EXHIBIT 10.3
Met. Min. - 1281d
Form Approved July 23, 1984
PROOF READ JG - EB MINERAL LEASE NO. 20569
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MINERAL LEASE APPLICATION NO. 20569 GRANT: SCH
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UTAH STATE LEASE FOR
METALLIFEROUS MINERALS
(Amendment)
THIS UTAH STATE MINERAL LEASE AND AGREEMENT entered into and executed in
duplicate as of the 28th day of May, 1963, by and between the STATE OF UTAH,
acting by and through the BOARD OF STATE LANDS & FORESTRY and DIVISION OF
STATE LANDS & FORESTRY, DEPARTMENT OF NATURAL RESOURCES, with the office
located at 3100 State Office Building, Salt Lake City, Utah 84114,
hereinafter called the "LESSOR," and
Atlas Corp
P. 0. Box 1207
Moab, UT 84532
(whether one or more individuals, corporation, or other entities) with business
office or address as shown above, hereinafter called the "LESSEE,"
WITNESSETH:
That the State of Utah as Lessor, for and in consideration of the fees,
rents, royalties, and any other financial consideration paid or required to be
paid by Lessee, and the terms and conditions to be performed by Lessee as
hereinafter set forth, does hereby GRANT AND LEASE to the Lessee the exclusive
right and privilege to explore for, drill for, mine, remove, and dispose of
the particular mineral or minerals described in Article I hereof, herinafter
called the "leased substances," situated within the boundaries of the
following-described tract of land (extending vertically downward from the
surface) in San Juan County, State of Utah, to-wit:
Township 30 South, Range 25 East, SLB&M
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Section 36: NW 1/4, E 1/2
containing 480.00 acres, more or less.
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This Mineral Lease is granted for and in consideration of and subject to
all of the terms, provisions, and conditions hereinafter set forth:
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ARTICLE 1. MINERALS COVERED BY THIS LEASE
This Mineral Lease covers the following-described leased mineral
substances with the boundaries of the above-described lands, to-wit:
METALLIFEROUS MINERALS
"Metalliferous Minerals" are herein defined to include any ore containing
any of the following minerals: Aluminum, Antimony, Arsenic, Beryllium,
Bismuth, Cadmium, Chromium, Cecium, Columbium, Cobalt, Copper, Flourspar,
Gallium, Gold, Germanium, Hafium, Iron, Indium, Lead, Mercury, Manganese,
Molybdenum, Nickel, Platinum, Group Metals, Radium, Selenium, Scandium, Silver,
Rare Earth Metals, Rhenium, Tantalium, Tin, Thorium, Tungsten, Thallium,
Tellurium, Vanadium, Uranium, Zinc, together with other minerals which are found
in association with said specified minerals in such a manner that they cannot be
mined separately.
In the event Lessee, or the operator or any contractor for Lessee, shall
discover within said lands some mineral or minerals other than the mineral or
leased substances covered by this lease, Lessee shall promptly notify the Lessor
of the kind or nature of such mineral or minerals not included in this lease.
ARTICLE II. PRIMARY TERM AND POSSIBLE EXTENSION OF TERM OF LEASE
This lease is granted for a primary term of TEN (10) years commencing on
the first day of January next succeeding the date hereinabove first written and
as long thereafter as the leased substances shall be produced in commercial
quantities from the above-described lands, on condition that Lessee shall
perform the terms and provisions required to be performed by Lessee including
payment of rents and royalties within the times required herein; provided
however, that it is expressly agreed that at the end of each period of ten (10)
years following the effective date of this lease, the State of Utah as Lessor
shall have the right to readjust the terms and conditions of this lease as may
then be determined to be in the best interest of the State of Utah as trustee-
owner of the mineral estate. In the event of failure or refusal of the Lessee to
accept and agree to the readjustment of the terms and conditions submitted by
Lessor at the end of such ten (10)-year period, such failure or refusal to
accept such readjustment of terms, conditions, or royalty shall operate to
forfeit any right to extension of the term of this Mineral Lease and terminate
this lease except for the rights of the State of Utah to recover any royalties
then owing the State and/or any damages for which Lessee may be liable. This
lease will not be extended beyond the end of the thirtieth year-except by the
production of the leased substances in commercial quantities from the leased
lands. If Lessee ceases production of leased substances in commercial quantities
this lease will terminate one (1) year from the date of last commercial
production, unless Lessee commences commercial production at least three (3)
months prior to the end of such year and such commercial production then
continues for at least six (6) months.
ARTICLE III. APPLICABLE LAWS AND REGULATIONS
This lease is issued pursuant to the provisions of Title 65, Utah Code
Annotated, 1953, as amended, and subject to all valid Rules and Regulations and
requirements adopted by the Board of State Lands & Forestry, and of the Board of
Oil, Gas, and
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Mining, applicable to the subject matter of this lease, together with all
requirements of the Utah Mined Land Reclamation Act, all requirements of the
State Antiquities Act, Title 63, Chapter 18, and all valid rules and
regulations relating to safety, sanitation, and health whether under the
jurisdiction of the Division of Oil, Gas, and Mining with respect to operations
under this lease or under the jurisdiction of some other State agency.
ARTICLE IV. RIGHTS TO THE SURFACE ESTATE
If the surface estate of all or sane portion of the hereinabove-described
lands is owned by the Lessor, Lessee shall be entitled to use reasonably and
prudently such portions of the surface estate owned by Lessor as shall be
reasonably necessary to explore and prospect for, mine, drill, remove, and
dispose of the leased mineral substances, including permission to establish and
maintain in, a safe condition on the surface estate owned by Lessor, access
roads, communication lines, tanks, pipelines, reservoirs, mills, processing
plants, reduction works, dumps, and other essential structures, facilities,
machinery, and equipment, reasonably necessary and expedient for the
economic operation of the leasehold and in furtherance of production, treatment,
and disposition of the leased substances under this lease. Such surface uses
shall be exercised subject to the rights reserved to the State of Utah as
provided in Article V hereof, and without unreasonable interference with the
rights of any prior or subsequent lessee of the State of Utah under the program
of multiple use.
If the surface estate of any portion of the described lands is not owned by
the State of Utah, except for a reserved right of entry to the mineral estate or
mineral estates, the Lessee may exercise such right of entry to the mineral
estate covered by this lease, at the sole cost and expense of Lessee herein and
without cost to the State of Utah. If any damage is caused directly or
indirectly to the surface estate by the Lessee or by the contractor or operator
for Lessee, Lessee shall make proper restitution and indemnify the surface
owner or owners. Lessee also shall make proper rehabilitation as required by
the Utah Mined Land Reclamation Act and as required by all lawful rules and
regulations adopted thereunder.
Lessor will require a bond to be posted or other security given to the
State to be filed with Lessor or any other State agency or officer in a
principal amount determined by Lessor to be adequate to assure appropriate
reclamation and restitution for and damage to the surface estate.
ARTICLE V. EXCEPTIONS AND EXCLUSIONS FROM LEASE
Lessor hereby excepts and reserves from the operation of this lease the
following rights and privileges:
First: The right to establish rights of way and easements on, through or
over the land above described, for utility corridors and for joint or Joint and
several uses as may be necessary and appropriate for the management of the
above-described lands and other lands of Lessor or lands administered by Lessor,
and for the working of other deposits within said lands under mineral leases
granted to others under the program on multiple use.
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SECOND: The right to issue mineral Leases to other lessees covering
minerals not included in this lease, under such terms and conditions which will
not unreasonably interfere with operations under this lease in accordance with
the principle of multiple use provided by Law.
THIRD: In the event Lessor owns the surface estate in said lands or portion
of said lands above described, Lessor retains the right to use, lease, sell, or
otherwise dispose of the surface estate in said lands or any part thereof, under
existing State laws or laws subsequently enacted, insofar as such surface is not
essential for the Lessee herein in exploration, prospecting for, mining,
drilling, removal, or disposal of the leased substances covered by this lease,
to the extent that such use, lease, or sale of the surface estate does not
unreasonably interfere with the rights granted to the Lessee herein. Lessor
shall notify Lessee herein of any such sale, lease, use, or other disposition of
the surface estate.
ARTICLE VI. PAYMENT OF RENTALS AND ROYALTIES
For and in consideration of the leasehold rights granted to the Lessee, in
addition to all other terms and conditions required to be performed by the
Lessee, the Lessee hereby covenants and agrees with Lessor to pay rentals and
royalties as follows:
FIRST: Lessee agrees to pay Lessor as rental for the Land covered by this
lease the sum of One Dollar ($1.00) per acre and for each fractional part of an
acre, each year in advance on or before January lst of each year except the
rental for the first year which has been paid with the application for this
lease. All rentals paid shall be credited against actual Production Royalties
for the lease year in which they shall accrue, but such rentals shall not be
credited against the Minimum Royalties under subparagraph "Fourth" of this
ARTICLE VI.
SECOND: "Lessee shall pay lessor a production royalty on the basis of 8% in
tax case of fissionable Metalliferous Minerals and 4% in the case of
non-fissionable Metalliferous Minerals of the market price, including all
bonuses and allowance received by Lessee, f.o.b. the nearest point of sale of
the first marketable product or products produced from the leased substances and
sold under a bonafide contract of sale, whether or not such product or products
are produced through chemical or mechanical treating or processing of the leased
substances raw material. It is expressly understood and agreed that none of
Lessee's mining or product cost, including but not limited, to material costs,
labor costs, overhead costs, distribution costs, or general and administrative
costs may be deducted from market price f.o.b. the point of sale in computing
Lessor's royalty. All such costs shall entirely be borne by Lessee and
anticipated by the rate of royalty assigned in his agreement."
THIRD: Payment of Production Royalty shall be made by Lessee to Lessor, as
herein required, on or before the last day of the month next succeeding the
month during which the minerals or leased substances shall have been shipped or
sold or used. In connection with such payment of Production Royalty, the Lessee
shall submit a certified statement of the production of all leased substances
mined or extracted from the hereinabove-described lands, according to the
foregoing royalty schedule together with such information required by the Board
of State Lands & Forestry to verify production and disposition of mineral
substances produced and disposed of from the leased premises.
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FOURTH: Lessee may maintain this lease in force beyond the primary term of
ten (10) years from the effective date of the original lease by paying Lessor,
in addition to rentals and production royalties as hereinabove required, an
annual minimum royalty of three (3) times the annual rental, providing the
lessee is engaged in diligent operations, exploration, research, or development
activity which is reasonably calculated to advance development or production of
the mineral covered by the lease from the leased premises or lands pooled or
unitized with or constituting an approved mining or drilling unit in respect to
the leased premises.
Said annual minimum royalty shall be paid each year in advance, commencing
with the eleventh year of the lease, along with the regular annual rental
required to be paid under the terms of this lease. Said rental per acre and said
Minimum Royalty shall be paid on each and every acre in this lease to extend the
term of this lease and to keep this lease in force and effect.
Rentals and Minimum Royalties paid annually shall be credited against
actual Production Royalties for the year in which they accrue during the
original term, or any extension thereof; but annual rentals shall not be
credited against Minimum Royalties.
ARTICLE VII. MINERAL TITLE OF LESSOR
Lessor claims title to the mineral estate covered by this lease. Lessor
does not warrant title nor represent that no one will dispute the title asserted
by Lessor. It is expressly agreed that Lessor shall not be liable to Lessee for
any alleged deficiency in title to the mineral estate, nor shall Lessee or any
assigns of the Lessee become entitled to any refund for any rentals, bonuses, or
royalties paid under this lease.
ARTICLE VIII. WATER RIGHTS
In the event Lessee shall initiate any water rights on the leased premises,
such right shall become an appurtenance to the leased premises; and upon
surrender, cancellation, or termination of this lease, Lessee or assigns of
Lessee shall assign and convey such water rights and any application for
appropriation of water to beneficial use relating to the land or the mineral
estate covered by this lease to Lessor.
If the Lessee shall purchase or otherwise acquire any water rights on
some other land and file with the State Engineer appropriate application for
change of use onto the premises covered by this lease, the Lessor herein
shall have an option for 45 days after the expiration, surrender, or
termination of this lease to purchase said otherwise acquired water rights at
the acquisition costs of the Lessee. Such option shall begin to run from the
date of termination, surrender or expiration of this lease or from the date
when Lessee shall specify in writing the acquisition costs of such other
water rights, whichever date is the later date. Unless Lessor accepts such
written offer to convey such rights at the actual acquisition costs within
said period of 45 days, Lessor shall be deemed to have rejected the offer.
Upon payment of the said acquisition costs by the Lessor, Lessee herein shall
assign and transfer such acquired water rights to the Lessor.
ARTICLE IX. WRITTEN CONSENT REQUIRED FOR ASSIGNMENT OR SUBLEASE
Lessee shall not assign this lease nor any portion thereof, nor any rights
or privileges herein granted, without the prior written consent of Lessor. Nor
shall the
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Lessee issue any sublease without the prior written consent of Lessor. Any
assignment of lease and any sublease issued without prior written consent of
Lessor shall be void ab initio.
In the event Lessor shall approve an assignment of this lease or of any
part hereof, such assignment shall be subject to all of the terms, conditions,
and obligations of the Lessee herein set forth. All of the terms, covenants,
conditions, and obligations of the Lessee shall be binding upon the heirs,
executors, administrators, successors, and assigns of the Lessee. This provision
also shall apply to any sublease issued by Lessee and approved by Lessor.
ARTICLE X. OVERRIDING ROYALTY LIMITATION
Neither the Lessee nor the assignee of Lessee shall create or grant any
overriding royalty except as permitted by law and by the Rules and Regulations
of the Board of State Lands & Forestry. Overriding royalty assignments shall not
become effective, even if otherwise valid, until filed with the Lessor.
ARTICLE XI. SURRENDER OR RELINQUISHMENT OF LEASE
Lessee may surrender this lease for cancellation by Lessor as to all or any
part of the leased lands, but not for less than a quarter-quarter section or
surveyed lot, upon payment of all rentals, royalties, and other amounts then due
and owing to the Lessor, by filing with Lessor a written relinquishment. As to
rental, such relinquishment shall be effective on the date of filing, but
otherwise on the date of cancellation by the Lessor.
ARTICLE XII. NOTICE OF COMMENCEMENT OF OPERATIONS, PLANS, PLATS, BOND
Not less than sixty (60) days before commencement of exploration,
drilling, or mining operations, Lessee shall give written notice hereof to the
Division of State Lands & Forestry and the Division of Oil, Gas, and Mining,
together with a plan of operation and a topographic map showing every proposed
shaft, tunnel, open pit, drill site, and access road to be used. Lessor shall
make an assessment of such plan of operation and either endorse or stipulate
changes in Lessee's plan of operation, or request additional information within
the sixty (60) day notification period. Lessee shall not proceed with the
execution of any such plan of operation without first receiving the written
approval of Lessor. Lessee shall maintain at the mine office clear, accurate,,
and detailed maps of all actual and planned operations on a scale of not more
than 50 feet to the inch, with points coordinated with public land surveys
showing distance to the nearest public survey monument or reestablished survey
corner. Such maps and plats shall be on tracing cloth or other material which is
substantially permanent and of which clear and distinct photo copies or blue
prints can be readily made without unreasonable delay. Such maps or plats shall
show the workings from time to time, as the same are extended. In the event that
the operations on the above-described leasehold are intended to be conducted in
conjunction with adjacent lands, whether Federal, State, or privately-owned
lands, the map and plats shall clearly show how the operations are to be
coordinated. All surveys shall be conducted by a licensed surveyor or engineer
qualified to practice in Utah. All such maps or plats shall be certified by the
surveyor or engineer
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preparing the same. The State or any agency of the State of Utah, including the
Division of Oil, Gas, and Mining, shall be entitled to a true and correct copy
thereof, together with the proposed plans of operation.
After Lessor receives notice of intent to commence mining operations,
upon request of the Lessor, the Lessee shall furnish a bond with an approved
corporate surety company authorized to transact business in the State of
Utah, or such other security acceptable to the Lessor, in an amount to be
determined by Lessor, after taking into account the value of the land and the
amount of potential damage which likely will result from such proposed mining
operations, and which bond or other security shall be conditioned upon
payment of all rentals and royalties from the leasehold and other sums which
may become payable to the Lessor, and to assure full compliance with the
terms and conditions of this lease and compliance with all Rules and
Regulations of the Board of State Lands & Forestry and all Rules and
Regulations of any other State agency having jurisdiction over mining
operations, and also conditioned upon payment of all damages to the surface
and improvements thereon if this lease covers surface estate or some portion
of the surface estate which has been sold or otherwise leased, and any damage
caused by Lessee to any other lessee of the State of Utah with respect to
said land. Such bond or other security furnished prior to commencement of
development of the leasehold may be increased in such reasonable amounts as
the Lessor may require after discovery of any of the leased substances.
If the plan of mining development or mining operations includes
core-drilling, the plan of operations shall disclose the locations of
core-drilling operations.
ARTICLE XIII. ALL OPERATIONS TO BE CONDUCTED IN A LAWFUL, PRUDENT MANNER
Lessee shall conduct all operations under this lease in a lawful, prudent,
and good workmanlike manner for the effective and safe production of the mineral
substances covered by this lease, and to avoid unnecessary damage and injury
to the leasehold estate, and also to avoid damage and wastage of other natural
resources not covered by this lease. All operations of Lessee, whether conducted
directly by Lessee or by operators or contractors, shall be at the sole cost
and expense of Lessee.
It is expressly covenanted and agreed that Lessor does not grant Lessee or
any person dealing with Lessee any right to subject the property hereinabove
described, nor any leased substances, to any lien-rights for labor or
mechanic's liens, nor to any materialmen's liens, nor to any other lien for any
act, omission, neglect, or performance of Lessee or its agents, employees,
and contractors. In the event any one shall file any notice or claim of lien
against said property or any estate in said property, Lessee shall take all
necessary steps expeditiously to have such notice or claim released of record.
Lessee shall save Lessor harmless from any and all lien notices and claims
against said land arising from any act or neglect of Lessee and any contractor
or operator of Lessee in any operations on or relating to the hereinabove
described lands.
Lessee shall not fence off or otherwise make inaccessible to livestock
lawfully on the surface of said premises any watering place without the written
consent of Lessor; provided, that Lessee shall not permit any livestock to come
upon any portion of the leasehold to pollute any surface or subsurface water
available or capable of being made available for domestic use or irrigation. In
the operations of Lessee, Lessee shall comply with all laws and regulations for
control of water which might be
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encountered or which might seep into any formation, to avoid pollution of
surface and underground waters as required by Chapter 14, Title 73, Utah Code
Annotated, 1953, as amended. Lessee shall comply with all valid laws and
regulations relating to prevention and suppression of fires, make all necessary
provisions for sanitary disposal of wastes, and in all operations connected with
said leasehold take appropriate measures for protection of human life and
prevention of injuries and disease.
ARTICLE XIV. RIGHTS OF LESSOR FOR INSPECTIONS OF LEASEHOLD AND RECORDS
Lessor, its officers, and agents have the right at all reasonable times
to enter upon the leased lands and premises to inspect the conditions of the
leasehold, the work done under the terms of this lease, and the production
obtained from the leasehold, such entry and inspections to be done in such a
manner as shall not unreasonably interfere with the lawful operations by the
Lessee in performance of the terms and conditions of this lease.
Lessor also shall have the right to examine all books and records
pertaining to operations under this lease whether such books and records are
located within a building on the leased premises or located in an office
elsewhere and to make copies and abstracts of such records if desired by Lessor.
Lessor, its officers, and agents shall have the right to post upon or within the
leasehold such notices deemed proper or expedient by Lessor.
If Lessee maintains an office in another state or in a foreign country,
Lessee nevertheless shall maintain within the State of Utah proper and adequate
records relating to operations on this leasehold and also relating to production
of leased substances and payment of rentals and royalties. Lessee also shall
have a resident agent in the State of Utah to whom any and all notices may be
sent by Lessor and on whom process may be served. In the event of any change in
the address of Lessee's office in the State of Utah, Lessee shall promptly
furnish Lessor with written notice of such change of address within the State
of Utah. Examinations of records of Lessee by the Lessor shall be conducted at
reasonable times.
In the event Lessee conducts core-drilling operations within the leasehold,
or by directional drilling from adjacent land, Lessor shall have a right of
inspection of core samples and any analysis made thereof and any assay;
provided, that any report obtained by Lessor of any core-drilling operations may
be declared confidential information by Lessee, in which event Lessor shall keep
such information in a separate confidential information file. Such Information
shall not be disclosed to any competitor nor to any one except to a
representative of the Attorney General of the State of Utah until Lessee waives
confidentiality or upon surrender, expiration, or termination of this lease.
After completion of any core drilling, Lessee shall notify Lessor; and
Lessee shall cause all core holes to be plugged or sealed as expeditiously as
possible after the need for keeping such core holes unplugged ceases, in
accordance with regulations and requirements of the Division of Oil, Gas, and
Mining.
ARTICLE XV. OPERATIONS IN CONJUNCTION WITH MINING ON OTHER LANDS
In the event Lessee, in the interest of economy in mining operations,
desires to conduct mining operations on or within the above-described lands in
conjunction with mining operations on or within any adjacent Federal, State, or
privately-owned land by
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utilization of shafts, inclines, or tunnels within either the above-described
lands, or within adjacent lands, Lessee shall make application in writing to the
Board of State Lands & Forestry and submit with such application a detailed plan
of operations illustrating how leased substances mined from the above-
described lands can and will be mined, segregated, and separately accounted for
from leased substances mined from some adjacent land. No such operations shall
be conducted without written approval of the Board. Any approval granted by the
Board shall be conditioned upon proper segregation and proper accounting and
record keeping of leased substances mined from each property. Separate records
shall be required for accounting for leased substances mined from the above-
described lands.
In the event Lessee desires to process or mill leased substances from the
above-described land in conjunction with processing or milling of leased
substances from adjacent or some other lands, whether such processing or
milling is intended to be performed on the above-described land or on some
other land, Lessee shall submit to the Board a written application detailing
how the leased substances mined from the above-described lands shall be
segregated and separately accounted for in computation of royalty payments
from leased substances mined from other lands. Any Board approval for any
such arrangements shall be conditioned upon segregation of leased substances
produced from the above described lands from mineral substances produced from
other lands with adequate safeguards to assure proper accounting for
determination of royalty.
If application is granted for either type of operation or for both, all
procedures for either production or milling of minerals shall be subjected to
examination by the Division of State Lands & Forestry and by the Division of
Oil, Gas, and Mining to determine whether either type of arrangement functions
satisfactorily without detriment to the State of Utah. If such inspection
results in an adverse report with recommendations for modification or
discontinuance of such operations, a copy of the report with recommendations
shall be submitted as expeditiously as possible to the Lessee. If any
objectionable condition is not promptly remedied to safeguard the rights of the
State as Lessor, the Board of State Lands & Forestry shall have the right to
order discontinuance of such arrangement; and failure to comply with such order
of the Board shall constitute a breach of this Lease Agreement.
ARTICLE XVI. SPECIAL REQUIREMENTS IN EVENT OF STRIP-MINING
In the event Lessee desires to conduct any strip-mining or open-pit mining
or operations which will materially disturb the surface of the above-described
lands or some portion thereof, at least sixty (60) days before commencing such
type of mining activities, Lessee shall submit to the Division of State Lands &
Forestry the proposed plan of operations together with a proposed plan of
surface rehabilitation in compliance with the Rules and Regulations adopted
thereunder. A copy of such proposed plan of operations and proposed plan of
surface rehabilitation also shall be submitted to the Division of Oil, Gas, and
Mining. No such operations shall be commenced until the Division of Oil, Gas,
and Mining approves the plan of operations and approves a program of
rehabilitation. Security may be required of Lessee to assure appropriate
rehabilitation in accordance with the said statute and rules and regulations
adopted thereunder.
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ARTICLE XVII. EQUIPMENT OR FACILITIES TO REMAIN WITH THE LAND
Upon surrender, forfeiture, expiration, or termination of this lease, any
and all underground timbering supports, shaft linings, rails, and other
installations necessary for the support of underground tunnels, shafts,
inclines, or other underground mine supports, together with all rails or head
frames and all other underground construction and safety equipment annexed to
the ground (excluding detachable motor-driven machinery) which cannot be
removed without creating a danger to any shaft, tunnel, incline, or other
underground improvement annexed to the mine, and including equipment
installed underground to provide for ventilation of the mine or some portion
thereof, shall be left within said land above described by the Lessee,
operator, and contractor of Lessee and shall remain a part of the realty.
Lessor shall acquire all rights thereto without indemnification of Lessee or
operator or contractor for Lessee. Except as herein specifically excepted,
all personal property of Lessee, including removable machinery, equipment,
tools, and stockpiles of leased substances for which royalty has been paid
shall remain the property of Lessee or operator or contractor for Lessee and
Lessee or operator or contractor for Lessee may remove the same at the sole
expense of Lessee or operator or contractor within two (2) months following
expiration, forfeiture, surrender, or termination of this lease, except that
the Board of State Lands & Forestry for good cause shown shall have the right
to grant a reasonable extension of time beyond the period of two (2) months
for removal of any and all equipment which may be removed by Lessee or
operator or contractor as herein provided. At the end of such period, Lessor
may consider abandoned and lay claim to any or all equipment or stockpiles
remaining on the premises.
Upon expiration, surrender, forfeiture, or termination of this lease or
abandonment of the leasehold by Lessee, the Lessee shall cause to be sealed or
properly shut off all or parts of the mine openings including shafts and tunnels
in the manner and method required by the Director of the Division of Oil, Gas,
and Mining, and to abate any hazardous condition which may have been left by
Lessee, such abatement of hazardous condition to be performed in accordance with
reasonable requirements of the Director of the Division of Oil, Gas, and Mining.
ARTICLE XVIII. CONSENT TO SUIT IN STATE DISTRICT COURT
It is agreed that if there arises any controversy between lessor and Lessee
or any successor in interest of Lessee which needs to be litigated, Lessee or
any one claiming by or under the Lessee shall bring such action in the District
Court of Salt Lake County, State of Utah, after compliance with the requirements
of State statutes for bringing suit, including compliance with the requirements
of the State Governmental Immunity Act, Title 63, Chapter 30, Utah Code
Annotated, 1953, as amended. Neither Lessee nor any assignee of lessee nor any
one claiming under, by, or through the Lessee shall bring any suit against the
State of Utah or against any State agency in the United States District Court
for the District of Utah, nor in any other United States District Court in some
other state, nor in the District 'of Columbia.
ARTICLE XIX. REMEDIES FOR DEFAULT BY LESSEE OR ASSIGNS
This Mineral Lease and the terms and conditions of this lease agreement
issued by the State of Utah are made with the Lessee herein on condition that
Lessee and any lawful successor in interest to Lessee shall perform all
covenants and terms and conditions herein set forth to be performed by Lessee or
its lawful assigns including
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payment of rentals and royalties as herein provided; and if at any time there
shall be default on the part of lessee or breach of any of the terms or
conditions hereof on the part of Lessee or by the successor in interest to the
Lessee; and if such default or breach shall continue for a period of thirty (30)
days after written notice from Lessor of such default or breach given to Lessee
or successor in interest addressed to Lessee or successor in interest at the
last address furnished by Lessee or successor in interest by United States
mail, then at the expiration of said period of thirty (30) days immediately
following such notice if the default or breach has not been remedied, then at
the expiration of said period of thirty (30) days, at the option of the Lessor,
Lessor may issue written notice of termination and cancellation of this lease
and forfeiture declaring that the leased premises and each and every part
thereof have thereby reverted to the Lessor, including any and all fixtures and
improvements required to be left with the property upon expiration, termination,
or cancellation of this lease.
In the event that the leasehold estate shall have been damaged or injured
by the acts or neglect of the Lessee or operator, contractor, or assigns of
Lessee, Lessor also shall have a right of action for damages and for restitution
for any failure or refusal to comply with the terms and conditions of any
statute of this State relating to reclamation or rehabilitation, or for
abatement of pollution, together with rights for injunctive relief. Lessor also
shall have the right to recover on any bond or other security deposited with
the State of Utah in accordance with the terms or conditions hereinabove set
forth for indemnification.
ARTICLE XX. DISPOSITION OF ROCK TAILINGS
Rock, tailings, and waste materials resulting from the operation of the
Lessee on this land which contain the metalliferous minerals enumerated in
Article I hereof are covered by this mineral lease, unless and until such time
as Lessee renounces in writing the leasehold interest in such materials. In the
event Lessee sells or otherwise disposes of any such rock, tailing, or waste
materials, Lessee agrees to pay Lessor a Production Royalty on the materials
consistent with the prevailing State of Utah royalty for materials or minerals
of like kind.
Met Min. - 1281d
-12-
ARTICLE XXI CLARIFICATION OF LEASE AMENDMENT
This mineral lease in the above form is an amendment of the original lease
which was issued on the date hereinabove first written. The effective date of
this present lease amendment is January 1, 1985. All fees, rentals, and
royalties paid heretofore shall remain in effect as payments required
theretofore. Readjusted payment rates required under this present lease
amendment shall not be retroactive, but shall commence with the effective date
of this lease amendment.
IN WITNESS WHEREOF, the parties have executed this lease as of the date
hereinabove first written.
THE STATE OF UTAH, acting by and through the
BOARD OF STATE LANDS & FORESTRY and DIVISION OF
STATE LANDS & FORESTRY
By /s/ Ralph A. Miles
-----------------------------------------------
Director, Div. Of State Lands & Forestry - LESSOR
-----------------------------------------------
/s/ Richard R. Weaver
-----------------------------------------------
Richard R. Weaver, President LESSEE
Atlas Minerals Division of Atlas Corporation
Met Min. - 1281d
-13-
STATE OF UTAH )
COUNTY OF SALT LAKE )
On the _____ day of ___________, 19__, personally appeared before me RALPH
MILES, who being by me duly sworn did say that he is the Director of the
Division of Lands of the State of Utah; and said instrument was signed in behalf
of the State of Utah authority of a resolution of the Board of State Lands; and
said RALPH A. MILES acknowledged to me that the State of Utah executed the same.
Given under my hand and seal this 20th day of November, 1984.
/s/ JoAnn Garcia
--------------------------------------
NOTARY PUBLIC, residing at: SLC, UT
My Commission Expires: 5-31-88
STATE OF UTAH )
COUNTY OF )
On the ____ day of ____________, 19__, personally appeared before me
______________________________, signer of the above instrument, who duly
acknowledged to me that _________________________ executed the same.
Given under my hand and seal this ______ day of _____________, 19__.
--------------------------------------
NOTARY PUBLIC, residing at:
My Commission Expires:
STATE OF COLORADO )
COUNTY OF MESA )
On the 12th day of September, 1984, personally appeared before me Richard
R. Weaver, who being duly sworn did say that he is President of Atlas
Minerals Div. of Atlas Corp. and that said instrument was signed in behalf of
said corporation by resolution of its Board of Directors, and said Richard R.
Weaver acknowledged to me that said corporation executed the same.
Given under my hand and seal this 12th day of September, 1984.
/s/ Jane B. Nichols
--------------------------------------
NOTARY PUBLIC, residing at:
My Commission Expires: 9-23-85 3453 1/2 G Road
Clifton, CO 81520
INSTRUCTIONS: ASSIGNMENT MUST BE SUBMITTED IN DUPLICATE. TOTAL ASSIGNMENT-$30,
INTEREST, OPERATING RIGHTS, AND OVERRIDING ROYALTY ASSIGNMENTS-$30, AND PARTIAL
ASSIGNMENT-$50.
INDIVIDUAL'S ACCEPTANCE OF ASSIGNMENT (ASSIGNEE)
AFFIDAVIT OF CITIZENSHIP OF ASSIGNEE
I, (we) _______________________ on oath, do solemnly swear that I am (we are)
at the present time (a)*____________________ Citizen(s) of the United States
of America and of legal age, and I (we) hereby assume and agree to perform
all of the covenants and obligations of said lease on the part of lessee(s)
to be kept and performed, and accept the foregoing instrument.
BY:
---------------------------------
Subscribed and sworn to before me this ____ day of ___________, 19__.
My Commission Expires:
----------- ---------------------------
NOTARY PUBLIC, residing at:
ACCEPTANCE OF ASSIGNMENT-CORPORATE (ASSIGNEE)
Comes now Summo USA Corporation, a corporation of Colorado and hereby accepts
the assignment from Lisbon Copper Ltd., of Utah ML No. 20569, which
assignment is dated May 23, 1995, subject to all of the covenants and
obligations of said Lessee.
IN WITNESS WHEREOF, Gregory A. Hahn has executed this acceptance this 13th day
of June, 1995.
BY: /s/ Gregory A. Hahn
----------------------------------
(Assignee) Summo USA Corporation
----------------------------------
(Officer, Agent, Attorney-in-Fact)
ASSIGNEES ACKNOWLEDGEMENT (CORPORATE)
STATE OF COLORADO )
:ss
COUNTY OF DENVER )
On the 13th day of June, 1995, personally appeared before me Gregory A.
Hahn, who being by me duly sworn did say, each for himself, that (he, she, or
they) is an officer, agent or Attorney-in-Fact for the assignee and is
authorized to accept this assignment and has executed the same and the seal
affixed is the seal of said corporation.
JAMES C. ROBERTSON
NOTARY
PUBLIC
STATE OF COLORADO
My Commission Expires: Feb 14, 1997 /s/ James C. Robertson
-----------------------------
NOTARY PUBLIC, residing at:
1776 Lincoln St. #1100
Denver, CO 80203
NOTE: A* INSERT HERE WHETHER NATIVE BORN OR NATURALIZED. IF NATURALIZED, IT
WILL BE NECESSARY TO FILE WITH THIS OFFICE PROOF OF CITIZENSHIP OR DECLARATION
OF INTENTION TO BECOME A CITIZEN IN THE FORM OF A LETTER OF CERTIFICATE OF
VERIFICATION FROM COURT OF ISSUANCE, AND REGISTRATION FEE OF $1.00.
AMENDMENT TO LEASE AGREEMENT
ML 20569
WHEREAS, the State Land Board, acting in behalf of the State of Utah,
Lessor, and Joseph F. Costanza, Lessee, entered into that certain Metalliferous
Minerals Lease dated May 28, 1963, as amended by that certain agreement dated
November 5, 1984 ("ML 20569"); and
WHEREAS, the School and Institutional Trust Lands Administration
(hereinafter referred to as "Lessee') is the successor in interest to the State
Land Board; and
WHEREAS Summo USA Corporation (hereinafter referred to as "Lessee") is now
the Lessee of record and the record title owner as to ML 20569; and
WHEREAS, Lessor and Lessee desire to supplement certain terms, conditions
and obligations under ML 20596.
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, Lessor and Lessee do hereby agree as follows:
1. Lessor will extend the term of ML 20596 for ten (10) years from
January 1, 1995, and for so long thereafter as leased substances are being
produced in commercial quantities.
2. To maintain ML 20596 in force during such ten (10) year extension,
Lessee shall pay to Lessor an annual rental of one dollar ($1.00) per acre,
and for each fractional part of an acre, on or before January 1 of each year.
Rental payments may be credited against actual production royalties only for
the year in which they accrue.
3. In furtherance of Lessee's obligation for diligent operations or
development activity under the terms of ML 20596, and to maintain ML 20596 in
force during such ten (10) year extension, Lessee shall also tender to Lessor an
additional payment of Seven Thousand Eight Hundred Seventy-five and No/100
dollars ($7,875.00), due annually on or before January 1 of each year beginning
January 1, 1996. Such payment shall be considered evidence of Lessee's
commitment to diligent operations for the next ensuing year. Diligence payments
may be credited against actual production royalties only for the year in which
they accrue.
4. Lessee shall pay Lessor a royalty of eight percent (8.0%) for
fissionable metalliferous minerals and four percent (4.0%) for non-fissionable
metalliferous minerals. The royalty shall be based on the gross value of the
ores produced from the leased lands and sold by the lessee under an arms-length
contract, except that if there is not an arms-length contract for the ore the
royalty shall be based on the gross value received by the lessee under an arms-
length contract for the processed product(s) produced from the leased lands less
actual processing and refining costs. Processing and refining deductions will
not include mining, transportation, administrative, or depreciation costs, or
deductions for property taxes. Should the processed products be sold under a
non-arms-length contract the royalty shall be based on the amount received under
the non-arms-length or the fair market value of the products whichever is
greater, less the allowable deductions as set forth above.
5. Lessor shall have the right to readjust any provision, term or
condition of ML 20596 at any time after January 1, 2005.
6. All terms, conditions and rights as to ML 20596 shall be subject to
current and all future State Statutes, Regulations and Rules governing the
management and use of school and institutional trust lands, and rules
promulgated by other governmental agencies, as appropriate.
7. This Amendment Agreement is supplemental to ML 20596 and does not
amend or supersede nor is it intended as an abrogation or waiver of any rights
Lessor may have under ML 20596, except those terms and conditions specifically
listed above.
IN WITNESS WHEREOF, this Agreement is made and entered into this 15 day of
August, 1995.
SCHOOL AND INSTITUTIONAL TRUST LANDS ADMINISTRATION
/s/ Scott Hirschi
- ------------------------------
Scott Hirschi
Director
APPROVED AS TO FORM:
JAN GRAHAM
ATTORNEY GENERAL
SUMMO USA CORPORATION By /s/ Steven F. Alder
-------------------------
By:/s/ Gregory A. Hahn
---------------------------
Title: VICE PRESIDENT
Page 2
State of Utah
County of Salt Lake
On this 15th day of AUGUST, A.D. 1995, personally appeared Scott Hirschi who
being by me duly sworn, did say that he is the Director of the School and
Institutional Trust Lands Administration of the State of Utah and the signer of
the above instrument, who duly acknowledged that he executed same.
Witness my hand and seal this 15th day of AUGUST, A.D. 1995.
My Commission expires 5-5-99 /s/ Teresa Wilhelmsen
-------- --------------------------
Notary Public
NOTARY PUBLIC
TERESA WILHELMSEN
355 W. NORTH TEMPLE #400
SALT LAKE CITY, UTAH 84180
MY COMMISSION EXPIRES
MAY 5, 1999
STATE OF UTAH
State of COLORADO )
---------------
County of DENVER )
---------------
On this 8th day of May, A.D. 1995, personally appeared before me Gregory A.
Hahn, who, being duly sworn, did say that (s)he is an officer of Summo USA
Corporation and that said instrument was signed in behalf of said corporation by
resolution of its Board of Directors, and said ______________ acknowledged to me
that said corporate executed the same.
Witness my hand and seal this 8th day of May, A.D. 1995.
My Commission expires 2/14/97 /s/ James C. Robertson
---------- ----------------------
Notary Public
JAMES C. ROBERTSON
NOTARY
PUBLIC
STATE OF COLORADO