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5. MINERAL LEASES

9 Months Ended

Sep. 30, 2024

5.MINERAL LEASES

Through its acquisition of 2020 Utah, the Company indirectly acquired certain mineral rights under three mineral leases entitled “Utah State Mineral Lease for Bituminous-Asphaltic Sands” between the State of Utah’s School and Institutional Trust Land Administration (“SITLA”), as lessor, and 2020 Utah, as lessee, covering certain lands in the PR Spring Area largely adjacent to each other (the “SITLA Leases”). The SITLA Mineral Lease consisted of the following and is included in oil and gas properties in the Condensed Consolidated Balance Sheet.

		SITLA Mineral Lease
Cost
January 1, 2023		`$63,800`
Additions		`-`
December 31, 2023		`63,800`
Additions		`-`
September 30, 2024		`$63,800`

Accumulated Amortization
September 30, 2024 and December 31, 2023		`$-`

Carrying Amounts
September 30, 2024		`$63,800`
December 31, 2023		`$63,800`

During the nine months ending September 30, 2024 and year ending December 31, 2023, the Company did not record any amortization of the lease rights as operations have not yet commenced.

The Company (through its subsidiary) holds mineral leases (or the operating rights under leases) covering approximately 5,930.3 net acres within the State of Utah. Terms of the SITLA Leases are set forth in the table below.

Reference	Gross Acres	Net Acres	Lease Expiry Date (1)	Annual Rent (2)	Annual Advance Minimum Royalty (3)	Production Royalty Rate (4)
ML-49579	50.4	50.4	12/31/2024	`$500`	`$5,000`	`6.5%`
ML-49927	4,319.9	4,319.9	5/31/2025	`4,320`	`43,200`	`6.5%`
ML-51705	1,560.0	1,560.0	1/31/2020	`1,560`	`15,600`	`8%`

Total	5,930.3	5,930.3		`$6,380`	`$63,800`

Notes:

1.Leases may be extended past expiry date by continued payment of annual rent and annual advance minimum royalty.

2.Annual rent may be credited against production royalties payable during the year.

3.Annual advance minimum royalty may be credited against production royalties payable during the year.

4.The production royalty is payable on the market price of products produced from the leased substances, without deduction of costs for mining, overhead, labor, distribution or general and administrative activities.