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<br />UNIT°_D ST:.TES <br />DE°ARTI4ENT OF THE INTEP.IOR <br />BUREri.U OF :AND Mr~NAG£MENT <br />Seer nt„wer <br />Lease Daa <br />C-0127592 <br />October 1, 1966 <br />- COAL LEa.SE RE~DJUSME"fT I - <br />PART I. LEASE RIGRTS GRANTED <br />T. his lease, entered into by and between the 1J YtTLD S7ATL5 OF AstEatCA herrtntlter callcd lessor, through the Bureau of Land Management. and <br />Sunland Mining Corporation <br />P. 0. Box 55 <br />Oak Creek, Colorado 80467 <br />hereineher called lessee. is resolusud e(fectty. October 1 , 1986 . (or a Deriod of 10 yean and for so long theresiter u roai is <br />oropuced in commercial quanttues from the leased lands, subject w readjuetmenc of lease arms ar the end of each 10.year lease panne. <br />See. 1. This leue readjustment u issued pursuant and subject to the terms and provtstons of the: <br />~~ Mineral Lands Leaning Act of 1920, Act of February 25. 19:0, as amended. 41 Stab, 43T, 30 U.S.C. 181~^~7, hereinstter reiened to u the Ac:: <br />[I Stineral Leasing Act for Acquired Lands, Act of Augusi ~, 194 i, 61 Stat. 913. 30 U.S.C. 3~I359: <br />and to cite regulations and formal orders of the Jecretary of the lacehor which are now or hereafter ih force, when noc inconsistent with the ex Dress <br />anti aDeciiic provtstons herein. <br />Sec. 2. Lessor, in consideration of any rents. sad royalties to be Daid. and the conditions and covenants to be observed ss herein se[ forth. hereby <br />grnnis to lessee the exclusive agar and pnvtiege to drill tor. mine, extracs, remove, or otherwise prottss and dispose of the coal geposita in, upon. <br />or under the Collowtng described tends: <br />T. 4 N., R. 86 W., 6th P.PS. <br />Sec. 22, SEA-„NIdZ and NE ~Sld ~; <br />• <br />containing 80.00 acres, more or less. together with the ngh[ to construct such worits. buildings, plane. scrurures. equipment and appiiantrs <br />and then¢nt to we auth on•jease ngnts•oi• way wnich may oe necessary and con venters c to [he exeroise of the nghta ears privileges grantee, suolett to <br />[he conditions heron provided. <br />PART II. TERMS AND CDNDITIONS <br />Sec. 1. Isl RENTAL RATE • Lessee shall pay lessor rental annually and <br />in advance for escr. acre or fraction thereof during the continuance of <br />the lease ar the rate of 3 3.00 for encn lease year. <br />Ibl RENTAL CREDITS Rental shall not be credited against either <br />production or aavance royalties for any yens. <br />Sea '_'. sal PROCUCTION ROYALTIES • The royalty shall be (Surf a~ <br />12.5 percent and (underground) 8.0 per <br />_ cent of the value of the coal ae setforth in the regulations. Royalties are <br />due to iesaor me imal day of the month aucceedmg the calendar month <br />jn which the royalty obltgauon accrues. <br />Ibl ADVANCE ROYALTIES • UDOn request by the lessee, the authorized <br />officer ma)• acteDi. for a total of not more than 10 years. [he Deyment of <br />advance rovalties in lieu of continued operation. eonsiatent with the <br />reguiationa. The advance ro>•atty snail be based on a percent of the <br />value of a minimum number of tons determined in the manner <br />.established by Ne egvance roysl[y re¢ulations in effect at the time the <br />lessee requeers approval to pay advance royalties to ilea of tonunued <br />operation. <br />Sec. 3. BONDS • Lessee shell maintain in the proper office a lease bond <br />in the amount of5 5,000.00 .The authonzed officer may require an <br />increase m this amount when additional coverage a determined <br />approoneie. <br />Sec. a. DILIGENCE • Thin leue is subject to the condinons of diligent <br />oevclopmencand tonunued operation. ezttp[ the[ these conditions are <br />excused when operations under the lease err interrupted by strikes. the <br />elements, or cnsuaittes noc attnbutable to the lessee. The lessor. in the <br />public interest. may swoenq the tondiuon of connnued ooention upon <br />payment of advance royalties is accorgance with tae regulations in <br />existence at the time of the suspension. Lessee's failure to produce coal <br />in commercial qunnntiea at cne end of 10 yean shall terminate the <br />lease. Lessee shall auomit an oDeratton and retiamanon Dian pursuant <br />to Vernon ~ of the Aet not Iatcr titan 3 years alter me eflearvc ame of <br />ass knse resdpistn,en. <br />The leaaor rnerves [he power to acsent to or order the suspension of [ he <br />terms and eonditiona of thin lease to accordance with, inter alts. <br />Section 39 0[ the Mineral Leasing Aet, 30 U.S.C. 209. <br />Sec. S. LOGICAL MINING UNIT ILMUI Esther upon approval by the <br />lessor of the lessee's application or at the direction of the lessor. [nis <br />lease shall become an LM U or pan o[ an LMU, aubjen w the provisions <br />set forth in the reguiationa. <br />The stipulations care bushed in an L\1U approve I in effect a[ the time of <br />LMU approval will supersede the relevant inconsistent terms of this <br />lease so long as the lease remains committed m the Lbt L''. if the L\1U of <br />which this ieasr u a part is dissolved. the lease snail tnen oe sublet[ to <br />the lease terms which would nave been appited ii the lease nod not oxen <br />inciuoed in an L\t U. <br />6.S uQLl2-g~ <br />