2020-03-30_REVISION - P2013002 - Laserfiche WebLink

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L/\L,...V I IV., VVI 1 amount of Monthly Royalty for Gold and the Monthly Royalty for Other Minerals that is credited against AMR, shall be due and payable to Lessor on or before the last day of each calendar month for Minerals sold by Lessee during the preceding calendar month. Reporting of royalty that is credited against AMR is also due on or before the last day of each calendar month following the month of production. Payment from the Lessee shall be accompanied by a settlement sheet indicating: (i) amount and calculation of the Monthly Royalty for Gold due to the Lessor; (ii) the amount and calculation of the Monthly Royalty for Other Minerals due to the Lessor; (iii) the quantities of each Minerals sold during the month; (iv) Gold Index Price; (v) the calculation of the Other Mineral Proceeds; (vi) the Royalty Rate for Gold; and (vii) the Royalty Rate for Other Minerals. Sampling: The Monthly Royalty for Gold and Monthly Royalties for Other Minerals shall be due and payable on Minerals extracted or removed from the Leased Premises for the purposes of sampling, testing, analysis or evaluation in order to determine Mineral values of the Leased Premises, if and when such Minerals are sold. 7. EXTENSION BY PRODUCTION -- This Lease shall not be held in perpetuity; however, this Lease will continue in effect subsequent to the Secondary Term, or any extended term, so long as Minerals are produced in Paying Quantities. "Paying Quantities" is defined as production and sales of Minerals sufficient to return to Lessor production royalty payments greater than the AMR as set forth in Paragraph 5. Following the Secondary Term or during any extended term, cessation of production for a period in excess of one hundred eighty (180) consecutive days will automatically remove this Lease from producing status unless otherwise agreed to in writing by Lessor. Lessee shall notify Lessor in writing prior to the 180th day following the last production stating the reasons for the cessation, and the time period during which production ceased, an explanation of when production will resume, and a description of the plan to resume production. Upon receipt of Lessee's notice, Lessor shall determine, in its sole and absolute discretion: (i) whether Lessee must continue production and, if production does not resume, if Lessee is in default; and (ii) whether cessation of production may continue, the amount of time that cessation of production may continue, and any other conditions under which cessation of production may continue. Failure to notify Lessee of a cessation of production prior to the 180th day following the last production will be considered a default of this Lease. 8. EXPLORATION -- 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. Exploration Plan: An exploration plan ("Exploration Plan") detailing the methods to be used for exploration and the timing of exploration activities shall be submitted to Lessor prior to commencing exploration activities. No surface disturbance shall occur prior to receipt of written approval of the Exploration Plan from the Lessor. A Reclamation Plan as set forth in Paragraph 18 of this Lease for all areas disturbed during exploration shall be included in the Exploration Plan. Lessor shall notify Lessee within thirty (30) days of receipt of the Exploration Plan if Lessor finds, in its sole discretion, that the Exploration Plan is inadequate for continued work on the Leased Premises by the Lessee. Exploration Report: A full report detailing the results of the exploration activities must be submitted to the Lessor within six (6) months after completing exploration activities approved in the Exploration Plan. The report shall include all data collected during exploration and include adequate details of the exploration and documentation of the Mineral resources on the Leased Premises, as well as a plan for Page 4 of 18