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6. REPORTS AND RECORDS -- After operations begin, it is agreed that on or before the last day of each
<br /> month during the term of this lease Lessee shall submit a sworn, verified, written report to Lessor, in
<br /> which report shall be entered and set down the exact amount in weight of all products and the assay
<br /> thereof mined and removed from said Leased Premises during the preceding calendar month. Lessee
<br /> agrees to keep and to have in possession complete and accurate books and records showing the
<br /> production and disposition of any and all substances produced on the Leased Premises and to permit
<br /> Lessor at all reasonable hours, to examine the same or to furnish copies of same to Lessor within 60
<br /> days following written request along with purchaser's support documentation. All said books and
<br /> records shall be retained by Lessee and made available in Colorado to Lessor for a period of not less
<br /> than 10 years. If any such examination shall reveal, or if either party shall discover any error or
<br /> inaccuracy in its own or the other party's statement, payment, calculation, or determination, then
<br /> proper adjustment or correction thereof shall be made as promptly as practicable thereafter, except
<br /> that no adjustment or correction shall be made if more than 10 years have elapsed between the time
<br /> the error or inaccuracy occurred and the discovery by either party of said error or inaccuracy.
<br /> Further, Lessee shall furnish annually a complete operations report to Lessor disclosing the
<br /> number of tons and the assay thereof of all ores, minerals and other materials mined from the premises
<br /> during the preceding year. Lessee shall also furnish in said report geologic interpretations and
<br /> recoverable reserve calculations, and maps and cross sections showing location of any mineral-bearing
<br /> outcrops, drill holes, trenches, ore bodies and other prospecting and exploration activities, along with
<br /> assays showing the amount of mineral contained in the ore. The records required to be maintained by
<br /> Lessee and provided to Lessor upon request include logs of all strata penetrated and all geologic and
<br /> hydrologic conditions encountered, and copies of in-hole surveys; this information to be collected and
<br /> prepared under the supervision of a qualified geologist, geological engineer or mining engineer. Other
<br /> qualified persons may collect and prepare this data, if agreed to in writing between Lessee and Lessor.
<br /> Any request to keep certain information confidential should be in writing to Lessor at the time such
<br /> information is submitted to Lessor, and such data may be kept confidential as consistent with State
<br /> law. Lessee shall submit, if requested by Lessor, such additional reports, records or documents
<br /> regarding Lessee's operation on the Leased Premises as necessary for the compliance with lease
<br /> provisions.
<br /> 7. OVERRIDING ROYALTY LIMITATIONS -- It is agreed that this Lease or any subsequent assignment hereof
<br /> shall not be burdened with overriding royalties the aggregate of which exceeds two percent (2%) of the
<br /> gross value of the minerals or ore at the first point of sale. Lessor must be notified of all overriding
<br /> royalties accruing to this Lease.
<br /> 8. DEVELOPMENT -- Lessee will diligently explore and develop the Leased Premises by utilizing methods
<br /> of exploration commonly used in the industry, such as mapping, sampling, drilling, trenching,
<br /> geophysical exploration, and laboratory analysis. Indirectly related exploration and development work
<br /> such as work done on adjacent properties, or design or construction of a mill will not be considered as
<br /> diligent development of the Leased Premises unless approved by Lessor.
<br /> 9. PENALTIES -- A penalty may be imposed for, but not limited to, late payments, improper payments,
<br /> errors on production reports, violation of any covenant of this Lease, or false statements made to
<br /> Lessor. Penalties, taking into account the nature of the claimed deficiency, shall be determined by
<br /> Lessor and may be in the form of, but not limited to, interest, fees, fines, and/or Lease cancellation.
<br /> Interest shall accrue on any delinquent annual rental, royalty, and other fees due under this Lease
<br /> GL 112574 Revised DOL 11/2018
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