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Forst aaoo-t2 UNITED STATES Serial Number
<br />pnl 19841
<br />~rtlr.v~t~ DEPARTMENT OF THE INTERIOR
<br />BUREAU OF LAND MANAGEMENT
<br />COAL LEASE
<br />PART I. LEASE RIGHTS GRANTED
<br />COC 51551
<br />This lease, entered inw by and between the UNtreo STAT65 Ot•' AMlRICA. hereinafter called lessor. through the Hureau at [and Management. :roll
<br />/Name and Address)
<br />Western Fuels-Utah, Inc.
<br />405 Urban Street, Ste. 305
<br />Lakewood, Colorado 80228
<br />hereinafter called lessee, is effective /date) , Cor a period of 20 years and for sr. lung thereafter as coal is produced in commercial
<br />quantities from the leased lands, subject w readjustment of lease terms at the end of the 20th lease year and each IO-year period thereafter.
<br />Sec. 1. This lease is issued pursuant and subject w the terms and provisions of the:
<br />~( Mineral Lands Leasing Act of 1920, Act of February 25. 1920, as emended. 41 Stat. 437, 30 U.S.C. 181.287. hereinafter referred to as the .Act:
<br />^ Mineral Leasing Act for Acquired Lando, Act of August 7, 1947, 6l Stat. 919, 30 U.S.C. 351.359:
<br />and to the regulations end formal orders of the Secretary of the Interior which are now or hereafter in force, when not inconsistent with the express
<br />and specific provisions herein.
<br />Sec. 2. Lessor, in consideration of any bonuses, rents, and royalties w be Daid, and the Conditions and covenants w be observed as herein set forth.
<br />hereby grants and leases w lessee the exclusive right and privilege to drill for, mine, extract, remove- ar otherwise process and dispose of the coal
<br />d~mt7mcyad~e~Nawdx~tasra[Va~irmofox deposits limited to the coal recoverable by underground
<br />mining methods in the following lands:
<br />• _ Sixth Principal Meridian
<br />T. 3 N., R. 101 W.,
<br />r.- sec. 25, S~;
<br />~- sec. 26, SE~SEt-6;
<br />sec. 34, S~NE~ and N'~SEly;
<br />sec. 35, NEC-~NE~t, S~N'>f, and N'~S'~;
<br />- ~ sec. 36, N'~ and N't-f5~.
<br />containing 1360 acres, more or less, wgether with the right w construct such worlw, buildin RS, planLS, structures, equipment and appliances
<br />and the right w use such on-lease rightsof-wa y which may be necessary and convenien t in the exercise of the rights and privileges granted, suhject to
<br />the conditions herein provided.
<br />PART II. TERMS AND CONDITIONS
<br />Sec. 1. I al RENTAL RATE -Lessee shall pay lessor rental annually and
<br />in advance for each acre or fraction [hereof during the Continuance of
<br />the lease at the rate of S 3 .00 -- for each lease year.
<br />(61 RENTAL CREDITS -Rental shall not be credited against either
<br />production or advance royalties Cor any year.
<br />Sec. 2. tar PRODUCTION ROYALTIES -The royalty shall he $ per
<br />cent oCthe value of the coal as set forth in the regulations. Royalties are
<br />due [o lessor the final day of the month succeeding the calendar month
<br />in which the royalty obligation accrues.
<br />Ibr ADVANCE ROYALTIES - Upnn request by the lessee, the authorized
<br />officer may accept, fora [oral of not more than 10 years, the payment of
<br />~vance royalties in lieu of continued operation, consistent with the
<br />ulations. The advance royalty shall be based on a percent of the
<br />ue of a minimum number of wns determined in the manner
<br />established by the advance royalty regulations in effet[ at the time the
<br />lessee requests aDProval to pay advents royalties in lieu of continued
<br />operation.
<br />Sec. 3. BONDS-Lessee shall maintain in the proper offices lease bond
<br />in theamount of8 563,000 .The authorized officer may require an
<br />increase in this amount when addinonal coverage is determined
<br />appropriate.
<br />Sec. 4. DILIGENCE -'I-his lease is subject to Chu cunditi~~ns of diligent
<br />development and continued opera[ion, except that these tonditiun<ar~~
<br />excused when rrperatiuns under thetease arc interrupted by strika•s. the
<br />elements, or casualties not attributable to the lessee. "1'he Irnenr. in the
<br />public interest, may suspend the condition n(cnntinued uperatrun up~~n
<br />payment of advance r~~vulties in accordance with the regulan~ms in
<br />existence at the time of the suspension. lessee-s failure to pn~d ore coal
<br />in commercial quantities nt the end of In years shall terminuu~ tha
<br />lease. Lessee shall submit an operation and rrclama[ion plan pursuant
<br />to tiec[ion i of the Act nut later than :f years after lease i.. uance.
<br />Thelessnr reserves the puwerto assent to nr order chr suspension ntthe
<br />terms and rnnditiuns of this lease in accordance wµh. inter alia.
<br />Section 39 of the Mineral Leasing Acl. 111 C.S.C. Y04.
<br />Sec.:r. LOGICAL MINING UNIT (LMU) - E:i[her upon appn,val by the
<br />lessor of the lessee's application or at the direction n( the lessor. this
<br />lease shall become an I.MU nr part of an I.MU, suhject to the provisions
<br />se[ forth in the regulations.
<br />The stipulations established in an LMU apprvrval in effect at the timrrlF
<br />LrMU approval will supersede the relevant inconsistent terms of this
<br />lease so long as the lease remains committed u. the LMU. If the LM I; of
<br />which this lease is a part is dissolved, the lease shall then hr subject [o
<br />[he lease terms which would have been applied if the lease h:rd not been
<br />inr.luded in an LMU.
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