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<br />UNITED STATES
<br />DEPARTMENT OF THE INTERIOR
<br />BUREAU OF LAND MANAGEhtENT
<br />COAL LEASE READJUSTMEIY~
<br />~~~ P-058300
<br />,,IC, .
<br />(j~p~ September 11. 19L1
<br />PART I. LEASE RIGHTS GRANTED
<br />Thu lease, entered into by and between the UNrraO STATES or AYEa1CA, hereinafter taped laseor, through the Bureau of Land Management, and
<br />National King Coal, Inc.
<br />P.O. Box 2905
<br />Durango, Colorado 81302
<br />haniaa[ter tailed lessm, is readpraad'eHective September 11 , 1991 , for a period of~10 yeah and for so long thereafter ea coal is
<br />produced in rnmmateial quantities from the leased lords, subject to readjmtmmt of lease terms at the end of each 10.yesr lease period.
<br />See. 1. This kaae is imued punua.nt and subject m the terms cad provuiom of the:
<br />® Mineral Lands Leming Aet of 1920, Act of February 23, 1920, u amended, 4I Stat 437. 30 US.C. 181.287, hereinafter referred to m the Act;
<br />^ Mistral Leming Aa for Acquired [ands, Act of Augmt 7. 1947, 61 Stat 913, 30 US.C. 331-859;
<br />and to the regulatiom and formal orlon of the 9«xetary of the Interior which are now or hereafter in fam, when not inrnnsiateat with the a:press
<br />and spsdfie proviaiom hetaia
<br />9x 2 Leswr, in eomideration of my ranee, and roysltiaa to ba paid and the mnditiom and covspanu to be obs~rvad m herein sac forth. hereby
<br />green to lasses the a:dusiva right and privilege m drill for, mine, a=tract, nmova, or othezwiea process end dupow of the mal deposin in, upon,
<br />or under the following described leads:
<br />T. 35 N., R. 11 W., N,M.P.M.
<br />sec. 31, SE%aNEl4,;
<br />sec. 32, W~NW`~ and SEI-,NWti
<br />rnsnining 160 aces, mon or less, together with the right to mnetract such works, buildings, plaata, structure, equipment and appliances
<br />and tharight to usasuch on•leass rightsof-wsy which may be necessary and convenient in the exercise of the righu end privilege granted, subject to
<br />the conditiom heroin provided
<br />PART IL 7ERM3 ANO CONDITONS
<br />Sae. 1. (al RENTALRATE - I~ssee shall pay lessor rental annually and
<br />in advmce for.aach acts or fraction thereof during the mntisuance of
<br />the lease at the race of 3 3.00 --- for each laaee year.
<br />(bl RENTAL CREDITS -Rental shall not M credited against either
<br />produetioa or edvesca royalties for any year.
<br />gee 2 lal PRODUCTON ROYALTIES - Tha royalty shell ba (surf a
<br />12'~ percent and (underground) 8.0 pm,
<br />cant of the valmof the coal m set forth in the reguleuom. Royalties an
<br />daa to Isasor the final day o[ the mosth succeeding the calendar month
<br />in which the royalty abligstion accntas.
<br />(h) ADVANCE ROYALTES -Upon regaast by the lamsa, the authorised
<br />officer may accept for a total of not mon than IO yesn, the payment of
<br />sdvases royalties in lies of continued operation, comutent with the
<br />regulations. The advance royalty sheA M based on a percent of the
<br />vslua of a minimum number of tom detartrtined in the manner
<br />uubliehad by the sdvane royalty rsguletiom in eHset et the time the
<br />laaaea requests approval to pay sdvana royalties is Gau of rontisued
<br />operation.
<br />See. 3. SONGS-Lessee shall maintain is the properofficesleasa bond
<br />in the amount a[f 5 , 000. 00 .. Tha authorized officer may require m
<br />incrcasa in this amount when additional coverage is determined
<br />a eortfnrla V
<br />Sea 4. DWGENCE -Thin leaaa is subject to the rnnditiom of diligent
<br />dwelopmast and continued operation, except that these rnnditiona are
<br />e:cuaed when operations under the lame are interrupted by strikes, the
<br />elements, orcmualtie rapt attributable w the lessee. The lessor, m the
<br />puhlic interest may suapand the condition of continued operation upon
<br />payment of advance royalties in aeeordance with the regulations in
<br />e:iatenea et the time of the ampession. Lease's failure to produce coal
<br />in commerdal quantities ae-Yt~-awd-e4i0.yeaw shall urminate the
<br />lama. Lawt shs8 r•~ooit _ _ ^Irntl-_ __a W ~_--.:-- -'-- °._.. _ _.
<br />-Mlrleestwstljasattea4 r
<br />Tha lessor rnsrvp the power to uwnt to or order the smpension of the
<br />terms end conditions of thin lasso in ateordana with, inter alit.
<br />Section 39 of the Mimrsl Leasing Act 30 US.C. 209.
<br />See. S. LOGICAL MINING UNR IUdI>) -Either upon approval by the
<br />lessor of the lessea'• spplicatios or at the direction of the Insor, thu
<br />lease shell become m LMU or pert of m LMU, subject to the provisions
<br />wt forth in the raguladona
<br />Tha stipulation established in an LMU approval in eNact at the time of
<br />LMU approval will supersede the relevant inconsistent terms of thin
<br />lease so long m the lame remains committed m the Ll+tU. If the LMU o[
<br />which thin lease is a pert is dissolved, the lease shall then be subject m
<br />lha lease terms which would have been applied if the lease had not been
<br />i.,rL,rin.i :., .,. r lttr
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