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• <br />• <br />• <br />and geological services, expenditures for transportation and subsistence of <br />the personnel who perform the described work; expenditures for <br />maintenance of unpatented mining claims, including fees paid to the Bureau <br />of Land Management in lieu of assessment work. Any amount expended in <br />or credited to any lease year in excess of the amount set forth in the <br />foregoing schedule shall be carried forward and credited against the work <br />requirement for the following lease year. A lease year is a period of one (I) <br />year commencing on the date of this Agreement or any anniversary of this <br />Agreement. Lessee shall have no obligation, express or implied, to explore, <br />develop, mine, or perform any work on, or for the benefit of the Mining <br />Properties except as required in this Section 4.1. The Lessee may explore, <br />evaluate, develop, operate and mine the Mining Properties at such time and <br />by such means and in such manner as it, in its sole discretion, deems <br />appropriate and may build and place thereon such roads and structures as are <br />necessary for the accomplishment of such activities. <br />Gold Price <br />$600 or less <br />$600 -$700 <br />$701 - $800 <br />$801 - $1000 <br />$1001- $1500 <br />$1501 or more <br />V. Royalties <br />5.1 Payment of Royalties. The Lessee shall pay the following royalties to <br />Lessor at such time as net smelter returns are realized from the production of <br />minerals from the Mining Properties: <br />Rate of Net Smelter Return Royalty <br />5.0% <br />5.5% <br />6.0% <br />6.5% <br />8.0% <br />9.5% <br />(a) The term "net smelter returns" means the net amount of money or <br />other net proceeds received from the sale of ore, concentrates, sponge, <br />bullion, or any other form in which minerals or materials (metallic or <br />non - metallic) are produced from the Mining Properties after deduction <br />of taxes based upon production, all treatment charges, penalties, smelter <br />charges, transportation costs, other charges made by a purchaser of ore <br />or concentrate, other umpire charges which the Lessee may be required <br />to pay and, if any portion of the production is from lands which are part <br />of the Mining Properties covered by unpatented mining claims or federal <br />mineral leases, any rentals, royalties or other consideration allocable to <br />5 <br />