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<br />Form 34n0-12 UNITED STATES
<br />(January 1995)
<br />DEPARTMENT OF THE INTERIOR
<br />BUREAU OF LAND MANAGEMENT
<br />COAL LEASE
<br />FORM APPROVED
<br />OMB NO. (OU1-0073
<br />Expires: June 30, 1997
<br />Senal Number
<br />COC 61357
<br />PART I. LEASE RIGHTS GRANTED
<br />This lease, entered into by and between the UNITED STATeS OF AMeaiCA. hereinafter called lessor, through the Bureau of Land Management, and
<br />(h'awe and Address)
<br />Oxbow Mining, Inc.
<br />P.O. Box 53~
<br />Somerset, CO 81439
<br />hereinafter called lessee, is effective ~ ~QR ~ 2QQI for a period of 20 years and for so long thereafter as coal is produced in commercial
<br />quantities from the leased lands, aubjec [o readjustment of lease terms at the end of the 20th lease year and each 10-year period thereafter.
<br />Sec. 1. This ]ease ie issued pursuant and subject to the terms and provisions of the:
<br />m Mineral Lando Leasing Act of 1920, Act of February 25, 1920, ae amended, 41 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, 1947, 61 Stat. 913, 30 U.S.C. 351-359;
<br />and to the regulations and formal orders of the'Secretary of the Interior which are now ar hereafter in Corce, when not inconsistent with the expiees
<br />and specific provisions herein. ~~-
<br />Sec.:. 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 />hereby grants and leases to lessee the exclusive right end privilege to drill for, mine, extract, remove, or otherwise process and dispose oC the coal
<br />deposits in, upon, or under the following described lands:
<br />T. 12 S., R. 90 W., 6th P.t4.
<br />sec. 31, all;
<br />sec. 32, lots 3 to 6, inclusive, lots 11 to 14, inclusive, and NW's;
<br />T. 12 S., R. 91 W.,
<br />sec. 35, all;
<br />sec. 36, all.
<br />T. 13 S., R. 90 W.,
<br />sec. 5, lots 7
<br />lots 17 to 18,
<br />sec. 6, lots 8
<br />6th P.M.
<br />6th P.M.
<br />to 10, inclusive,
<br />inclusive;
<br />to 17, inclusive.
<br />lots 14 to 15,.inclusive, and
<br />T. 13 S., R. 91 W., 6th P.M. o ~
<br />sec. 1, lots 1 to 4, inclusive, S~?iW~y, and SW~; ~ ~"
<br />c•~-
<br />sec. 2, lot 1 and S zNE~t; `^~+
<br />sec. 12, S'~NE~ and NWT. ~ nip '
<br />T= C
<br />con[aining4, 443. 57 scree, more or lees, together with the right to construct such works, buildings, plants, structures, equipa~it and~~j i nces
<br />and the right to use such on-leaserights-of-way which may be necessary end con venient in the exercise of the rights and privileges grante~sa b+ect to
<br />the conditions herein provided. .~ i•i?',
<br />~ ,1¢.;:
<br />_ r-Y
<br />PART II. TERMS AND CONDITIONS Sec. 4. DILIGENCE -This lease is subject to the co~itionsmyf-litigant
<br />developmentand continued operation, except that tl~se conditions are
<br />Sec. L. (a) RENTAL RATE -Lessee shall pay lessor rental annually and excused when operations under theleese are interrupted by strikes, the
<br />in advance for each acre or Fraction thereof during the continuance of elements, or casualties not attributable to the lessee. The lessor, in the
<br />[he lease at the rate of $ 3.00 for each lease year. public interest, may suspend the condition of continued operation upon
<br />',b) RENTAL CREDITS -Rental shell not be credited against either payment of advance royalties in accordance with the regulations in
<br />orod action or advance royalties for any year. existence a[ the time of the suspension. Lessee's failure to produce coal
<br />Sec 2. (a) PRODUCTION ROYALTIES -The royalty shall be 8 peC. in commercial uantities at the end of 10 ears shall termin to the
<br />:ant oC the value of the coal as set forth in the regulations. Royalties ere
<br />Sue to lessor the final day of the month succeedingthe calendar month
<br />n which the royalty obligation accrues.
<br />b) ADVANCE ROYALTIES -Upon request by the lessee, the authorized
<br />itficer may accept, for a total of not more than 10 years, the payment of
<br />,dvaiice royalties in lieu oC continued operation, consistent with the
<br />regulations. The advance royalty shall be based on a percent of the
<br />•alue of a minimum number of tons determined in the manner
<br />~s[ablished by the advance royalty regulations in effect at the time the
<br />asses requests approval to pay advance royalties in lieu of continued
<br />operation.
<br />iec. 3. BONDS-Lessee shallmaintain in the proper officealease bond
<br />ntheamount of S6, 993, 000 The authorized officer may require an
<br />ncrease in this amount when additional coverage is determined
<br />.pprepriate.
<br />q y n
<br />lease. Lessee shall submit an operation and reclamation plan pursuant
<br />to Section 7 of the Act not later than 3 veers after lases issuance.
<br />The lessor reservesthe power to aseent to or order the suspension of the
<br />terms and conditions of this lease in accordance with, inter olio,
<br />Section 39 0(the Mineral Leasing Act, 30 U.S.C. 209.
<br />Sec. 5. LOGICAL MINING UNIT (LMU) -Either upon approval 6y the
<br />lessor of the lessee's application or et the direction of [he lessor, this
<br />lease steal I become an LMU or part of an LM L', s[ibl act to th a provisions
<br />set forth in the regulations.
<br />The stipulations established in an LMU approval in effect at the timeo(
<br />LD1U approval will supersede the relevant inconsistent terms of this
<br />lease so long es the lease remains committed to the LMU. I f the LM U of
<br />which [his lease is a part is dissolved, the lease shall then be subject to
<br />the lease terms which would have been applied if the lease had not been
<br />included in an LMU.
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