Laserfiche WebLink
exceed the rate of increase of the average Producer's Price Index for Construction Sand, Gravel and Crushed Stone <br /> for the previous 5-year period,as published by the U.S. Department of Labor, Bureau of Labor Statistics. Failure to <br /> comply with any new royalty rate set by Lessor may subject this lease to cancellation by thirty-day written notice by <br /> Lessor. <br /> Reporting of production royalty that is credited against advanced minimum royalty is also due on or before the <br /> last day of each calendar month for mining during the preceding calendar month. <br /> 3. EXTENSION-- Lessee may have a preferential right to renew the lease or to receive a new lease,whichever may be <br /> determined by Lessor to be in the best interest of the State,under the following conditions: <br /> A. An advance minimum royalty, the amount to be negotiated before expiration of the lease, will be due and <br /> payable annually commencing on the date this lease is renewed or a new lease is executed and shall <br /> continue until the expiration of the new or renewed lease.This amount may be adjusted by Lessor at the end <br /> of each five-year period of the renewed or new lease. <br /> B. Lessee shall furnish to Lessor satisfactory evidence of plans for mining during the term of the renewed lease <br /> or during the term of a new lease. <br /> C. Lessee shall furnish adequate geological evidence to Lessor that the acreage subject to the renewed or new <br /> lease is in fact an integral part of and contains reserves in a logical mining unit. Whether the acreage is or is <br /> not a part of a logical mining unit will be determined by Lessor. <br /> D. An extension of this Lease as determined by Lessor would be in the best interest of Lessor. <br /> 4. EXTENSION BY PRODUCTION—The Lease may continue in effect for a Secondary Term of 10 year to the I st <br /> day of August, 2033 as long as sand and gravel are being produced in paying quantities from the Leased Premises. <br /> Paying quantities is defined as production and sales of a quantity sufficient to return to Lessor production royalty <br /> payments of a minimum of $7,500.00 per year. Cessation of production for a period in excess of 180 days will <br /> automatically remove lease from producing status unless otherwise agreed to in writing by Lessor. <br /> 5. ANCILLARY USE -- Lessee may remove approved minerals, and place on the Leased Premises stock piles of <br /> material mined from the Leased Premises and other such equipment as is approved by Lessor for this removal and <br /> processing. All temporary ancillary uses such as concrete plants, asphalt plants, accessory equipment, offsite <br /> aggregate materials and any other uses not specifically mentioned herein will be subject to the approval of Lessor, <br /> which approval may require a yearly rental payment to Lessor of not less than Two thousand and no/100 Dollars <br /> ($2,000.00) per acre. Haul roads and/or access roads which do not directly benefit the Leased Premises will be <br /> subject to a separate permit and approval of Lessor. <br /> 6. REPORTS AND RECORDS -- After operations begin, it is agreed that on or before the last day of each month <br /> during the term of this lease Lessee shall submit a sworn,verified,written report to Lessor, in which report shall be <br /> entered and set down the exact amount in weight of all products and the assay thereof mined and removed from said <br /> Leased Premises during the preceding calendar month. Lessee agrees to keep and to have in possession complete <br /> and accurate books and records showing the production and disposition of any and all substances produced on the <br /> Leased Premises and to permit Lessor at all reasonable hours, to examine the same or to furnish copies of same to <br /> Lessor within 60 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 than 10 years. <br /> If any such examination shall reveal, or if either party shall discover any error or inaccuracy in its own or the other <br /> parry's statement,payment,calculation,or determination,then proper adjustment or correction thereof shall be made <br /> as promptly as practicable thereafter, except that no adjustment or correction shall be made if more than 10 years <br /> have elapsed between the time the error or inaccuracy occurred and the discovery by either party of said error or <br /> inaccuracy. <br /> Page 3 of 11 <br />