Common use of Production Royalty Clause in Contracts

Production Royalty. When Lessee commences production of ores, minerals or materials from the premises, Lessee shall pay to Lessor a production royalty of 3% of the Net Smelter Returns (NSR) received by Lessee from the sale of said ores, minerals or materials, from the Premises. Lessor may buy out the Lessee’s Production Royalty at a rate of One Million Dollars ($1,000,000.00) per Royalty percentage, with the Lessee retaining One Percent (1%). (1) If Lessee sells refined gold or silver, Lessee will be deemed to have received proceeds from the sale thereof equal to the number of ounces of refined gold or silver outturned to Lessee's account during the calendar quarter multiplied in the case of gold by the average daily London Bullion Brokers P .M Gold Fixing during such calendar quarter and in the case of silver by the average of the daily Engelhard industrial bullion price for silver during the calendar quarter. The average price for a calendar quarter shall be determined by dividing the sum of all daily prices posted during the calendar quarter by the number of days that prices were posted. The posted price shall be obtained from the Wall Street Journal, Reuters, E&MJ or other industry-accepted source. If a posted price referenced above becomes no longer available, Lessee shall, acting reasonably, select an alternative posted price that closely approximates such original posted price. Lessee shall have the right to market and sell to third parties refined gold and silver in any manner it chooses, including the sale of such refined gold and silver on the commodity market. In this regard, Lessor shall have no right to participate in any gains and/or profits or obligation to suffer any losses accruing to Lessee as a result of forward sales, options trading, commodities futures trading or similar transactions. (2) Charges to be deducted from proceeds in determining Net Smelter Returns (a) all costs, charges and expenses paid or incurred by Lessee for treatment in the smelting and refining processes (including handling, processing, interest and provisional settlement fees, sampling, assaying and representation costs, penalties and other processor deductions);

Production Royalty. When Lessee commences So long as this Lease is in force, a Production Royalty shall be due Lessor during any period of commercial production of ores, minerals or materials from the premisesclaims. One hundred percent (100%) of all cumulative Minimum Advance Royalty paid by Lessee and received by Lessor can be deducted from the Production Royalty due Lessor. Production Royalty shall be payable on all minerals regardless of what stage in the milling, Lessee refining, upgrading or other processing the minerals may be, which are mined from the claims ("leased substances") and sold to a buyer. Production Royalty shall pay to Lessor be calculated and paid as follows: (1) The Production Royalty will be calculated as a production royalty percentage of 3% of the Net Smelter Returns ("NSR) "). Net Smelter Returns is defined as the dollar amount actually received by Lessee from the sale of said oresany leased substances less Lessee's actual costs, minerals if any, of (a) transportation to a smelter or materialsrefiner, (b) off site refining charges and smelter charges, and (c) charges as described in this section B, subsection 9, related to Lessor taking its royalty in kind from the Premises. Lessor may buy out the Lessee’s Production Royalty at a rate sale of One Million Dollars ($1,000,000.00) per Royalty percentage, with the Lessee retaining One Percent (1%)all leased substances. (12) If The Production Royalty on the sale of all leased substances other than gold, silver and platinum shall be three percent (3%) of the Net Smelter Return. (3) The Production Royalty percentage rate for the sale of all gold, silver or platinum contained in leased substances from the claims will be based upon the average daily price of gold on the London Metal Exchange ("LME") for the twenty (20) trading days immediately preceding the date of sale of such leased substances: less than $375 3% greater than $375, but less than $475 4% $475 or more 5% (4) In addition to the Production Royalty payable under subsection B(1) of this Section V, Lessee shall pay to Lessor as Production Royalty hereunder a like percentage of the gross amount paid before any deductions whatsoever of any bonus, subsidy or tax credit (but not any Mining Lease Independence Gold Range 061705 federal income tax depletion allowance available to Lessee) which are calculated directly in proportion to the amount of gold or other metal produced. (5) The Production Royalty payable to Lessor-by Lessee to under this Agreement shall be based solely on the payments actually received by Lessee for leased substances produced from the claims and delivered to a refinery, smelter or other purchaser. Lessee shall have no obligation to account to Lessor, and Lessor shall have no interest or right of participation in, any profits or proceeds of futures contracts, forward sales, hedging or other similar marketing mechanisms used by Lessee concerning any leased substances from the claims. (6) In the event the United States or other public authority imposes the payment of any new royalty on production from the mining claims (whether a gross, net smelter returns, net proceeds, net profits or other form of royalty) the amount of NSR that Lessor would otherwise receive shall be reduced by whatever the amount of royalty imposed by the United States or other public authority, further provided that, the foregoing notwithstanding, in no event shall Lessor's percentage of NSR be reduced below 2.5% as it would have been calculated without deduction of any new royalty on production by the United States or other public authority. (7) Unless taken in kind by Lessor, the Production Royalty shall be determined quarterly on the basis such that payments will be determined as of and payable within forty five (45) days after the last day of each calendar quarter during which Lessee receives any net Smelter returns. (8) It is mutually understood and agreed that Lessor shall have the right and option to take its production royalty in kind in the form in which Lessee sells refined gold such leased substances. On or silverbefore October 1 of each calendar year commencing with the year 2006, Lessor shall give Lessee will written notice of whether Lessor elects to take its production royalty in kind throughout the following calendar year. If Lessor fails to give such notice for the first calendar year in which it is eligible to take its production royalty in kind, Lessor shall be deemed to have received proceeds elected not to take its production royalty in kind for that calendar year. If Lessor fails to give such notice by October 1st of any subsequent year, the election then in effect will continue throughout the following calendar year. Lessor hereby agrees that each election to take or not to take its production royalty in kind Mining Lease Independence Gold Range 061705 shall remain in effect for calendar year increments and that all persons or entities constituting the Lessor shall be required to make the same election whether or not to take in kind. If Lessor elects to take its production royalty in kind, an account will be established in Lessor's name with any buyers, smelters, refiners or other processors to whom leased substances are shipped from the sale thereof equal premises. Such buyers, smelters, refiners or other processors will be instructed to the number automatically deliver Lessor's share of ounces of refined gold or silver outturned production to LesseeLessor's account during after accounting for the calendar quarter multiplied allowable deductions in the case calculation of gold by the average daily London Bullion Brokers P .M Gold Fixing during such calendar quarter and in the case Lessor's percentage of silver by the average of the daily Engelhard industrial bullion price for silver during the calendar quarter. The average price for a calendar quarter shall be determined by dividing the sum of all daily prices posted during the calendar quarter by the number of days that prices were posted. The posted price shall be obtained from the Wall Street Journal, Reuters, E&MJ or other industry-accepted sourceNSR. If Lessor elects to take its production royalty in kind, it shall bear all risks associated with taking its production royalty in kind, and shall bear all additional costs incurred by Lessee as a posted price referenced above becomes no longer availableresult of Lessor's taking in kind. Such additional costs will be considered a deduction against the NSR and will include but not be limited to increased costs due to separate accounts, Lessee shallpourings, acting reasonablystorage, select an alternative posted price that closely approximates such original posted priceinsurance, security, transportation and monitoring. Lessee Lessor shall have the right to market reasonably inspect procedures used by Lessee to make payment in kind, and sell to third parties refined gold and silver in any manner it choosesat its option, including the sale of such refined gold and silver on the commodity market. In this regardLessor, Lessor or its agent, shall have no the right to participate be present to observe sampling and splitting procedures and to review all records and procedures related to division of leased substances for the purpose of taking in any gains and/or profits or obligation to suffer any losses accruing to Lessee as a result of forward sales, options trading, commodities futures trading or similar transactionskind. (2) Charges to be deducted from proceeds in determining Net Smelter Returns (a) all costs, charges and expenses paid or incurred by Lessee for treatment in the smelting and refining processes (including handling, processing, interest and provisional settlement fees, sampling, assaying and representation costs, penalties and other processor deductions);

Production Royalty. When Lessee commences So long as this Lease is in force, a Production Royalty shall be due Lessor during any period of commercial production of ores, minerals or materials from the premisesclaims. One hundred percent (100%) of all cumulative Minimum Advance Royalty paid by Lessee and received by Lessor can be deducted from the Production Royalty due Lessor. Production Royalty shall be payable on all minerals regardless of what stage in the milling, Lessee refining, upgrading or other processing the minerals may be, which are mined from the claims ("leased substances") and sold to a buyer. Production Royalty shall pay to Lessor be calculated and paid as follows: (1) The Production Royalty will be calculated as a production royalty percentage of 3% of the Net Smelter Returns ("NSR) "). Net Smelter Returns is defined as the dollar amount actually received by Lessee from the sale of said oresany leased substances less Lessee's actual costs, minerals if any, of (a) transportation to a smelter or materialsrefiner, (b) off site refining charges and smelter charges, and (c) charges as described in this section B, subsection 9, related to Lessor taking its royalty in kind from the Premises. Lessor may buy out the Lessee’s Production Royalty at a rate sale of One Million Dollars ($1,000,000.00) per Royalty percentage, with the Lessee retaining One Percent (1%)all leased substances. (12) If The Production Royalty on the sale of all leased substances other than gold, silver and platinum shall be three percent (3%) of the Net Smelter Return. (3) The Production Royalty percentage rate for the sale of all gold, silver or platinum contained in leased substances from the claims will be based upon the average daily price of gold on the London Metal Exchange ("LME") for the twenty (20) trading days immediately preceding the date of sale of such leased substances: less than $375 3% greater than $375, but less than $475 4% $475 or more 5% (4) In addition to the Production Royalty payable under subsection B(l) of this Section V, Lessee shall pay to Lessor as Production Royalty hereunder a like percentage of the gross amount paid before any deductions whatsoever of any bonus, subsidy or tax credit (but not any federal D/WLM/759956.1 income tax depletion allowance available to Lessee) which are calculated directly in proportion to the amount of gold or other metal produced. (5) The Production Royalty payable to Lessor-by Lessee to under this Agreement shall be based solely on the payments actually received by Lessee for leased substances produced from the claims and delivered to a refinery, smelter or other purchaser. Lessee shall have no obligation to account to Lessor, and Lessor shall have no interest or right of participation in, any profits or proceeds of futures contracts, forward sales, hedging or other similar marketing mechanism used by Lessee concerning any leased substances from the claims. (6) In the event the United States or other public authority imposes the payment of any new royalty on production from the mining claims (whether a gross, net smelter returns, net proceeds, net profits or other form of royalty) the amount of NSR that Lessor would otherwise receive shall be reduced by whatever the amount of royalty imposed by the United States or other public authority, further provided that the foregoing notwithstanding, in no event shall Lessor's percentage of NSR be reduced below 2.5% as it would have been calculated without deduction of any new royalty on production by the United States or other public authority. (7) Unless taken in kind by Lessor, the Production Royalty shall be determined quarterly on the basis such that payments will be determined as of and payable within forty five (45) days after the last day of each calendar quarter during which Lessee receives any net Smelter returns. (8) It is mutually understood and agreed that Lessor shall have the right and option to take its production royalty in kind in the form in which Lessee sells refined gold such leased substances. On or silverbefore October 1 of each calendar year commencing with the year 2006, Lessor shall give Lessee will written notice of whether Lessor elects to take its production royalty in kind throughout the following calendar year. If Lessor fails to give such notice for the first calendar year in which it is eligible to take its production royalty in kind, Lessor shall be deemed to have received proceeds elected not to take its production royalty in kind for that calendar year. If Lessor fails to give such notice by October 1st of any subsequent year, the election then in effect will continue throughout the following calendar year. Lessor hereby agrees that each election to take or not to take its production royalty in kind shall remain in effect for calendar year increments and that all persons or entities constituting the Lessor shall be required to make the same election whether or not to take in kind. If Lessor elects to take its production royalty in kind, an account will be established in Lessor's name with any buyers, smelters, refiners or other processors to whom leased D/WLM/759956.1 substances are shipped from the sale thereof equal premises. Such buyers, smelters, refiners or other processors will be instructed to the number automatically deliver Lessor's share of ounces of refined gold or silver outturned production to LesseeLessor's account during after accounting for the calendar quarter multiplied allowable deductions in the case calculation of gold by the average daily London Bullion Brokers P .M Gold Fixing during such calendar quarter and in the case Lessor's percentage of silver by the average of the daily Engelhard industrial bullion price for silver during the calendar quarter. The average price for a calendar quarter shall be determined by dividing the sum of all daily prices posted during the calendar quarter by the number of days that prices were posted. The posted price shall be obtained from the Wall Street Journal, Reuters, E&MJ or other industry-accepted sourceNSR. If Lessor elects to take its production royalty in kind, it shall bear all risks associated with taking its production royalty in kind, and shall bear all additional costs incurred by Lessee as a posted price referenced above becomes no longer availableresult of Lessors taking in kind. Such additional costs will be considered a deduction against the NSR and will include but not be limited to increased costs due to separate accounts, Lessee shallpourings, acting reasonablystorage, select an alternative posted price that closely approximates such original posted priceinsurance, security, transportation and monitoring. Lessee Lessor shall have the right to market reasonably inspect procedures used by Lessee to make payment in kind, and sell to third parties refined gold and silver in any manner it choosesat its option, including the sale of such refined gold and silver on the commodity market. In this regardLessor, Lessor or its agent, shall have no the right to participate be present to observe sampling and splitting procedures and to review all records and procedures related to division of leased substances for the purpose of taking in any gains and/or profits or obligation to suffer any losses accruing to Lessee as a result of forward sales, options trading, commodities futures trading or similar transactionskind. (2) Charges to be deducted from proceeds in determining Net Smelter Returns (a) all costs, charges and expenses paid or incurred by Lessee for treatment in the smelting and refining processes (including handling, processing, interest and provisional settlement fees, sampling, assaying and representation costs, penalties and other processor deductions);

Production Royalty. When Lessee commences production of ores, minerals or materials from the premises, Lessee shall pay to Lessor a production royalty of 3% three percent (3.0%) of the Net Smelter Returns (NSRof Mineral Substances produced from the Premises and sold. Net Smelter Returns means the proceeds actually received, or deemed to have been received in the case of refined gold and silver as described in Section 3.B(1) received by Lessee below, from the sale or deemed sale of said ores, minerals or materials, Mineral Substances produced from the Premises, less the charges described in Section 3.B(2) below. Lessor may buy out All production royalty payments shall be credited toward the Lessee’s Production Royalty at a rate of One Million Dollars ($1,000,000.00) per Royalty percentage, with the Lessee retaining One Percent (1%)Purchase Price. (1) If Lessee sells refined gold or silver, Lessee will be deemed to have received proceeds from the sale thereof equal to the number of ounces of refined gold or silver outturned to Lessee's ’s account during the calendar quarter multiplied in the case of gold by the average daily London Bullion Brokers P .M P.M. Gold Fixing during such calendar quarter and in the case of silver by the average of the daily Engelhard industrial bullion price for silver Handy & Harmon Noon Silver Quotation during the calendar quarter. The average price for a calendar quarter shall be determined by dividing the sum of all daily prices posted during the calendar quarter by the number of days that prices were posted. The posted price shall be obtained from the Wall Street Journal, Reuters, E&MJ or other industry-accepted source. If a posted price referenced above becomes no longer available, Lessee shall, acting reasonably, select an alternative posted price that closely approximates such original posted price. Lessee shall have the right to market and sell to third parties refined gold and silver in any manner it chooses, including the sale of such refined gold and silver on the commodity market. In this regard, Lessor shall have no right to participate in any gains and/or profits or obligation to suffer any losses accruing to Lessee as a result of forward sales, options trading, commodities futures trading or similar transactions. (2) Charges to be deducted from proceeds in determining Net Smelter ReturnsReturns are the following: (a) all costs, charges and expenses paid or incurred by Lessee for treatment in the smelting and refining processes (including handling, processing, interest and provisional settlement fees, sampling, assaying and representation costs, penalties and other processor deductions); (b) all costs, charges and expenses paid or incurred by Lessee for transportation (including freight, insurance, security, transaction taxes, handling, port, demurrage, delay and forwarding expenses incurred by reason of or in the course of such transportation) of Mineral Substances from the Premises to the place or places of treatment and thence to the place or places of sale; (c) sales and brokerage costs on Mineral Substances for which the royalty is payable; and (d) sales, use, severance, net proceeds of mine, and ad valorem taxes applicable under local, state and federal law and any other tax or governmental levy or fee relating to the Mineral Substances for which the royalty is payable (other than taxes based upon income). (3) Royalties shall accrue quarterly (based on calendar quarters) and shall become due and payable by Lessee prior to the end of the month following the end of each quarter. Royalty payments shall be accompanied by pertinent information in sufficient detail to explain the calculation of the royalty payment. (4) All statements for royalties rendered to Lessor by Lessee during any quarter shall conclusively be presumed to be true and correct after one year following the end of such quarter unless within said one-year period Lessor takes written exception thereto and makes a claim on Lessee for adjustment. No adjustment favorable to Lessee shall be made unless it is made within the same prescribed period. (5) Lessor, upon notice in writing to Lessee, shall have the right to audit Lessee’s accounts and records relating to the payment of the royalty for any calendar quarter within the one-year period following the end of such calendar quarter; provided, however, the making of any audit shall not extend the time for the taking of written exception to and the adjustment of accounts as provided for in the paragraph above. All audits shall be conducted by Lessor at the office of Lessee where the relevant books and records are maintained and such audit shall be conducted during normal business hours. (6) If a royalty, production fee, or other payment based upon production is subsequently imposed by the United States on Mineral Substances produced from any unpatented mining claims included in the Premises (whether or not such claims are converted to some other form of property interest), the amount payable to the United States shall be deducted from the royalty payable to Lessor for such Mineral Substances pursuant to this Section 3.B, provided, however, that the royalty paid to Lessor shall not be less than the amount that would be payable to Lessor hereunder at a royalty rate of one percent (1.0%).

Production Royalty. When Lessee commences production of ores, minerals or materials from the premises, The Lessee shall pay to the Lessor a production royalty (the "PRODUCTION ROYALTY") for uranium or other Leased Substances mined by the Lessee from the Leased Land or land pooled therewith and saved and removed therefrom and sold, or processed and sold, by or for the Lessee. The total amount of 3the Production Royalty shall be as follows: (a) in the event that the actual sales price to the Lessee for uranium or other Leased Substances mined by the Lessee from the Leased Land or land pooled therewith is less than U.S. $50 per pound, then the Lessee shall pay to the Lessor a Production Royalty in the amount of 5% of the Net Smelter Returns (NSR) net proceeds received by the Lessee for such uranium-bearing solution, yellowcake, U3O8, slurry or other Leased Substances after deducting the cost, if any, of transporting such uranium-bearing solution, yellowcake, U3O8, slurry or other Leased Substances from the Leased Land or land pooled therewith to the point of sale; and (b) in the event that the actual sales price to the Lessee for uranium or other Leased Substances mined by the Lessee from the sale Leased Land or land pooled therewith is equal to or greater than U.S. $50 per pound, then the Lessee shall pay to the Lessor a Production Royalty in the amount of said ores6% of the net proceeds received by the Lessee for such uranium-bearing solution, minerals yellowcake, U3O8, slurry or materialsother Leased Substances after deducting the cost, if any, of transporting such uranium-bearing solution, yellowcake, U3O8, slurry or other Leased Substances from the PremisesLeased Land or land pooled therewith to the point of sale. Lessor may buy out All Production Royalties which are due and payable under the Lessee’s Production Royalty at a rate terms of One Million Dollars ($1,000,000.00) per Royalty percentage, with this Lease shall be paid within 30 calendar days after the end of the calendar month within which the Lessee retaining One Percent (1%). (1) If Lessee sells refined gold or silver, Lessee will be deemed to have received receives the proceeds from the sale thereof equal to the number of ounces of refined gold or silver outturned to Lessee's account during the calendar quarter multiplied in the case of gold by the average daily London Bullion Brokers P .M Gold Fixing during such calendar quarter and in the case of silver by the average of the daily Engelhard industrial bullion price for silver during the calendar quarter. The average price for a calendar quarter shall be determined by dividing the sum of all daily prices posted during the calendar quarter by the number of days that prices were posted. The posted price shall be obtained from the Wall Street Journal, Reuters, E&MJ or other industry-accepted source. If a posted price referenced above becomes no longer available, Lessee shall, acting reasonably, select an alternative posted price that closely approximates such original posted price. Lessee shall have the right to market and sell to third parties refined gold and silver in any manner it chooses, including the sale of such refined gold the uranium or other Leased Substances; and silver on which payment shall be subject to adjustment, by addition to or deduction from the commodity market. In this regardProduction Royalty due, Lessor shall have no right to participate in any gains and/or profits or obligation to suffer any losses accruing to Lessee as a result of forward salesactual sales assays. The Lessee's failure to pay or tender or timely pay or tender any sum as a Production Royalty shall render the Lessee liable for the amount due plus simple interest accrued thereon at the rate of 12% per annum, options tradingcompounded semi-annually. The Lessee shall use reasonable diligence to sell the uranium or Leased Substances and any of them, commodities futures trading or similar transactions. (2) Charges to be deducted from proceeds in determining Net Smelter Returns (a) all costson which a Production Royalty is payable under the terms of this Lease, charges and expenses paid or incurred by Lessee for treatment but in the smelting and refining processes (including handlingexercise of such diligence the Lessee shall not be obligated to sell the same, processingor any of them, interest and provisional settlement feesunder terms, samplingconditions or circumstances which, assaying and representation costsin the Lessee's judgment, penalties and other processor deductions);exercised in good faith, is not in its best interests.

Production Royalty. When Lessee commences The following provisions shall apply with respect to a production royalty (the “Production Royalty,” and collectively with the Minimum Royalty, the “Royalties”) of ores, minerals or materials from $1.71 per ton of 2,000 pounds avoirdupois (“Ton”) of the premisesCoal mined and sold by Lessee: (a) Subject to Section 2.3, Lessee shall pay to Lessor a production royalty of 3% the Production Royalty for all of the Net Smelter Returns (NSR) received Coal mined and sold by Lessee from during each calendar quarter. For this purpose, any Coal mined and sold by Lessee in 2014 and on and after the sale of said ores, minerals or materials, from the Premises. Lessor may buy out the Lessee’s Production Royalty at a rate of One Million Dollars ($1,000,000.00) per Royalty percentage, with the Effective Date shall be considered to be Coal mined and sold by Lessee retaining One Percent (1%). (1) If Lessee sells refined gold or silver, Lessee will be deemed to have received proceeds from the sale thereof equal to the number of ounces of refined gold or silver outturned to Lessee's account during the calendar quarter multiplied in the case of gold by the average daily London Bullion Brokers P .M Gold Fixing during such calendar quarter and in the case of silver by the average of the daily Engelhard industrial bullion price for silver during the calendar quarterbeginning January 1, 2015. The average price Production Royalty for a calendar quarter shall be determined by dividing accounted for and due and payable to Lessor on the sum of all daily prices posted during the calendar quarter by the number of days that prices were postedRoyalty Payment Date. The posted price Late payments shall be obtained bear interest from the Wall Street Journal, Reuters, E&MJ or other industry-accepted source. If a posted price referenced above becomes no longer available, Lessee shall, acting reasonably, select an alternative posted price that closely approximates such original posted price. Lessee shall have due date until paid at the right to market and sell to third parties refined gold and silver in any manner it chooses, including the sale rate of such refined gold and silver on the commodity market. In this regard, Lessor shall have no right to participate in any gains and/or profits or obligation to suffer any losses accruing to Lessee as a result of forward sales, options trading, commodities futures trading or similar transactionsten percent (10%) per annum. (2b) Charges to Lessee covenants that it shall keep a proper account of the Tons of Coal mined and sold by Lessee as well as a proper account of the Tons of coal mined and sold by Lessee from other lands which may be deducted from proceeds in determining Net Smelter Returns (a) all costs, charges commingled with the Tons of Coal mined and expenses paid or incurred sold by Lessee for treatment purposes of sale. In determining the Tons of Coal mined and sold by Lessee, certified belt scales shall be employed by Lessee to determine the weights. Such scale facilities shall be tested and calibrated periodically (and in all events no less frequently than once per year) at Lessee’s expense by a competent and qualified independent licensed weightmaster to insure accuracy, and the results of such testing shall be certified to Lessor. The Production Royalty shall be calculated on a “clean coal” basis for the Coal which is required to be washed or otherwise processed to remove impurities. For purposes of the calculation of the Production Royalty, “clean coal” includes the Tons of Coal that are mine run coal and other Coal sold by Lessee to its customers without washing or preparation. No reduction in the smelting Production Royalty shall be permitted for moisture, ash or other impurities in the Coal mined and refining processes (including handlingsold by Lessee. Should there arise any dispute between Lessor and Lessee as to calculation of the Tons of Coal reported and used for the calculation of the Production Royalty, processingLessor and Lessee shall share equally the cost to employ a mutually acceptable, interest independent, certified engineer or laboratory to verify the Tons of Coal mined and provisional settlement feessold by Lessee using ASTM methods for laboratory analyses and standard engineering practices for calculation of the Tons mined and sold by Lessee. Lessee and Lessor shall cooperate fully with said engineer/laboratory and make available all maps, sampling, assaying and representation costs, penalties reports and other processor deductions);data reasonably requested by said engineer/laboratory to complete the work of said engineer/laboratory. The determination by said engineer/laboratory of the Tons of Coal mined and sold by Lessee shall be fully binding upon the Parties.

Production Royalty. When Lessee commences production of ores, minerals or materials from the premises, Lessee shall pay to Lessor a production royalty of 3% three percent (3.0%) of the Net Smelter Returns (NSRof Mineral Substances produced from the Premises and sold. Net Smelter Returns means the proceeds actually received, or deemed to have been received in the case of refined gold and silver as described in Section 3.B(1) received by Lessee below, from the sale or deemed sale of said ores, minerals or materials, Mineral Substances produced from the Premises, less the charges described in Section 3.B(2) below. Lessor may buy out All production royalty payments shall be credited toward the Lessee’s Production Royalty at a rate of One Million Dollars ($1,000,000.00) per Royalty percentage, with the Lessee retaining One Percent (1%)Purchase Price. (1) If Lessee sells refined gold or silver, Lessee will be deemed to have received proceeds from the sale thereof equal to the number of ounces of refined gold or silver outturned to Lessee's account during the calendar quarter multiplied in the case of gold by the average daily London Bullion Brokers P .M P.M. Gold Fixing during such calendar quarter and in the case of silver by the average of the daily Engelhard industrial bullion price for silver Handy & Harmon Noon Silver Quotation during the calendar quarter. The average price for a calendar quarter shall be determined by dividing the sum of all daily prices posted during the calendar quarter by the number of days that prices were posted. The posted price shall be obtained from the Wall Street Journal, Reuters, E&MJ or other industry-accepted source. If a posted price referenced above becomes no longer available, Lessee shall, acting reasonably, select an alternative posted price that closely approximates such original posted price. Lessee shall have the right to market and sell to third parties refined gold and silver in any manner it chooses, including the sale of such refined gold and silver on the commodity market. In this regard, Lessor shall have no right to participate in any gains and/or profits or obligation to suffer any losses accruing to Lessee as a result of forward sales, options trading, commodities futures trading or similar transactions. (2) Charges to be deducted from proceeds in determining Net Smelter ReturnsReturns are the following: (a) all costs, charges and expenses paid or incurred by Lessee for treatment in the smelting and refining processes (including handling, processing, interest and provisional settlement fees, sampling, assaying and representation costs, penalties and other processor deductions); (b) all costs, charges and expenses paid or incurred by Lessee for transportation (including freight, insurance, security, transaction taxes, handling, port, demurrage, delay and forwarding expenses incurred by reason of or in the course of such transportation) of MGC 033.doc Mineral Substances from the Premises to the place or places of treatment and thence to the place or places of sale; (c) sales and brokerage costs on Mineral Substances for which the royalty is payable; and (d) sales, use, severance, net proceeds of mine, and ad valorem taxes applicable under local, state and federal law and any other tax or governmental levy or fee relating to the Mineral Substances for which the royalty is payable (other than taxes based upon income). (3) Royalties shall accrue quarterly (based on calendar quarters) and shall become due and payable by Lessee prior to the end of the month following the end of each quarter. Royalty payments shall be accompanied by pertinent information in sufficient detail to explain the calculation of the royalty payment. (4) All statements for royalties rendered to Lessor by Lessee during any quarter shall conclusively be presumed to be true and correct after one year following the end of such quarter unless within said one-year period Lessor takes written exception thereto and makes a claim on Lessee for adjustment. No adjustment favorable to Lessee shall be made unless it is made within the same prescribed period. (5) Lessor, upon notice in writing to Lessee, shall have the right to audit Lessee's accounts and records relating to the payment of the royalty for any calendar quarter within the one-year period following the end of such calendar quarter; provided, however, the making of any audit shall not extend the time for the taking of written exception to and the adjustment of accounts as provided for in the paragraph above. All audits shall be conducted by Lessor at the office of Lessee where the relevant books and records are maintained and such audit shall be conducted during normal business hours. (6) If a royalty, production fee, or other payment based upon production is subsequently imposed by the United States on Mineral Substances produced from any unpatented mining claims included in the Premises (whether or not such claims are converted to some other form of property interest), the amount payable to the United States shall be deducted from the royalty payable to Lessor for such Mineral Substances pursuant to this Section 3.B, provided, however, that the royalty paid to Lessor shall not be less than the amount that would be payable to Lessor hereunder at a royalty rate of one percent (1.0%).

Production Royalty. When Lessee commences production of ores, minerals or materials Sublessee agrees to pay Sublessor a royalty (“Production Royalty”) on Minerals produced and sold from the premises, Lessee Property as follows: (a) Rental payments shall pay to Lessor a production royalty of 3% not be credited against any Production Royalty. The Production Royalty for "Bitumen Product" produced from Tar Sands mined or otherwise extracted from the Property shall be eight percent (8%) of the Net Smelter Returns (NSR) gross sales revenue received by Lessee Sublessee from the sale of said oressuch Bitumen Product at the Property. As used herein, minerals the term "Bitumen Product" means naturally occurring oil in the Tar Sands that is sold in whatever form, including run-of-mine, screened, processed, or materials, from after the Premises. Lessor may buy out addition of any additives and/or upgrading of the Lessee’s Bitumen Product; it being the intent of the parties hereto that calculation of Production Royalty for Bitumen Product, shall be determined solely by the actual number of tons, cubic yards, barrels of Bitumen Product produced and sold from Tar Sands contained within the Property. The "gross sales revenue” of Bitumen Product shall be calculated by multiplying the volume of Bitumen Product in whatever form, such as barrels (forty-two U.S. gallons per barrel), tons, or cubic yards, times the sales price received for the Bitumen Product at a rate of One Million Dollars ($1,000,000.00) per Royalty percentagethe Property. No deduction may be made for any process chemicals, with including but not limited to the Lessee retaining One Percent (1%)condensate/naphtha component. (1b) If Lessee sells refined gold The Production Royalty on all other Minerals produced from Bitumen Product mined or silver, Lessee will be deemed to have received proceeds otherwise extracted from the sale thereof equal Property and sold shall be eight percent (8%) of the gross sales revenue received by Sublessee. Subject to the number provisions of ounces Paragraph 1 (a) wherein sales of refined gold products and by- products are wholly accounted for, should sales occur to a third party purchaser that is engaged in marketing a variety of products or silver outturned by-products made from such materials, payments to Lessee's account during Sublessor may vary. If Sublessee’s receipts are measurably greater than comparable sales by others of similar products or by- products which may be due to the calendar quarter multiplied in the case nature of gold high end by-products such as frac sands produced and sold by the average daily London Bullion Brokers P .M Gold Fixing during such calendar quarter third party, the Production Royalty to Sublessor shall be the greater of a 5% royalty on the gross value of the product and in the case of silver by-products sold by the average third party or 50% of the daily Engelhard industrial bullion price for silver during the calendar quarter. The average price for a calendar quarter shall be determined gross revenue received by dividing the sum of all daily prices posted during the calendar quarter by the number of days that prices were posted. The posted price shall be obtained Sublessee from the Wall Street Journal, Reuters, E&MJ or other industry-accepted source. If a posted price referenced above becomes no longer available, Lessee shall, acting reasonably, select an alternative posted price that closely approximates such original posted price. Lessee shall have the right to market and sell to third parties refined gold and silver in any manner it chooses, including the sale of such refined gold and silver on products or byproducts, as the commodity market. In this regard, Lessor shall have no right to participate in any gains and/or profits or obligation to suffer any losses accruing to Lessee as a result of forward sales, options trading, commodities futures trading or similar transactionscase may be. (2c) Charges to The Production Royalty on oil and gas, and associated hydrocarbons produced by Sublessee using standard oil and gas drilling recovery techniques above 3000 feet MSL and sold shall be deducted from proceeds in determining Net Smelter Returns1/6 of the gross market value. (ad) Any sales of Minerals to third parties shall be of such a nature that the sales price adequately represents the market value of all costspotential products or by-products. (e) Minerals shall be deemed sold at the time they leave the Property or at the time the Minerals are transferred by Sublessee to an Affiliate. As used herein, charges and expenses paid "Affiliate" means any business entity which, directly or incurred indirectly, is owned or controlled by Lessee for treatment in the smelting and refining processes (including handlingSublessee or owns or controls Sublessee, processing, interest and provisional settlement fees, sampling, assaying and representation costs, penalties and other processor deductions);or any entity or firm acquiring Minerals from Sublessee otherwise than at arm's-length.