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GoodMiller #2 Pit 112c Permit <br />Further, Lessee shall furnish annually a complete operations report to Lessor disclosing the number of tons <br />and the assay thereof of all ores, minerals and other materials mined from the premises during the preceding year. <br />I essee shall also furnish in said report geologic interpretations and recoverable reserve calculations, and maps and <br />cross sections showing location of any mineral - bearing outcrops, drill holes, trenches, ore bodies and other <br />prospecting and exploration activities, along with assays showing the amount of mineral contained iu the ore. The <br />records required to be maintained by Lessee and provided to Lessor upon request include logs of all strata penetrated <br />and all geologic and hydrologic conditions encountered, and copies of in -!tole surveys; this infonnatiou to be <br />collected and prepared under tltc supervision of a qualified geologist, geological engineer or mining engineer. Other <br />qualified persons may collect and prepare this data, if agreed to in writing between Lessee and Lessor. Any request <br />to keep certain information confidential should be in writing to Lessor at the time such information is submitted to <br />Lessor, and such data may be kept confidential as consistent with State law. Lessee shall submit, if requested by <br />Lessor, such additional reports, records or documents regarding Lessees operation on the !:eased Premises as <br />necessary for the compliance with lease; provisions. <br />OVERRIDING ROYALTY LIN9ITATIONS — It is agreed that this Lease or any subsequent assignment hereof shall <br />not be burdened with overriding royalties the aggregate of which execeds two percent (2 %) of the gross value of the <br />minerals or ore at the first point of sale. Lessor must be notified of all overriding royalties accruing to this Lease. <br />8. 1)t;VELOPMENT -- Lessee will diligcntty explore and develop the Leased Premises by utiliAng methods of <br />exploration c:omnronly used in tdtc industry, such as mapping, sampling, drilling, trenching, geophysical exploration, <br />and laboratory analysis and will expend as a minimum annually the amounts set forth below: <br />LEASH YEAR MIN' GXPIEND LEASE YEAR MIN EXPEND <br />NA NA JOW NA <br />Indirectly related exploration and development work such as work done on adjacent properties, or design or <br />construction of a mill will not be considered as diligent development of the Leased Premises unless approved by <br />Lessor. <br />9. PENALTIES — A penalty shall be imposed for, but not limited to, laic payments, improper payments, operational <br />deficiencies of any kind whatsoever, violations of any covenants of this Lease, or any false statements made to <br />I.cssor. Penalties shall be determined by I." -A)r unless otherwise provided for by law and stay be in the form of, but <br />not limited to, interest, fees, tines, andior lease cancellation. A penalty schedule shall be prepared by Lessor and <br />shall become effective inuuediately after public notice, Said schedule may be changed from time to time after such <br />notice. <br />10. ASSIGNMENT -- I.c-ssce, only with written consent of Lessor, may assign this lease as to the leasehold interest of <br />such Lessee in all or part of the lands covered hereby; not less, however, than tracts of approximately forty (40) <br />acres or governmental lots corresponding to a quarter- quarter section for any partial assignment. <br />No assignment of undivided interests or retention or reservation of overriding royalties will be recognized or <br />approved by Lessor, and the effect, if any, of any such assigmm=s or reservations will be strictly and only as <br />between die parties thereto and outside the tcrmts of this lease. No dispute betoken parties to any assignment or <br />reservation shall operate to relieve Lessee from pertbrmancc of any terns or conditions hereof or to postpone the <br />time therefor. Lessor will at all times be entitled to look solely to Lessee or his assignee shown on Lessor's books as <br />being sole owner hereof, and for the sending of all notices required by this Lease, for the performance of all terms <br />and conditions hereof. <br />Page d of 11 <br />GoodMiller #2 Pit Dec 2014 N -5 <br />