HomeMy WebLinkAbout770322.tiff,▪ c.300 tle _ _ . . 3f
1 1.`132397
Rec No. ... Mary Feuerstem,iRamat1M "rl 1 N i NG L I AS E
to- I
- HIS LEASE is made and entered into on this 30th day of September
19 77 , by and between the County of Weld, Colorado , a political subdivision
. of the State of Colorado, by and through its Board of County Commissioners ,
Weld County Centennial Center, 915 10th Street, Greeley, Colorado 80631 ,
hereinafter called "Lessor" , and Power Resources Corporation
hereinafter called "Lessee" , WITNESSETH:
1 . interests Leased. For and in consideration of $1,687.45
Dollars ( j , receipt of which is hereby acknowledged as first
years rent in the amount of $
, and a bonus in the amount of
$ 1 ,687.45 , and in further consideration of Lessee ' agreement to pay
one and no/100 Dollars ($ 1..00 ) per acre annually as
rental in advance of the anniversary date of this lease until such time as
an advance minimum royalty becomes due under the terms of paragraph 3 of this
Lease; and in further consideration of the terms and conditions hereinafter
.stated, and of the payments of royalties reserved herein , to be kept and
performed by Lessee, its successors and assigns , Lessor hereby grants , leases
and lets exclusively unto Lessee all uranium, vanadium, other fissionable
source materials , other spatially associated minerals , and all other min-
erals of every kind and character whatsoever, together with all deposits
thereof (which leased minerals and mineral deposits are hereinafter called
the "Subject Minerals" ) ,, except oil , gas , and associated liquid hydrocarbons
and coal , in , on , and under the land described herein (which lands are h; rc-
inafter called the "Leased Premises" ) , and together with all rights and
privileges of the Lessor to enter upon the leased premises for the purpose ai
surveying , exploring,-prospecting, drilling for, developing , mining , stock-
piling , removing , shipping, and marketing any of the subject minerals : all
rights of the Lessor to construct and use buildings , roads , power and com-
munication lines and other improvements reasonably required by Lessee for
the full enjoyment of the leased premises: to use so much of the surface of
the leased premises in such manner as may be reasonably necessary, conven-
ient, or suitable for or incidental to any of the rights or privileges of
Lessee hereunder or otherwise reasonably necessary to effect the purpose of
this lease consistent with the rights of the Lessor; and together with ease-
ments and all rights of way for ingress to and egress from the leased premises to
which Lessor may be entitled: SUBJECT TO all existing easements and rights
of way of third parties , existing leases , rights and encumbrances of record ,
and rights of surface owners; and the right of Lessor to develop , explore ,
produce or lease for development, exploration or production of oil , gas and
associated liquid hydrocarbons and coal , in and under the leased premises ;
to the following land situated in Weld Coilnty, Colorado, to-wit:
See Schedule B Attached Hereto
2. Term of Lease. The term of this lease shall begin on the date el
execution hereinabove first written, and this lease shall continue in full
force and effect for a term of ten ( 10) years from such commencement date, and
' so long thereafter as any of ,the subject minerals are produced from the leased
premises in paying quantities. Paying quantities means production sufficient
to return royalties to Lessor equal to the advance minimum royalty, but not
less than ten dollars ($10.00) per acre per year.
3- Cessation of Production. Lessee shall notify Lessor of any cesna •
tion of production, and the reasons therefor. Cessation of production for any
reason for a period in excess of 180 consecutive days will automatically re-
move this lease producing status. Lessor may, upon a showing of good cause
for cessation of production by Lessee, agree , in a writing, which shall be an-
nexed to this lease, to continue the term of this lease during such a period
despite a lack of production of any of the subject minerals on the leased
premises , if during such period, the rentals or advance minimum royalty ray-
merits required by paragraphs 41; 5 hereof shall be made. Should production
cease for a period in excess of 180 consecutive days after the initial ten (10)
.year term of this lease, the advance minimum royalty required to hold the
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810 1732 397
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leased premises shall be agreed upon between the parties.
I . Delay Rentals. So long as lessee is not producing subject min-
erals from the leased premises, on or before each anniversary date of tis
lease for the initial five years of the lease term, Lessee shall pay to
Lessor, by certified or cashiers check or cash, the sum of O ' NeV% `"' ' ia,
Dollars (. '. cc? ) , as delay rental ,
the same to be reduced by the amount of any royalties received by Lessor for
production from the leased premises during the preceding lease year and not
theretofore recovered by Lessee from payments by Lessor. No sight drafts
will be accepted by Lessor.
5. Advance Minimum Royalty. As minimum and advance royalty, and in
lieu of any delay rentals , without relation to the amount of uranium mined
from the leased premises , Lessee shall pay annually to Lessor the folly„gn
amounts:
LEASE YEAR ADVANCE MINIMUM ROYALTY LEASE YEAR ADVANCE MINIMUM kOhltili
1st none 6th $6.00 per acre
2nd none 7th $7.00 per acre
3rd none 8th $8 .00 per acre
4th none 9th $9. 00 per ucr.,
5th none 10th $10. 00 per rcr
Acreage changes resulting from surrender or partial assignment may reduce the
advance minimum royalty proportionately. •
Further, at the end of each five-year period,-lessor may chance the rate of
amount of advance minimum royalty to be paid by Lessee. in the event Lessee
• shall not extract uranium from the leased premises sufficient to return Lo the
Lessor the minimum amounts above specified, it is nevertheless understood that
the above sums of money are due and payable to Lessor whether or not urisiunr
is mined, but that such advance minimum royalty shall be credited upon the firil
royalties due as hereinafter provided for uranium actually produced from said
premises.
6. Forfeiture of Advance Minimum Royalty. In the absence of production
of uranium in continuous paying quantities before the expiration date o
lease, all advance minimum royalties ah d' all rentals shall he forfeited to the
Lessor.
7. Extension. Lessee may have a preferential right to renew the ? r-:. s
to receive a new lease , whichever may he determined by Lessor to he in the `. eis't
interest of the County, under one or more of the following conditions :
A. An advance minimum royalty, the amount to he neoctiated before
expiration of the lease, will be continuous until the end of the
second ten-year term of the lease, or until the expiration of the
new lease. This amount may be adjusted at the end of each five-
.year period of the lease.
D. Lessee shall furnish to Lessor satisfactory evidence of plans
for mining during the second ten-year term or during the ten-year
term of a new lease or; •
C. Furnish adequate geological evidence to Lessor that the acreage
leased is in fact an integral part of and contains reserves in a
logical mining unit. Final determination as to whether the acreage
is or is not a part of a logical mining unit will be made by Lessor.
8. Production Royalty. Lessor hereby reserves and Lessee agrees to pay
to Lessor production royalty per the following schedule without, regard to trio
mining methods employed by Lessee:
7
SP-810 1732397
ROYALTY SCIILDUL E /U -.3
I 11 Ill
ASSAY PERCENTAGE ROYALTY PERCEN1AGE DOLLAR VALUE QUO1ILNT
0. 001 to 0. 075 2.25% )
0. 076 to 0. 75 4. 25% ) NUEXO + ERDA
0.16 to 0. 20 6. 25% ) —._
2
• 0. 21 to 0. 25 8.25% )
0. 26 and higher 10..25% )
Column I of the schedule, Assay Percentage:
Assay percentages of uranium contained in each ton of ore mined shall br de-
termined by Lessee or Lessee' s qualified agent. Lessor reserves the right to
•
perform its own assay at any time and, in the event of disagreement betwoen
Lessee and Lessor, a disinterested third party may be employed as a referee
by mutual agreement to perform a third assay to arbitrate the disagreement .
- The cost of the referee shall be paid by the party whose assay shows the
greatest variance from that of the referee.
• Column II of the schedule, Royalty Percentage:
The royalty percentage shown opposite the assay percentage shall be multiplied
by the number of pounds or fraction thereof of uranium contained in the ore
as
determined by the assay percentage , the product of which shall he multiplie . P
the following quotient to compute the royalty due to Weld County.
Column III of the schedule, Dollar Value Quotient :
The quotient is obtained by dividing by two the sum of NUEXO plus ERDA . Said
quotient shall be re-computed quarterly during the first working week of Jan-
uary, April , July, and October, using the latest ERDA values and those valutt
printed by NUEXCO on the last working day of the previous month.
In the event that published uranium exchange values should become unavailable
to Lessor from either NUEXCO or ERDA, then exchange values published by mica
entities may be used in the scheduled formula. Selection of other entities
whose published exchange values will be used shall be agreed to in writing be-
tween Lessee and Lessor.
NUEXO, as used herein , means the uranium Exchange Value for immediate delivery
of uranium as published by the Nuclear Exchange Corporation , 3000 Sand Hill
Road, Menlo Park, California 94025; Phone (415) 854-1510; TWX 910-373-1700.
ERDA, as used herein, means the latest long-term-contract quotations as pub-
lished by the Energy Research Development Administration, P.O. Box 2567 ,
Grand Junction, Colorado 81501 ; Phone (303) 242-8621.
Fractional parts of a ton shall be valued on a pro rata basis to the nearest.
cent. All weights for purposes of this lease shall be dry weight.
•
The royalty on any mineral recovered as a by-product shall be payable only to
the extent Lessee removes and sells same or is otherwise separately compen=
sted for same. . .
Lessor reserves the right to reasonably adjust the production royalty rate
at the end of each ten-year period of the lease, provided the leased premises
are held by production.
Payment, of royalties shill be made by Lessee to let,sor within thirty ( ,l) hay'
after the end of the calendar quarter within which said ore is processcdi 1f
processed by or for the benefit of Lessee, or removed from the leased premiet
if sold by Lessee, and shall be accompanied by a statement showing ra lents ,
analyses and values of all ores , concentrates, minerals , and metals produced
from the leased premises during such previous calendar quarter and ti._ amount
of the charges or costs deductible therefrom.
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$ .'f� A. 73239'7
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The mineral content of all ore mined and removed from the leased premises
shall be determined by Lessee, or by the mill or smelter to which the ore is
shipped, in accordance with standard sampling and analysis procedures.
Upon request to Lessee, and at Lessor's expense, Lessor shall have the right
• to have a representative present at the time samples are taken.
In the event Lessee mines ore from the leased premises, Lessor shall be fur-
nished, at the Lessor's request and at no expense, a portion of all or any
samples taken for analysis. In that event, split samples shall be retained
by Lessee for later analysis by an independent referee, as provided above.
9. Solution Mining in Situ. Lessee shall determine the depth, size;
shape, volume, tonnage and uranium content of the ore body to be mined. The
ore body shall be accurately located relative to the lands described in this
lease. Royalty percentage and monies shall be computed on the average ame unt
of uranium per ton of ore in the ore body or bodies that exist on, in, and
under the leased premises by use of the above royalty schedule.
SOLUTION MINING IN SITU means any process by which urau um is removed from eo
ore body -by dissolving the uranium from the ore body and removing the uranium
with a liquid substance without removal of or disturbance of the ore body, ee-
cepting that holes may be drilled into the ore body for injection and removal
of the liquid substance, for monitoring the process and for assay purposes.
• HEAP LEACHING. Lessee shall determine volume, tonnage, and uranium content
of materials in mine dumps from this lease that are to be leached, Royalty
monies shall be computed by use of the above schedule, with the average amount
of uranium contained per ton of material in the mine dump leach piles. Ores:
containing recoverable uranium shall not be commingled with mine dump materials.
The mine dump shall be on the leased premises unless otherwise agreed to in
writing between Lessee and Lessor.
HEAP LEACHING means any process by which uranium is removed from materials in
mine dumps by dissolving the uranium contained'in the mine dump materials.
MINE DUMP means spoil heap of waste rock refuse or other non-ore materials.
10. Overriding Royalty Limitations. It is agreed that this lease or ;:r✓
subsequent assignment hereof shall not be burdened with overriding royalties
the aggregate of which exceeds 2 % of the gross value of the uranium
at the first point of sale. Lessor must be notified of all overriding roy •
-
alties accruing to this lease. Violation of the above will subject this lease .
to cancellation by Lessor.
11. Annual Production Reports. In addition to the quarterly statements
from Lessee required by paragraph 7 of this lease, Lessee. shall also, annually
during the term of this lease, submit a sworn statement to Lessor disclosing
the number of tons and the assay thereof of all uranium mined from the premises
during the preceding year.• Such annual statements may coincide with Lessee's
fiscal years or with official calendar years. Further, Lessee shall furnish
a map annually showing all workings, depths, thicknessess or uranium ore with
location of same tied to a corner established by United States survey, cer-
- • tified by a licensed surveyor. Maps furnished to the Colorado Division of
Mines or to the Mined Land Reclamation Board may satisfy this requirement.
• Lessor agrees that all such information supplied by Lessee shall remain con-
.fidential and unpublished for the duration of this lease.
12. Prospecting and Exploration Data. Lessee shall provide to Lessor,
upon request, a complete report on prospecting and exploration .operations, •
- including geologic interpretations and recoverable -reserve calculations , and
maps and cross sections showing location of any uranium bearing outcrops, drill
holes, trenches, uranium ore bodies and other prospecting and exploration
activities, along with assays showing the amount of uranium contained in the
ore. The records required to be maintained by Lessee and provided to Lessor
upon request include logs of all strata penetrated and all geologic and h.0 ro-
logic conditions encountered, and copies of in-hole surveys. This information
is to be collected and prepared under the supervision of a qualified geolo ist,
geological engineer or mining engineer. Other qualified persons may collect
and prepare this data, if agreed to in writing between Lessee and •Lessor. .n
any event, upon termination of this lease, all of the above information shall
be provided by Lessee to Lessor. Lessor agrees that all such information sup-
plied by Lessee shall remain confidential and unpublished for the duration of
this lease.
•
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810 1'7,3239'7
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13. No Drillsite l s i to Near Dwelling House. No dri l 1 si to shall be located
within 200 feet of any existing well or dwelling house unless the permission
of the surface owner is first had and obtained, and notice of the grant of
such permission is given to Lessor.
14. Limitation of Exploratory Work. No work shall be done by Lessee
during exploratory operationsthat may interfere with lambing or feeding oi'
livestock unless the permission of the surface owner is first had and ob-
tained, and notice of grant of such permission is given to Lessor.
•
' 15. Livestock-Tight Fences. Lessee agrees to enclose with a livestock-
tight fence any excavations dangerous to livestock that it may make in the
course of-its operations.
16. Maintenance of Fences. The Lessee agrees not to keep fences down
at any point, to repair promptly any road damage done by vehicles and equip-
ment of Lessee,.and to. erect gates or cattleguards in all fences in which
• openings may be made for ore haulage:
17. Payment for Surface Damage. If any of Lessee's operations here-
under result in damage to buildings, land, personal property, growing crops
or timber, Lessee shall reimburse the owner for the reasonable value of the
same, and shall hold Lessor harmless from any liability for such damage.
18. Lesser Interest. In the event Lessor owns an interest in the sub-
ject minerals which is "less than the entire and undivided mineral estate
therein, whether or not such lesser mineral interest is referred to herein,
then the royalties and delay rentals herein provided for shall be paid to
Lessor only in the proportion that Lessor's interest therein bears to the
whole and undivided mineral estate. Lessor shall be entitled to retain only
such proportion of the moneys previously paid to Lessor hereunder as Lessor's
said interest bears to the whole and undivided mineral estate, and Lessee
shall be entitled to offset all other moneys previously paid Lessor hereunder
against royalties and delay rentals which thereafter become due and payable
to Lessor hereunder. Notwithstanding any other provisions of this lease, with
respect to that portion, if any, of the leased premises in which Lessor owns
no right, title, or interest in the subject minerals, Lessee is under no
obligation to pay,. and Lessor has no right to receive, delay rentals, advance
minimum royalties, or production royalties.
19. Disclaimer of Warranty. Nothing herein shall be construed as a
warranty of title or an agreement to defend title to the Leased Premises by
- the Lessor.
•
20. Exploration and Mining Operations. Lessee agrees to maintain all
operations in a good and workmanlike manner. The Lessee shall use the method
of exploration and reclamation set out in Schedule A of this lease. The
• Lessee may use and employ methods of mining as it may desire or find r.ost
profitable and economical so long as the Lessee complies with all applicable
requirements of the County of Weld and the State of Colorado regarding the
protection of ground water resources, the rights of surface owners, and the re-
clamation of mined lands. Lessee shall have all the right and privilege of the
Lessor at any time during the term of this lease, and so long thereafter as
it may hold an interest in the minerals hereunder, to use any and all roads or
workings located at any time.on or under the leased premises, and Lessee shall
have the. further right of mixing, either underground or at the surface or pr:)-
cessing plant, any ores, solutions or other products (herein called "products")
containing subject minerals and produced from the leased premises or any
portion thereof with products from any other lands, provided that the mixing is
• accomplished only after the products have been sampled and after the weighL or
volume thereof has been determined or ascertained by sound engineering pail,
ciples. An accurate record of the tonnage or volume of products and of the
analysis of products from each property going into such mixture shall be 4,c:pt
and made available to Lessor at all reasonable times. The tonnage or volume
of products from each property, together with the analysis thereof, shall
used as the basis of the allocation between the properties of production
•
royalties paid .from such products.
21. Pooling. In connection with in situ, leach or solution mining, te!se'-'
is hereby granted the right to pool and combine acreage from the leased premises
with acreage from other lands for the purpose of obtaining a drilling pattern
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- 810 1932397
set up for such mining at the bouncl.iry of said leased premises. In such 16 . ("
event, Lessee shall have a location of such drilling pattern acurately surveyed
to determine the position of the drilling pattern with respect to the pro-
perty line or lines of the properties involved. The Lessee shall furnish the
Lessors of the leased premises of the other properties involved with a cory
of' such survey. The allocation of royalties attributable to mineral contain-
ing solutions produced from production well or wells involved in such drill-
- ing pattern shall be allocated to the respective royalty owners pro rata , on
the basis of surface -acreage of the leased premises and other lands lying
within such drilling pattern. It shall be conclusively presumed that the sub-
ject minerals which are produced are produced in a uniform manner within the
boundaries of such drilling' pattern. In no event shall the drilling pattern
used for the purpose of pooling under this paragraph exceed 100 feet on either
side of the boundary line or a radius of 100 feet from -a point on the boundary
line if the drilling pattern is irregular.
22. Assignment. : The- estate of either party may be assigned in whole or
in part; provided, that no change in the ownership of the leased premises :or
assignment of royalties payable hereunder shall be binding upon lessee until
Lessee has been furnished with a written transfer or assignment or a certifi' .'
copy thereof; and provided further that Lessee may not assign its estate with-
out written permission of Lessor, which permission will not be unreasonably
withheld. In the event this mining lease shall be assigned as to a part or •
parts of the leased premises and the Lessee, or assignee 'or assignees of any
part or parts, shall fail or made default in the payment of the proportionate
part of royalties due from him or them or otherwise breach any covenants con-
tained herein, such default shall not operate to defeat or affect this lease
insofar as it covers any other part or parts of the leased premises. An as-
signment of this lease shall , to the extent of such assignment, relieve ar,d
discharge the Lessee of all obligations hereunder which have not theretofore
become due_
•
23. Inspection. Lessor or its duly -appointed representative shall have
the right, exercisable at all reasonable times and in a reasonable manner so
as not- to interfere with the Lessee's operations, to go upon the leased pre-
mises or any part thereof, for the purpose of inspecting the workings thereon.
Lessor is also hereby authorized to check assays and scales as to- their ac-
curacy, to go through any of the slopes, entries, shafts, openings or workings
on said premises, and to examine, inspect, survey and take measurements of the
same, and to examine and make extracts from, or copies of, all books and .
weight sheets and records which show in any way the uranium output, uranium
values, payments and royalties from and of the leased premises. Lessee shall
furnish all conveniences necessary for saLd inspection survey or examination
to Lessor. Lessor may require Lessee to provide all instruments and docu-
ments of any kind and nature whatever which affect Lessee's interests. Lessor.
shall hold Lessee harmless from all claims for damages arising out of any
death, personal injury or property damage sustained by Lessor or Lessor's
agents or servants, while in or upon the leased premises herein permitted, -
less such death or injury arises as a result of negligence of the Lessee.
- 24. Notices. It is agreed -that any notice required to be given to Lessee
under the provisions of this lease shall be sent by certified mail to the ad-
dress set forth at the beginning of this lease or to such other address as ' •
Lessee may indicate -in writing to Lessor, and such service by mail shall be
deemed sufficient and in fuile cornpliance with the terms of this lease. Notice
to Lessor shall be given in like manner, addressed to the Weld County Board of
County Co,nmissioners, •Centennial Center, 915 10th Street, Greeley, Colorado
80631.
a �
25. Default;_ Force Majeure; Termination. If at any time Lessee sf,alI be
in default -in the perforinance cif the terms and conditions of this lease to hr
performed by it, provided such default is not caused by casualties, strike,
legislation, public regulations, storms, flood, acts of God, civil or milit:ir„j
disorders, insurrection, riots, fire, accident, explosion, or other causes be-
yond the control of Lessee, and if, with 90 days after written notice of such
default is given by Lessor to Lessee, Lessee has not commenced activities
which will cure the default if pursued diligently, then Lessor may terminate
this lease by notice to Lessee provided that, for any default in the payment.
of money, Lessor may terminate this lease by notice to Lessee if such default
is not cured within 30 days after such written notice of default. If this
lease is surrendered or terminated for any cause, Lessee shall remove all en-
gines, tools, machinery, buildings, structures, headframes, trailers, ore
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810 :1732397
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stockpiles and all other property ;,f every nature and description erected,
• place or situated on the leased premises by it within a period -of 90 days
from the effective date of such surrender or termination. Upon such term-
ination, Lessee shall close off and plug any open shafts or holes to such
extent that such shaft of hole shall not thereafter be a hazard to persons
or livestock using the surface of the leased premises, in accordance with
the provisions of Schedule A attached. If upon termination of this lease
for any reason, whether by surrender, forfeiture or expiration of term or
otherwise, Lessee shall not have fully complied with the terms of this
lease, Lessor shall hold and retain possession of the property improvements
and equipment of the Lessee as security unto Lessor, for the payment of
rent and royalties to Lessor, or to protect Lessor against liens, or to
indemnify Lessor against any loss or damage sustained by Lessor by reason
of default of Lessee, for which purpose Lessor is hereby given a lien uuor,
all such property improvements and equipment, which lien shall attach as
the same are place upon the premises. In the event Lessor shall foreclose
the lien given to Lessor by Lessee, Lessor may itself be purchaser et a;;y
sale thereof upon such foreclosure. Upon the termination of this lease
for any cause, if Lessee shall remain in possession of said premises , Lessee
shall be guilty of an unlawful detainer under applicable Colorado law,
and shall be subject to all the. conditions and provisions thereof and to •
eviction and removal .
26. Surrender. Lessee may at any time execute and deliver to Leseor
a release or releases covering all or any portion or portions of the lee ed
premises and thereby surrender this lease as to all or such por-tio;, or por-
tions and, from and after the date of such release, thereby terminate al '
obligations, including a proportionate amount of delay rentals, to the
. acreage surrendered except obligations accrued as of the day of surrender.
Such release must be in writing and must contain the book and page nrr;;ber
of said lease. All annual and quarterly reports and exploration infor-
mation required by this lease must be submitted to Lessor.before the lease
may be terminated. This clause becomes inoperative upon the institution
of any' suit in any court of law by Lessee, Lessor or any assignee of eithee
- to enforce this lease, or any of its terms, express or implied.
27. Notice to Lessor. Notwithstanding any provision of this lease
to the contrary, no operation shall be commenced upon the leased premises
without written notice to the Lessor and to the surface owner, if other .
than the Lessor.
28. Government Regulations. It is expressly understood that this
lease is subject to and controlled by any,law of the State of Colorado now
in effect restricting or limiting the powers of counties of boards of county
commissioners, and any provision herein in conflict therewith shall be in-
operative .and void. It is further understood that this lease in no way
operates to relieve Lessee of the -obligation *to comply with all applicable
laws, rules, regulations and ordinances of the County of Weld, the State of
Colorado and the United .States of America , governing mineral exploration,
mining operation, and reclamation of mined lands, including land use and
building regulations.
29. Water. If Lessee initiates or establishes any water rights for
which the point of surface diversion or ground water withdrawal is on the
leased premises, title to sucli •water rights shall , upon. termination of the
lease, become the property of the surface owner without cost, and title to
• water rights shall be conveyed to the surface owner immediately upon •term-
ination, except that i•f Lessor is the surface owner the water right shall •
be taken in the name of the Lessor in the' first instance and shall be the
property of Lessor without cost.
30. Binding Effect. This lease shall be binding on the parties here-
to, and upon their heirs, successors, assigns, executors or administrators.
31 . Indemnification of Lessor. Lessee agrees •to hold Lessor harmlcso
for any and all manner of claims arising or to arise from Lessee's operations
on the said leased premises.
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® 1732397
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32. Notwithstanding anything hereinabove contained to the contrary,
in the event that uranium and other associated minerals are recovered from
the leased premises by Lessee through in situ, leach or solution mining,
Lessee shall pay Lessor a royalty which is the greater of the royalty set
forth herein or a royalty for each pound of U308 recovered of 3 1/3% of the
NUEXCO rate for the month in which the U308 is actually recovered from the
leased premises.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the day and year first above written.
Powrz c-oruPoa
LESSEE: LESSOR: BOARD OF COUNTY COMMISSIONERS
1/icc /1.r ,ognr7' WELD COUNTY, COLORADO
i
s T S R2r7art y
ea
A1ThST:
COUNT CT,FRK AND RECORDER,Y
CLERK TO THE
BY
puty County C �--?
0
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1® /0- 9
SCHEDULE A
DRILLHOLE ABANDONMENT PROCEDURE
WELD COUNTY MINERAL LEASE
1. Materials. The following materials or similar materials made by
different manufacturers shall be used in the drillhole abandonment pro-
cedure. ' Baroid Quick Gel - a high yield bentonite packaged in fifty (50)
pound bags; Baroid Quick Trol - granular nonfermenting organic compound
packaged in two (2) pound moisture proof bags.
2. Mixing. The materials described in No. 1. above shall be mixed
in a ration of 2 pounds of Quick Trol to 100 pounds of Quick Gel . At the
time of reaching the total depth, the proper amount of Quick Gel and Quick
•
Trol are to be premixed prior to "jetting" into the mixing tank. Mixing
must be doneslowly and thoroughly. "Balls" of unyielded gel floating in
the mixing tank are an indication of insufficient and too rapid mixing.
Approximately one gallon of cementing material per foot of depths is required
for a 4 3/4 inch diameter drillhole. To minimize waste, a portion t,f the
mixing tank of sufficient volume to fill the drillhole should be.blocked
off and the mixing operation confined to that portion.
A Marsh Funnel and a graduated one-quart capacity cup shall be used for
testing the viscosity of the drilling mud according to the following pro-
cedure:
A. Pour sample of mud through a screen into the funnel (close exit
hole with finger). "Lumpy" (unyielded) gel shall be screened out
and should be discarded.
B. When the funnel is nearly full , release finger from exit hole and
determine length of time necessary to fill the cup to one-quart cap-
acity. Not less than 53 seconds should be required to fill the cup.
Any lesser viscosity is. unacceptable.
•
• 3. Injection. After determining that the mud meets specifications,
the mud shall be pumped into the drillhole displacing the fluid already
in the hole. The drill pipe may now be removed from the hole and any un-
injected mixture remains should be used to fill the hole to the surface
after the pipe is withdrawn.
. 4. Plugging. After injection of mud, a substantial surface plug shall
be placed in. the drillhole according to the following procedure:
A. . An octoplug or other substantial expandable plug shall be placed
in the drillhole to a depth of 10 feet.
B. Approximately one foot of drill cuttings shall be shoveled into
the drillhole to act as a sealant for the cement.
C. AL least 1/3 of a bag of cement shall be emptied onto the wet,
sandy portion of the drill cutting pile. If the hole is out of gauge,
such as in a surface gravel , then more cement-sand mixture must be
placed in the hole. if necessary, several sacks of cement shall be
used to plug one hole.
D. The cement and sand shall be thoroughly mixed with a shovel until
all cement has been taken out by the wet sand.
E. The sand and cement mixture shall be shoveled into the drillhole.
F. The mixture shall be lightly tamped in the hole to insure against
- the formation of air pockets.
G. The above procedure shall be repeated until the drillhole is filled
to within two feet below ground level .
H. Drill cuttings shall be shoveled into the hole until it is filled
to slightly above ground level alowing for some compaction.
5. Reclamation. The surface around each drillhole shall be reclaimed
by the following proocedure: Dried cutting piles shall be reduced to a veneer
less than 1/2 inch thick with a backhoe with a bucket attachment, in order to
allow the underlying grass to reclaim the surface around the drillhole.
-9-
5ooK ni 810 SCHEDULE B
Attached to and made a part of Uranium Mining Leas
eNResources 5, teCorporatior..
d
September 30, 1977, from Weld County, Colorado to Power
Township 9 North, Range 59 West
Section 5: NEl
•�,- - Section 8: NW%NE1-4
Township 9 North, Range 6.1 West
'• --�- Section 6: E1/2SW-4, Lot 7
r+ t ..
Township 10 North, Range 61 West
Section 7: ,Lot 4
Section 11: . E�
•• Section 12: WINW-
Section 25: S1/2N1, SW1, SW SEA
Township 10 North, Range 60 West
•
Section 20: --&E' < . .
Section 27: N'-�
• Section 33: S zSW1/4
Containing 1, 687 . 45 acres
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