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Sent By: OXBO'N MINING INC.; 970 929 5177;
<br />+d00-12
<br />7,;rJ. ]x~si UNITEll STAT'tiS
<br />DEPARTMENT' OF THE INTERIOR
<br />BUREAU OF LAND M.4NAGEMEN'1'
<br />~'
<br />COAL LEASE
<br />Au4-17-GO 2:29PM; Palle 3;3
<br />FORf~I .4 PI'ROV EL
<br />n>vfa NO. Inna0n7;
<br />Fapires, June 30, 1y97
<br />Serial Number
<br />COC E1357
<br />PAgT I. LEASE RIGHTS GRgNTEO
<br />This Issue. entered into by and between file Utirreo 9Tn'rES ur AnrERICA, hereinafter called lessor, through the Bureau of Land Management, and
<br />lNnme and AddreseJ
<br />Oxbow Mining, Inc.
<br />P,O. Box 535
<br />Somerset, CO 81439
<br />hereinafter called lessee, u eHaettve (dotal' , for a period of 20 years and for eo long thereafter es coal is produced in camniercixl
<br />quantities lTOm the le9sed lends, subject to roedjustment o(loese terms et Uie end of the 20th lease year and each 10.yesr period thereafter.
<br />Sec. 1. Thu lease is issued pursuant and aublect W the facets end provieion• of [hay
<br />® Mineral l~ttde Leasing Ace of 1920, Act of February 26, 1Q20, es emendwd, ql Slat. s37, 30 U.S.C. 181787, hereinuftai ref<rred to ea the At:e:
<br />(] Mineral Leaning Act for Aegaired Londe, Act of August 7, 1987, 61 Stet. 913, 30 U.S.C. 351-35fr,
<br />and to tho regulations and lormal oedere of the Becretary of the Interior which ere now nr hereafter in force, when not inconaietenl with the expreaa
<br />end eperific provisions herein.
<br />Sec. 2. Iassor, inconsideration of any bonuses, rents, and royalNeE W be paid, end the conditions end covenants to be observed u herein set forth,
<br />hereby grant. rod lessee m lessee The excltuivs right and pnvBege b dell (or, mine, extract, ramous, or otherwise process and dispose n[ the coal
<br />depoetu in, upon, or under the following deeQibed Itnde:
<br />T. 12 5., R. 90 W„ 6th P.M.
<br />sec. 31, all;
<br />sec. 32, lots 3 to 6, incltsive, lots 11 to 14, inclusive, and NWT;
<br />T. 12 S., R. 91 W., 6th P,M.
<br />eec_ 35, all;
<br />. sec. 36, sll-
<br />T. 13 S., R.
<br />sec. 5,
<br />lots 17
<br />sec. 6,
<br />T. 13 5., R.
<br />sec. 1,
<br />sec. 2,
<br />sec. 12
<br />90 W., 6th P.M.
<br />lots 7 to 10, inclusive,
<br />to 18, Inclusive;
<br />lots 8 to 17, iDClueive.
<br />91 W., 6th P.M_
<br />lots 1 tD 4, inclusive,
<br />lot 1 and S'~NP.~;;
<br />S~NF3i; and NWI;-
<br />lots 14 co 15, inclusive, and
<br />515N4fls, and SWk;
<br />mataining4 , 443. 57 saes, mote or lane, tagathv with the right W eonetruct each works, ]taildinge, plants, etrocturea, equipment and appliencae
<br />and the right cause sash oa-leans righU•of•wsy which may be neceeaery end convenient in the ezarciee of the rights end privileges granted, subiect W
<br />d+e conditions heroin provided.
<br />~AR7II. TERMS AND CONOtTIONS
<br />Sec. 1. (e) RENTAL RATE - Lessee obeli pay Inver rental annually and
<br />.n advance for each sera or frattitm thereofduring the continuance of
<br />he Ivabu rt the eta of i 3.00 for each lease year.
<br />b) RENTAL CREDITS Rental shall eat be credited agttiast richer
<br />lroductiun or udranu royalties far any year.
<br />lac. 2 fa) RRODUCTION ROYALTIES -The royalty shell be 8 ur-
<br />:ent otthe value of the met u set forth in the regulations, lloyeltia an
<br />lue to Isaac the final day of the month euceesding thecslendar month
<br />n whtcb t}u royalty obligetiutt avaraaa.
<br />bl AOVgNCE ROYALTIES • Upon reteuest by the lessee, the authorized
<br />iffiest may eccepl, for w total of not max than 30 years, the payment of
<br />advance roysltin in Bru of continued operation, rnnsistont with the
<br />egulations. The advance royalty shall be based on s pertrnt of the
<br />•elue of a minimum number of tons determined io the martyr
<br />•etabliehed by the etlvence rvyslty regulations in effect at the time the
<br />~aae rpuaeta approval to pay advance royaltip in 6eu of continued
<br />ration.
<br />tee. 3. BONDS-l.asee abaci maintain in theproper offices leans bond
<br />n the amount of iCi, 993 , 000 . The authtrrized officer may require sn
<br />,I~~rcaar in this amount when additional coverage to determined
<br />~PPmpriats.
<br />Sec. 4. DILIGENCE -'l;hie We• is .object to flu oondipons of diligent
<br />derelopmmt and oontinued up.rotion, soaps that these condition. ere
<br />eaeueed wbsn operations undo the lease eroineerrnp{rd by seriken, the
<br />elements or cuueltisa not wttrlbutabls to the lessee. The le.eor, in tht
<br />puhlie interest, may ^uepend the condition o[contin tied operation upon
<br />payment of advance royalties in accordance with the regulations in
<br />eaietente et the time of the suspension. Cannes's tadare to produce coal
<br />in tnmmedai quaniitln at the end of (U yenta shall terminate the
<br />loess. Leseeeshall eubmitan operationand teclemation plan pursuant
<br />to Section 7 of the Act not later rl,m 3 yeah sfter lease ianuence.
<br />The ]sssor rsservas the power La assent to or order the snepeneion of tht
<br />terms and conditions of this lease in accordance with, inter olio,
<br />Section 39 oC she Mineral Leaning Ace. 30 U.S.C. 209.
<br />Sec. 5. LOGICAL MINING UNR (LMU) -Either upon approval by the
<br />lessor of she lessee's application or at the direction of the lrssur, Thin
<br />lease shall became na LMU or part of m I.ML', subject to [he provlslone
<br />set FoRh in the trgdatione.
<br />The agpu4uona es46}iehtxl in an LMU approval in affect at the nme of
<br />I.h1U appeovel will superaade the relevant inconsistent tt:nna of this
<br />lease eo long ea she Iteee remains committed to the LMU. [f th a LM U of
<br />which this lease is a part is dissolved, the lease shall then M eu bjsce t~
<br />the lease terms which would have been applied if the tease had not been
<br />included is an 1.MU.
<br />fib-17-88 14:21 TO~MONTGOMERY WATSON FROM~97B 929 5177 PB3
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