|
<br />3. EXTENSION -- Permittee may have a preferential right to renew Ute lease or to receive a new lease, whichever
<br />may be detemuned by Permitter to be in the best interest of the State, under the following conditions:
<br />A. An advance minimum royalty, Ute amount to be negotiated before expiration of the lease, will be due and
<br />payable annually commencing on the date .this lease is renewed or a new lease is executed and shall
<br />continue until the expiration of the new or renewed lease. This amount may be adjusted by Permitter at
<br />the end of each five-year period of the renewed or new lease.
<br />B. I'et7ttittee shall furnish to Permitter satisfactory evidence of plans for mining during the term of the
<br />renewed tease or during the term of a new ]ease.
<br />C. I'ertnittee shall furnish adequate geological evidence to Permitter that the acreage subject to the renewed
<br />or new' lease.is in fact an integral part of and contains reserves in a logical mining unit. Whether the
<br />acreage is or is not apart of a logical mining unit will be determin+:d by Permitter.. .
<br />D. An extension of this Lease as determined by Permitterwould be in the best interestof Permitter
<br />4. EXTENSION BY PRODUCTION -This paragraph is not applicable.
<br />5. ANCILLARY USE -- Permittee may remove approved minerals, and place on the Leased Premises stock piles of
<br />.material mined from this lease.and..such equipment as is approved by Permitter for this removal. All other
<br />' :ancillary uses such as.concrete plants, asphalt plants, accessory equipment, offsite aggregate materials and any
<br />other.uses.not specifically mentioned herein will be subject to the approval of Permitter and require a yearly rental
<br />payment of no less than N, /~i ,per acre. Haul roads and/or access roads which do not directly benefit the I-eased
<br />Premises will be subject to a separate permit and approval of Perminer.
<br />6. REPORTS AND RECORDS -- After operations begin, it is agreed that on or before the last day of each month
<br />during the term of this lease Permittee shall submit a sworn, verified, written report to Permitter, in which report
<br />shall be entered attd set down the exact amount in weight of all products and the assay thereof mined and removed
<br />from said leased premises during the preceding calendar month. Permittee agrees to keep and to have in
<br />possession complete and accurate books and records showing the production and disposition of any and all
<br />substances produced on the leased land and. to permit Permitter at all reasonable hours, to examine the, same or to
<br />furnish copies of same to 1?ertnitter within 60 days following written request. along .with purchaser's support
<br />documentation.. All said books and records shall be retained by Permittee and made available in Colorado to
<br />.Permitter for a period,of.not less than l0.years. If any such examination shall .reveal, or if either pazty shall
<br />discover any error or inaccuracy in its own or, the other.parry's.statement,.payment, calculation, or determination,
<br />then proper adjustment,or correction thereof shall be.made as promptly as practicable thereafter, accept that no
<br />adjustment or correction shall be .made .if .more than. 10 years have elapsed between the time the error or
<br />inaccuracy. occurred and the discovery by eiUer party of said error or inaccuracy.
<br />Further, Permittee shall famish annually a complete operations report to Permitter disclosing the number
<br />of tons and the assay thereof of all ores, minerals and other materials mined from the .premises during the
<br />preceding year. Permittee shall also furnish 'in said report geologic interpretations. and recoverable reserve
<br />calculations, and,maps and cross sectiorts showing iocation of any mineral-bearing outcrops, drill holes, trenches,
<br />ore bodies and other prospecting and exploration activities, along with assays showing the amount of mineral
<br />contained in the ore..The records required to be maintained by Permittee and provided to Permitter upon request
<br />include logs of all strata penetrated and all geologic and hydrologic conditions encountered, and copies of in-hole
<br />surveys-this information to ,be collected and prepared under the supervision ot',a,qualified geologist, geological
<br />engineer or mining engineer. Other qualified persons may collect and prepare this data, if agreed to in writing
<br />between Permittee and Permitter. Any request to keep certain information confidential should be in writing to
<br />Permitter at the time such information is submitted to Permitter, and.such data may be kept confidential as
<br />consistent with State law.. Permittee shall submit, if requested by Pemiltter, such additional reports, records or
<br />documents regarding Peimittee's operation on the Leased Premises as necessary for the compliance with.lease
<br />provisions..
<br />7. OVERRIDING ROYALTY ~LiIv1iTATIONS -- It .is agreed that this lease or any subsequent assignment hereof
<br />shall not be burdened with overriding royalties the aggregate of which exceeds two percent (2%) of the gross
<br />value of the minerals. or ore at the first point of sale. Permitter must be notified of all overriding royalties
<br />accruing.to this lease.
<br />8. DEVELOPMENT -This paragraph not applicable.
<br />9. PENALTIES"'-- A penalty shall be imposed for,'but not limited to, late payments, improper payments, operational
<br />deficiencies of any kind whatsoever, violations of any covenants of this lease, or any false statements made to
<br />Permittee. Penalties shall be determined by Permitter unless otherwise provided for bylaw and maybe in the
<br />Page 2 of 7
<br />
|