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credited upon the first royalties due as herein provided for minerals actually produced from the Leased <br /> Premises. In the absence of production of minerals in continuous paying quantities necessary to fully <br /> use the AMR before the expiration date of the Lease, all AMR and all rentals shalt be forfeited to <br /> Lessor. <br /> 6. PRODUCTION ROYALTY -- Lessor reserves as royalty, and Lessee agrees to pay to Lessor on or before <br /> the last day of each calendar month following the month of production, a production royalty for all gold <br /> and other metalliferous minerals which are mined, saved, and/or removed from the Leased Premises <br /> based on the following: <br /> Monthly Royalty: Lessee shalt pay Lessor the Monthly Royalty calculated based on minerals produced <br /> from the Leased Premises during the prior calendar month. The amount of the Monthly Royalty shall be <br /> calculated as follows: <br /> Monthly Royalty = (Gold Index Price x Troy Ounces of Gold Produced) x Royalty Rate <br /> Gold Index Price: The Gold Index Price shall be the average monthly New York Spot Gold Price, <br /> calculated by dividing the sum of all such prices reported for the month by the number of days for <br /> which such prices were reported. If the New York Spot Gold Price ceases to be published, the Gold <br /> Index Price shall be determined by reference to prices for refined gold for immediate delivery in the <br /> most nearly comparable established market, as such prices are published in "Ptatts Metals Week" or a <br /> similar publication. <br /> Royalty Rate: The Royalty Rate shall be determined based on the scale below, which is indexed to <br /> the Gold Index Price as defined above: <br /> Gold Index Price (per ounce) 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 Lessor for each month, <br /> commencing within thirty days of the first month of production. The requirements for these reports <br /> are further outlined in paragraph 10. <br /> Other Minerals: In the event that other minerals or mineral products besides gold are produced and <br /> sold from the Leased Premises, they shall be valued using an available published price representative <br /> of the fair market price of the mineral. The gross value of other minerals shalt be determined by <br /> multiplying the fair market price of the mineral by the total amount of mineral produced. The <br /> monthly royalty for other minerals shall be calculated by multiplying the gross value of the minerals <br /> by the Royalty Rate as defined above. <br /> Sand and Gravel: Lessor reserves as royalty, and Lessee agrees to pay to Lessor on or before the last <br /> day of each calendar month following the month of production the following amounts: <br /> Page 3 of 18 <br />