77-3-203. Duration of lease. (1) (a) Subject to subsections (1)(b) and (1)(c), a lease must be issued for:

(i) a primary term of not less than 10 years and to be held by production for as long thereafter as nonmetallic minerals are produced in commercial quantities; or

(ii) if the lands are subject to limitations contained in grants by which the state acquired title to the lands or mineral rights to be leased, a period determined by the board to be in accordance with the limitations.

(b) If a lease issued under this part, a corresponding permit issued pursuant to Title 82, chapter 4, or a proposed evaluation under Title 75 is enjoined or ineffective due to a temporary restraining order, preliminary injunction, or other equitable relief, or if its issuance is postponed by a challenge requiring further agency review, then the primary term of the lease described in subsection (1)(a) must be commensurately extended for the period that the lease, permit, or action is enjoined or ineffective.

(c) If a lease is issued under this part and an exploration license as provided for in 82-4-332 is obtained on the leased lands, the lease must be extended commensurately with the period for which the exploration license is authorized and for which exploration is occurring on the leased lands.

(2) (a) As long as a lessee complies with the terms and conditions of a lease, the lease may not be terminated at the end of the primary term of the lease described in subsection (1)(a) if the lands are covered and described by a mining permit issued under Title 82, chapter 4, or are described in a mine-site location permit under Title 82, chapter 4.

(b) If nonproduction may result in the termination of a lease under this part, the lessee may provide notice to the board of the lessee's election to pay a nonproduction royalty to extend the primary term of the lease for a one-time, subsequent term of 5 years. The board may determine the appropriate nonproduction royalty payment to be paid by the lessee.

(3) As used in this section, the following definitions apply:

(a) "Commercial quantities" means a quantity of nonmetallic minerals that can be sold at a profit.

(b) "Covered and described" or "described" means, under a mine permit or a mine-site location permit, that the leased lands or a portion of the leased lands within or outside the boundaries of the permit area are expected to be affected or disturbed at some point during the term of the permittee's exploration activities or surface mining or underground mining operations and are identified in the permit or permit application.