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Royalty Agreement
<br />Page 7 Item 7(d)
<br />Company applies for or seeks governmental permits or authorizations
<br />to commence mining operations under the Lease.
<br />d. Lessor acknowledges that it may be necessary during the Term of this
<br />Lease for the Company to construct, maintain, and use roads, pipe
<br />lines, power lines, telephone lines, conveyors and stockpile areas and
<br />right of ways on the Property. As set forth in Paragraph 7.c., the
<br />Company will prepare and submit for Lessor's review and approval a
<br />mining and reclamation plan detailing, rote►- alia, the location and
<br />nature of any such improvements or modifications to the Property.
<br />The Company shall receive prior written approval from Lessor for all
<br />roads, pipe lines, power lines, telephone lines, conveyors, stockpile
<br />areas, right of ways, and the like deemed necessary or desirable to its
<br />operations on the Property. The Company shall not use Lessor's
<br />power lines, telephone lines, pipelines, fences, roads, ditches or other
<br />improvements on or to the Property without Lessor's prior written
<br />approval and the payment of fair compensation.
<br />e. The Company shall not disturb, remove, relocate, use or destroy any
<br />existing structures on the Property, including but not limited to
<br />buildings, fences, roads, power lines, ditches, and telephone lines,
<br />without the prior written authorization of Lessor and the payment of
<br />fair compensation.
<br />The Company shall have the right during the Term of this Lease and
<br />without payment to Lessor to strip overburden and topsoil, and
<br />otherwise to use and occupy the Property as is reasonably required in
<br />connection with mining, quarrying, extracting, processing (including
<br />tailings - washed fines storage facilities), storage, transportation, sale
<br />and removal of Materials from the Property, as set forth in the mining
<br />and reclamation plan approved by Lessor. However, the Company
<br />shall segregate, stockpile and protect from wind and water erosion, and
<br />from contamination, the first eighteen (18) inches of materials on any
<br />portion of the Property that it intends to mine, whether this material is
<br />topsoil, overburden or some combination thereof, for use during
<br />reclamation efforts on the Property. In no event shall any topsoil be
<br />removed from the Property without the prior written approval of
<br />Lessor.
<br />Timber. There shall be no removal of timber without prior written
<br />notice to Lessor. Any merchantable timber cut in conjunction with the
<br />Company's operations on the Property shall remain the property of
<br />Lessor. All other timber, slash, stumps and boughs are to be properly
<br />disposed of by the Company.
<br />Lessor's Initials Company's Initials
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