The net severance base is fifty per cent of the difference between the gross value of production and the production costs.

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Terms Used In Arizona Laws 42-5204

  • Gross value of production: means the sum of the value of production determined for each metalliferous mineral mined by the severer. See Arizona Laws 42-5201
  • Production costs: means the costs incurred by the severer in mining and processing until the point of sale including but not limited to energy, fuel, labor, supplies, depreciation, transportation and other expenses reasonably allocable to mining or processing including but not limited to labor benefits, property taxes, lease payments for equipment used in mining or processing and support services such as maintenance, security and administration if such services are site specific. See Arizona Laws 42-5201