; or (B) if the licensee failed to perform diligent prospecting activities, such failure was due to conditions beyond the control of the licensee. (c) Noncompetitive leases (1) In general Upon a showing to the satisfaction of the Secretary by a prospecting licensee under subsection (a) that a valuable mineral deposit has been discovered by the licensee within an area covered by the prospecting license and with the consent of the surface agency, the licensee shall be entitled to a lease for any or all of the land included in the prospecting license, as well as any nonmineral lands necessary for processing or milling operations, at a royalty of not less than 12.5 percent of the gross value of production of hardrock minerals or mineral concentrates or products derived from hardrock minerals under the lease. (2) Rentals (A) In general Rentals for a lease under this section shall be set by the Secretary at not less than $10 per acre per year, with rentals paid in any 1 year credited against royalties accruing for that year. (B) Operations permit A lessee under this section is not entitled to an operations permit. (3) Lease period (A) In general A lease under this subsection shall be for a period of 20 years, with the right to renew for successive periods of 10 years if hardrock minerals are being produced in commercial quantities under the lease. (B) Extension during nonproduction The Secretary may issue not more than 1 10-year extension of a lease under this subsection if hardrock minerals are not being produced in commercial quantities at the end of the primary, or any subsequent, term of such lease and— (i) it is in the interest of conservation or reclamation maintenance; (ii) the lessee shows that the lease cannot be successfully operated at a profit