2018-05-01_REVISION - M1982058 (3)

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2 B. The right to use or lease said premises or any part thereof at any time for any purpose, including the right to explore and prospect said premises, which use and leasing of said premises shall be for purposes other than and not inconsistent with the rights and privileges herein specifically granted. C. The right to dispose of or lease the surface where Lessor is the surface owner. D. The right at all times during the life of this lease to go upon said premises and every part thereof for the purpose of inspecting said premises, and the books of accounts and records of mineral workings therein, and of ascertaining whether or not said Lessee and those holding thereunder by and from it, are carrying out the terms, covenants and agreements in this lease contained. E. The right at any time to grant a right-of-way upon, over or across all or any part of said premises for any ditch, reservoir, railroad, communication system, electric powerline, pipeline, schoolhouse or other '_awful pnroone: but that such grants shalt be subject 'o the rights of Lessee. TO HAVE AND TO HOLD The above-described premises unto Lessee, its heirs, successors, assigns, or legal representatives for the term of J-esn (l(Z) years, and until Twelve O'clock noon on the ivt day of Nov.'rh'r 1QQQ . and, except as hereinafter stated, as long thereafter as minerals are being produced in paying quantities from said premises, and the royalties and rentals provided for herein are being paid, or by any extension hereof, subject to the following terms, conditions and agreements, to-wit: 1. ADVANCE MINIMUM ROYALTY -- As minimum and advance royalty, without relation to the amount of minerals mined from the leased premises, Lessee shall pay annually in advance to Lessor the following amounts: LEASE YEAR ADVANCE MINIMUM ROYALTY LEASE YEAR ADVANCE MINIMUM ROYALTY i t None `'Lt °il.00Joc/yr 2nd ^^ 7th '.O(1/Rc/yr 3rd tont nth f,l nn/,ar/yr 4th Nnne "1th II'1/ar/yr 5t:1 on lith T,S )n/ /yr Royalty due for minerals produced from said premises shall be cred,.ted against such advance minimum royalty until the total sum is equal to the advance minimum royalty previously paid to the State, at which time a regular monthly royalty will be due and payable as herein provided. In the event Lessee does not extract minerals from the leased premises during the primary term or any additional term so agreed to by Lessor, the minimum amounts above paid to the State will be forfeited. Acreage changes resulting from surrender or partial assignment may reduce the advance minimum royalty proportionately. Further, at the end of each five-year period, commencing from the original lease date, Lessor may reasonably change the rate or amount of advance minimum royalty to be paid by Lessee. In case of assignment of this lease, all advance minimum royalty paid to the State shall be carried forward and credited to the new assignee. 2. PRODUCTION ROYALTY -- The royalty for any products whatever which are mined, saved, sold and/or removed from the leased premises shall be based on one of the following, whichever is greater: per. ton of 24_044 ,_gtr., yard`— B ta,q percent ( “1- ) of the Net Returns at the first point of non-captive market sale of the product(s) as determined by the Colorado State Board of Land Commissioners on an individual case basis. C. +yam percent ( _: ) of the Gross Market Value at the first point of sale. All accounting shall be validated and verified, Net Returns and Gross Market Value are defined as follows: Net Returns means the net amount received by Lessee from the sales of the products after processing, where processing is necessary for commercial