Common use of Financial Assurance Clause in Contracts

Financial Assurance. A. Unless waived by the Commissioner in writing, and before the commencement of mining activity, the Lessee shall provide financial assurance to guarantee payment of royalties and to comply with the terms and conditions of this Lease other than reclamation, which is covered under 19.2.2.39 NMAC. The Commissioner will determine the amount of financial assurance required. B. Unless waived by the Commissioner in writing, and before commencement of any exploration, drilling, development, processing and/or mining activities on, in and/or under the Property pursuant to this Lease, the Lessee shall execute and provide financial assurance to secure payment for potential injuries to the Property’s surface and/or mineral estates, water rights appertaining thereto, and/or improvements on, in and/or under the Property that may result from the Lessee’s said activities. The Commissioner shall fix or set the required financial assurance in an amount to be determined by the Commissioner depending upon the Lessee’s proposed operations but not less than five thousand dollars. The financial assurance shall be in favor of the Commissioner, but held for the benefit of the State Land Office Trust and/or its beneficiaries, contract purchasers, patentees, right-of-way holders, easement grantees, licensees, permitees, surface and/or other lessees of the Property (including without limitation, agricultural, grazing, business, commercial, oil and gas, carbon dioxide, helium, coal bed methane, and/or other mineral estate lessees) with rights to the Property’s surface and/or mineral estates. Provided that, in lieu of said financial assurance, the Commissioner may accept a waiver of financial assurance, duly executed or acknowledged by the owners of the said improvements and/or other rights described above. C. Lessees having multiple leases with the Commissioner may, with the approval of the Commissioner, provide one instrument to fulfill their total financial assurance obligations under all such Leases regarding the protection of improvements and/or other rights described above concerning the Property. The Commissioner shall fix or set the amount of the Lessee’s consolidated financial assurance obligation, which amount shall not be less than twenty-five thousand dollars. The Lessee’s obligation to provide financial assurance for payment of royalties and reclamation of the Property’s surface and/or mineral estates is not eligible for coverage under this provision. D. The financial assurance required under this Lease and/or 19.2.2.36 NMAC, 19.2.2.37 NMAC, and 19.2.2.38 NMAC is in addition to that which the permitting agency may require pursuant to the New Mexico Mining Act or comparable law, whichever applies. If the Commissioner determines that the amount or coverage of financial assurance required by the permitting agency is insufficient to adequately protect and reclaim the Property’s surface and/or mineral estate, the Commissioner may require the Lessee to provide additional financial assurance as a supplemental requirement to this Lease under 19.2.2.26 NMAC. E. Forms for all financial assurance instruments required by the Commissioner shall either be prescribed by the Commissioner or be in a form approved by the Commissioner.

Financial Assurance. A. Unless waived by the Commissioner in writing, and before the commencement of mining activity, the Lessee shall provide financial assurance to guarantee payment of royalties and to comply with the terms and conditions of this Lease other than reclamation, which is covered under 19.2.2.39 NMAC. The Commissioner will determine the amount of financial assurance required. B. Unless waived by the Commissioner in writing, and before commencement of any exploration, drilling, development, processing and/or mining activities on, in and/or under the Property pursuant to this Lease, the Lessee shall execute and provide financial assurance to secure payment for potential injuries to the Property’s 's surface and/or mineral estates, water rights appertaining thereto, and/or improvements on, in and/or under the Property that may result from the Lessee’s 's said activities. The Commissioner shall fix or set the required financial assurance in an amount to be determined by the Commissioner depending upon the Lessee’s 's proposed operations but not less than five thousand dollars. The financial assurance shall be in favor of the Commissioner, but held for the benefit of the State Land Office Trust and/or its beneficiaries, contract purchasers, patentees, right-of-way holders, easement grantees, licensees, permitees, surface and/or other lessees of the Property (including without limitation, agricultural, grazing, business, commercial, oil and gas, carbon dioxide, helium, coal bed methane, and/or other mineral estate lessees) with rights to the Property’s 's surface and/or mineral estates. Provided that, in lieu of said financial assurance, the Commissioner may accept a waiver of financial assurance, duly executed or acknowledged by the owners of the said improvements and/or other rights described above. C. Lessees having multiple leases with the Commissioner may, with the approval of the Commissioner, provide one instrument to fulfill their total financial assurance obligations under all such Leases regarding the protection of improvements and/or other rights described above concerning the Property. The Commissioner shall fix or set the amount of the Lessee’s 's consolidated financial assurance obligation, which amount shall not be less than twenty-five thousand dollars. The Lessee’s 's obligation to provide financial assurance for payment of royalties and reclamation of the Property’s 's surface and/or mineral estates is not eligible for coverage under this provision. D. The financial assurance required under this Lease and/or 19.2.2.36 NMAC, 19.2.2.37 NMAC, and 19.2.2.38 NMAC is in addition to that which the permitting agency may require pursuant to the New Mexico Mining Act or comparable law, whichever applies. If the Commissioner determines that the amount or coverage of financial assurance required by the permitting agency is insufficient to adequately protect and reclaim the Property’s 's surface and/or mineral estate, the Commissioner may require the Lessee to provide additional financial assurance as a supplemental requirement to this Lease under 19.2.2.26 NMAC. E. Forms for all financial assurance instruments required by the Commissioner shall either be prescribed by the Commissioner or be in a form approved by the Commissioner.