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(b) ADVANCE ROYALTIES - Upon request by the lessee,
<br />the BLM may accept, for a total of not more than 20 years,
<br />the payment of advance royalties in lieu of continued
<br />operation, consistent with the regulations. The advance
<br />royalty will be based on a percent of the value of a
<br />minimum number of tons determined in the manner
<br />established by the advance royalty regulations in effect at
<br />the time the lessee requests approval to pay advance
<br />royalties in lieu of continued operation.
<br />Sec. 3. BONDS - Lessee must maintain in the proper office
<br />a lease bond in the amount of $8,000. The BLM may
<br />require an increase in this amount when additional coverage
<br />is determined appropriate.
<br />Sec. 4. DILIGENCE - This lease is subject to the conditions
<br />of diligent development and continued operation, except
<br />that these conditions are excused when operations under the
<br />lease are interrupted by strikes, the elements, or casualties
<br />not attributable to the lessee. The lessor, in the public
<br />interest, may suspend the condition of continued operation
<br />upon payment of advance royalties in accordance with the
<br />regulations in existence at the time of the suspension.
<br />Lessee's failure to produce coal in commercial quantities at
<br />the end of 10 years will terminate the lease. Lessee must
<br />submit an operation and reclamation plan for the BLM's
<br />approval pursuant to 30 U.S.C. 207(c) prior to conducting
<br />any development or mining operations or taking any other
<br />action on a leasehold which might cause a significant
<br />disturbance of the environment.
<br />The lessor reserves the power to assent to or order the
<br />suspension of the terms and conditions of this lease in
<br />accordance with, inter alfa, Section 39 of the Mineral Leasing
<br />Act, 30 U.S.C. 209.
<br />5. LOGICAL MINING UNIT (LMU) - Either upon approval
<br />by the lessor of the lessee's application or at the direction of
<br />the lessor, this lease will become an LMU or part of an LMU,
<br />subject to the provisions set forth in the regulations.
<br />The stipulations established in an LMU approval in effect at
<br />the time of LMU approval will supersede the relevant
<br />inconsistent terms of this lease so long as the lease remains
<br />committed to the LMU. If the LMU of which this lease is a
<br />part is dissolved, the lease will then be subject to the lease
<br />terms which would have been applied if the lease had not
<br />been included in an LMU.
<br />Sec. d. DOCUMENTS, EVIDENCE AND INSPECTION -
<br />At such times and in such form as lessor may prescribe,
<br />lessee must furnish detailed statements showing the amounts
<br />and quality of all products removed and sold from the lease,
<br />the proceeds there from, and the amount used for production
<br />purposes or unavoidably lost.
<br />Lessee must keep open at all reasonable times for the
<br />inspection by BLM the leased premises and all surface and
<br />underground improvements, works, machinery, ore
<br />stockpiles, equipment, and all books, accounts, maps, and
<br />records relative to operations, surveys, or investigations on
<br />or under the leased lands.
<br />Lessee must allow lessor access to and copying of
<br />documents reasonably necessary to verify lessee compliance
<br />with terms and conditions of the lease.
<br />While this lease remains in effect, information obtained
<br />under this section will be closed to inspection by the public
<br />in accordance with the Freedom of Information Act (5
<br />U.S.C. 552).
<br />Sec. 7. DAMAGES TO PROPERTY AND CONDUCT OF
<br />OPERATIONS -Lessee must comply at its own expense
<br />with all reasonable orders of the Secretary, respecting
<br />diligent operations, prevention of waste, and protection of
<br />other resources.
<br />Lessee must not conduct exploration operations, other than
<br />casual use, without an approved exploration plan. All
<br />exploration plans prior to the commencement of mining
<br />operations within an approved mining permit area must be
<br />submitted to the BLM.
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<br />Lessee must carry on all operations in accordance with
<br />approved methods and practices as provided in the
<br />operating regulations, having due regard for the prevention
<br />of injury to life, -health, or property, and prevention of
<br />waste, damage or degradation to any land, air, water,
<br />cultural, biological, visual, and other resources, including
<br />mineral deposits and formations of mineral deposits not
<br />leased hereunder, and to other land uses or users. Lessee
<br />must take measures deemed necessary by lessor to
<br />accomplish the intent of this lease term. Such measures
<br />may include, but are not limited to, modification to
<br />proposed siting or design of facilities, timing of operations,
<br />and specification of interim and final reclamation
<br />procedures. Lessor reserves to itself the right to lease, sell,
<br />or otherwise dispose of the surface or other mineral deposits
<br />in the lands and the right to continue existing uses and to
<br />authorize future uses upon or in the leased lands, including
<br />issuing leases for mineral deposits not covered hereunder
<br />and approving easements or rights-of-way. Lessor must
<br />condition such uses to prevent unnecessary or unreasonable
<br />interference with rights of lessee as may be consistent with
<br />concepts of multiple use and multiple mineral development.
<br />Sec. 8. PROTECTION OF DIVERSE INTERESTS, AND
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