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b. The Lease is based on royalty payments for a minimum annual quantity of <br />per year. Lessee shall pay, in advance of each <br />calendar quarter, MW equal to one quarter of the <br />minimum annual royalty based on the minimum yearly quantity of <br />(each quarter, the "Minimum Royalty").. On or before the <br />Effective Date, the Lessee shall pay the first quarterly Minimum Royalty payment <br />and the last quarterly Minimum Royalty payment'. In the event this <br />Lease is terminated, per the terms herein, these Minimum Royalty payments and <br />Production Royalty payments shall be non - refundable to Lessee and retained by Lessor. <br />C. Prior royalty payments (both minimum payments and the regularly <br />scheduled payments based on actual production described in the preceding paragraph) shall <br />be allowed as a credit against the cumulative minimum royalty payment otherwise due. <br />d. Any unearned Minimum Royalty payment will be applied as a credit to the <br />ensuing year Production Royalties on a ton - for -ton basis. However, production in any year <br />for which prior year Minimum Royalty payments are applied as credit, is not counted <br />toward the minimum quantity of tons for that year. At the expiration of the Term of this <br />Lease, any Minimum Royalty payments for which Lessee has not utilized credit are <br />forfeited to Lessor. <br />e. During every consecutive (rolling) twelve (12) month period during the <br />Term, Lessee shall remove not less than tons of Sand and <br />Gravel from the pit (the "Minimum Take "), which may be removed from the Premises <br />(royalties paid as provided herein) or stockpiled in locations approved in advance by <br />Lessor. Lessee shall remove the Minimum Take in accordance with a mining plan <br />designed to maximize Lessor's ability to use the Premises as a water storage facility. All <br />Sand and Gravel mined and stockpiled, but not removed from the Premises, by Lessee will <br />remain the property of Lessor until the royalty is paid. Lessor shall not make for sale during <br />the Term any aggregate produced by the Lessor. <br />f. Notwithstanding the above, gross proceeds from any overburden or <br />unprocessed sand and gravel material sold by Lessee or Lessor for the Highway 287 Lamar <br />Bypass project will be split 50% to Lessee and 50% to the Lessor. Lessee will be <br />responsible for the costs of production of these materials from the Premises. Either Lessee <br />or Lessor may negotiate with the State of Colorado Department of Transportation for the <br />sale of such materials; and will reasonably cooperate with one another to coordinate such <br />sales. <br />g. Any gross proceeds income received from the recovery of precious metals <br />will be split 50% to the Lessee and 50% to the Lessor. <br />h. Lessor right to conduct Operations. During the Term, Lessor shall have <br />the option to conduct production operations in the pit, alongside Lessee's operations, at <br />Lessor's cost. Lessor will stockpile any Sand and Gravel produced by Lessor on the <br />Premises, and Lessee will have the right to remove such Sand and Gravel, and Lessee shall <br />