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3.3 Cure by Lessee. If the Lessee elects to cure defects not corrected by the Lessor, it may <br />recover its curative costs from fifty percent (50 %) of the value of any royalty payments <br />thereafter accruing, to a maximum of $1,000. Curative costs to the Lessee in excess of <br />$1,000 shall be its sole <br />responsi bili ty. <br />3.4 Title Failure After Examination Period. In the event of a title failure at any time after the <br />examination period and during the term hereof, the Lessor shall not be liable therefore in <br />damages or otherwise, and such title failure shall not operate to reduce any payment due to <br />the Lessor pursuant to this Mining Lease, except to the extent such title failure is a result of <br />encumbrances or other defects in title created by, through or under the Lessor and except that <br />royalties on production payable to the Lessor shall be paid only in proportion which the <br />Lessor's interest in the part of the Mining Properties from which the royalties on production <br />occur bears to the entire mineral interest therein. <br />4.1 Performance of Work. The parties have agreed that no minimum amount of work will be <br />required during the first five years of the lease term. Thereafter, the Lessee agrees to expend <br />not less than the amounts set forth during each lease year on the following schedule: <br />The second year of the Mining Lease The third year of the Mining. Lease and each lease year <br />thereafter <br />$ 15,000 $ 20,000 $ 30,000; <br />Such expenditures are to be for exploration, development, mining or related operations in or <br />for the benefit of the Mining Properties. Amounts expended shall include, but not by way of <br />limitation, expenditures for test and development drilling and excavations, both surface and <br />underground; rental of equipment used in operations in the leased premises or if equipment <br />used in the operations is owned by Lessee, equivalent rental computed at the current rental <br />schedule of the Associated Equipment Distributors for equipment used in Colorado; <br />expenditures for servicing and maintaining the rented or owned equipment; expenditures for <br />geological mapping, surveying, sampling and assaying and metallurgical test work, <br />engineering