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<br /> <br />3. Production royalties are due and payable on any production from the leases, <br />including the first five years. It Is generally assumed that the first five years of a <br />lease is involved with startup of the operation. The definition of the product for <br />which royalty is due can be found in Sec. 3(cl, Part 1, of the leases. <br />4. Present policy generally allows a lessee to have short-term nonproduction at <br />the end of the lease term. The definition of short-term nonproduction is a couple <br />of months, at most, as opposed to a year or more. <br />2 <br />5. We agree that the water rights provision in Sec. 6, Part II, applies only to water <br />rights on the leases. <br />6. Sec, 4, Part 1, of the leases controls incidental mining of oil shale as part of the <br />mining of nahcolite. <br />You further state in your letter that the applicant, by accepting the leases, does <br />not intend to imply that the applicant has thereby waived all rights to sodium <br />located above the saline zone as the applicant remains of the belief that a lease <br />which would permit distinct and separate leases with respect to the same mineral <br />on the same tract is contrary to both the letter and spirit of the Mineral Leasing <br />Act. <br />As stated to Donald Morgan in our letter of October 19, 1991, the Interior Board <br />of Land Appeals (IBLA) decision, Yankee Gulch Joint Venture. et al. v. Bureau of <br />Land Managemen.*_, 113 IBLA .106 (1990), held that the holders of three sodium <br />preference right lease applications (PRLAs) are entitled to sodium leases for the <br />Lands described in their sodium prospecting permits but limited recovery operations <br />to the "leased deposits" i.e., the saline zone as defined in the proposed leases <br />upon which the appeal was based. Section 24 of the Mineral Leasing Act of <br />1920, as amended, 41 Stat. 437; 30 U.S.C. 181 gS ~gy. (1988), provides that, if <br />the holder of a prospecting permit shows to the satisfaction of the Secretary that <br />valuable 'deposits" have been discovered, the holder shall be entitled to a lease for <br />'any Q all" of the land described by the prospecting permit and that the lessee will <br />have the right to recover and sell "the sodium compounds and other related <br />products' 130 U.S.C. 262 (1988)). The other "related products" which may be <br />recovered and sold under a sodium lease are the by-products of the sodium <br />compounds for which a sodium lease is issued; not oil shale, the deposits of <br />which are leased only as directed by Section 21 of the Mineral Leasing Act <br />(30 U.S.C. 241). <br />Applicants' initial and final showings made in support of a discovery of a valuable <br />deposit of sodium were predicated on the existence and mineability of the sodium <br />minerals nahcolite and dawsonite found within the saline zone of the Parachute <br />Creek Member of the Green River Formation. Applicants recognized the restrictive <br />