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LEASE YEAR MIN EXPEND <br /> 1999 thru 2001 NONE <br /> 2002 And each year thereafter NONE <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 lease unless approved by Lessor. <br /> 9. PF,NALTIES--A penalty shall he imposed for,but not limited to,late payments,improper payments,operational <br /> deficiencies of any kind whatsoever,violations of any covenants of this lease, or any false statements made to <br /> Lessor. Penalties shall be determined by Lessor unless otherwise provided for by law and may he in the form of, <br /> but not limited to, interest,fees,fines,and/or lease cancellation. A penalty schedule shall be prepared by Lessor <br /> j and shall become effective immediately after public notice. Said schedule may be changed from time to time after <br /> such notice. <br /> 10 ASSIGNMENT-- Lessee,only with written consent of Lessor,may assign this lease as to the leasehold interest <br /> of such Lessee in all or part of the lands covered hereby;not less, however, than tracts of approximately forty <br /> (40)acres or govermnental 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 <br /> or approved by Lessor,and the effect,if any,of any such assigrnnents or reservations will he strictly and only as <br /> between the parties thereto and outside the terms of this lease. No dispute between parties to any assigrnent or <br /> reservation shall operate to relieve Lessee from performance of any terms 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 <br /> as being sole owner hereof, and for the sending of all notices required by this lease, for the performance of all <br /> terms and conditions hereof. <br /> If an assignment of a part of this lease is approved,a new lease designated as an assignment will be issued <br /> to the assignee covering the lands assigned for the balance of the term of the base lease on the mining lease form <br /> in use at the time of assignment and limited as to term as said lease is limited. The assignor will be released and <br /> discharged from all further obligations for such lands assigned,as if the same had never been a part of this lease <br /> 11. ASSIGNMENT CONSIDERATION --The consideration for approval of assignment by Lessor shall be 10 h- of <br /> the value of any consideration tendered to Assignor by Assignee for the assignment. Divulgence of the value of <br /> these considerations shall be mandatory,in affidavit form,which form shall be presented to Lessor along with the <br /> other assignment instruments in order to obtain Lessor's approval for the assignment. An assignment does not <br /> constitute a new lease but is a continuation of the base lease. Any attempt to withhold this information shall be <br /> construed as an attempt to defraud the State of Colorado and shall render this lease null,void and nonexistent,and <br /> all moneys paid to Lessor shall he forfeited to Lessor. In addition,the current statutory fees will be paid at the <br /> time the assignment record form is submitted. <br /> 12 WEiGIITS -- It is agreed that all ores,minerals and other materials mined and taken from the leased premises <br /> shall be weighed and assayed and the weight and assay thereof shall be entered in due form in weight and assay <br /> records kept for such purposes by Lessee. <br /> Ton means 2000 pounds. Ton shall be determined by official Colorado State certified scales or other <br /> methods approved by Lessor. <br /> Ounce means ounce troy. <br /> 13, STEWARDSHIP TRUST STIPLII ATiON--Lessor shall specify certain stipulations with respect to use of the <br /> surface if said surface is included in the Stewardship Trust prior to the issuance of this Lease.These stipulations <br /> are attached as Exhibit I and by this reference incorporated herein <br /> 14 MINING METHODS -- Only mining methods that will insure the extraction of the greatest possible amount of <br /> minerals consistent within the laws and with prevailing good mining practice shall be used. <br /> 15. OPERATION PLAN --All plans for exploration and mining shall be submitted to Lessor for approval by Lessor <br /> before such operations begin.These plans will include,but not be limited to, location of additional roads,location <br /> of access points to the Leased Premises,and location of any cattle guards or gates. In the event that adjacent lands <br /> are mined and that rights of[Wining including strip mining, open pit mining, in situ solution mining. and heap <br /> leaching are sought by Lessee,such rights will only be granted if at lease one-half of the mined, royalty hearing <br /> product produced from the adjacent land and the Leased Premises comes from the Leased Premises and Lt <br /> approved by Lessor.These plans shall include provisions for control of weeds. <br /> Page 4 of 8 <br />