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use, less the actual cost of transportation from the mine to the closest feasible point of sale, less costs of processing including smelting charges and deductions and other treatment costs. Gross Market Value means the value of the ore or products after extraction and at the mine. (See 39-6-106)(E)(h)-CRS). Royalty shall be due and payable on or before the last day of each calendar month during the term of this lease for ores, minerals and other materials mined and removed for sale by Lessee during the preceding calendar month. Reporting of production royalty that is credited against advanced minimum royalty is also due on or before the last day of each calendar month for mining during the preceding calendar month. Withic, sixty days prior to the termination of each and every five-year period ..r In ..- this -c_se r^-a: ie offe^_t, Lessor may reappraise the property herein leased and fix and determine the rate of production royalty to be paid during each year of the succeeding five-year period. Failure to comply with any new royalty rate set by Lessor may subject this lease to cancellation by thirty-day written notice by Lessor. 3. WEIGHTS -- It is agreed that all ores, minerals and other materials mined and taken from the leased premises shall be weighed and assayed and the weight and assay thereof shall be entered in due form in weight and assay records kept for such purposes by Lessee. Ton means 2000 pounds. Ton shall be determined by official scales or by weight determined at the mine tipple, or by weightometer. 4. EXTENSION -- Lessee may have a preferential right to renew the lease or to receive a new lease under one or more of the following conditions: A. Lessee shall furnish to Lessor satisfactory evidence of plans for mining during the term of the renewed lease or during the term of a new lease. B. Lessee shall furnish adequate geological evidence to Lessor that the acreage subject to the renewed or new lease is in fact an integral part of and contains reserves in a logical mining unit. Whether the acreage is or is not a part of a logical mining unit will be determined by Lessor. C. An extension of this lease would, as determined by Lessor, be in the best interest of the State. At the time of expiration of this primary lease, the following may be considered in the determination of the conditions of an extension or a new lease. A. An advance minimum royalty, the amount to be negotiated at the time of this extension, will be due and payable annually commencing on the date this lease is renewed or a new lease is executed and shall continue until the expiration of the new or renewed lease. This amount may be adjusted by Lessor at the end of each five-year period of the renewed or new lease. d. At the end of the primary lease term or at any time during this priiT.xry lease term when a permit is issued by the Mined Land Reclamation Division for a mining operation on a specific parcel of these described lands, Lessee may be required to apply to Lessor for one or more individual mineral leases of not more than 640 acres if State mineral rights stand alone, or not more than 1,280 acres if State mineral rights have a common boundary, but in no case not more than the acreage of this lease. Type of lease will be determined by Lessor at that time based on Lessor's mineral classification system. 5. EXTENSION BY PRODUCTION -- This lease may not be held in perpetuity; however, the lease will continue in effect for so long as minerals are produced in paying quantities. Cessation of production for a period in excess of 180 consecutive days will automatically remove lease from producing status unless otherwise agreed to in writing by Lessor. Lessee shall notify Lessor of each cessation of production, the reasons therefor, and the time period during which production will or did cease. 3