2020-02-13_REVISION - M2014070 - Laserfiche WebLink

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Further, Lessee shall furnish annually a complete operations report to Lessor disclosing the number of tons and the assay thereof of all ores, minerals and other materials mined from the premises during the preceding year. Lessee shall also furnish in said report geologic interpretations and recoverable reserve calculations, and maps and cross sections showing location of any mineral-bearing outcrops, drill holes, trenches, ore bodies and other prospecting and exploration activities, along with assays showing the amount of mineral contained in the ore. The records required to be maintained by Lessee and provided to Lessor upon request include logs of all strata penetrated and all geologic and hydrologic conditions encountered, and copies of in-hole surveys; this information to be collected and prepared under the supervision of a qualified geologist,geological engineer or mining engineer. Other qualified persons may collect and prepare this data, if agreed to in writing between Lessee and Lessor. Any request to keep certain information confidential should be in writing to Lessor at the time such information is submitted to Lessor, and such data may be kept confidential as consistent with State law. Lessee shall submit, if requested by Lessor, such additional reports, records or documents regarding Lessee's operation on the Leased Premises as necessary for the compliance with lease provisions. 7. OVERRIDING ROYALTY LIMITATIONS--It is agreed that this Lease or any subsequent assignment hereof shall not be burdened with overriding royalties the aggregate of which exceeds two percent(2%)of the gross value of the minerals or ore at the first point of sale. Lessor must be notified of all overriding royalties accruing to this Lease. 8. DEVELOPMENT -- Lessee will diligently explore and develop the Leased Premises by utilizing methods of exploration commonly used in the industry, such as mapping, sampling, drilling,trenching,geophysical exploration, and laboratory analysis and will expend as a minimum annually the amounts set forth below: LEASE YEAR MIN EXPEND LEASE YEAR MIN EXPEND NA NA NA NA Indirectly related exploration and development work such as work done on adjacent properties, or design or construction of a mill will not be considered as diligent development of the Leased Premises unless approved by Lessor. 9. PENALTIES -- A penalty shall be imposed for, but not limited to, late payments, improper payments, operational deficiencies of any kind whatsoever, violations of any covenants of this Lease, or any false statements made to Lessor. Penalties shall be determined by Lessor unless otherwise provided for by law and may be in the form of,but not limited to, interest, fees, fines, and/or lease cancellation. A penalty schedule shall be prepared by Lessor and shall become effective immediately after public notice. Said schedule may be changed from time to time after such notice. 10. ASSIGNMENT -- Lessee, only with written consent of Lessor, may assign this lease as to the leasehold interest of such Lessee in all or part of the lands covered hereby; not less, however, than tracts of approximately forty (40) acres or governmental lots corresponding to a quarter-quarter section for any partial assignment. No assignment of undivided interests or retention or reservation of overriding royalties will be recognized or approved by Lessor, and the effect, if any, of any such assignments or reservations will be strictly and only as between the parties thereto and outside the terms of this lease. No dispute between parties to any assignment or reservation shall operate to relieve Lessee from performance of any terms or conditions hereof or to postpone the time therefor. Lessor will at all times be entitled to look solely to Lessee or his assignee shown on Lessor's books as being sole owner hereof, and for the sending of all notices required by this Lease, for the performance of all terms and conditions hereof. Page 4 of 11