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<br />In the event that said Lessee does not extract from said premises said minimum amounts above specified during
<br />each Itase year oC the term of this lease, it is necerrlreless understood that the above sums of money are royalties
<br />for rite years stated, and are due and payable to rite Lessor whether minerals are mined or not during such year,
<br />but that such minimum advance royalty will be credlred upon rite first royalties due as lterrinafter provided for
<br />minerals actually produced from said premises and sold or milled doting the year for which such minimum royalty
<br />was paid.
<br />Z. Production Rovalty -Lessor hereby reserves and Lessee agrees to pay to Lessor as royalty rite following:
<br />(a-1) rhrsTngoat't^~Y.cra~to~smrKYO[aditdcmhrrdssiz Rock used for rip rap, road metal, ballast:
<br />pet on oc
<br />cu c2)yat ton.
<br />(b) >bx+mitiq~xktcta~ECfru°,:'~.~r~~`iRaen;~E~rxffiavsx xn:atafca,;srtt3martt:a
<br />nsreruts¢ Within sixty days prior to the termination o(rath and every the-year period for so lung as this
<br />lease remains In efieet, the State Board of Ind Commissioners may reappraise rice property herein
<br />leased and fix and determine lire rate of production royalty to be paid during each year of the succeeding
<br />five-year period. Failure to comply with any new royalty rate set by the Doard may subject this lease to
<br />cancellation by thirty-0ay written notice by the Board,
<br />If reouested by Lessor, Lessee is to furnish proof of price received for all minerals sold. $titlt royalty is due and
<br />payable on or before the twenty-fifth (25th) day o! each calendar month during the term of this lease for minerals
<br />mined, removed, and sold by Lessee during the preceding calendar month.
<br />Royally payments shall apply to pa rnent received by rite Lessee on any mineral so sold. The minerals mined
<br />from the leased premises may be milled in a custom or tortunercial plant or mill owned and operated by Lessee.
<br />They may not be muted or commingled with ores from other properties until they have been erustted and sampled
<br />by the mill for the purpose of determittirtg rite Itereinabove desrgnaled minerals and outer minerals contained in
<br />the crude ore that may b¢ salvaa~ed by milling of same. 'lire resulting samples are to be assayed at the laboratory
<br />used by the mill where ore is milled xnd Lessor may demand an assay eertt(icate showing the contents of Bath
<br />delivery to [Hill. IC requested by the Lessor, the mill is to reserve a pulp of each composite sample for testing,
<br />provided, however, said mi0 will'not be obliged to keep pulp for a period o(more than nincfy (9p) days. In rite
<br />event of a dispute u to analysis, the pulp prepared front raclt composite sample is to be refereed to an umpire
<br />acceptable to Lessor and Lessee and the deterinmation of the umpire wiB be binding upon both parties. lire net
<br />weight of the crude ore on adry-weight basis will be determined at the scales at tJie mdl. Lessor will have the right
<br />to check the weights as often as it deems advisable. Lessee will furnish Lessor with duplicate scale weiRltt
<br />certificates. Lessee agrees to, xnd wi0 be held accountable to see that the foregoing provisions are carried out y
<br />such mill or mills as receive minerals produced from Ute premises herein demised.
<br />The Lesser has rhr right to mine, raise, rar-,y acrd transpon ores from the lands hereby leased through other lands
<br />now or hereafter owned or leased by the lessee, and the right to raise, earrv, and transport ores mined by the
<br />Lessee from or)ser lands owned or leased by the Lessee over or through rice lairds covered by this lease; provided,
<br />that the ores mined from other lairds arc in nu event mixed with ore mined from tftese leased premises, except as
<br />provded above.
<br />7. Overriding Rovalty f~rrdtations - It is agreed drat this lease or any subsequent assignment hereof may not be
<br />burdened with overriding royalties rile aggregate of which exceeds ~Y .Lessor must be notified
<br />of all overriding royalties accruing to this lease. Violation of the above may subject this lease to tancellation by
<br />Lessor.
<br />4. 1Veighls - ft is agreed that all minerals mined and taken from said premises are to be weighed and the weight
<br />ifiercot is to be entered in due form in weight records kept for such purposes by Lessee. .
<br />5. R~epo~rts -After opentions are begun, it is agreed that oft or before the 25th day of each and every month during
<br />the rerrn of this love the Lessee will snake a sworn sepoft on forms famished by Lessor, in which the exact
<br />arnoun[ in weight of all minerals mined and removed from said premises and sold during the preceding calendar
<br />month are to a entered and accompanied by full payment for all royalty due for the month. Further, Lessee
<br />must famish annually a rtup or blueprint of survey of all workings, with location of same lied to a corner
<br />established by United States surveys of spore land subdivision, certified to by a Bcensed engineer or surveyor.
<br />6. Ins ection - It is agreed that daring all proper hours and at all times during rice continuance of this lease the
<br />ssor or its duly authorized agent or agents, is authorized to check scales as to their accuracy, to go through any
<br />of the slopes, entries, shafts, openings, or workings on said premises, and to examiste, inspect, survey and take
<br />measurements of the same and to examine and make carnets of copies of all books and weight streets and records
<br />which show in any way Ilse mineral output of rite leased premises, and that all conveniences necessary for said
<br />inspection, survey, or examination are to be furnished to rite Lessor.
<br />7. b~lirung titetliods - Fsilure to comply with anv of tlte.provisions of this paraaraoh may subiect phis lease to
<br />canccllauon:
<br />In the under¢round and open pit workings, all shafts, inclines, and tunnels must be well timbered (when good
<br />mining requires timbering) acrd a0 parts of workings, where minerals arc not exhausted, will be kept free from
<br />water and waste materials. The underground and open ppit workings are to he protected against fire, Boods, creeps,
<br />and squeezes. If such events tlo Decor, they must be Checked in a ntanncr which is in keeping with ggood methods
<br />of rtdning. $uth meelrods of mining must be used as will insure the exrraction of t}:e greatest possibleamovn[s of
<br />minerals consistent with prevailing good mining practice. ~•
<br />Lessee agrees to rlo~+e the sides of all surface pits or excavations to a ratio of not more than one foot (1' vertical
<br />for each two feet (:) of horizontal distance. Suclt sloping is to become a normal part of the operation. Whenever
<br />practicable, all pits or excavations are to be shaped to drain, and N no case mry the its or excavations be
<br />allowed l0 become a hazard to persons or Bvestock. All material mined and not removed from the premises will
<br />be used to fdl the pits so that at Ilse expiration, surrender, or termination of this lease the land will, as nearly as
<br />practicable, approximate its original configuration, with a minimum ofpermanent damage to the surface:
<br />Upon re vest (rq_ om rise Board~Lbessee further agrees to submit Ip ans and maps of proposed mining rrograms in
<br />a Vance, so that t c Board ma eiulT•y aware of t-~ prooose3-opetauons.
<br />S. Riehts~f•wav - It is agreed shat rice Lesser reserves tfre right to grant rightsof-way over said premises for public
<br />roads, railroads, power, telegraph, telephone, ditch, and Cana! lines, bu(such grants are to be subject to rhr rights
<br />of the Lessee.
<br />Q, !VgtiCe - It is agreeC that an notice required or perndtted to be gtvon to t:te Lessee under rite provisions of lltls
<br />lease is to be sent by tertl[1ed tn~ll to Ilse addf!ss Set forth at the beginning of this laa~a or to such other address
<br />as Lessee may indicate in writing to Lessor and such service by mail sviB be deemed sufficient and in full totn•
<br />~r•Itance with lire terms cf this lease. Voticr to Lessor is to be given its like manner, addressed to State Board of
<br />Lind Coinrnissioners, Denver, Colorado.
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