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<br />MINING LEASE
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<br />This Mi Ing Lease made and ~nteFed into this _~ day of ~ 1982, by
<br />and between , ',l rt '~i,. '~ ', (,.. of .,;J olor o, hereinafter
<br />for convenience referred to as "Lessor,"~ d C LORADO MA ETING ASSOCIATES,
<br />INC., hereinafter referred to as "Lessee."
<br />WITNESSETH:
<br />1. Property. This Lease relates to certain property located in the County of
<br />Douglas, State of Colorado, located and,pazticuiazly described as follows, to-wit:
<br />See attached Exhibit A - "Legal Description"
<br />2. Ri hts Granted to Lessee, The Lessor, for and in consideration of the rental
<br />sum of Ten Dollars ($10.00 , herewith acknowledged as received, and in further
<br />consideration of the payments, covenants, promises and agreements contained herein,
<br />does hereby grant, demise and lease unto said Lessee all of Lessor's right, title and
<br />interest in and to said property described in pazagraph 1 above. Together with all
<br />campsites, wells, electrical facilities, all improvements, fixtures and other property, real
<br />or personal, located on or about the property.
<br />3. Proper Operation Required. Lessee shall conduct all operations on the leased
<br />premises in a manner necessary to good, minerlike and economical mining so as to
<br />~~ develop and take out leased-deposits of ore and/or minerals with due regard to the
<br />development of the leased deposits, to the preservation of the workability of workings on
<br />the leased premises and to the special covenants herein provided.
<br />4. Minimum Royalties. Lessee shall be responsible for minimum royalties of
<br />Twenty-Five Thousand Dollars ($25,OOO.OD) per yeaz. Lessee's minimum royalty payment
<br />shall be credited against Lessee's next actual royalty payment due, from time to time.
<br />Said royalty shall be paid each year on or before December 1st beginning
<br />December 1883.
<br />5. Actual Royalties. Lessee shall pay to Lessor on all ores and/or minerals
<br />extracted and shipped from the leased premises a royalty (in this instrument referred to
<br />as actual royalty) of fifty cents (50 ¢) per cubic yazd or ten percent (10%) of the sales
<br />price, F.O.B. the mine, whichever is greater, for all material extracted and shipped from
<br />the property, Said actual royalties shall be payable quarterly as per statements
<br />described in paragraph 6 below.
<br />6. Statements to be Furnished. Lessee shall, on or before the 20th day of each
<br />month hereof during which actual royalties are payable to Lessors hereunder, furnish
<br />Lessor with a written report showing, as to shipments which were made during the
<br />preceding month, the total amount of ore and minerals shipped and the nature of the ore
<br />and minerals shipped, along with a statement of payments received or due for ore and
<br />minerals shipped.
<br />7. Books and Records. Lessor and his authorized agents shall, at any and all
<br />reasonable times be permitted [o inspect all book, and records of Lessee, relating to the
<br />leased premises in order to ascertain the correct amount of royalty due Lessor or to
<br />determine whether or not the provisions of the Lease are being complied with.
<br />8. Lessor's Right of Lnspection. Lessee shall allow said Lessor and his agents to
<br />enter upon and into Lessee's workings on said leased premises for purposes of inspection
<br />at such reasonable times as shall not interfere with the regulaz operations of the leased
<br />premises. It is understood and agreed that Lessee shall assume no responsibility for the
<br />safety of Lessor or his agents when and while upon the leased premises for such purposes.
<br />9. State and Federal Enactments -Indemnification of Lessor. Lessee in the
<br />operation and development of the leased premises (property hereby leased) shall 6e
<br />subject to all applicable Federal enactments, laws of the State of Colorado, and all
<br />Federal or State rules and regulations regarding Employer's liability, Workmen's
<br />Compensation, Social Security and Unemployment Insurance, and said Lessee covenants
<br />and agrees to indemnify and hold hazmless the Lessor from and against [be payment of
<br />any and all damages, claims, costs and expenses in connection therewith under :viy claim
<br />of subrogation provided for by said enactments or otherwise; and Lessee shall furtl~cr
<br />indemnify and hold hazmless Lessor from and against any and al] damages, clairns, costs
<br />and expenses arising out of damage to property of any injuries to or dc~th of the
<br />employees of Lessee, or any other person whomsoever, other than LP550r ;md those
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