Dear Friends, I have 40 AC in Ward County, I have been asked to lease to Mining Company for the Rock on the land. They are offering 5 years, with 2 year option, paying .50 a pound, and no bonus.
Chris Wilson
No bonus = No Way in my opinion.
They want to tie up rights to your land for 7 years for free, to me that is a non-starter.
If no bonus is required then 6 months to a year at most with free extension 1 year at a time as long as they are mining X product a month or something like that.
Just my opinion.
Is this a caliche lease related to your surface ownership? Do you have a written specific offer or is this based on a phone discussion? Caliche is more generally measured by cubic yard, rather than per pound, and is dug out of the surface. A price of $0.50 (50 cents) per pound is very high. Or is this for some other rock on your surface which might have another value? You might want to consult an attorney to review the details of any contract.
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