Document:

Exhibit 10.12

 

ASSIGNMENT OF MINING LEASE

 

For One Dollar ($1.00) and
other good and valuable consideration, the receipt of which is hereby
acknowledged, Great Western Exploration, LLC (“Assignor”), does hereby
assign, convey and set over unto BE Resources Inc. (“Assignee”), whose
legal address is 107 Hackney Circle, Elephant Butte, New Mexico 87935, all
of its right, title and interest in and to that certain Mining Lease dated January 2,
2004, between David Q. Tognoni, as Lessee and Kenneth Alan Sullivan and
Cherrill L. Sullivan, as Lessors, which lease was assigned by
David Q. Tognoni to the Assignor on February 3, 2004, upon certain
real property described in said lease located in Socorro County, New Mexico,
which is more fully described as:

 

All of Special Section 2,
and access through the East 1/2 of Special Section 4, Township
8 South, Range 7 West, save and except that portion of the Real
Estate conveyed previously Quitclaimed to Commissioners of the Acequia de
Canada Alamosa of Sierra County, New Mexico

 

TO HAVE AND TO HOLD the same
unto the Assignee and its assigns from this date forward for the rest of the
term of said lease, subject to the covenants, conditions and provisions
therein.

 

SIGNED AND DELIVERED this
1st day of October, 2007.

 

	
   

  	
   

  	
  GREAT WESTERN EXPLORATION, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  /s/ David Q. Tognoni

  
	
   

  	
   

  	
   

  	
  David Q. Tognoni, General Manager

  
	
  City of Toronto

  	
  )

  	
   

  	
   

  
	
   

  	
  ) ss.

  	
   

  	
   

  
	
  Province of Ontario

  	
  )

  	
   

  	
   

  

 

The foregoing instrument was
acknowledged before me this 1st day of October, 2007 by David Q.
Tognoni, the General Manager of Great Western Exploration, LLC.

 

	
   

  	
  /s/ [Illegible]

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My commission expires: Not applicableExhibit 10.13

 

AMENDMENT TO MINING LEASE

 

This AMENDMENT TO MINING LEASE (this “Amendment”)
is entered into as of the 9th day of April, 2008, by and between Kenneth Alan Sullivan and
Cherrill L. Sullivan whose address is Box 90, Winston, New Mexico, 87943 (collectively
the “Lessor”) and BE Resources Inc., a Colorado corporation (the “Lessee”).

 

RECITALS

 

A.    Lessor
and David Q. Tognoni (“Tognoni”) entered into a mining lease on January 2,
2004 (the “Lease”) with respect to the certain real property described in said
Lease located in Socorro County, New Mexico, which is more fully described as:
All of Special Section 2, and access through the East 1/2 of Special Section 4,
Township 8 South, Range 7 West, save and except that portion of the Real Estate
conveyed previously Quitclaimed to Commissioners of the Acequia de Canada
Alamosa of Sierra County, New Mexico (the “Property”). On February 3,
2004, Tognoni assigned all of his right, title, and interest in and to the
Lease to Great Western Exploration, LLC. On October 1, 2007, Great
Western Exploration, LLC assigned all of its right, title, and interest in
and to the Lease to the Lessee.

 

B.    Lessor
and Lessee desire to execute this Amendment to clarify the term of the Lease to
accurately reflect the intent of the parties in the manner and form hereinafter
set forth.

 

NOW, THEREFORE, in consideration of the
Property and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged and agreed, as of the date first written above,
Lessor and Lessee hereby agree as follows:

 

1.     Paragraph 1
of the Lease is hereby repealed in its entirety and the following
Paragraph 1 is substituted:

 

PROPERTY.  Lessor hereby leases to Lessee, and Lessee
hereby leases from Lessor all minerals, including beryllium and associated
minerals on the property owned by Lessor or in which Lessor has an interest
located in Socorro County, New Mexico and more particularly described as
follows: All of Special Section 2, and access through the East 1/2 of
Special Section 4, Township 8 South, Range 7 West, save and except that
portion of the Real Estate conveyed previously Quitclaimed to Commissioners of
the Acequia de Canada Alamosa of Sierra County, New Mexico. The above property
description is hereinafter referred to as “The Property” and a map of “The
Property” is attached to this agreement, all located in Socorro County, New
Mexico.

 

2.     Paragraph 2
of the Lease is hereby repealed in its entirety and the following
Paragraph 2 is substituted:

 

TERM.  The term of this Lease shall be for an
initial period of 20 years commencing on January 2, 2004 and for so
long thereafter as the Lease is not terminated pursuant to Paragraph 11
thereof.

 

3.     Paragraph 7
of the Lease is hereby repealed in its entirety and the following Paragraph 7
is substituted:

 

CONDUCT OF
OPERATIONS.  All work
performed by the Lessee on “The Property” pursuant to this Lease Agreement
shall be done in a good and workmanlike manner. In removing any minerals or
metals from “The Property” the Lessee shall use its reasonable efforts to
perform such extraction in a cost effective way and manner.

 

All other terms and conditions of the Lease shall remain unchanged.

 

 

IN WITNESS WHEREOF, the parties hereto have
executed this Amendment as of the day and year first written above. This
Amendment and all of its terms and conditions shall be binding upon Lessor and
Lessee, and their respective successors and assigns.

 

	
  LESSOR:

  	
   

  	
  LESSEE:

  
	
   

  	
   

  	
  BE RESOURCES INC.

  
	
   

  	
   

  	
   

  
	
  /s/ KENNETH ALAN SULLIVAN

  	
   

  	
  By:

  	
  /s/ DAVID Q. TOGNONI

  
	
  Kenneth Alan Sullivan

  	
   

  	
   

  	
  David Q. Tognoni, President

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ CHERRILL L. SULLIVAN

  	
   

  	
   

  	
   

  
	
  Cherrill L. Sullivan

  	
   

  	
   

  	
   

  

 

2

 

	
  State of New Mexico

  	
  )

  
	
   

  	
  ) ss.

  
	
  County of Sierra

  	
  )

  

 

The foregoing instrument was acknowledged before me this 16th day of April, 2008 by
Kenneth Alan Sullivan.

 

	
   

  	
  /s/ Vicki Cecil Sears

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My commission expires:

  	
  9/12/2010

  

 

	
   

  	
   

  
	
  State of New Mexico

  	
  )

  
	
   

  	
  ) ss.

  
	
  County of Sierra

  	
  )

  

 

The foregoing instrument was acknowledged before me this 16th day of April, 2008 by
Cherrill L. Sullivan.

 

	
   

  	
  /s/ Vicki Cecil Sears

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My commission expires:

  	
  9/12/2010

  

 

	
   

  	
   

  
	
  State of New Mexico

  	
  )

  
	
   

  	
  ) ss.

  
	
  County of Sierra

  	
  )

  

 

The foregoing instrument was acknowledged before me this 16th day of April, 2008 by David Q. Tognoni, the
President of BE Resources Inc.

 

	
   

  	
  /s/ Paula Thompson

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My commission expires:

  	
  1/24/2011

  

 

3Exhibit 10.14

 

NEW MEXICO STATE LAND OFFICE

 

MINING LEASE FOR GENERAL MINING—LEASE NO. HG-0059

 

This Lease is made and
entered into between the COMMISSIONER OF PUBLIC LANDS, (“Commissioner”), as
Lessor, and

 

Great
Western Exploration, LLC

2008
Meander Rd., Windsor, CO 80550

 

(“Lessee”), and shall become effective upon
the date executed by the Commissioner.

 

The Lessee has duly filed an
application for a mining lease for the purpose stated in this Lease, covering
the lands described below which are under the jurisdiction of the Commissioner.
The Lessee has tendered a bonus amount of $555
which includes the first year’s annual rental and the further sum of
$100.00 as application fee, and
the Commissioner has accepted the application as submitted.

 

The parties agree as
follows:

 

The Commissioner does grant,
demise and lease to Lessee for the sole and only purpose of exploring for,
mining, removing, and processing of Beryllium
as the principal mineral and minerals associated therewith on and
from the following described lands, (the “Property”), situated in Socorro
County, New Mexico:

 

	
  SUBDIVISION

  	
   

  	
  SEC

  	
   

  	
  TWP

  	
   

  	
  RGE

  	
   

  	
  BENEFICIARY

  	
   

  	
  ACRES

  	
   

  
	
  NW4NW4,
  S2NW4, NW4SW4

  	
   

  	
  15

  	
   

  	
  9S

  	
   

  	
  8W

  	
   

  	
  CS

  	
   

  	
  160

  	
   

  

 

The parties agree as
follows:

 

1.             Inspection by Lessee:  Lessee is leasing the Property based on
Lessee’s own inspection of and judgment regarding the Property. Lessee agrees
that the Commissioner is making no representations or warranties with regard to
the Property.

 

2.             Term:

 

A.            Primary
Term Of Mineral Lease:

 

i.              The Lease shall
be for a primary term of three (3) years and so long thereafter as
minerals are produced or mined in paying quantities from the Property.

 

ii.            Annual rent
during the primary term shall be one dollar ($1.00) per acre, which amount
shall be paid in advance each year.

 

B.            Secondary
Term Of Mineral Lease:

 

i.              If minerals are
not produced or mined in paying quantities during the primary term, then the
Lessee may continue the Lease in full force and effect through a secondary
term. The secondary term shall be two (2) years and so long thereafter as
minerals are produced or mined in paying quantities from the Property.

 

ii.            Annual rent
during the secondary term shall be ten dollars ($10.00) per acre, which amount
shall be paid each year in advance.

 

C.            Tertiary
Term Of Mineral Lease:

 

i.              If minerals are
not produced or mined in paying quantities during the primary or secondary
term, then the Lease may be continued into the tertiary term. The tertiary 

 

1

 

term shall be five (5) years
and so long thereafter as minerals are produced or mined in paying quantities
from the Property.

 

ii.            Annual rent
during the tertiary term shall be three dollars ($3.00) per acre, which amount
shall be paid each year in advance.

 

D.            Quaternary
Term Of Mineral Lease:

 

i.              If minerals are
not produced or mined in paying quantities from the Property during the
primary, secondary or tertiary term, then the Lease may be continued into the
quaternary term. The quaternary term shall be five (5) years and so long
thereafter as minerals are produced or mined in paying quantities from the
Property.

 

ii.            Annual rent
during the quaternary term shall be ten dollars ($10.00) per acre, which amount
shall be paid each year in advance.

 

3.             Amount Of Royalty:  In addition to annual rentals, the Lessee
shall pay royalty on all minerals mined and removed except special minerals.
The royalty shall be no less than two percent (2%) of the gross returns, less
the actual and reasonable transportation and smelting or reduction costs, up to
fifty percent (50%) of the gross returns. Gross returns shall be based on the
arm’s-length sales price of the produced minerals and shall include, if
applicable, all premiums, bonuses and other consideration of any kind received
by the Lessee for the minerals produced from the Property. The Lessee shall
calculate royalty for special minerals in exactly the same manner as for other
minerals, except that the royalty percentage shall be no less than five percent
(5%) of the gross returns. “Special minerals”
means rare earth minerals, precious and semi-precious stones, uranium, thorium
or any other minerals which have been or may hereafter be determined to be
essential to the production of fissionable materials.

 

4.             Advance Royalty During Quaternary Term:  If minerals are not produced or mined in
paying quantities during the primary, secondary or tertiary term, then the
Lease may be continued into the quaternary term by the payment of advance
royalties:

 

A.            In the eleventh
year of the Lease, the Lessee shall pay, in addition to rent, ten dollars ($10)
per acre as an advance royalty.

 

B.            In the twelfth
year of the Lease, the Lessee shall pay, in addition to rent, twenty dollars
($20) per acre as an advance royalty.

 

C.            In the
thirteenth year of the Lease, the Lessee shall pay, in addition to rent, thirty
dollars ($30) per acre as an advance royalty.

 

D.            In the
fourteenth year of the Lease, the Lessee shall pay, in addition to rent, forty
dollars ($40) per acre as an advance royalty.

 

E.             In the
fifteenth year of the Lease, the Lessee shall pay, in addition to rent, fifty
dollars ($50) per acre as an advance royalty.

 

5.             Credit For Advance Royalties:  Upon the commencement of production of
minerals in paying quantities, the principal sum paid as an advance royalty for
the year in which such production commences, and the principal sums so paid for
the two (2) previous years, shall be credited against the royalty
otherwise payable to the Commissioner.

 

6.             Payment Of Royalty And Accounting:  The Lessee shall pay the correct amount of
royalty to the Commissioner on the twentieth (20th) day of the month following the month of use, sale
or other disposal of minerals. On the same day, the Lessee shall submit to the
Commissioner a production and royalty statement, accounting for the production
and royalty for the previous calendar month. Such statements shall be prepared
upon forms prescribed and furnished by the Commissioner and in accordance with
instructions accompanying the forms.

 

2

 

7.             Reclamation Plan Required:  Notwithstanding the issuance of this mineral
Lease, no mining activity shall be conducted on the Property except in
accordance with a written reclamation plan approved by the Commissioner.
Reclamation plans consist of the mining permit or other authorizations issued
by the permitting agency and any supplemental requirements deemed necessary by
the Commissioner to assure adequate protection and reclamation of Property.
Upon approval by the Commissioner, the reclamation plan shall automatically be
incorporated into this mineral Lease without the necessity of further agreement
between the Lessee and the Commissioner. A violation of the reclamation plan
shall constitute a violation of the mineral Lease.

 

8.             Obtaining Permit From The Permitting Agency:

 

A.            The Lessee
shall apply for a permit from the permitting agency in accordance with the New
Mexico Mining Act or other applicable laws, whichever applies. The Lessee shall
submit copies of the permit application and all supporting documents to the
Commissioner at the same time that these materials are submitted to the
permitting agencies. The Lessee shall also promptly submit copies to the
Commissioner of all correspondence, reports and other documents regarding the
Lessee’s permit applications.

 

B.            The Lessee’s
permit applications and supporting documents shall fully disclose the intended
mining activity to the permitting agencies and the Commissioner. The
Commissioner will review the Lessee’s application and supporting documents and
may participate in the permitting process at the discretion of the
Commissioner.

 

C.            If the
permitting agencies require the land management agency or landowner to approve
a proposed permit prior to issuance, the Commissioner may withhold such
approval if the Commissioner determines that a proposed mining activity is not
in the best interest of the trust. At the written request of the Commissioner,
the Lessee shall withdraw any such proposed mining activities from its permit
application.

 

9.             Supplemental Requirements:

 

A.            After the
Lessee obtains the necessary permits or other final authorization from the
permitting agencies in accordance with 19.2.2.25 NMAC, the Lessee shall submit
a complete and accurate copy of the permit or other authorization to the
Commissioner. The Commissioner may review the permit or other authorization to
determine whether to include any supplemental requirements in the reclamation
plan.

 

B.            If the
Commissioner determines that supplemental requirements are needed, the
Commissioner may notify the Lessee of the specific areas of concern, and the
Lessee shall thereafter propose supplemental requirements to address these
concerns. The Commissioner may review the Lessee’s proposal and may notify the
Lessee of any deficiencies, which the Lessee shall address in a subsequent
submittal. The process of submittal and review shall be repeated until the
Commissioner approves the Lessee’s proposed supplemental requirements.

 

10.          Issuance Of Reclamation Plan:  After the permitting agencies issue the
mining permit or other authorizations and the Commissioner reviews the permit
and approves any supplemental requirements, the Commissioner may prepare a
reclamation plan. The reclamation plan may consist of the permits or other
authorization issued by the permitting agencies, incorporated by reference, and
any supplemental requirements imposed by the Commissioner. The Lessee shall
sign and acknowledge the plan, in triplicate, and return all three originals to
the Commissioner. The Commissioner may thereafter approve the reclamation plan
by signing the plan, in triplicate, and returning one fully executed original
to the Lessee.

 

11.          Strict Compliance With Reclamation Plan:  The Lessee shall conduct mining activity in
strict compliance with an approved reclamation plan. The reclamation plan in
effect at any given time 

 

3

 

authorizes only such mining
activity as is authorized under the permit or other authorization issued by the
permitting agencies and expressly incorporated by reference into the plan.

 

12.          Additional Reclamation Plans:  The Lessee shall obtain an additional
reclamation plan before conducting any mining activity that is not authorized
under its existing reclamation plan. The Lessee shall obtain the additional
reclamation plan to cover the new mining activity by following the procedure
set out in 19.2.2.25 NMAC through 19.2.2.27 NMAC. The original and all
additional reclamation plans approved by the Commissioner shall remain in full
force and effect unless otherwise provided in the latest plan approved by the
Commissioner. In the event of a direct conflict between the most current
reclamation plan and any earlier plan, the most current plan shall govern.

 

13.          Survival Of Reclamation Plan Requirements:  The Lessee’s obligation to reclaim the
Property in accordance with the reclamation plan in effect at the time the
mineral Lease is suspended, relinquished or otherwise terminated for any reason
shall survive such suspension, relinquishment or termination and continue so
long thereafter as Lessee’s liability under the Mining Act or other applicable
laws continues. In the event of such suspension, relinquishment or termination
of the mineral Lease, the Commissioner may provide the Lessee with written
authorization to enter the Property to carry out the reclamation plan.

 

14.          Mine Development Plan Required:  No minerals shall be produced except in
substantial compliance with a written mine development plan approved by the
Commissioner. The mine development plan shall provide for efficient and orderly
development of mineral reserves and prevention of waste. The mine development
plan shall be consistent with the Lessee’s obligation to reclaim the Property.
The requirements of the mine development plan shall, upon approval by the
Commissioner, be incorporated automatically into the mineral Lease without the
necessity of further agreement between the Lessee and the Commissioner. Failure
to substantially comply with the mine development plan shall constitute a
violation of the mineral Lease.

 

15.          Obtaining A Mine Development Plan:  The Lessee shall submit a proposed mine
development plan to the Commissioner, who shall review the plan and thereafter
notify the Lessee, in writing, of any deficiencies. The Lessee shall then
submit a modified proposal addressing the deficiencies and any other issues
raised by the Commissioner. This process of submittal and review shall be
repeated until the Commissioner and Lessee reach agreement on the plan. Once agreement
is reached, the Lessee shall sign and acknowledge the mine development plan, in
triplicate, and return all originals to the Commissioner. The Commissioner
shall thereafter approve the plan by signing all three originals and returning
one original to the Lessee.

 

16.          Modification Of Mine Development Plan:  If the Lessee determines that
it is no longer feasible or economically prudent to follow the approved mine
development plan, the Lessee shall submit a proposed modification of the plan
to the Commissioner, together with the reasons that modification is required.
The Lessee shall seek the Commissioner’s approval for the modification by
following the procedure set out in 19.2.2.32 NMAC. The Lessee shall continue to
comply with the existing mine development plan until the Commissioner approves
the modification. The Commissioner may refuse to approve any modification that
the Commissioner determines is not in the best interest of the trust.

 

17.          Restriction On Permanent Pits, Piles And Impoundments:  No permanent pit, pile, impoundment or any
other permanent manmade feature or improvement shall be placed on the Property
unless specifically approved by the Commissioner. The Commissioner may refuse
to approve any such permanent feature or improvement that would prevent
productive post-mining use of the affected land, as determined by the
Commissioner, unless the Lessee fully compensates the trust for the loss of
such land through purchase or other arrangement approved by the Commissioner.

 

4

 

18.          No Processing Or Stockpiling Of Off-Lease Materials:  This Lease grants the Lessee the right to
enter the Property for mining purposes, together with the right to use and
occupy so much of the Property as may be necessary or convenient to carry out
such mining purposes. The Lease does not authorize the Lessee to process or
stockpile minerals, waste rock, ore, overburden or other materials obtained
from off-Lease sources. Therefore, unless authorized under a separate commercial
Lease issued by the Commissioner, no minerals, waste rock, ore, overburden or
other materials obtained from off-Lease sources shall be processed or
stockpiled on the Property.

 

19.          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.

 

5

 

20.          Inspections:

 

A.            The
Commissioner has the right to inspect all records and books of account
pertaining to the operations under the mineral Lease, including records and
books relating to mining, production, extraction, processing, transportation,
reduction, returns and reclamation. At the request of the Commissioner, the
Lessee shall furnish such reports, books, records, samples, logs, assays or
cores, as the Commissioner deems reasonably necessary to the proper
administration of the Lease.

 

B.            The
Commissioner has the right to enter the Property and the facilities located
thereon to inspect operations thereon, to conduct a field audit and to inspect
the records and books referred to in Subsection A of this section. To
facilitate field audits and inspections under this subsection, the Lessee shall
keep originals or true and accurate copies of all of the foregoing records,
books, documents and sample materials on the Property unless otherwise approved
by the Commissioner in writing.

 

C.            The Lessee
shall allow the permitting agencies to enter the Property and the facilities
located thereon to conduct activities or inspection consistent with such
agencies’ regulatory jurisdiction over Lessee’s operations or mining activity.

 

D.            No prior notice
is required under this section. Failure to timely comply with this section by
the Lessee, and failure to correct violations noted as a result of site
inspections provided hereunder, shall constitute a breach subjecting the Lease
to cancellation.

 

21.          Compliance With Laws:  The Lessee shall be responsible for
compliance with all laws, regulations, rules, ordinances, permits, licenses and
other requirements applicable to the Leasehold estate and the operations
thereon. Upon receiving notice from a government agency of an actual, potential
or alleged violation of law, the Lessee shall promptly notify the Commissioner
of the alleged violation and provide copies of all related documents to the
Commissioner.

 

22.          Cessation Of Production Before Expiration Of Set Terms:

 

A.            If production
in paying quantities commences during the primary or any subsequent term and
thereafter ceases before the quaternary term would have expired had there been
no such production, then the Lease shall be deemed a “non-producing” Lease on
the date that production in paying quantities ceases. Notwithstanding such
cessation of production in paying quantities, a non-producing Lease shall not
expire if the Lessee continues to pay rent and, if the Lease is in its
quaternary term, advanced royalties.

 

B.            The Lessee may
maintain the mineral Lease in effect under this section until the end of the
quaternary term and so long thereafter as minerals are produced in paying
quantities.

 

23.          Cessation Of Production After Expiration Of Set Terms:  lf for any reason beyond the Lessee’s
control, production in paying quantities ceases after the quaternary term would
have expired, then the Lessee may, with the written approval of the
Commissioner, continue the Lease from year to year for an additional period not
to exceed three years. The Lessee shall continue to pay in advance the annual
rental at the rate provided in the quaternary term and an advance royalty of
sixty dollars ($60.00) per acre per each year of the extended term.

 

24.          Suspension Of Mineral Lease:  After notice and hearing, the Commissioner
may suspend a mineral Lease for a period not exceeding five years if the
Commissioner finds:

 

A.            the Lessee is
not in default,

 

B.            suspension of
the Lease will not affect compliance with safety, reclamation or environmental
requirements,

 

6

 

C.            the Lessee
submitted a written request for suspension to the Commissioner prior to
expiration of the Lease,

 

D.            the Lessee
submitted adequate evidence, as determined by the Commissioner, to prove that
the discovery on the Property of an ore body containing valuable mineral
deposits in merchantable quality and quantity, and

 

E.             temporary
conditions beyond the Lessee’s control have precluded mining on the Property
except at an economic loss or at an unreasonable threat to safety.

 

25.          Lessee’s Obligations During Suspension Of Mineral
Lease:  The Lessee’s
obligation to pay rent and royalties shall be suspended during the period the
mineral Lease is suspended. Provided, however, that the Lessee shall pay a
non-refundable fee of sixty dollars ($60.00) per acre for each year of
suspension. Suspension of a mineral Lease shall not operate to relieve the
Lessee from its obligations under this lease, the New Mexico Mining Act and
other applicable laws.

 

26.          Notice Of Commencement Of Production:  Within five (5) days after commencing
production the Lessee shall notify the Commissioner of such production in
writing, giving the date that production commenced, and stating specifically
the legal subdivision, section, township and range where production occurred.
The Lessee shall provide the same notice where production re-commences after a
period of cessation lasting three consecutive months or longer.

 

27.          Lease Assignments Must Be Approved By Commissioner:  The Lessee may assign this mineral Lease, in
whole or in part, only if the Commissioner approves the assignment. No
purported assignment will bind the Commissioner, or change the Lessee of
record, unless approved in writing by the Commissioner. Provided, however, that
a mere change in the name of the mineral Lessee will not constitute an
assignment requiring approval by the Commissioner. The Lessee shall promptly
notify the Commissioner, in writing, of any change in name or mailing address.

 

28.          Approval Of Lease Assignments:  The Commissioner may approve an assignment of
this mineral Lease, in whole or in part, if the Commissioner finds:

 

A.            the assignment
does not create an undivided interest in the Lease or any part thereof,

 

B.            the assigned
portion of the Property is not less than a legal subdivision,

 

C.            the assignment is executed
in the proper form and by the proper person,

 

D.            the Lease is in good
standing as to the assigned portion of the Property,

 

E.             no litigation is pending
that could affect the Lease or the interest of any person therein,

 

F.             the assignee has been
pre-qualified pursuant to 19.2.2.21 NMAC; and

 

G.            the assignment will not
adversely affect the interests of the trust.

 

29.          Form Of Assignments:  Assignments of mineral Leases shall be upon
forms prescribed and furnished by the Commissioner. The Commissioner’s approval
of an assignment shall be noted on all copies of the assignment. Assignments
shall be executed and acknowledged in the same manner prescribed for conveyance
of real estate and shall be filed in triplicate with the Commissioner. One
original shall be recorded permanently, the second filed and the third returned
to the assignee.

 

30.          Assignment Fee:  The non-refundable fee for filing an
assignment of a mineral Lease shall be set forth in the schedule of fees.

 

31.          Subleasing Prohibited:  The Lessee shall not sublease this mineral
Lease.

 

32.          Side Agreements:  Side agreements are not binding upon the
Commissioner and do not change the Lessee’s obligations under this mineral
Lease. The Lessee of record shall remain responsible for compliance with the
terms and conditions of the mineral Lease.

 

7

 

33.          Cancellation Of Mineral Lease And Opportunity To Cure:  The Commissioner may cancel any mineral Lease
for non-payment of rentals, non-payment (or underpayment) of royalties and for
violation of any of the terms, covenants or conditions of the mineral Lease.
However, before any such cancellation shall be made, the Commissioner shall
mail a thirty-day (30) notice of cancellation to the Lessee, by registered
or certified mail, at the address of the Lessee shown by the records of the
Commissioner. The thirty-day (30) notice shall specify the default for
which the Lease is subject to cancellation. If the default is not cured within
thirty (30) days after the Commissioner mails the notice, then the
Commissioner may cancel the Lease. No proof of receipt of such notice is
necessary for cancellation. The Lessee shall be liable for all reasonable
attorneys fees and costs incurred by the Commissioner in enforcing the terms of
the Lease, including fees and costs incurred in regaining possession of and
reclaiming the Property.

 

34.          Relinqiuishment Of Mineral Lease:  With the consent of the Commissioner, a
mineral Lease in good standing may be relinquished, in whole or in part, upon
approval of the Commissioner and payment of the non-refundable filing fee in
accordance with the schedule of fees. However, the Commissioner will not
approve relinquishment of an undivided interest in a Lease or less than a legal
subdivision. Relinquishment does not relieve the Lessee from its obligation to
reclaim the Property.

 

35.          Reservations:  All rights not expressly granted under this
mineral Lease are reserved to the Commissioner. Notwithstanding the issuance of
this mineral Lease, and without limitation of said reservation of rights by the
Commissioner, the Commissioner specifically reserves the right to:

 

A.            Lease the
Property for glazing, agricultural or commercial purposes;

 

B.            Lease the
Property for oil and gas, coal bed methane gas, helium and/or carbon dioxide
exploration and extraction;

 

C.            Lease the
Property for the development of geothermal resources;

 

D.            Lease the
Property for exploration, drilling, development, processing, extraction and/or
mining of minerals on, in, under and/or from the Property other than the
aforedescribed principal mineral and minerals associated therewith which are
the subject of this mineral Lease;

 

E.             Sell the
Property subject to the mineral Lease, reserving all minerals of whatsoever
kind to the New Mexico State Land Office; and

 

F.             Issue rights of
way and easements over, under, upon or across the Property for any purpose,
including but not limited to, public highways, railroads, tramways, telegraph,
telephone and power lines, pipelines, irrigation works, mining, logging and for
exploration and development of geothermal resources.

 

36.          Cultural Properties:  Any archaeological sites,
historical artifacts or other cultural resources, including but not limited to
pottery, bone, modified stone and early historic remains, on or within the
Property are the Commissioner’s property. Lessee shall immediately stop mining or exploration operations,
report the discovery of any such material to the State Land Office Field
Operations Division Director, and shall consult with the State Land Office
Field Operations Division Director to determine a course of action.

 

A.            Adequate
fencing may be required to protect and preserve any significant sites as
determined by the State Land Office Field Operations Division Director.

 

B.            Liability for
damages to cultural resources, including restoration costs, is that of the
Lessee.

 

C.            In the event
that the presence of cultural resources materially and adversely affects the
ability of the Lessee to use a portion or all of the Property, the Lessee may,
with the approval of the State Land Office Field Operations Division Director,
negotiate an effects mitigation plan for 

 

8

 

legal removal of the
cultural resources, surrender the entire legal subdivision in which the
archaeological sites or other cultural resources are located or surrender the
entire parcel.

 

D.            Unless a
class III Archaeological survey is conducted for the Property and a Letter
of Clearance obtained, the following will apply:

 

i.              An on-site
archaeologist will be required during any ground disturbing activities
conducted under an Exploration permit issued to the Lessee for the Property
under the New Mexico Mining Act.

 

ii.            A letter of
clearance for the specific site to be disturbed from the State Historical
Preservation Officer must be obtained by the Lessee under the New Mexico Mining
Act for the Property prior to any ground disturbing activities initiated under
a minimal impact mining permit.

 

37.          Indemnity.  Lessee shall save, hold harmless, indemnify
and defend the State of New Mexico, Commissioner and Commissioner’s employees,
agents and contractors, in both their official and individual capacities, from
any and all liability, claims, losses, damages, or expenses, including but not
limited to attorney’s fees, court costs, loss of land value or use, third party
claims, penalties, or removal, remedial or restoration costs arising out of, or
alleged to arise out of:

 

A.            The operations
or presence on the Property, or on adjacent or proximate state trust lands,
including those used to access the Property for the purposes of this Lease, of
Lessee or Lessee’s employees, agents, contractors or invitees;

 

B.            The activities
of third parties on the Property, or on adjacent or proximate state trust
lands, including those used to access the Property or other adjacent or
proximate state trust lands, whether with or without Lessee’s knowledge or
consent;

 

C.            Any Hazardous
Materials located in, under, upon or otherwise affecting the Property or
adjacent or proximate property, resulting from the Lessee’s operations.

 

38.          Waiver Of Reservations:  The Commissioner may, at the Commissioner’s
discretion, agree not to exercise one or more of the rights reserved above upon
payment of additional consideration determined by the Commissioner.

 

39.          Commissioner’s Statutory Right To Purchase Production:  The Commissioner has the right to purchase at
any time and from time to time, at the market price prevailing in the area on
the date of purchase, all or part of the minerals that may be produced from the
Property. (The Commissioner may waive this reservation by following the
procedure set out in Section 19-14-2 NMSA 1978.)

 

40.          Road Development:  Lessee shall comply with the requirements for
development and closure of roads set forth in 19.2.20 NMAC.

 

41.          Trespass And Prevention Of Waste:  Lessees shall protect the Property and
mineral estate from waste or trespass in accordance with Sections 19-6-1 et seq. NMSA 1978.

 

42.          Water Rights:

 

A.            Any and all
water rights developed on the Property by Lessee shall be developed in the name
of the Commissioner. Lessee, at its own expense, shall comply with all
regulations of, and obtain all necessary permits from, the New Mexico State
Engineer’s Office.

 

B.            Lessee shall
have the use of such water rights solely for Lease operations during the term
of the Lease. Upon expiration or termination of the Lease, such water rights
shall be retained by Commissioner. During the term of the Lease, Lessee shall
preserve, protect and defend such water rights.

 

9

 

43.          Venue And Applicable Law:  All legal actions regarding mineral Leases
issued under 19.2.2 NMAC shall be brought in the First Judicial District, Santa
Fe, New Mexico. New Mexico law shall govern.

 

44.          Interest On Late Payments:  Lessee shall pay interest at the rate of one
percent (1%) per month on any late payment of rents, royalties or other
payments required under the mineral Lease. If the Lessee fails to pay the entire
amount owed, then interest shall accrue on the unpaid portion. Interest shall
begin to accrue on the day the payment becomes due and continue to accrue daily
until payment is made.

 

45.          Removal Of Improvements:  Upon termination of the mineral Lease by
reason of forfeiture, surrender, expiration of term or for any other reason,
Lessee may with the Commissioner’s consent and/or approval, pursuant to Section 19-8-29
NMSA 1978, remove all improvements and equipment as can be removed without
material injury to the Property; provided, however, that all rents and
royalties have been paid and that such removal is accomplished within two (2) years
from the termination date or before such earlier date as the Commissioner may
set upon thirty (30) days written notice to the Lessee. All improvements
and equipment remaining upon the Property after the removal date as set in
accordance with this section shall be forfeited to the Commissioner without
compensation, unless such forfeiture is disclaimed by the Commissioner.
Notwithstanding the foregoing, the Commissioner may require the Lessee to
remove any and all improvements from the Property and to reclaim any surface
disturbance caused by such removal in accordance with its reclamation plan.

 

46.          Immediate Cessation Of Operations In The Event Of An
Environmental Or Health And Safety Threat: In the event that the
Commissioner, in his discretion, concludes that there exists any substantial
and imminent environmental or health and safety threat caused by, connected
with, or affecting either Lessee’s operations under this Lease or the Property,
the Commissioner may direct the immediate cessation of Lessee’s operations on
the Property, vacating the Property by Lessee’s personnel, and/or removal of
any equipment or supplies that the Commissioner believes should be removed in
order to abate or avoid the threat.

 

10

 

SIGNATURE PAGE

 

Mineral Lease HG-0059

 

Approved by the Commissioner of Public Lands
on this 3rd day of
January, 2005.

 

	
  /s/ Patrick H. Lyons

  	
   

  
	
  Patrick H. Lyons 

  	
   

  
	
  Commissioner of Public Lands

  	
   

  
	
   

  	
   

  
	
  Great Western Exploration, LLC

  	
   

  
	
   

  	
   

  
	
  /s/ Robert Valois

  	
   

  
	
  Signature of Lessee or Authorized Agent

  	
   

  

 

ACKNOWLEDGMENT IN AN INDIVIDUAL CAPACITY

 

State of Colorado

 

County of Weld

 

	
  This instrument was acknowledged before me on

  	
  12/27 2004

  	
  by

  	
  Robert Valois

  
	
   

  	
  (date)

  	
   

  	
  (name(s) of
  person(s))

  

 

	
  ARNE G.
  SANSOM

  	
  /s/ Arne G Sansom

  
	
  Notary
  Public

  	
  Signature of Notarial
  Officer

  
	
  State of
  Colorado

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (SEAL)

  	
  Printed Name

  	
  Arne G. Sansom

  
	
   

  	
   

  	
  (Notary)

  
	
   

  	
  My

  	
   

  
	
   

  	
  commission

  	
   

  
	
   

  	
  expires:

  	
  9-3-2008

  

 

11

 

ACKNOWLEDGMENT IN A REPRESENTATIVE CAPACITY

 

State of Colorado

 

County of Weld

 

	
  This instrument was acknowledged before me on

  	
  12/27/04

  	
   

  
	
   

  	
  (Date)

  	
   

  
	
   

  	
   

  	
   

  
	
  by

  	
  Robert Valois

  
	
   

  	
  (name(s) of
  person(s))

  
	
   

  	
   

  
	
  as

  	
  Officer—CEO

  
	
   

  	
  (type of authority,
  e.g., officer, trustee, etc.) of

  
	
   

  	
   

  
	
  Great Western
  Exploration, LLC

  
	
  (name of party on behalf
  of whom instrument was executed.)

  
				

 

	
  ARNE G.
  SANSOM

  	
  /s/ Arne G. Sansom

  
	
  Notary
  Public

  	
  Signature of Notarial
  Officer

  
	
  State of
  Colorado

  	
   

  
	
   

  	
   

  	
   

  
	
  (SEAL)

  	
  Printed Name

  	
  Arne G. Sansom

  
	
   

  	
   

  	
  (Notary)

  
	
   

  	
  My

  	
   

  
	
   

  	
  commission

  	
   

  
	
   

  	
  expires:

  	
  9-3-2008

  

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}]]