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<br />UNITED STATES
<br />DEPARTMENT OF THE INTERIOR Serial Number C-8425
<br />BUREAU OF LAND MANAGEMENT
<br />Lease Date June 1. 1982
<br />COAL LEASE READJUSTMENT
<br />PART 1. LEASE RIGETS GRANTED
<br />This lease, entered into by and between the UNITED STATES OF AMERICA, hereinafter called lessor, Chrough
<br />the Bureau of Land Management, and
<br />Blue Mountain Energy, Inc.
<br />10714 South Jordan Gateway #300
<br />South Jordan, Utah 84095
<br />hereinafter called lessee, is readjusted, effective June 1, 2002, for a period of ZO years and for so long
<br />thereafter as coal is produced in commercial quantities from the leased lands, subject to readjustment
<br />of lease terms at the end of each 10-year lease period.
<br />Sec. 1. This lease readjustment is issued pursuant and aubj ect to the terms and provisions of the Mineral
<br />Lands Leasing Act of 1920, Act of February 25, 1920, as amended, 41 Stat. 437, 30 U.S.C. 181-2s7,
<br />hereinafter referred to as the Act;
<br />and to the regulations and formal orders of the Secretary of the Interior which are now or hereafter in
<br />force, when not inconsistent with the express and specific provisions herein.
<br />Sec. 2. Lessor, in consideration of any rents, and royalties to be paid, and the Conditions and covenants
<br />to be observed as herein set forth, hereby grants to lessee the exclusive right and privilege to drill
<br />for, mine, extract, remove, or otherwise process and dispose of the coal deposits in, upon, or under the
<br />following described lands:
<br />T. 3 N., R. 101 W., 6`h P.M.
<br />sec. 2E, S~4SW'/,;
<br />sec. 33, N'/,Ny„ S'~NE'ti, SE'bNW34, NE~SW~, and N35SEy.;
<br />sec. 34, NfSW'/..
<br />containing 56o acres, more or less, together with the right to construct such works, buildings, plants,
<br />structures, equipment and appliances and the right to use such on-lease rights-of-way which may be
<br />necessary and convenient in the exercise of the rights and privileges granted, subject to the conditions
<br />herein provided.
<br />PART II. TERMS AND CONDITIONS
<br />Sec. 1. (a) RENTAL RATE - Lessee shall pay lessor
<br />rental annually and in advance for each acre or
<br />fraction thereof during the continuance of the
<br />lease at the rate of $3.00 for each lease year.
<br />(b) RENTAL CREDITS - Rental shall not be credited
<br />against either production or advance royalties
<br />for any year.
<br />Sec. 2. (a) PRODUCTION ROYALTIES - The royalty
<br />shall be 8.0 percent of the value of the coal as
<br />set forth in the regulations. Royalties are due
<br />to lessor the final day of the month succeeding
<br />the calendar month in which the royalty
<br />obligation accrues.
<br />(b) ADVANCE ROYALTIES - Upon request by the
<br />lessee, the authorized officer may accept, for a
<br />total of not more than 10 years, the payment of
<br />advance royalties in lieu of continued operation,
<br />consistent with the regulations. The advance
<br />royalty shall be based on a percent of the value
<br />of a minimum number of tons determined in the
<br />manner established by the advance royalty
<br />regulations in effect at the time the lessee
<br />requests approval to pay advance royalties in
<br />lieu of continued operation.
<br />proper office a lease bond in the amount of
<br />$15,000. The authorized officer may require an
<br />increase in this amount when additional coverage
<br />is determined appropriate.
<br />Sec. 4. DILIGENCE - The lessee is subject to the
<br />conditions of diligent development and continued
<br />operations, except that these conditions are
<br />excused when operations under the lease are
<br />interrupted by strikes, the elements, or
<br />casualties not attributable to the lessee. The
<br />lessor in the public interest, may suspend the
<br />conditions of continued operation upon payment of
<br />advance royalties in accordance with the
<br />regulations in existence at the time of the
<br />suspension. Lessee's failure to produce coal in
<br />commercial quantities at the end of to years
<br />shall terminate the lease, pursuant to Section 7
<br />of the Act. If not submitted already, lessee
<br />shall submit an operation and reclamation plan
<br />pursuant to Section 7 of the Act no later than 3
<br />years after the effective date of this lease
<br />readj uatment.
<br />The lessor reserves the power to assent to or
<br />order the suspension of the terms and conditions
<br />of this lease in accordance with, inter olio,
<br />Section 39 of the Mineral Leasing Act, 30 U.S.C.
<br />209.
<br />Sec. 3. BONDS - Lessee shall maintain in the ~ Sec. 5. LOGICAL MINING UNIT (LMU) - Either upon
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