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2 <br /> D. The right at all times during the life of this lease to go upon said <br /> premises and every part thereof for the purpose of inspecting said <br /> premises, and the books of accounts and records of mineral workings <br /> therein, and of ascertaining whether or not said Lessee and those <br /> holding thereunder by and from it, are carrying out the terms, <br /> covenants and agreements in this lease contained. <br /> E. The right at any time to grant a right-of-way upon, over or across <br /> all or any part of said premises for any ditch, reservoir, railroad, <br /> communication system, electric powerline, pipeline, schoolhouse or <br /> other lawful purpose; but that such grants shall be subject to the <br /> rights of Lessee. <br /> TO HAVE AND TO HOLD The above-described premises unto Lessee, its heirs, <br /> successors, assigns, or legal representatives for the term of Ten 10 years, <br /> and until Twelve O'clock noon on the 28th day of February, 2000, and, except <br /> as hereinafter stated, as long thereafter as minerals are being produced in <br /> paying quantities from said premises, and the royalties and rentals provided <br /> for herein are being paid, or by any extension hereof, subject to the <br /> following terms, conditions and agreements, to-wit: <br /> 1. ADVANCE MINIMUM ROYALTY -- As minimum and advance royalty, without <br /> relation to the amount of minerals mined from the leased premises, Lessee <br /> shall pay annually in advance to Lessor the following amounts: <br /> LEASE YEAR ADVANCE MINIMUM ROYALTY LEASE YEAR ADVANCE MINIMUM ROYALTY <br /> 1st None 6th $4.00/ac/yr <br /> 2nd None 7th $4.00/ac/yr <br /> 3rd $1.00/ac/yr 8th $4.00/ac/yr <br /> 4th $2.00/ac/yr 9th $4.00/ac/yr <br /> 5th $3.00/ac/yr 10th $4.00/ac/yr <br /> Royalty due for minerals produced from said premises shall be <br /> credited against such advance minimum royalty until the total sum is <br /> equal to the advance minimum royalty previously paid to the State, at <br /> which time a regular monthly royalty will be due and payable as herein <br /> provided. <br /> In the event Lessee does not extract minerals from the leased <br /> premises during the primary term or any additional term so agreed to by <br /> Lessor, the minimum amounts above paid to the State will be forfeited. <br /> Acreage changes resulting from surrender or partial assignment may <br /> reduce the advance minimum royalty proportionately. Further, at the end <br /> of the third and tenth year of this lease and each five-year period <br /> thereafter, Lessor may reasonably change the rate or amount of advance <br /> minimum royalty to be paid by Lessee. <br /> In case of assignment of this lease, all advance minimum royalty paid <br /> to the State shall be carried forward and credited to the new assignee. <br /> 2. PRODUCTION ROYALTY -- The royalty for any products whatever which are <br /> mined, saved, sold and/or removed from the leased premises shall be based <br /> on one of the following, whichever is greater: <br /> A. Thirty cents ($ .30 ) per ton of 2,000#, or <br /> Forty cents ($ .40 ) per cubic yard. <br /> All accounting shall be validated and verified. <br /> Net Returns and Gross Market Value are defined as follows: <br /> Net Returns means the net amount received by Lessee from the sales of the <br /> products after processing, where processing is necessary for commercial <br /> use, less the actual cost of transportation from the mine to the closest <br /> feasible point of sale, less costs of processing including smelting <br /> charges and deductions and other treatment costs. <br /> Gross Market Value means the value of the ore or products after <br /> extraction and at the mine. (See 39-6-106)(E)(h)-CRS) . <br />