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3.3 Cure by Lessee.7f the Lessee elects to cure defects not corrected by the <br /> Lessor,it may recover its curative costs from fifty percent(50%)of the <br /> value of any royalty payments thereafter acxuing,to a maximum of$1,000. <br /> Curative costs to the Lessee in excess of$1,000 shall be its sole <br /> responsibility. <br /> 3.4 JiLdg Failure After Examination Period.In the event of a title failure at <br /> any time after the examination period and during the term hereof;the Lessor <br /> shall not be liable therefore in damages or otherwise,and such title failure <br /> shall not operate to reduce any payment due to the Lessor pursuant to this <br /> Mining Lease,except to the extent such title failure is a result of <br /> encumbrances or other dew in title created,by,through or under the <br /> Lessor and except that royalties on production payable to the Lessor shall be <br /> paid only in proportion which the Lessor's interest m the part of the Inning <br /> Properties from which the royalties on production occur bears to the entire <br /> mineral interest therein. <br /> IV.Minimum Expenditure <br /> i <br /> 4.1 Performance of Work The parties have agreed that no minimum amount <br /> of work wr11 be required during the first five years of the lease term. ---.i <br /> Thereafter,the Lessee agrees to egmA not less ban the amounts set forth <br /> during each lease year on the following schedule: <br /> The second year of the Mining Lease $ 153000 <br /> The third year of the Mining.Lease $ 20,000 <br /> and each lease year dioreaftu $ 30,000; <br /> Such expenditures are to be for exploration,development,mining or related <br /> operations in or for the benefit of the Mining Properties. Amounts expended <br /> shall include,but not by way of limitation, expenditures fior test and <br /> development drilling and excavations,both surfim and underground;rental <br /> of equipment used in operations in the leased premuses or if equipment used <br /> in the operations is owned by Lessee,equivalent reatal computed at the <br /> current rental schedule of the Associated Equipment Distributors for <br /> equipment used in Colorado;expenditures for servicing and maintaining the <br /> rented or owned equipment;expenditures for geological mapping, <br /> surveying,sampling and assaying and metallurgical test work,engineering <br /> 4 <br />