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<br />1. ADVANCE MINIMUM ROYALTY -This paragraph is not applicable. <br />2. PRODUCTION ROYALTY -- Permitter reserves as royalty, and Permittee agrees to pay to Permitter on or <br />before the last day of each calendar month following the month of production, $ 0:30 per ton. <br />3. EXTENSION -- Permittee may have a preferential right to renew the lease or to receive a new lease, whichever <br />may. be determined by Permitter to be. in the best interest of the State, under the following conditions: <br />A. An advance minimum royalty, the 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. Permittee shall furnish to Permitter satisfactory evidence of plans for mining during the term of the <br />renewed lease or during the term of a new lease. <br />C. Permittee shall fiunish adequate geological evidence to Permitter that the acreage subject to the renewed <br />or new lease is in:fact an integral part of and coniains reserves in a logical mining unit. 'Whether the <br />acreage is or is not a part of a logical mining unit will be determined by Pemutter. <br />D. An extension of this Lease as determined by Permitter would be in the best interest of Permitter <br />4. EXTENSION EY 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/A per acre: Haul roads and/or access roads which do not directly benefit the <br />Leased Premises will be subject to a separate permit and approval of Permitter. <br />6. REPORTS AND RECORDS -- Afrer 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 and 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 Permitter within tiU days fol]owmg 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 10 years. If any such examination shall reveal, or if either party shall <br />discover any error or inaccuracy in its own or the other party'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 either party of said error or inaccuracy. <br />Further, Permittee shall furnish annually a complete operations report to Permitter disclosing the number <br />of Ions 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 sections showing location 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 of 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 co~dential as <br />consisten± with State law. Pertnittee shall submit, if requested by Permitter, such additional reports, records or <br />documents regarding Permittee's operation on the Leased Premises as necessary for the compliance with lease <br />provisions. <br />7. OVERRIDING ROYALTY LIMITATIONS -- 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 />Page 2 of 7 <br />