2021-05-04_PERMIT FILE - M2021029

Home Browse Search

2. PRODUCTION ROYALTY -- Lessor reserves as royalty, and Lessee agrees to pay to Lessor on or before the last day of each calendar month following the month of production the following amounts: • The royalty rate shall be $ 0.86 per cubic yard of sand Et gravel produced and sold from the Leased Premises, or a sum equal to eight percent (8%) of the Gross Sale Price (as herein defined) at the first point of sale, whichever is greater. For the purpose of this lease, the "Gross Sale Price" shall be the average gross sale price per ton of sand Et gravel actually mined, removed, sold and shipped from the Leased Premises during any month which shall be an amount equal to the total gross proceeds from all such sales of sand Et gravel during such month divided by the total number of tons of such sand Et gravel. The only deduction allowed from the total gross proceeds shall be for transportation and delivery costs incurred by the Lessee in transporting the sand Et gravel from the mining permit boundary to the point of sale. Further, at the end of each five-year period, commencing from the original lease date, for so long as this lease remains in effect, Lessor may increase the rate or amount of production royalty to be paid by Lessee by a rate not to exceed the rate of increase of the average Producer's Price Index for Construction Sand, Gravel and Crushed Stone for the previous 5-year period, as published by the U.S. Department of Labor, Bureau of Labor Statistics. Failure to comply with any new royalty rate set by Lessor may subject this lease to cancellation by thirty-day written notice by Lessor. Reporting of production royalty that is credited against advanced minimum royalty is also due on or before the last day of each calendar month for mining during the preceding calendar month. 3. EXTENSION -- Lessee may have a preferential right to renew the lease or to receive a new lease, whichever may be determined by Lessor to be in the best interest of the State, under the following conditions: a) An advance minimum royalty, the amount to be negotiated before expiration of the lease, will be due and payable annually commencing on the date this lease is renewed or a new lease is executed and shall continue until the expiration of the new or renewed lease. This amount may be adjusted by Lessor at the end of each five-year period of the renewed or new lease. b) Lessee shall furnish to Lessor satisfactory evidence of plans for mining during the term of the renewed lease or during the term of a new lease. c) Lessee shall furnish adequate geological evidence to Lessor that the acreage subject to the renewed or new lease is in fact an integral part of and contains reserves in a logical mining unit. Whether the acreage is or is not a part of a logical mining unit will be determined by Lessor. d) An extension of this Lease as determined by Lessor would be in the best interest of Lessor. 4. EXTENSION BY PRODUCTION - The Lease may continue in effect for a Secondary Term of 10 years to the 20th day of October, 2040 as long as sand and gravel are being produced in paying quantities from the Leased Premises. Paying quantities is defined as production and sales of a quantity sufficient to return to Lessor production royalty payments of a minimum of $500 per year. 5. ANCILLARY USE -- Lessee may remove approved minerals, and place on the Leased Premises stock piles of material mined from the Leased Premises and other such equipment as is approved by Lessor for this removal and processing. All temporary ancillary uses such as concrete plants, asphalt plants, accessory equipment, offsite aggregate materials and any other uses not specifically mentioned herein will be subject to the approval of Lessor and require a yearly rental payment of no less than $5,000.00. Haul