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'Form 3400-12
<br />(No-:embcr 1998)
<br />UNITED STATES
<br />DEPARTMENT OF THE INTERIOR
<br />BUREAU OF LAND MANAGEMENT
<br />COAL LEASE
<br />FORM APPROVED
<br />OMB NO. 1004-0073
<br />spires: October 3 ] ,2000
<br />Serial Number
<br />COC 62920
<br />PART I. LEASE RIGHTS GRANTED
<br />This lease, entered into by and between the UNlren STATES ov AMEkICA, hereinafter called lessor, through the Bureau of Land Management, and
<br />/Name and Address)
<br />National King Coal, LLC
<br />P.O. Box 2905
<br />Durango, Colorado 81302
<br />NOV - ! 2bfl2
<br />hereinafter called lessee, is effective for a period of 20 years and for so long thereafter as coal is produced in commercial
<br />quantities from the leased ]ands, subject to readjustment of lease terms at the end of the 20th lease year and each 10-year period thereafter.
<br />Sec. 1. This lease is issued pursuant and subject to the teems and provisions of the:
<br />^ Mineral Lands Leasing Act of 1920, Act of February 25, 1920, as amended, 4] Stat. 437, 30 U.S.C. 181.287, hereinafter referred to as the Act;
<br />^ Mineral Leasing Act for Acquired Lands, Act of August 7, 1997, 61 Stat. 913, 30 U.S.C. 351-359; ---
<br />and to the regulations and forma] orders of the Secretary of the Interior which are now or hereafter in force, when not inconsistent with the express
<br />and specific provisions herein.
<br />Sec. 2. Lessor, in consideration of any bonuses, rents, and royalties to be paid, and the conditions and covenants to be observed as herein set forth
<br />,
<br />hereby grants and leases to lessee the exclusive right and privilege to drill for, mine, extract, remove, or otherwise process and dispose of(tije coal
<br />deposits in, upon, or under the following described ]ands:
<br /> :: L _:
<br />T. 35 N., R. 11 W., N.M.P.M. ~-~ ,,,
<br />sec. 19, lots 4, 5, Er2SW~, and SE's; -
<br /> ,s
<br />T. 35 N., .R. 12 W., N.M.P.M. ,"~
<br />sec. 24; lots 1, 2, and SW4SE4; __, ~~~~~~'~
<br />• - - sec. 25, lots 1,
<br />sec. 26, SE'~NEl4 2, WZNB~, and W~; _,, i, ~--
<br />E?SE'~
<br />. and Sidt4SE~;
<br />,
<br />sec. .35, NE a, and ,
<br />NZSE 4, t~ I~l
<br />containing 1 304 . S ].. acres, more or less, together with the right to construct such works, buildings, plants, structures, equipment and appliances
<br />and the right ~.o use sueh on-]ease rights-of-way which may be necessary and convenient in the exercise of the rights and privileges granted, subject to
<br />the conditions herein provided.
<br />PART 11. TERMS AND CONDITIONS
<br />Sec. 1. (a) RENTAL RATE -Lessee shall pay lessor rental annually and
<br />in advance for each acre or fraction thereof during the continuance of
<br />the lease at the rate oC $ ~ for each lease year.
<br />(b) RENTAL CREDITS -Rental shall not be credited against either
<br />production or advance royalties for any year.
<br />Sec. 'L. (a) PRODUCTION ROYALTIES -The royalty shall be ~per-
<br />centofthevalueofthecoalassetforthintheregulotions. Roya yes are
<br />due to lessor the final day of the month succeeding the calendar month
<br />in which the royalty obligation accrues.
<br />(b) ADVANCE ROYALTIES -Upon request by the lessee, the authorized
<br />officer may accept, for a total of not more than 10 years, the payment of
<br />advance royalties in lieu of continued operation, consistent with the
<br />regulations. The advance royalty shall be based on a percent of the
<br />value of a minimum number of tons determined in the manner
<br />established by the advance royalty regulations in effect at the time the
<br />•e requests approval to pay advance royalties in lieu of continued
<br />• anon.
<br />Sec. 3. BONDS-Lessee shall maintain in the proper officealease bond
<br />.n theamount of "3~iTh .The authorized officer may require an
<br />.ncrease in Lhis oun w en additional coverage is determined
<br />appropriate.
<br />$ec. 4. DILIGENCE -This lease is subject to the conditions of diligent
<br />development and contin ued operation, except that these conditions are
<br />excused when operati ons under the lease are interrupted by strikes, the
<br />elements, or casualties not attributable to the lessee. The lessor, in the
<br />public interest, may suspend the condition of continued operation upon
<br />payment of advance royalties in accordance with the regulations in
<br />existence at the time of the suspension. Lessee's failure to produce coal
<br />in commercial quantities at the end of 10 years shall terminate the
<br />lease. Lessee shall submit an operation and reclamation plan pursuant
<br />to Section 7 of the Act not latei-~than 3 years after lease issuance.
<br />Thelessor reservesthe power to assent to or order the suspension of the
<br />terms and conditions of this lease in accordance with, inter alia,
<br />Section 39 of the Mineral Leasing Act, 30 U.S.C. 209.
<br />Sec. fi. LOGICAL MINING UNIT (LMU) -Either upon approval by the
<br />lessor of the lessee's application or at the direction of the lessor, this
<br />lease shall become an LM U or part of an LMU, subj ect to the provisions
<br />set forth in the regulations.
<br />r
<br />The stipulations established in an LMU approval in effect at the. time of
<br />LMU approval will supersede the relevant inconsistent terms of this
<br />lease so long as the ]ease rem sins committed to the LMU. if the LMLJ of
<br />which this lease is a part is dissolved, the lease shall then be subject to
<br />th a lease terms which would have been applied if the lease h ad not been
<br />included in an LMU.
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