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• <br />• <br />• <br />5.3 Advance Royalty Payments. That while this Lease remains in effect, the <br />Lessee shall pay, or will have paid, to the Lessor on or before the end of <br />each lease year, royalties amounting in the aggregate to not less than the <br />amount set forth opposite each date respectively as follows: <br />End of Lease Year <br />1 <br />2 <br />3 and 4 <br />5 and thereafter <br />Advance Payment <br />$ 3600 <br />$ 4000 <br />$ 5000 <br />$ 5000 <br />Dollar amounts above shall be adjusted as provided in Schedule 3) Any <br />amount so paid in excess of royalties payable on production shall be advance <br />royalties and shall be applied against future production, and no royalties on <br />production shall be paid, except to the extent that there shall be a balance <br />due on production after having applied and credited against the said <br />production the following: <br />(a) All royalties previously paid in advance; and <br />(b) Any costs which Lessee may deduct from royalty payments as <br />provided in Section 3.3 of the Lease; and <br />(c) The amount of haulage fees paid as provided in Section 9.3. <br />5.4 Co-Mingling. If the Lessee is mining other properties, it shall have the <br />right to co- mingle the ore and concentrates from the Mining Properties with <br />other ore and concentrates from other properties, provided that Lessee <br />weighs, samples and assays as required in accordance with sound mining <br />practices to properly allocate the mineral values amongst the <br />different ownerships. <br />5.5 The Lessee may refine, smelt or otherwise treat the production from the <br />Mining Properties at facilities operated by Lessee provided that its charges <br />shall not be more than an amount which would be charged if a non - affiliated <br />smelter or refinery or other processing facility refined, smelted or processed <br />the production from the Mining Properties. <br />7 <br />