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• Grand Valley Coal Comoanv <br />McClane Canyon and Huncer Canyon Mines Looieal Hinina Unit <br />d. ADVANCE ROYALTY: The number of years for which advance royalty may <br />be paid in lieu of continued operation is ten. Advance royalty may be paid in <br />lieu of continued operation only until Hay 1, 2008. No advance royalty paid <br />prior to that date may be credited against production royalty after that date. <br />e. REPORTING PERIOD: The rental amount for each federal coal lease is <br />to be prorated to the effective date of the LHU. Thereafter, the LHU rentals <br />for all federal coal leases within the LMU will be due in lump sus on each <br />annual anniversary of the effective date of LMII approval. Upon approval and <br />for the duration of this LHU, no federal rentals may be credited against <br />production royalties for any federal coal lease contained in the LMU, the <br />federal coal lease terms of which allowed for such credits prior to the <br />effective date of the LMU. <br />Royalties for federal recoverable coal reserves produced within the LMU will <br />be paid in lump sum, identified by individual federal coal lease on the <br />appropriate forms specified by the Minerals Management Service. <br />The LMU royalty reporting period will be on a monthly basis beginning the <br />royalty reporting period after the date that coal is first produced from the <br />LMU, following the effective date of LMU approval. Since all production <br />within an LMU is credited to the entire LMU, a certified record of all <br />nonfederal LHU coal production must be provided to the Resource Area Manager <br />on an annual basis. Progress maps and reports required by 43 CFR 3482.3 shall <br />show all federal and nonfederal production from anywhere within the LMU. <br />• f. RECOVERABLE COAL RESERVES EXHAUSTION: The 40-year LMU recoverable <br />coal reserves exhaustion period eomme noes the date that coal is first produced <br />from the LMU, following the effective date of LMU approval. <br />g. OTHER: If the LMiI, of which federal leases C-0125439, C-0125515, <br />and C-0125516 are a part, fails for whatever reason, federal leases C-0125439, <br />C-0125515, and C-0125516 will automatically be subject to the diligence <br />provisions that otherwise would have applied had the federal coal leases not <br />been included in an LHU. <br />Grand Valley Coal Companyy Onited States of America <br />Unit Operator / , <br />~~ :/ <br />t'i'.~~ .:~._k1 ... <br />Sate Director 3 <br />Title <br />Date ' <br />~.~ '+-C. ~4 3 <br />Date <br /> <br />~~ <br />