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Sent By: 0XB01N MINING INC.; 970 929 5177;
<br />+400 -12
<br />7,;rJ. 1995) UNITED STATES
<br />DEPARTMENT OF THE INTERIOR
<br />BUREAU OF LAND MANAGEMENT
<br />COAL LEASE
<br />PART I. LEASE RIGHTS GRANTED
<br />Au4 -17 -00 2:29PM; Palle 3;3
<br />FORM .APPROVED
<br />OMB NO. 1004-007 i
<br />Fapires, June 30, 1997
<br />Serial Number
<br />COC 61357
<br />This lease. entered into by and between Ile. UNITED 87A'I'LS Ur An ERICA. herein a ner called leeeor, through the Bureau of Land Management, and
<br />!Name and Address)
<br />Oxbow Mining, Inc.
<br />P.O. Box 535
<br />Somerset, CO 81439
<br />hereinafter called lessee, is eHseuve (date) , for a period of 20 years and for *along thereafter as coal is produrrd in commercial
<br />quantities 1lom the leased lands, subject to readjustment of lease terms et the end of the 20th lease year and each 10-year period thereafter.
<br />Sec. 1. This lease is issued pursuant and subject to the terms and provietons of the:
<br />M Mineral Lands Leasing Act*( 1920, Act of February 25, 1920, as emended, 41 Stat. 437, 30 U.S.C. 181287, hereinaftai referred to ea the Act:
<br />0 Mineral Leasing Act for Acquired Londe, Act of August 7, 1947, 61 Stet. 913, 30 U.S.C. 351 -35%,
<br />and to the regulations and formal orders of the Secretary of the Interior which are now or hereafter in force, when not inconsistent with the expo...
<br />and specific provisions herein.
<br />Sec. 2. lessor, in consideration of any bonuses, rents, and royalties to be paid, and the conditions and covenants to be observed as herein set forth,
<br />hereby grants and lessees to leans, the exclusive right end privilege to drill for, mine, extract, ram ova, or otherwise process and dispose of the coal
<br />deposits in, upon, or under the following described lands:
<br />T. 12 S., R. 90 W., 6th P.M.
<br />sec. 31, all;
<br />sec. 32, lots 3 to 6, inclusive, lots 11 to 14, inclusive, and NWT;
<br />T. 12 S., R. 91 W., 6th P.M.
<br />sec_ 35, all;
<br />. sec. sll-
<br />T. 13 S., R.
<br />sec. 5,
<br />lots 17
<br />sec. 6,
<br />T. 13 S., R.
<br />sec. 1,
<br />sec. 2,
<br />sec. 12
<br />90 W., 6th P.M.
<br />lots 7 to 10, inclusive, lots 14 to 15, inclusive, and
<br />to 18, Inclusive;
<br />lots 8 to 17, inclusive.
<br />91 W., 6th P.M.
<br />lots 1 to 4, inclusive, ShNWk, and SW;4;
<br />lot 1 and SA5NFn';;
<br />SkNFk and NW1;-
<br />mntaming4 , 443. 5 7 saes, more or lase, together with the right to construct each waria, buildings, plants, structures, equipment and appliances
<br />and the right to use such on -lease rights -of -way which may be necessary and convenient in the exrcioe of the rights end privileges granted, subject to
<br />d+e conditions heroin provided.
<br />PART It. TERMS AND CONDITIONS
<br />Sac. 1. (a) RENTAL RATE - Lessee shall pay lessor rental annually and
<br />'n advance for each acre or frattion thereof during the continuance of
<br />he leans at the rate of i 3.00 for each lease year.
<br />b) RENTAL CREDITS - Rental shall not be credited against either
<br />Imducuun or advance royalties for any year.
<br />lac. 2 (a) PRODUCTION ROYALTIES -The royalty shell be 8 per -
<br />:ant of the value of the coal asset forth in the regulations. Royalties are
<br />lue to lessor the final day of the month succeeding thecalendar month
<br />n whtcb the royalty obligation araraaa.
<br />bI ADVANCE ROYALTIES - Upon request by the lessee, the authorized
<br />dficer may eccepl, for a total of not more then 10 yea", the payment of
<br />advance royalties in lieu of continued operation, consistent with the
<br />egulations. The advance royalty shall be based on a percent of the
<br />,slue of a minimum number of tons determined in the manner
<br />•stablished by the advance royalty regulations in effect at the time the
<br />,psas rsgaa*ta approval to pay advance royalties in lieu of continued
<br />rat on.
<br />,ec.3. BONDS- 1As*" shall maintain in the proper Office a lease bond
<br />n the amount of xi, 993 , 000 . The authorized officer may require an
<br />nrrcaar in this ernount when additional coverage to determined
<br />'pPmpnKte.
<br />Sec. 4. DILIGENCE - Whim We• is subject to the oondipons of diligent
<br />development and Continued op.rAtion- except that these condiliane are
<br />exe:ueed when operations under the lease arointerrupted by strikes, the
<br />elements, or e"ualtias not attributable to th. lessee. The lessor, in the
<br />publie interest, may suspend the condition of Conlin ued operation upnn
<br />payment of advance royalties in accordance with the regulations in
<br />existence at the time of the suspension. Lessee's failure to produce coal
<br />in commercial quantities at the and of Ill years shall terminate the
<br />Iaasa. 14neeshall aubmitan operationand reclamation plan pursuant
<br />to Ssetian 7 of the Act not later than 3 yea" after lease issuance.
<br />The lessor nerves the power to assent to or arder the suspension of the
<br />terme and conditions of this lease in accordance with, inter aliu,
<br />Section 39 of the Mineral Leaving Ace. 30 U.S.C. 209.
<br />See. 5. LOGICAL MINING UNIT (LMU) - Either upon approval by the
<br />lessor of the !ewe's application or at the direction of the lessor, this
<br />lease shall become an LMU or part of m LML', subject to the provlslonv
<br />set forth in the regulations.
<br />The stipulations established in an LMU approval in effect at the time of
<br />I-MU approval will supersede the relevant inconsistent tcnns of this
<br />lease so long an the lease remains committed to the LMU. If th a LM U of
<br />which this lease is apart is dissolved, the lease shall then be su bject t�
<br />the lease terms which would have been applied if the lease had not been
<br />included in an LMU.
<br />88 -17 -09 14:21 TO:MONTGOMERY WATSON FROM:979 929 5177 PEl 3
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