New Mexico Administrative Code

The financial assurance required under 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 the New Mexico Mining Act or comparable law, whichever applies. If the commissioner determines that the amount or cover…

Permanent.

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. In addition, the permitting agency must approve the form of financial assurance required for reclamation in acco…

A. The commissioner has the right to inspect all records and books of account pertaining to the operations under a mineral lease, including records and books relating to mining, production, extraction, processing, transportation, reduction, returns and reclamation. At the request…

All mineral leases made under 19.2.2 NMAC shall include and be subject to the statutory covenants to operate and develop the premises and minerals under lease in a workmanlike manner, as set forth at Section 19-8-13 NMSA 1978 and to market and develop, as set forth at Section 19-…

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 …

A. All mineral leases shall be for a primary term of three years and so long thereafter as minerals are produced or mined in paying quantities. B. Annual rent during the primary term shall be one dollar per acre, which amount shall be paid in advance each year.

A. 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 years and so long thereafter as minerals are produced or mined in payin…

A. 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 term shall be five years and so long thereafter as minerals are produced or mined in paying quantities. B. Annu…

A. 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. The quaternary term shall be five years and so long thereafter as minerals are produced or mined in paying quant…

A. In the eleventh year of the lease, the lessee shall pay, in addition to rent, ten dollars per acre as an advance royalty. B. In the twelfth year of the lease, the lessee shall pay, in addition to rent, twenty dollars per acre as an advance royalty. C. In the thirteenth year of…

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 previous years, shall be credited against the royalty otherwise payable t…

March 14, 2001, unless a later date is cited at the end of a section.

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 payi…

If 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 thre…

After notice and hearing, the commissioner shall 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;…

All lease obligations, including the obligation to pay rent and royalties, shall be suspended during the period the mineral lease is suspended. Provided, however, that the lessee shall pay the annual rental required in Section 19-8-19.1 NMSA 1978 for each year of suspension. Susp…

Within five 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…

In addition to annual rentals, the lessee shall pay royalty on production as determined by the commissioner and as specified in the notice of sale and the lease. For all minerals except special minerals, the royalty shall be no less than two percent of the gross returns less the …

The lessee shall pay the correct amount of royalty to NMSLO on the twentieth day of the month following the month of use, sale or other disposal of minerals. On the same day, the lessee shall submit to NMSLO a production and royalty statement, accounting for the production and ro…

The lessee may assign a mineral lease, in whole or in part, only if the commissioner approves the assignment. No purported assignment will bind the state of New Mexico, or change the lessee of record, unless approved in writing by the commissioner. Provided, however, that a mere …

The commissioner will approve an assignment of 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 premises is not less than a legal subdivision; C.…

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…

The objectives of 19.2.2 NMAC are to obtain revenues from production of minerals; to assure protection and maintenance of trust surface estate and minerals; to provide standard lease terms and conditions; and to provide an efficient process for mineral leasing.

The non-refundable fee for filing an assignment of a mineral lease shall be set forth in the schedule of fees.

Upon approval by the commissioner of a valid mineral lease assignment, the assignor shall stand relieved from all lease obligations to the commissioner with respect to the state trust resources embraced in the assignment. The state shall likewise be relieved from all obligations …

Production of minerals in paying quantities from anywhere on the premises, as defined by the original lease, will continue the term of the lease and all assignments thereof.

The lessee shall not sublease the mineral lease.

Notwithstanding any other provision herein, side agreements that do not constitute assignments but which define or set out the various interests of other parties in a mineral lease may be filed with the commissioner as miscellaneous instruments upon payment of the filing fee set …

To transfer an interest in a lease owned by a deceased resident of New Mexico to the decedent's heirs or devisees, proper probate proceedings must be held in accordance with the New Mexico Probate Code. Certified copies of such proceedings showing proper legal authority to transf…

To transfer an interest in a lease owned by a nonresident decedent (a person who was not a resident of New Mexico at the time of the person's death) to the decedent's heirs or devisees, the decedent's estate must be probated in the state of such decedent's residence and ancillary…

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 ma…

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 reli…

All rights not expressly granted under the mineral lease are reserved to the commissioner. Notwithstanding the issuance of a mineral lease, the commissioner specifically reserves the right to: A. lease the premises for grazing, agricultural or commercial purposes; B. lease the pr…

As used in 19.2.2 NMAC, the following terms have the meaning set forth in this section unless otherwise indicated in the text of this rule. A. "arm's-length sales price" means the sales price resulting from a good faith sale of minerals between an unaffiliated seller and buyer wh…

The commissioner may, at the commissioner's discretion, agree not to exercise one or more of the rights reserved under 19.2.2.69 NMAC upon payment of additional consideration determined by the commissioner.

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 premises. (The commissioner may waive this reservation by following the proc…

Lessees shall comply with the requirements for development and closure of roads set forth in 19.2.20 NMAC.

Lessees shall protect the premises and mineral estate from waste or trespass in accordance with Sections 19-6-1 et seq. NMSA 1978.

The lessee shall obtain and exercise water rights on the premises only as approved in writing by the commissioner, in a manner consistent with the mineral lease, the rules issued by the commissioner and New Mexico water 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.

Where two persons are both lessees under the same mineral lease, they shall be jointly and severally liable for all obligations imposed by such lease.

The delay of the commissioner in asserting any right of the state under the mineral lease shall under no circumstances constitute a waiver of such right.

Lessee shall pay interest at the rate of one percent 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 …

Upon termination of the mineral lease by reason of forfeiture, surrender, expiration of term or for any other reason, lessee may, pursuant to Section 19-8-29, remove all improvements and equipment as can be removed without material injury to the premises; provided, however, that …

A. No person shall explore for, extract or produce minerals unless authorized by a mineral lease issued under this rule. B. Notwithstanding the issuance of a mineral lease or special use permit, no person shall conduct any mining activity unless such activity is authorized under …

The commissioner may include in any mineral lease additional terms and conditions not set out in this rule, as the commissioner deems appropriate.