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<br />making the annual advance minimum royalty payments which shall be retained by the Grantor <br />regazdless of whether or not the company commences mining operations. <br />6. Water Auerrrentation, Backfilling, and Dewaterine. <br />A. The Company shall be responsible for any augmentation plan made necessary <br />by the Company's dewatering or mining operations on the Property. The Company's reclamation <br />plan will avoid exposure of water surface requiring peananent augmentation. However, if the State <br />Engineer determines that a temporary plan is necessary for the Company's operations on the <br />Property, Lessors shall provide any owned water associated with this Property for the Company to <br />implement any such temporary augmentation plan. <br />B. To the extent feasible and economically reasonable, the Property will be <br />backfilled or developed into a wetland; provided that the Company makes no representation or <br />warranty that sufficient overburden or other material will be available to permit complete backfilling <br />of this Property. The Company shall not import any asphalt or hazazdous materials for backfilling; <br />but may import concrete rubble, so long as the top three feet of fill material is overburden. <br />C. Lessors covenant and agree that, in connection with its dewatering and other <br />operations, the Company may dischazge water into the existing lake owned by Lessors east of the <br />Property. The Company shall be responsible for installing a dischazge pipe from that lake and for <br />obtaining any necessary NPDES or other permit or authorization necessary to allow discharge of the <br />water. <br />7. erations. <br />A. The Company shall conduct its operations on the Property in a prudent and <br />workmanlike manner and in accordance with good and accepted mining and business practices and <br />in compliance with all applicable federal, state and local laws, rules and regulations. The timing, <br />nature, manner and extent of mining operations, processing and sales shall be within the sole <br />discretion of the Company, and the Company shall not be required to mine, preserve or protect in <br />its operations any Materials which, under good mining practices, cannot be mined or sold at a <br />reasonable profit to the Company at the time they aze extracted. <br />B. The Company shall have the right to construct, maintain, and use roads, pipe <br />lines, power lines, telephone lines, and stockpile azeas and any right-of--way it deems necessary or <br />desirable for its operations on the Property related to the Company's operations under this Lease. <br />The Company shall have the right during the Term of this Lease and without payment to Lessors <br />(except for production royalties payable pursuant to Pazagraph 3 and advance minimum royalties <br />payable pursuant to Section 4) to strip and remove overburden and otherwise to use and occupy the <br />Property as is reasonably required in connection with mining, quarrying, extracting, processing, <br />storage, transportation, sale and removal of Materials from the Property. <br />C. The Company shall consult with Lessors with respect to all permit <br />applications, plans and designs of the Company; provided, however, that all final decisions on mine <br />~ RECEIVED <br />MAR 3 0 2000 <br />Division of MineraY~ 6 GeoloGy <br />