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<br />)n (hc event that said Lesscc does not extract from said premises said minimum amounts above specified during
<br />each Icase year of the Icrm of this Icasc, it is nevertheless understood that the above sums o(money are royalties
<br />fn. the ycais stated, and are due and payable to the Lessor whether minerals arc mined or nut during such year,
<br />but that such minimum advance royalty will be credited upon the first royalties due as hereinafter provided (or
<br />minerals actually produced from said premises and sold or milled during the year for which such minimum royalty
<br />was paid.
<br />2. Production Royally -Lessor hereby reserves and Lessee agrees to pay to Lessor as royally the following:
<br />(a-I) For fission;tble nmterials -see attached schedule.
<br />(a-2) For nun-fissionable ntatcrials - A sum equal lo---' % of the gross value al the mill or buying station
<br />less reasonable transportation costs. Lessee will furnish evidence that prices received for malenal sold
<br />and trans ,ortation charges deducted are reasonable and fair. Unless otherwise agreed to in writing by
<br />the Boar, deductible transportation charges will be from the mine to Ihe~nearest mdl or buyingstalron.
<br />Lessee may use the weighted average sale price received for all lots of ores sold during each calendar
<br />nwnth period.
<br />(b) A sum of 9fL35-for each :md every ton (2000JJ) of the above specified miuerals mined from the
<br />prcrnises. Nithin sixty days pi iur to the tcnninatton o(eac6 and every trvc-year period for so long as this
<br />lease remains in effect, the State Du:ud of Land Commissioners may reapprmse the properly herein
<br />leased and fix and determine the ride of {{rroduction royally to be paid during rack year of the succeeding
<br />five•ycar period. Failure to comply wills any new royalty rate set by the Iluard may subject this lease to
<br />cancellation by thirty-day written notice by the Doard.
<br />1( requested by Lessor, Lessee is to furnish F~roo( oC price received for all minerals sold. Such royalty is due and
<br />payable on or before the twenty-fifth (251h) clay of each calendar month during the teen of this lease for minerals
<br />mined, removed, and sold by Lessee dining the preceding calendar month.
<br />Royalty payments shaD apply to payment received by the Lessee on any mineral so sold. The minerals mined
<br />from the leased premises may be millet in a custom or commercial plant or mill owned :md operated by Lessee.
<br />They may not be mixed or commingled with ores from other properties until they have been crushed and sampled
<br />by the mill for the purpose of dclennining the hereinabove designated minerals and other minerals contained in
<br />the crude ore That may be salvaged by milling o(same. The resulting samples are to be assayed at the laboratory
<br />used by the mill where ore is nulled and Lcssur may demand an assay certificate showing the contents of each
<br />delivery to mill. If requested by the Lcssur, the mill is to reserve a pulp of each composite sample for telling,
<br />provided, however, said mill will not be obliged to keep pulp for a period o(more than ninety (90) days. In the
<br />event of a dispute as to analysis, the pulp prepared from each composite sample is to be referred to an umpire
<br />acceptable to Lessor and Lessee and the dctennination of the umpue will be binding upon both ~rarties. The net
<br />weight of the crude ore on adry-wcighl basis will be determined at the scales al the mill. Lessor wi 1 have the rigid
<br />to check the weights as often as it deems advisable. Lessee will furnish Lessor with duplicate scale weipJtl
<br />certificates. Lessee agrees to, and will be bell accountable to see that the foregoing provisions are carried out y
<br />such mill or mills as receive minerals produced from the premises herein demised.
<br />The Lessee has the right to mine, raise, carry, mid transport ores from the lands hereby (rased through other lands
<br />now or hereafter owned or leased by the Lessee, and the right to raise, carry,-and transport ores mined by the
<br />Lessee from other lands owned or leased by fire Lessee over or through the lands covered by this lease; provided,
<br />That the ores mined from other lands ::re iu nu event mixed with ore mined from Ihese leased premises, except as
<br />provided above.
<br />3. Overriding Royalty Limitations - 11 is ugrccd Thal this lease or any subsequent assignment hereof may not be
<br />burdened with overriding royalties the al;grcgate of which exceeds°------°--" .Lessor nmst be notified
<br />of all overriding royalties accruing lu Ihrs (rise. Violation of the above may subject this Icase to cancellation by
<br />Lessor. _ _ .. ., _ .. _
<br />4. Wei h_l~s~- Il is agreed that all miuerals mined and taken from said premises are to be weighed and the weigh[
<br />1 reel eof is to be entered in due form in wcighl records kepi (or such purposes by Lesscc.
<br />5. Re~ort~s -After operations are begun, it is agreed that on or before the 25th day of rack and every month during
<br />t rl a term of this lease the Lessee will make a sworn report on forms (uinished by Lessor, in which the exact
<br />anmunt in weight o! all minerals mine) and removed from said premises and sold during the receding calendar
<br />month are to a entered and acconq,:mied by full payment for all royally due for the moot r. Further, lessee
<br />must furnish annually a map or blucpiiut of survey of all workings, with location of same lied to a corner
<br />established by United Stales surveys of some land subdivision, certified to by a licensed engineer or surveyor.
<br />6. Ins eclion - Il is agreed that during all proper hours and al all times during the continuance u! this lease the
<br />slur or its duly authorized agent or ;igcuts, 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 examine, inspect, survey and take
<br />measurements of the same and to exawiuc and nmke extracts of copies of all books and weight sheets and records
<br />which show in any way the mineral outlsul of the leased premises, and that all conveniences necessary for said
<br />inspection, survey, or examination arc to be fuurished to the Lessor.
<br />7. Minin Methods -Failure to comely with any of the provisions of this paragraph pray subject this lease to
<br />canoe ahon.
<br />. In the underground and open pit woikiugs, ail shafts, inclines, and tunnels must be well timbered (when good
<br />mining requires timbering) and all parts of workings, where minerals are not exhausted, will be kept free from
<br />water and waste materials. The underground and o en pi[ workings are to be protected against fire, floods, creeps,
<br />and squeezes. ((such events do occur, they must be checked in a manner which is in keeping with good methods
<br />of mining. Such methods of mining must be used as will insure the extraction of the greatest possible amounts of
<br />minerals consistent with prevailing good mining practice.
<br />Lessee agrees to slo to the sides uCall surface bits or excavations to a ratio of not more than one foot (1' vertical
<br />for each two feet (~') of horizontal distance. Such sloping is to become a normal part o(the operation. Whenever
<br />practicable, all pits or excavatimrs are to be shaped to drain, and in no case may the pits or excavations be
<br />~~ allowed to become a hazard to persons ur livestock. A!1 material mined and not removed from the premises will
<br />be used to fill the pits so that at the e~~,iration, surrender, or termination of this lease the land will, as nearly as
<br />practicable, approximate its original cunliguration, with a minimum of permanent damage to the surface.
<br />~n r_ equals from tlr_~~B~ ard,_~esscc further agrees to submit fans and nra s of ru used minis ro rams in
<br />a Vance, so that t to oar nta eTully aware of l le propOSe operaltons.
<br />8. Rigltls-of-waY - Il is agreed Ilia[ tlic Lessor reserves the right to grant rigltls-of-way over said premises for public
<br />roads, railroads, power, telegraph, telephone, ditch, and canal lines, but such grants arc lobe subject to the rights
<br />of Ilic Lessee.
<br />9. Notices - 1t is agreed that any notice required or permitted to be geven to the Lesscc under the provisions of this
<br />ease is to be sent by certified mail lu the address set forth at the beginning of this Icasc or to such other address
<br />as Lessee may indicate in writing to 1_CSSUr and such service by mail will be deenmJ sufficient and in full co~-
<br />pliance with the terms of this Icase. Notice to Lessor is to be given iu like manner, addressed to Stale Board of
<br />Lvtd Commissioners, Denver, Colorado.
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