In the case of lands bona fide entered as agricultural, and not withdrawn or classified as mineral at the time of entry, but not including lands claimed under any railroad grant, the entryman or patentee, or assigns, where assignment was made prior to January 1, 1918, if the entry has been patented with the mineral right reserved, shall be entitled to a preference right to a permit and to a lease, as herein provided, in case of discovery; and within an area not greater than a township such entryman and patentees, or assigns holding restricted patents may combine their holdings, not to exceed two thousand five hundred and sixty acres for the purpose of making joint application.

Leases executed under this section and embracing only lands so entered shall provide for the payment of a royalty of not less than 12 1/2 per centum as to such areas within the permit as may not be included within the discovery lease to which the permittee is entitled under section 223 of this title.