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I I I I I I I I I I I I I I I I I I I' Property: Pre-Mix Concrete Company Plant, Part of Section 26, T6S, R69W. (L2) Lessor Lessee Shore Farms Pre-Mix Size Date Operations Began 72+ acres 1963 Remarks: Property was acquired under two basic contracts, known as follows: Riverside Contract No.1: Provides that Lessee will purchase the gravel in the ground at the rate of $3,000 per . acre, payable $12,500 a year with no yearly minimum required to be mined. This contract covers approximately 48,5 acres of lower lying land. Note that there is no ton royalty rate, and that the $12,EOO per year acts as a minimum payment. At the termination of mining, the residual land remains in the Lessor. Thus, the sale rate of $3,000 per acre of gravel is in lieu of tonnage royalty. For instance, operator informs us that each acre contains 25,000 to 30,000 tons, Noting that as of August 15, 1969 production has been nearly 126,000 tons, this would be between 4 and 5 acres. Extrapolating to the end of the year, therefore, production would be approximately 8 acres, or payments to Lessor of $24,000. The price per acre, in other words, is simply a way of expressing royalty on an acreage basis rather than a tonnage basis. Hillside Contract No.2: Covers approximately 24 acres of shelf land, and provides a royalty of $0.06 per ton based on sales, against $2,400 per year advance once mining has commenced, no advance without mining operations; Operator considers this portion unprofitable, and has no intention at this time of mining. Current Production (1969):125,852 tons to August 15, 1969, working 8-hour shift per day, Type of Product: Concrete aggregates, approximately 40% waste, Estimated Reserves (Lessee's estimate): Approximately 10 acres, or 300,000 tons, or l~ to 2 years, -5G-