Regulation 2-Variation of Rate of Royalty.

(1) The rate of royalty payable under these Regulations shall be based on the profitability of the mining operations.

(2) Such profitability shall be determined by the application of the operating ratio, being the ratio as expressed in terms of percentage which the operating margin bears to the value of the minerals won from the mining operations during the yearly period.

(3) For the purpose of determining the operating margin of any mining operation, the operational cost shall be deducted from the total value of minerals won from such mining operations.