(2) Should consist of copies of timely correspondence or other evidence demonstrating the unsuccessful efforts to obtain the material or labor.

(3) Should state why the permittee's failure to perform diligent prospecting activities was due to conditions beyond his control.

(4) Must show how much additional time is necessary to complete prospecting work.

§ 3511.3-3 Approval.

Extension will be limited to such period, not to exceed the 2 years, as may be determined to be allowable under the circumstances in each particular case. § 3511.3-4 Rejection.

(a) Failure to perform. Failure of the permittee to perform prospecting or exploration work as required without adequate justification.

(b) Failure to file. If an application for extension is not filed within the specified period, the permit will expire without notice to the permittee and the lands if otherwise available shall be subject to filing of new applications for permits. § 3511.4 Terminations, expirations, and

cancellations.

§ 3511.4-1

Relinquishments.

The permittee may surrender the entire prospecting permit or any legal subdivision thereof. If the lands are not described by legal subdivisions, a partial relinquishment must describe definitely the lands surrendered and give the exact area thereof.

(a) Where filed and copies. A relinquishment must be filed in the proper land office and filed in triplicate.

(b) Acceptance. Upon its acceptance, it will be effective as of the date it is filed, subject to the continued obligation of the permittee and his surety to make payment of all accrued rentals and royalties, and to provide for the preservation of any mines or productive works or permanent improvements on the permit lands in accordance with the regulations and terms of the permit.

§ 3511.4-2 Operation of law.

(a) Expiration. If an application for extension is not filed within the specifid period, the permit will expire without notice to the permittee and the lands if otherwise available shall be subject to filing of new applications for prospecting permits.

(1) Exceptions—(i) Sodium and sulphur. Unless a lease application is filed pursuant to subpart 3520 the permit will expire at the end of its period without notice to permittee.

(ii) Solid (hardıock) minerals. Upon failure of the permittee to file an application for extension within the specified period, the permit will expire 30 days after the end of its primary term without notice to the permittee and the lands will thereupon become subject to new application for prospecting permits.

(b) Terminations and expirations for nonpayment of rental. (1) Any prospecting permit shall terminate automatically if the permittee fails to pay the rental on or before the anniversary date of the permit. However, if the time for payment falls upon any day in which the proper office to receive payment is not open, payment received on the next official working day shall be deemed to be timely.

(2) The termination of the permit for failure to pay the rental must be noted on the official records of the proper land office. Until such notation is made, the lands covered by the permit shall not be available for filing of any other permit applications. Applications for such permits filed prior to such notation will be rejected.

(3) Where lands embraced in a canceled or relinquished permit are not withdrawn from leasing, such lands shall become available for the filing of new permit applications immediately upon notation on the official status records of the cancellation or relinquishment of the permit. Even if the cancellation or relinquishment has not been noted, the lands formerly covered by the permit shall likewise become available for the filing of new applications on the date which would have marked the end of the primary or extended term of the permit except for the cancellation or relinquishment. § 3511.4-3

Default.

(a) Noncompliance with terms of permit. Except as provided for in § 3511.42(b) (1), if a permittee fails to comply with the general regulations in force at the date of the permit, or defaults with respect to any of the terms or stipulations of the permit, and such failure or default continues for 30 days after service of written notice thereof by the Government, the permit may be canceled. A waiver of any particular cause for can

cellation shall not prevent the cancellation of the permit for any other cause, or for the same cause occurring at any other time.

§ 3511.4-4 Cancellations.

(a) Coal. A permit issued pursuant to § 3524.1 may be canceled by the authorized officer, if the cancellation is in the public interest or the coal deposits in the lands covered thereby are no longer necessary for the lessee or permittee to carry on business economically or if the lessee or permittee has divested himself of all or any part of the original 46,080 acres or no longer has facilities for the exploitation of the deposits under lease. or permit. However, such lessee or permittee will be given notice of the proposed cancellation and afforded an opportunity of submitting evidence showing why the lease or permit should not be canceled.

Subpart 3520--Preference Right and Competitive Leases; General

SOURCE: The provisions of this Subpart 3520 appear at 35 F.R. 9713, June 13, 1970, unless otherwise noted.

§ 3520.0-3

Authorities.

(a) Public domain and acquired lands. The Secretary is authorized to divide into leasing units and award leases of mineral lands and mineral deposits owned by the United States as set forth in § 3500.1-1 subject to the provisions of the Mineral Leasing Act, as amended and supplemented, and the Mineral Leasing Act for Acquired Lands as set forth in § 3500.0-3. § 3520.1 General.

§ 3520.1-1 Preference right leases.

A permittee who discovers valuable mineral deposits in the land before his permit expires is entitled to a preference right lease of all or part of the lands in the permit in a reasonably compact form.

(a) Exceptions-(1) Coal. Showing is required that the land in his permit contains coal in commercial quantities.

(2) Sulphur. Showing required that valuable deposits have been discovered in the permit and that the land is chiefly valuable therefor.

(3) Solid (hardrock) minerals. A permittee who discovers any valuable deposits of minerals shall be entitled to a preference right lease for the mineral in any or all of the lands in the permit except as provided in § 3501.2-7.

(a) The Secretary is authorized to lease competitively those lands as set forth in Subpart 3501, containing valuable mineral deposits as set forth in § 3500.1. (1) No coal land or deposits may be leased until after division into suitable leasing units or tracts. Such leasing units may be established either upon application or when it is deemed advisable that additional coal units be established.

(2) All material factors, such as character and depth of the coal deposits, topography of the land, situation with respect to adjacent private holdings of coal lands, the proximity of rail or water transportation and outlet for other lands in the immediate vicinity, as well as the investment reasonably required to provide the requisite development and operating facilities, will be given consideration in the establishment of leasing units.

(3) Leasing units may include, in whole or in part, unsurveyed land. If the lands are unsurveyed, they must be described in accordance with approved protracted surveys or, in the absence of such protracted surveys, by metes and bounds.

(b) Potassium. Potash lands and deposits in or adjacent to Searls Lake, Calif., are subject only to lease by competitive bidding, except as to potash mining rights included in sodium permits and leases issued under subparts 3511 and 3520.

§ 3520.2 Terms.

§ 3520.2-1 Duration of leases.

Leases shall be issued for indeterminate periods subject to readjustment or renewal at the end of the first 20-year period upon such terms and conditions as may be incorporated in each lease or prescribed in general regulations theretofore issued by the Secretary of the Interior, including covenants relative to mining methods, waste, period of preliminary development and minimum production. (a) Exceptions-(1) Asphalt. Asphalt leases are issued for 10 years and so long thereafter as the lessee complies with the terms and conditions of the lease.

(2) Solid (hardrock) minerals. The lease will be issued for a period not exceeding 20 years the term to be determined upon the advice of the agency having jurisdiction over the surface and the U.S. Geological Survey.

(a) Preference right leases. The lease will be dated the first day of the month following the date of the decision notifying the applicant that he is entitled to a preference right lease, except that upon the applicant's request, the lease will be dated the first day of the month following the date the application is filed.

(b) Competitive leases. The lease will be dated as of the first day of the month following its issuance unless the successful bidder requests that it be dated as of the first day of the month of issuance. § 3520.2-3 Acreage limitations.

(a) Consolidation of prospecting permits into preference right leases after discovery. After discovery, prospecting permits may be consolidated into preference right leases not to exceed the allowable acreage as set forth in § 3501.1-4(b) if, after consulation with the Mining Supervisor, it is determined to be justified and the interests of the United States are protected.

(b) Consolidation of competitive leases. Competitive leases may be consolidated not to exceed the allowable acreage as set forth in § 3501.1-4(b) if, after consultation with the mining supervisor of the Geological Survey, if it is justifiable and the interests of the United States are protected.

(c) Size of competitive lease. (1) Compliance with § 3501.1-4(b) is required.

(2) Preference right leases; acquired lands. Should the issuance of the preference right lease, for the acreage applied for, increase the permittee's leased acreage beyond 10,240 acres, such preference right lease will not issue unless the permittee, within the time allowed by the signing officer, relinquishes sufficient of his leased lands to reduce the area of his leaseholds, including the area to be included in the preference right lease, to 10,240 acres except as provided for in § 3501.2-5.

§ 3520.2-4 Land description.

(a) Compliance with 3501.1-3 is required.

Subpart 3521-Designation of Lands for Lease and Offer of Lands for Lease

SOURCE: The provisions of this Subpart 3521 appear at 35 F.R, 9714, June 13, 1970, unless otherwise noted.

(a) Where and when filed; copies. An application for preference right lease shall be filed in duplicate in the proper land office not later than 30 days after the permit expires. (1) Exception—(i) Coal. An application for a preference right lease must be filed in duplicate promptly after commencement of commercial operations, but in no event later than the expiration of the period to which the permit is limited.

(b) Requirements-(1) Showing required. The application must describe the lands desired, show any change in the information contained in the application for permit, specify fully the extent and mode of occurrence of the deposits as disclosed by the prospecting work, and show that valuable deposits of the mineral covered by the permit were discovered before the permit expired.

(2) Exceptions—(i) Coal. Showing that coal was discovered in commercial quantities.

(ii) Solid (hardrock) minerals. The application must describe the lands for which the lease is desired; must contain a statement of permittee's interests, direct or indirect, in acquired lands mineral leases except leases covering oil, gas, oil shale, coal, phosphate, potassium, sodium, and sulphur; must disclose any change in the information contained in the application for the permit specify fully the extent the mode of occurrence of the mineral deposit disclosed by the prospecting, and show that a valuable deposit of minerals was discovered before the expiration of the permit.

(3) Rental to be submitted. The application must be accompanied by the first years rental at the rate of 25 cents per acre or fraction thereof.

(4) Exceptions-(i) Sulphur. The application must be accompanied by the first year's rental at the rate of 50 cents per acre or fraction thereof.

(ii) Solid (hardrock) minerals. The application must be accompanied by a payment of $1 for each acre or fraction thereof included in the application, but not less than $20. In no event shall the first year's rental on any lease be less than $20.

§ 3521.1-2 Qualifications.

(a) Compliance with subpart 3502 required.

(a) Application. (1) Forms. (i) Where filed and copies. An application for a lease must be filed in duplicate in the proper land office. No specific form is required. The application should include the information set forth in (ii) to (v) of this subparagraph.

(ii) The applicant's name and address. (iii) Statement of citizenship and qualifications.

(iv) A complete and accurate description of the lands for which the lease is desired. See § 3501.1-3.

(v) Evidence that the land is valuable for the mineral for which application is made, with a statement as to the character, extent and mode of occurrence of the deposit.

(2) Additional statements required. (i) Coal.

(ii) A statement of interests, direct or indirect, in other identified Federal coal leases, permits or applications therefor in the same State. Such total interests may not exceed 46,080 acres, except that if applicant is a railroad or corporation operating a common carrier such total interests may not exceed 10,240 acres.

(iii) A statement of the general situation of the land with respect to other mines, its topography, outlet to market, and transportation facilities and the character and extent of the coal deposits so far as known.

(3) The contemplated investment for the development and equipment of a producing mine of a stated average daily output. (i) Phosphate. To the extent such information is known to the applicant, a description of the phosphate and associated or related mineral deposits in the land based upon such actual examination as can be effected without an injury to the land or deposits (such examination shall not be deemed a trespass), giving nature and extent of the deposits; an outline in general terms of the proposed method of mining and processing the same; the proposed investment in mining operations

thereon, and processing facilities therefor.

(4) Evidence showing in sufficient detail that:

(i) The amount of phosphate lands, Federal and non-Federal, held by him, together with the lands described in the application are necessary for his proposed development plan.

(ii) He intends to explore, mine and develop the property in good faith.

(iii) His proposed operations of the property will be in accordance with good conservation practice and this additional development is needed in order to supply an existing demand which cannot otherwise be reasonably met.

(a) Compliance with subpart 3502 is required.

(b) Bureau motion. (1) Bureau of Land Management responsibility.

(2) Geological Survey responsibility. (c) Leasing units. (1) Coal. If the lands or deposits are found to constitute an acceptable leasing unit and subject to coal lease, they will be offered for such lease on the terms and conditions to be specified in the notice of sale to the qualified person who offers the highest bonus by competitive bidding as provided in the notice of sale. If it be found that the area covered by an application does not constitute an acceptable leasing unit, the area may be adjusted, by appropriate additions and eliminations, to constitute an acceptable leasing unit which may be offered for lease.

(2) Phosphate. If the authorized officer shall determine, after consultation with the Mining Supervisor of the Geological Survey that specific lands or deposits, not under an outstanding permit or application for preference right lease, which constitute an acceptable leasing unit are subject to phosphate lease, they will be offered for such lease on the terms and conditions to be specified in the notice of lease offer to the qualified person who offers the highest bonus by competitive bidding either at public auction or by sealed bids as provided in the notice of lease offer.

(3) Solid (hardrock) minerals. Any qualified person may file an application for the competitive offering of such deposits. Leasing units may not exceed, in reasonably compact form, 2,560 acres of land described in the manner required by this section. The authorized officer may prescribe a lesser area for any min

eral deposit if the Geological Survey reports that such lesser area is adequate for a logical leasing unit.

(i) Exception.

(a) Phosphate. In a notice for a phosphate lease, the detailed statement will set forth that the terms of minimum production will not be reduced or waived at the lessee's request except as provided in § 3503.3-2(b)(3), (d), (e), or upon a satisfactory showing that market conditions are such that the lessee cannot operate except at a loss § 3503.3-2(b) (3), (d), (e).

(b) Asphalt. All leases will be issued through competitive bidding only in the same manner as that provided for in subpart 3120.

(c) Publication. Notice of offer of lands or deposits for lease by competitive bidding will be by publication once a week for four consecutive weeks, or for such other period as may be deemed advisable, in a newspaper of general circulation in the county in which the lands. are situated.

(a) Contents. (1) The notice will show the time and place of sale, whether the sale will be at public auction or by sealed bids, the description of the land and the place where a detailed statement of the terms and conditions of the lease offer and the obligations of the successful bidder to pay for publication of that notice may be obtained.

(2) It will also contain a statement that sealed bids may not be modified or withdrawn unless the modification or withdrawals are received prior to the time fixed for opening of the bids.

(3) The detailed statement will set forth the terms and conditions of the sale, including the manner in which the bids may be submitted, and statements (a) that the successful bidder will be required, prior to the issuance of a lease, to pay his proportionate share of the total cost of publication of the notice of lease offer, and that the successful bidder's share shall be that proportion of the total advertising cost, that the number of parcels of land awarded to him bears to the number of parcels for which high bidders are declared.

(4) The detailed statement will also contain a warning to all bidders against violation of 18 U.S.C. 1860, which prohibits unlawful combination or intimidation of bidders.