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6. PRODUCTION ROYALTY: Lessor reserves as royalty, and Lessee agrees to pay <br /> to Lessor on or before the last day of each calendar month following the month <br /> of production, a production royalty for all gold and other metalliferous minerals <br /> which are mined, saved, and/or removed from the Leased Premises based on the <br /> following: <br /> Monthly R2yalty: Lessee shall pay Lessor the Monthly Royalty calculated based <br /> on minerals produced from the Leased Premises during the prior calendar month. <br /> The amount of the Monthly Royalty shall be calculated as follows: <br /> Monthly Royalty = (Gold Index Price x Troy Ounces of Gold Produced) x <br /> Royalty Rate <br /> Gold Index Price: The Gold Index Price shall be the average monthly Handy & <br /> Harman Base Gold Price, calculated by dividing the sum of all such prices <br /> reported for the month by the number of days for which such prices were <br /> reported. If the Handy & Harman Base Gold Price ceases to be published, the <br /> Gold Index Price shall be determined by reference to prices for refined gold <br /> for immediate delivery in the most nearly comparable established market, as <br /> such prices are published in "Platts Metals Week" or a similar publication. <br /> Royalty Rate: The Royalty Rate shall be determined based on the scale below, <br /> which is indexed to the Gold Index Price as defined above: <br /> Gold Index Price (per ounces Royalty Rate <br /> $1000.00 and below 4.0% <br /> $1000.01-$1500.00 5.0% <br /> $1500.01 and above 6.0% <br /> Production Reports: Monthly production reports shall be submitted to <br /> Lessor for each month, commencing within thirty days of the first month of <br /> production. The requirements for these reports are further outlined in <br /> paragraph 10. <br /> Other Mine,: In the event that other minerals or mineral products <br /> besides gold are produced and sold from the Leased Premises, they shall be <br /> valued using an available published price representative of the fair market <br /> price of the mineral. The gross value of other minerals shall be determined <br /> by multiplying the fair market price of the mineral by the total amount of <br /> mineral produced. The monthly royalty for other minerals shall be calculated <br /> by multiplying the gross value of the minerals by the Royalty Rate as defined <br /> above. <br /> Page 4 of 20 <br />