An order of consolidation entered by the secretary pursuant to this act [69-9-1 to 69-9-10 NMSA 1978] shall, as to each small tract or interest therein, within the consolidated area on which applicant does not otherwise hold the mining rights, effectuate a mining lease to applicant from the owner of such tract, or interest therein, granting applicant mining rights thereon effective as of the date of the first publication of the notice of hearing on the application for consolidation.

The terms and provisions of the leases so granted to applicant shall be stated in the order and shall correspond to those contained in the form of mining lease attached to the application, except for such changes therefrom as the secretary may in his order determine to be required in order to effectuate the intents and purposes of this act, and provided that for purposes of such leases:

A. if operations are being conducted anywhere on the consolidated area, it shall be considered that operations are being conducted on each tract within the consolidated area;

B. if ore is produced from any part of the consolidated area (ore produced, saved and removed from the consolidated area being hereinbelow called "area production"), it shall be considered as though production of ore is had from each tract within the consolidated area and there shall be allocated to each such tract, as its share of area production, that part of the area production which bears the same ratio to the whole amount of such area production as the ratio that the number of surface acres in said tract bears to the total number of surface acres in the consolidated area; and unless the secretary shall determine and make another allocation which is more equitable in the protection of the correlative rights of the interested parties; and

C. each owner in a small tract within the consolidated area whose interest is under lease granted pursuant to this act shall receive in lieu of any other royalties a royalty as the same shall be fixed by the terms of the lease.

History: 1953 Comp., § 63-32-8, enacted by Laws 1967, ch. 33, § 8; 1977, ch. 255, § 25.