Tribal Governments, or CATG. The Council of Athabascan Tribal Governments CATG is a grassroots organization working to empower and strengthen member tribes to protect , conserve, and manage traditional land and natural resources for current and future generations, while promoting the development of sustainable economies based upon traditional values. The purpose of the CATG as mandated by their Constitution: to conserve and protect tribal land and other resources; to encourage and support the exercise of tribal powers of self government; to aid and support economic development; to promote the general welfare of each member tribe and it’s respective individual members; ii to preserve and maintain justice for all and, to otherwise, exercise all powers granted by it’s member villages and the purposes expressed in the preamble. The CATG is recognized as a non-profit tribal consortium for the purposes of administering federal, state, and private foundation grants and contracts as authorized by the tribally elected Chiefs. The CATG implements programs in areas of: self-governance, programs development and technical assistance, Indian health, tribal education, accredited tribal university training, environmental health, and natural resource management. With central offices located in Fort Yukon and employees serving every member tribe, the organization is the largest tribal employer in the region, providing ~60 jobs and managing an annual budget exceeding $4 million. The organization continuously improves the services to tribal members through increased effectiveness and efficiency internally and within member tribal government operations. It is up to each member tribe to decide which services of government it will exercise individually and which it will join in with the other tribes under the umbrella of —§ CATG. The resourcefulness of the Gwitch’in peoples encourages them to use both their tribal and corporate statuses in concert with each other in order to garner the resources necessary to carry out the wishes of the people they serve. In most cases CATG will be involved with any major effort to further the well being of their peoples. Fishwheel on Yukon River CATG Natural Resource Department and RC&D CATG has their own Natural Resources department, with a staff that includes two wildlife biologists, one of whom is Gwich'in, and they work closely with hunters and elders educated in the traditional ways. The Natural Resources Department has established its own specific goals. CATG NATURAL RESOURCES DEPARTMENT GOALS Tribal representation in Natural Resources Management Decision-Making. Sustainable Tribal Natural Resources programs. Qualified Tribal Natural Resources professionals. Traditional Land base protection. Healthy Fish & Wildlife populations. Clean land, air, and water. Sustainable village economies Bruce Thomas, a local Fort Yukon resident and a Gwichyaa Gwich'in tribal member is the current Natural Resource Director for CATG. He has worked within the CATG Natural Resources Department for over six years and is well versed in project management, concerns facing Tribal Natural Resources Management programs, and issues facing his people. He is the lead liaison for the Department with the State & Federal Government and has an excellent relationship with his people. The Natural resources Department is an active participant in a variety of projects in the Yukon Flats, including moose harvest data collection, wildlife population studies, moose management committee, prescribed burns, habitat assessments, vegetation analysis, beaver/whitefish interactions research and the Yukon Flats Fur Coop. Most recently Bruce has become the key contact for an emerging woody biomass renewable energy effort with Alaska Village Initiatives. It was soon recognized that other resources could be added to the Natural Resource Department's efforts through the Natural Resource Conservation Service’s _ Resource Conservation Development Program (RC&D). Bruce Thomas, CATG The purpose of the (RC&D) program is to Natural Resources Director accelerate the conservation, development and utilization of natural resources, improve the general level of economic activity, and to enhance the environment and standard of living in designated RC&D areas. Yukon Flats Resource Conservation District The Yukon Flats RC&D improves the capability of State, tribal and local units of government and local nonprofit organizations in rural areas to plan, develop, and carry out programs for resource conservation and development. The program also establishes or improves coordination systems in rural areas. Current program objectives focus on improvement of quality of life achieved through natural resources conservation and community development which leads to sustainable communities, prudent use (development), and the management and conservation of natural resources. RC&D areas are locally sponsored areas designated by the Secretary of Agriculture for RC&D technical and financial assistance program funds. The CATG leadership felt that the Resource Conservation and Development Program was a natural extension of their work, reflecting the same ‘do it yourself philosophy. CATG sought and gained RC&D area status for the Yukon Flats region in 1994. In 2001 the RC&D coordinator completed a Revised Area Plan entitled “Building Thriving Tribal Villages & Economies to Compliment a Traditional Native Lifestyle’. In that plan “Sustainable Energies” and “Forest Industry Development” were identified as opportunities for economic growth. The Revised Plan also identified seven desired characteristics for economic opportunities in the Yukon Flats: 1) Develops industries which are compatible with the long range goals and objectives of the local communities. 2) Empowers local village governments to participate in a cooperative Land and Resource Management Planning Process. 3) Develops a locally controlled renewable resource industry based on sustainable yields. oe | i Led Le i Ci LU 4) Demonstrates potential for expansion into value-added resource products. 5) Utilizes unemployed and/or under employed skilled labor. 6) Provides for planning, training, and development. 7) Replaces and improves existing outside management structures with locally managed and operated services. Challenges for a Yukon Flats Forest Industry Thoughts about developing a forest industry in the Yukon Flats have been discussed for many years. The potential benefits of having lumber and other wood products produced from local forests are too obvious to residents to ever let the idea ever die completely. Several attempts have been made to encourage even small scale forest product development, including the delivery of a small portable sawmill to Fort Yukon. These efforts have all faced a similar set of obstacles and accordingly have met with similar fates. To date no commercial supply of local forest products currently exists in Fort Yukon. Market demands exist for a limited amount of lumber and fuel wood, but apparently not enough for an entrepreneur to make _ sufficient investment in equipment and capacity to fill this demand. It is clear that if an appropriately scaled sustainable forest industry is to become a reality in Fort Yukon, that the supply and demand for such goods must be developed and expanded simultaneously and_ in coordination with each another. This will require an unprecedented level of collaboration and cooperation amongst potential forest product suppliers and consumers. These potential customers Bill Wall and Bruce Thomas - Porcupine River must have enough confidence and perceive sufficient incentives to change from their existing purchasing habits in favor of buying local wood products. It is equally clear that these conditions will not emerge without external expertise and other assistance. Until the relatively recent increases in the cost of fuel oil there seemed little potential for a forestry program even under the best of circumstances. l< ji bi he ket LL Li bt Li Woody Biomass as Fuel The high cost of fuel oil has rekindled interest in developing alternative energy sources throughout the region. In a follow through of the Revised Area Plan “Sustainable Energies” goal, CATG inquired with Alaska Village Initiatives regarding potential applications for a biomass energy program in the Yukon Flats. AVI agreed to work with CATG on a preliminary assessment of the potential for biomass energy program in the region, beginning with the production of a Forest Stewardship Plan for Gwitchyaa Zhee Corporation. Forest Meadow along Porcupine River- Gwitchyaa Zhee Corporation lands Most all of AVI’s activities related to this Forest Stewardship Plan have been directed towards answering several key questions related to the feasibility of an integrated and sustainable forest utilization program with a biomass energy component as its centerpiece. This Forest Stewardship Plan attempts to provide an answer to the biological and economic resource availability portion of that question. This Plan intends to do more than simply describe the forest resources on Gwitchyaa Zhee lands. It outlines the steps that are necessary in order to develop an economically and biologically sustainable woody biomass program in Fort Yukon. ee | a ee | oi LI bi be he Li I Property Description Uplands The Yukon Flats is a relatively flat, marshy basin floor marked by flood plains, terraces, alluvial fans, and small areas of sand dunes. Many braided and meandering streams traverse the area, while numerous thaw ponds, oxbow lakes, and meander scars pattern the ground. Surface water in streams, lakes and bogs is abundant throughout the majority of the region. The Yukon Flats is bordered in the north by the Brooks Range, which project out of the Flats approximately 150 miles north of the Arctic Circle, and is bordered in the south by the White Mountains. Climate The weather on the refuge is similar to that of Fairbanks, Alaska, and is referred to as “continental subarctic,” characterized by great seasonal extremes of temperature and daylight. A dry continental sub-arctic climate prevails throughout the region, with warm summers and long cold winters. The mountains which surround the eco-region isolate it from the weather systems affecting the neighboring regions. Consequently, summer temperatures tend to be higher and winter temperatures tend to be much colder. i The average annual temperature Precipitation is approximately 25 Meares Fahrenheit. Daily winter temperatures range from lows as low as 60 degrees Fahrenheit City below 0 to highs around 10 degrees Fahrenheit below 0. Daily summer _ temperatures range from lows in the 30’s to — highs in the 90's, although freezing can occur in any month. Annual precipitation is low averaging 6 to 10 inches and average snowfall averages at about 45 inches. The Yukon River remains frozen from early October through late May. "Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Fort Yukon Average Monthly Precipitation Fort Yukon holds the state record high temperature of 100° F (38° C), and comes close to the record low at —75° F (-59° C). This village is the largest within the Yukon Flats and has good historical climate records. For the period of January 1, 1938 through March 31, 1990 the following averages were recorded in the Yukon Flats: e Annual maximum temperature, 31° F (-1° C); ranging from -10,.9° F (-23.8° C) in January to 73.2° F (22.8° C) in July e Annual minimum temperature, 10.7° F (-11.8° C); ranging from -27.8° F (-33.2° C) in January to 51.2° F (10.6° C) in July e Annual total precipitation, 6.57 inches; ranging from 0.21 in April to 1.06 inches in August e Annual snowfall, 41.9 inches; ranging from no snow in July and August to 6.8 inches in October | ee ee ee ee ] | 2 J e Annual snow depth, 9 inches; ranging from no snow cover during the summer to 23 inches in March SOF SO°F 40°F WF Average Temperatures 10°F OF 10°F -20F -2F Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Daily high Average Daily low US average! Fort Yukon Average Monthly Temperatures Plant communities are also shaped by frequent summer storms that produce very little rain, but numerous lightning strikes. These “dry” storms cause numerous wildfires resulting from lightning strikes. Occasional flooding also shapes the landscape and creates habitat diversity. The area has a short growing season, averaging 81 days at Fort Yukon, in the heart of the Refuge. The average date of the last killing frost in the spring is June 1; the average date for the first killing frost in the fall is August 21. However, this short growing season is punctuated by 84 days of continuous sunlight and twilight from May 13 to August 4; though officially in Fort Yukon the sun fails to fall below the horizon between June 5 and July 7. In the winter, the sun stays below the horizon for a large part of the day, but twilight lasts for several hours. The shortest day of the year, December 21st, known as the winter solstice, is graced by the sun’s presence in Fort Yukon from 11:35 a.m. to 1:44 p-m., a period of 2 hours and 9 minutes of sunlight. Soils Typical soil profile along the Porcupine River Parent materials for soils in the area are generally well- sorted floodplain terrace and alluvial fan deposits commonly associated with streams and rivers. Additionally, the Flats are underlain by fine lake sediments thought to be the result of a late tertiary lake. As much as 100 feet of alluvial deposits overlie 300 feet of lake sediments. Soils are generally silty and sandy loams varying significantly depending on the stage of development, how well- drained the soils are, depth of permafrost, and existence and depth of any overlying ji kt LH bebeiit bei Lebeieti Lei bei kei be Li et LL peat layer. Permafrost is discontinuous throughout the area; areas immediately adjacent to the Yukon River and associated sloughs are generally free of permafrost and support the better forest stands in the area. Soil patterns are somewhat complex owing to the randomness of parent material deposition, stream river course scars, and associated periodic flooding. The better drained, more permafrost free soils support the bottomland spruce /balsam poplar forests characterized by tall stands of white spruce and balsam poplar. The less developed and poorer drained permafrost soils support thickets of willow, alder, and birch and a variety of smaller shrubs, forbs, grasses, ferns, and mosses. Occurrence of lightning-ignited wildfire is common throughout the ecoregion, and individual burns average about 6.85 kmg2 in the upper Yukon flats. Soils in this ecoregion are very susceptible to wildfire alteration, due to the relatively warm (-1.5°C) and shallow permafrost . Organic mat disturbance from wildfire can warm soils, significantly lower permafrost tables, alter soil properties and hydrology, and change vegetation composition. Forest Characteristics Forest vegetation is characterized by five common tree species. Picea glauca (white spruce) reaches its optimum growth adjacent to stream channels, but is also found on a diversity of sites up to treeline. Picea mariana (black spruce) typically grows in open stands and is common on sites with restricted drainage, such as muskeg and north- facing slopes (usually with a shallow thaw zone). Betula papyrifera (white birch) is characteristically an upland species, and often occurs mixed with white spruce. Populus tremuloides (quaking aspen) predominates on well to extremely well drained south-facing slopes, while Populus balsamifera (balsam poplar) is primarily a riparian species forming forest communities often associated with Picea glauca. Spruce-dominated coniferous forests cover the majority of the Yukon Flats landscape and occupy a variety of site conditions. White spruce (Picea glauca) forests occur on warmer, drier sites on hillsides, in timberline areas, and along rivers. Black spruce (Picea mariana) is found in similar areas but has higher tolerance for poorly drained soils and extends into bottomlands and other wet areas. River meanders support a continuous succession of colonizing willow (Salix spp.) and alder (Alnus spp.), followed by balsam poplar (Populus balsamifera) and quaking aspen (Populus tremuloides), which are eventually replaced by spruce. Recently disturbed sites, areas near timberline, north-facing slopes, and wetter areas support scrub communites dominated by willow, alder, and dwarf birch (Betula spp.) Bottomland bogs and other extremely wet areas are occupied by scrub-graminoid communities, including willow, dwarf birch, Labrador-tea (Ledum decumbens), bush cinquefoil (Potentilla fruticosa), and sedges (Eriophoum vaginatum and Carex spp.). Wildfire is very common throughout the area and keeps a continuous mosaic of successional communities present, including herbaceous communities, scrub communities, and broadleaf, coniferous, and mixed forests. 3 | : 3 | Common understory shrubs include bog birch, labrador-tea, crowberry, and_ blueberry. Feathermosses are common. Many wet depressions are dominated by alder and willow swamp communities. The low shrub layer typically includes currants, high and low bush cranberries. Bluejoint, sedge, horsetail, and marsh five-finger are common herbs. Sedge tussock communities dominate the coldest, wettest sites on the Yukon Flats. Mosses and berries are present here. Shrub communities of Salzx spp. (willow) and Alnus spp. (alder) are most abundant on riparian sites. Dwarf shrubs, such as Chamaedaphne calyculata (leatherleaf) and Andromeda poltfolia (bog rosemary), are typical of poorly drained organic soil, while others like Rosa acicularis (prickly rose), Viburnum edule (highbush cranberry), and Shepherdia canadensis (soapberry) are characteristic of well drained mineral soils in forests. Wildfires Wildfires are a common event in the Yukon Flats. Like much of the interior Alaskan taiga forest, wildfires are an important part of the forest disturbance regime in the Yukon Flats. Periodic drying and flooding of shallow wetlands along with wildland fire help maintain diversity and productivity. Since 1981, Yukon Flats has had over 260 lightning-caused fires burn in excess of 2.5 million acres. The combination of fire and flood has created an area rich in wildlife. Fires run through Yukon Flats each summer because it is one of the hottest areas in Alaska. The state’s all-time high of 100 degrees F occurred at Fort Yukon, and it receives a good share of the state’s lightning strikes as well. Significant resources are dedicated to addressing wildfire events each year. Yukon Flats National Wildlife Refuge staff work with the Alaska Fire Service, Doyon, Limited (the Native Regional Corporation), local tribal governments and state agencies to maintain a near- natural fire regime. In areas near villages where large wildland fires must be suppressed, prescribed burns and mechanical treatments are conducted in cooperation with local villages to help maintain the role of fire in the ecosystem and to reduce wildfire Wildfires can alter the productivity of forest soils risk. In a typical summer, 500,000 to 1.5 million Alaska acres burn, according to statistics from past years. And usually, fire is part of the natural cycle that clears black spruce and white spruce, slender, fast-growing conifers with high levels of flammable resin, out of the way for hardwood trees like birch and aspen. The summer of 2004 was a record fire season in Alaska with more than 6.4 million acres burned, including more than a million acres in the Yukon Flats. Satellite Image of Wildfires in the Yukon Flats Wildlife The rich habitats of the interior lowlands support moose, black and brown bears, wolf, and caribou. Smaller mammals include wolverine, lynx, red fox, beaver, snowshoe hare, mink, muskrat, weasel, marten, red squirrel, and porcupine. Moose are found in relatively low numbers throughout the refuge. In winter, they congregate in the Yukon River valley where they find shelter and food. In summer, they are found dispersed throughout the refuge, typically near ponds and marshes. Caribou and sheep are found in low densities in the upland regions on the periphery of the refuge. Black and grizzly bears occur throughout the refuge, with the more abundant black bears found primarily in the forested lowlands. Wolves are also an important component of the ecosystem and are found throughout the refuge. Furbearer resources are rich and include beaver, fox, lynx, marten, muskrat, otter, weasel, and wolverine. Birds Millions of migrating birds arrive here each spring to use the flats as a resting location before continuing to their breeding areas. The Yukon Flats is noted as one of the most densely populated duck nesting regions in North America. Over two million duck that migrate through each of the four major North American flyways are produced in the area in good nesting years. In addition to ducks, some Canada Geese and White-fronted Geese also nest here. The Yukon Flats is an important fall staging area for waterfowl and Sandhill Cranes. About 200,000 Sandhills from breeding grounds in western Alaska, eastern Siberia and the Yukon Territory congregate in the Yukon Flats wetlands before they begin their southern migration along the Central Flyway. Upland birds include northern hawk-owls, great horned owls, rough grouse, spruce grouse, boreal chickadees, and red poles. 13 hardy species including boreal chickadees, great gray owls, spruce grouse, three-toes woodpeckers and ravens call Yukon Flats home year round. Salmon and Other Freshwater Fish The people of the Yukon River drainage have been utilizing salmon since inhabiting the area. Approximately 128,000 people live in the Yukon River drainage today. For nearly all the people who reside in the Yukon River drainage, fish and wildlife resources, provide the foundation for their survival and livelihood. Salmon, the staple food in many communities, is one such resource that has been harvested since time immemorial through traditional subsistence and aboriginal practices. The Yukon River hosts the longest upstream migrating Chinook (Oncorhynchus tshawytsha) and Chum (Oncorhynchus keta) pacific salmon stocks in the world. Some headwater stocks migrate over 1,840 miles /2960 km to reach their spawning grounds in the Yukon and northern British Columbia . The river also supports Coho salmon (Oncorhynchus. kisutch) as far as the Porcupine River Drainage, Pink salmon (Oncorhynchus. Gorbuscha), and Sockeye salmon (Oncorhynchus. nerka) closer to the mouth. Other fish supporting the region include northern pike, whitefish, burbot, and grayling. itscha) Chinook salmon (Oncorhynchus tshaw’ Chinook salmon spawn in streams and rivers along the west coast of North America. The Yukon River is one of the most northerly of the major chinook spawning rivers, hosting some of the longest upstream migrating salmon stocks in the world. Some headwater stocks migrate over 1,840 miles/2960 km to reach their spawning grounds in the Yukon and northern British Columbia. In the Yukon River drainage basin, chinook fry emerge during spring and early summer from the gravel where they were spawned. Emergent juveniles are found in still-water areas such as the advancing margins of ome rivers and micro-habitats near shore fry leave the rivers of their birth, or "natal" streams, soon after emergence. In large rivers, Juvenile chinook are easily captured along margins and in mixing zones below where tributaries join the Yukon River. They have been captured in near shore waters in lakes and near the mouths of tributaries. Juveniles may be abundant in tributaries not used for spawning. Predators include northern pike, burbot and inconnu and birds such as _ mergansers kingfishers, gulls and loons. In spring, a portion of the over-wintering population remains in small streams until early- to mid-June. Surviving juveniles migrate to the Bering Sea to start their ocean life usually after spending one year in freshwater. Some never leave the freshwater Yukon River Chinook environment. These "residuals" are almost invariably male, and reach spawning condition at a small size. Adults return to the mouth of the Yukon River from mid-to-late May through early July after spending 2 to 6 years in the ocean. Peak migration timing of chinook salmon entering the Canadian section of the drainage usually occurs mid-to-late July with spawning from late July through mid-September. Chinook salmon use a wide variety of spawning habitats including small streams, larger rivers and lake outlets, or waters intermediate to these. Streambed substrate requirements, redd structure and spawning behaviour have not been specifically studied in the Yukon River drainage. There is no apparent use of groundwater for redd location. Emergence from the egg occurs as early as September in the central Yukon River. Emergence from the substrate has been little studied, but may vary by up to six weeks (April to June) in nearby waters having different thermal regimes. Chum salmon (Oncorhynchus keta) Almost all chum salmon in the Canadian portion of the Yukon River drainage are "fall" chum. The upper Yukon River stocks of this species may have the longest upstream spawning migration in the world with some stocks migrating over 1 678 miles (2 700 km). In more southerly rivers, adult freshwater migrations tend to be much shorter with spawning occurring closer to estuaries. There are two runs of chum salmon that enter the mouth of the Yukon River. The first to arrive are the "summer chum", which enter the river mouth in early June and reach peak abundance around the third week of June. Summer chum generally spawn in the lower 497 miles (800 km) of the Yukon drainage and, until recently, were not believed to migrate into the Canadian section of the drainage. Adult fall chum salmon are distinguished from fall chum by later run timing, larger body size and a more silvery appearance at the river mouth. Spawning occurs primarily in the upper portions of the Yukon River drainage. Compared to summer runs, the fall chum are usually less abundant at the river mouth. Upper Yukon River chum return as spawning adults to the river mouth generally from mid-July through early September after spending up to five years in the ocean. While some chum spawn along cutbanks and in riffle areas of the mainstem Yukon, other chum prefer spawning in side channels and sloughs. Peak spawning usually occurs during October through early November. Juvenile upper Yukon River chum salmon emerge from the gravel during the spring (April/May). After emergence, they appear to spend little time in the natal area. By mid-June, most have moved away from the spawning areas. Little is known about the downstream migration of juveniles although it may occur close to the time of spring break-up. Rett tb dd sk Le ed i ee Access The villages of the Yukon Flats are connected by the river system, regularly scheduled air service, snow machine trails, and dog sled trails. Throughout the summer months the Yukon River and tributaries provides for barge service and river boat travel between villages. One village, Circle, is located on the Alaska road system where the Steese Highway ends at the Yukon River. All villages, with the exception of Canyon Village, have FAA approved airstrips and are serviced by bush airlines. The cost of transporting goods into the villages is the primary reason for the high cost of living. Land Descriptions by Township T1sN,RO9E This township is located in the southwestern most portion of the Corporations ownership. No final conveyance figures are currently available as the final conveyances to the Corporation are currently being processed, but they will total approximately 20,000 acres. Remote and undeveloped, access is limited to small boat use on Birch Creek during the ice free season and overland by snow machine in the winter months. The area is uninhabited and experiences little human use other than subsistence fishing and hunting activities. This township is located between the village of Birch Creek and the Yukon River. A slow meandering stream named Birch Creek flows through most of this township and is navigable with a small (20 foot skiff or similar) in most ice free river conditions. Low summer water levels can seasonally limit even small boat use. As with most all of the Yukon Flats, very little topographical relief is occurs in the area. INITIATIVES NEW HORIZONS FOR RURAL ALASKA Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) pe Doyon, LTD Yukon Flats i 5 * - ss 00306 1.2 Miles T.18 N., R.9E. a : .a: Fairbanks Meridian _ - Date: February 1, 2007 Vicinity Map 0.26 1 Kilometers Data Source: BLE ] No timber inventory data is available for forest resources in this township. Consequently no volume estimates are available at this time. Typical of forest distribution throughout the Yukon Flats, mature stands of white spruce have occurred within a half mile of the stream. Much of the township was burned however in a large wildfire in 2004 which impacted the majority of forest resources in the township. It is unknown how much, if any of the burned remains can be economically utilized. TISN,R1I3E This township is located in the southeastern most portions of the Corporations ownership and is approximately 12 river miles up river from Fort Yukon. All of the townships 16,090.80 acres outside of native allotments have been conveyed to the Corporation. The Yukon River is the major feature within the township which provides boat access to the area during ice free seasons. The land in this township is road-less and undeveloped, and experiences little human use other than subsistence fishing and hunting activities. Oy _ S\ INITIATIVES TA NEW HORIZONS FOR RURAL Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) va Doyon, LTD Yukon Flats 0 0306 1.2 Miles T.18 N., R. 13 E. mm a en Vicinity Map 0.26 1 Kilometers Data Source: BLM Two native allotments are located on the southwest shore of the River. A forest inventory conducted in 1984 evaluated timberlands within a half mile of the Yukon River in this township and is discussed elsewhere in this report. Significant stands of white spruce occur along the Yukon River in this township that will likely be economically feasible to utilize in a woody biomass program. T19N,R10E This township is located approximately 8 miles southwest of Fort Yukon. All of the townships 21,280.90 acres outside of native allotments have been conveyed to the Corporation. Remote and undeveloped, access is limited to snow machine in the winter months. No navigable rivers occur within the township boundaries. The Yukon River is approximately 4 miles to the north and Birch Creek is approximately the same distance to the southwest. The area is uninhabited and experiences little human use other than subsistence hunting activities. Mi INITIATIVES NEW HORIZONS FOR RURAL ALASKA Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) a Doyon, LTD Yukon Flats T. 19 N., R. 10 E. ainastosl cals Fairbanks Meridian Date: February 1, 2007 fe Biaeees bul Vicinity Map The remote and roadless nature of these lands most likely makes the forest resources in this area fiscally unfeasible to utilize under current economic conditions. T1I9N,R12E This township is located approximately 5 river miles up river from Fort Yukon. All of the 17,092.37 acres outside of native allotments have been conveyed to the Corporation. The Yukon River is the major feature within the township which provides boat access to the area during ice free seasons. The land in this township is road-less and undeveloped, and experiences little human use other than subsistence fishing and hunting activities. INITIATIVES TA NEW HORIZONS FOR RURAL ALASKA Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) a Doyon, LTD Yukon Flats 00306 1.2 Miles T.19 N., R. 12 E. o a Vicinity Map 0.26 1 Kilometers Data Source: BLAH The 1984 forest inventory evaluated timberlands within a half mile of the Yukon River in this township and is discussed elsewhere in this report. Significant stands of white spruce occur along the Yukon River in this township that will likely be economically feasible to utilize in a woody biomass program. TI9N,RI4E This township is located approximately 13 miles southeast of Fort Yukon. These lands are selected by Gwitchyaa Zhee Corporation but are not a priority for conveyance. These lands are remote and undeveloped, and access is limited to snow machine in the winter months. The upper reaches of the Sucker River, a small, un-navigable stream, flows through the township. The Yukon River is approximately 3 miles to the southwest. The area is uninhabited and experiences little human use other than subsistence hunting activities. i rr > RASRe test INITIATIVES Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) Pee Doyon, LTD Yukon Flats 0.0308 12 Mies TAQN., R. 14 E. mm Fairbanks Meridian Vicinity Map 0.26 1 Kilometers Data Source: BLM Scattered stands of spruce and hardwoods occur throughout the township, and there is likely a significant volume of wood fiber in these stands. No timber inventory data currently exists for this area however, and no estimates have been made. The remoteness of these stands marginalizes the economic feasibility of harvesting stands in this township. T20N,RO9E This township is located approximately 14 river miles down river from Fort Yukon. All of the townships 17,004.64 acres outside of native allotments have been conveyed to the Corporation. The Yukon River is the major feature within the township which provides boat access to the area during ice free seasons. The land in this township is road-less and undeveloped, and experiences little human use other than subsistence fishing and hunting activities. aA —\ INITIATIVES a NEW HORIZONS FOR RURAL ALASKA Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) Fs ial Doyon, LTD Yukon Flats 0 0306 1.2 Miles T.20 N., R. 9 E. mm = Vicinity Map 0.26 1 Kilometers Data Source: BLM The 1984 forest inventory evaluated timberlands within a half mile of the Yukon River in this township and is discussed elsewhere in this report. Significant stands of white spruce occur along the Yukon River in this township that will likely be economically feasible to utilize in a woody biomass program. T20N,R1I1E This township is located to the immediate west of Fort Yukon. All of the townships 15,168.44 acres outside of native allotments and 14c claims have been conveyed to the Corporation. The community of Fort Yukon is the major feature within the township. Fort Yukon is located at the confluence of the Yukon and Porcupine Rivers and is the economic hub of the Yukon Flats. A limited amount of roads exist in the vicinity of Fort Yukon, but the majority of use and access to these lands is by boat during the ice free season, and by snow machine in the winter. The 1984 forest inventory evaluated timberlands within a half mile of the Yukon and Porcupine River in this township. Significant stands of white spruce and other hardwoods occur along these rivers and they represent a good portion of the economically feasible woody biomass volume. It is likely that a wood yard will be located in this township near the confluence. i S INTTIATIVES 3 NEW HORIZONS FOR RURAL ALASKA Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) ce Doyon, LTD Yukon Flats 00306 12 Miles T.20 N., R. 11 E. m7 Fairbantss: Merivian Vicinity Map 0.26 1 Kilometers Data Source: BLM Numerous native allotments are located within this township, most of which are on one of several large islands at the confluence of the two major rivers. The ownership patterns must be well understood prior to woody biomass harvest in this area. T20N,R12E The community of Fort Yukon is located in this township. All of the townships 15,192.14 acres outside of native allotments and 14c claims have been conveyed to the Corporation. A network of roads and trails exists in the northern half of the area. Wildfires have had extensive influence over the majority of the township which has significantly reduced the spruce component of the forest. The area is the most highly used of all townships due to its proximity to Fort Yukon. Mi LAoeeriteset INITIATIVES NEW HORIZONS FOR RURAL ALASKA Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) ei Doyon, LTD Yukon Flats 00306 1.2 Miles T.20 N., R. 12 E. mm eS Vicinity Map 0.26 1 Kilometers Data Source: BLM The 1984 forest inventory evaluated timberlands within a half mile of the Yukon and Porcupine River in this township, although a good part of the evaluated forest has since been subject to several wildfires. Numerous native allotments are located throughout the township. T20N,R1I3E This township is located immediately to the east of Fort Yukon. All of the townships 10,059.59 acres outside of native allotments and 14c claims in _ sections 1,2,3,4,5,6,7,8,9, 10,11,17,18,19,20,29,30, and 31 have been conveyed to the Corporation. The land in this township is largely road-less and undeveloped, and experiences little human use other than subsistence hunting and gathering activities. No timber inventory data currently exists for this township. Mi RSet INITIATIVES Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) ei Doyon, LTD Yukon Flats 00306 12 Miles T.20 N., R. 13 E. mm SS Vicinity Map 0.26 1 Kilometers Data Source: BLM T21N,R10E This township is located to the northwest of the confluence of the Yukon and Porcupine Rivers. All of the townships 19,211.70 acres outside of native allotments have been conveyed to the Corporation. At the very southern edge of the township, the Yukon River is the major feature in the area, which provides boat access during ice free seasons. The land in this township is road-less and undeveloped, and experiences moderate subsistence fishing, hunting, and other gathering activities. i Sl INTTIATIVEs TA NEW HORIZONS FOR RURAL ALASKA, Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) = Doyon, LTD Yukon Flats 00306 12 Miles T.21 N., R. 10 E. mm Fairbanks Meridian Vicinity Map 0.26 1 Kilometers Data Source: BLM The 1984 forest inventory evaluated timberlands within a half mile of the Yukon and Porcupine River in this township. Those timber stands located closer to the Yukon River are likely to be economically viable sources for a woody biomass program in Fort Yukon. Numerous native allotments are located throughout the township. ell — ee | T21N,R12E This township is located immediately to the north of Fort Yukon. The Porcupine Rivers meanders throughout much of the township providing boat access in the ice free season. All of the townships 18,201.29 acres outside of native allotments have been conveyed to the Corporation. The land in this township is road-less and undeveloped, and experiences moderate subsistence fishing, hunting, and other gathering activities. YN SLoRevitece INITIATIVES NEW HORIZONS FOR RURAL ALASKA Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) Eo Doyon, LTD Yukon Flats T. 21.N., R. 12 E. o ois 08 1eihes Fairbanks Meridian Date: February 1, 2007 Data Source: BLM The 1984 forest inventory evaluated timberlands within a half mile of the Porcupine River in this township. Those timber stands located closer to the Porcupine River are likely to be economically viable sources for a woody biomass program in Fort Yukon. Much of the northeast corner of the township experienced a wildfire in 2005 and burned some of the timber described in the 1984 inventory but will likely still be suitable for biomass energy for several more years. Numerous native allotments are located throughout the township. T22N,RO9E This township is located approximately 12 miles northwest of Fort Yukon. All of the townships 1,082.54 acres in sections 25, 26, 34, 35, and 36 have been conveyed to the Corporation. The land in this township is road-less and undeveloped, and experiences little human use other than occasional subsistence hunting and gathering activities. No timber inventory data currently exists for this township. a —\ INITIATIVES 7M Rem RGNEORE SON ORAS Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) ae Doyon, LTD Yukon Flats 00306 12 Miles T.22 N., R.9 E. mm = en Vicinity Map 0.26 1 Kilometers Data Source: BLM These 5 sections are very remote and contain comparatively little biomass harvest opportunities. It is unlikely that any biomass material will be harvested from these lands under any set of economic circumstances. T22N,R1I1LE This township is located approximately 8 miles north of Fort Yukon. All of the townships 22,503.46 acres have been conveyed to the Corporation. These lands are remote and undeveloped, and access is limited to snow machine in the winter months. The area is uninhabited and experiences occasional subsistence hunting and gathering activities. YO ~ ROORetexeE INITIATIVES Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) a Doyon, LTD Yukon Flats 00306 1.2 Miles T.22 N., R.11E. mm Fairbanks Meridian Vicinity Map 0.26 1 Kilometers Date Source: BLII Small isolated stands of spruce and hardwoods occur throughout the township. The remoteness of these stands marginalizes the economic feasibility of harvesting stands in this township. No timber inventory data currently exists for this area, and no estimates have been made. Se ee ee ee ee | ee eee ee en ee a T22N,R13E This township is located approximately 14 miles northeast of Fort Yukon. All of the townships 20,000 (approximately) acres have been conveyed to the Corporation. The Porcupine River just touches the southeastern corner of the township. These lands are remote and undeveloped. Access is limited to snow machine in the winter months and by boat on the Porcupine River during ice free seasons. The area is uninhabited and experiences occasional subsistence hunting and gathering activities. AS INITIATIVES Legend Gwitchyaa Zhee Corp. (Conveyed) Gwitchyaa Zhee Corp. (Selected) a Doyon, LTD Yukon Flats 0 0306 1.2 Miles T.22 N., R. 13 E. TT) oe ridian Vicinity Map 0.26 1 Kilometers Data Source: BLM No inventory data currently exists for this township. A review of available satellite imagery suggests that little timber occurs in the area. A large fire burned approximately 85% of the area. This fact in conjunction with the remoteness of these stands likely precludes any economic harvesting of residual stands in this township. lA i ||) =) |e inet Let ] ] History On December 1, 1978, President Carter used his authority under the Antiquities Act of 1906 to create 17 national monuments in Alaska, including the "Yukon Flats National Wildlife Monument." When the Alaska National Interest Lands Conservation Act was passed on December 2, 1980, the monument designation was dropped, boundary adjustments were made, and the Yukon Flats National Wildlife Refuge was established. Native Americans within the Yukon Flats at the time of European contact included several bands of Athabascan Indians, largely nomadic hunters dependent on fisheries resources and big game, primarily moose and caribou. An exceptional abundance of furbearers first brought non- native people into the area. The Hudson's Bay Company established Fort Yukon, centrally located within the Refuge, in 1847. After Alaska was purchased by the United States from Russia in 1867, Hudson's Bay Company was forced to relocate back on Canadian soil, and the Alaska Commercial Company assumed operations in Fort Yukon. Gold was discovered on Birch Creek in 1893 and the community of Circle rapidly expanded to a population of over one thousand people during the gold boom. Though the gold rush era ended, fur trapping continued to expand and by the 1920s Fort Yukon had become the most important fur center in Alaska. Travel on the Yukon river in the early 1900’s was provided by wood fueled steam driven sternwheelers. Cordwood harvested along the Yukon River for fueling these ships provided some local economic The Nenana at Alaskaland opportunity while these classic vessels plied the ; interior waters of Alaska and northern Canada. The Fairbanks, Alaska Yukon River once had the largest fleet of riverboats north of the Mississippi River. There were steamboats on the Yukon River every summer from 1869 to 1955--nearly 100 years, yet the basic ship did not change in its design or operation. For decades cordwood was bought along the river at five to seven dollars per cord. Going downstream, a boat might use as little as a cord an hour; upstream, though, it might use ten. The importance of the Yukon Flats to migratory waterfowl wasn't fully recognized until after World War II. During the late 1950s a major hydroelectric project was proposed for the Yukon River at Rampart Canyon. The dam, if constructed, would have flooded the entire Yukon Flats and created a lake larger than Lake Erie. Environmental organizations, sportsman's groups, Alaska Native groups, and the U.S. Fish and Wildlife Service took a firm stand against this proposal, and eventually the project died. Fort Yukon Fort Yukon was founded in 1847 by Alexander Murray as a Canadian outpost in Russian Territory. It became an important trade center for the Gwich'in Indians, who inhabited the vast lowlands of the Yukon Flats and River valleys. The Hudson Bay Company, a British trading company, operated at Fort Yukon from 1846 until 1869. In 1862, a mission school was established. In 1867, Alaska was purchased by the U.S., and two years later it was determined that Fort Yukon was on American soil. Moses Mercier, a trader with the Alaska Commercial Company, took over operation of the Fort Yukon Trading Post. A post office was established in 1898. The fur trade of the 1800s, the whaling boom on the Arctic coast (1889-1904), and the Klondike gold rush spurred economic activity and provided some economic opportunities for the Natives. However, major epidemics of introduced diseases struck the Fort Yukon population from the 1860s until the 1920s. In 1949, a flood damaged or destroyed many homes in Fort Yukon. During the 1950s, a White Alice radar site and an Air Force station were established. Fort Yukon incorporated as a city in 1959. Il. Plan Objectives The forest resources on Corporation lands have not attracted commercial interests since the firewood harvest days of the steam driven sternwheelers. This situation is not likely to change anytime in the future with the possible exception of its use as a renewable source for energy. In this event the level of harvest and forestry activity will be dependant on the local demand. The benefits of establishing a sustainable fuel wood program are as important as they are varied. The use of local wood supplies for heat and electrical power generation can make significant reductions in the fuel oil payments that are currently being exported out of the region. The stabilization and reduction of energy costs will positively affect every household in the community. The management of the forest for biomass can also make significant contributions to browse availability for important subsistence wildlife species such as moose while reducing the risk of wildfire caused damage to the community. Irrespective of the known benefits of a successful woody biomass business, local acceptance of commercial forestry will have to be earned. Perceptions of what a commercial harvest program might entail are wide ranging and often inaccurate. Information on the major elements of a biomass harvest program will have to be clear and made widely available to Corporation shareholders and community members alike. There are currently no commercial producers of fuel wood within the Yukon Flats region. Likewise, there is currently no commercial demand for fuel wood. The high cost of wood fueled boilers and timber harvest equipment discourages investment in these items. In order for a biomass program to become a reality in Fort Yukon and other communities like it, both the supply and demand of fuel wood must be developed simultaneously and in concert with each other. This will require a high degree of cooperation and collaboration amongst the stakeholders, including agencies that provide technical and financial resources to this effort. Early estimates are that a fairly aggressive use of woody biomass, either in stick firewood form or in wood chips, will annually require 900 cords (745 tons) of wood (or wood chip equivalents) in order to displace 70% of the current level of heating oil consumption. If electrical power generation becomes fueled from wood, then annual wood consumption for energy could be over 10,000 cords (8,280 tons) for Fort Yukon alone. The Corporation recognizes that a biomass program needs to be economically, biologically, and socially sustainable if it is to succeed over the long term. Indications are that sustainability is altogether possible if the program is guided by sound forestry, economic, and community protocols in combination with a resilient work ethic in the community. It is the objective of this Plan to provide the reader with the forest resource management elements of a potential biomass program using Gwitchyaa Zhee forest resources. 1) Integrated Resource Management Objective: “Identify the inter-relationships of various activities of resource management associated with subsistence wildlife management, fire hazard reduction, job creation, and production of woody biomass for fuel from Gwitchyaa Zhee Corporation lands.” Guiding Principles for Integrated Resource Management An integrated biomass energy program which harvests wood from Gwitchyaa Zhee lands is an opportunity to make significant contributions to several issues important to the Corporation and Fort Yukon community. Harvesting woody biomass from the Corporations forest ownership will provide a local sustainable supply of fuel for heat and ultimately for electrical power generation. Harvest activities can also reduce the risk exposure of wildfire to the Fort Yukon community by consciously harvesting fuel loads in the vicinity of the community in a manner that lowers the potential for wildfire to spread into the community itself. These acres can then be planted with less fire prone species of hardwood. Biomass harvest and wildfire risk reduction practices can also improve moose habitat, by establishing a constant supply of high value foraging habitat. Indigenous species of willow that are high value browse for moose also can grow respectable amounts of wood fiber. Thus, when several objectives are accomplished through a biomass program, the activities are said to be integrated with each other, with an end result of the production of several desirable outcomes. In the example above, planned biomass harvest can simultaneously improve wildfire risk to the community, moose brows, and fuel wood energy production. It is recognized that little or no forest planning or management activities will occur unless a sustainable economy based on supply and demand for wood fuel is deemed to be feasible and subsequently developed. Accordingly, this Forest Stewardship Plan devotes significant effort towards woody biomass sustainability. Furthermore, this plan also broadly describes steps that will be necessary to take in order to develop a wood fuel economy where currently none exists. PLAN STATEMENT: Gwitchyaa Zhee Corporation will endeavor to integrate active forest management activities with wildlife management and enhancement practices, wildfire risk mitigation, and economic development for the benefit of each whenever it is practical to do so. 2) Timber Harvest Objective: “To describe the components of a commercial woody biomass harvest program Jor the Gwitchyaa Zhee Corporation lands.” History No commercial timber harvest has occurred in the Yukon Flats region in recent decades. Local use of forest resources has been limited to a subsistence level of firewood and house log harvest. Little or no infrastructure currently exists that would facilitate forest resource harvesting. Timber Harvest Key Elements 1. Timber Harvest Systems and Transportation Timber harvest for biomass fuel and other forest products has never been attempted on a commercial scale in Yukon Flats. Consequently there are no other timber operations in Alaska that can serve as a direct example of proven harvest systems. Establishing a commercial harvest operation for woody biomass in Yukon Flats will in every sense be a pioneering effort. The closest timber harvest examples in terms of distance are located in the Tok area. Relatively small sawmills harvest and mill timber harvested from State and private lands. As in most interior Alaska logging operations, the majority of logging occurs in the winter months when soft ground is frozen and under a layer of snow. Convention feller-bunchers and log skidders are common equipment components that deliver the to highway legal log trucks. In most cases the timber being harvested is of the larger diameter classes. The similarities of a biomass harvest program and these more conventional logging systems are limited. The absence of roads in the Yukon Flats is a major limiting factor regarding the size of equipment that can be employed. It is doubtful that the value of wood fuel will ever be such that it can support the construction of a road system for its transport. The Yukon Flats, and Gwitchyaa Zhee lands in particular are interwoven with large river systems. A long term harvest program will be required to address the opportunities and possible obstacles these rivers may pose to transportation needs. While it is common to travel on these rivers in winter months with snow machines, there is no historical experience of transporting heavier loads across river ice. Hauling heavier loads over long distances on ice is not uncommon in similar environments in parts of Canada. Practices and expertise that have been developed there will help facilitate developing similar practices in applicable portions of interior Alaska. River travel in the ice free seasons is the only safe mode of transportation at this point in time. It is therefore imperative that the river characteristics and limitations be well understood for this application. The most economic and reliable configuration for a work boat must be carefully decided upon. Failure on this issue will negate successes in every other part of the program. An important requirement for the work boat will be operation during low water flows. This suggests that the boat be flat bottom, use jet| propulsion, and be constructed out of aluminum. A boat with these abilities will likely cost $300,000 or more if it is diesel powered and utilizes the durable and highly efficient Tractor drive type propulsion systems. There will be a temptation to try to compromise the effectiveness of the workboat because of its’ high cost. Such temptations will prove unwise in the long run. Tractor Jet Propulsion Unit The logging equipment size should be as small as possible while maintaining the capacity to process and produce most timber sizes that occur on Corporation lands. Small track mounted excavators with a relatively simple wood processor attachments will weigh approximately 15,000 pounds. Other equipment such as small log skidders and crawlers will weigh less. Thus the work boat should be designed to carry 15,000 pounds efficiently and safely. Loading and off- loading of equipment will be on gravel river . banks as near to the wood sources as possible. 15,000 # excavator with processor head It may be advisable to install small temporary abutments at the harvest sites. This will allow efficient loading of equipment and logs onto the work boat or small barge. If rafting of log bundles proves possible, the temporary abutment will increase efficiency and reduce the amount of disturbance to the river bank. Once the harvest is completed for each site, the temporary abutment would be removed and reused. The excavator mounted processor will cut and trim small logs to specified lengths. The skidding or forwarding of the processed logs will best be accomplished with a small track log skidder, usually towing a small log trailer with a hydraulic loader powered by the skidder. These small machines are in use in small logging applications throughout interior Canada. Log lengths of 12 to 16 feet are most likely to be optimal for this equipment configuration. These “Forcat” style of skidders are small, maneuverable and highly suited for this type of application. They are simple to operate and maintain. They are comparatively small however and they have a definite load limitation which needs to be recognized up front. As production requirements increase, it is altogether likely that additional machinery of similar capacity will be the most effective way to accomplish this, as opposed to bringing in larger equipment. It will be important to bundle these logs, probably while they are on the forwarding trailer, to facilitate efficient handling. The log loader and excavator lifting capacities will determine how heavy the bundles may become. Two or three 1% inch wide or more metal banding should be of sufficient strength to maintain bundling integrity until they are delivered to the wood yard at the village. PLAN STATEMENT: Gwitchyaa Zhee Corporation will develop a harvest system strategy that identifies the equipment needs and applications to efficiently and economically harvest and haul forest products for fuel and materials within Yukon Flats. Wood Yard A wood yard of sufficient size that is strategically located as close to the village as possible is of major importance. A small (approximately 40 foot long and 6 feet high) bulkhead will need to be installed for efficient loading and off loading of wood and equipment. These not necessarily be elaborate, and a “Bolt-A-Bin” type of configuration is believed to be adequate for this application. The logs will be inventoried at the yard and processed further into stick firewood or (eventually) wood chips. The yard will need to be about an acre in area initially, but expanded later as the volume of soutien. Ineowne’ Wi i creases over time. Typical Bin-Wall Abutment Figur mtanare tthe ann fuel wood inc poate pa nbeaeppaecare oe baring apecty to apart the The wood yard should be owned and operated = by a locally owned individual or company. Gwitchyaa Zhee is a logical choice for this independent business but it does not necessarily have to be so. The distribution company will process the wood and deliver it to its customers. Billing and delivery schedule responsibilities will lie with the wood fuel distribution company. Spacer stiffener The logging company will be paid by the distribution company upon delivery to the wood yard per the terms of a biomass harvest contract between the logging and wood distribution companies. Biomass delivery and payment can be set by either weight or volume and the necessary tracking mechanisms must be an integral component of the overall program. Biomass moisture content may also need to be measured and accounted for. Permits may be necessary to construct the abutments and to raft logs. This is discussed further in another part of this chapter. 2. Timber and Woody Biomass Harvest Economics The lack of comparable programs that bring renewable woody biomass fuels to a rural Alaskan village make economic projections more difficult. Perhaps the two most important questions that must be answered with a relatively high degree of certainty is “what will it cost to produce a cord of firewood?”, and “can the community save money at the figure answering question #1?” There are several factors that influence the cost of production. The density and location of the fuel wood in relation to the end user, the capital costs of the production equipment, the efficiency of the harvest equipment and the crew that operates it, and the daily and annual production levels al play a major role in what it will cost to produce woody biomass for fuel in Fort Yukon from Gwitchyaa Zhee lands. Economic modeling of these factors can provide reasonable estimates of each of these variables and their ultimate influence on production costs. Alaska Village Initiatives has developed a cost model for Corporation lands in an effort to estimate what production costs might be under a variety of assumptions. These costs estimates can then be compared to what the existing heat and power generation infrastructure fuel costs are. It is worthwhile to discuss some basic wood energy calculations. A cord of seasoned firewood has approximately the same heating energy availability as 100 gallons of heating oil. Thus, if a cord of Fort Yukon School firewood cost $200 for example, this would be the equivalent of paying $2 for a gallon of heating oil. Since the price of heating oil has been over $3/gallon in Fort Yukon for some time, it would appear that if cordwood could be delivered to the customer at $200/cord that there would be a high degree of interest for cordwood in the community. The school and gym in Fort Yukon consume approximately 30,000 gallons of heating oil annually. To displace all 30,000 gallons, it would take 300 cords of wood, assuming the aforesaid conversion. At $3.50/gallon the heating fuel costs for the school and gym total $105,000. Total firewood costs at $200/cord total $60,000, or just 57% of the cost using oil. It would appear then, that if cordwood could be produced for $200/cord that there is the potential for significant fuel savings for the community. Most potential wood heat projects are considered feasible if the capital costs of installing a wood burning boiler can be recovered in 10 years or less. The above example might be recoverable in as little as 5 years depending on the installed cost of Garn type stick fired wood boilers. Chip fueled boilers have the advantage of automated feed systems whereas the Garn type needs to be hand stoked. Chip systems are generally significantly more expensive Garn Boiler at Dot Lake however. The need then is to be able to produce wood fuel at a rate that encourages the community to invest in wood fueled boilers. The contracts for providing wood fuel should be approximately 10 years in duration or at least as long as it will take to recover the capital investment of the wood fueled installation. Our cost modeling reveals that with the logging equipment described that two main variables affect the cost of producing cordwood. They are the average daily production rate and the annual total production. Daily production rates reflect the efficiency of the crew and equipment, and the total production reflects the economies of scale for fuel wood. Annual Cordwood Production Effect on Cost $1,000.00 i $900.00 $800.00 $700.00 $600.00 $500.00 $400.00 $300.00 $200.00 $100.00 $- 250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000 Tons Produced Annually @ 23 Tons Daily Production acres a day for forests with 18 tons of fuel wood per acre. Delivered cost of cordwood to the wood yard goes down as more wood is harvested at this rate per year. The economies of scale are said to be better as more wood is harvested. With the assumptions imbedded in the data the above chart shows that approximately 2250 tons of cordwood needs to be produced before a sustainable delivered price of $200/cord will be possible. Daily Cordwood Production Effect on Costs | $210.00 | $200.00 $190.00 $180.00 $170.00 | $160.00 $150.00 12 15 18 21 24 27 30 33 36 39 42 45 With the given equipment configurations a daily production rate of 23 tons will harvest 1.3 Cords Produced Daily @ 2500 Tons Annual Production OL ld Cord wood costs decrease as efficiency in daily production increase. If the annual production is 2500 tons of wood, the production cost model shows that we need to be producing 12 cords of wood or more per day to get the costs near $200/cord. The opportunity to produce wood fuel from Gwitchyaa Zhee lands at reasonable costs are is real under the assumptions used in the production cost model. It is important however that harvest activities be carried out at a large enough scale (2,000 tons annually) as soon as possible and as efficiently as possible if the cost to the consumer will be in the $200/cord or less range. PLAN STATEMENT; Gwitchyaa Zhee Corporation will develop a business plan that endeavors to produce wood fuel for Fort Yukon reliably and economically. A central goal of the business plan will be to instill confidence and price induced incentives within Fort Yukon and the Yukon Flats area to convert from fuel oil energy to locally produced wood fuel systems. 3. Timber Harvest Planning It is currently estimated that 8,280 tons or more of biomass will be required on an annual basis when Fort Yukon uses woody biomass as the main source of fuel for heat and electrical power production. In order for this level of biomass use for energy to occur the community must take deliberate, logical, and consistent steps towards displacing fuel oil with wood, starting with the installation of wood boilers for their larger buildings. Under an optimistic schedule, wood fuel for heat could use up to 1,800 cords of wood annually within 3-5 years. Further increases in wood consumption would be for fueling electrical power production. It is anticipated that all of Fort Yukon’s future wood fuel will be produced from Gwitchyaa Zhee Corporation forest lands. On average, approximately 70-90 acres of spruce will need to be harvested annually in order to provide a demand of 1,800 cords. Once electrical power production is fueled by wood the annual consumption will likely exceed 8,000 tons of wood in chip form requiring approximately 400 acres of forest to be harvested annually. Most, if not all of the firewood produced in the first few years is expected to be harvested from timber stands that have been burned from wildfire events. In subsequent years firewood will be harvested from other spruce stands while wood chips may be from spruce or hardwood stands suitable for these purposes. It is clear then that harvest planning is a critical element to an emerging program during its initial stages. The assumptions in the harvest plan will determine the harvest and transportation equipment needs for the program, which in turn influence the overall harvest cost structures. This plan will need to be mapped well in advance of harvest initiation. Planning for the initial few years of harvest is technically achievable by coupling local knowledge of river behavior with existing GIS tools, including the use of satellite imagery or digital aerial photography. During the planning process it will be important to identify any specific issues on each harvest site that might negatively affect efficient production flows. These may be seasonal issues such as high river levels causing flooding, river current intensity, wet soils, or shallow waters that could impede boat traffic. Any of these or similar issues will need to have a plan in place to address them prior to commencement of harvest activities. PLAN STATEMENT: The Corporation will develop a harvest plan that projects annual wood harvest location and quantities to meet projected demands as wood burning boilers and generation facilities are installed. 4. Permits Certain activities will require permitting or notifications to one or more public agency. The Alaska State Forest Practices Act requires a Plan of Operations to be submitted when ever commercial timber harvest exceeding 5 acres in area occurs. These plans are regularly submitted by commercial operators and typically result in authorization to proceed within 45 days. Installation of abutments into the river floodplain will likely require a permit from the U.S. Army Corps of Engineers and perhaps others. Small non-controversial projects can sometimes be permitted within 90 days, but 6 months is a more likely timeframe. Larger, more controversial projects can take longer. It is advisable then that those activities requiring State or Federal authorizations be identified as early as possible in order to obtain the proper permits. PLAN STATEMENT: The Corporation will inquire about and meet the permitting needs for woody biomass harvest program activities as described by the Timber Harvest Systems and Transportation and Timber Harvest Planning portions of this Plan. 5. Infrastructure and Systems Having the appropriate infrastructure to facilitate the production of wood for fuel will be as critical for the long term sustainability of the program as having the proper equipment. In the case of Gwitchyaa Zhee Corporation, the most critical infrastructure will be the wood yard, The wood yard need not be elaborate. It must be of sufficient area to provide for the efficient handling, processing, and inventorying of fuel wood. It is the central place for the majority of the distribution company’s activities. Logs will be delivered from the forest to this location and they will either be cut to length and split, or eventually, be chipped or chunked at this site. Some of the fuel wood may need to be seasoned for a period in the yard before delivery to the customers. Harvest equipment and boat storage during the off season will also be necessary. No less than one acre of yard should be planned for the first few years of firewood production. This may need to be expanded to over 3 acres in future years when additional production is required. The yard needs efficient road access to the community year round. The yard should be located near the river to facilitate efficient log handling. An abutment that affords at least 3 feet of water depths at lower flow levels will be very important to the efficiency, and thus the economic viability of the entire program. There should be 20 to 30 feet of abutment face such that the work boat can dock alongside with a small barge or raft of logs. The abutment should be directly adjacent to the yard. Other infrastructure may include an anchor system for remote mooring of the work boat at the harvest site. This may be necessary in some cases where the river bank or currents do not allow the boat and/or small barge to be pulled up to the bank. A small 10 foot wide portable abutment may also prove useful to facilitate efficient loading of logs onto a small barge or for log raft assembly. A small portable ramp may also come in handy in some situations if the work boat or barge does not already have one. PLAN STATEMENT: The Corporation will work with partners to secure a site in Fort Yukon to locate and operate a wood processing and distribution yard. ] ] ] 6. Timber Inventory and Forest Growth At the request of the Fort Yukon Native Association, Tanana Chiefs Conference with assistance from the Bureau of Indian Affairs completed a forest inventory of the river corridor forest lands for the Fort Yukon village corporation, Gwitchyaa Zhee Corporation. Completed during the field season of 1982, the inventory was confined to corporation lands located within 1/2 mile either side of the Yukon and Porcupine Rivers. The project area contains approximately 85,000 acres of land and water and was determined by Gwitchyaa Zhee Corporation as the area of their holdings containing the best and most accessible forest stands. Methods Timber stands were delineated on 1:60,000 scale color infrared imagery by species, size class, density, and estimated volume per acre. Field plots were then selected for each type to be sampled. This selection process was determined by placing a dot grid containing one point for every 100 acres over each photo and recording the type call at each point. The proportion o f each type to total area was then calculated. The typed individual stands to be sampled were then selected randomly from the photo grids based on the actual proportions of each type. Results Approximately 47% of the total acreage within % mile of the Yukon and Porcupine rivers was determined to be forest land, or approximately 40,000 acres. On these acres it was estimated that 28,924,000 cubic feet of white spruce in the sawtimber and poletimber size class was in inventory. An additional 7,699,000 cubic feet of balsam poplar was identified in these size classes as well. Forest land was classified into three types; Sawtimber, Poletimber, and Seedling/Sapling. Forest Land Area and Volume by Type Specie/Size Class Acres % of Area Cubic Feet Sawtimber Type White spruce 8,291 21 15,687 Balsam Poplar 134 1 143 Subtotal 8,425 21 15,830 Poletimber Type White spruce 9,123 23 13,237 Balsam Poplar 7,685 19 7.556 Subtotal 16,808 42 20,793 Seedling/Sapling Type White spruce 1,640 4 NA Hardwoods 12,973 33 NA Subtotal 14,613 37 Total 39,846 36,623 | In the context of this Plan it is anticipated that most of the timber volumes will be used for fuel, either in stick firewood form or as wood chips. Thus timber grade is of little importance. Species is of significance however in that white spruce can be used as stick firewood, where hardwoods need to be chipped in order to be used as fuel. With certain conversion assumptions timber volume data can be translated into cordwood or weight metrics that are more useful for planning a biomass program. If the assumed average volume of a cord of wood is 100 cubic feet then an average of approximately 16 cords of white spruce per acre is present on sites averaging 1,660 cubic feet per acre. If a bone dry cubic foot of white spruce weighs 23 pounds, then an average acre of white spruce will produce 19 tons of wood chips. Forest Yield Site productivity can vary dramatically. In the case of white spruce, it is reasonable to assume that on average lands planted with 250 trees/acre will conservatively be able to grow 1,600 cubic feet of wood fiber within 100 years. Average annual cubic foot volume growth on these acres is approximately 16 cubic feet, or 0.18 ton bone dry tons/acre. If this growth occurs on all existing white spruce forest lands within the 1982 inventory, then 19,054 acres growing 16 cubic feet per year equals an annual growth of 304,864 cubic feet, or just over 3,000 cords annually. Certain willow species, such as Pacific and Sandbar willow are capable of better performance. Stands of these species can grow as much as 16-20 tons per acre within 25 years under the right conditions. Little attention has been given to the mapping of existing stands or growth rates of these species. It will be important to determine what the capacity is to grow these species on Corporation lands as it would appear that at high biomass consumption levels that they have an important contribution to make to the overall program. Mapping of Remaining Corporation Forest Lands The 1982 inventory data is quite useful for purposes discussed above. The assumption that the lands within % of a mile of the Porcupine and Yukon Rivers are those most likely to be developed remains true today. It is of value however to develop an understanding of the remaining lands as opportunity arises. With modern GIS technology and publicly available satellite imagery this task is achievable with a reasonable amount of effort. Rt i i oe ee SS 3) Reforestation Objective Develop a reforestation strategy to restock and efficiently grow biomass on lands that have been either harvested for biomass production or burned by wildfire. History Little applied forestry has been practiced on Corporation lands. Consequently no direct experience can be tapped to direct a reforestation and tree growing program. Certain principles for establishing trees in interior Alaskan forest sites can be applied successfully however with an appropriate degree of care and diligence. Wildfires and river flooding have been the key disturbance mechanisms in the Yukon Flats forest for millennia. Natural reforestation has been occurring on these disturbed sites for nearly as long and the land base exhibits some recognizable patterns. Some burn sites have taken a relatively long period of time to naturally — re-establish themselves. There are some indications that the growing capacity of a number of burned sites has been diminished. This may have resulted from the combustion of the soils humus and litter layers resulting in degraded fertility. It is also possible that the heat from the fire reduced the soils capacity to absorb or otherwise retain moisture and thus emulate drought conditions to the vegetation that had since been established on the site. Timing also plays a significant role in a natural reforestation regime. If seed sources are experiencing low seed productivity after a fire, Forest re-established 40 to 50 years after a those tree species that rely on seed to propagate wildfire will not re-establish themselves very well in the . early successional stages following a fire. Similar results may develop if high populations of small animals such as snowshoe hare or field mice are present during the trees early stages. These species have the capacity to destroy high numbers of seedlings when their populations are high through their foraging habits. Reforestation Key Elements Tree planting programs in remote areas such as Gwitchyaa Zhee lands can be challenging and expensive. Early decisions should be made carefully and conservatively with a recognition that experience will undoubtedly be gained over time that will refine attitudes on what processes work best in this area. One of the first decisions will need to be made regarding what species will be desired to be established on each tract of harvested lands. Both biological and economic factors will likely influence this decision. The two broad options are to establish conifer (white spruce) or hardwoods, and then which species within these two broad classifications will be most beneficial to the landowner. The processes for establishing a new conifer forest is different than for hardwoods. As discussed above, neither has been done to any extent in the Yukon Flats. It is wise then to start off with developing some experience on a small scale before making significant investment in any method. This fits the overall program in Fort Yukon since the acres that will need to be reforested will be comparatively small in the early years of the program. Unless the Corporation is willing to consider introducing conifer species that are exotic to the area, white spruce is the best growing species available to grow for biomass. Establishing white spruce through a tree planting or seeding program will involve the need to gather of seed from standing timber. If possible, the seedlings (seed) should be purchased through other established reforestation efforts with similar site characteristics as is found in the Yukon Flats. This will keep the initial planting efforts simple and efficient. The State of Alaska Division of Forestry may be willing to cooperate in these efforts. Hardwood plantings may be done from entirely local sources. It is envisioned that most, if not all hardwood planting will be of one or two species of willow, and it appears to be the best species to start with. Most willow species are easily propagated by cuttings if done properly. This involves the harvest of cuttings during dormancy of the plant, and then the planting of the willow “slip” as soon as the ground thaws in the spring. Tall willow species such as Felt-leaf willow (Salix alaxensis) are good candidates for this application. They tend to grow comparatively fast in dense stands, most often with over 1,000 stems per acre. Funding Funding the reforestation efforts may prove to be a challenge, particularly in the early stages of the program. Sources of financial assistance can and should be sought out from the Forest Stewardship Program and the Natural Resource Conservation Service. These programs can offer technical and financial help, particularly in a start up program. The Corporation is eligible to participate in the NRCS EQIP program as a beginning producer. This designation entitles the Corporation to submit projects such as reforestation to the EQIP program for a cost reimbursement of up to 90% for eligible and selected projects. 4) Private Lands Wildlife Management Objective: To describe an integrated approach to managing subsistence wildlife populations within the area of GZ Lands Background Private lands wildlife management (PLWM) is a collaborative and incentive based program developed in several of the lower states under the North American model of wildlife management. The purpose is to encourage the private landowner to become a partner with the state in game and habitat management through a set of economic and regulatory incentives. Typically the state wildlife agency gives greater flexibility in the harvest of game on the participating private land allowing the landowner greater opportunity to market hunting rights on that land. In exchange for this incentive the land owner is expected to enhance wildlife habitat and develop a focused intensive management program for the wildlife on the land. Aldo Leopold recognized the basic need for this type of incentive to get private landowners involved in conservation during the development of the Game Management Policy in 1930. He stated: “Recognize the landowner as the custodian of public game on all [private] land, protect him from the irresponsible shooter, and compensate him for putting his land in productive condition... In short, make game management a partnership enterprise to which the landowner, the sportsman, and the public each contributes appropriate services, and from which each derives appropriate rewards’(Game Management Policy, 1930). This same basic principle of integrated power, responsibility and benefit sharing is the underpinning for Community Based Natural Resource Management (CBNRM) developed primarily in emerging economies and with indigenous communities through out the southern hemisphere. The CAMPFIRE program in Zimbabwe is the most noted and successful thus far. The basic concept as described in the above quote is to develop a three way partnership among the government, private sector, and landholder where a true sharing of benefits, power (decision making), and responsibilities takes place. This is the challenge to developing PLWM with native private landowners in Alaska. Should the process be modeled after the PLWM model developed primarily for the individual private landowner under the North American Wildlife Model or should it be more like the CBNRM model of developing countries and communal landowners? Challenges to implementation For effective management to occur on Native Corporation Private Lands, the model will be a hybrid of the two above models and will depend upon the local dynamics of the corporation, tribe and community. For a model to be successfully implemented the local users of the land for subsistence must be fully empowered and engaged. Thus even though the corporation has fee title, in many cases it is not the “tenured” land user, the local community or village is. Thus developing a PLWM management program is not as simple as engaging one private landowner it must be community based. Implementation of a PLWM program may have a significant long term lag phase in economic return. There are two reasons for this. The first is the need to build internal capacity within the managing entity whether the corporation, tribe, community, or local entrepreneurs. This will require participative meetings and decisions on management directions and objectives. Given that decisions are made on goals for wildlife populations and their use, then if a program beyond subsistence is to be developed the resource must be built to a high enough quality to attract tourist hunters, fishermen, or eco-tourists. This then requires marketing and service capacity. Starting from ground zero with a need to build moose populations requires at least 5 to 10 years. Thus a program built in the interior of Alaska will require time to develop even if local interest exists to develop this type of program. CATG Resource Department: Currently the CATG Natural Resources Program has a Director, Special Projects Coordinator, Fisheries Biologists, Environmental Coordinator, and Community Development Coordinator. All staff work as a team, making themselves available to assist on projects as necessary. The CATG is recognized as the Yukon Flats Resource Conservation and Development Area (RC&D). Yukon Flats Moose Management Plan In May 2002 a final cooperative moose management plan was published for the Yukon Flats Region. The plan demonstrated that the current status of moose populations in the region is one of the lowest densities in the state at 0.2 moose per sq. mi. (see figure below). Number of Moose per 100 Square Miles in Various Parts of Interior Alaska 0 McGrath Area Yukon Flats KanutiFlats Nowitna TananaFlats Minto flats Lower Koyokuk Yukon Flats has 0.2 moose per square mile. (ADF &G 2002) Since 2002 the CATG Resource Department has implemented the plan with a goal of increasing moose densities within the Yukon Flats Region. In order to increase moose densities three primary issues must be addressed: 1. Subsistence Moose Harvest — Traditionally cow moose were harvested along with bulls even thought state regulations prevented cow moose harvest. CATG worked with local subsistence hunters to educate them on the need to decrease the harvest of cow moose. Maintain high quality habitat—Studies in the Yukon Flats region has demonstrated that habitat is not limiting to the moose population. Recent large scale fires will increase moose habitat quality for the next 20 years. Implementation of a biomass utilization program can slightly increase habitat quality locally near villages through a 60 year rotation on forest stands. 3. Predator management — the predator management issue is the most critical limiting factor for moose population increase in Yukon Flats. Black and Grizzly bear populations are at an all time high. The wolf population has more than doubled in the past 25 years. Fort Yukon hunters have increased the number of black bears they are harvesting since 2002. However, it is more difficult for subsistence hunters to harvest significant numbers of wolves. Bears are key predators on moose calves and wolves take adults during winter. Fig. 2 Estimated Moose Population Composition in Western and Eastern Yukon Flats Survey Areas © @ Calves 2 Bulls fa 8 ae TTT TTT No. Cows, Bulls and Calves 2 wanna on 8 TTT ad Vii Litit 0. 2 : 1996 1999 2000 2001 2003 2004 2004 2006 1995 1997 1999 2000 2001 2004 2004 2005 2006 Western Yukon Flats Year Eastern Yukon Flats . ‘ : 2 . i * . gee. : From ADF&G 2006. Moose Management Plan Implementation The CATG Resource department has done an excellent job in implementing the moose management plan in Yukon Flats. This has been especially effective on GZ Corporation lands. The two critical issues addressed to date are cow moose harvest and bear harvest. Cow moose harvest is now insignificant as a population limiting factor. In and around Fort Yukon in 2006, twenty grizzly bears and 104 black bears were harvested. This is a significant increase in bear harvests. Unfortunately only 20 wolves were harvested in 2006. Fort Yukon and GZ lands have the largest number of hunters in the region and thus are able to impact bear populations more effectively than other villages and lands. Thus the increased harvest of bears over the last several years has stopped the decline of the local moose population and increased calf survival. See below figure. The eastern survey area includes Fort Yukon and the western area includes Birch Creek which has much smaller hunter population and thus minimal impact on the bear population. These data demonstrate how the reduction of the bear population has stopped the decline of the moose population and increased the calf survival in the eastern survey area versus the western survey area. Recommendations: Predator harvest —The Fort Yukon area has had the greatest success at bear management thus far. This will need to be maintained and increased on the lands surrounding Fort Yukon for future growth of the moose population. The most effective way to reduce the wolf population is through use of planes, sighting wolf kills of moose and snaring. Local hunters and trappers simply cannot have the impact that is necessary for to effectively decrease the wolf population enough to allow for maximum growth of the moose population. This program should be a contracted program for full effectiveness. <a (xd Pi ‘a & vi Habitat enhancement -- Implementation of a biomass utilization program with the associated harvest and silvicultural practices offers an opportunity to locally enhance habitats surrounding the village. The impact will not be enough to make significant population enhancement but will need to be addressed as part of the planned harvest strategy. A mosaic of habitats across the landscape will be generated. Silvicultural techniques may include will harvesting and planting for high productivity of biomass. 5) Forest Health Objective Establishment of a system that monitors the health of the Corporations forests and identifies corrective measures for threats to forest health when they are identified. Methods To meet this objective we will take the following steps: e Develop a plan for fire protection and response. © Develop a plan to monitor and respond to insect and disease out breaks. Discussion Fire Protection The last major wildfire threat to Fort Yukon was in the 1960's. A biomass harvest program can reduce the future wildfire risks to the community by a management scheme that significantly reduces the fuel loads in the forest lands immediately surrounding the community. Ea | S\ INITIATIVES GA New HORIZONS FOR RURAL ALASKA Fire History - 1950 > 1987 - BLM 8 Miles Fire History nae P aitew eel || Vicinity Map Date Source: BL Gwitchyaa Zhee Lands Strategically implementing biomass harvest around the community will result in an effective firebreak over time. Reforestation efforts can plant lower fire hazard species such as willow in order to manage the new forests capacity to contribute to the high risk fuel loading of these lands over a biomass crop rotation. Planning efforts should include input from agency personnel with fire suppression training and experience. Planting willow in the vicinity of the community will also compliment the PLWM principles discussed above. Resource Inventories 1) Forest Typing and Mapping Objective Complete the forest type map for all of Gwitchyaa Zhee lands. Purpose A type map for all Corporation lands will enable the Corporation to make reasonable estimates of existing biomass and forest growth potential for their entire ownership. Methods To meet this objective we will take the following steps: e Check and update the existing forest type map created in the 1984 inventory that covers forest lands within 0.5 miles of the Yukon and Porcupine rivers. Digitize vegetation types for the remainder of the Gwitchyaa Zhee ownership using the forest typing protocols established in the 1984 inventory. Use the new type maps to estimate biomass quantities on entire Corporation ownership. Discussion The forest typing work conducted for the 1984 inventory project included Gwitchyaa Zhee lands within one half of a mile of the Yukon and Porcupine Rivers. The reason for limiting the typing to these areas was that these areas were the most likely to be ever harvested or managed, and that the cost of further typing was not justified. Today, GIS capabilities make the typing exercise much more attainable. While the likelihood of harvest of forest resources more than half of a mile away from the major rivers is still problematic, having the remainder of the Corporations ownership typed out will provide information useful for a broader scale forest management plan. The existing forest typing format is sufficient for planning purposes and can be projected over the entire ownership with a reasonable amount of effort. It may be possible to have cooperators in the Fort Yukon project assist in having this work carried out with little or no out of pocket expense to the Corporation. The NRCS is in the process of acquiring new detailed satellite imagery for the Yukon Flats in association with a soil and land cover survey planned for the 2008 field season. In a collaborative effort, the Corporation is encouraged to work with the NRCS to explore potential avenues to working with them to include woody biomass typing as well. 2) Soil Survey Objective Obtain digital soils mapping data for Corporation lands through a collaborative process with the Natural Resource Conservation Service. Purpose Provide soils data that will enhance the ability to better manage its land and resources for the benefit of its shareholders, the general public, and wildlife. The soil survey will be produced in a form useable by Gwitchyaa Zhee Corporation and CATG staff for its incorporation into broad management planning processes. Method The Corporation and CATG will continue to work with the USDA-Natural Resources Conservation Service (NRCS) to produce a soil survey — project that is scheduled for 2008 which will include — Gwitchyaa Zhee lands. The Corporation is encouraged to enter into a_ collaborative relationship with the NRCS and other partners to facilitate leveraging project funding and implementation. CATG will review its priorities for obtaining soils data and provide this information to the NRCS. The 10 Year Action Plan The ten year action plan for Gwitchyaa Zhee Corporation is a_ first-of-a-kind Forest Stewardship Plan that outlines a plan to bring a new wood based economy to Fort Yukon and Yukon Flats Region of Interior Alaska. This is a task that has never been done before. The internal measures of this plan are dependant on activities outside of its scope being successfully implemented in a coordinated manner. The need for and ability to carry out this action plan is contingent on funding for start up of a wood harvest and distribution company activities as well as those efforts that are endeavoring to install wood fueled heat and electrical power generation projects in Fort Yukon. Should either of these efforts fail, the applicability of this action plan becomes moot. Additionally, the upstart nature of the project makes precise scheduling of these activities impractical. A general plan can however, be laid out such that the sequences can be followed in the event the actual timing of each task is altered. The 10 Year Action Plan has natural groupings of years 1-3, 4-7, and 8-10. Years 1-3 Collaborate with partners to: ¢ Develop a business plan for a wood harvest and distribution company in Fort Yukon with potential application in other interior Alaska Villages. Produce a preliminary harvest plan by identifying 3 years of harvesting in firewood and wood chip producing vegetation types. Project numbers of acres needed on an annual basis to produce the needed amount of biomass for fire wood and electrical power. Generate an equipment list and cost structure for a harvest company producing the projected short term, mid-term and long term woody biomass consumption in Fort Yukon. Generate long term contracts for wood harvest and delivery to the village and end user contracts with the wood distribution company, Identify and obtain necessary regulatory permits needed to carry out short term harvest activities. Update vegetation and biomass typing e Determine acreages and estimate quantities for each acreage type e Determine which types are capable of supporting biomass harvest activities e Determine which areas will contribute to moose habitat enhancement e Produce a soils and habitat type map. Identify and secure funding. Procure harvest equipment and initiate a harvest regime based on above plan. Work with partners to identify harvest methodologies that support natural regeneration of both deciduous and conifer stands. Work with partners including the CATG Resource Department and University of Alaska in Fort Yukon to develop a forestry and wildlife technician program for training future resource management staff. Conduct village outreach meetings in conjunction with CATG Resource Department as needed to keep the village informed of harvest activities. Years 4-7 a. b. Years 8-10 a. b. d. Verify economic assumptions developed for the biomass harvest company and the wood distribution company and adjust production and sales methods as needed. Review harvest and wood delivery equipment efficiencies and adjust equipment package as needed and economically feasible. Verify harvest and regeneration methods through regeneration surveys on harvested stands of both deciduous and conifer stands adjust methods as needed. If demand for biomass is increasing especially with the addition of electrical power, then working with partners explore short rotation high volume wood chip silvicultural opportunities including such species as willow, cotton wood, and hybrid poplar. Continue to monitor the economics of harvest, and biomass delivery to end users and adjust processes as needed; Verify harvest and regeneration methods through continuous annual monitoring of harvested stands and adjust as needed. Update the three year harvest plan for the next three years based on new understanding of biomass demand within the village. Verify and project average acres needed to supply biomass needs of Fort Yukon. Monitor sustainability of harvest and projected length of biomass rotations for both deciduous and conifer stands. Assure sustainability of the program. Cap annual production if needed. Follow through with the development of a short rotation high yield biomass production system for wood chips. Continue to support resource management training programs and on job training for harvesting and wood delivery. Conduct village outreach meetings in association with CATG Resource Department as needed to keep the village informed of management activities.