32. Notwithstanding section 31, the rate of royalty may be altered by agreement between the Division Chief and the lessee from a rate based on a percentage of the gross revenue or of the market value to the equivalent rate per ton or per cubic yard of the mineral output at the pithead.
33. Any royalty rate based upon a weight or measure of mineral output shall be adjusted annually to conform to changes in a price index or other index that is published by Statistics Canada and is chosen by the Division Chief.
34. (1) During the term of his lease and any renewal thereof, a lessee shall forward to the Supervisor within 30 days after the expiry of each period of production a royalty payment in favour of the Receiver General in respect of that period together with a statement in duplicate showing the production and sales figures upon which the payment has been calculated.
(2) Where the Supervisor is not satisfied with the amount of a royalty payment or with a statement forwarded by a lessee pursuant to subsection (1), he may require the lessee to submit further particulars in relation to the statement and, if then required by the Supervisor, the lessee shall adjust the amount of the royalty payment.
(3) A period of production consists of the three calendar months ending on the last day of March, June, September and December or of such other period of time as the Supervisor may determine.
Notice of Production
35. Every lessee, within 10 days from the commencement of production of any mineral from his lease area, shall
(a) notify the Supervisor of the commencement of production; and
(b) submit to the Supervisor such information with respect to his mining operations and production as the Supervisor may require.
Penalty and Cancellation
36. (1) Where a lessee fails to pay rental as required by section 24 or to surrender his lease within 30 days from the date on which the rental becomes payable, he is liable to a penalty of five per cent of the amount of his rental.
(2) Notwithstanding subsection (1), where in the opinion of the Division Chief a lessee has failed in respect of his lease to comply with any provision of these Regulations, the Division Chief may forward to the lessee written notice by registered mail advising him that unless he commences to remedy the failure within 30 days from the date of the mailing of the notice and continues diligently to remedy the failure his lease may be cancelled by the Minister.
(3) Where a lessee has received a notice pursuant to subsection (2), he may, within 30 days from the date of the mailing of the notice, make written application to the Minister for a hearing to consider reasons why his lease should not be cancelled.
(4) Upon receipt of an application made pursuant to subsection (3), the Minister shall appoint a time and place for a hearing and shall notify the lessee by registered mail of the time and place of the hearing not less than 10 days before the date thereof.
(5) Where, in the opinion of the Minister, a lessee has failed to comply with the requirements of a notice mailed to him pursuant to subsection (2), or at a hearing held pursuant to this section does not show adequate reason why his lease should not be cancelled, the Minister shall cancel his lease.
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