Prospecting leases shall require that the lessee perform the required annual prospecting work that contributes to the mineral evaluation of the premises. The lessee may make payment to the department in lieu of prospecting work for not more than three years during the term of the lease.

Mining contracts, except those issued for placer gold mining pursuant to RCW 79.01.617, shall require that the lessee perform the required annual development work that contributes to the mineral development of, and production from, the property. The lessee may make payment to the department in lieu of the performance of development work.

Prospecting work or development work actually accomplished during any one lease or contract year in excess of the lease or contract requirements may be applied toward the next succeeding year only, provided that the work is reported to the department at the end of the year in which it was performed, accompanied by a written request that the excess be applied to the next succeeding year.

All prospecting and development work reported is subject to evaluation and confirmation by the department. Work that does not directly contribute to the mineral evaluation or development of the property will not be accepted. The department shall have the right to inspect the work done and to examine all books and records pertaining to prospecting and development work reported. Prospecting and development work reports shall contain sufficient information, including adequate maps, plans, diagrams, locations, and costs to indicate the location, amount and type of work accomplished on or adjacent to the property and an explanation of how this work contributed to the mineral evaluation or development of the property.

Upon the written request of the lessee at the time the prospecting or development work report is submitted to the department, the report shall be considered confidential until a written release is obtained from the lessee or the termination, cancellation, surrender or expiration of the lease or contract.