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<br />Pan D. TERMS AND CONDI7[ONS
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<br />Sec. L (s) RENTAL RATE - 1-essee shall pay lessor rental
<br />annually and in advance for each acre or fraction thereof during
<br />the continuance of the lease at [he etc of $3.00 for each lean
<br />year.
<br />(b) RENTAL CREDITS -Rental shall nor be credited
<br />against either production or advance royalties for any year.
<br />Sec. 2. (a) PRODUCTTON ROYALTIES -The royalty skull
<br />he 8.0 percent of the value of the wal as set forth iv the
<br />regulations. Royalties aze due to Lessor the Enal day of the
<br />month succeeding the calendar month in which the royalty
<br />obligation accrues.
<br />7'hdstiptilAirotra<~mbfishrd in an LMU approval in eRecr et the
<br />time Of LMU approval or modification will supersede the
<br />relevant inwnsistent terms of this lean so long as the lease
<br />remvns commiaetl to the LMU. 1f the LMU of which this lease
<br />is a pan is dissolved, the lease shall then be subjecuo the lean
<br />terms which would have been applied if the lean had nm 6een
<br />includrd in an LMU.
<br />Sea b.DOCUMENTS, EVIDENCEAND INSPEC170N-At
<br />such tunes and in such form as Lessor rosy prescribe, Lessee
<br />shall furnish detailed sutemcnu showing dse amounu and quality
<br />of atl products removed and sold from the lease, the proceeds
<br />therefrom, and the amount used for production purposes or
<br />unevvidebfy iatt.
<br />ro) ADVANCE ROYALTIES .Upon request by the
<br />Lessu, the authorized vffmu may accepq for a total of not more
<br />than 10 years, the payment of advance royaldes in lieu of
<br />continued operation, consistem with the regulations. The
<br />advance royalty shall be based on a percent of the value of a
<br />minimum numbu of tons deturninrd iv the rtuoner established
<br />by the advanceroyalty mgulations in ellectat the dmethe Lesu
<br />requests approval to pay advance royalties in lieu of continued
<br />operation.
<br />Sec. 3. BONDS -Lessee shall maintain iv the proper offitt a
<br />lease bond in the amoun[ofS5,000. The authorized officmmay
<br />require an inause in this amount when additional coverage is
<br />determined appropriate.
<br />Sea 4. DILIGENCE -This lease is subjut to the conditions of
<br />diligenldevelopmcntond continued operation, except (ha[lheu
<br />Conditions are excused when operatons under [fie lean am
<br />inlemupled by slrike5, the dcnrems, or cesualliu no[ amihulable
<br />to the Lessee. The lessor. in the public in2resq may suspend the
<br />condition of condnued operation upon payment of advance
<br />royalties in accordance with the regula[ioru in existence at the
<br />time of the suspension. Lessee shall submit an amended
<br />operation and reclamation plan pursuant to Sectlon 7 of the Act
<br />(30 U.S.C. 207(c) within 3 years o(Ne date o(modificarion or
<br />prior to approval to commence mining operations.
<br />Lesor reserves the power to assent to or order the suspension of
<br />the terms and conditions of this lease in accordance with, inter
<br />laiia, Section 39 of the Mineral Leazing Act, 30 U.S.C. 209.
<br />Sec 5. LOGICAL M[NING UNIT (LMU) -The lands
<br />eonuined in the original lease me included in Colowyo Mine
<br />LMU, serial numbvCOC 57194 effective Apol 1, 1992. Within
<br />30 days after the effective date of this lease modi[wtion, lessee
<br />shall amend irs Colowyo Mine LMU to include the W acres
<br />added to coal tease D-034365 by this modification. The
<br />modified fend shall tie segregated inro another Federal coal lase
<br />should the lessee fail to file such amendment.
<br />Lessee shell keep open at all reasonable dines for dse inspection
<br />of any duly aurlwrized officer of lessor, the leased premises and
<br />all stuiace end underground improvements, works, machinery,
<br />ore stockpiles, egwpmen4 and all books, accounts, maps, and
<br />records relative to opeutioru, surveys, or invwtigadons on or
<br />under the IeasM lantls.
<br />Lessu shall allow lessor access to and copying of documents
<br />reasonably necessary to verify Lessee compl'unu with terms eM
<br />wnditions of the lease.
<br />White Ws lease remains in effect. information obtained uMer
<br />this section shall be closed to inspatian by the public in
<br />acconlanu with the Freedom of Information Action ($ U.S.C.
<br />552).
<br />Sec 7. DAMAGES TO PROPERTY AND CONDUCT OF
<br />OPERATIONS - Lesu shell comply vt its own expense with
<br />all reasonable orders of the Semetary, respecting diligent
<br />operadorss, prevention of waste, and protection of other
<br />resourtts.
<br />Lessee shall not conduct exploration operations, other than
<br />casual use, without an approved exploration plan. All
<br />exploration plans prior m the commencement of reining
<br />operations within av approved mining perndt area shall be
<br />submitted m the authorized officer.
<br />Lessee sha0 carry on all operations in accordance with approved
<br />methods end pmcuces az provided iv the opmadng regulations,
<br />having due regard far the prevention of injury m life, health, or
<br />pmpeny, etd prevention of wazte, damage or dcgradetion any
<br />land, av, water, culmml, biological, visual, and other resource,
<br />including ndnerel deposits and formations of mineral deposits
<br />not leased hereunder, and to othv land uses or users. Lessee
<br />shall Wkemeasme deerrcd necessary by lessor to accomplish
<br />[he intent of this lease term. Such measures may include, bin not
<br />limited m, modifcation ro proposed sitingordesignof facilities,
<br />liming of operations, and specifications of interim end final
<br />Exhibit 1, Item 1-5 Revision Date: 1/16/06
<br />Revision No.: MR-78
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