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Part I1. TERMS AND CONDITIONS
<br />Sec. 1. (a) RENTAL RATE - Lessee shall pay lessor rental
<br />annually and in adt ance for each acre or fraction thereof durnt
<br />the continuance of the lease ai the rate of $3.00 for each lease
<br />Year.
<br />(b) RENTAL CREDITS - Rental shall not be credited
<br />a ainsi ether prodw-von ori dvance ro�alt:es for any year.
<br />Sec. Z. (a) PRODUCTION ROYALTIES - The royJty shall
<br />be 8.0 percent of the value of the coag ds sct fonh in the
<br />regulations. Royalties are due to Lessor the final day or the
<br />month succeeding, the calendar month in which the royalty
<br />obhratton accrues.
<br />(b) ADVANCE ROYALTIES - Upon request by the
<br />Lessee, the author Ted officer may accept, fora total of not more
<br />than 10 years, the payment of advance royalties in lieu of
<br />continued operation, consistent with the regulations. The
<br />advance roydlty shall be based on a percent of the value of a
<br />minimum number of tons &ermined in the manner established
<br />by the advance royalty regulations in ertect at the time the Lessee
<br />requests approval to pay advance royalties in lieu of continued
<br />operation.
<br />Sec. 3. BONDS - Lessee Shall maintain to the proper ofitce a
<br />lease bond in the amount of $5,000. The authorized officer may
<br />require an increase in this amount when additional coverage is
<br />determined appropriate.
<br />Sec. 4. DILIGENCE - This lease is subject to the conditions of
<br />diligent development and continued operation, except that these
<br />conditions are excused when operations under the lease are
<br />interrupted by strikes, the elements, orcasualties not attributable
<br />to the Lessee. The lessor, in the public interest, may suspend the
<br />condition of continued operation upon payment of advance
<br />royalties in accordance with the regulations in existence at the
<br />time of the suspension. Lessee shall submit an amended
<br />operation and reclamation plan pursuant to Section 7 of the Act
<br />(30 U.S.C. 207(c) w.thin 3 yt ar,. of the date of modifica°.on o-
<br />prior to approval to commence mining operations.
<br />Lessor reserves the power to assent to or order the suspension of
<br />the terms and conditions of this lease in accordance with, inter
<br />Sect: on 34 of the Mineral Leasing Act, 30 U.S.C. 209.
<br />Sec. 5. LOGICAL MINING UNIT (LMU) — Either upon
<br />approval by the lessor or the letisee's application or at tate
<br />direction of the lessor, this lease will become an LMU or part
<br />Of an LMU, subject to the provisions, set forth in the
<br />rep ulauons.
<br />The stipulations established i n an LMU approval to efirct at iii e
<br />time of LMU approval or modification will supersede the
<br />relevant incon,.ascent terms of the lease so long 2.s thc'iC4s4
<br />rema; ns committed to the LMU. If the LMU of A%44.h thii~-teat'
<br />i,. a pan is dissolved, the lease shall then be subje.puo the
<br />terms which would have been applied if the lease -had ngtreei
<br />included in an LMU.
<br />Sec. 6. DOCUMENTS, EVIDENCE AND INSPEorloN s 3
<br />such tames and in such form as Lessor may presoribe, Le+sec
<br />shall furnish detailed statement, showing the amounttnd quality
<br />of all products removed and sold from the lease, the proceed,
<br />therefrom, and the amount used for production purposes or
<br />unavoidably lost.
<br />Lessee shall keep open at all ret<onable t. me.,. for the inspect' on
<br />ofany dulyauthorized officer of Lessor, the leased premises and
<br />all surface and underground improvements, works, machinery,
<br />ore stockpiles, equipment, and all books, accounts, maps, a -w
<br />records relative to opera{tons, surveys, or investigation.,. on or
<br />under the leased lands.
<br />Lessee shall allow lessor access to and copying of documents
<br />reasonably necessary to verify Lessee compl°ante with terms and
<br />conditions or the lease.
<br />While this lease remains in ef3ect, informar�on obtained and -..r
<br />this section shall be closed to inspection by the public in
<br />accordance with the Freedom of Informat on Action (5 U.S.C.
<br />552).
<br />Sec. 7. DAMAGES TO PROPERTY AND CONDUCT OF
<br />OPERATIONS - Lessee shall comply at its own expense with
<br />all reasonable orders of the Secretary, respecting diligent
<br />operations, prevention of waste, and protection of other
<br />resources.
<br />Lessee shall not conduct exploration opera.+ions, other than
<br />casual use, without an approved explor lion plan. All
<br />exploration plans prior to the commencement of minim
<br />operations within an approved mining permit area shall be
<br />submitted to the authorized officer.
<br />Leasee shall carry on all operations in accordance with approved
<br />methods and practices as provided in the operating regulations,
<br />hdvin,r due regard for the prevention of injury to life, health, or
<br />property, and prevention of waste, damk-a or degradation any
<br />land, air, water, cultural, biological, visual, and other resources,
<br />including mineral deposits and formations of mineral deposits
<br />not leased hereunder, and to other land uses or users. Lessee
<br />shall take measures deemed necessary by lessor to accomplish
<br />the intent of this lease term. Such measures may include, but not
<br />limited to, modification to proposed sating or design of facilities,
<br />timing of operations, and specifications of interim and final
<br />reclamation procedures. Lessor reserves to itself the right to
<br />lease, sell, or otherwise dispose of the surface or other mineral
<br />deposits in the lands and the right to continue existing uses and to
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