<PAGE>
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                 FORM S-1

            REGISTRATION STATEMENT UNDER SECURITIES ACT OF 1933

                             U.S. ENERGY CORP.
           _____________________________________________________
          (Exact Name of registrant as specified in its charter)

                                  Wyoming                        
           _____________________________________________________
              (State or other jurisdiction of incorporation)      
         
                                   1090
          _______________________________________________________
         (Primary Standard Industrial Classification Code Number)

                                83-0205516
                    ___________________________________
                   (I.R.S. Employer Identification No.)

                   877 North 8th West, Riverton, Wyoming
                             Tel. 307/856-9271
                 ________________________________________
                  (Address and telephone of registrant's 
                       principal executive offices)

                             Daniel P. Svilar
       ____________________________________________________________
       (Name, address and telephone of agent for service of
process)

Approximate date of commencement of proposed sale to public: As
soon as practicable after this registration statement is declared
effective.

If the securities being registered on this Form are being offered
in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [ ]

                      Calculation of Registration Fee

                              Proposed      Proposed
Title of each                  maximum       maximum     Amount
class of          Amount      offering      aggregate      of
securities to      to be        price       offering     regis.
be registered   registered    per share       price       fee  

Common,         150,000(1)    $6.63(2)     $994,500(2)  $345.00  
$.01 par        shares

 Totals         150,000                    $994,500     $345.00
                shares
_____________________ 
(1) Shares registered are held by The Brunton Company, a
wholly-owned
subsidiary of the registrant.     
(2) Based on last sale price on NASDAQ/NMS for registrant's shares
on
April 11, 1995.

<PAGE>
                    Cross Reference Sheet
                     under Rule 501(a)e

           Information Required in the Prospectus
                              
Item 1. Forepart of Registration        Facing page, front
Statement and Outside Front Cover       cover of Prospectus
of Prospectus

Item 2. Inside Front and Outside        Inside front and
Back Cover Pages of Prospectus          outside back
                                        Prosp. cover pages

Item 3. Summary Information,            Summary Information;
Risk Factors, and Ratio of              Risk Factors
Earnings to Fixed Charges

Item 4. Use of Proceeds                 Selling Security
                                        Holders

Item 5. Determination of                Not applicable.
Offering Price                          

Item 6. Dilution                        Not applicable.

Item 7. Selling Security Holders        Selling Security
                                        Holders

Item 8. Plan of Distribution            Not applicable.

Item 9. Description of                  Description of
Securities to be Registered             Securities.

Item 10. Interests of Named             Not applicable
Experts and Counsel

Item 11. Information With               Business
Respect to the Registrant

Item 12. Disclosure of                  Not applicable.
Commission Position on 
Indemnification for 
Securities Act Liabilities

<PAGE>
                        U.S. ENERGY CORP.

                      150,000 COMMON SHARES
           __________________________________________


The Common Shares are offered for sale by The Brunton Company, a
Wyoming corporation ("Brunton"), a wholly-owned subsidiary of U.S.
Energy Corp. ("USE").  Common Shares of USE are traded on the
NASDAQ/NMS quotation system.  At April 11, 1995, the closing bid
price was $6.63 per share.  See "Market for USE Common shares and
Related Stockholder Matters."   
           __________________________________________  

These are Speculative Securities.  Such Securities Involve a High 
              Degree of Risk.  See "Risk Factors."
           __________________________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE 
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION, OR ANY
STATE SECURITIES COMMISSION, PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
          _____________________________________________

          The date of this Prospectus is April  , 1995




No one is authorized to give any information, or make any
representation on behalf of USE if not contained in this
Prospectus.  This Prospectus does not constitute an offer to sell,
or a solicitation of an offer to purchase, the securities offered
hereby, by any person in any jurisdiction in which such an offer or
solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so, or to any person
to whom it is unlawful to make such an offer, or solicitation of an
offer.

Neither delivery of this Prospectus nor any sale of the securities
being offered hereby, shall create an implication that there has
been no change in the information set forth herein since date of
this Prospectus.
           ___________________________________________

<PAGE>
                      Available Information

USE is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other statements and
information with the Commission.  The reports and other documents
so filed can be inspected and copied at the Commission's public
reference room located at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's public reference
facilities at Commission regional offices located at: 7 World Trade
Center, 13th Floor, New York, New York 10048; and Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661.  Copies of such documents can be obtained at
prescribed rates by writing to the Securities and Exchange
Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549.

This Prospectus does not contain all of the information set forth
in the Registration Statement covering the USE Shares offered
hereby, certain portions of which have been omitted pursuant to
Commission rules and regulations.  Statements herein concerning any
such other information are not necessarily complete.  In each
instance where reference is made herein to such other information,
reference is made to the copies of such documents filed as exhibits
to the Registration Statement.  Each such statement is qualified in
its entirety by such reference.  

                    Incorporation of Certain
                     Documents by Reference

This Prospectus incorporates by reference documents not presented
herein or delivered herewith.  Documents relating to USE are
available without charge upon request to the Secretary, U.S. Energy
Corp., 877 North 8th West, Riverton, Wyoming 82501.  Telephone
requests may be directed to Sharon Miller at (307) 856-9271.

The following documents filed with the Commission by USE
(Commission File No. 0-6814) are incorporated herein by reference:
(a) USE Annual Report on Form 10-K for fiscal year ended May 31,
1994; (b) USE Quarterly Reports on Form 10-Q for quarters ended
August 31, 1994, November 30, 1994, and February 28, 1995; (c)  USE
Proxy Statement for Annual Meeting on December 9, 1994. 

All documents filed by USE under Section 13(a) or Section 14 of the
Exchange Act subsequent to date of this Prospectus shall be deemed
to be incorporated herein by reference and to be a part hereof from
the date of such filing.  Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by
reference, shall be deemed to be modified or superseded for
purposes hereof to the extent that a statement contained herein or
in any other subsequently filed document which also is, or is
deemed to be, incorporated herein by reference modifies or
supersedes such statement.  Any such statement so modified or
superseded shall not be deemed to constitute a part hereof, except
as so modified or superseded.

<PAGE>
                     Summary of the Offering

The following summary is not intended to be complete and is
qualified in all respects by the more detailed information included
in this Prospectus.  

                           The Company

USE is in the general minerals business of acquiring, developing,
exploiting and/or selling mineral properties.  USE is now engaged
in two principal mineral sectors: uranium and gold.  Interests are
held in other mineral properties (principally molybdenum), but are
either nonoperating interests or undeveloped claims.  Other USE
business segments are commercial operations (professional and
recreational products manufacture and sales, real estate, and
general aviation), and construction operations.  Most USE
operations are conducted through a joint venture with Crested Corp.
("Crested", a majority-owned subsidiary), and various joint
subsidiaries of USE and Crested.

USE was incorporated in Wyoming in 1966.  All operations are in the
United States.  Principal executive offices are located at 877
North 8th Street West, Riverton, Wyoming 82501, telephone (307)
856-9271.

                          Risk Factors

An investment in the Common Shares of USE involves substantial
risks.  See "Risk Factors."

                          The Offering

Securities Offered (1). . . . . . .150,000 Common Shares.  
                                   See "Description of Securities."
Common Shares Outstanding
  Before and After Offering . . . .5,247,993 Shares

NASDAQ/NMS Symbol                  "USEG
_______________
(1)  All Common Shares offered are owned by and are being sold for
the account of Brunton.

                    Selling Security Holders

This Prospectus relates to the registration by USE of 150,000
common shares owned by The Brunton Company, for sale by Brunton
into the public market from time to time.  Brunton has had several
material transactions with USE within the last three fiscal years
(see "Certain Relationships and Related Transactions"), including
the loan by Brunton of $300,000 to USE in August, 1993,
subsequently converted by terms of the loan (in October, 1993) to
restricted USE common shares (such converted shares are included in
the shares offered by this Prospectus).

<PAGE>
Brunton presently owns 211,205 USE common shares (4,538 shares
acquired prior to fiscal 1992, 50,000 shares purchased in fiscal
1993, 100,000 shares acquired by loan conversion in fiscal 1994,
and 56,667 shares purchased in the December 1994 private placement-
- -see the discussion of liquidity and capital resources for the nine
months ended February 28, 1995 under "Management's Discussion and
Analysis of Financial Condition and Results of Operations").  If
all 150,000 shares offered hereby are sold, Brunton will own 61,205
USE common shares (1.2 percent of the total outstanding shares),
not including an additional 150,000 shares underlying options
exercisable through April 30, 1998 (none exercised to Prospectus
date).  See "Certain Relationships and Related Transactions."

Brunton anticipates using proceeds from sale of the USE common
shares offered by this Prospectus for general working capital
requirements, however, a portion of the proceeds may be loaned to
USE.

<TABLE>
                 USE  -  Selected Financial Data
<CAPTION>
                                               May 31,
                   _______________________________________________________________

                       1994         1993        1992         1991         1990
                   ___________  ___________  ___________   __________  ___________

<S>                <C>          <C>          <C>           <C>         <C>
Current assets     $ 3,866,600  $ 1,650,300  $ 3,260,500   $7,302,300  $ 5,481,000
Current
  liabilities        1,291,700    1,592,100      681,900      816,000      634,400
Working capital      2,574,900       58,200    2,578,600    6,486,300    4,846,600
Total assets        33,090,300   24,037,200   24,583,000   20,500,100   13,151,200
Long-term 
  obligations(1)    16,612,500    2,900,000    4,540,400    3,244,100    4,036,100
Shareholders
  equity            12,559,100   15,063,200   14,982,900   15,045,500    8,087,800
<FN>
<FN1>
(1)Includes $3,951,800, $1,695,600, $1,695,600, $725,900 and $725,900 of accrued
reclamation costs on uranium property at May 31, 1994, 1993, 1992, 1991 and 1990,
respectively.  See Note K of Notes to the audited Consolidated Financial
Statements.
</FN>
</TABLE>
                                        February 28,
                                        ____________
                                        (unaudited)
                                    1995            1994
                               ____________     ____________
Current assets                 $  3,496,200     $  3,866,600
Current liabilities               3,092,900        1,291,700
Working capital                     404,000        2,574,900
Total assets                     33,379,000       34,496,800
Long-term obligations (2)        15,946,200       16,612,000
Shareholders' equity             12,071,400       12,599,100

(2)  See Notes 5 and 6 to the unaudited Consolidated Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
                                        May 31,
                  ________________________________________________________________

                     1994          1993        1992          1991          1990
                  ________________________________________________________________

<S>               <C>          <C>          <C>          <C>          <C>
Revenues          $ 8,776,300  $ 9,045,500  $ 6,353,600  $ 9,569,100  $ 6,552,300
Income (loss) 
  before equity 
  in income
  (loss) of 
  affiliates,
  provision for
  income taxes 
  and extraor-
  dinary item      (3,587,900)    (103,100)     819,200     6,082,900   4,601,600

Equity in
  income (loss)
  of affiliates      (390,700)    (444,700)    (324,900)      (96,100)   (417,800)

Net income (loss)  (3,370,800)    (221,900)     613,200     1,164,900   3,743,200

Income per share
  before extra-
  ordinary item        $ (.70)      $ (.05)      $  .09        $  .90      $  .80
Extraordinary 
  item                    --           --           .06           .62         .21
                       ______       ______       ______        ______      ______
Income (loss)
  before cumu-
  lative effect
  of accounting
  change                 (.70)        (.05)         .15          1.55        1.01
Cumulative effect
  at June 1, 1993
  of income 
  tax accounting
  change                 (.06)         --           --            --          --
                       ______       _______      ______        ______      ______
Net income (loss)
  per share(1)        $  (.76)      $  (.05)     $  .15        $ 1.55      $ 1.01
                       ______       _______      ______        ______      ______
                       ______       _______      ______        ______      ______

Cash dividends
  per share             -0-           -0-          -0-           -0-         -0-

<FN>
<FN1>
(1)Per share amounts for years prior to fiscal 1991 have been
retroactively adjusted to reflect the 10% stock dividend declared
and paid to record shareholders as of November 1, 1990.
</FN>
</TABLE>

<PAGE>
                                       February 28,
                                       ____________
                                       (unaudited)
                                     1995           1994
                                _____________     ____________

Revenues                        $  6,394,300      $  6,587,200
Loss before
  equity in 
  loss of affiliates,
  provision for       
  income taxes and
  cumulative effect               (1,429,300)       (2,058,500)
Equity in income
  (loss) of
  affiliates                        (304,900)         (266,700)
Net income (loss)                 (1,315,800)       (2,019,300)
Income (loss) per share 
  before cumulative effect      $       (.27)     $       (.40)
Cumulative effect                      --                 (.06)
                                ____________      ____________
Net loss
  per share                     $       (.27)     $       (.46)
                                ____________      ____________
                                ____________      ____________

Cash dividends per share            -0-                -0-      

____________   

<PAGE>
               Certain Considerations Relating to 
                      an Investment in USE

Prospective investors should note that the business of USE is
subject to certain risks, including the following:

Concerning Litigation. Because of USE and Crested litigation
against their partner in the Sheep Mountain Partners partnership
("SMP"), USE and Crested have been required to fund all standby
mine maintenance and related costs of the SMP partnership since the
spring of 1991.  Recovery by USE and Crested of their funds
advanced to the SMP partnership will depend on the outcome of the
litigation, which is presently uncertain.  See "Business-Uranium",
"Legal Proceedings", and the audited USE Consolidated Financial
Statements.

Sutter Gold Venture Investment. As of February 28, 1995, USE and
Crested have invested more than $12,100,000 to acquire, permit and
develop a gold property in California, held through subsidiary
Sutter Gold Company.  The amount of this investment represents a
significant portion of USE's consolidated assets.  However, there
is no assurance current efforts will be successful in financing the
mill construction and mine development costs needed to put the
property into production.  See "Information About USE-Gold-Lincoln
Mine."

Mineral Industry Risks. Generally, the business of USE is subject
to the risks of the minerals industry, including unanticipated
delay and expense in putting properties into production, commodity
price fluctuations, and variable environmental compliance costs. 
In addition, recent legislation has increased unpatented federal
mining claim holding costs.  Other legislation may be proposed
which, if enacted, would impose percentage royalties on production
from such lands.  Any increase in federal land property costs would
adversely affect operations on federal lands, however, the extent
of such impact cannot be presently assessed.  See "Business-Certain
Permits, Costs."  Operations on patented lands would not be
affected (the Lincoln Mine in Amador County, California, for
example).   

Reclamation Costs. USE is a joint venturer in GMMV and a partner of
SMP, which two entities are responsible for mine reclamation,
environmental restoration and decommissioning associated with
mineral properties and the Sweetwater Mill on Green Mountain, in
south central Wyoming.  Future costs to comply with these
obligations are now estimated at approximately $25,000,000.  If
actual costs are higher, USE could be adversely impacted.  There is
no assurance the properties will generate sufficient revenues to
fund reclamation, restoration and decommissioning costs in excess
of current estimates.  See Note K to the audited USE Consolidated
Financial Statements, and the notes to the unaudited USE
Consolidated Financial Statements, for further information. 
Current bonds and funds in escrow are deemed adequate for
reclamation and decommissioning liabilities associated with the
Shootaring Mill in Utah. 

Seasonality.  The mining and petroleum exploration and development
businesses may be considered seasonal to the extent properties are
located in areas where climate prevents access or reduces
activities during certain times of the year.  Exploration of mining
claims located in the Colorado Mineral Belt, and in certain areas
of Wyoming and Montana, is generally limited to the summer months
by rugged terrain and snowpack.  USE and affiliates have generally
had year-round access to the Ft. Peck, Montana oil wells.  The gold
properties near Sutter Creek, California are accessible year round,
as are the Plateau operations in Utah and the GMMV properties and
Sweetwater Mill in Wyoming.  Portions of USE commercial operations
are also seasonally affected, with aviation fuel sales at the fixed
base operation higher in summer months.
     
Uranium Contract Margins Uncertain. USE is not in arrears with
respect to uranium delivery obligations, except as may result from
the Illinois Power Company (see "Business-USE Legal Proceedings"). 
As of February 28, 1995, SMP had firm orders for an estimated
$29,573,000 of future uranium deliveries; USE and subsidiaries have
no other firm orders for future deliveries.  USE estimates one
percent of the SMP obligations will have been filled during the
last quarter of fiscal 1995.  The foregoing estimate of firm orders
was prepared assuming the $10.40 per pound price of U3O8 at February
28, 1995 would remain in effect for the duration of market-price
related supply contracts.  Approximate floor price in effect at
that date was used to estimate future delivery obligations under
base-price escalated contracts.  However, prices and quantities of
U3O8 required by utilities may vary substantially, as may the cost
to USE and subsidiaries to obtain inventory to supply the
contracts.  Profits on such future deliveries cannot be predicted.

Competition.  USE's business is highly competitive in the
exploration for and production of minerals and oil and gas, as well
as in its commercial and construction operations.  USE's
competitors include major mining and oil and gas companies, many of
which are larger than USE in all respects.  Competitive conditions
vary depending upon the mineral.  The location and composition of
mineral ore bodies are of great importance to the competitive
position of a mining company, as are the milling methods that must
be used to extract mineral from the ore.  Producers of high-grade
ore bearing readily extractable minerals are in advantageous
position.  Producers of one mineral may be able to efficiently
recover other minerals as by-products, with significant competitive
impact on primary producers.  Substantial capital costs for
equipment and mine-works are often needed.  Competitors that have
developed a property generally have incurred substantial fixed
costs which must precede mining undeveloped properties.  As a
result, owners of producing (or previously producing) properties
generally enjoy substantial competitive advantages over
organizations that propose to develop non-producing properties.  

In its other business segments, USE affiliate FNG encounters strong
competition with a number of larger civil engineering construction
firms in the western United States, and Brunton competes with
domestic and foreign sporting and professional equipment
manufacturers.  

Uranium Prices and Competition.  Uranium market prices in the
United States have declined from as high as $17.00 per pound in
1988 to less than $8.00 per pound in 1992, and recovered somewhat
to about $11.00 per pound in March 1995.  Further sustained price
increases in the spot market (to $14.00 per pound) are believed to
be required to create the need for United States utilities to seek
long term price stabilizing uranium supply contracts, however,
upward price movement cannot be assured.  USE would be adversely
affected if the United States nuclear utilities do not seek long
term uranium supply contracts in the 1990s.  See  "Business-Certain
Market Information."  Although the extent of such adverse impact
cannot be predicted, if uranium prices remained so depressed
through the 1990s that USE's properties and facilities were not put
into operation, the book value of such assets might decrease.   

USE believes that if and when market prices improve, it will be
able to compete with other uranium producers, primarily because it
holds significant uranium resource in place, along with the
facilities necessary to mine and mill the ore into uranium oxide,
which assets were acquired for much less than prior owners
reportedly had spent.  Applications have been submitted to upgrade
the mill facilities' licenses to operating levels, however, delays
in final permitting may be encountered, as the uranium refining
industry is tightly regulated by the NRC.  

Nonetheless, USE expects strong competition from low cost producers
in Canada, Australia and Africa (where uranium is a byproduct of
other mineral recovery processes), and from imports to the United
States of highly enriched uranium from the Commonwealth of
Independent States (formerly the Soviet Union).  See "Business-
Certain Market Information."  

Variable Revenues, Recent Losses, and Declining Working Capital. 
Due to the nature of USE business, there are from time to time
major increases in gross revenues from sale of mineral properties. 
During fiscal 1991, $7,193,600 was recognized from sale of a
partial interest in a uranium property to Kennecott Uranium Company
(a GMMV partner).  No such revenues were recognized in fiscal 1992,
1993 or 1994.  Further, USE realized net losses of $221,900 and
$3,370,800 in fiscal 1993 and 1994, respectively, and a $1,315,800
net loss for the nine months ended February 28, 1995.  To a
significant extent, these results reflect the variability of income
from mineral sales, however, USE is not totally dependent on
mineral sale revenues from year to year.  See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," for discussion of such items for the last three fiscal
years.  

Continued operating losses without offsetting replacements of
working capital will adversely affect USE.  See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" for information on future working capital requirements
and capital resources.

Potential Issuance of Preferred Stock. Under the USE Articles of
Incorporation and as permitted by the Wyoming Business Corporation
Act ("WBCA"), the USE board of directors has authority to create
series of preferred stock and to issue shares thereof, without the
approval of any USE shareholders.  The creation and issue of USE
preferred stock with dividend rights senior to the USE common
shares could adversely affect common stockholder participation in
future earnings through dividends that otherwise would be available
for distribution to common stockholders.  

Such preferred stock also could inhibit a takeover of USE.  Under
the WBCA, separate voting approval by classes of stock is required
for certain substantive corporate transactions.  If the interests
of preferred stockholders is perceived to be different from those
of the common stockholders, the preferred stockholders could
withhold approval of the transactions needed to effect the
takeover.   See "Description of Securities."

Potential Anti-Takeover Effects of Staggered Board.  The USE board
of directors is presently divided into three classes of two
directors each.  Pursuant to the USE Articles of Incorporation and
as permitted by the WBCA, the directors in each class serve a three
year term, and only those directors in one class are reelected each
year.  This board classification could stall a takeover of USE,
even if a majority of the common stock were to be held by persons
desiring a change in control of the board.  See "Description of
Securities."

                            Business

USE is principally engaged in the general minerals business.  This
segment involves the acquisition, exploration, sale and/or
development of mining properties, with primary interests in
uranium, gold and molybdenum properties in the western United
States.  USE also holds oil and gas interests in Montana and
Wyoming.

The other two business segments of USE are commercial operations
and construction operations.  See Footnote I to the audited
Consolidated Financial Statements.

A substantial portion of USE business, particularly property
acquisition and exploration, is conducted with its majority-owned
subsidiary, Crested Corp. ("Crested"), through a joint venture
("USECC") owned equally by USE and Crested, and through various
joint subsidiaries.

Minerals

Uranium

USE has acquired interests in several uranium properties in Wyoming
and Utah, including  uranium processing mills in Sweetwater County,
Wyoming ("Sweetwater Mill") and southeastern Utah ("Shootaring
Mill"), in anticipation of renewed demand for long term uranium
concentrate supply contracts by public utilities in the United
States which operate nuclear powered electrical generation
facilities.

All the uranium properties are located in areas which have produced
significant amounts of uranium in the 1970s and 1980s.   

The properties are:    

Unpatented lode mining claims on Green Mountain (Fremont County,
Wyoming) on which the (Round Park uranium deposit) is located, and
the Sweetwater Mill, (23 miles south of Green Mountain).  These
assets are held by the joint venture Green Mountain Mining Venture
("GMMV"), owned 50 percent by USE and USECC, and 50 percent by
Kennecott Uranium Company ("Kennecott"), a subsidiary of Kennecott
Corporation.  See "Green Mountain-Concerning Kennecott", below. 
All claims are accessible by county and United States Bureau of
Land Management ("BLM") access roads.  The proposed Jackpot Mine
into the Round Park deposit has had no previous operators, and
would be a new mine when opened.  The Big Eagle Mine and related
claim groups (which are part of the claims held by GMMV), are
accessible by county and private roads; the Big Eagle Mine was
first operated by Pathfinder Mines starting in the late 1970s.   

The Tony M and Frank M Mines (unpatented lode mining claims) in San
Juan County, Utah, accessible by county roads.  The mines
(originally developed by Plateau Resources Limited when owned by
Consumers Power Company, a Michigan public utility which also built
the nearby Shootaring Canyon Mill to process uranium ore out of
these mines), the Shootaring Canyon Mill, uranium mineralized
material stockpiled at the mill, and related mill support
facilities, are held by Plateau Resources Limited, a wholly-owned
USE subsidiary.

Unpatented lode mining claims, underground and open pit uranium
mines and mining equipment in the Crooks Gap area located on Sheep
Mountain, Fremont County, Wyoming (these claims are adjacent to and
west of the Big Eagle mining claims held by GMMV).  These assets
are held by the Sheep Mountain Partners partnership ("SMP"), the
partners of which are USE and Crested, doing business as the USECC
Joint Venture, and Nukem, Inc. ("NUKEM") through its wholly-owned
subsidiary Cycle Resource Investment Corporation ("CRIC").  The
Sheep Mountain Mines 1 and 2, accessible by county and private
roads, were first operated by Western Nuclear, Inc. in the late
1970s.

The above properties contain uranium mineralization in sandstones
of Tertiary age, as is typical of most Wyoming uranium deposits. 
Electric power to all the above Wyoming properties is furnished by
either Pacific Power & Light or Hot Springs Rural Electric
Association.
          
There is no assurance of renewed market demand by the domestic
nuclear utilities for uranium concentrates, which would result in
price increases for concentrates, sufficient to warrant
commencement of mining and milling operations.

Green Mountain

GMMV.  In fiscal 1990, USE and Crested sold 50 percent of their
interests in unpatented lode mining claims on Green Mountain
(hereafter, "Green Mountain Claims), and certain other rights, to
Kennecott for $15,000,000 cash (USE's share was $12,600,000, and
the balance was Crested's).  In fiscal 1991, USE and USECC ("USE
Parties") and Kennecott formed the Green Mountain Mining Venture
("GMMV") to develop, mine and mill uranium ore from the Green
Mountain Claims, and market uranium oxide concentrates to nuclear
powered utilities.  

Kennecott agreed to fund the first $50,000,000 of GMMV
expenditures, pursuant to Management Committee budgets. 
Thereafter, GMMV expenses will be shared by the parties generally
in accordance with their participating interests (50 percent
Kennecott, 50 percent USE Parties).  However, in addition to the
initial $50,000,000 of expenditures, Kennecott will pay a
disproportionate share (up to an additional $45,000,000) of GMMV
operating expenses, but only out of cash operating margins from
sales of processed uranium at more than $24.00/lb (for $30,000,000
of such operating expenses), and from sales of processed uranium at
more than $27.00/lb (for $15,000,000 of such operating expenses). 

Pursuant to the joint venture agreement, each party's participation
interest in the GMMV is subject to reduction for voluntary or
involuntary failure to pay its share of expenses as required in
approved budgets, so that in effect the interest held by each party
collateralizes its performance.  These provisions apply equally to
Kennecott's commitment to fund the initial $50,000,000 of GMMV
expenditures, so that if and to the extent Kennecott did not fund
Management Committee approved budgets, its interest in the venture
would be reduced proportionately.  However, a defaulting party
would remain liable for third party liabilities incurred during
GMMV operations, proportionate to its interest before reduction.

GMMV cash flows will be shared between Kennecott and the USE
Parties, according to their participation interests.  However, 105
of the Green Mountain Claims cover the Round Park uranium deposit,
currently believed to be the most significant mineralized resource
on Green Mountain; these 105 claims had been formerly owned solely
by USE.  Pursuant to agreement between USE and Crested, cash flow
from production out these 105 Green Mountain Claims will be
distributed only to USE and Kennecott, and GMMV expenditures from
such properties will be shared 50 percent by USE and 50 percent by
Kennecott.  

The USE Parties' share of GMMV cash flow resulting from the balance
of the properties (outside the 105 claims) previously owned by USE
and Crested together, will be shared equally by USE and Crested;
GMMV expenditures from such properties will be shared 25 percent
each by USE and Crested, and 50 percent by Kennecott.  Such latter
properties are expected to be developed after the Round Park
deposit is developed and placed into production.

The GMMV Management Committee has three Kennecott representatives
and two USECC representatives, acts by majority vote, and appoints
and supervises the project manager.  The USE Parties acted as
project manager during fiscal 1991 and 1992; in fiscal 1993,
Kennecott succeeded as project manager, by consent.  

While acting as project manager, the USE Parties received fees in
fiscal 1991, 1992 and part of 1993 for overhead costs and general
and administrative fees, based on a percentage of expenditures on
the project.  Since mid-fiscal 1993, USECC has continued work on a
contract basis at Kennecott's request.

Pre-development activities on the GMMV properties have included
environmental and mining equipment studies, mine permitting and
planning work, property maintenance, setting up a uranium marketing
program, and acquisition and monitoring of the Sweetwater Mill. 
For fiscal 1996, GMMV plans to build a sediment dam, sediment
basin, drainage diversion ditch, fuel storage facility and other
support facilities and improvements to existing facilities.

Properties and Mine Plan.  GMMV owns 443 Green Mountain Claims,
including the 105 claims on which the Round Park uranium deposit is
located.  Surface rights are owned by the United States Government
under management by the BLM.  In addition, other uranium
mineralization has been delineated in the Phase 2 and Whiskey Peak
deposits on these properties, which formerly belonged to USE and
Crested.  These deposits are undeveloped.  

Drilling and exploration work has been conducted on the Round Park
deposit, and USECC has constructed two portals for the Jackpot Mine
declines (see below).  Roads and utilities have been put in place,
which are satisfactory to support future mine development.  

GMMV also owns the Big Eagle Properties on Green Mountain, which
contain substantial uranium mineralization, and are adjacent to the
other GMMV mining claims.  The Big Eagle Properties contain one
underground and two open-pit mines, as well as related roads,
utilities, buildings, structures, equipment and a stockpile of ore.

The assets include 38,000 and 8,000 square foot buildings formerly
used by Pathfinder Mines Corporation ("PMC") in mining operations. 
Also included are three ore-hauling vehicles, each having a 100-ton
capacity.  Permits transferred to GMMV for the properties include:
a permit to mine, an air quality permit, and water discharge and
water quality permits.  GMMV owns the surface rights and the
mineral rights to the underlying unpatented lode mining claims. 

The Round Park mining claims contain a deposit of uranium which has
been estimated by USECC personnel to contain 52 million pounds of
U3O8 averaging .23% uranium oxide using a grade-thickness cut-off
of .6 (i.e., deposit areas were excluded unless deposit bed
thickness at intercept, times intercept grade of uranium
mineralization, exceeded .6).  GMMV plans to produce this deposit
from the Jackpot Mine, which will be driven underground from the
south side of Green Mountain when the market for uranium oxide
concentrates improves.  The first of several mineralization
horizons is about 2,300 feet down from the top of Green Mountain.<PAGE>
<PAGE>
The mine plan provides for two declines to be driven from the side
of Green Mountain, extending about 10,400 feet into the deposit;
one decline will be used for ventilation and transportation of
personnel, and the other will convey ore, rock and waste out of the
mine.

USE anticipates mine development costs will not exceed $25,000,000
to begin production from the Round Park deposit.  However, cost
estimates may change as exploration and initial development
progress.  Kennecott has agreed to fund the initial $50,000,000 in
development costs including reclamation costs.  Additional costs
would be funded by operations and/or by cash assessments on the
venturers.
     
Sweetwater Mill.  On June 23, 1992, GMMV acquired the Sweetwater
uranium processing mill and associated properties located in
Sweetwater County, Wyoming, 23 miles south of the proposed Jackpot
Mine, from Union Oil Company of California ("UNOCAL"), primarily in
consideration of Kennecott and GMMV assuming environmental
liabilities, and decommissioning and reclamation obligations.

Kennecott is manager of the Sweetwater Mill, and as such will be
compensated by GMMV out of production.  Payments for pre-operating
management will be based on a sliding scale percentage of Mill cash
operating costs prior to Mill operation, and payments for operating
management will be based on 13 percent of mill cash operating costs
when processing ore.  Cash operating costs are defined as all costs
for labor (supervisory, operating, maintenance and laboratory),
reagents, utilities, materials and supplies (fuels, grinding balls
and other mill equipment, etc.), road and access maintenance,
environmental and regulatory costs (including permitting and
remediation costs), concentrate shipping costs, vehicle and
equipment operating costs, insurance, and employee health and
benefit costs.

Kennecott, as mill operator, has initiated discussions and
appropriate filings with the Nuclear Regulatory Commission ("NRC")
regarding amendments to the Source Material License to resume ore
processing at the Sweetwater Mill.  Separately, Kennecott has
applied to the NRC for permission to use a mill tailings cell to
hold low level tailings waste from an ion exchange plant owned by
USE and Crested in the Crooks Gap area. 

The Sweetwater Mill includes buildings, milling and related
equipment, real estate improvements, mining and mill site claims
and other real property interests, personal property and intangible
property (including government permits relating to operation of
those properties).  The major assets are the mill buildings and
equipment located on approximately 92 acres.

The mill was designed as a 3,000 ton per day ("tpd") facility. 
UNOCAL's subsidiary Minerals Exploration Company reportedly at
times processed in excess of 4,200 tpd.  USE believes the mill
adequate for processing projected rates of ore production out of
the Green Mountain Claims.  The mill is one of the newest uranium
milling facilities in the United States, and has been maintained in
good condition. 

As consideration for the Sweetwater Mill, GMMV agreed to indemnify
UNOCAL against certain reclamation and environmental liabilities,
which indemnification obligations are guaranteed by Kennecott
Corporation (parent of Kennecott Uranium Company).  GMMV has agreed
to be responsible for compliance with mill decommissioning and land
reclamation laws, for which the environmental and reclamation
bonding requirements are approximately $23,600,000.  

None of the GMMV future reclamation and closure costs are reflected
in the USE Consolidated Financial Statements (see Note K to USE
Consolidated Financial Statements).  UNOCAL has also agreed that if
GMMV incurs expenditures for environmental liabilities prior to the
earlier of commercial production by GMMV or February 1, 2001,
(which liabilities are not due solely to the operations of GMMV),
then UNOCAL will reimburse GMMV the first $8,000,000 of such
expenditures.  Any such reimbursement may be recovered by UNOCAL
from 20% of future cash flows from sale of uranium concentrates
processed through the mill.  In any event, until such time as
environmental and reclamation undertakings are liquidated against
the bonds, such costs are not deemed expenditures under Kennecott's
$50,000,000 development commitment (but bond costs may be charged
against such commitment).

The reclamation and environmental liabilities assumed by GMMV
concern two categories: (1) cleanup of the inactive open pit mine
site near the mill (the source of ore feedstock for the mill when
operating under UNOCAL), including water (heavy metals and other
contaminants) and tailings (heavy metals dust and other
contaminants requiring abatement and erosion control) associated
with the pit; and (2) decontamination and cleanup and disposal of
the mill building, equipment and tailings cells after mill
decommissioning.  Current liabilities for such efforts have been
established at approximately $17,028,000 by the Wyoming Department
of Environmental Quality ("WDEQ") for mine pit site matters
(exercising EPA-delegated jurisdiction to administer the Clean
Water Act and the Clean Air Act, and directly administering Wyoming
statutes on mined land reclamation), and by the NRC for tailings
cells and mill decontamination and cleanup.  The EPA has continuing
jurisdiction under the Resource Conservation and Recovery Act,
pertaining to any hazardous materials which may be on site when
cleanup work is started.

Although USE and the other GMMV parties are liable for all
reclamation and environmental compliance costs associated with mill
and site maintenance, as well as mill decontamination and cleanup
and site reclamation and cleanup after the mill is decommissioned,
USE believes it is unlikely USE would have to pay for such costs
directly.  First, based on current estimates of cleanup and
reclamation costs (reviewed annually by the oversight agencies),
such costs may be within the $50,000,000 development commitment of
Kennecott Uranium Company for GMMV.  These costs are not expected
to increase materially, if the mill is not put into full operation.

Second, to the extent GMMV is required to spend money on
reclamation and environmental liabilities related to mill and site
operations during ownership by Minerals Exploration Company, UNOCAL
has agreed to fund up to $8,000,000 of such costs (provided such
costs are incurred before February 1, 2001 and before mill
production resumes), which would be recoverable only out of future
mill production (see above).  Third, payment of reclamation and
environmental liabilities related to the mill is guaranteed by
Kennecott Corporation, parent of Kennecott Uranium Company.  See
"Concerning Kennecott", below.  Last, the GMMV will set aside a
portion of operating revenues to fund reclamation and environmental
liabilities when mining and milling operations are shut down.

Kennecott Corporation will be entitled to contribution from the USE
parties in proportion to their participation interests in GMMV, if
Kennecott Corporation is required to pay mill cleanup costs
directly pursuant to its guarantee.  Such payments by Kennecott
Corporation only would be required if the liabilities cannot be
satisfied within the initial $50,000,000 development commitment,
and then only to the extent there are insufficient funds from the
accumulated reclamation reserve.  In addition, if and to the extent
such liabilities resulted from UNOCAL's mill operations, and
payment of the liabilities was required before February 1, 2001 and
before mill production resumes, then up to $8,000,000 of that
amount would be paid by UNOCAL, before Kennecott Corporation would
be required to pay on its guarantee.  However, notwithstanding the
preceding, the extent of any ultimate USE liability for
contribution to mill cleanup costs cannot be predicted.
     
GMMV believes Minerals Exploration Company operated the mill in a
responsible manner, and that reclamation and environmental
liabilities for the mill and site as acquired from Minerals
Exploration Company are within the normal range of such costs for
similar operations in the western United States. 
     
GMMV reimbursed UNOCAL one-half of UNOCAL's mill maintenance costs
for the period January 1, 1991 to June 23, 1992.  Ongoing mill
maintenance expense is funded by Kennecott as part of its
development commitment.  

Concerning Kennecott.  Kennecott Corporation is a wholly-owned
United States corporation subsidiary of The RTZ Corporation PLC
("RTZ"), a United Kingdom public company.  RTZ is one of the
world's leading international natural resource companies and one of
the largest companies in the United Kingdom with a market
capitalization exceeding $9 billion.  Kennecott Corporation owns
and operates several mines through wholly-owned subsidiaries,
including the Bingham Canyon, Utah open pit copper mine which was
started in 1906.  

Kennecott Uranium Company is a wholly-owned United States
corporation subsidiary of Kennecott Corporation.  Based upon the
financial resources and results of operations of RTZ, upon
Kennecott Corporation's reported contributions to RTZ net earnings,
upon Kennecott Corporation's acceptance by the NRC as a financially
sound self-bonding entity for reclamation purposes (see Note K to
the USE Consolidated Financial Statements), and upon Kennecott
Uranium Company's $27,133,728 financial performance through May 31,
1994 in the Green Mountain project ($15,000,000 in 1990 to purchase
a one-half interest in the Green Mountain uranium properties from
USE and Crested, and $12,133,728 in GMMV expenditures from 1991
through May 31, 1994), USE believes Kennecott Uranium Corporation
will continue to have the ability to satisfy its obligations under
the GMMV joint venture agreement.  In the event such obligations
are not met, Kennecott Uranium Company's participation interest in
the GMMV would be reduced, and the USE parties' interest would be
increased.  See "Uranium-Green Mountain," above.

USE has no knowledge of any guarantee by Kennecott Corporation or
RTZ of the performance by Kennecott Uranium Company of Kennecott
Uranium Company's development commitment under the GMMV joint
venture agreement.  Further, USE has no knowledge whether earnings
of Kennecott Uranium Company are retained by it, or remitted to its
shareholder Kennecott Corporation.  Accordingly, performance by
Kennecott Uranium Company of its development commitment under the
GMMV joint venture agreement is not assured.

Permits.  In March 1993, GMMV applied to the WDEQ for a Permit to
Mine the Round Park deposit through the Jackpot Mine, for up to 22
years; this document presently is under review.  Until this Permit
is granted, no further construction of mine facilities is allowed,
no further underground mine development can occur, and the Round
Park Deposit cannot be mined.

A renewal application for a License to Explore, obtained from the
Wyoming Department of Environmental Quality, was submitted to the
WDEQ, and was approved on August 23, 1994.  This is an annual
renewal, which keeps prior exploration work in current status to
abate any site reclamation which otherwise would be required, until
after completion of all actual exploration activities.  Failure to
renew would activate the reclamation obligations, which is less
than $150,000.  Planned improvements to the GMMV properties in
fiscal 1995 will be made under the License to Explore.
    
Initial environmental studies have been submitted to appropriate
governmental regulators, and are being reviewed.  Applications to
appropriate water have been made, and an NPDES permit has been
obtained (expiring December 31, 1997).  Additional surface water,
weather and wetland studies have also been initiated.

In 1993, an application was submitted to the BLM for upgrading
roads to the Sweetwater Mill.

The WDEQ is the lead agency for review of environmental issues
associated with mining in Wyoming, and as such has authority to
examine landowners' and lessees' proposed uses of public lands for
compliance with the United States environmental statutes (the Clean
Water Act, the Clean Air Act, and others), as well as Wyoming laws.

This authority is exercised, in part, by WDEQ requiring proposed
mining plans to undergo environmental review prior to issuance of
a Permit to Mine, which may contain express conditions to mitigate
possible environmental impacts from operations.

In 1993, the BLM, as manager of Federal Lands, determined that the
potential effects of the Jackpot Mine (and associated work areas
and roads) on surface and ground waters, air quality, animal
habitat and local fauna at Green Mountain should be presented and
analyzed by an environmental impact statement ("EIS").  The EIS is
being prepared by the BLM (funded by the GMMV) and will be
submitted to the WDEQ.  Accordingly, the environmental assessment
application previously submitted by the BLM has been withdrawn. 
The EIS is nearly complete and, after public comment, will be
submitted to the WDEQ in the near future.  Following the WDEQ
technical review of the Jackpot Mine plan, the Permit Application
will be presented for public comment.  After the EIS has been
reviewed by the WDEQ, the Permit to Mine would be issued (with any
amendments to conditions required after public hearings and final
WDEQ review).

Uranium was mined on Green Mountain in the 1970s and 1980s.  USE
and Crested do not anticipate any adverse environmental impacts
from the Jackpot Mine which cannot be mitigated to acceptable
levels.  Accordingly, the Permit to Mine the Round Park deposit
through the Jackpot Mine portal is expected to be issued by the
WDEQ in due course, subject to delays from appeals of WDEQ
decisions by project opponents.

The Environmental Protection Agency has promulgated final rules for
radon emissions.  These regulations affect the mining and milling
of uranium and may require substantial expenditures for compliance.

GMMV (and SMP, for its properties, see below) may need to install
venting at mine sites, and must monitor radon emissions at the
mines, as well as wind speed, direction and other conditions.  USE
believes all its uranium operations are in compliance with these
rules.

Shootaring Canyon Mill

Acquisition of Plateau Resources.  On August 11, 1993, USE closed
the Stock Purchase Agreement ("Agreement") with Consumers Power
Company ("CPC"), by which USE purchased from CPC all outstanding
stock of Plateau Resources Limited ("Plateau").  Plateau, a Utah
corporation, owns the Shootaring Canyon uranium processing mill and
support facilities in southeastern Utah ("Shootaring Mill").  The
Shootaring Mill holds a source materials license from the NRC.  CPC
is a utility company with offices in Jackson, Michigan.

USE paid nominal cash consideration for the Plateau stock, but as
additional consideration, USE has agreed:

(a) to perform or cause the performance by Plateau of all studies,
remedial or other response actions or other activities necessary
from time to time for Plateau to comply with environmental
monitoring and other provisions of (i) federal and state
environmental laws relating to hazardous or toxic substances, and
(ii) the Uranium Mill Tailings Radiation Control Act, the Atomic
Energy Act of 1954, and administrative orders and licenses relating
to nuclear or radioactive substances or materials on the property
of or produced or released by Plateau; and

(b) to indemnify CPC from all liabilities and costs related to the
presence of hazardous substances or radioactive materials on
Plateau property, and to any future violation of laws and
administrative orders and licenses relating to the environment or
to nuclear or radioactive substances.

Prior to Agreement closing, CPC and affiliates paid Plateau
approximately $11,700,000 against prior outstanding loans to and
accounts receivable from CPC and its affiliates.  At closing,
Plateau transferred an additional $2,500,000 cash to fund the "NRC
Surety Trust Agreement" with a commercial bank as trustee.  The
trustee is to pay future costs of Shootaring Mill decommissioning,
site reclamation, and long term site surveillance, as directed by
the NRC.  The amount transferred to the trust is the minimum amount
now required by the NRC as financial assurance for clean up after
permanent shut down of the Shootaring Mill.

Also at closing, Plateau transferred $4,800,000 cash out of the
$11,700,000 to fund the "Agency Agreement" with a commercial bank. 
These funds will be available to indemnify CPC against possible
claims related to environmental or nuclear matters, as disclosed
above, and against third-party claims related to a tax benefit
transfer agreement between Plateau and the third-party, in the
event of a "disqualification event" as provided in such agreement. 
See Note K to the USE audited Consolidated Financial Statements.  

There are no present claims against funds held under either the
Trust Agreement or Agency Agreement.  Funds (including accrued
interest) not disbursed under the Trust and Agency Agreements will
be paid over to Plateau upon termination of such Agreements with
NRC concurrence.   

Prior to closing of the Stock Purchase Agreement, there was no
affiliation between USE and any USE affiliate, and Plateau.  There
is no affiliation between USE and CPC.  

The consideration paid by USE was determined by negotiation with
CPC, taking into account estimated annual Shootaring Mill holding
costs, and estimated future Mill decommissioning and site
reclamation costs as required by the NRC and the Utah Department of
Natural Resources, Division of Oil, Gas and Mining ("DOGM").  

The Plateau acquisition was negotiated and closed solely for the
account of USE, in light of potential NRC objections to selling
Plateau to the USECC joint venture.  Subsequent to closing, in
September 1993, USE and Crested agreed that after Plateau's
unencumbered cash has been depleted, USE and Crested each will
assume one-half of Plateau's obligations, and share equally in
Plateau operating cash flows, pursuant to the USECC Joint Venture.

Shootaring Mill and Facilities.  The Shootaring Mill is located in
south-eastern Utah, approximately 13 miles north of Lake Powell,
and 50 miles south of Hanksville, Utah via State Highway 276, then
four miles west on good gravel roads.  The entire facility occupies
18.9 acres of a 264.52 acre plant site.  The mill was designed to
process 750 tpd, but only operated on a trial basis for two months
in mid-summer 1982.  In 1984, Plateau suspended operations and put
the mill on standby because of the depressed uranium concentrate
market.

Included with mill assets are tailings cells, laboratory
facilities, equipment shop and inventory.  
The NRC issued a license to Plateau authorizing production of
uranium concentrates, however, since the mill was shut down, only
maintenance and required safety and environmental inspection
activities have been performed.  The current source materials
license with the NRC is for a standby operation only and expired on
December 31, 1993. Prior to expiration, USE applied for, and
expects either license renewal or extension of its expiration date
in due course.

Plateau owns approximately 90,000 tons of uranium mineralized
material stockpiled at the mill site. 

USE intends for Plateau to continue maintenance activities pending
evaluation of resuming Shootaring Mill operations to process
uranium ores to concentrates in anticipation of increased
concentrate prices.  NRC and DOGM approval will be required prior
to commencing such operations.

Plateau also owns Canyon Homesteads, Inc. ("Canyon"), which
developed the Ticaboo, Utah townsite 3.5 miles south of the mill,
including a 66 room motel, general store, laundromat facility, 98
single family home sites, 151 mobile home sites, and 26
recreational vehicle sites (all with utility access).  The townsite
is located on a State of Utah lease near Lake Powell, and is
planned to be operated as a commercial enterprise, for which
purpose in fiscal 1994 limited capital improvements and a general
refurbishing were effected (total costs approximately $400,000). 
USE may further develop the townsite, and seeks financial partners.

There have been no further material expenditures on the Ticaboo
townsite in fiscal 1995.  See "Commercial and Construction - Utah
Properties", below.

Sheep Mountain Partners ("SMP")

Partnership.  SMP is a Colorado general partnership formed in
December 1988 between USE and Crested, d/b/a USECC, and NUKEM, Inc.
through its wholly-owned subsidiary Cycle Resource Investment
Corporation ("CRIC").  NUKEM, of Stamford, Connecticut is a uranium
brokerage and trading concern.  During fiscal 1991, certain
disputes arose among members of SMP.  These matters are in
litigation.  See Item 3 - Legal Proceedings."  

In February 1988, USE and Crested acquired uranium mines and mining
equipment properties at Crooks Gap in south-central Fremont County,
Wyoming, from Western Nuclear, Inc. (a subsidiary of Phelps-Dodge).

USE and Crested, doing business as USECC, mined and sold uranium
ore from one of the underground mines in fiscal 1988 and 1989. 
These Crooks Gap properties are adjacent to the Green Mountain
uranium properties referred to above.

USE and Crested sold 50 percent of their interests in the
properties to NUKEM's subsidiary CRIC for cash; the parties
thereafter contributed the properties to SMP, in which USE and
Crested received an undivided 50 percent interest.  Each group was
to provide one-half of $350,000 to purchase equipment from Western
Nuclear, Inc.; USE and Crested also contributed their interests in
three uranium supply contracts to SMP and agreed to be responsible
for property reclamation obligations.  The agreement provided that
each partner generally had a 50 percent interest in SMP net
profits, and an obligation to contribute 50 percent of funds needed
for partnership programs or discharge of liabilities.  Capital
needs were to have been met by loans and credit lines.  

SMP was directed by a management committee, with three members
appointed by USE and Crested, and three members appointed by
NUKEM/CRIC.  The committee has not met since 1991.

Properties.  SMP owns 77 unpatented lode mining claims on the
Crooks Gap properties, including one open-pit and five underground
uranium mines, mining equipment, and an inventory of uranium ore. 
An ion-exchange plant (see below) is located near the SMP
properties, but is held by USECC and not SMP. Production from the
properties is subject to sliding-scale royalties payable to WNI;
the rates are from one to four percent on recovered uranium
concentrates.  Two Wyoming State leases (one for minerals covering
640 acres, and one for surface use covering 142 acres) expired in
early 1994, and will not be renewed.   

Various structures and equipment are located on the properties:
three operating and three non-operating mine headframes with
hoists; maintenance shops; offices; and other buildings, equipment
and supplies. 
   
SMP also has interests in 59 unpatented mining claims, one State
mineral lease and one State surface use lease, which have been
conveyed to Pathfinder Mines Corporation ("PMC").  The conveyance
originally was made to induce PMC to mill ore produced from the
properties, at PMC's mill.  These properties contain a previously-
mined open-pit uranium mine (the Congo pit) and three underground
mines.  PMC has the right to mine a portion of these properties
(the Congo area), by open-pit or in-situ techniques to certain
depths, without royalty or other obligations to SMP.  PMC has the
responsibility for reclamation work needed thereon as a result of
its activities.  If PMC mines any portion of the properties outside
the Congo area, a 3% royalty is owed to SMP.  Conversely, SMP has
the right to mine portions of the claims and leases outside the
Congo area (and specified surrounding zones) by underground mining
techniques, subject to a 3% royalty to PMC.  PMC has completed an
exploration program on a portion of these properties, and advises
it presently does not intend any further development.  The 59
claims and two leases may be reacquired from PMC by SMP.  PMC has
decommissioned and dismantled its uranium mill in the vicinity.

An ion exchange plant on the former PMC properties (and now held by
USECC) was used to remove natural soluble uranium from mine water. 
Decommissioning of this facility awaits final NRC approval.

Property Maintenance.  As operating manager for SMP, USECC is
responsible for exploration, mining, and care and maintenance of
SMP mineral properties.  USECC was to have been reimbursed for
certain expenditures on the properties.  Currently, USECC has a
limited care and maintenance staff on site to maintain the mines
and pump mine water to prevent flooding of the mines.  NUKEM/CRIC
have refused to allow SMP to pay USECC for care and maintenance
services since the spring of 1991.  

In 1988, USECC produced uranium from certain of the underground
mines located on the Crooks Gap properties.  Production ceased in
fiscal 1989, because uranium could be purchased from the spot
market at prices below SMP mining and milling costs.

Uranium Marketing.  NUKEM, Inc. was engaged by SMP to provide SMP
with financial expertise and marketing services.  SMP entered into
a marketing agreement with CRIC, which was assigned to and assumed
by NUKEM, to provide marketing and trading services for SMP, which
included acquiring uranium for SMP by purchasing or borrowing. 
Nukem was to be reimbursed at its direct costs for acquiring such
uranium for SMP.  USECC, SMP and Nukem had acquired seven long-term
contracts for sales of uranium to eight domestic utilities.  SMP
had paid annual nonaccountable fees of $300,000 for marketing to
NUKEM, but SMP ceased making such payments in the spring of 1991,
when NUKEM/CRIC refused to authorize payment of care and
maintenance costs.

SMP's uranium supply contracts either are base-price escalated or
market-related (referring to how price is determined for uranium to
be delivered).  Base-price escalated contracts set a floor price
which is escalated over the term of the contract to reflect changes
in the GNP price deflator.  The current base-price escalated
contract of SMP requires deliveries of from 94,200 to 424,100
pounds of uranium concentrates during various years in the 1990s. 
The amounts deliverable under the contract may be increased or
decreased by the utility, in amounts from 10% to 25%.  Prices of
uranium for deliveries under the base-escalated price contract
currently exceed prices at which uranium can be purchased in the
spot market.

Under the market-related contracts, the purchaser's cost depends on
quoted market prices and the price at which a willing seller will
sell its U3O8 during specified periods before delivery.  Some of
these contracts place a ceiling on the purchase price, substituting
a base-price escalated amount, if the market price exceeds a
certain level.  Under the terms of the various market-price related
contracts, SMP is required to deliver from 270,000 to 1,301,253
pounds of uranium annually from 1995 to 2000, which amounts may be
increased or decreased by specified percentages.  

Through fiscal 1994, USE and its affiliates have satisfied most of
these contracts with either uranium previously produced by SMP,
borrowed from others, or purchased on the open market.  A number of
disputes have arisen among USECC and its partner NUKEM/CRIC in SMP,
and USECC initiated litigation against NUKEM, CRIC and certain of
their affiliates.  See "USE Legal Proceedings."

However, performance under the SMP utility supply contracts has
been in dispute since fiscal 1993, and may continue past May 31,
1995; the cooperation of NUKEM to assure deliveries to customers
pending resolution of the SMP disputes, is not assured.  See "Legal
Proceedings".

Permits.  Necessary permits to operate current mines on SMP
properties have been issued by the State of Wyoming.  Amendments
are needed to open new mines within the permit area.  As a
condition to the issuance of the permits, an NPDES permit under the
Clean Water Act has been obtained.  Monitoring and treatment of
water removed from the mines and discharged in nearby Crooks Creek
is generally required.  During the past year, SMP did not discharge
wastewater into Crooks Creek, and the mine water is presently being
discharged into the McIntosh Pit.  

Gold
     
Lincoln Mine (California)

Sutter Gold Mining Company.  In fiscal 1991, USE acquired an
interest in the Lincoln Project (including the underground Lincoln
Mine) in the Mother Lode Mining District of Amador County,
California.  This property, formerly held by the Sutter Gold
Venture ("SGV"), a mining joint venture, is now wholly owned by
USECC Gold, a Wyoming limited liability company (owned by USE and
Crested).  Until the end of fiscal 1994, Seine River Resources Inc.
("SRRI", a Vancouver Stock Exchange listed company which is not
affiliated with USE or its subsidiaries) was a joint venture party
in SGV.  USECC Gold now is a subsidiary of Sutter Gold Mining
Company (see below).

The parties had intended to operate SGV as equal 50 percent
venturers.  However, because of SRRI defaults on its obligations to
USE, USE and Crested had acquired (through USECC Gold) by the end
of fiscal 1993 a 90 percent aggregate equity interest in the
Lincoln Project (and the interests in USECC Gold were owned 88.89
percent by USE, and 11.11 percent by Crested).  By the end of
fiscal 1994, SRRI owed USE and Crested $1,970,507 for SGV property
holding costs, permitting costs and mine maintenance expense
incurred and paid for by USE and Crested since March 1992,
including interest and management fees charged by USE and Crested. 
As of May 23, 1994 SRRI agreed to assign its remaining 10 percent
interest in SGV to USE as payment for the $1,970,507 owed USE and
Crested.  However, only the $1,389,272 of costs and expenses paid
for by USE and Crested was recorded; $581,235 for interest and
management fees was written off as uncollectible.  SRRI also issued
400,000 common shares of stock and delivered them to USE as final
payment of any deficiencies for pre-fiscal 1994 indebtedness (owed
by SRRI to SGV) which had been secured with SRRI's interest in SGV
and upon which USE and Crested acquired in lieu of foreclosure (see
Note E to the USE Consolidated Financial Statements).  A conveyance
of SRRI's 10% interest is being prepared for delivery to USE and
Crested pending the decision of Amador United Gold Mines on its
right of first refusal on the project.

Subsequent to the end of fiscal 1994, the Sutter Gold Venture was
terminated, USE and Crested formed a new Wyoming corporation
(Sutter Gold Mining Company), and agreed to exchange their
interests in USECC Gold for common stock of Sutter Gold Mining
Company (hereafter, "Sutter Gold").  Sutter Gold is owned 89
percent by USE and 11 percent by Crested; USECC Gold is a
subsidiary of Sutter Gold.

Sutter Gold continues to seek the capital funding needed to fund
mine development, construction of a gold mill and related
facilities, to put the gold mine into full production at an initial
rate of 300 tons per day.  To date, there are no agreements in
principle to obtain such financing.
  
For information on the initial formation of SGV, and the respective
interests of USE, Crested and SRRI at formation and thereafter, see
Note E to the audited USE Consolidated Financial Statements.

During fiscal years 1992, 1993 and 1994, SGV conducted
environmental studies, drafted initial mine and mill designs, mined
bulk samples from the Lincoln Mine for assay and mill design
purposes, installed an underground water treatment plant to treat
mine water seepage, and performed other work to support application
for operating permits.  See "Properties", below.

Properties.  Sutter Gold (through USECC Gold) holds approximately
14 acres of surface and mineral rights (owned), 362 acres of
surface rights (leased), 217 acres of mineral rights (leased), and
374 acres of mineral rights (owned), all on patented mining claims
near Sutter Creek, Amador County, California.  The properties are
located in the western Sierra Nevada Mountains (1,000 to 1,500 feet
elevation); year-round climate is temperate.  Access is by
California State Highway 16 from Sacramento to California State
Highway 49, then by paved county road approximately .4 miles
outside Sutter Creek.   

Total land holding costs are estimated at $574,000 for the two
fiscal years ending May 31, 1996, including $42,000 for payments on
two parcels (14 acres) purchased in 1994; $30,000 in one time costs
to acquire a surface easement and lease for land running from the
proposed mill site to California State Highway 49; payment of two
years' accrued royalties of $46,000, plus advance royalties coming
due in 1995 and 1996 totalling $96,000 on a surface and minerals
lease (with purchase option); payment of advance royalties and
lease rental payments coming due in 1995 and 1996 on other surface
and mineral properties, totalling $228,000; and property taxes of
$60,000 ($30,000 annually); and other miscellaneous lease payments.

Property taxes will increase to about $100,000 annually when the
mill is built and the mine is in production. 

The leases are for varying terms (the earliest expires in November
1995), and require rental fees, advance production royalties, real
property taxes and insurance.  Leases expiring before 2010 will
generally be extended, so long as minerals are continuously
produced from the property that is subject to the lease.  Other
leases may be extended for various periods on terms similar to
those contained in the original leases.  Production royalties are
from four to seven percent, and up to 20 percent for some areas of
high-grade ore.  The various leases have different methods of
calculating royalty payments (net smelter return, gross proceeds,
and net profits interest). 

Amador United Gold Mines ("Amador United") was a prior owner of
certain leases which it conveyed into the Lincoln Project when
owned by Meridian Minerals, in return for which Amador United
received a right of first refusal to buy the Lincoln Project (see
below) and a 20 percent net profits interest in production from any
of the Lincoln Project properties.  Although all of the properties
which Amador United conveyed into the Lincoln Project were
relinquished by Meridian as uneconomic or of marginal utility to
the Project, Amador United remains entitled to its net profits
interest.  "Net profits" will be determined by deducting from gross
revenues from sale of minerals produced by the Lincoln Project, an
amount equal to 105 percent of all costs and expenses in excess of
$6,000,000 which are directly or indirectly attributable and
necessary or incidental to the acquisition, exploration,
development, mining and marketing of minerals produced from all of
the properties comprising the Lincoln Project.  Costs and expenses
are defined to include (but not be limited to): ad valorem real
property and personal property taxes; reasonably anticipated
reclamation costs; salaries and wages of employees assigned to
property acquisition, exploration, development, mining and
marketing activities; travel expenses and transportation of
employees, material equipment and supplies; all payments to
contractors; assay, metallurgical testing and other analyses to
determine the quality and quantity of minerals on all of the
properties; costs to obtain environmental permits and other
permits, rights-of-way and similar rights, as incurred in
connection with acquisition, exploration, development, mining and
marketing activities; property acquisition and holding expenses;
costs for feasibility studies; costs for title curative work; and
1.25 percent monthly interest on such costs and expenses which are
not paid. 

Based on an estimated $15,000,000 of investments to date in the
Lincoln Project by Meridian and USE, and current estimates of up to
$17,974,000 additional investment required to put the properties
into full production, payment of any amount to Amador United for
its net profits interest will only occur after the Lincoln Project
has generated gross revenues in excess of the amount invested. 
Lease royalties burdening the Lincoln Project properties are in
addition to Amador United's net profits interest.

In connection with SRRI's transfer of interests in the Lincoln
Project to USE and Crested at formation of the SGV, and thereafter
upon USE's and Crested's acquisition of SRRI's remaining interests
in SGV due to default by SRRI, Amador United was provided notice of
its right of first refusal to acquire such interests for amounts
equal to USE's and Crested's advances to SRRI. Amador United has
made technical objections to the notices given, however, USE and
Crested believe these objections are without merit. 

In fiscal 1992, USE and Crested expended $2,537,400 on SGV for mine
development, mining and processing bulk samples of mineralization,
project permitting costs, holding costs, and related general and
administrative costs, which amount includes advances by USE and
Crested to cover SRRI's share of such costs.  In fiscal 1993 and
1994, SGV spent $1,266,500 and $1,088,536, respectively, for
exploration and feasibility work to further delineate the Lincoln,
Comet and other zones, and for land holding, permitting and related
costs.  All expenditures were funded by USE and Crested, including
SRRI's share of such costs.  To Prospectus date, Sutter Gold (and
predecessor SGV) has spent over $12,100,000 to acquire the Lincoln
Project, and on mine development, exploration and feasibility work,
permitting and mill equipment.

Geology and Reserves.  The minerals consulting firm Pincock, Allen
& Holt ("PAH") has prepared a prefeasibility study on the Lincoln
Project.  PAH reviewed core drilling data on the Lincoln Zone on
100-foot centers from the surface, and drilling on the Comet Zone
from both surface and underground.  PAH also reviewed data from
drilling on the Keystone Zone from surface on 200-foot centers. 
Total data is from 162 exploration core holes (surface and
underground), with total footage of 64,700 feet.  PAH based its
estimate of proven reserves on mineralized material within 25 feet
of sample information; probable reserves were based on material
located between 25 and 50 feet of sample information.   In nearly
all cases, the veins (approximately 17 in number, though at some
points several veins appear to briefly converge) in the three areas
sampled are believed by PAH to extend well beyond these limits. 

Using a cutoff grade of 0.25 ounces of gold per ton in place, PAH
estimates the Lincoln Project contains 194,740 tons of proven and
probable reserves grading 0.57 ounces of gold per ton.  If
operating economics indicate a lower cutoff grade is feasible, the
amounts of reserves would increase.

In fiscal 1992, SGV mined 8,000 tons of material (including waste
rock and low grade mineralization) out of drifts and raises off the
Stringbean Alley decline (see "Permits and Future Plans", below) in
a bulk sampling program to test mining techniques and milling
recoveries.  Milling results indicated at least 94 percent of the
gold in the ore should be recoverable with gravity, flotation and
cyanidation milling circuits (1,400 ounces of gold were recovered
in this program).  Subsequent metallurgical tests by the
engineering firm Brown & Root, Inc. (using test data from the
Lincoln Project developed by Hazen Research, Inc.) indicate mill
recovery should be in excess of 96 percent.  PAH believes the
recovery rate should be between 93 and 95 percent.

The geology within the Lincoln project is typical of the historic
Mother Lode region of California, with a steeply dipping to
vertical sequence of metavolcanic and metasedimentary rocks hosting
the gold-bearing veins.  Depending on location along the strike
length on the vein systems, the gold-bearing veins are slate,
metavolcanic greenstone, or an interbedded unit of slates and
volcanics.  The Lincoln Project covers over 11,000 feet of strike
length along the Mother Lode vein systems.   

Permits and Future Plans.  In August 1993, the Amador County Board
of Supervisors issued a Conditional Use Permit ("CUP") allowing
mining of the Lincoln Mine and milling of production, subject to
conditions relating to land use, environmental and public safety
issues, road construction and improvement matters, and site
reclamation.  The permit will allow construction of the mine and
mill facilities in stages as the project gets underway, thereby
reducing initial capital outlays.  Additional permits (for road
work, dust control and construction of mill and other surface
improvements) will be applied for in due course. 

Initial mining using standard cut-and-fill overhead stoping
techniques, is planned for the Lincoln and Comet Zones, by an
existing 15 feet by 12 feet by 2,800 feet decline (the Stringbean
Alley decline), which runs from the surface down through the Comet
and into the Lincoln Zone.  This decline was developed by Meridian
Minerals.  Screened tailings from the mill flotation circuit will
be used to back-fill the stopes and stabilize the wall rocks; this
recycling will also greatly reduce the volume of tailings going
into the tailings ponds.  In the pre-production stage, the
Stringbean Alley decline will be extended down to 750 feet, then a
drift driven back horizontally along the 750 foot level (above sea
level).    

The CUP requires that within 18 months after operations start up,
a new decline (to be named the Lincoln Decline) will have to be
completed running for 1,850 feet from the surface at the mill site
(1,340 feet above sea level) down to a new drift to be driven at
the 1,000 foot (above sea) level; the new decline will be used for
access of mining personnel and supplies to the underground
workings, as well as permit ore haulage up the decline by conveyor,
thus eliminating surface ore haulage from mine portal to the mill. 

Concurrently with production mining, Sutter Gold intends to
maintain an aggressive underground development program to delineate
(on an on-going basis) two to three years of developed ore in
sight.

Sutter Gold may require up to $17,974,000 financing to construct
the mill and prepare the mine for full scale production, and for
interim holding costs.  The mill design has been reviewed by PAH,
and Sutter Gold expects to follow PAH's recommendations in building
the recovery circuits.  The mill will be constructed to allow a 500
ton per day operations, but initially equipped so as to handle 300
tons per day throughput.  Exclusive of attached lab and other
support facilities, the central mill building is expected to cover
approximately 20,000 square feet, and will be constructed with
interior mezzanine levels to hold different banks of equipment. 
Adequate power is available at the boundaries of the Lincoln
Project from the local utility; water also is available from a
utility if needed, although the Lincoln Mine is expected to produce
adequate water for mining and milling operations.  

Molybdenum 

As holders of royalty, reversionary and certain other interests in
properties located at Mt. Emmons near Crested Butte, Colorado, USE
and Crested have received annual advance royalties of 50,000 pounds
of molybdenum, or cash equivalent (one-half to each), starting in
fiscal 1990, pursuant to agreements for sale of interests in the
Mt. Emmons properties to AMAX.  The properties were acquired in the
1970s, and sold to AMAX in 1980.  AMAX delineated a deposit of
molybdenum containing approximately 146 million tons of
mineralization averaging 0.43% molybdenum on the properties, making
the deposit one of the world's largest known primary molybdenum
deposits.

Advance royalties are paid in equal quarterly installments, until:
(i) commencement of production; (ii) failure to obtain certain
licenses, permits, etc., that are required for production; or (iii)
AMAX's return of the properties to the USE and Crested.  During
fiscal 1994, USE recognized $126,800 of advance royalty revenue
under this arrangement.  These royalties are shown in the
Statements of Operations as a component of gains from restructuring
mineral properties agreements.  See Note F to the audited USE
Consolidated Financial Statements.  The royalty payments reduce the
operating royalties (six percent of gross production proceeds)
which would otherwise be owed by AMAX in the event of production. 
There is no obligation to repay the advance royalties, if the
property is not placed in production.  AMAX is to pay $2,000,000 to
USE and Crested (one-half to each), if the Mt. Emmons properties
are put into production.

In fiscal 1995, USE and Crested reached agreement with AMAX (now
Cyprus Climax) to forego six quarters of advance royalties
(starting fourth quarter calendar 1994) for full payment for real
estate in Gunnison, Colorado owned by AMAX and the subject of a
purchase option held by USE and Crested.  The option exercise price
was valued at $266,250.

Also as part of the original AMAX transaction, interest free loans
were made to USE and Crested.  These loans were fully amortized by
the end of the first quarter of fiscal 1994 (see Notes F and G to
the audited USE Consolidated Financial Statements.  In the event
AMAX sells its interest in the properties, USE and Crested would
receive 15 percent of the first $25,000,000 received by AMAX.

Parador Mining (Nevada)

USE and Crested are sublessees and assignees from Parador Mining
Co., Inc. ("Parador"), on certain rights under two patented mining
claims located in the Bullfrog Mining District of Nye County,
Nevada.  The claims are immediately adjacent to and part of a gold
mine operated by Bond Gold Bullfrog, Inc. ("BGBI"), a non-
affiliated third party.  They have also been assigned certain
extralateral rights associated with the claims and certain royalty
rights relating to a prior lease on those properties.  The lease to
USE and Crested is for a ten year primary term, is subject to a
prior lease to BGBI on the properties, and allows USE and Crested
to explore for, develop and mine minerals from the claims.  If USE
and Crested conduct activities on the claims, they are entitled to
recover costs out of revenues from extracted minerals.  After
recovering any such costs, USE and Crested will pay Parador a
production royalty of 50 percent of the net value of production
sold from the claims.  

USE, Crested and Parador have informed BGBI that payments are owed
to them pursuant to extralateral rights on the claims.  BGBI in
turn has initiated legal proceedings to establish the rights of the
various parties in the claims.  Thereafter, Parador notified BGBI
that it had defaulted in its lease and terminated the lease.  BGBI
denies that it has defaulted.  See "Legal Proceedings".

Oil and Gas

Fort Peck Lustre Field (Montana).  USECC conducts oil production
operations at the Lustre Oil Field on the Ft. Peck Indian
Reservation in north-eastern Montana; five wells are producing, and
USE and Crested receive a fee based on oil produced.  USE is the
operator of record.  No further drilling is expected in this Field.

This fee and certain real property of USE and Crested, have been
pledged or mortgaged as security for a $1,000,000 line of credit
from a bank.

ENERGX, LTD.  Fort Peck Gas Project.  ENERGX, LTD., a Wyoming
corporation and a subsidiary of USE and Crested formed in fiscal
1994, signed on October 29, 1993 an "Agreement Between The
Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation
and ENERGX, LTD. to Explore, Develop and Produce Shallow Gas." 
This Agreement has been approved by the Secretary of the Interior
and the  United States Bureau of Indian Affairs.  ENERGX intends to
drill and test three exploratory wells, and otherwise develop the
area, with NuGas Resources (see below).  If ENERGX determines there
is potential for a natural gas field, ENERGX (and NuGas) will have
exclusive exploration rights for shallow gas (down to the top of
the Muddy formation, approximately 4,000 feet) on approximately
325,000 acres of tribal mineral lands on the Reservation for a
period of five years, and for successive five year terms, provided
ENERGX drills another five exploration wells during each term.  The
first three dry holes would be at ENERGX sole expense (and now will
be funded by NuGas-see below).  

Proceeds from production will be allocated to ENERGX (and now
NuGas-see below) for all wells' drilling and completion expense
(except for the initial three dry holes), lease operating expenses,
gas gathering and compression facilities, capital and operating
costs.  Net revenues will be allocated 40 percent to the Tribes and
60 percent to ENERGX.  Pursuant to United States Law, only the
Tribes may own beneficial interests in reservation minerals;
ENERGX' share of net revenues is compensation for operating
services.  The Tribes also own 10 percent (nondilutable) of ENERGX
common stock.

Two major gas transmission systems cross the Fort Peck reservation
(Northern Border and Williston Basin).

The Fort Peck tribal lands are believed to contain significant
shallow gas deposits, analogous to the Bowdoin Gas Field (eastern
Montana) and other Cretaceous age gas producing reservoirs in the
Northern Great Plains Gas Province.  Numerous wells drilled for
deep oil on the Fort Peck tribal lands have documented shallow gas
shows.  However, no reserves have been established for the acreage
subject to the Agreement with ENERGX.

     NuGas Agreement.  By the Joint Venture Agreement ("JVA") of
July 18, 1994, NuGas Resources (U.S.) Inc., Calgary, Alberta,
Canada will drill and complete (or abandon) at NuGas' sole expense,
eight exploratory shallow gas wells on the Fort Peck Reservation
(three before December 31, 1994, and five more by July 1, 1996), to
earn a one-half interest in ENERGX' rights under the Fort Peck
Shallow Gas Agreement (see above).  Well gathering, gas dehydration
and related equipment costs will be shared equally by NuGas and
ENERGX.  ENERGX Will be carried for the first eight exploratory
wells (see below).

NuGas has contributed $100,000 to pay for costs of acquiring leases
and easements on non-Tribal lands contiguous to Tribal lands, so as
to assemble adequate sized drilling units for the first three
exploratory wells.  Due to the unexpected complexity of assembling
the necessary land packages, NuGas and ENERGX have postponed the
drilling of the initial exploratory wells until the summer of 1995.

NuGas and ENERGX each will receive 50 percent of proceeds from gas
produced and sold out of the initial eight wells, until NuGas
receives 50 percent of such wells' drilling, completion, geological
and equipping costs; thereafter, distributions will be shared 30
percent each to NuGas and Energx, and 40 percent to the tribes
pursuant to the Fort Peck Shallow Gas Agreement.  NuGas will not be
entitled to recoup any of drilling and geological costs related to
up to three dry holes drilled in the initial eight well drilling
program.  All activities after the initial exploration drilling
program will be funded equally by NuGas and ENERGX. 

ENERGX received $200,000 under the JVA as a prospect generation
fee, and will be the operator of the initial exploration program.

NuGas is a subsidiary of a Toronto Stock Exchange company with
substantial experience in shallow gas exploration and production,
principally in the northern plains states and Canada, where the
company currently operates more than 450 shallow gas wells and
produces 25,000,000 cubic feet of gas per day.

     Powder River Basin.  ENERGX holds by lease approximately 960
acres of coalbed methane rights in  the Powder River Basin,
Campbell County, Wyoming, having drilled two coalbed methane
stratigraphic test wells, and four production wells to test for and
produce coalbed methane.  Casing has been set in each of the four
coalbed methane wells.  The coal is expected to produce commercial
quantities of methane, once the hydrostatic pressure is reduced by
pumping water out of the coalbed formation. 

One of the four wells is on water pump.  Until methane production
commences, methane reserves cannot be reliably estimated.

     Wind River Basin.  Approximately 38 sections (25,000 acres) of
BLM leases (10 year term) in Fremont County, WY are now held by
ENERGX, believed to be prospective of shallow coalbed methane and
conventional stratigraphic natural gas and oil deposits.  Acreage
in this part of the County has been leased by major oil and gas
companies in the past, but very little of the acreage has been
drilled.  ENERGX may negotiate farmout arrangements with other
companies to test the acreage (two large independent oil and gas
exploration and production companies have acreage near ENERGX's
positions).     

ENERGX operations to date have been funded with USECC equity
investments and advances, and transaction revenue (the NuGas
prospect generation fee).  Future operations are to be funded by a
combination of private equity financing by ENERGX, and by industry
and private investor participants on prospects.

Commercial and Construction

USE owns varying interests, alone and with Crested, in affiliated
companies in manufacturing and retailing, real estate,
transportation, and engineering businesses.  The affiliated
organizations include Brunton, Western Executive Air, Inc. ("WEA"),
Four Nines Gold, Inc. ("FNG"), and Plateau through its wholly-owned
subsidiary Canyon Homesteads, Inc.  Activities of these
subsidiaries and USE in these business sectors include a variety of
real estate operations (ownership and management of a commercial
office building, which includes the quarters where USE executive
offices are located, ownership and management of a trailer home
park in Riverton, Wyoming, and ownership and management of town
sites and a motel facility in Ticaboo, Utah).  WEA owns and
operates an aircraft fixed base operation with fuel sales, charter
planes and flight school in Riverton, Wyoming.  Manufacturing and
marketing of recreational products and professional engineering
products are carried on through Brunton.  FNG provides civil
engineering contracting primarily for large concrete structure and
pipe work in municipal sewage systems, irrigation systems and other
water control projects.  

Manufacturing

Brunton

Brunton operates in the industry segment of manufacture and sales
of outdoor professional and sporting products.  All common stock of
Brunton except for shares previously owned by USE was acquired as
of May 1994, in exchange for 276,470 registered common shares of
USE.

Brunton is the manufacturer of the original Brunton pocket transit
(developed by D.W. Brunton in 1884), and has been manufacturing and
marketing pocket transits to the professional surveying, mining,
geology and military markets world wide since 1972 when the product
line was purchased from a Denver company and moved to Riverton,
Wyoming. 

Brunton also manufactures and sells a line of sporting compass
products, and imports and distributes optical products and Lakota
cutlery, having acquired Lakota cutlery in 1982.   These products
are marketed through traditional sporting goods channels by
distributors, catalog houses, retailers and chain stores nationally
and internationally.  Additional markets include ad specialty,
military and the U.S. government.  A majority of the products are
marketed as quality items commanding premium prices.

Brunton sales for fiscal 1994 (compared to fiscal 1993) by product
line were:  35 percent (44 percent) sporting compasses; 26 percent
(26 percent) professional products; 27 percent (21 percent) optical
products; and 7 percent (9 percent) cutlery.  The balance of 1994
revenues were from interest income, paint shop custom work, and
warranty service.

No customer accounted for more than 10 percent of Brunton sales in
any of the three fiscal years ended May 31, 1994.  Major customer
revenue contributions within product lines are discussed below.  

Brunton has 34 full-time employees and 5 part-time employees, none
under collective bargaining agreements.  Employee relations are
considered satisfactory.

     Professional Products

     Pocket Transits and Accessories.  Brunton is a manufacturer of
pocket transits.  This instrument is a hand-held compass with a
mirrored protective cover and long bar sight, capable of
calculating both horizontal (compass bearings) and vertical
(inclination) angles.  Primary advantages of the pocket transit
include small size and accuracy.  

Several versions of this instrument are produced to satisfy the
needs of civil engineers, mining engineers, archaeologists,
foresters, geologists and military personnel.  Many units are
waterproof.  Numerous product options, high quality and ready
serviceability separate Brunton instruments from its competition. 
Suggested retail price for the pocket transit range from $187 to
$263 per unit.  Brunton also manufactures and sells non-magnetic
tripods and field accessories to the foregoing consumer groups.

     Marketing.  Professional products are sold on a direct basis
to 275 wholesale dealers, distributors and catalog supply houses
throughout the world.  In addition, Brunton markets professional
products to the U.S. government (GSA) and military organizations
including the U.S. Army.

     Competition.  Brunton faces competition for its pocket
transits with look-a-like models manufactured in the far east by
companies substantially larger than Brunton who include their
competing unit as one of several surveying type instruments
available from the company.  Despite larger competitors, and
despite somewhat higher prices for Brunton pocket transits,
management believes Brunton holds a consistent estimated 80 percent
United States market share for the pocket transit market.  This is
due to name brand recognition, highest quality workmanship,
excellent wholesale and consumer service and consistent advertising
programs.

     Seasonality.  Sales of pocket transits are seasonal with
increased sales in the spring and summer due to minerals
exploration and college/university field exercises.  Brunton
currently seeks to increase penetration of South American markets
to counter seasonality of North American sales.

     Major Customers.  One customer (Forestry Suppliers, Inc., a
catalogue supplier) accounted for 10 percent of professional
product sales in fiscal 1994 (15 percent in fiscal 1993).  Loss of
this customer would not have a material adverse effect on Brunton.

     Sporting Products

There are three lines of Brunton sporting products: compasses,
optics and cutlery.  Compasses and optics are marketed under the
Brunton name; cutlery is marketed under the Lakota label.  

     Compasses.  Brunton map compasses were first introduced in
1979 to the general sporting goods market.  To the best of
management's knowledge, Brunton compasses continue to be the only
100 percent made in USA map compasses.  A complete priced line of
compasses (22 different models) is offered, with a suggested retail
price range of $3.99 to $264, and are used by virtually any type of
outdoors person, from hunters to backpackers, boaters to mountain
climbers.  All sporting compasses are liquid damped, which means
that the compass housing contains a clear oil-based fluid to dampen
the action of the magnetic needle, which allows for quicker and
more accurate instrument readings.


     Optics.  Brunton optics include a range of high quality
binoculars and monoculars, which are manufactured primarily in
Japan and Korea to Brunton specifications.  Brunton optical
products are targeted to wholesale accounts that market to quality
conscious consumers willing to pay premium prices for quality
optical products.  Additional features are found on its optics,
including upgraded lenses and prisms, fully-coated optics, long eye
relief (so eyeglass wearers can enjoy full field of view), and lens
coatings (to significantly reduce both ultraviolet (UV) and
infrared (IR) light from entering the product).  Suggested retail
prices for the 11 standard optical products range from $129 to
$389.

Substantially all optics are manufactured for Brunton by one
Japanese firm.  Although the services of such firm could be
replaced if necessary, attendant delays would adversely impact
Brunton and could result in eroding market share.  Relations
between such firm and Brunton are considered excellent.  However,
continued erosion of the dollar against the yen could lead to price
increases which may be difficult for Brunton to pass along to
customers.      

     Cutlery.  Lakota cutlery offers high quality cutlery for the
outdoors person, with models that include unique lockback and fixed
blade designs.  Lakota cutlery is manufactured in Japan by quality
conscious subcontractors.  Leather sheaths and packaging are
assembled at Brunton headquarters.  A majority of Lakota designs
are for hunters, campers and fishermen.  Twenty models are
currently in the Lakota line, with a suggested retail price range
of $32 to $155.

The current cutlery manufacturer could be replaced if necessary,
although Brunton would be adversely affected depending on the lead
time required for a new firm to come on line.

     Marketing.  All Brunton sporting products are distributed
throughout the United States and overseas markets by its direct
sales force and manufacturers sales representatives, to over 1,000
retailers, including sporting goods retailers, mass merchants,
catalog houses, cutlery shops, and certain U.S. Army/Navy PX
stores.  In addition, Brunton sells some of nearly every model of
its products to corporations and other organizations for
promotional purposes, premium and employee gift award programs, and
corporate identity programs.  

In fiscal 1994, foreign sales represented 14 percent of sales (all
lines), and sales in the United States represented 86 percent of
sales.  These percentages are not expected to change materially in
fiscal 1995.

     Competition.  Competition in the compass line is provided by
several foreign firms, including Silva in Sweden and Suunto in
Finland.  Brunton is unable to determine its market share for
compass sales, as data therefor is unreliable, but believes it is
a substantial competitor in the United States.  Silva and Suunto
are believed to have larger market shares in the United States
compass market; such companies are believed to have resources
substantially greater than Brunton.

Lakota cutlery faces competition from over ten competitors, all of
which have larger United States market shares and greater marketing
and other resources than Brunton.

Brunton optical products compete with products from at least ten
other firms, all of which have a larger percentage of the United
States binocular market.  Most of these competitors have
substantially greater marketing and other resources.

     Seasonality.  All Brunton sporting products experience
seasonal sales, with stronger sales in July through December and
declining in January and February.

     Major Customers.  Two national discount chains accounted for
approximately 21 percent of compass sales in fiscal 1994, compared
to 20 percent in fiscal 1993.  Sales to one catalogue supplier
represented 18 percent of optical product sales in fiscal 1994,
compared to 35 percent in fiscal 1993.  Sales to one catalogue
supplier represented 13 percent of cutlery sales in fiscal 1994. 
The preceding percentages have not changed materially to date in
fiscal 1995.

Loss of any one of the major customers would not have a material
adverse effect on Brunton, however, loss of more than one in any
one product line could cause significant market share loss.

     Intellectual Property 

Brunton currently holds United States utility patent Nos. 4,175,333
(expires 2005), covering its pocket transit, and 5,079,846,
covering a liquid-type survival compass (expires 2009).  Eight
other United States utility patents are held which cover different
compass constructions, expiring 1993 to 1994, and one United States
utility patent (4,578,864) is held on a cutlery model (expires
2002).

Five United States design patents are held on compasses and
cutlery, which expire between 1998 and 2004.

Foreign patent protection in certain countries (principally Canada
and Europe) has been obtained on a limited number of products.
     
United States patent applications are filed for significant new
products, as developed.  No notice of adverse determinations has
been received with respect to pending applications.

Real Estate

Wyoming Properties.  USECC owns a 14-acre tract in Riverton,
Wyoming, with a two-story 30,400 square foot office building
(including underground parking).  The first floor is rented to
affiliates, nonaffiliates and government agencies; the second floor
is occupied by USE and Crested and is adequate for their executive
offices.  USECC also owns and operates Wind River Estates, a 100-
unit trailer park on 19.7 acres in Riverton.  The preceding two
properties are mortgaged to the State of Wyoming as security for
future reclamation work on the SMP properties.  

USECC owns a fixed base aircraft operation at the Riverton
Municipal Airport, including a 10,000 square foot aircraft hangar
and associated offices and facilities.  This operation is located
on land leased from the City of Riverton, for a term ending
December 16, 2005, with an option to renew on mutually agreeable
terms for five years.  The annual rent is presently $1,156
(adjusted annually to reflect changes in the Consumer Price Index),
plus a $0.02 fee per gallon of fuel sold.  

USE and Crested own 18 undeveloped lots on 26.8 acres of the Wind
River Airpark near the Riverton Municipal Airport, and three
mountain sites covering 16 acres in Fremont County, Wyoming.

USECC owns various buildings, 600 city lots and other properties at
the Jeffrey City townsite in south-central Wyoming.  More than
4,000 people resided in Jeffrey City in the early 1980s, when the
nearby Crooks Gap and Big Eagle uranium mining projects were
active.  The townsite may be utilized for worker housing as the
Jackpot Mine and Sweetwater Mill are put into operation.  

USE owns five city lots and a 20-acre tract with improvements
including two smaller office buildings and three other buildings
with 19,000 square feet of office facilities, 5,000 square feet of
laboratory space and repair and maintenance shops containing 8,000
square feet, all in Riverton, Wyoming.  

Colorado Properties.  In connection with the AMAX transaction for
the molybdenum properties near Crested Butte, Colorado, USECC
acquired an option from AMAX (now Cyprus Climax) to purchase (until
June, 2002) approximately 57 acres for $200,000 in Mountain Meadows
Business Park, Gunnison, Colorado.  The property is zoned
commercial and industrial, and is adjacent to Western State
College.  In fiscal 1995, USECC and Cyprus Climax agreed on
exercise of the option by foregoing six quarters of advance
royalties from Cyprus Climax (the option purchase price was
$200,000).  See "Molybdenum" above.

Thereafter, USE (together with Crested) signed option agreements
with Pangolin Corporation, a Park City, Utah developer, for sale of
the 57 acres, and a separate parcel owned in Gunnison County,
Colorado.  If both options are exercised, the combined purchase
price is US$1,851,920.  The acreage is not encumbered.

The first option (exercised in February, 1995) was for the 57
commercial and noncommercial zoned acres in the City of Gunnison,
Colorado; the purchase price was $970,300.  Pangolin has paid
$345,000 cash and $625,300 by its three year nonrecourse promissory
note.  19.25 acres have been deeded to Pangolin; the remaining
acreage secures the note, and will be released to the buyer against
principal payments on the note as development (mixed commercial and
residential) advances. 

The second option covers 472.5 acres of ranch land northwest of the
City of Gunnison, Colorado (purchase price $851,920).  Pangolin has
paid $10,000 for the option; on option exercise and closing,
Pangolin will pay $40,000 in cash and $801,920 by two nonrecourse
promissory notes (each with principal and unpaid interest due on
the third anniversary of closing).  At closing, 22.19 acres will be
deeded to Pangolin; different parcels of the remaining acreage will
secure the notes, and be released for principal payments in the
course of development.  The option expiration date of February 20,
1995 is being extended on a monthly basis in anticipation of
exercise and closing within fiscal 1995.
  
Both notes ($150,000 and $651,920) will require annual payments of
accrued interest: the larger note accrues interest at 7.5 percent;
the initial interest rate on the smaller note is 7.5 percent for 90
days after closing if all principal and interest is paid by the
ninetieth day, and 12 percent thereafter (with a $35,000 principal
payment on the first anniversary).  Separately, the Company (and
Crested Corp.) are negotiating a possible joint venture residential
lot development of an 88 acre parcel northwest of Crested Butte,
Colorado, previously the site of anthracite coal mining.  No
agreement has been signed to date on this parcel. 

Utah Properties.  Canyon Homesteads, Inc. (a Plateau subsidiary)
owns the Ticaboo Townsite in Ticaboo, Utah.  Canyon Homesteads was
the majority partner in a joint venture which developed the
townsite in the 1980s; subsequent to May 31, 1994, USE acquired the
minority interest in the venture from a nonaffiliate.  

The townsite is 3.5 miles south of the Shootaring Canyon Mill, and
includes a 66 room motel, general store, laundromat facility, 98
home sites, 151 mobile home sites, and 26 recreational vehicle
sites (all with utility access).  The townsite is located on a
State of Utah lease near Lake Powell.  In fiscal 1994, limited
capital improvements and a general refurbishing were effected by
USE (total costs approximately $400,000).  There have been no
similar material expenditures in fiscal 1995.  USE presently seeks
an operator/developer partner for upgrading this asset to a
commercial enterprise, located 13 miles from Lake Powell; no
agreements have been reached to date.  

Net Revenues by USE Segment

Minerals and construction operations have accounted for more than
15 percent of USE total revenues in the last three fiscal years. 
Percentage contributions by the three USE segments in the last
three fiscal years was: 

                  Percentage of Net Revenue During Year Ended

                           May 31,      May 31,    May 31,
                            1994         1993       1992 

Minerals Operations          50%          53%        26%
Commercial Operations        13%          10%        13%
Construction Operations      30%          22%        46%

See Note I to audited USE Consolidated Financial Statements for
information concerning a significant customer in minerals
operations.  Neither commercial nor construction operations are
dependent upon a single customer, or a few customers, the loss of
which would have a materially adverse effect on USE.

Uranium and Molybdenum Market Information

Uranium.  During recent years there have been several major
producers of uranium in the United States (Pathfinder Mines
Corporation, Chevron Resources, Uranium Resources Inc., Freeport-
McMoRan Resource Partners, L.P., Energy Fuels Nuclear, Inc.,
Ferrett Exploration, General Atomics and others).  There are
several major producers in Canada (Cameco, Cogema Canada, Ltd. and
Rio Algom); Australia (Energy Resources of Australia and 
Pancontinental Mining, Ltd.); Africa (Cogema and RTZ's Rossing 
unit), and Europe.  Many of these operations are in standby mode
due to current low prices for U3O8.  The market deteriorated as the
former Soviet Union, now known as the Commonwealth of Independent
States ("CIS"), increased exports to the western uranium spot
market, which slowed down the reduction of western inventories.

Uranium is primarily used in nuclear reactors that heat water to
drive turbines that generate electricity.  There are presently
about 425 commercial nuclear power plants worldwide either
operating, under construction or on order.  Current worldwide
consumption is about 150 million pounds of U3O8 per year, but
worldwide production is approximately 75 million pounds per year. 
Published reports indicate that approximately 31 percent of the
worldwide nuclear-powered electrical generating capacity is in the
U.S., 49 percent is in western Europe, and 14 percent is in the Far
East.  Although the reactors in western Europe have a greater
aggregate generating capacity and fuel usage, the supply of uranium
for those reactors has been obtained for relatively long periods,
and the market requiring the greatest supply of uranium for the
next few years is believed to be the United States.  The Asia
Pacific region may also develop into a significant uranium
consumer, due to announced plans for rapid expansion of nuclear
power programs in Japan and Korea.

Pursuant to Suspension Agreements signed in fiscal 1993 between the
United States Department of Commerce ("DOC") and certain of the
Republics of the Commonwealth of Independent States ("CIS"), to
rectify prior damage to domestic United States uranium producers
from dumping sales by certain CIS republics of U3O8, all spot sales
of U3O8 delivered into the U.S. now reflect quota restrictions on
U3O8 imports from the CIS.  However, there are provisions which
allow certain long-term uranium sales contracts entered into with
domestic utilities prior to March 5, 1992, to be grandfathered.

NUEXCO Exchange Value.  The market related contracts of SMP are
based on an average of the Nuexco Exchange Value ("NEV") for 2, 3
or more months before uranium delivery.  The high and low NEV
reported on U3O8 sales during USE's past five fiscal years are
shown
below.  NUEXCO Exchange Values are reported monthly and represent
NUEXCO's judgment of the price at which spot and near term
transactions for significant quantities could be concluded.  NEVs
for fiscal 1993 are higher for U.S. transactions, due to the impact
of CIS import restrictions since late 1992.  These prices ("US
NEV") were reported by NUEXCO for spot sales in the restricted U.S.
market.
                              NUEXCO EXCHANGE VALUE
                              _____________________

                               US $/pound of U3O8
               Years Ended      _________________
                 May 31,        High         Low
               ___________     ______      ______
                 1989          15.10         9.85
                 1990           9.80         8.70
                 1991          11.70         8.35
                 1992           9.05         7.75
                 1993          10.05         7.75
                 1994          10.20         9.25

US NEV at March 31, 1995 was $11.15.

On August 31, 1993, NUEXCO made a public release that clarified its
definition of the NEV with reference to restricted and unrestricted
terminology, so that the restricted market values apply to all
products and services delivered in the U.S. as well as non-CIS
origin products and services delivered outside the U.S.

In the U.S., uranium is generally supplied to electric utilities
under medium to long-term supply agreements, which require
deliveries more than one year after entry into the contract.  These
agreements are designed to provide both the producer-supplier and
the customer with comfort as to the amount of uranium desired and
the availability of supply at a predictable price.  Utilities
generally seek supply contracts at least two to three years before
their needs occur.  It is expected that a large portion of U.S.
demand will be secured by electric utilities entering into
contracts in the next two to four years.  There also is an active
spot market, through which approximately 5 to 10 percent of uranium
concentrate needs are satisfied.

NUEXCO reports that through the first six months of 1994, U.S.
utilities bought 6,300,000 lbs U3O8 in the spot and near term
market, and another 11,800,000 lbs. U3O8 was purchased under
outstanding long-term contracts.  A portion of the spot and near
term market sales may have supplied purchases under long-term
contracts.  While demand in 1994 appears to exceed domestic
production, there remains a near-term supply of U3O8 from domestic
producers' inventory, and from unrestricted (i.e., not under
quotas) foreign producers current production and inventory.  USE
expects these and other factors (e.g., weapons grade uranium
conversions) will contribute to moderate concentrate price
increases, which otherwise might be expected from the shortfall of
United States production meeting demand, into fiscal 1996, in spite
of increasing interest from U.S. utilities in renewing long-term
contracts at higher than spot market prices.  To date in fiscal
1995, long-term contract prices have increased moderately, and spot
prices have increased from $10.20 in fiscal 1994 to $11.15 at March
31, 1995.
 
Molybdenum

Molybdenum is a metallic element with applications in both
metallurgy and chemistry.  Principal consumers include the steel
industry, which uses molybdenum alloying agents to enhance strength
and other characteristics of its products, and the chemical, super-
alloy and electronics industries, which purchase molybdenum in
upgraded product forms.

The molybdenum market is cyclical with prices influenced by
production costs of foreign and domestic competition, world-wide
economic conditions, the U.S. dollar exchange rate, and other
factors such as the market for end-use products.  When molybdenum
prices rose dramatically in the late 1970s, for example, steel
alloys were modified to reduce reliance on molybdenum.  AMAX and
Cyprus Minerals Company were the two major primary producers of
molybdenum in the United States until late 1993, when the companies
merged.

Worldwide demand for molybdenum in 1989 was reportedly 210 million
pounds, its highest level ever.  However, production for that
period was about 233 million pounds, as the industry and prices
continue to be affected by co- and by-product production of
molybdenum by other metals operations, and by excess capacity of
the primary producers.  By-product producers of molybdenum
(primarily Chilean copper mining companies) dominate the molybdenum
market and have a major impact on available supplies.  It is
unlikely that any new major primary deposits will commence
production during fiscal 1995.

Molybdenum prices on the open spot market have increased
substantially ($3.35 per pound of molybdic oxide (the refined
product) in September 1994, to $10.50-11.50 per pound in April
1995).
 
Research and Development

USE has incurred no research and development expenditures, either
on its own account or sponsored by customers, during the past three
fiscal years. 

Environmental

USE operations are subject to various federal, state and local laws
and regulations regarding the discharge of materials into the
environment or otherwise relating to the protection of the
environment, including the Clean Air Act, the Clean Water Act, the
Resource Conservation and Recovery Act ("RCRA"), and the
Comprehensive Environmental Response Compensation Liability Act
("CERCLA").  With respect to mining operations conducted in
Wyoming, Wyoming's mine permitting statutes, Abandoned Mine
Reclamation Act and industrial development and siting laws and
regulations impact USE.  Similar laws in California affect Sutter
Gold Mining Company operations.  Utah statutes will effect
Plateau's operations.

To USE's knowledge, it is in compliance with current environmental
regulations.  To the extent that production by SMP, GMMV or Sutter
Gold is delayed, interrupted or discontinued due to need to meet
additional provisions which relate to environmental protection,
future USE earnings could be adversely affected.

Certain Permits, Costs

A number of legislative proposals and regulations have been
introduced in Congress and in the legislative bodies of various
states which, if enacted, would significantly affect the minerals
industry.  For example, in fiscal 1993 the Mining Law of 1872 was
revised to change methods of acquiring and maintaining mining
claims on public lands, by requiring the payment (two years in
advance) of an annual fee of $100 per claim for assessment rather
than performing $100 worth of work on each unpatented mining claim.

This law already has affected USE, as a number of unpatented claims
were dropped in fiscal 1993 due to high holding costs.  A limited
number of such claims are currently held.

Status and estimated future costs for permits not previously
disclosed in this Report follow:

Crooks Gap.  An inoperative ion exchange facility at Crooks Gap
currently holds a NRC license for possession of uranium operations
byproducts.  To date, a notice of minor violations was received
from the NRC, which USE has resolved.  USE has applied to the NRC
for permission to decommission and decontaminate the plant, dispose
low level waste into the Sweetwater Mill tailings cell, and keep
intact such of the facility as does not require dismantling.  Costs
for this two year effort (once approved by the NRC) are not
expected to exceed $150,000.  

SMP.  USE and Crested are not required to make additional
expenditures to comply with provisions of the mine permit and
licenses and to protect the environment at SMP, however, included
in general and administrative expenses are expenditures related to
preparation and filing of reports on maintaining the properties in
compliance with environmental regulations.  

GMMV.  During the twelve months ending May 31, 1995, it is
anticipated that expenditures by GMMV to comply with provisions of
the mine permits and licenses, or otherwise to protect the
environment, will be approximately $200,000, 50 percent of which
will be for capital expenditures. 

Sutter Gold.  In fiscal 1994, Sutter Gold spent approximately
$90,000 to build an underground mine water treatment and surface
disposal plant, in compliance with California environmental
regulations.  This plant will be adequate for future mine water
treatment needs, even after the Lincoln Mine is put into
production.  

A significant amount of the total capital requirements to put the
Lincoln Mine into production, will pay for road construction,
tailing ponds, mill circuit design and other capital items which
are required by the conditional use permit from the Amador County
Board of Supervisors.

Actual costs for compliance with environmental laws may vary
considerably from estimates, depending upon such factors as changes
in environmental regulation (e.g., the new Clean Air Act), and
conditions encountered in minerals exploration and mining.  

With respect to environmental compliance expenditures by GMMV,
there ultimately will be an effect on USE earnings since GMMV
operations will be accounted for by the equity method.  GMMV's
expenses for compliance with environmental laws (as well as other
matters) are not expected to materially affect USE from a cash flow
standpoint during the next two years, as Kennecott will fund the
first $50,000,000 of costs of GMMV.  USE does not anticipate that
expenditures of SMP, GMMV and SGV to comply with laws regulating
the discharge of materials into the environment, or which are
otherwise designed to protect the environment, will have any
substantial impact on the USE's competitive position. 

Employees

USE has 52 full-time employees.  Crested uses approximately 50
percent of the time of USE employees, and reimburses USE
accordingly.  Payroll expense has been shared by USE and Crested
since 1981.

Mining Claim Holdings

The majority of mining properties owned by USE and/or by USECC are
unpatented mining claims, valid title to which depends upon
numerous factual matters.  Due to changes in the 1872 Mining Law,
USE and/or its co-venturers had the obligation to pay a rental fee
of $200 per claim for years ending on September 1, 1993 and 1994 by
August 31, 1993, and thereafter $100 annual per claim in order to
preserve the right to possession of unpatented mining claims.  Due
to these changes in the 1872 Mining Law, USE dropped a large number
of claims to reduce holding costs.  In addition to annual rental
fees, there are technical requirements which must be met to
establish a valid mining claim.  Satisfaction of these technical
requirements cannot be assured.

As a result of the above changes in 1872 Mining Law, title to the
unpatented lode mining claims held by GMMV and SMP on the Wyoming
uranium properties now are maintained by annual filings with the
BLM of $100 per claim.  Such claim filings are current.   

                      USE Legal Proceedings

Concerning Sheep Mountain Partners
 
Arbitration. On June 26, 1991, CRIC submitted certain disputed
matters concerning SMP to arbitration before the American
Arbitration Association in Denver, Colorado, to which USE and
Crested filed a responsive pleading and counterclaim alleging
violations of contracts and duties by CRIC related to SMP.  CRIC
asserted that USE and Crested, d/b/a/ USECC, were in default under
the SMP partnership agreement ("SMP Agreement").  Prior to
initiation of arbitration proceedings, USE and Crested had notified
CRIC it was in default under the SMP Agreement.  The issues raised
in the arbitration proceedings were generally incorporated in the
Federal proceedings (see below), wherein the U.S. District Court of
Colorado stayed further proceedings in arbitration.  See
"Stipulated Arbitration", below.   

Federal Proceedings. On July 3, 1991, USE and Crested
("plaintiffs") filed Civil Action No. 91-B-1153 in the United
States District Court for the District of Colorado against CRIC,
Nukem, Inc. ("Nukem"), and various affiliates of CRIC and Nukem
(together, the "defendants"), alleging that CRIC and Nukem
misrepresented material facts to and concealed material information
from the plaintiffs to induce their entry into SMP Agreement and
various related agreements.  Plaintiffs also claim CRIC and Nukem
have wrongfully pursued a plan to obtain ownership of the USE-
Crested interests in SMP through various means, including
overcharging SMP for uranium "sold" to SMP by defendants. 
Plaintiffs further allege that defendants refused to provide a
complete accounting with respect to dealings in uranium with and on
behalf of SMP, and that certain defendants misappropriated SMP
property, and engaged in other wrongful acts relating to the
acquisition of uranium by SMP.
  
Plaintiffs requested that the court order rescission of the SMP
Agreement and related contracts, and ask the court to determine the
amounts payable to CRIC by USECC as a result of any such rescission
order to place the parties in status quo.  USE and Crested also
requested that the court order defendants to make a complete
accounting to them concerning the matters alleged in the Amended
Complaint.  They requested an award of damages (including punitive,
exemplary and treble damages, interest, costs and attorneys' fees)
in an amount to be determined at trial.  Plaintiffs had further
requested imposition of a constructive trust on all property of SMP
held by defendants, and on profits wrongfully realized by
defendants on transactions with SMP.

The defendants filed various motions, an answer and counterclaims
against plaintiffs, claiming plaintiffs had misappropriated a
partnership opportunity by being involved with Kennecott on the
Green Mountain uranium properties.  Defendants also requested
damages (including punitive, exemplary and treble damages, interest
costs and attorney fees).   

Stipulated Arbitration.  In fiscal 1994, the plaintiffs and
defendants agreed to proceed with exclusive, binding arbitration
before a panel of three arbitrators with respect to any and all
post-December 21, 1988 disputes, claims and controversies
(including those brought in the 1991 arbitration proceedings, the
Colorado State Court proceeding (see below), and the U.S. District
Court proceeding), that any party may assert against the other. 
Each party may file or amend its claims in the arbitration
proceeding, to assert all claims it believes it has.  All pre-
December 21, 1988 claims, disputes and controversies pending before
the U.S. District Court have been stayed by stipulation between the
parties, until the arbitrators enter an order and award in the
arbitration proceeding.   

In connection with agreeing to proceed to arbitration as stated
above, the plaintiffs have affirmed the Sheep Mountain Partners
partnership, and are proceeding on common law damages and other
claims in the arbitration.  Approximately $8.6 million cash,
comprising part of the damages claimed by plaintiffs, has been
placed in escrow by agreement of the parties pending resolution of
the disputes.  Plaintiffs are claiming additional substantial
amounts of damages.   

At Prospectus date, it is expected that the arbitration evidentiary
proceedings will be completed June 2, 1995, and the award of the
arbitrators is expected within 90 days thereafter.  As in most
litigation, there is no assurance of the outcome.
     
Colorado State Court Proceeding. On September 16, 1991, plaintiffs
filed Civil Action No. 91CV7082 in Denver District Court, seeking
reimbursement of $85,000 per month from the spring of 1991 for
maintaining the SMP underground uranium mines at Crooks Gap on a
standby basis.  On behalf of SMP, CRIC filed an answer, affirmative
defenses and a counterclaim against plaintiffs.  Plaintiffs filed
a motion for summary judgment; the court denied the motion and
stayed all proceedings pending resolution of the Federal
proceeding, which in turn have been stayed through arbitration (see
"Stipulated Arbitration" above).

BGBI Litigation Parador

On July 30, 1991, Bond Gold Bullfrog, Inc. ("BGBI") filed Civil
Action No. 11877 in the District Court of the Fifth Judicial
District of Nye County, Nevada, naming USE, Crested, USECC, Parador
and H. B. Layne Contractor, Inc. ("Layne"), as defendants.  The
complaint primarily concerns extralateral rights associated with
two patented mining claims owned by Parador and initially leased to
a predecessor of BGBI.  USE and Crested assert certain interests in
the claims under an April 1991 assignment and lease with Parador,
which claims are in and adjacent to BGBI's Bullfrog open pit and
underground mine.  The Bullfrog Mine reportedly produced
approximately 220,000 ounces of gold in 1990, 199,000 ounces of
gold in 1991, and 323,800 ounces of gold in 1993.

The BGBI complaint alleges Layne owns 20 unpatented mining claims
adjacent to or in the vicinity of the subject claims, which 20
claims are allegedly under lease by Layne to BGBI. BGBI seeks a
declaratory judgment on any extralateral rights of defendants to
the various claims at the Bullfrog Mine.  Parador, USE and Crested
had previously advised BGBI that they are entitled to royalty
payments with respect to extralateral rights of the subject claims
on minerals produced at the Bullfrog Mine, claiming that the lode
or vein containing the gold mineralization apexes on the Parador
claims and dips under the Layne claims.

BGBI also seeks quiet title to its leasehold interest in the
subject claims, alleging that the lease thereof to USE and Crested
is adverse to the interest claimed by BGBI, and that the assertions
by USE and Crested of an interest in the claims have no foundation.

BGBI seeks a determination that USE and Crested have no rights in
the Claims, and an order enjoining USE and Crested from asserting
any interest in them.  BGBI further claims that in attempting to
lease an interest in the subject claims to USE and Crested, Parador
breached the provisions of its lease to BGBI, and that Parador is
responsible for the legal fees and costs incurred by BGBI in the
quiet title action which may be offset against royalties.  Under an
arrangement to pay certain legal expenses of Parador, USE and
Crested may be responsible for any such amounts.

BGBI alleges that by entering into the Assignment and Lease of
Mining Claims with Parador, USE and Crested disrupted the
contractual relationship between BGBI and Parador.  In addition,
BGBI claims that the USECC-Parador agreement slanders BGBI's title
to the Claims.  BGBI seeks compensatory damages from Parador, USE
and Crested; punitive damages from USE and Crested; and costs and
other appropriate relief from Parador, USE and Crested, all in
amounts to be determined.

USE and Crested believe that they have rightfully acquired
interests in extralateral rights concerning the subject claims, and
have filed an answer, counterclaim against BGBI and cross-claim
against Layne asserting rights to royalties and other obligations
due from BGBI.

The parties have held discovery conferences and exchanged exhibits
and scheduled depositions.  USE and Crested filed a motion for
summary judgement, which was denied. This litigation is not
anticipated to have a material adverse impact on USE, regardless of
its outcome.  If USE's position concerning extralateral rights is
sustained, substantial additional revenues and income may be
received by USE and Crested.  Trial on the issue of extralateral
rights is scheduled for July 1995.

Concerning Illinois Power

On October 29, 1993 Illinois Power Company ("IPC") filed Civil
Action No. 93-2247 in United States District Court, Central
District of Illinois, naming USE, Crested, USECC, CRIC, Nulux Nukem
Luxemburg GmbH (NULUX), Dresdner Bank, and SMP, seeking a
declaratory judgment that IPC was entitled to terminate the 1988
uranium supply contract between IPC (a utility) and USECC.  Under
this contract, IPC agreed to purchase 1 million pounds of uranium
by increments from 1990 to 2000.  Contract prices started at $20.00
per pound plus escalator provisions, and currently are
substantially over spot market prices.

Plaintiff IPC claimed authority to terminate the contract (assigned
by USECC to SMP, and thereafter assigned by SMP to Nulux and
Dresdner Bank), under contract provision permitting termination in
the event a contract party "enters into any voluntary or
involuntary receivership, bankruptcy, or insolvency proceedings."

Plaintiff IPC alleged that when USE and Crested filed (in July
1991) a motion (in United States District Court, District of
Colorado) for appointment of USE and Crested as receiver pendente
lite for SMP and the SMP assets (pending resolution of the
litigation claims among the SMP partners), such filing constituted
"receivership proceedings" under the contract with IPC, giving IPC
power to terminate the contract.  Subsequent to filing their motion
for receiver, USE and Crested asked the court to defer ruling on
the motion for receiver.

No receiver has been appointed over USE, Crested, USECC or SMP or
their assets, in the United States District Court, District of
Colorado proceedings to date. 

Plaintiff IPC had notified USE (and SMP and the other SMP
partners), that IPC will not accept the nine uranium concentrate
deliveries anticipated under the contract, from October 31, 1993
through June 1996.

Dresdner Bank was dismissed from the case in fiscal 1994.  The
remaining defendants filed Motions for Summary Judgment. 
Subsequent to hearing on May 27, 1994, the Court granted
defendants' motions to dismiss IPC's complaint, and granted summary
judgment on all of the defendants' counterclaims against IPC.  A
trial to the court on the amounts of plaintiffs' damages presently
is set for October 23, 1995.

  Market for USE Common Shares and Related Stockholder Matters

Shares of USE common stock are traded on the over-the-counter
market, and prices are reported on a "last sale" basis by the
National Market System ("NMS") of the National Association of
Securities Dealers Automated Quotation System ("NASDAQ").   The
range by quarter of high and low sales prices for USE common stock
is set forth below for fiscal 1993, 1994, and the first three
quarters of fiscal 1995.

                                         High     Low
                                         _____   _____
       Fiscal year ending May 31, 1995
       _______________________________
       First quarter ended 8/31/94       $5.13   $3.88
       Second quarter ended 11/30/94      4.75    3.50 
       Third quarter ended 2/28/95        4.63    3.38  

       Fiscal year ending May 31, 1994
       _______________________________
       First quarter ended 8/31/93       $6.25   $4.25
       Second quarter ended 11/30/93      5.00    4.12
       Third quarter ended 2/28/94        4.12    3.75
       Fourth quarter ended 5/31/94       5.13    4.12

       Fiscal year ended May 31, 1993
       _______________________________
       Fourth quarter ended 5/31/93      $5.38   $2.50
       Third quarter ended 2/28/93        3.63    2.25
       Second quarter ended 11/30/92      3.75    2.63
       First quarter ended 8/31/92        4.25    2.88

At April 3, 1995, there were 837 stockholders of record for USE
common stock.
   
USE has never paid cash dividends on any class of stock.  There are
no contractual restrictions on USE's present or future ability to
pay cash dividends, however, USE intends to retain any earnings in
the near future for operations. 

            USE Management's Discussion and Analysis
        of Financial Condition and Results of Operations

The following is managements's discussion and analysis of those
significant factors which have affected USE's liquidity, capital
resources and results of operations during the periods covered in
the USE Consolidated Financial Statements included with this
Prospectus.                                

Liquidity and Capital Resources at February 28, 1995 (unaudited)

Working capital declined during the nine months ended February 28,
1995 by $2,170,900 to working capital of $404,000.  Cash and cash
equivalents decreased by $401,000 during the period ended February
28, 1995.  This decrease was primarily as a result of operating and
investing activities. 

USE utilized $268,400 in its investing activities during the nine
months ended February 28, 1995.  This was primarily as a result of
USE and its subsidiary Crested Corp. ("Crested") funding Sheep
Mountain Partners ("SMP"), Plateau Resources Limited ("Plateau"),
Energx, Ltd. ("Energx") and the Sutter Gold Mining Company
("SGMC").  As USE and Crested provide various services for GMMV and
SMP, the non-affiliated participants are invoiced for their
proportionate share of the approved operating costs.  GMMV is
current on its reimbursements to USE and Crested for all the
operating costs.  Due to disputes existing between the SMP
partners, USE and Crested have not been reimbursed for care and
maintenance costs expended on the SMP mineral properties since the
spring of 1991.

The other significant changes in current assets occurring during
the most recently completed period, were a decrease in accounts
receivable of $131,200 and an increase in inventory of $61,800. 
Inventories increased as a result of USE's subsidiary Brunton
expanding its optics product line. 

Other changes in working capital were increases in accounts payable
and accrued expenses of $672,100 and current portion of long term
debt of $1,128,400.  The increase in current portion of long term
debt is primarily due to the draw down by USE and Crested of a line
of credit with a bank.  The line of credit is for $1,000,000 and as
of February 28, 1995 USE and Crested had utilized $960,000 of the
credit facility leaving $40,000 available for operations.

The primary requirements for USE's working capital continue to be
the funding of on-going administrative expenses, including legal
costs incurred as a result of the SMP litigation and arbitration
with Nukem/CRIC; the mine and mill development and holding costs of
SGMC; holding costs of Plateau; development of gas properties of
Energx; uranium (U3O8) delivery costs, and property holding costs
of SMP.  As a result of the disputes between the SMP partners, USE
and Crested have been delivering certain of their respective
portions of the U3O8 concentrates required to fill various delivery
requirements on long-term U3O8 contracts with domestic utilities. 
Currently, Nukem/CRIC are making the SMP deliveries of U3O8.  It is
not known how long this arrangement will continue.  The capital
requirements to fill USE's and Crested's portion of the remaining
commitments in fiscal 1995 will depend on the spot market price of
uranium and is also dependent on the outcome of proceedings
involving Nukem/CRIC.

The primary source of USE's capital resources for the remainder of
fiscal 1995, will be (i) cash on hand; (ii) sale of an interest or
100% in mining and investment properties, (iii) sale of equipment;
(iv) private placement of USE's common stock; (v) settlement of
litigation; (vi) sale of royalties on mineral properties; (vii)
proceeds from the sale of uranium under the SMP contracts; (viii)
and borrowings from financial institutions.  Fees from oil
production, rentals of various real estate holdings and equipment,
aircraft chartering and the sale of aviation fuel will also provide
cash.  Additional working capital to that on hand at February 28,
1995 will be required to hold and maintain existing mineral
properties, permitting, the construction of a mill, and mine
development of SGMC, funding of litigation against Nukem/CRIC and
the development of Plateau associated properties and administration
costs.  USE and Crested are currently seeking a joint venture
partner and/or other means of financing the construction of the
SGMC mill and mine development.  

The funding of SMP care and maintenance costs may require
additional funding, depending on the outcome of the SMP
arbitration.  USE and Crested sought rescission of the SMP
Partnership Agreement as well as damages from Nukem/CRIC in U.S.
District Court.  The parties to the litigation agreed to a
consensual binding arbitration on claims accruing after the
formation of the SMP partnership.  In the opinion of management,
the arbitration proceedings are progressing favorably for USE and
Crested, however, it is premature at this time to predict the
outcome. It is currently anticipated that the arbitration hearings
will be concluded by June 2, 1995.  It is further anticipated that
the Arbitration Panel will enter its award  some time during August
or September 1995 depending on the Panel's availability.

During the quarter ended February 28, 1995, USE began selling
shares of its common stock through a private placement to
individual investors.  As of February 28, 1995 a total of 289,396
shares had been sold for a total of $868,188.  The balance of the
private placement was completed during March 1995.  The total
number of shares sold was 400,000 at $3.00 per share for total
proceeds of $1,200,000.  No commissions were paid.  USE has agreed
to either buy the stock back on October 15, 1995 or issue an
additional share for every three shares purchase or a total of
133,333 additional shares.  USE has further agreed to register all
the shares issued in the private placement by February 28, 1996.

USE is currently negotiating an additional private placement in
Canada of 1,000,000 shares of its common stock at market.  If this
private placement is completed, these monies will be used to
develop the Plateau properties.

Results of Operations

Nine Months Ended February 28, 1995 Compared to Nine Months Ended 
February 28, 1995 (unaudited)

Revenues for the period ended February 28, 1995 remained consistent
with the same period of the previous year; however the components
changed somewhat.

Commercial revenues increased by $3,377,300 primarily as a result
of the consolidation of sales from Brunton.  These revenues were
consolidated for the nine months ended February 28, 1995 due to the
acquisition of Brunton in May 1994.  Brunton revenues were not
consolidated during the same period of the prior year.

Revenues from mineral sales and mineral property transactions
decreased by $2,893,700 and $505,900, respectively, as a result of
USE reporting revenues from the deliveries of U3O8 to fill various
SMP contracts with domestic utilities and the final amortization of
the indebtedness to AMAX of $500,000 during the period ended August
31, 1993.  There were no similar U3O8 deliveries or amortization
activities in the current year.  The debt to AMAX was fully
amortized as of August 31, 1993.  

Construction operation revenues for the nine months ended February
28, 1995 decreased by $1,085,100 from the same period last year due
to decreased contract work performed by USE's subsidiary Four Nines
Gold, Inc. ("FNG").  

The costs and expenses associated with mineral operations decreased
primarily due to no U3O8 sales in fiscal 1995.  This decrease was
partially offset by an increase in legal costs in connection with
the SMP arbitration.  The commercial operations, and general and
administrative expenses increased primarily due to the Brunton
consolidation.

On June 1, 1993, USE implemented SFAS No. 109.  See Footnote 4 to
the unaudited USE Consolidated Financial Statements.  The
cumulative effect for the period ended February 28, 1994, of this
tax accounting change was a decrease of net income of $267,000.  No
charge for a change in tax accounting was made for the nine months
ended February 28, 1995.

Operations for the nine months ended February 28, 1995 resulted in
a net loss $1,315,800 as compared to a loss of $2,019,300 during
the same period of the previous year.

Liquidity and Capital Resources at May 31, 1994

Working Capital Components.  Net cash used in operating activities
and financing activities were $3,808,400 and $285,900, respectively
for fiscal 1994.  Cash provided by investing activities was
$4,796,400.  For the year, these activities resulted in a net
increase of $702,100 in cash.              

Working capital increased during the fiscal year ended May 31, 1994
by $2,516,700 to $2,574,900 (from $58,200 at May 31, 1993).  The
principal components of the increase were a $702,100 increase in
cash and cash equivalents, an increase of $1,344,200 in inventory
which is primarily as a result of the acquisition of Brunton, and
$251,600 of trade receivables.  The increase in cash resulted from
the acquisition and consolidation of Plateau through a stock
purchase agreement and the acquisition of Brunton (see Note F to
the USE Consolidated Financial Statements).  The trade receivable
increased primarily as a result of the acquisition of Brunton.  At
the time of the acquisition of Plateau, USE received $14,200,000 in
cash and the Shootaring Mill facilities for the assumption of
certain liabilities as described further in Note F to the
consolidated financial statements.  $7,300,000 of these funds were
deposited in trust accounts for the future settlement of an
estimated $2,500,000 reclamation liability relative to the Plateau
assets and $4,800,000 for the resolution of any other environmental
claims associated with the Shootaring Mill owned by Plateau.  The
remaining $6,900,000 of cash received from Plateau, together with
$293,500 of cash received when the remaining interest in Brunton
was acquired in May, 1994, gave USE $7,193,500 of cash from
investing activities that was used primarily to fund expenditures
made during 1994.

Cash was primarily used in operations and financing activities
during the period.  Cash was used in the development of mining
properties, primarily SGV's Lincoln gold project, in the amount of
$796,300, development of the Energx gas properties, $207,900,
purchases and modification of property and equipment, $855,800 and
the continued investment in affiliates, $760,500.  These activities
resulted in a net cash flow from investing activities of
$4,796,400.

Due to disputes among the SMP partners, USE and Crested have not
been reimbursed for care and maintenance costs for the SMP
properties since the spring of 1991.  Such costs, including the
running of a decline to reduce pumping and production costs, were
approximately $1,400,000 in fiscal 1994.

Capital Requirements - General:  The primary requirements for USE's
working capital during fiscal 1995 are expected to be the costs
associated with development activities of SGV, care and maintenance
costs of SMP, care and maintenance of the Plateau properties,
payments of holding fees for all mining claims, purchase of uranium
for delivery to utility customers of SMP, drilling and overhead
expenses of ENERGX, and corporate general and administrative
expenses, including costs associated with continuing litigation and
arbitration. 

Capital Requirements - SGV:  SGV's properties contain reserves of
gold.  A portion of those properties has been the subject of a
preliminary feasibility study for the development of the
underground Lincoln Mine.  The study estimated that for a 500 ton
per day ("tpd") mine/mill operation using a cyanide-flotation
process, up to $18,000,000 may be needed for mine site development,
mill and tailings construction, permitting and the like, to place
the proposed mine into full operation.  However, more recent
studies indicate a gravity milling process will produce
satisfactory gold recovery rates.  Thus, USE and Crested anticipate
building the gravity process system initially, estimated to cost
less than $3,000,000.  USE and Crested have already purchased a
used semiautogeneous grinding mill and other equipment for the
front end of the facility.

Although pre-production mine development and underground
exploration is substantially complete, capital resources in
addition to those currently held on hand, will be needed to
complete mine development and construct a mill facility.  The
timing of these expenditures will depend upon internal cash flows
or additional financing.

Capital Requirements - SMP:  SMP's activities continue to consist
of negotiation of uranium sales agreements, purchases and
borrowings of uranium to fill contracts, and maintenance of the
Crooks Gap mines in a standby mode.  There are no current plans to
mine the SMP Crooks Gap properties during fiscal 1995, however, USE
and Crested will continue to preserve the ore body and develop
concepts to reduce care and maintenance costs, including driving a
decline to reduce pumping costs (which also would reduce future
mining costs by reducing hoisting costs).  Although funds are
available in SMP's bank account, these funds are restricted and
since early 1991 SMP has not paid USE and Crested the operating
costs and fees associated with their services as operating manager
of the Crooks Gap properties; such accumulated costs and fees were
$3,643,100 at May 31, 1994. 

Notwithstanding disputes between the SMP partners, USE and Crested
have delivered an agreed-upon portion of the uranium concentrates
required to fill contract delivery requirements on certain long-
term U3O8 contracts since July 1, 1991.  Working capital was
required for the purchase of these pounds on a short-term basis,
until resold under delivery contracts.  However, there is no
assurance this protocol with NUKEM/CRIC will be in place for 1995
and thereafter.  If the SMP partners are unable to agree on how to
separately effect contract performance for the various SMP
customers, resulting delivery delays and/or incomplete deliveries
could adversely affect the contracts, and therefore USE.

Capital Requirements - GMMV:  Operations of GMMV are not requiring
USE's capital resources, as the initial $50,000,000 of expenses on
the GMMV properties is being paid by Kennecott.  USE and Crested
continue to project the proposed Jackpot Mine can be put into
production for less than $25,000,000.  However, depending on
results of exploration and development projects on the properties,
additional expenditures may be required.  GMMV expenditures for
fiscal 1995 will depend on whether one or both declines for the
proposed mine are started.  A decision by the management committee
of GMMV regarding the declines will be made after all necessary
permits are acquired.  Nonetheless, GMMV should not require any
funding from USE during fiscal 1995.

Capital Requirements - Plateau:During fiscal 1994 the annual care
and maintenance costs for the Shootaring Mill were $1,098,000.  It
is anticipated that these costs will continue until the mill is
either placed into production or decommissioned unless USE is able
to sell or Joint Venture a portion of the Plateau assets.

Capital Requirements - ENERGX:  Another requirement of USE's and
Crested's working capital is the continued funding of ENERGX
overhead expenses and drilling operations.  Subsequent to May 31,
1994, ENERGX entered into an agreement with a Canadian firm, NuGas,
to drill shallow gas wells on the Fort Peck indian reservation in
Montana.  NuGas as a condition of its earn-in to the properties is
required to fund the drilling of the first eight wells.  After the
first eight wells, Energx will be required to fund its share of all
future drilling.  It is currently anticipated that if the first
eight wells are not profitable, there will be no additional wells
drilled.  Therefore capital expenditures for Energx by USE are not
anticipated to be significant in fiscal 1995.

Long-Term Debt and Other Obligations: In connection with the
transfer of properties to AMAX in 1980, AMAX made long-term loans
to USE and Crested of $7,500,000 each.  AMAX later agreed to credit
each of USE and Crested $250,000 per quarter against principal, in
lieu of advance royalties due USE and Crested.  

Indebtedness to AMAX is now fully retired (the final $500,000 was
amortized by AMAX without the use of cash during the quarter ended
August 31, 1993, in accordance with previously negotiated
arrangements); this final $500,000 installment was recognized as
revenue from mineral property transactions, as have been previous
such installments.  These revenues from debt amortization did not
generate cash.

Long-term debt at May 31, 1994 was $1,678,600, the current portion
of which is $569,500 (see Note G to the audited USE Consolidated
Financial Statements), not including $600,000 of draw downs as of 
September 1, 1994 on the new credit line discussed below).

Reclamation Costs.  Prior to fiscal 1994, USE and Crested assumed
the reclamation obligations, environmental liabilities and
contingent liabilities for employee injuries, from mining the
Crooks Gap and other properties in the Sheep and Green Mountain
Mining Districts.  The reclamation obligations, which are
established by governmental regulators, were most recently set at
$1,451,800, which amount is shown on USE's balance sheet as a long-
term obligation.

To assure the reclamation work will be performed, regulatory
agencies require posting of a bond or other security.  USE and
Crested satisfied this requirement with respect to SMP properties
by mortgaging their executive office building and a trailer park in
Riverton, Wyoming.  A portion of the funds for the reclamation of
SMP's properties was to have been provided by SMP, which agreed to
pay up to $.50 per pound of uranium produced from its properties to
USE and Crested for reclamation work.  The status of this
commitment could be impacted by the ultimate settlement of the
litigation with SMP.

Reclamation obligations on the contiguous Big Eagle properties and
the Sweetwater Mill, estimated at approximately $23,600,000, have
been assumed by the GMMV venturers, and secured by a bank letter of
credit provided by Kennecott.  The reclamation and environmental
costs associated with the Sweetwater Mill will not commence prior
to conclusion of mining activities on Green Mountain.  As uranium
is processed through the Mill, a reclamation reserve will be funded
on a per unit of production basis.  Up to $8,000,000 (in 1990
dollars) in any reclamation costs which may be incurred prior to
commencement of production or 2001 will be paid for by UNOCAL.

Reclamation obligations of Plateau are covered by a $2,500,000 cash
bond to the U.S. Nuclear Regulatory Commission and a $4,800,000
cash deposit for the resolution of any environmental or nuclear
claims.  

Reclamation work on any of the above properties need not be fully
completed until a decision is made to abandon the properties, or as
otherwise required by regulatory agencies.  Reclamation and
environmental costs associated with any of these properties are not
expected to require USE funding in fiscal 1995, because such costs
are not anticipated to be incurred for many years.  

See Note K to the audited USE consolidated financial statements
regarding reclamation and environmental costs, and the funding
thereof.

Capital Resources:  The primary source of USE capital resources for
fiscal 1995 will be cash on hand, proceeds from sale of uranium
under SMP contracts, sale of certain marketable securities and
miscellaneous non-core assets, and proceeds from financing
activities.  Fees from oil production (Ft. Peck Lustre Field,
Montana), rentals of real estate holdings and equipment, aircraft
chartering and aviation fuel sales, also will provide cash. 

Additional sources of capital will be needed to develop and build
the mine and mill complex for the Lincoln Project, for which
capital costs Sutter Gold Mining Company presently is seeking
financing by joint venture partner or public offering of equity. 
If such financing cannot be obtained, USE and Crested will be
forced to either sell the Lincoln Project or continue funding
Sutter Gold's property holding costs.  Continued funding of such
costs could cause USE and Crested to incur short term working
capital needs.  At Prospectus date, no arrangements for funding
needed for the project are under contract or agreement in
principle.

To fund the ENERGX drilling on the Fort Peck Reservation as well as
other locations, USE will seek a joint venture partner or obtain
financing through banking institutions or the public market.  At
Prospectus date, no arrangements for such financing are under
contract or agreement in principle. 

Funding of SMP care and maintenance costs may require additional
funding, depending on the outcome of the SMP litigation.  See
"Business-Legal Proceedings."  Although management is of the
opinion that the SMP litigation will be resolved in favor of USE
and Crested, which will result in funds being available to repay
USE and Crested for advances to SMP, this outcome is not assured. 
In any event, further delays (at least to the end of fiscal 1995)
in resolution of the litigation are expected, and may cause short
term liquidity needs.      

USE believes available working capital, operating revenues and
anticipated financing operations will continue to be adequate to
fund working capital requirements.  However, with the exceptions of
GMMV and Plateau, USE will require additional sources of funding to
continue to develop and invest in its various mineral ventures.

As of the end of fiscal 1994, USE had negotiated a $1,000,000
commercial bank credit line, $300,000 of which was available for
uranium spot market purchases and $100,000 was available for short
term working capital.  USE continues to implement a program to
reduce costs generally.

Although USE currently is not in production on any mineral
properties, development work continues on several of its major
investments.  USE is not using hazardous substances and known
pollutants to any great degree in these activities.  Consequently,
recurring costs for managing hazardous substances, and capital
expenditures for monitoring hazardous substances or pollutants,
have not been significant.  Likewise, USE does not have properties
which require current remediation.  USE is not aware of any claims
for personal injury or property damages that need to be accrued or
funded.

USE has received a notification of tax deficiency from the Internal
Revenue Service for fiscal years ended May 31, 1989, 1990 and 1991.

USE has filed a response to the proposed deficiency, and has
requested an administrative appeal of the initial examiner's
deficiency finding.  To Prospectus date, USE has received a
preliminary indication that a major portion of the findings has
been resolved in favor of USE.  No written confirmation has been
received as of the date of filing.  USE is confident the matters
will be resolved favorably at the administrative appeals level. 
Until such time, if ever, as the deficiency claim goes to Tax Court
after exhaustion of administrative hearings, management is of the
opinion that this dispute is not a legal proceedings matter.

Results of Operations

Fiscal 1994 Compared Fiscal 1993

Overall, while revenues declined only slightly (by $269,200) in
fiscal 1994 to $8,776,300 (compared to $9,045,500 for the prior
year), costs and expenses increased substantially (by $3,215,600)
in fiscal 1994 to $12,364,200 (compared to $9,148,600 for 1993). 
Although operating losses were recorded for some activities, as
discussed below, two items contributed significantly to the overall
operating loss of $3,370,800 for the year.  First, general and
administrative expense increased by $741,500 to $2,696,800
(compared to $1,955,300), reflecting the one-time legal and
accounting expenses of acquiring Brunton (which closed at the end
of fiscal 1994), increased general and administrative expenses
associated with Sutter Gold, general and administrative expenses
associated with Plateau, and the write down of a note receivable to
market prior to its assumption by Crested.  Second, costs
associated with mineral operations, which are producing no
revenues, increased by $469,100 to $1,129,000 (compared to $659,900
for the prior year).  This increase is due primarily to the
litigation over the SMP and Parador disputes and increased
maintenance cost of heavy mining equipment due to underground
development work on the SMP properties.   

Mineral sales revenues increased primarily as a result of the sale
and delivery during the year of U3O8 in accordance with SMP utility
supply contracts, however an operating loss of $665,100 for the
year was recognized due to contracted price being lower than the
price at which USE could acquire the U3O8 and increased maintenance
costs on properties and equipment.  Construction contract revenues
increased by $579,900 (to $2,606,400 compared to $2,026,500 for
fiscal 1993), due to increased contract work by USE's subsidiary
Four Nines Gold, Inc. ("FNG"), resulting to an operating profit of
$317,500 for construction contract activities for the year.  

Interest income increased by $250,500 to $328,700 (compared to
$78,200 for fiscal 1993) because of higher cash balances from the
Plateau acquisition early in the year.

During the quarter ended August 31, 1993, USE implemented Statement
of Financial Accounting Standard No. 109 ("Accounting for Income
Taxes", hereafter "SFAS 109").  The cumulative effect of this tax
accounting change is a $267,000 decrease in net income for fiscal
1994.

Oil sales revenues (recorded for services provided by USE as
operator of the Ft. Peck Lustre Field) dropped by $102,600 to
$183,700 (compared to $286,300 in fiscal 1993) due to lower
production rates and lower prices for the first two quarters of
fiscal 1994.  Separately, but related to oil and gas activities,
certain start-up operations in coalbed methane gas contributed
$157,800 to 1994 costs and expenses.  

Results of Operations

Fiscal 1993 Compared to Fiscal 1992

During fiscal 1993, USE recorded $2,690,800 in revenues from the
sale of U3O8,which revenue was recognized as a result of the
dispute
between the SMP partners, which has resulted in USE and Crested
making their share of various deliveries under long-term supply
contracts, compared to $123,300 recognized from uranium sales in
fiscal 1992, due to higher delivery volumes in 1993.  A dispute
arose between SMP and a utility during 1993 regarding the price
calculation for delivery under a market related contract.  USE and
Crested elected to not make their portion of the delivery. 
CRIC/Nukem indemnified the utility and delivered their portion as
well as USE's and Crested's portion.  This matter may be resolved
as part of the on-going litigation and now arbitration with
Nukem/CRIC.

USE recognized $2,026,500 of construction revenues during fiscal
1993 as compared to construction revenues of $2,895,000 during
fiscal 1992, due to FNG not being successful in bidding as many
jobs during fiscal 1993.  

Revenues from gold sales of $498,300 were recognized during 1992,
being gold processed from a bulk sample at SGV.  There were no gold
sales during 1993.  During fiscal 1993, USE recorded revenues from
the sale of various pieces of equipment and securities (SRRI stock)
of $326,000 and $408,600, respectively.  No revenues from these
activities were recognized in fiscal 1992.

Revenues from the restructuring of mineral property agreements and
oil sales increased by $1,049,900 and $152,200.  This increase is
not due to increased activity, but as a result of the consolidation
of operations of Crested in 1993.  Operations of Crested were not
consolidated with USE in 1992, as the increase in ownership did not
occur until late May 1992.  

Management fee revenues decreased by $398,900 to $228,900 for
fiscal 1993, as a result of (i) a portion of the management fees
and other charges to SGV being reduced due to increased ownership
by USE, and (ii) reduced activities by USE and Crested at GMMV.

During fiscal 1993, interest revenues decreased by $123,800 as a
result of smaller amounts of cash being invested in interest
bearing accounts and reduced interest rates.

Oil production expenses increased by $46,100 as a result of
maintenance required on various equipment on the Ft. Peck Lustre
Field in Montana being operated by USE.  Oil prices for this
production averaged approximately $21.00 per barrel in both 1993
and 1992.  As no exploration is conducted in this field, and USE is
compensated for services with the rate based on share of net
production income, commodity price swings (if any) only would
affect the amount of income received during the year.  Year to year
changes in income from oil activities is not considered material to
USE operations.  

Cost of mineral sales were $2,617,600 for uranium sales to supply
SMP contracts.  For fiscal 1993, the average cost per pound for
uranium delivered was approximately $8.80, compared to
approximately $8.92 per pound in fiscal 1992.  During fiscal 1993,
the NUEXCO uranium spot price per pound ranged from $8.75 early in
the period, up to $10.50 mid-period, then back to $10.00 at the end
of the period.  The increases were largely due to import
restrictions levelled against the CIS (see "Business-Certain Market
Information-Uranium NUEXCO Exchange Value).  These commodity prices
favorably impacted uranium margins for fiscal 1993, as prices paid
by buyers under market-related utility contracts increased
according to contract terms, which enabled USE to purchase at or
below spot and supply at a profit.  

The decrease in construction costs of $880,500 is as a result of
the reduced amount of work performed by FNG during fiscal 1993.

During fiscal 1993, USE recorded an expense of $378,700 as a result
of the abandonment of certain mining claims.  This is an increase
in mining claim abandonment of $203,300 over the prior year.  It is
not anticipated that this is a recurring expense.

Mineral operations, commercial operations and general and
administrative expenses increased by $344,800, $847,600 and
$1,034,300, respectively.  These increases are primarily as a
result of the consolidation of operations from Crested into the USE
Consolidated Financial Statements during the year ended May 31,
1993.  Crested's operations were not consolidated during the year
ended May 31, 1992.  All operations for USE and Crested are
recorded on the books of USECC Joint Venture.  The increase in
these expenses of mineral operations, commercial operations and
general and administrative expense, do not reflect any increase in
activity or a material change in operations, but rather the
accounting treatment of the acquisition of additional equity in
Crested by USE in fiscal 1993.

Operations for fiscal 1993 resulted in a loss before provision for
income taxes and extraordinary item of $103,100.  Equity in loss of
affiliates of $444,700, along with minority interest in losses of
consolidated subsidiaries of $325,900, resulted in a loss of
$221,900.

Effects of Changes in Prices

Mining operations and the acquisition, development and disposition
of mineral properties are significantly affected by changes in
commodity prices.  As prices for a particular mineral increase,
prices for prospects for that mineral also increase, making
acquisitions of such properties costly, and dispositions
advantageous.  Conversely, a price decline facilitates acquisitions
of properties for that mineral, but makes sales of such properties
more difficult.  Operational impacts of changes in mineral
commodity prices are common in the mining industry.

Uranium and Gold.  Changes in the prices of uranium and gold affect
USE to the greatest extent.  When uranium prices were relatively
high in fiscal 1988, USE and Crested acquired the Crooks Gap
properties, and thereafter put the properties into production. 
When uranium prices fell sharply during fiscal 1989-1991, USECC
suspended mining operations for SMP, because uranium could be
purchased at prices less than the costs of producing uranium. 
Uranium production in the United States reportedly fell by 25
percent to 33 percent in 1990, due to the lowest prices for uranium
since the market developed in the 1960s.  However, these low prices
created opportunities for acquiring the Sweetwater Mill and the
Shootaring Canyon Mill.

Changes in uranium prices directly affect the profitability of
SMP's uranium supply agreements with utilities.  Certain of those
agreements become advantageous to USE when the spot market price
for uranium falls significantly below the price which a utility has
agreed to pay.  Some of the supply agreements of SMP were acquired
before the fall of spot market prices during fiscal 1989-1991. 
Those fixed-price contracts, which have contract prices exceeding
current spot market rates, are currently advantageous to USE, as
the uranium to fill them can be readily obtained at favorable
prices.  Although such contracts benefit SMP and USE in a falling
market, a corresponding adverse impact would not be anticipated in
the event of substantially increased prices.  SMP would produce
uranium from its Crooks Gap properties to fill those contracts, in
the event of a prolonged increase in the spot market price above
the contract prices.

For information on the particular impacts changing uranium spot
prices may have had on operations, see the period to period
discussions of Results of Operations, above.

USE believes SGV's Lincoln Mine will be profitable with gold prices
over $290 per ounce.  Recent price improvements for gold (from
approximately $340 per ounce in fiscal 1993 to approximately $390
per ounce at April 3, 1995) would positively impact operating
margins at the Lincoln Mine, if such prices are sustained, when,
and if, the mine becomes operational.

Molybdenum and Oil.  Changes in oil prices are not expected to
materially affect USE with respect to either its oil production
fees.  However, a significant increase in the price of molybdenum
would increase the likelihood that the Mt. Emmons properties will
be developed by AMAX, and in the interim would increase income from
advance molybdenum royalties.

                Directors and Executive Officers

The directors of USE are divided into three classes of two persons
each.  Directors are elected until the third succeeding annual
meeting and until their successors have been duly elected or
appointed and qualified or until death, resignation or removal.  

 Name, age and               Positions         Director         
  designation                with USE            since
_____________________   ___________________    ________

John L. Larsen (63)      Chairman, CEO and        1966            
                         President (c)(d)(e)              

Max T. Evans (70)        Secretary                1978
                         (a)(c)(e)

Harold F. Herron (41)    Vice President           1989
                         (b)(c)(e)

David W. Brenman (38)    (b)(d)                   1989

Don C. Anderson (67)     Geologist (c)            1990

Nick Bebout (43)         (a)(b)(d)                1989


(a)  Member of the nominating committee.
(b)  Member of the compensation/stock option committee.
(c)  Member of the executive committee.
(d)  Member of the audit committee.
(e)  ESOP trustee.

Executive officers are elected by the Board at annual directors'
meetings, which follow each Annual Shareholders' Meeting, to serve
until the officer's successor has been duly elected and qualified,
or until death, resignation or removal by the Board.

Robert Scott Lorimer, 44, has been the Controller and Chief
Financial Officer for both USE and Crested for more than the past
five years.  Mr. Lorimer has also been the Chief Financial Officer
for both of those companies, since May 25, 1991, and their
Treasurer since December 14, 1990.  There are no understandings
between Mr. Lorimer and any other person, pursuant to which he was
named as an officer, and he has no family relationship with any of
the other executive officers or directors of USE or Crested.     

Daniel P. Svilar, 66, has been general counsel for both USE and
Crested for more than the past five years.  He has also served as
Secretary and a director of Crested and Assistant Secretary for
USE.  He serves at the will of the USE and Crested Boards of
Directors.  There are no understandings between Mr. Svilar and any
other person pursuant to which he was named as an officer.  He has
no family relationships with any of the other executive officers or
directors of the USE or Crested, except Nick Bebout, a director of
USE and Mr. Svilar's nephew.  

Family Relationships.

Harold F. Herron, a director and vice-president, is the son-in-law
of John L. Larsen, a principal shareholder, director and Chief
Executive Officer of USE.  Nick Bebout, a director, is a nephew of
Daniel P. Svilar, a principal shareholder and USE general counsel. 
There are no other family relationships among the executive
officers or directors of USE.

Business Experience and Other Directorships

John L. Larsen has been an officer and director of USE since 1966. 
He is a director of USE subsidiary Ruby Mining Company, and an
officer and director of Crested Corp.  Crested and Ruby have
registered classes of equity securities under the Exchange Act. 
Mr. Larsen is an officer and director of Plateau Resources Limited,
a private Utah corporation and wholly-owned USE subsidiary.

Max T. Evans has been principally employed as an officer and chief
geologist of USE and Crested for more than the past five years.  He
is a director of Crested.  Mr. Evans received B.S. and M.S. degrees
in geology from Brigham Young University.  Mr. Evans is an officer
and director of Plateau Resources Limited.

Harold F. Herron has been a director of USE, and its Vice-President
since 1989.  Since 1976, Mr. Herron has been an employee of
Brunton, and since 1987 he has been its president.  Mr. Herron is
a director of Ruby and NWG, which have registered equity securities
under the Exchange Act.  Mr. Herron received an M.B.A. degree from
the University of Wyoming after receiving a B.S. degree in Business
Administration from the University of Nebraska at Omaha.  Mr.
Herron is an officer and director of Plateau Resources Limited.

David W. Brenman has been a director of USE since January 1989. 
Since September 1988, Mr. Brenman has been a self-employed
financial consultant.  In that capacity, Mr. Brenman has assisted
USE and Crested in negotiating certain financing arrangements. 
From February 1987 through September 1988, Mr. Brenman was a vice-
president of project financing for Lloyd's International Corp., a
wholly-owned subsidiary of Lloyd's Bank, PLC.  From October 1984
through February 1987, Mr. Brenman was president, and continues to
be a director of Cogenco International, Inc., a company engaged in
the electric cogeneration industry, which has a class of equity
securities registered under the Exchange Act.  Mr. Brenman has an
L.L.M. degree in taxation from New York University and a J.D.
degree from the University of Denver.

Don C. Anderson has been a geologist for USE since January 1990 and
a member of its Board since May 1990.  Mr. Anderson was Manager of
Exploration and Development for Pathfinder Mines Corporation, a
major domestic uranium mining and milling corporation, from 1976
until retirement in 1988.  Previously, he was Mine Manager for
Pathfinder's predecessor, Utah International, Inc., from 1965 to
1976.  He received a B. S. degree in geology from Brigham Young
University.

Nick Bebout has been a director of USE since 1989.  He is a
director and president of NUCOR, Inc., a private corporation
providing exploration and development drilling services to the
mineral and oil and gas industries.  Mr. Bebout is also president
and a director of S.W. Financial Corp. ("SWF"), a corporation which
is evaluating potential acquisitions or business combinations with
other entities, but has no other current operations.  SWF is
currently subject to certain periodic reporting requirements under
Section 15(d) of the Exchange Act.  
                                
Executive Compensation
                                
Under a Management Agreement dated August 1, 1981, the Company and
Crested share certain general and administrative expenses,
including compensation of the officers and directors of the
companies (but excluding directors' fees) which have been paid
through the USECC Joint Venture ("USECC").  Substantially all the
work efforts of the officers of the Company and Crested are devoted
to the business of both the Company and Crested.  

All USECC personnel are Company employees, in order to utilize the
Company's ESOP as an employee benefit mechanism.  The Company
charges USECC for the direct and indirect costs of its employees
for time spent on USECC matters, and USECC charges one-half of that
amount to each of Crested and the Company.

The following table sets forth the compensation paid to the USE
Chief Executive Officer, and those of the four most highly
compensated USE executive officers who were paid more than $100,000
cash in any of the three fiscal years ended May 31, 1994.  The
table includes compensation paid such persons by Crested and
Brunton for such persons' services to such subsidiaries.

<PAGE>
<TABLE>
<CAPTION>
                        SUMMARY COMPENSATION TABLE

                                                              Long Term Compensation
                                                           ____________________________
                             Annual Compensation              Awards    Payouts
                           ____________________________________________________________
(a)                (b)       (c)        (d)     (e)       (f)         (g)         (h)       (i)
                                               Other
Name                                           Annual   Restricted                       All Other
and                                            Compen-    Stock                   LTIP    Compen-
Principal                  Salary      Bonus   sation    Award(s)    Options/   Payouts   sation
Position           Year      ($)        ($)      ($)       ($)         (#)        ($)     ($)(4)
__________________________________________________________________________________________________
<S>   <C>           <C>   <C>        <C>          <S>    <C>            <S>                <C>
John L. Larsen      1994  $148,239   $  7,028     --     $9,600(1)      -0-         --     $14,394
  CEO,              1993   164,968      4,016     --      7,200(1)    100,000(2)    --      15,026
  President         1992   144,024    406,357     --        --        100,100(3)    --      22,844

Daniel P. Svilar    1994   112,753     64,984     --      8,640(1)      -0-         --      17,300
  Asst. Secretary   1993   108,000      2,991     --      6,480(1)      -0-         --      11,100
                    1992   108,000      5,088     --        --         66,000(3)    --      11,309

Harold F. Herron    1994   105,983     18,268     --        --          -0-         --       9,743
    Vice President  1993    99,469     12,617     --        --          -0-         --       4,824
                    1992    87,609      3,155     --        --         11,000(3)    --       4,481

R. Scott Lorimer    1994    92,799     43,461     --      6,181(1)      -0-         --      13,260
  Treasurer         1993    78,921      2,196     --      4,548(1)      -0-         --       8,111
                    1992    77,192      3,652     --        --         29,700(3)    --       8,084

____________

(1)  Bonus shares equal to 20% of original bonus shares issued FY
1990, multiplied by $4.00 in 1994 and $3.00 in 1993, the closing
bid price on issue dates.  These shares are subject to forfeiture
on termination of employment, except retirement, death or
disability.

(2)  10-year non-qualified option at $2.00 per share.

(3)  10-year non-qualified option at $2.90 per share.

(4)  Dollar values for ESOP contributions and 401K matching
contributions.

</TABLE>

Executive Compensation Plans and Employment Agreements

To provide incentive to Mr. Larsen for his efforts in having GMMV
develop a producing mine as soon as possible, in fiscal 1993 the
USE Board adopted a long-term incentive arrangement under which Mr.
Larsen is to be paid a non-recurring $1,000,000 cash bonus,
provided that the Nuexco Exchange Value of uranium oxide
concentrates has been maintained at $25.00 per pound for six
consecutive months, and provided further that USE has received
cumulative cash distributions of at least $10,000,000 from GMMV as
a producing property.  It is not expected that this cash bonus will
become payable in fiscal 1995.  

The Company has adopted a plan to pay the estates of Messrs.
Larsen, Evans and Svilar amounts equivalent to the salaries they
are receiving at the time of their death, for a period of one year
after death, and reduced amounts for up to five years thereafter. 
The amounts to be paid in such subsequent years have not yet been
established, but would be established by the Boards of the Company
and Crested.

Mr. Svilar has an employment agreement with the Company and
Crested, which provides for an annual salary in excess of $100,000,
with the condition that Mr. Svilar pay an unspecified amount of
expenses incurred by him on behalf of the Company and its
affiliates.  In the event Mr. Svilar's employment is involuntarily
terminated, he is to receive an amount equal to the salary he was
being paid at termination, for a two year period.  If he should
voluntarily terminate his employment, the Company and Crested will
pay him that salary for nine months thereafter.  The foregoing is
in addition to Mr. Svilar's Executive Severance and Non-Compete
Agreement with the Company (see below).

In fiscal 1992, the Company signed Executive Severance and Non-
Compete Agreements with Messrs. Larsen, Evans, Svilar and Lorimer,
providing for payment to such person upon termination of his
employment with the Company, occurring within three years after a
change in control of the Company, of an amount equal to (i)
severance pay in an amount equal to three times the average annual
compensation over the prior five taxable years ending before change
in control, (ii) legal fees and expenses incurred by such persons
as result of termination, and (iii) the difference between market
value of securities issuable on exercise of vested options to
purchase securities in USE, and the options' exercise price.  These
Agreements also provide that for the three years following
termination, the terminated individual will not compete with USE in
most of the western United States in regards to exploration and
development activities for uranium, molybdenum, silver or gold. 
For such non-compete covenant, such person will be paid monthly
over a three year period an agreed amount for the value of such
covenants (depending on the individual, ranging from $66,667 up to
$86,667).  These Agreements are intended to benefit the Company's
shareholders, by enabling such persons to negotiate with a hostile
takeover offeror and assist the Board concerning the fairness of a
takeover, without the distraction of possible tenure insecurity
following a change in control.  At Prospectus date, USE Company is
not aware of any proposed hostile takeover.

USE and Crested provide all of their employees with certain forms
of insurance coverage, including life and health insurance.  The
health insurance plan does not discriminate in favor of executive
employees; life insurance of $50,000 is provided to each member of
upper management (which includes all persons in the compensation
table), $25,000 of such coverage is provided to middle-management
employees, and $15,000 of such coverage is provided to other
employees.

Employee Stock Ownership Plan ("ESOP").  USE has adopted an ESOP,
to encourage ownership of USE Common Stock by employees and provide
a source of retirement income to them.  The ESOP is a combination
stock bonus plan and money purchase pension plan.  It is expected
that the ESOP will continue to invest primarily in the Common
Stock.  Messrs. Larsen, Herron and Evans are the ESOP trustees.

Contributions to the stock bonus plan portion of the ESOP are
discretionary and are limited to a maximum of 15% of the covered
employees' compensation for each year ended May 31.  Contributions
to the money purchase portion of the ESOP are mandatory (fixed at
ten percent of the compensation of covered employees for each
year), are not dependent upon profits or the presence of
accumulated earnings, and may be made in cash or shares of Company
Common Stock.

The Company made a contribution of 46,332 shares to the ESOP for
fiscal 1994, all of which were contributed under the money purchase
pension plan.  At the time the shares were contributed, the market
price was $4.00 per share, for a total contribution valued at
$185,000 which has been funded by the Company.  Crested and the
Company are each responsible for one-half of that amount (i.e.,
$92,500), and Crested currently owes its one-half to the Company.

Employees are eligible to participate in the ESOP on the first day
of the plan year (June 1) following completion of one year of
service in which at least 1,000 hours are credited.  Each
employee's participation in the ESOP continues until the ESOP's
anniversary date coinciding with or next following termination of
service by reason of retirement, disability or death.  In these
cases, the participant will share in the allocation of USE's
contributions for the ESOP year in which the retirement, death or
disability occurs, and will have a fully-vested interest in
allocations to the participant's account.

An employee's participation in the ESOP does not cease upon
termination of employment.  If the employment of a participant in
the ESOP is terminated for reasons other than disability, death, or
retirement (unless the employee receives a lump sum distribution
upon the termination of employment), participation continues
following the termination, until five consecutive one-year breaks
in service have been incurred.  An employee is deemed to have
incurred a one-year break in service during any year in which 500
or fewer hours of service are completed.

Employee interests in the ESOP are earned pursuant to a seven year
vesting schedule.  Upon completion of three years of service for
the Company, the employee is vested as to 20% of the employee's
account in the ESOP, and thereafter at the rate of 20% per year. 
Any portion of an employee's ESOP account which is not vested is
forfeited upon termination of employment for any reason, other than
retirement, disability, or death.

The 46,332 shares issued to the ESOP for fiscal 1994 included 3,165
shares allocated to John L. Larsen's account, 1,962 shares
allocated to Max T. Evans' account, 713 shares allocated to Harold
F. Herron's account, 4,325 shares allocated to Daniel P. Svilar's
account, and 3,315 shares allocated to R. Scott Lorimer's account,
for a total of 13,480 shares allocated to accounts for all
executive officers as a group (five persons).  The accounts of the
executive officers are fully vested, as they have all been employed
by the Company and USECC for more than the past seven years. 
Allocations of shares for fiscal 1995 have not been made with
respect to any participant in the ESOP.

The maximum loan outstanding during fiscal 1993 under a loan
arrangement between USE and the ESOP, was $1,014,300 at May 31,
1994 for loans made in fiscal 1992 and 1991.  Interest owed by the
ESOP was not booked by USE.  Crested pays one-half of the amounts
contributed to the ESOP by USE.  Because the loans are expected to
be repaid by contributions to the ESOP, Crested may be considered
to indirectly owe one-half of the loan amounts to USE.

During fiscal 1994, the Company was issued a proposed adjustment
from the Internal Revenue Service ("IRS")  indicating that the ESOP
was not in compliance with certain sections of the Internal Revenue
Code.  Based on management's response to the IRS notice, the IRS
has determined that the ESOP has complied with applicable sections
of the Internal Revenue Code, subject to operation of the ESOP in
compliance with ESOP provisions and applicable law and rules.  No
Company deductions were disallowed by the IRS.

Stock Option Plan.  USE has a combined incentive stock option/non-
qualified stock option plan, reserving an aggregate of 550,000
shares of Common Stock for issuance upon exercise of options
granted thereunder.  Awards under the plan are made by a committee
of two or more persons selected by the Board (presently Messrs.
Bebout and Brenman).  The committee establishes the exercise
periods and exercise prices for options granted under the plan. 
Total grants to officers and directors as a group may not exceed
275,000 shares.

Options expire no later than ten years from the date of grant, and
on termination of employment, except in cases of death, disability
or retirement.  Subject to the ten year maximum period, upon the
death, retirement or permanent and total disability of an optionee,
options are exercisable for three months (in case of retirement or
disability) or one year (in case of death) after such event.  In
fiscal 1994, conditions relating to periods of Company service
before vesting of stock purchased on exercise of the non-qualified
options were removed.

For fiscal 1994, no qualified or non-qualified options were
granted.

The following table shows unexercised options, how much thereof
were exercisable, and the dollar values for in-the-money options,
at May 31, 1994.

Aggregated Option/SAR Exercises in Last Fiscal year and FY-End
Option/SAR Values
<TABLE>
<CAPTION>
   (a)                    (b)              (c)             (d)                 (e) 
                                                                            Value of
                                                         Number of         Unexercised
                                                        Unexercised       In-the-Money
                                                        Options/SARs      Options/SARs
                                                          FY-End (#)        FY-End($)

                    Shares Acquired        Value        Exercisable/        Exercisable/
Name                on Exercise (#)     Realized($)     Unexercisable       Unexercisable

<S>   <C>               <S>                 <C>           <C>                <C>
John L. Larsen,         -0-                -0-            100,000            $200,000(1)
  CEO, President                                        exercisable        exercisable and
                                                                             unexercised

                                                          100,100            $110,110(2)
                                                        exercisable        exercisable and
                                                                             unexercised

Max T. Evans,           -0-                -0-             57,200            $ 62,920(2)
  Secretary                                             exercisable        exercisable and
                                                                             unexercised

Harold F. Herron,       -0-                -0-             11,000            $ 12,100(2)
 Vice President                                         exercisable        exercisable and
                                                                             unexercised

Daniel P. Svilar        -0-                -0-             66,000            $ 72,600(2)
 Assistant Secretary                                    exercisable        exercisable and
                                                                             unexercised

R. Scott Lorimer        -0-                -0-             29,700            $ 32,370(2)
   Treasurer                                            exercisable        exercisable and
                                                                             unexercised

(1)Equal to $4.00 closing bid on last trading day in FY 1994, less
$2.00 per share option exercise price, multiplied by all shares
exercisable.

(2)Equal to $4.00 closing bid on last trading day in FY 1994, less
$2.90 per share option exercise price, multiplied by all shares
exercisable.

</TABLE>

Restricted Stock Plans.  USE has issued stock bonuses to various
executive officers and directors of USE and others.  These shares
are subject to forfeiture to the issuer by the grantee if
employment terminates otherwise than for death, retirement or
disability.  If the required service is completed, the risk of
forfeiture lapses and the shares become the unrestricted property
of the holder.  Messrs. Larsen, Evans, Svilar, Herron, Lorimer and
all executive officers as a group (five persons) received 13,200,
8,250, 11,880, 9,900, 7,920 and 51,150 shares of Common Stock,
respectively, under this restricted stock plan through fiscal 1993.

In fiscal 1994, another 7,500 shares were issued to such persons as
a bonus (20% of the 1990 shares).  Additional bonuses of 20% of the
original shares will be issued annually through fiscal 1997.  The
expenses relating to these stock issuances are shared equally by
the Company and Crested.

The Company has also issued restricted stock bonuses to non-
employee directors.  A total of 5,500 shares are held by the two
directors who are not also employees of the Company (one-half to
each).  See "Directors' Fees and Other Directors' Compensation".

Subsidiary Plans.  During the year ended May 31, 1991, Brunton
adopted a salary deduction plan intended to qualify as a deferred
compensation plan under Internal Revenue Code Section 401(k). 
Harold F. Herron and John L. Larsen are the only Company officers
who are able to participate in this retirement plan.  The fiscal
1994 acquisition of Brunton by the Company has not affected the
Brunton 401(k) plan.

Other than as set forth above, neither USE nor any of its
subsidiaries have any pension, stock option, bonus, share
appreciation, rights or other plans pursuant to which they
compensate the executive officers and directors of USE.  Other than
as set forth above, no executive officer received other
compensation in any form which, with respect to any individual
named in the Cash Compensation Table, exceeded ten percent of the
compensation reported for that person, nor did all executive
officers as a group receive other compensation in any form which
exceeded ten percent of the compensation reported for the group.

Directors' Fees and Other Compensation

The Company pays non-employee directors a fee of $150 per meeting
attended.  All directors are reimbursed for expenses incurred with
attending meetings.

Prior to fiscal 1992, the Board authorized the Executive Committee
to make loans to members of the Board, or to guarantee their
obligations in amounts of up to $50,000, if such loans or surety
arrangements would benefit USE.  Any loans or surety arrangements
for directors which are in excess of $50,000 will require Board
rather than Executive Committee approval.  USE loaned $25,000 to
David W. Brenman under this plan prior to fiscal 1991.  The loan to
Mr. Brenman bears interest at the prime rate of the Chase Manhattan
Bank and was due September 1, 1994, but has been extended to
September 1, 1995 by Board vote (Mr.Brenman abstaining).  The loan
was provided as partial consideration for Mr. Brenman's
representation of the Company to the financial community in New
York City.  The loan to Mr. Brenman originally was approved by the
executive committee.

Pursuant to shareholder approval of the 1992 Stock Compensation
Plan for Outside Directors at the 1992 Annual Meeting, in fiscal
1993 the Board issued 5,000 shares of Common Stock each to outside
directors Brenman, Anderson and Bebout, which shares vest 1,000
shares to each on the 1992 Annual Meeting date and each succeeding
four Annual Meetings through 1996.

         Certain Relationships and Related Transactions

Purchase of Common Shares [Fiscal 1995].  From December, 1994
through Prospectus date, certain affiliates of USE purchased 96,700
restricted common shares from USE (pursuant to the private
placement offer of 400,000 shares) at $3.00 per share (total
purchases $290,100), as follows:  Daniel P. Svilar, general counsel
(16,700 shares, through a family partnership); R. Scott Lorimer,
chief financial officer (8,333 shares); Brunton (56,667 shares);
Max T. Evans, officer and director (6,667 shares); Nick Bebout,
director (8,333 shares, through Nucor, Inc., an affiliate of Mr.
Bebout).  

Transactions with Brunton [Fiscal 1993 and 1994].  In fiscal 1993
and early fiscal 1994, USE and Crested had entered into financing
arrangements with Brunton totalling $1,173,260, as set forth below.

These transactions were effected prior to the acquisition of
Brunton by USE at the end of fiscal 1994.

     Sale and Lease Back.  In November, 1992 USE and Crested sold
Brunton certain aircraft and heavy equipment for $404,000, and
Brunton leased the items back to USE and Crested for seven years
(level payments amortizing purchase price with interest at prime
plus two points, subject to Brunton's renegotiating term and
interest after three years).  Brunton funded the loan with bank
financing secured with the items sold and the lease.

     Loan, Stock Sale and Option.  By agreement of April 30, 1993,
Brunton (i) loaned USE and Crested $211,800 and $76,760,
respectively, secured by borrowers' 3,607,000 Brunton shares
(2,647,500 owned by USE and 959,500 owned by Crested), with the
loans (maturity of April, 2003) bearing interest at prime plus 2.5
points; (ii) purchased 50,000 shares of restricted USE Common Stock
for $137,500 ($2.75 each) and 160,000 shares of restricted Crested
Common Stock for $43,200 ($.27 each); and (iii) received options
through April 30, 1998 to purchase 150,000 shares of restricted USE
Common Stock for $525,000 ($3.50 each) and 300,000 shares of
restricted Crested Common Stock for $120,000 ($.40 each).

In fiscal 1994, the April 30, 1993 loans to USE and Crested
($288,560 principal) were repaid and the collateral Brunton shares
released back to USE and Crested.  In late fiscal 1994, all common
stock of Brunton (except for Brunton shares previously owned by
USE) was acquired in exchange for 276,470 registered common shares
of USE.

     Convertible Loan.  In August 1993, Brunton loaned USE $300,000
(without security), due October 19, 1993.  The loan, bearing
interest at 10 percent per annum, was convertible in whole or part
at Brunton's election into shares of USE Common Stock at the rate
of one share for $3.00 of debt (100,000 shares maximum).  In fiscal
1994 (but prior to USE's acquisition of Brunton), the debt was
converted to 100,000 shares of USE Common Stock.

Transactions Concerning Sutter Gold Venture.  During fiscal 1991,
USE acquired an interest in an underground gold mine (the "Lincoln
Mine") being developed in the Mother Lode Gold Mining District of
Amador County, California.  Until the end of fiscal 1994, the
leasehold interests had been held by and operations on the
properties conducted through the Sutter Gold Venture ("SGV"), a
joint venture between Seine River Resources Inc. ("SRRI", a
Vancouver Stock Exchange listed company not affiliated with USE or
Crested), and USECC Gold Limited Liability Company ("USECC Gold"). 
USECC Gold, in turn, had been owned 89 percent by USE and 11
percent by Crested.  

The parties had intended to operate SGV as equal 50 percent
venturers.  However, because of SRRI defaults on its obligations to
USE, USE and Crested had acquired (through USECC Gold) by the end
of fiscal 1993 a 90 percent aggregate equity interest in the
Lincoln Project.  By the end of fiscal 1994, SRRI owed the Company
and Crested $1,970,507 for property holding, permitting and mine
maintenance costs incurred and paid for by the Company and Crested
since March 1992, including interest and management fees charged by
the Company and Crested.

As of May 23, 1994 SRRI agreed to assign its remaining 10 percent
working interest in the Lincoln Project for the $1,970,507 owed the
Company and Crested.  However, only the $1,389,272 of costs and
expenses paid for by the Company and Crested was recorded; $581,235
for interest and management fees was written off as uncollectible. 
SRRI also issued 400,000 common shares of stock and delivered same
to the Company as final payment of any deficiencies for pre-fiscal
1994 indebtedness which SRRI had owed to the Company and Crested,
which had been secured by SRRI's interests and acquired by the
Company and Crested in lieu of foreclosure when SRRI defaulted on
its payments.  

Subsequent to the end of fiscal 1994, the SGV was terminated, the
Company and Crested formed a new Wyoming corporation (Sutter Gold
Mining Company), and agreed to exchange their respective interests
in USECC Gold for common stock of Sutter Gold Mining Company, in
the same percentage interests as the parties hold interests in
USECC Gold (which latter entity will continue to hold the property
interests of record, as a wholly-owned subsidiary of Sutter Gold
Mining Company).

A conditional use permit for the Lincoln Mine was issued by the
Amador County Board of Supervisors in August, 1993.  USE and
Crested are exploring different sources of capital to develop the
Mine and build a milling complex, however, at Proxy Statement date
no financing agreements have been signed and there is no assurance
needed capital will be available.

Transactions with Sheep Mountain Partners ("SMP").  In fiscal 1989,
USE and Crested through USECC sold a one-half interest in the Sheep
Mountain properties to Cycle Resource Investment Corporation
("CRIC"), a wholly-owned subsidiary of Nukem, Inc., and thereafter
USECC and CRIC contributed their 50% interests in the properties to
a new Colorado partnership, SMP, which was organized to further
develop and mine the uranium claims, market uranium and acquire
additional uranium sales contracts.  Due to disputes (in
arbitration proceedings at Proxy Statement date) with CRIC and
Nukem, necessary mine maintenance has been funded by USECC alone
without reimbursement from SMP.  At May 31, 1993, USE and Crested
had expended $2,056,900 on SMP mine maintenance and $136,500 for
the purchase of U3O8, all of which is owed USE and Crested by SMP. 
For fiscal 1994, USE and Crested spent an additional $1,449,700 on
SMP property maintenance, none of which has been reimbursed by SMP.

At May 31, 1994, accumulated SMP property maintenance costs and
fees owed USE and Crested were $3,643,100 ($4,127,229 at February
28, 1995).

Transactions with Directors.  Three of USE's directors, Messrs.
Larsen, Evans and Herron, are trustees of the ESOP.  In that
capacity they have an obligation to act in the best interests of
the ESOP participants.  This duty may conflict with their
obligations as directors of USE in times of adverse market
conditions for the Common Stock, or in the event of a tender offer
or other significant transaction.

In general, the ESOP trustees exercise dispositive powers over
shares held by the ESOP, and exercise voting powers with respect to
ESOP shares that have not been allocated to a participant's
account.  In addition, the Department of Labor has taken the
position that in certain circumstances ESOP trustees may not rely
solely upon voting or dispositive decisions expressed by plan
participants, and must investigate whether those expressions
represent the desires of the participants, and are in their best
interests.

Harold F. Herron, son-in-law of John L. Larsen, has been living in
and caring for a house owned by USE until such time as the property
was sold.  In fiscal 1995, Mr. Herron purchased the house for
$260,000, the appraised value of the property, and was reimbursed
by USE for leasehold improvements totaling $22,800.

Other Information.  USE has adopted a stock repurchase plan under
which it may purchase up to 275,000 shares of its Common Stock. 
These shares would be purchased in part to provide a source of
shares for issuance upon the exercise of various outstanding
options.

Three of John L. Larsen's sons are employed by USE (as manager of
USECC's commercial operations, uranium marketing manager, and as
chief pilot, respectively).  Mr. Larsen's brother is employed by
USE as drilling superintendent.  Collectively, the four individuals
received $224,900 in compensation for those services during the
fiscal year ended May 31, 1994.  That expense was shared by USE and
Crested, in accordance with the compensation arrangements for all
employees.

Certain Indebtedness

Transactions Involving USECC.  USE and Crested conduct the bulk of
their activities through their equally-owned joint venture, USECC. 
From time to time USE and Crested advance funds to or make payments
on behalf of USECC in furtherance of their joint activities.  These
advances and payments create intercompany debt between USE and
Crested.  The party extending funds is subsequently reimbursed by
the other venturer.  USE had a note receivable of $3,792,800 from
Crested at May 31, 1994.  The largest aggregate debt of Crested to
USE during fiscal 1994 was $3,792,800.

Debt Associated with USE's ESOP. During the year ended May 31,
1994, USE made a contribution of 46,332 shares of Common Stock to
the ESOP.  Because Crested engages USE's employees to discharge
substantially all of its functions, these contributions benefitted
Crested.  As a result, Crested owes USE $92,500 for one-half of
USE's contribution to the ESOP.  Regular and substantial
contributions by the USE to the ESOP are required to maintain the
ESOP in effect.  In fiscal 1993 USE contributed 46,591 shares of
Common Stock to the ESOP, for one-half of which Crested owes USE
$87,360.

Loans to Three Directors.  In fiscal 1992 USE loaned Mr. Evans
$24,200 against his promissory note due April 30,1993 and bearing
annual interest at ten percent.  This loan is secured with 7,500 of
Mr. Evans' shares of Common Stock.  Also in fiscal 1992, USE loaned
Mr. John L. Larsen $147,000 and further agreed to consolidation of
such new loan with outstanding indebtedness of $99,008 owed USE by
members of his immediate family (total debt $246,008), against Mr.
Larsen's promissory note for the total amount due April 30, 1993
and bearing annual interest at ten percent.  The Board approved
these transactions to obtain a higher interest rate of return on
the funds compared to commercial rates, and to avoid having USE
stock prices depressed from such persons selling their shares to
meet personal obligations.  The loan maturities were extended to
October 30, 1994, and again to May 31, 1996.  At May 31, 1994, the
Larsen family indebtedness totaled $432,200, of which $322,800 is
represented by notes secured by 120,600 shares of USE's Common
Stock.

In fiscal 1995, USE made a five year non-recourse loan in the
amount of $112,170 to Harold F. Herron.  The loan is secured by
30,000 shares of USE's Common Stock, bears interest at a rate of 7%
and is payable at maturity.  The Board approved the loan to obtain
a higher interest rate of return on the funds compared to
commercial rates, and to avoid having USE stock prices depressed
from such persons selling their shares to meet personal
obligations.  See Transactions with Directors above.

Other Debt.  At June 1, 1990, a brother of Nick Bebout, a director
of USE, and nephew of Daniel P. Svilar, general counsel, was
indebted to USE in the amount of approximately $408,800.  This loan
was made in 1983, prior to the time Mr. Nick Bebout became a
director.  The non-recourse note was secured by 60,000 shares of
USE's Common Stock and did not bear interest.  During fiscal 1991,
Mr. Bebout repaid $36,200 of the loan.  At May 23, 1994, the
principal amount of the debt was $372,600.  

In fiscal 1993, the Board (Nick Bebout abstaining), extended
maturity of this $372,600 loan and the maturity of a separate
$72,700 loan (from Crested made in 1987, which Mr. Bebout secured
with 20,000 shares of USE Common Stock), to October 30, 1994.  In
fiscal 1994, Crested assumed the liability for the non-recourse
loan to USE in exchange for the 60,000 shares of USE's Common Stock
at $260,600 (the market value of the pledged shares on the date of
the assumption).  At the same time Crested accepted 22,000 shares
(the pledged shares plus 2,000 stock dividend shares received in
1990) of USE's Common Stock as full payment of the $72,700 non-
recourse loan made by Crested to Mr. Bebout.

                    Description of Securities

The USE Articles of Incorporation authorize issuance of 20,000,000
shares of common stock, $.01 par value, and 100,000 shares of
preferred stock, $.01 par value.  

Common Stock. Holders of USE common stock are entitled to receive
dividends when and as declared by the USE Board of Directors out of
funds legally available therefor.  

Holders of USE common stock are entitled to one vote per share on
all matters upon which such holders are entitled to vote, and
further have the right to cumulate their votes in elections of
directors to the USE Board of Directors.  Cumulation is effected by
multiplication of shares held by the number of director nominees,
and voting is by casting the product as desired among the nominees;
directors are elected by a plurality of votes cast.  

Pursuant to the USE Articles and the Wyoming Management Stability
Act, shares of USE common stock held by Crested may be voted by
Crested in elections of USE directors, so long as USE conducts
substantial business in Wyoming and is "qualified" under such Act
as having assets in excess of $10,000,000, with a class of stock
listed on NASDAQ or on a principal exchange. 

In the event of dissolution, liquidation or winding up of USE,
holders of USE common stock are entitled to share ratably in assets
remaining after creditors (including holders of any preferred
stock, as to liquidation preferences) have been paid.

All outstanding shares of USE common stock (including the USE
Shares offered for sale by this Prospectus) have been fully paid
and nonassessable.

Preferred Stock. The USE Board of Directors is authorized to issue
shares of preferred stock in one or more series, with such rights
to redemption, liquidation preference, dividends, voting and other
matters as determined by the Board of Directors, without
authorization from the USE stockholders.  Accordingly, the USE
Board of Directors could issue preferred shares with dividend
rights senior to the common shares.  Under the WBCA, separate
classes of stock are entitled to vote separately on certain
substantive transactions (e.g., a merger or sale of most of the
company assets), with approval of the transaction subject to
approval by each class.

No shares of USE preferred stock have been issued, and no series
thereof has been established to date.  

                             Experts

The consolidated financial statements of USE included in this
Prospectus have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of
said firm as experts in giving said reports.  Reference is made to
said report which includes an explanatory paragraph that describes
the litigation discussed in notes E, F, and K to the USE
consolidated financial statements.

                          Legal Matters

Stephen E. Rounds, Denver, Colorado, has acted as special counsel
to USE in connection with this offering.

<PAGE>
                 U.S. ENERGY CORP. AND AFFILIATES

               Condensed Consolidated Balance Sheets

                              ASSETS
                                        February 28,      May 31,
                                            1995           1994
                                        ____________   ____________
                                         (Unaudited)    (Unaudited)
CURRENT ASSETS:
   Cash                                  $  780,700    $1,181,700 
   Accounts receivable
     Trade                                  791,000     1,009,800 
     Related parties                        254,100       166,500 
   Inventory                              1,486,400     1,424,600 
   Deferred federal income tax current       36,000        --     
   Deferred compensation                     12,200        12,200 
   Other                                    135,800        71,800 
                                       ____________  ____________ 

       TOTAL CURRENT ASSETS               3,496,200     3,866,600 

INVESTMENTS
   Affiliates                             2,980,600     2,807,900 
   Other                                  7,637,700     7,728,500 
                                       ____________  ____________ 

                                         10,618,300    10,536,400 

PROPERTIES AND EQUIPMENT                 26,890,800    26,252,200 
   Less accumulated depreciation, 
   depletion and amortization            (9,507,500)   (8,874,000)
                                       ____________  ____________ 

                                         17,383,300    17,378,200 

OTHER ASSETS:
   Accounts and notes receivable:
     Real estate sale and other             652,400        28,700 
     Affiliates and related parties          25,000        25,000 
     Employees                              498,500       366,000 
   Buildings and improvements
     held for sale                          496,200       758,200 
   Deferred compensation, long-term           8,100        17,300 
   Deposits and other                       117,200       113,900 
                                       ____________  ____________ 

                                          1,797,400     1,309,100 
                                       ____________  ____________ 

                                        $33,295,200   $33,090,300 
                                       ____________  ____________ 
                                       ____________  ____________ 



     See notes to condensed consolidated financial statements.

<PAGE>
                 U.S. ENERGY CORP. AND AFFILIATES

               Condensed Consolidated Balance Sheets

               LIABILITIES AND SHAREHOLDERS' EQUITY

                                        February 28,      May 31,
                                            1995           1994
                                        ____________   ____________
                                         (Unaudited)    (Unaudited)

CURRENT LIABILITIES:
   Accounts payable and 
     accrued expenses                    $1,394,300    $  722,200 
   Current portion of long-term debt      1,697,900       569,500 
                                       ____________  ____________ 

     TOTAL CURRENT LIABILITIES            3,092,200     1,291,700 

LONG-TERM DEBT (See Note 5)                 918,700     1,109,100 

RECLAMATION LIABILITY (See Notes 6)       3,951,800     3,951,800 

OTHER ACCRUED LIABILITIES
   (See Note 6)                          10,892,500    11,284,600 

DEFERRED TAX LIABILITY                      183,200       267,000 

COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST                           815,300     1,326,400 

Common stock, 187,817 and 169,300
    shares forfeitable                    1,370,100     1,300,600 

SHAREHOLDERS' EQUITY:
   Preferred stock, $.01 par value;
     authorized, 100,000 shares;
     none issued or outstanding               --            --    
   Common stock, $.01 par value;
     authorized, 20,000,000 shares;
     issued, 5,002,486 and 4,693,090         49,900        46,800 
   Additional paid-in capital            17,729,900    16,784,800 
   Retained earnings (deficit)           (2,501,600)   (1,185,800)
   Treasury stock, 758,276 shares,
     at cost                             (2,192,500)   (2,072,400)
   Unallocated ESOP contribution         (1,014,300)   (1,014,300)
                                       ____________  ____________ 

                                         12,071,400    12,559,100 
                                       ____________  ____________ 

                                        $33,295,200   $33,090,300 
                                       ____________  ____________ 
                                       ____________  ____________ 



          See notes to consolidated financial statements.


<PAGE>
                      U.S. ENERGY CORP. AND AFFILIATES
                   Consolidated Statements of Operations
                                (Unaudited)

                           Three Months Ended         Nine Months Ended
                              February 28,              February 28,
                         ________________________   _______________________

                            1995         1994         1995         1994
                         ___________  __________   __________   __________

REVENUES:
 Mineral sales          $    --       $   --       $   --         $2,893,700 
 Oil sales                   47,400      51,100       138,200        141,900 
 Commercial revenues      1,268,600     123,700     4,032,200        461,700 
 Gain from
  restructuring 
  mining properties 
  agreements                 --          33,400        85,500        591,400 
 Construction contract
  revenues                   29,100     120,400       919,600      2,004,700 
 Gain on sale of assets     975,000        --       1,288,900         30,300 
 Interest                    81,100      61,000       254,200        162,000 
 Management fees
  and other                  77,000      98,000       215,700        301,500 
                         __________   __________    _________      __________

                          2,478,200     487,600     6,934,300      6,587,200 
                         __________   __________    _________      __________

COSTS AND EXPENSES:
 Cost of mineral sales       --          --           --           2,927,400 
 Mineral operations         299,300     262,500     1,005,500        700,900 
 Construction costs          36,500     106,000       790,500      1,774,300 
 General and 
  administrative          1,127,300     787,400     2,783,200      1,859,400 
 Commercial operations    1,195,100     366,900     3,466,800      1,004,600 
 Oil production              24,100     106,200        52,700        259,900 
 Loss on sale
  of investments             --          29,800        89,900         31,800 
 Interest                    72,400      26,900       175,000         87,400 
                         __________   __________    _________      __________

                          2,754,700   1,685,700     8,363,600      8,645,700 
                         __________   __________   __________      __________
<PAGE>

                           Three Months Ended         Three Months Ended
                               February 28,              February 28,
                         _______________________    _________________________

                            1995         1994          1995          1994
                         __________   __________    ___________  ____________
Income (Loss) Before 
 Equity Income of 
 Affiliate, Provision 
 for Income Taxes
 and Extraordinary Item    (276,500) (1,198,100)   (1,429,300)  (2,058,500)
Minority Interest in
 Loss of Consolidated 
 Subsidiaries                76,200     299,600       418,400      572,900 
Equity in Income of 
 Affiliates-net            (128,100)    (95,400)     (304,900)    (266,700) 
                         ___________  __________   ___________  ___________
Income (Loss) Before 
 Provision for 
 Income Taxes
 and Cumulative 
 Effect                    (328,400)   (993,900)   (1,315,800)  (1,752,300)
Provision for 
 Income Taxes                --          --           --           --     
                         ___________  __________   ___________  ___________ 
Income (Loss) Before 
 Cumulative Effect 
 of Accounting Changes     (328,400)   (993,900)   (1,315,800)  (1,752,300)
Cumulative Effect 
 at June 1, 1993
 of Income Tax 
 Accounting Changes          --          --           --          (267,000)
                         ___________  __________   ___________  ___________

NET INCOME (LOSS)         $(328,400)  $(993,900)  $(1,315,800) $(2,019,300)
                         ___________  __________   ___________  ___________
NET INCOME (LOSS)
 PER SHARE                $    (.07)  $    (.22)   $    (.27)   $    (.46)
                         ___________  ___________  ___________  ___________
                         ___________  ___________  ___________  ___________
WEIGHTED AVERAGE
 NUMBER OF SHARES
 OUTSTANDING              5,012,216    4,473,468    4,877,776    4,402,658 
                         ___________  ___________  ___________  ___________
                         ___________  ___________  ___________  ___________


         See notes to condensed consolidated financial statements.

<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES
              Condensed Consolidated Statements of Cash Flows
                                (Unaudited)
                                                       Nine Months Ended
                                                         February 28,
                                                 _____________________________

                                                     1995           1994
                                                  ___________    ___________
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income (loss)                          $(1,315,800)   $(2,019,300)
     Adjustments to reconcile net income
     (loss) to net cash used in
     operating activities:
         Minority interest in (gain) loss 
           of consolidated subsidiaries            (418,400)      (572,900)
         Depreciation, depletion and 
           amortization                             577,300        710,600 
         Non-cash compensation                       69,500         82,300 
         Gain from restructuring mineral
            properties agreements                    --           (500,000)
         Equity in loss of affiliates               304,900        266,700 
         Gain on sale of assets                  (1,288,900)       (27,900)
         Loss (gain) on sale of investments          89,900         (3,400)
         Cumulative effect of 
           accounting changes                       (83,800)       267,000 
         Change in deferred income taxes            (36,000)        --     
       Net changes in components 
         of working capital                         282,600     (1,138,100)
                                                 ___________    ___________
NET CASH PROVIDED BY (USED IN)
      OPERATING ACTIVITIES                       (1,818,700)    (2,935,000)
                                                 ___________    ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
     Investments in affiliates                     (476,800)    (1,095,300)
     Investments other                             (198,400)        --     
     Purchase of property and equipment            (141,000)      (632,200)
     Proceeds from sale of assets                   969,100         55,100 
     Development of mining claims                  (341,400)      (624,100)
     Development of gas properties                 (147,700)        --     
     Increase in note receivable                   (128,200)       (36,800)
     Proceeds from sale of investments              199,300         --     
     Cash acquired in purchase 
       of subsidiary                                 --          6,900,000 
     Deposits and other                              (3,300)       172,300 
                                                 ___________    __________
NET CASH PROVIDED BY (USED IN)
     INVESTING ACTIVITIES                          (268,400)     4,739,000 
                                                 ___________    __________
CASH FLOWS FROM FINANCING ACTIVITIES:
     Private placement of common stock              868,100         --     
     Company stock purchased by 
       consolidated affiliate                      (120,000)        --     
     Additions to long-term debt                  1,740,800        368,400 
     Payments on long-term debt                    (802,800)      (630,800)
                                                 ___________   ____________
NET CASH PROVIDED BY (USED IN)
     FINANCING ACTIVITIES                         1,686,100       (262,400)
                                                 ___________   ____________

  The accompanying notes to consolidated financial statements are an integral 
  part of these statements.

<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

              Condensed Consolidated Statements of Cash Flows
                                (Unaudited)

                                                       Nine Months Ended
                                                         February 28,
                                                ____________    ___________

                                                    1995            1994
                                                ____________    ___________

NET INCREASE (DECREASE) IN CASH 
  AND CASH EQUIVALENTS                           $ (401,000)    $1,541,600 

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                             1,181,700        479,600 
                                                 ___________    ___________
CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                                  $  780,700     $2,021,200 
                                                 ___________    ___________
                                                 ___________    ___________

SUPPLEMENTAL DISCLOSURES:
  Income tax paid                                $  118,900     $   --     
                                                 ___________    ___________
                                                 ___________    ___________

  Interest paid                                  $  175,000     $   60,500 
                                                 ___________    ___________
                                                 ___________    ___________


NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Acquisition of unowned portion of 
   affiliate with Company stock                  $   80,000     $   --     
                                                 ___________    ___________
                                                 ___________    ___________

  Common stock issued in lieu of 
   payment of long-term debt                     $   --         $  300,000 
                                                 ___________    ___________
                                                 ___________    ___________

  Negotiate settlement on accounts payable
   for asset previously capitalized              $   --         $  155,000 
                                                 ___________    ___________
                                                 ___________    ___________


         See notes to condensed consolidated financial statements.

<PAGE>
                U.S. ENERGY CORP. AND AFFILIATES

      Notes to Condensed Consolidated Financial Statements

     1)   The Condensed Consolidated Balance Sheet as of February
28, 1995, the Condensed Consolidated Statements of Operations for
the nine months ended February 28, 1995 and 1994, and the Condensed
Consolidated Statements of Cash Flows for the nine months ended
February 28, 1995 and 1994, have been prepared by the Registrant
without audit.  The Condensed Consolidated Balance Sheet as of May
31, 1994, has been taken from the audited financial statements
included in the Registrant's Annual Report on Form 10-K for the
period then ended.  In the opinion of the Registrant, the
accompanying financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the financial position of Registrant as of February 28, 1995
and May 31, 1994, the results of operations for the nine months
ended February 28, 1995 and 1994, and the cash flows for the nine
months then ended.

     2)   Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted.  It is suggested that these financial statements be read
in conjunction with the Registrant's May 31, 1994 Form 10-K.   The
results of operations for the periods ended February 28, 1995 and
1994 are not necessarily indicative of the operating results for
the full year.

     3)   The consolidated financial statements of the Registrant
include 100% of the accounts of USECB Joint Venture (USECB) which
is owned 50% by the Registrant and 50% by the Registrant's
subsidiary, Crested Corp. (Crested).  The consolidated financial
statements also reflect 100% of the accounts of its majority-owned
subsidiaries: The Brunton Company (100%), Energx Ltd. (90%),
Crested (51.9%), USECC Gold Limited Liability Company (100%),
Plateau Resources Limited (100%) and Four Nines Gold, Inc. (50.9%) 
All material intercompany profits and balances have been
eliminated. 

     4)   Effective June 1, 1993, the Registrant adopted Statement
of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes".  This statement requires recognition of deferred
income tax assets and liabilities for the expected future income
tax consequences, based on enacted tax laws, of temporary
differences between the financial reporting and tax bases of
assets, liabilities and carryforwards.

     In contrast to the previous method, SFAS No. 109 requires
recognition of deferred tax assets for the expected future effects
of all deductible temporary differences, loss carryforwards and tax
credit carryforwards.  Deferred tax assets are then reduced, if
deemed necessary, by a valuation allowance for any tax benefits
which, based on current circumstances, are not assured of
realization.

     As a result of adopting SFAS No. 109, the Registrant
recognized a cumulative provision for change in accounting
principle of $267,000 or $(0.06) per common share as of the
beginning of the fiscal year.  The provision is included under the
caption "cumulative effect at June 1, 1993 of income tax accounting
change" in the accompanying condensed consolidated statements of
operations. 

     5)   Debt as of February 28, 1995 consists of a $960,000
operating line of credit; two property loans totaling $274,900;
various equipment and other loans totaling $199,200; and debt
attributable to consolidated affiliates of $1,029,200 on Brunton
and $153,300 on Four Nines Gold.  Certain inter-affiliate loans
were eliminated during consolidation.

     6)   Accrued reclamation obligations of $3,951,800 are the
Registrant's share of a reclamation liability at the Crooks Gap
Mining District and the full obligation at the Shootaring Uranium
Mill.  The reclamation work may be performed over several years.

     7)   Net income (loss) per share is computed using the
weighted average number of common shares outstanding during each
period.  The dilutive effect of stock options is not included in
the computation, as it is not material.

<PAGE>
            Report of Independent Public Accountants


To the Board of Directors and Shareholders
U.S. Energy Corp.
Riverton, Wyoming


We have audited the accompanying consolidated balance sheets of
U.S. Energy Corp. (the "Company"), a Wyoming corporation, and
affiliates as of May 31, 1994 and 1993, and the related
consolidated statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended May 31,
1994.  These financial statements and the schedules referred to
below are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statements and schedules based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of U.S.
Energy Corp. and affiliates as of May 31, 1994 and 1993, and the
results of their operations and their cash flows for each of the
three years in the period ended May 31, 1994, in conformity with
generally accepted accounting principles.

As discussed further in Notes E, F and K, the Company and its 52%-
owned subsidiary, Crested Corp., (together referred to as "USECC")
are involved in litigation with their 50/50 partner in Sheep
Mountain Partners ("SMP"), Cycle Resource Investment Corporation
("CRIC").  USECC and CRIC have filed various claims and
counterclaims against each other alleging violations of the SMP
Partnership Agreement among other various allegations.  As a
consequence of this litigation, USECC has been required to fund all
of the expenditures of SMP, resulting in advances of $3,643,100. 
USECC has expensed its equity portion of these advances as of May
31, 1994.  Recovery of the remaining investment and advances of
$2,042,400 is dependent upon the outcome of the litigation, which
is uncertain at this time, and accordingly, the accompanying
financial statements do not reflect any adjustments that might
result from this litigation.  The Company is currently
participating in arbitration proceedings on this matter and expects
some resolution early in 1995.

<PAGE>

Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole.  The schedules listed
in the index of financial statements are presented for purposes of
complying with the Securities and Exchange Commission's rules and
are not part of the basic financial statements.  These schedules
have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, fairly state
in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken
as a whole. 

     As discussed in Notes B and H to the consolidated financial
statements, effective June 1, 1993, the Company changed its method
of accounting for income taxes.



ARTHUR ANDERSEN LLP

Denver, Colorado,
September 1, 1994.

<PAGE>
                   U.S. ENERGY CORP. AND AFFILIATES

                      CONSOLIDATED BALANCE SHEETS

                                ASSETS
                                                   May 31,
                                              __________________________

                                                 1994           1993
                                              ___________   ____________
CURRENT ASSETS:
   Cash and cash equivalents                  $1,181,700     $  479,600 
   Accounts and notes receivable (Note C):
     Trade, net of allowance of $32,600
       and $4,000 for doubtful accounts        1,009,800        758,200 
     Related parties, net of allowance
       of $1,600 and $1,600 for 
       doubtful accounts                         166,500        242,400 
   Inventory (Note B)                          1,424,600         80,400 
   Deferred compensation (Note J)                 12,200         40,800 
   Other                                          71,800         48,900 
                                            ____________   ____________ 

     TOTAL CURRENT ASSETS                      3,866,600      1,650,300 
                                            ____________   ____________ 

INVESTMENTS AND ADVANCES  (Notes E and F):
   Affiliates                                  2,807,900      2,706,700 
   Restricted investments (Note F)             7,728,500            800 
                                            ____________   ____________ 

                                              10,536,400      2,707,500 

PROPERTIES AND EQUIPMENT
   (Notes B, C, D and F):
   Land and mobile home park                   2,803,100      2,794,300 
   Buildings and improvements                  5,728,600      5,237,500 
   Aircraft and other equipment                6,237,800      6,160,800 
   Developed oil properties, 
     full cost method                          1,769,800      1,769,800 
   Undeveloped gas properties                    207,900        --      
   Mineral properties and mine
     development costs                         9,505,000      8,510,000 
                                            ____________   ____________ 

                                              26,252,200     24,472,400 
   Less accumulated depreciation, 
     depletion and amortization               (8,874,000)    (8,182,800)
                                            ____________   ____________ 

                                              17,378,200     16,289,600 
                                            ____________   ____________ 
(continued)

<PAGE>

                   U.S. ENERGY CORP. AND AFFILIATES

                      CONSOLIDATED BALANCE SHEETS

                                ASSETS
                             (continued)

                                                   May 31,
                                              __________________________

                                                 1994           1993
                                              ___________   ____________

OTHER ASSETS:
   Notes receivable:
     Trade                                        28,700         15,200 
     Affiliates                                   25,000         25,000 
     Employees (Note C)                          366,000        435,800 
     Shareholder (Note C)                         --            445,300 
     Joint venture partner (Note F)               --          1,275,500 
   Buildings and improvements held for sale      758,200        758,200 
   Long-term deferred compensation (Note J)       17,300         29,400 
   Deposits and other                            113,900        405,400 
                                            ____________   ____________ 

                                               1,309,100      3,389,800 
                                            ____________   ____________ 

                                             $33,090,300    $24,037,200 
                                            ____________   ____________ 

The accompanying notes to financial statements are an integral part 
of these balance sheets.

<PAGE>
                   U.S. ENERGY CORP. AND AFFILIATES

                      CONSOLIDATED BALANCE SHEETS

                 LIABILITIES AND SHAREHOLDERS' EQUITY


                                                   May 31,
                                       ______________________________

                                             1994           1993
                                         ____________   ____________
CURRENT LIABILITIES:
   Accounts payable and 
     accrued expenses                     $  722,200     $  963,000 
   Current portion of 
     long-term debt (Note G)                 569,500        629,100 
                                        ____________   ____________ 

     TOTAL CURRENT LIABILITIES             1,291,700      1,592,100 

LONG-TERM DEBT (Notes F and G)             1,109,100      1,204,400 

RECLAMATION LIABILITY (Note K)             3,951,800      1,695,600 

OTHER ACCRUED LIABILITIES (Note F)        11,284,600         --     

DEFERRED GAIN ON SALE OF ASSETS
   (Note C)                                   --            249,800 

DEFERRED TAX LIABILITY (Note H)              267,000         --     

COMMITMENTS AND CONTINGENCIES
   (Note K)

MINORITY INTERESTS                         1,326,400      2,986,800 

FORFEITABLE COMMON STOCK,
   $.01 par value; issued 169,300
     and 155,780, shares, 
     respectively, forfeitable
     until earned (Notes C and J)          1,300,600      1,245,300 

(continued)

<PAGE>
                   U.S. ENERGY CORP. AND AFFILIATES

                      CONSOLIDATED BALANCE SHEETS

                 LIABILITIES AND SHAREHOLDERS' EQUITY
                              (continued)


                                                   May 31,
                                       ______________________________

                                             1994           1993
                                         ____________   ____________


SHAREHOLDERS' EQUITY (Notes C and J):
   Preferred stock, $.01 par value; 
     authorized, 100,000 shares; 
     none issued or outstanding               --             --     
   Common stock, $.01 par value;
     authorized, 20,000,000 shares; 
     issued 4,693,090 and
     4,257,288 shares, respectively           46,800         42,500 
   Additional paid-in capital             16,784,800     15,050,900 
   (Accumulated deficit)/
     retained earnings                    (1,185,800)     2,185,000 
   Treasury stock at cost,
     718,276 and 440,301 
     shares, respectively                 (2,072,400)    (1,200,900)
   Unallocated ESOP contribution          (1,014,300)    (1,014,300)
                                        ____________  _____________ 

                                          12,559,100     15,063,200 
                                        ____________   ____________ 

                                         $33,090,300    $24,037,200 
                                        ____________   ____________ 

The accompanying notes to financial statements are an integral part 
of these balance sheets.

<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                   CONSOLIDATED STATEMENTS OF OPERATIONS

                                                 Year Ended May 31,
                                       ___________________________________

                                           1994         1993        1992
                                        __________  __________  _________
REVENUES:
  Mineral sales                         $3,732,500  $2,690,800  $  621,600 
  Construction contract revenues         2,606,400   2,026,500   2,895,000 
  Commercial operations                  1,165,100     894,400     817,200 
  Oil sales                                183,700     286,300     134,100 
  Gain on sale of assets (Note F)           52,800     326,000     --      
  Gain on sale of investments              --          408,600     --      
  Gain from restructuring mineral
     properties agreements (Note F)        626,800   2,105,800   1,055,900 
  Interest                                 328,700      78,200     202,000 
  Management fees and other (Note C)        80,300     228,900     627,800 
                                         __________  __________  _________

                                         8,776,300   9,045,500   6,353,600 
                                         __________  __________  _________

COSTS AND EXPENSES:
  Cost of minerals sold                  3,895,400   2,617,600     619,200 
  Mineral operations                     1,129,000     659,900     315,100 
  Construction costs                     2,288,900   1,760,400   2,640,900 
  Commercial operations                  1,989,400   1,573,000     725,400 
  Oil production                            89,800     122,400      76,300 
  General and administrative             2,696,800   1,955,300     921,000 
  Abandonment of mining claims             --          378,700     175,400 
  Gas operations                           157,800      --         --      
  Interest and other                       117,100      81,300      61,100 
                                        __________  __________   _________

                                        12,364,200   9,148,600   5,534,400 
                                        __________  __________   _________

INCOME (LOSS) BEFORE MINORITY
  INTEREST IN LOSS, EQUITY 
  IN INCOME (LOSS) OF
  AFFILIATES, PROVISION 
  FOR INCOME TAXES AND 
  EXTRAORDINARY ITEM                    (3,587,900)   (103,100)    819,200 

MINORITY INTEREST IN LOSS OF
  CONSOLIDATED SUBSIDIARIES                874,800     325,900      58,900 

EQUITY IN LOSS OF AFFILIATES              (390,700)   (444,700)   (324,900)
                                        __________  __________   __________


The accompanying notes to financial statements are an integral part
of these statements.

(continued)

<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (continued)


                                                Year Ended May 31,
                                        __________________________________

                                           1994         1993        1992
                                        __________  __________   _________

INCOME (LOSS) BEFORE PROVISION FOR
  INCOME TAXES AND EXTRAORDINARY ITEM   $(3,103,800) $(221,900)  $ 553,200 

PROVISION FOR INCOME TAXES (Note H)         --          --         197,300 
                                        ___________  __________  _________ 

INCOME (LOSS) BEFORE
  EXTRAORDINARY ITEM                    (3,103,800)   (221,900)    355,900 

EXTRAORDINARY ITEM
  Utilization of net operating loss
     carryforward (Notes E and H)           --          --         257,300 
                                        ___________  __________  _________ 
INCOME (LOSS) BEFORE CUMULATIVE
  EFFECT OF ACCOUNTING CHANGE           (3,103,800)   (221,900)    613,200 

CUMULATIVE EFFECT AT JUNE 1, 1993
  OF INCOME TAX ACCOUNTING CHANGE
  (Notes B and H)                         (267,000)     --         --      
                                        ___________  __________  _________ 

NET INCOME (LOSS)                      $(3,370,800)  $(221,900)  $ 613,200
                                        ___________  __________  _________ 
(continued)

The accompanying notes to consolidated financial statements are an integral
part of these statements.

<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (continued)


                                                Year Ended May 31,
                                        __________________________________

                                           1994         1993        1992
                                        __________  __________   _________


EARNINGS PER SHARE AMOUNTS:
  Income (loss) Before 
     Extraordinary Item                $      (.70)  $    (.05)  $     .09 
  Extraordinary Item                        --            --           .06 
                                        ___________  __________  _________ 
  Income (loss) before cumulative
     effect of accounting change              (.70)       (.05)        .15 
  Cumulative effect at June 1, 1993
     of income tax accounting change          (.06)       --          --     
                                        ___________  __________  _________ 

NET INCOME (LOSS) PER SHARE            $      (.76)  $    (.05)  $     .15 
                                        ___________  __________  _________ 
                                        ___________  __________  _________ 

WEIGHTED AVERAGE SHARES OUTSTANDING      4,431,469   4,248,848   4,228,165 
                                        ___________  __________  _________ 
                                        ___________  __________  _________ 
The accompanying notes to financial statements are an integral part
of these statements.

<PAGE>
<TABLE>
<CAPTION>
                                   U.S. ENERGY CORP. AND AFFILIATES

                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                           Common Stock                 (Accumulated     Treasury Stock
                         __________________  Additional   Deficit)/   ____________________   Unallocated      Total
                                               Paid-In    Retained                              ESOP       Shareholders'
                          Shares     Amount    Capital     Earning    Shares      Amount    Contribution      Equity
                         _________  _______  ___________  __________  _______   __________  _____________  ____________


<S>    <C>   <C> <C>     <C>        <C>      <C>          <C>          <C>     <C>          <C>            <C>
Balance, May 31, 1991    4,103,289  $41,100  $14,531,500  $1,793,700   51,267  $ (310,100)  $(1,010,700)   $15,045,500

Funding of ESOP             49,599      500      173,100     --         --          --          --             173,600
Other                          313     --        --          --         --          --          --               --     
Loan to ESOP to 
 purchase common stock       --        --        --          --         --          --          (3,600)         (3,600)
Issuance of common stock 
 to third party for 
 services rendered           5,000     --        18,700      --         --          --          --              18,700
Common stock owned by
 Crested Corp.               --        --        --          --      387,384    (882,200)       --            (882,200)
Issuance and forfeiture
 of common stock bonus       5,000     --        26,300      --        1,650      (8,600)       --              17,700
Net income                   --        --        --         613,200     --          --          --             613,200
                         _________  _______  ___________  __________  _______   __________   ___________   ___________

Balance, May 31, 1992    4,163,201    4,600   14,749,600  2,406,900  440,301  (1,200,900)    (1,014,300)    14,982,900

Funding of ESOP             49,087      400      183,000        --       --         --          --             183,400 
Issuance of common stock
 to affiliate for cash      50,000      500      137,000        --       --         --          --             137,500 
Common stock issued to a
 third party in prior year
 that was forfeitable       (5,000)    --        (18,700)       --       --         --          --             (18,700)
 
Net loss                     --        --         --       (221,900)     --         --          --            (221,900)
                         _________  _______  ___________  __________  _______   __________   ___________   ___________

Balance, May 31, 1993    4,257,288  $42,500  $15,050,900  $2,185,000  440,301  $(1,200,900)  $(1,014,300)  $15,063,200
                         _________  _______  ___________  __________  _______   __________   ___________   ___________
                         _________  _______  ___________  __________  _______   __________   ___________   ___________
<FN>
The accompanying notes to financial statements are an integral part of these statements.
</FN>

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                             U.S. ENERGY CORP. AND AFFILIATES

                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                              (continued)

                           Common Stock                 (Accumulated     Treasury Stock
                         __________________  Additional   Deficit)/   ____________________   Unallocated      Total
                                               Paid-In    Retained                              ESOP       Shareholders'
                          Shares     Amount    Capital     Earning    Shares      Amount    Contribution      Equity
                         _________  _______  ___________  __________  _______   __________  _____________  ____________

<S>    <C>   <C> <C>     <C>        <C>      <C>          <C>         <C>      <C>           <C>           <C>
Balance, May 31, 1993    4,257,288  $42,500  $15,050,900  $2,185,000  440,301  $(1,200,900)  $(1,014,300)  $15,063,200

Funding of ESOP             46,332      400      184,900      --         --         --            --           185,300
Issuance of common stock 
 to affiliate in lieu of 
 payment of loan           100,000    1,000      299,000      --         --         --            --           300,000
Issuance of common stock 
 to purchase an affiliate  276,470    2,800    1,197,100      --         --         --            --         1,199,900
Issuance of common stock
 to third party for
 services rendered           7,000      100       26,900      --         --         --            --            27,000
Issuance of common stock
 to an employee for
 services rendered           1,000     --          4,300      --         --         --            --             4,300 
Issuance of common stock     5,000     --         21,700      --         --         --            --            21,700
Common stock owned by 
 Brunton                     --        --          --         --      150,000     (437,500)       --          (437,500)
Common stock owned by  
 Crested Corp.               --        --          --         --      127,975     (434,000)       --          (434,000)
Net loss                     --        --          --     (3,370,800)    --         --            --        (3,370,800)
                         _________  _______  ___________  __________  _______   __________   ___________   ___________

Balance, May 31, 1994    4,693,090  $46,800  $16,784,800 $(1,185,800) 718,276  $(2,072,400)  $(1,014,300)  $12,559,100
                         _________  _______  ___________  __________  _______   __________   ___________   ___________
<FN>
Shareholders' Equity at May 31, 1994 does not include 169,300 shares 
currently issued but forfeitable if certain conditions are not met by
the recipients.  However, both the "Outstanding Shares at September 7, 
1994" on the cover page and the "Weighted Average Shares Outstanding"
on the Consolidated Statement of Operations include the forfeitable 
shares.  These two line items also include the 665,359 shares of common
stock held by a majority-owned subsidiary, which, through consolidation, 
are treated as treasury shares.

The accompanying notes to financial statements are an integral part 
of these statements.
</FN>
</TABLE>
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                  CONSOLIDATED STATEMENTS  OF CASH FLOWS

                                                 Year Ended May 31,
                                          ____________________________________

                                             1994          1993         1992
                                          __________    _________    _________
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                      $(3,370,800) $  (221,900) $   613,200
   Adjustments to reconcile
    net income to net cash used 
    in operating activities:
      Minority interest in loss of
        consolidated subsidiaries           (874,800)    (325,900)     (58,900)
      Depreciation, depletion and 
        amortization                         720,200      908,400      876,100 
      Abandoned mining claims                  --         378,700      175,400 
      Gain from restructuring mineral
        properties agreements               (500,000)  (2,000,000)  (1,000,000)
      Unrealized gain on investment            --           --        (180,800)
      Equity in (income)
        loss from affiliates                 390,700      444,700      264,900 
      Gain on sale of assets                 (52,800)    (326,000)       --
      (Gain) loss on sale/write down
        of marketable equity securities         --        (408,600)       --
      Common stock issued to fund ESOP       185,300      183,400       86,800
      Non-cash compensation                   75,900       55,600        --    
      Common stock exchanged 
       for services                           34,300        --          18,700
      Other                                 (149,900)    (246,400)     (21,400)
      Net changes in:
        Accounts and notes receivable        468,700     (406,800)    (719,000)
        Inventory                             (9,100)     407,300     (450,900)
        Other assets                          (4,000)      62,200       (2,000)
        Accounts payable and 
          accrued expenses                  (573,700)     557,900       27,900 
        Other liabilities                   (415,400)       --           --    
        Income taxes payable                   --           --        (289,800)
        Deferred tax liability               267,000        --           --    
                                          __________    _________    _________

NET CASH USED IN OPERATING ACTIVITIES     (3,808,400)   (937,400)     (659,800)
                                          __________    _________    _________

(continued)
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                  CONSOLIDATED STATEMENTS  OF CASH FLOWS

                                                 Year Ended May 31,
                                          ____________________________________

                                             1994          1993         1992
                                          __________    _________    _________
CASH FLOWS FROM INVESTING ACTIVITIES:
  Cash acquired in purchase
   of subsidiaries                       $7,193,500   $    --      $  344,100 
  Development of mining properties         (796,300)    (740,500)  (2,129,000)
  Development of gas properties            (207,900)       --          --
  Proceeds from sale of property 
    and equipment                           149,700      848,800       --
  Proceeds from sale of investments            --        611,200       --
  Purchases of property and equipment      (855,800)    (656,700)    (218,700)
  Changes in notes receivable                73,700     (173,400)    (110,800)
  Investments in affiliates                (760,500)  (1,108,600)    (770,400)
                                          __________  __________   __________
NET CASH PROVIDED BY (USED IN)
   INVESTING ACTIVITIES                   4,796,400   (1,219,200)  (2,884,800)
                                          __________  __________   __________

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock      --         137,500       --
  Loan to ESOP                                --          --           (3,600)
  Increase in long-term debt                368,400      914,600      326,100 
  Principal payments on long-term debt     (654,300)    (202,700)    (583,400)
                                          __________  __________   __________
NET CASH (USED IN) PROVIDED BY 
   FINANCING ACTIVITIES                    (285,900)     849,400     (260,900)
                                          __________  __________   __________

NET INCREASE (DECREASE) IN CASH AND 
   AND CASH EQUIVALENTS                     702,100    (1,307,200)  (3,805,500)

CASH AND CASH EQUIVALENTS,
  Beginning of year                         479,600     1,786,800    5,592,300 
                                         __________   ___________  ___________
CASH AND CASH EQUIVALENTS,
  End of year                            $1,181,700   $   479,600  $ 1,786,800
                                         __________   ___________  ___________
                                         __________   ___________  ___________

SUPPLEMENTAL DISCLOSURES:
   Interest paid                         $    --      $    79,100  $    54,000
                                         __________   ___________  ___________ 
                                         __________   ___________  ___________ 

   Income taxes paid                     $    --      $   --       $   290,000
                                         __________   ___________  ___________
                                         __________   ___________  ___________

(continued)

The accompanying notes to financial statements are an integral part 
of these statements.

<PAGE>
                             U.S. ENERGY CORP.

                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (continued)
                                                 Year Ended May 31,
                                       _____________________________________

                                            1994        1993        1992
                                       ___________   _________   ___________

Non-cash investing and financing activities:

   Issuance of common stock 
     to acquire affiliate              $1,199,900    $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Issuance of common stock 
     in lieu of payment 
     on debt to affiliate              $  300,000    $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Release of forfeitable common
     stock bonus to third party        $   18,000    $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Issuance of common stock 
     to officers and employees
     for services rendered             $  104,400    $   --      $   729,300 
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Change in valuation of 
     reclamation liability             $  (243,800)  $   --      $   121,900 
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Conversion of SRRI receivable 
     to investment upon SRRI 
     loan default                      $ 1,857,800   $   --      $ 1,777,800
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Undeveloped mining properties 
     contributed to the Green
     Mountain Mining Venture           $   243,800   $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Cancellation of accounts 
     receivable for common 
     stock of affiliate                $    --       $   --      $   809,200 
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Acquisition of USE common 
     stock in exchange for 
     shareholder notes receivable      $   445,300   $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 

The accompanying notes to consolidated financial statements are an integral 
part of these statements.

<PAGE>
                        U.S. ENERGY CORP.

              CONSOLIDATED STATEMENTS OF CASH FLOWS

                           (continued)

Significant assets acquired and liabilities assumed in acquisition
of subsidiaries:

     Reclamation liability         $  2,500,000 
     Other accrued liabilities       11,700,000 
     Restricted investments          (7,300,000)
     Other                              293,500 
                                   ____________ 
     Net cash acquired in 
       purchase of subsidiaries    $  7,193,500 
                                   ____________ 


The accompanying notes to consolidated financial statements are an
integral part of these statements.

<PAGE>
                U.S. ENERGY CORP. AND AFFILIATES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   MAY 31, 1994, 1993 AND 1992


A.   BUSINESS ORGANIZATION AND DESCRIPTION:

     U.S. Energy Corp. (the "Company" or "USE") was incorporated
in the State of Wyoming on January 26, 1966 under the name of
Western States Mining & Contracting, Inc.  The name was
subsequently changed to U.S. Energy Corp.  The Company engages in
the acquisition, exploration, sale and/or development of mineral
properties, mining and marketing of minerals.  Principal mineral
interests are in uranium, gold, and molybdenum.  The Company also
holds various real and personal properties used in commercial
operations and engages in the exploration, development and
production of petroleum and methane gas.  Most of these
activities are conducted through the joint venture discussed
below and in Note B.  The Company, through its wholly-owned
subsidiary, The Brunton Company ("Brunton"), the remaining 56% of
which was acquired at fiscal 1994 yearend (see Note C), also
engages in the manufacturing and/or marketing of compasses and
the distribution of outdoor recreational products, including
knives and binoculars.  In addition, through its majority owned
subsidiary, Four Nines Gold, Inc. ("FNG"), the Company engages in
projects such as the construction of municipal sewage systems,
irrigation projects and other civil engineering matters.

     The Company and its 52%-owned subsidiary, Crested Corp.
("Crested") (see Note E) are engaged in two ventures to develop
certain uranium properties, one with Kennecott Uranium Company
("Kennecott") known as Green Mountain Mining Venture ("GMMV"),
formed on June 1, 1990, and the second, a partnership with Nukem,
Inc. ("Nukem") through its wholly-owned subsidiary Cycle Resource
Investment Corporation ("CRIC"), known as Sheep Mountain Partners
("SMP").  During fiscal 1991, the Company and Crested formed
USECC Gold Limited Liability Company ("USECC Gold"), and with
Seine River Resources Inc. ("SRRI") established the Sutter Gold
Venture ("SGV") to develop certain gold properties located in
California.  The remaining interest of SRRI was acquired by the
Company and Crested during fiscal 1994 (see Note F).

     During fiscal 1994, the Company also acquired 100% of the
outstanding stock of Plateau Resources Limited ("Plateau"), which
owns a uranium mill and support facilities in Southeastern Utah. 
Currently the mill is nonoperating but being maintained.  See a
further discussion of the acquisition details in Note F.
<PAGE>
B.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

     The consolidated financial statements of USE and affiliates
include the accounts of the Company, the accounts of its
majority-owned subsidiaries: Brunton (100%), Plateau Resources
Ltd ("Plateau") (100%), Energx, Ltd ("Energx") (90%), FNG
(50.9%), USECC Gold (100%), Crested (52%) and USECC Joint Venture
("USECC"), a joint venture through which USE and Crested conduct
the bulk of their operations.  USECC is owned equally by the
Company and Crested.  USECC owns the buildings and other
equipment (see Note D) used by the Company and has invested in
SMP (see Notes E and F).  The accompanying consolidated balance
sheets include the accounts of USE, Brunton, Plateau, Energx,
FNG, USECC, USECC Gold and Crested for 1994 and USE, FNG, USECC,
USECC Gold and Crested for 1993.  The accompanying consolidated
statements of operations include USE, Plateau, ENERGX, FNG,
USECC, USECC Gold and Crested for fiscal 1994, and USE, FNG,
USECC, USECC Gold and Crested for fiscal 1993.  Brunton was not
consolidated in the statement of operations and cash flows in
1994 or prior because the Company acquired it on May 20, 1994. 
Crested was not consolidated in the statements of operations and
cash flows prior to fiscal 1993 because the Company acquired its
controlling interest on May 26, 1992.  Consequently, the
accompanying consolidated statements of operations include USE,
FNG, USECC Gold and one-half of the accounts of USECC for fiscal
1992.  

     Investments in other joint ventures and 20% to 50% owned
companies are accounted for by the equity method (Note E). 
Investments of less than 20% in companies are accounted for by
the cost method.  All material intercompany profits, transactions
and balances have been eliminated.

Unaudited Pro Forma Condensed Consolidated Results of Operations

     The following unaudited pro forma consolidated results of
operations assume that the acquisitions of the controlling
interests in Brunton and Plateau occurred at the beginning of
fiscal years 1994 and 1993.  The following condensed unaudited
consolidated results therefore include the accounts of USE, USECC
Gold, FNG, Crested, USECC, Brunton, Plateau and Energx:
<PAGE>
<PAGE>
                                                May 31,
                                      ___________________________

                                          1994           1993
                                      _____________  ____________
                                       (Unaudited)    (Unaudited)

     Revenues                          $12,895,100    $12,607,200
     (Loss) income before 
       cumulative effect of 
       accounting changes               (2,848,200)        45,600
     Net (loss) income                  (3,115,200)        45,600
     Net (loss) income per share              (.70)           .01

Cash Equivalents

     The Company considers all highly liquid investments with
original maturities of three months or less to be cash
equivalents.

Marketable Equity Securities

     Marketable equity securities are carried at lower of
aggregate cost or market.  Net unrealized losses on non-current
marketable equity securities are included in shareholders' equity
unless such losses are considered to be other than temporary, in
which case the losses are charged to operations.

Inventories

     Inventories consist primarily of outdoor recreational
products including compasses, knives and binoculars.  Other
inventory includes aviation fuel, associated aircraft parts,
mining supplies, purchased uranium and gold ore stockpile. 
Manufactured and retail inventories are stated using the average
cost method of accounting for inventories.  Finished goods and
work in process inventories include related materials, labor and
applied overhead.  Other inventory is stated at the lower of cost
or market.

     Inventories consist of the following:

                                                May 31,
                                      __________________________

                                          1994         1993(A)
                                       ___________   __________
     Outdoor Recreational Products
       Raw materials                   $  508,900     $   --   
       Work in process                    161,600         --   
       Finished goods                     664,600         --   
     Other                                 89,500        80,400
                                      ___________     _________

                                       $1,424,600     $  80,400
                                      ___________     _________
                                      ___________     _________

<PAGE>
     (A)There was no outdoor recreational products inventory at
May 31, 1993 because the controlling interest in Brunton was not
acquired until fiscal 1994.

Properties and Equipment

     Land, buildings, improvements, aircraft and other equipment
are carried at cost.

     Depreciation of buildings and improvements, aircraft and
other equipment is provided principally by the straight-line
method over estimated useful lives ranging from three to forty-
five years.

     The Company capitalizes all costs incidental to the
acquisition, exploration and development of mineral properties as
incurred.  The costs of mine development are deferred until
production begins on the basis that they will be recovered
through future mining operations.  Once commercial production
begins, mine development costs incurred to maintain production
will be expensed.  Capitalized costs are charged to operations at
the time the Company determines that no economic ore bodies exist
on such properties.  An impairment allowance is charged to
operations at such time when, in the opinion of management, the
carrying value of the property exceeds its expected future
economic benefit.  Costs and expenses related to general
corporate overhead are expensed as incurred.

     The Company and Crested have acquired substantial mining
property assets and associated facilities at minimal cash cost,
primarily through the assumption of reclamation and environmental
liabilities.  Certain of these assets are owned by various
ventures in which the Company is either a partner or venturer. 
The market value of these assets and the reclamation and
environmental liabilities associated with them are not reflected
in the accompanying balance sheets (see Note K).

     Proceeds from the sale of undeveloped mineral properties are
treated as a recovery of costs with any excess of proceeds over
cost recognized as gain.

     The Company follows the full-cost method of accounting for
oil and gas properties whereby all costs incurred in the
acquisition, exploration and development of the properties,
including unproductive wells, are capitalized, limited to the
present value of the estimated proved reserves and the lower of
cost or estimated fair value of unproved properties.

     Depreciation, depletion and amortization of oil properties
is provided by the unit of production method based on the
estimated reserves to be recovered.

Revenue Recognition

     Advance royalties which are payable only from future
production or which are non-refundable are recognized as revenue
when received (see Note F).  Non-refundable option deposits are
recognized as revenue when the option expires.

     Sales of gold, uranium and oil are recognized upon delivery.

Revenues are recognized from the rental of certain assets as they
are rented.  

     Revenue from long-term construction contracts is recognized
on the percentage-of-completion method determined by the ratio of
costs incurred to management's estimate of total anticipated
costs.  If estimated total costs on any contract indicate a loss,
the Company provides currently for the total anticipated loss on
the contract.  Billings on uncompleted long-term contracts may be
greater than or less than incurred costs and estimated earnings,
and are shown as current liabilities or current assets in the
accompanying balance sheets.

     Revenue from sales of outdoor recreational products are
recognized upon shipment of products.

Income Taxes

     Effective June 1, 1993, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes".  This statement requires recognition of deferred
income tax assets and liabilities for the expected future income
tax consequences, based on enacted tax laws, of temporary
differences between the financial reporting and tax basis of
assets, liabilities and carryforwards.

     In contrast to the previous method, SFAS No. 109 requires
recognition of deferred tax assets for the expected future
effects of all deductible temporary differences, loss
carryforwards and tax credit carryforwards.  Deferred tax assets
are then reduced, if deemed necessary, by a valuation allowance
for any tax benefits which, based on current circumstances, are
not assured of realization.

     The Company previously followed Accounting Principles Board
Opinion No. 11 whereby deferred income taxes were provided to
reflect the tax effect of timing differences.

     As a result of adopting SFAS No. 109, the Company recognized
a cumulative provision for change in accounting principle of
$267,000 or $(0.06) per common share as of the beginning of the
fiscal year.  The provision is included under the caption
"cumulative effect at June 1, 1993 of income tax accounting
change" in the accompanying Consolidated Statements of
Operations.

Net Income (Loss) Per Share

     Net income (loss) per share is computed using the weighted
average number of common shares outstanding during each period. 
The dilutive effect of stock options is not included in the
computation, as it is not material.

Reclassifications

     Certain reclassifications have been made in the 1993 and
1992 financial statements to conform to the classifications used
in 1994.

C.   RELATED-PARTY TRANSACTIONS:

     In November 1993, USE and Brunton executed an Agreement and
Plan of Share Exchange ("Exchange Agreement") which closed in
late May 1994.  The Exchange Agreement provided for the Exchange
of 276,470 shares of USE common stock for all 5,529,200
outstanding shares of Brunton's common stock, which were not
owned by USE.  Brunton is now owned 100% by USE as of
May 31, 1994.  The transaction was accounted for as a purchase.

     The Company and Crested provide management and
administrative services for affiliates under the terms of various
management agreements.  The Company provides all employee
services required by Crested.  In exchange, Crested reimburses
the Company for its share of the costs for providing such
employees.  Revenues from services by the Company to affiliates
other than Crested were $80,300, $113,000 and $252,800 in fiscal
1994, 1993 and 1992, respectively.

     At May 31, 1994, the Company's President and immediate
family were indebted to the Company in the amount of $432,200, of
which $322,800 is represented by notes secured by 120,600 shares
of the Company's common stock.

     The Company holds a $260,600 non-interest bearing, non-
recourse promissory note from an affiliate.  The note is secured
by 60,000 shares of the Company's common stock and is due
October 30, 1994.  This note is eliminated in consolidation.

     On May 26, 1992, the Company received 1,618,746 shares of
Crested common stock in exchange for the cancellation of accounts
receivable of $809,300 due the Company from Crested.  The receipt
of these shares increased the Company's ownership in Crested to
52.9%.  Therefore, both the balance sheet and statement of
operations have been consolidated with the Company for fiscal
years ended May 31, 1994 and 1993, but the statement of
operations was not consolidated for fiscal 1992.

     In November 1992, the Company entered into a sale/leaseback
agreement as the lessee, and sold certain machinery and equipment
to Brunton.  This machinery and equipment is being leased from
the affiliate on a month to month basis for $6,800.  The Company
had deferred the gain of $249,800 on this sale as of May 31,
1993.  The deferred gain was eliminated in consolidation as of
May 31, 1994 (Note B).

     In April 1993, the Company received a $211,800 advance from
an affiliate and sold 50,000 shares of common stock to this
affiliate for $2.75 per share, which approximated market value. 
The advance is in the form of a note to be repaid by 2003, with
interest at 2.5% above prime.  This note was paid off during
fiscal 1994.  As further consideration for the note, the Company
granted the affiliate options for 150,000 common shares at $3.50
per share.  These options are exercisable over a five year
period.  None of these options have been exercised as of May 31,
1994.

D.   USECC JOINT VENTURE:

     USECC operates the Glen L. Larsen office complex; Wind River
Estates, a 100-unit mobile home park; an aircraft hangar with a
fixed base operation, office space and certain aircraft; holds
interests in various mineral operations including SMP and GMMV;
conducts oil and gas operations; and transacts all operating and
payroll expenses, except for specific expenses allocated directly
to each venturer.  The joint venture agreement also provides for
the allocation of certain operating expenses to other affiliates.

E.   INVESTMENTS AND ADVANCES:

     The Company's investment in and advances to affiliates are
as follows:

                                          Carrying Value at May 31,
                                          _________________________
                          Consolidated
                            Ownership        1994          1993
                           ___________    __________     __________
Equity Method:
  GMMV                        50.0%       $ 724,800      $  724,800
  Brunton (Note B, 
     consolidated
     at end of 1994)          43.6%           --            737,400
  Ruby Mining Company         26.7%          40,700          57,000
  SMP (Note F)                50.0%       2,042,400       1,187,500
                                         ___________    ___________

                                          $2,807,900     $2,706,700
                                         ___________    ___________
                                         ___________    ___________


     Equity income (loss) from investments and writedowns of
investments accounted for by the equity method are as follows:

                                       Year Ended May 31,
                                ________________________________

                                   1994          1993          1992
                                __________    __________     ________
Crested Corp. 
  (consolidated 
  beginning in 1993)           $   --         $   --         $ 115,100 
SMP (Note F)                    (514,800)      (532,000)      (497,400)
Brunton (Note B)                 140,500         85,600         61,900 
Ruby Mining Company              (16,400)         1,700         (4,500)
GMMV                               --             --             --    
                               _________      _________      _________

                                (390,700)      (444,700)      (324,900)

Equity investment 
  extraordinary item               --             --            60,000 
                               _________      _________      _________ 

                               $(390,700)     $(444,700)     $(264,900)
                               _________      _________      _________ 
                               _________      _________      _________ 

<PAGE>
     There is currently litigation and arbitration proceedings
with the Company's partner in the SMP partnership, as discussed
further in Note K.  Because of the litigation and arbitration,
the Company has funded all recent advances to SMP in the amount
of $3,643,100 for standby mine care and maintenance, the rental
of certain mining equipment and administrative costs during
fiscal 1992, 1993 and 1994.  These advances are included in the
above investment account and while they have been reduced by the
Company's equity share of SMP's expenses, the Company considers
the $3,643,100 to be a receivable from SMP.  Whether or not the
$3,643,100 of advances are recovered will depend on the outcome
of the litigation and arbitration with Nukem and its wholly-owned
subsidiary CRIC as further discussed in Note K.

     SMP has entered into various market related and base price
escalated uranium sales contracts with certain utilities which
require delivery of an estimated 270,000 to 1,301,253 pounds of
uranium annually from 1995 through 2000.  These contracts also
allow for the quantities to be substantially increased by the
utilities.  Until the disputes between the SMP partners are
resolved, the Company and Crested are arranging for the purchase
and delivery of their portion of the contracts or are allowing
NUKEM and CRIC to make the entire delivery.  The deliveries will
be satisfied by purchases in the spot market, existing purchase
contracts, uranium inventories or by producing from SMP
properties.  Production will not be commenced, however, until
uranium prices rise substantially.  Most market related sales
contracts can be settled through spot market purchases.  All base
price sales contracts exceed the spot market price as of May 31,
1994.  Revenues from such uranium sales of $2,893,800, $2,690,800
and $123,300 have been included in the accompanying consolidated
statements of operations for the years ended May 31, 1994, 1993
and 1992, which would normally have been sales of SMP.

     During fiscal 1993, GMMV began expensing certain general and
administrative, maintenance and holding costs.  The Company has
not recognized an equity loss in GMMV for fiscal 1994 and 1993
because Kennecott is committed to fund 100% of the first
$50,000,000 of development and operating costs of the Joint
Venture.  The Company's investment in GMMV of $724,800 in the
accompanying balance sheets is substantially lower than its
equity in GMMV.

     Condensed combined statements of operations of the Company's
equity investees include GMMV, SMP, Brunton and Ruby Mining
Company ("Ruby") for 1994, 1993 and 1992.  Condensed combined
balance sheets do not include Brunton for 1994 as Brunton's
balance sheet was consolidated into USE as of May 31, 1994.  


<PAGE>
      CONDENSED COMBINED BALANCE SHEETS -  EQUITY INVESTEES

                                         May 31,
                              _____________________________

                                 1994              1993
                              ____________     ____________

Current assets                $    720,700     $  2,677,100
Non-current assets              48,795,700       47,953,900
                              ____________     ____________

                              $ 49,516,400     $ 50,631,000
                              ____________     ____________

Current liabilities           $  6,429,000     $  5,432,900
Other long-term debt            23,621,600       24,423,900
Excess in assets                19,365,800       20,774,200
                              ____________     ____________

                              $ 49,516,400     $ 50,631,000
                              ____________     ____________
                              ____________     ____________

 CONDENSED COMBINED STATEMENTS OF OPERATIONS - EQUITY INVESTEES

                                   Year Ended May 31,
                      __________________________________________

                          1994           1993           1992
                       ___________    ___________    ___________

Revenues              $    17,000    $ 3,604,800    $ 3,845,500 
Less costs 
  and expenses          2,980,300      8,500,500      4,690,200 
                      ___________    ___________    ___________ 
Net loss              $(2,963,300)   $(4,895,700)   $  (844,700)
                      ___________    ___________    ___________ 
                      ___________    ___________    ___________ 

F.   MINERAL CLAIMS TRANSACTIONS AND MINING PROPERTIES:

GMMV

     During fiscal 1990, the Company and Crested entered into an
agreement with Kennecott, a wholly-owned, indirect subsidiary of
The RTZ Corporation PLC, for Kennecott to acquire a 50% interest
in certain uranium mineral properties known as the Green Mountain
Properties.  The purchase price was $15,000,000 of which
$6,000,000 was received in fiscal 1990 and $9,000,000 was
received in fiscal 1991.  Before they were contributed to GMMV,
the Green Mountain Properties were owned by the Company, with a
portion owned by USECC.

     The Boards of Directors of the Company and Crested adopted a
method of apportioning the initial consideration of $15,000,000,
on a ratio of 84% to the Company and 16% to Crested.  This
division was based on analyses of the projected cash flows of the
properties contributed by USE and USECC.

     Kennecott committed to fund 100% of the first $50 million of
capital contributions to the joint venture.  Kennecott will also
pay additional amounts if certain future operating margins are
achieved.  Because the Company held 100% of the claims containing
the Round Park Deposit portion of the Green Mountain properties,
it has the right to receive 50% of the cash flows from the
operations relating to that portion of GMMV properties.  With
respect to portions of GMMV properties previously held by USECC,
the Company and Crested share in cash flows attributable to their
combined 50% interest in GMMV.

     GMMV has incurred $12,133,700 in the development and
operations of the above uranium mineral properties through May
31, 1994.  This was funded by Kennecott out of the $50 million
funding commitment.  As previously mentioned, the Company's
carrying value of its investment in GMMV is $724,800 at May 31,
1994, which is substantially lower than its equity basis in GMMV.

Reclamation obligations of GMMV are discussed in Note K. 
Development of the properties continues in anticipation of future
uranium price increases.

SMP

     During fiscal 1989, USE and Crested, through USECC, entered
into an agreement to sell a 50% interest in their Sheep Mountain
properties to Nukem's subsidiary CRIC.  USECC and CRIC
immediately contributed their 50% interests in the properties to
a newly-formed partnership, SMP.  SMP was established to further
develop and mine the uranium claims on Sheep Mountain, acquire
uranium supply contracts and market uranium.  In 1989 USECC
agreed to assign three uranium delivery contracts to SMP.  USECC,
however, remained solely responsible for the reclamation of the
properties and future environmental liabilities.  SMP agreed to
deposit up to $.50 per pound of U3O8 as it is produced from the
properties for reclamation obligations.  See Notes E and K for a
description of the investment and a discussion of related
litigation.

AMAX Transactions

     During prior years, the Company and Crested conveyed
interests in mining claims to AMAX Inc. ("AMAX") in exchange for
cash, royalties, and other consideration including interest-free
loans, due in 2010.  In connection with a renegotiation of
various rights and duties of the parties, AMAX agreed to amortize
the principal amount of those loans to the Company and Crested by
$250,000 each quarter, subject to certain conditions and until
AMAX put the properties into production, which has not occurred. 
The amortization of these loans is complete as of May 31, 1994.

     In addition, AMAX pays the Company and Crested an annual
advance royalty of 50,000 pounds of molybdenum (or its cash
equivalent).  AMAX is entitled to a credit against future
royalties for any advance royalty payments made, but such
royalties are not refundable if the properties are not placed
into production.  The Company recognized $126,800, $105,800 and
$55,900 of revenue from the advance royalty payments in fiscal
1994, 1993 and 1992, respectively.

     AMAX may elect to return the properties to the Company and
Crested which would cancel the advance royalty obligation.  If
AMAX formally decides to place the properties into production, it
will pay $2,000,000 to the Company and Crested, and if AMAX sells
the properties, the Company and Crested will receive 15% of the
first $25 million received by AMAX.

Sutter Gold Venture

     During fiscal 1991, the Company acquired a one-half interest
in Sutter Gold Venture ("SGV"), a joint venture formalized to
acquire mineral leases and develop and mine gold from properties
in California.  The Company, in conjunction with Crested, formed
USECC Gold and transferred one-ninth of its interest in SGV to
Crested in exchange for Crested's agreement to pay one-ninth of
the Company's acquisition costs for its interest in the joint
venture, plus accrued interest as described below.  

     The Company acquired its interest in SGV for: (i) $4,500,000
of the $5,000,000 purchase price of SGV's properties; (ii) an
agreement to fund predecessor holding costs and the initial
development costs of SGV totalling $500,000; and (iii) its
agreement to provide its share of costs and assessments of SGV. 
SRRI, the other initial venturer in SGV, provided $500,000 of the
property purchase price, and agreed to pay $2,000,000 to the
Company to equalize their investments in SGV.  The Company and
SRRI agreed that they would each initially hold 50% interests in
SGV.

     SRRI issued a $2,000,000 note to the Company, bearing
interest at 10% per annum.  The note provided that $500,000 of
principal and accrued interest was due April 12, 1991, and the
balance of $1,500,000 was due October 12, 1991, with interest.  
If the installments were not paid when due, the interests of the
Company and SRRI in SGV were to be adjusted to equal the
percentage of the $5,000,000 purchase price of SGV's properties
that each of them provides.

     Crested's purchase price for its interest in SGV was: (i)
$500,000 (one-ninth of the $4,500,000 provided by the Company to
purchase the SGV properties) with interest; (ii) an agreement to
pay the Company $55,556 (one-ninth of the initial $500,000 of
predecessor holding costs and initial development costs of SGV
which the Company agreed to pay) with interest; and (iii) an
agreement to fund one-ninth of the assessments and liabilities
imposed on the Company-Crested ownership interest in SGV.  In
exchange, Crested received one-ninth of the Company's interest in
SGV, which initially entitled it to a 5.6% interest in the
project.  Crested was also entitled to one-ninth of any payments
on the $2,000,000 note by SRRI.

     In exchange for an agreement to issue 475,000 shares of
SRRI's common stock (one-ninth to Crested and eight-ninths to the
Company), SRRI obtained an extension of the due date for the
initial $500,000 note obligation to July 16, 1991.  Payment was
not received by the extended due date, and the 50% interest of
SRRI in SGV was reduced to 40%, with a corresponding increase in
the Company-Crested interest to 60%.  Payment was not received on
the remaining portion of the debt by the final due date and USECC
Gold's percentage interest in SGV increased to 90%.  During May
1994, the Company, Crested and SRRI reached an agreement under
which SRRI gave up all rights, title and interest in SGV and
delivered 400,000 shares of its common stock in exchange for
forgiveness of all accounts and notes payable by SRRI to the
Company and Crested.  Consequently, USE and Crested own 100% of
SGV.

     SGV is in the development stage at May 31, 1994 and is
primarily engaged in mine development, exploration and
feasibility work, permitting and acquisition of mill equipment. 
Limited revenues have been generated to date from processed ore
samples.  The related mining costs were recognized along with all
general and administrative type costs.  All acquisition and other
mine development costs have been capitalized, amounting to
$9,317,300 at May 31, 1994.

Plateau Resources Limited

     On August 11, 1993, the Company concluded the June 30, 1993
Stock Purchase Agreement ("SPA") with Consumers Power Company
("CPC"), by which the Company purchased from CPC all of the
outstanding stock of Plateau Resources Limited ("Plateau"). 
Plateau, a Utah corporation, owns the Shootaring Canyon Uranium
Mill and support facilities in southeastern Utah.  At the present
time, Plateau has applied to renew its materials license with the
United States Nuclear Regulatory Commission ("NRC").  See
paragraph (b) below.
      
     In 1984, because of a severely depressed uranium market for
uranium concentrates, Plateau indefinitely extended the
suspension of operations of its uranium processing facility and
ceased development of the Ticaboo Townsite project.  Therefore,
the acquisition as discussed below consisted of non-operating
assets with no reportable continuing operations.  The Company
paid nominal cash consideration for the Plateau stock.  As
additional consideration, the Company agreed:

     (a) to perform or cause the performance by Plateau of all
studies, remedial or other response actions or other activities
necessary from time to time for Plateau to comply with
environmental monitoring, site exit and other provisions of (i)
federal and state environmental laws relating to hazardous or
toxic substances, and (ii) the Uranium Mill Tailings Radiation
Control Act, the Atomic Energy Act of 1954, and administrative
orders and licenses relating to nuclear or radioactive substances
or materials on the property of or produced or released by
Plateau; and

     (b) to indemnify CPC from all liabilities and costs related
to the presence of hazardous substances or radioactive materials
on Plateau property, and of any future violation of laws and
administrative orders and licenses relating to the environment or
to nuclear or radioactive substances.

     At closing of the SPA, Plateau's assets included $14,200,000
in cash and cash equivalents.  Of this amount, $2,500,000 was
transferred at closing by Plateau to fund the "NRC Surety Trust
Agreement" with a commercial bank as trustee.  The trustee is to
pay future costs of mill decommissioning, site reclamation, and
long term site surveillance, as directed by the NRC.  The amount
transferred to the trust is the minimum amount now required by
the NRC as financial assurance for clean up after permanent shut
down of the mill.

     Also at  closing, $4,800,000 was transferred by Plateau to
fund the "Agency Agreement" with a commercial bank.  These funds
will be available to indemnify CPC against possible claims
related to environmental or nuclear matters, as disclosed above,
and against third-party claims related to a tax benefit transfer
agreement between Plateau and the third-party, in the event of a
"disqualification event" as provided in such agreement.  The
$4,800,000 and $2,500,000 are reflected as Restricted
Investments.  No value has been recorded by the Company for the
mill and related operating assets received in the transaction
because of their current nonoperating nature and the lack of cash
flow from any operations in the foreseeable future.  The Company
recorded the specified $2,500,000 reclamation liability, an
additional liability for $4,800,000 related to an indemnification
of other possible claims against Plateau and recorded a liability
of $6,900,000 for estimated care and maintenance costs on the
mill.  Certain care and maintenance costs incurred during the
year reduced this liability to $6,484,600 at yearend.  Together
with the $4,800,000 indemnification reserve, these estimated
obligations are recorded as Other Accrued Liabilities of
$11,284,000 in the accompanying consolidated financial
statements.

     Since the date of acquisition, there has been only minimal
subsequent operations because the future operating and holding
costs of most of the facilities acquired were accrued as part of
the acquisition transaction and included Other Accrued
Liabilities.

Energx

     During fiscal 1994, USE and Crested formed Energx to engage
in the exploration, development and operation of natural gas
properties.  Energx currently has leased properties in Wyoming
and the Fort Peck Indian Reservation, Montana.  Energx is owned
by USE (45%), Crested (45%), the Assiniboine and Sioux Tribes
(10%).

G.   LONG-TERM DEBT:

     The last quarterly amortization of $250,000 each for the
non-interest bearing loans from AMAX to USE and Crested were
recognized in fiscal 1994 (Note F).

     The Company's debt includes the $200,000 revolving line of
credit of Brunton with a commercial bank.  The line of credit
accrues interest at 9.75% and expires on April 27, 1995 .  As of
May 31, 1994, $161,000 was outstanding on the line of credit. 
Brunton has two installment notes bearing interest at 8% secured
by generally all of the assets of Brunton.  FNG also has various
installment notes bearing interest from 6.9% to 11.5% which are
secured by FNG equipment with maturity dates through 1997.

     The components of debt as of May 31, 1994 and 1993 are as
follows:
<PAGE>
                                                 May 31,
                                       __________________________

                                          1994            1993
                                       __________      __________
   Non-interest bearing note to
     AMAX USE portion (Note F)         $    --        $ 250,000
   Non-interest bearing note to
     AMAX Crested portion (Note F)          --          250,000
   Installment note - secured 
     by equipment, interest at 8%, 
     matures February 1996               220,200          --
   Installment notes - secured 
     by real estate, interest at
     7.9% - 8%, matures 1998-2004        287,600          --
   Brunton installment notes             770,000          --
   Brunton line of credit                161,000          --
   FNG installment notes                 157,800        805,000
   FNG line of credit                       --          213,500 
   Notes payable - other                  82,000        315,000 
                                      __________     __________ 

                                       1,678,600      1,833,500 
   Less current portion                 (569,500)      (629,100)
                                      __________     __________ 

                                      $1,109,100     $1,204,400
                                      __________     __________ 
                                      __________     __________ 

     Principal requirements on debt for the five years after May
31, 1994 are as follows: 1995 - $569,500; 1996 - $232,900; 1997 -
$142,800, 1998 - $129,400, and thereafter - $604,000.

   Subsequent to yearend, USE and Crested obtained a $1,000,000
line of credit from a bank.  The line of credit bears interest at
the banks prime rate plus .5% (8.5% initially) and matures on
June 23, 1995.  The line of credit is secured by certain
receivables and a share of the net proceeds of production from
certain oil and gas wells.  As of September 1, 1994, $600,000 had
been drawn under this agreement.

H.   INCOME TAXES:

     The Company adopted SFAS 109 during fiscal 1994.
<PAGE>
     The components of deferred taxes as of May 31, 1994 are as
follows:

                                                    May 31,
                                                     1994
                                               ____________
     Deferred tax assets:
       Deferred compensation                   $     26,800 
       Deferred gain on sale of assets               84,500 
       Net operating loss carryforwards           4,601,100 
       Capital loss carryforwards                   452,000 
       Tax Credits                                  325,000 
       Other                                         36,000 
                                               ____________ 

     Total deferred tax assets                 $  5,525,400 
                                               ____________ 

     Deferred tax liabilities:
       Accelerated depreciation for tax          (1,112,900)
       Development and exploration costs         (2,039,900)
                                               ____________ 

     Total deferred tax liabilities              (3,152,800)
                                               ____________ 

                                               $  2,372,600 

     Valuation allowance                       $ (2,639,600)
                                               ____________ 

     Net deferred tax liability                $    267,000 
                                               ____________ 
                                               ____________ 

<PAGE>
     The Company has established a valuation allowance of
$2,639,600 against deferred tax assets due to the losses incurred
by the Company in fiscal 1994 and 1993.  The Company's ability to
generate future taxable income to utilize the NOL and capital
loss carryforwards is uncertain.

     For the years ended May 31, 1993 and 1992, the tax effect of
deferred taxes resulting from timing differences in the
recognition of revenues and expenses for tax and financial
statement purposes are as follows:


                                         Year Ended May 31,
                                    ____________________________
                                        1993             1992
                                    _____________   ____________
Gain on sale of property 
  and equipment                     $   (81,800)    $    --     
Operating loss
  carryforwards for
  income tax 
  reporting purposes                   (311,200)       (563,700)
Deferred compensation 
  expense                               (55,600)        (75,800)
Exploration and 
  development costs                     437,700         737,900 
Depreciation                             54,000          50,300 
Other                                   (43,100)         48,600 
                                    ___________      __________ 

Deferred income taxes                     --            197,300 
Less operating loss 
  carryforwards
  recognized for
  financial reporting 
  purposes                                --            197,300 
                                    ___________      __________ 

Net deferred 
  income taxes                      $     --        $    --     
                                    ___________      __________ 
                                    ___________      __________ 


     The income tax provision (benefit) is different from the
amounts computed by applying the federal income tax rate to
income before taxes.  The reasons for these differences are as
follows:

<PAGE>
                                       Year Ended May 31,
                            ___________________________________

                               1994           1993        1992
                            ___________    _________   _________
Expected federal 
  income tax                $(1,055,300)   $  --       $ 208,500 
Other                           --            --         (11,200)
SFAS 109 allowance            1,055,300       --            --
                            ___________    _________   _________ 
Income tax provision            --            --         197,300 
Extraordinary item - 
  net operating
  loss carryforwards            --            --         197,300 
                            ___________    _________   __________
Provision for
  (benefit from)
  income taxes less
  net operating
  loss carryforwards        $   --         $  --       $    --
                            ___________    _________   __________
                            ___________    _________   __________

There were no taxes payable as of May 31, 1994 or 1993.

     At May 31, 1994, the Company and its subsidiaries had
available, for federal income tax purposes, net operating loss
carryforwards of approximately $13,150,000, which will expire
from 1995 to 2009 and investment tax credit carryforwards of
$325,000 which, if not used, will expire from 1995 to 2001.  The
Internal Revenue Code contains provisions which limit the NOL
carryforwards available which can be used in a given year when
significant changes in company ownership interests occur.  In
addition, the NOL and credit amounts are subject to examination
by the tax authorities.

     The Internal Revenue Service has audited the Company's and
affiliates' tax returns through fiscal 1986, and their income tax
liabilities are settled through that year.  The IRS has recently
audited the Company's and affiliates' fiscal years 1989, 1990 and
1991 tax returns.  The Company has received a deficiency letter
for the years 1989 through 1991.  The Company has submitted a
written appeal to protest the findings of the examining agent. 
Management believes the Company will prevail on the significant
issues in dispute, and therefore, that significant liabilities
will not result from the findings.

I.   SEGMENTS AND MAJOR CUSTOMERS:

     The Company's primary business activity is minerals
operations.  Other reportable industry segments included
commercial operations, primarily real estate activities and
operation of an airport fixed base operation and construction
operations.  The following is information related to industry
segments:
<PAGE>
<PAGE>
                                      Year Ended May 31, 1994
                      ______________________________________________________

                       Minerals     Commercial   Construction
                      Operations    Operations    Operations    Consolidated
                      __________    ___________  ___________    ___________

Revenues              $4,359,300   $ 1,165,100   $2,606,400     $ 8,130,800
                      ___________   __________   __________ 
                      ___________   __________   __________ 
Interest and
  other revenues                                                    645,500
                                                                ___________

  Total Revenues                                                $ 8,776,300 
                                                                ___________
                                                                ___________ 
Operating 
  profit (loss)       $ (665,100)  $  (824,300)  $  317,500     $(1,171,900)
                      ___________  ___________   __________ 
                      ___________  ___________   __________   
Interest and
  other revenues                                                    645,500
General corporate 
  and other expenses                                             (2,186,700)
Equity in loss 
  of affiliates                                                    (390,700)
Cumulative effect 
  of income tax 
  accounting change                                                (267,000)
                                                                ___________
Loss before income
  taxes and cumu-
  lative effect                                                 $(3,103,800)
                                                                ___________
                                                                ___________ 
Identifiable assets
  at May 31, 1994     $17,745,200  $ 6,464,000   $  371,200     $24,580,400
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Investments in
  affiliates                                                      2,807,900 
Corporate asset s                                                 5,702,000 
                                                                ___________
  Total assets 
    at May 31, 1994                                             $33,090,300 
                                                                ___________ 
                                                                ___________ 
Capital expenditures  $1,190,700   $   441,600   $   19,800 
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Depreciation,
  depletion and
  amortization        $     --     $   505,600   $  160,200

                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
<PAGE>
                                      Year Ended May 31, 1993
                      ______________________________________________________

                       Minerals     Commercial   Construction
                      Operations    Operations    Operations   Consolidated
                      __________    ___________  ___________   ___________

Revenues              $4,796,600   $   894,400   $2,026,500    $ 7,717,500
                      ___________   __________   __________ 
                      ___________   __________   __________ 
Interest and
  other revenues                                                 1,328,000
                                                               ___________

  Total Revenues                                               $ 9,045,500 
                                                               ___________
                                                               ___________ 
Operating 
  profit (loss)       $1,140,400   $  (678,600)  $  266,100    $   727,900
                      ___________  ___________   __________ 
                      ___________  ___________   __________   
Interest and
  other revenues                                                 1,328,000
General corporate 
  and other expenses                                            (1,833,100)
Equity in loss 
  of affiliates                                                   (444,700)
Loss before income
  taxes and extra-
  ordinary item                                                $  (221,900)
                                                               ___________
                                                               ___________ 
Identifiable assets
  at May 31, 1993     $ 8,765,100  $ 5,605,800   $1,190,200    $15,561,100
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Investments in
  affiliates                                                     2,706,700 
Corporate assets                                                 5,769,400 
                                                               ___________
  Total assets 
    at May 31, 1993                                            $24,037,200 
                                                               ___________ 
                                                               ___________ 
Capital expenditures  $    3,300   $   169,800   $  819,900 
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Depreciation,
  depletion and
  amortization        $     --     $   419,400   $  162,200

                      ___________  ___________   __________ 
                      ___________  ___________   __________ 

<PAGE>
                                      Year Ended May 31, 1992
                      ______________________________________________________

                       Minerals     Commercial   Construction
                      Operations    Operations    Operations   Consolidated
                      __________    ___________  ___________   ____________

Revenues              $1,677,500   $   817,200   $2,895,000    $ 5,389,700
                      ___________   __________   __________ 
                      ___________   __________   __________ 
Interest and
  other revenues                                                   963,900
                                                               ___________

  Total Revenues                                               $ 6,353,600 
                                                               ___________
                                                               ___________ 

Operating profit      $  567,900   $    91,800   $  254,100    $   913,800
                      ___________  ___________   __________ 
                      ___________  ___________   __________   
Interest and
  other revenues                                                   963,900
General corporate 
  and other expenses                                              (999,600)
Equity in loss 
  of affiliates                                                   (324,900)
Income before income
  taxes and extra-
  ordinary item                                                $   553,200
                                                               ___________
                                                               ___________ 
Identifiable assets
  at May 31, 1992     $ 8,059,900  $ 6,368,400   $  583,400    $15,011,700
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Investments in
  affiliates                                                     1,985,700 
Corporate assets                                                 7,585,600 
                                                               ___________
  Total assets 
    at May 31, 1992                                            $24,583,000 
                                                               ___________ 
                                                               ___________ 
Capital expenditures  $    1,600   $   228,600   $  336,100 
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Depreciation,
  depletion and
  amortization        $     --     $   266,700   $  126,100

                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
<PAGE>
     During fiscal 1994, 1993 and 1992, approximately 14%, 44%
and 62% of mineral revenues were from amortization of principal
on the AMAX notes and annual advance royalties of molybdenum from
AMAX.  During fiscal 1994, 1993 and 1992, 86%, 56% and 7%,
respectively, of mineral revenues were from sales of uranium.

     The Company subleases excess office space, contracts
aircraft for charter flights and sells aviation fuel.  Commercial
revenues in the statements of operations consist of mining
equipment, office and other real property rentals, charter
flights and fuel sales.

J.   SHAREHOLDERS' EQUITY:

     The Board of Directors has adopted the U.S. Energy Corp.
1989 Stock Option Plan (the "Option Plan") for the benefit of
USE's key employees.  550,000 shares of the Company's $.01 par
value common stock have been reserved for issuance under the
Option Plan.  During fiscal 1990, the Company issued options to
certain of its executive officers, Board members and others. 
44,000 incentive options were issued at purchase prices ranging
from $7.84  per share to $8.62 per share.  231,000 non-qualified
options were also issued at exercise prices from $6.27 to $8.62
per share.  The options will expire on January 2, 2000, with the
exception of those issued to the Company's Chief Executive
Officer, which will expire January 2, 1996.

     The Board of Directors of USE adopted the U.S. Energy Corp.
1989 Employee Stock Ownership Plan ("ESOP") in 1989, for the
benefit of USE's employees.  During fiscal 1994, 1993 and 1992,
the Board of Directors of USE contributed 46,332, 49,087 and
49,599, shares to the ESOP at prices of $4.00, $3.75 and $3.50
per share, respectively.  The Company is responsible for one-half
of these contributions of $92,500, $91,700 and $86,800 in fiscal
1994, 1993 and 1992, respectively.  Crested is responsible for
the remainder (see Note C).  USE has loaned the ESOP $1,014,300
to purchase 125,000 shares from the Company and 38,550 shares on
the open market.  These loans, which are secured by pledges of
the stock purchased with the loan proceeds, bear interest at the
rate of 10% per annum and are due in fiscal 1995 and 1996.

     During fiscal 1991, the Board of Directors of both the
Company and Crested issued shares of stock as bonuses to certain
directors, employees and third parties.  The stock bonus shares
have been reflected outside of the Shareholders' Equity section
in the accompanying balance sheets because such shares are
forfeitable to the Company and Crested until earned.  Crested is
responsible for one half of the compensation expense related to
these issuances (see Note C).  Compensation expense will be
recognized over the various earn out periods.  As of May 31,
1994, 1993 and 1992, the Company had compensation expense of
$116,700, $271,700 and $293,200, respectively, resulting from
these issuances.  During fiscal 1993, the Company's Board of
Directors amended the stock bonus plan.  As a result, the earn
out dates have been extended until retirement, which is the earn
out date of the amended stock bonus plan.  The new plan grants a
stock bonus of 20% of the previous plan per year for five years. 
Additional information related to these stock issuances is set
forth in the following table:

   Issue             Number                 Issue        Total
    Date            of Shares  Issuer       Price    Compensation
   May 1990          44,330     USE       $  8.86      $392,925
   June 1990         46,530     USE         10.00       465,300
   June 1990         15,400     USE         10.00       154,000
   June 1990         11,000     USE         10.00       110,000
   June 1990         25,000     Crested      1.0625      26,562
   December 1990     22,500     Crested       .50        11,250
   January 1993      18,520     USE          3.00        55,560
   January 1993       6,500     Crested       .22         1,430
   January 1994      18,520     USE          4.00        74,080
   January 1994       6,500     Crested       .28         1,828

     No shares were earned in fiscal 1993 or 1992; however, 5,000
shares were earned and released in fiscal 1994. 

     In April 1993, the Board of Directors of USE authorized the
issuance of 50,000 shares of its common stock at $2.75 per share
to an affiliate for cash in an effort to increase the Company's
operating capital.  USE also granted Brunton options for 150,000
common shares at $3.50 per share.  No options have been exercised
as of May 31, 1994.

     On November 11, 1993, the Company issued 100,000 shares of
its common stock at $3.00 per share to Brunton in lieu of payment
on a $300,000 line of credit.

K.   COMMITMENTS, CONTINGENCIES AND OTHER:

Legal Proceedings

SMP

     Arbitration Proceeding Concerning SMP.  During fiscal 1992,
NUKEM's wholly-owned subsidiary Cycle Resource Investment
Corporation ("CRIC") instituted arbitration proceedings against
the Company and Crested.  CRIC claimed that the Company and
Crested violated the SMP partnership agreement by assigning
amounts equal to any SMP cash distributions to USECC derived from
sales of uranium under SMP supply contracts.  CRIC also asserted
that by entering into the GMMV agreement, the Company and Crested
misappropriated a business opportunity of SMP.  CRIC seeks
damages and certain equitable remedies from the Company and
Crested, in an amount to be determined and seeks to expel the
Company and Crested from the SMP Partnership.  The Company and
Crested do not believe their entry into the GMMV agreement
violated the restraints on transfer of SMP property set forth in
the SMP agreement.  They have vigorously defended themselves
against the allegations of CRIC.  

     Federal Court Action Concerning SMP.  On July 3, 1991, the
Company and Crested filed a civil action in the U. S. District
Court of Colorado against Nukem, CRIC and their affiliates,
alleging that Nukem, CRIC and their affiliates fraudulently
misrepresented facts and concealed information from the Company
and Crested to induce their entry into the agreements forming SMP
and seeks rescission, damages and other relief.  The Company and
Crested further alleged that NUKEM and CRIC have refused to
provide information about transactions by CRIC and its affiliates
with SMP, and that the defendants had engaged in various wrongful
acts relating to financing and acquisition of uranium for SMP. 
NUKEM and CRIC filed an answer and a variety of counterclaims
against the Company and Crested.  NUKEM's affiliates (excluding
CRIC) were thereafter dismissed from the lawsuit.  The U. S.
District Court granted the motion of the Company and Crested to
stay the above arbitration initiated by CRIC and also ordered the
Company and Crested to amend their complaint.  On April 6, 1992,
the Company and Crested filed an amended complaint against NUKEM
and CRIC setting out the alleged fraud with particularity, and
NUKEM and CRIC filed answers and counterclaims to the amended
complaint.  

     State Court Action Concerning SMP.  On September 16, 1991,
USECC filed a civil action in the Denver District Court against
SMP seeking reimbursement of $85,000 per month since the spring
of 1991 for the care and maintenance of the SMP underground
uranium mines and properties in south-central Wyoming.  On May
11, 1993, the Denver District Court stayed all proceedings until
the U.S. District Court for Colorado case is resolved.

     Summary.  The discovery stage in the case filed by the
Company and Crested on July 3, 1991 in the U. S. District Court
of Colorado against NUKEM, CRIC et al  has been protracted and
vigorously contested by all parties.  On November 6, 1993, the
remaining parties in that suit, NUKEM and CRIC, verbally agreed
with the Company and Crested that the majority of the litigation
post the formation of SMP, would be handled through consensual
arbitration with the American Arbitration Association ("AAA"). 
The agreement to arbitrate was finally reduced to writing and
executed effective on February 7, 1994.  The arbitration
proceeding commenced on June 27, 1994 before a three member AAA
arbitration panel.  Given the amount of evidence to be addressed
and the availability of the members of the panel and counsel, it
is currently estimated that arbitration proceedings will not be
concluded until early 1995.  Pursuant to a court order requiring
an election of remedies, the Company and Crested elected to
affirm the SMP Partnership and seek the remedies of common law
damages, damages as provided under the Racketeer Influenced and
Corrupt Organization(s) Act (RICO) and other remedies, in lieu of
asking that the SMP Partnership be rescinded.  

Illinois Power

     Illinois Power Company ("IPC"), one of the utilities with
whom SMP has a long-term uranium supply contract, unilaterally
sought to terminate the contract on October 28, 1993 and filed
suit contemporaneously in the Federal District Court, Danville,
Illinois, against the Company, Crested, CRIC, SMP, Nukem
Luxemburg GmbH ("NULUX") and the Dresdner Bank, seeking a
declaratory judgment that the contract with USECC, which was
assigned to SMP and thereafter to NULUX, had been breached by
USECC filing of a Motion for Appointment of Receiver in the SMP
litigation.  The Dresdner Bank was dismissed from the case, and
the remaining defendants filed answers denying IPC's allegations
and filed counterclaims for damages due under the IPC contract. 
These defendants also filed Motions for Summary Judgment and a
hearing was held on the motions on May 27, 1994.  On September 1,
1994, the U. S. District Court for the Central District of
Illinois granted the defendants' motions for summary judgment
against IPC dismissing IPC's complaint, and further granted those
defendant's counterclaims against IPC for breach of contract by
IPC.  A scheduling conference has been set by the Court for
September 30, 1994 to determine the amount of damages, if any, to
be awarded to the Company.

Reclamation and Environmental Liabilities

     Most of the Company's mine development, exploration and
operating activities are subject to federal and state regulations
that require the Company to protect the environment.  The Company
attempts to conduct its mining operations so as to comply with
these regulations, but they are continually changing and
generally becoming more restrictive.  Consequently, the Company's
current estimates of its reclamation obligations and its current
level of expenditures to perform ongoing reclamation may change
in the future.  At the present time, however, the Company cannot
predict the outcome of future regulation or its impact on costs. 
Nonetheless, the Company has recorded its best estimate of future
reclamation and closure costs based on currently available facts
and technology and enacted laws and regulations.  Certain
regulatory agencies, such as the Nuclear Regulatory Commission,
the Bureau of Land Management and the Wyoming Department of
Environmental Quality review the Company's reclamation,
environmental and decommissioning liabilities, and the Company
believes its recorded amounts are consistent with those reviews
and related bonding requirements.  To the extent that planned
production on its properties is delayed, interrupted or
discontinued because of regulation or the economics of the
properties, the future earnings of the Company would be adversely
affected.  The Company believes it has accrued all necessary
reclamation costs and there are no additional contingent losses
on unasserted claims to be disclosed or recorded in the
reclamation liability.  The Company has not disposed of any
properties for which it has a commitment or is liable for any
known environmental liabilities.

     The majority of the Company's environmental obligations
relate to former mining properties acquired by the Company. 
Since the Company currently does not have properties in
production, the Company's policy of providing for future
reclamation and mine closure costs on a unit-of-production basis
has not resulted in any significant annual expenditures or costs.

For the obligations recorded on acquired properties, including
site-restoration, closure and monitoring costs, actual
expenditures for reclamation will occur over a number of years,
and since these properties are all considered future production
properties, those expenditures, particularly the closure costs,
may not be incurred for many years.  The Company also does not
believe that any significant capital expenditures to monitor or
reduce hazardous substances or other environmental impacts are
currently required.  As a result, the near term reclamation
obligations are not expected to have a significant impact on the
Company's liquidity.

     As of May 31, 1994, the Company has recorded estimated
reclamation obligations, including standby costs, of $15,236,400,
as reflected in reclamation and other long-term liabilities in
the accompanying financial statements.  In addition, the GMMV
joint venture, in which the Company is a 50% equity investor, has
recorded a $23,600,000 liability for future reclamation and
closure costs.  None of these liabilities have been discounted,
and the Company has not recorded any potential offsetting
recoveries from other responsible parties or from any insurance
companies.

     The Company currently has four mineral properties or
investments that account for most of its environmental
obligations.  The Company is a partner in SMP, a joint venturer
of GMMV and owner of SGV and Plateau.  The environmental
obligations and the nature and extent of cost sharing
arrangements with other potentially responsible parties, as well
as any uncertainties with respect to joint and several liability
of each are discussed in the following paragraphs:

SMP

     The Company and Crested agreed to assume the reclamation
obligations, environmental liabilities and liabilities for
injuries to employees in mining operations with respect to the
Crooks Gap properties, which are part of the SMP venture.  The
reclamation obligations, which are established by regulatory
authorities, were reviewed by the Company and the regulatory
authorities during fiscal 1994 and the balance in the reclamation
liability account at May 31, 1994 of $1,451,800 was determined by
the Company to be adequate.  The obligation will be satisfied
over the life of the mining project which is estimated to be at
least 20 years.  The Company and Crested self bonded this
obligation by mortgaging certain of their real estate holdings. 
A portion of the funds for the reclamation of SMP's properties is
expected to be provided by SMP which has agreed to pay up to $.50
per pound of uranium to the Company and Crested for reclamation
work, as the uranium is produced from the properties.  The
current arbitration proceedings with Nukem and CRIC could result
in changes to these agreements between the parties.

GMMV

     During fiscal 1991, the Company and Crested acquired
developed minerals properties on Green Mountain known as the Big
Eagle Property.  In connection with that acquisition, the Company
and Crested agreed to assume reclamation and other environmental
liabilities associated with the property.  Reclamation
obligations imposed by regulatory authorities were established at
$7,300,000 at the time of acquisition.  Immediately after the
acquisition, the Company and Crested transferred a one-half
interest in them to Kennecott, and Kennecott, the Company and
Crested contributed the Big Eagle properties to GMMV, which
assumed the reclamation and other environmental liabilities. 
Kennecott holds a commercial bank letter of credit as security
for the performance of the reclamation obligations for the
benefit of GMMV.

     During fiscal 1993, GMMV entered into an agreement to
acquire the Sweetwater uranium mill and related properties from
UNOCAL.  GMMV's consideration for the acquisition of the
Sweetwater Mill Property was the assumption of all environmental
liabilities and reclamation bonding obligations.  The
environmental obligations of GMMV are guaranteed by Kennecott
Corporation (parent of Kennecott Uranium Company, the other joint
venture partner).  However, UNOCAL also agreed that if GMMV
incurs expenditures for environmental liabilities prior to the
earlier of commercial production by GMMV or February 1, 2001
(which liabilities are not due solely to the operations of GMMV),
UNOCAL will reimburse GMMV the first $8,000,000 of such
expenditures.  Any such reimbursement may be recovered by UNOCAL
from 20% of future cash flows from sale of uranium concentrates
processed through the Mill.  In any event, until such time as
environmental and reclamation undertakings are liquidated against
Kennecott Corporation, such costs are not deemed expenditures
under Kennecott's $50,000,000 development commitment (although
bond costs may be charged against this development commitment).

     The reclamation and environmental liabilities assumed by
GMMV concern two categories: (1) cleanup of an inactive open mine
pit site near the Mill, including water (heavy metals and other
contaminants) and tailings (heavy metals and other dust
contaminant abatement and erosion control) associated with the
pit, and (2) decontamination and cleanup and disposal of the Mill
building and equipment and tailings cells after Mill
decommissioning.  Current liabilities for such efforts have been
established at approximately $16,314,000 by the Wyoming
Department of Environmental Quality for mine pit site matters
(exercising EPA-delegated jurisdiction to administer the Clean
Water Act and the Clean Air Act, and directly administering
Wyoming statutes on mined land reclamation), and by the NRC for
decontamination and cleanup of the Mill and Mill tailings cells. 
The EPA has continuing jurisdiction under the Resource
Conservation and Recovery Act, pertaining to any hazardous
materials which may be on site when cleanup work is started.

     Although USE and the other GMMV parties are liable for all
reclamation and environmental compliance costs associated with
Mill and site maintenance, as well as Mill decontamination and
cleanup and site reclamation and cleanup after the Mill is
decommissioned, USE believes it is unlikely USE will have to pay
for such costs directly.  First, based on current estimates of
cleanup and reclamation costs (reviewed annually by the oversight
agencies), such costs may be within the $50,000,000 development
commitment of Kennecott Uranium Company for GMMV.  These costs
are not expected to increase materially, if the Mill is not put
into full operation.  Second, to the extent GMMV is required to
spend money on reclamation and environmental liabilities related
to previous Mill and site operations during ownership by Minerals
Exploration Company (a UNOCAL subsidiary), UNOCAL has agreed to
fund up to $8,000,000 of such costs (provided such costs are
incurred before February 1, 2001 and before Mill production
resumes), which would be recoverable only out of future Mill
production (see above).  Third, payment of the GMMV reclamation
and environmental liabilities related to the mill is guaranteed
by Kennecott Corporation, parent of Kennecott Uranium Company. 
Last, GMMV will set aside a portion of operating revenues to fund
reclamation and environmental liabilities once mining and milling
commences.  To date, ongoing Mill maintenance expense is funded
by Kennecott as part of its development commitment.

     Kennecott Corporation will be entitled to contribution from
the USE parties in proportion to their participation interests in
GMMV, if Kennecott Corporation is required to pay Mill cleanup
costs directly pursuant to its guarantee.  Such payments by
Kennecott  Corporation only would be reimbursed if the
liabilities cannot be satisfied within the initial $50,000,000
expenditure commitment, and then only to the extent there are
insufficient funds from the reclamation reserve (to be built up
out of GMMV operating revenues).  In addition, if and to the
extent such liabilities resulted from UNOCAL's Mill operations,
and payment of the liabilities was required before February 1,
2001 and before Mill production resumes, then up to $8,000,000 of
that amount would be paid by UNOCAL, before Kennecott Corporation
would be required to pay on its guarantee. Accordingly, although
the extent of any ultimate USE liability for contribution to Mill
cleanup costs cannot be predicted, USE and Crested will only be
required to pay its proportional share of Mill cleanup if a) the
liabilities cannot be satisfied with the initial $50,000,000
expenditure commitment from Kennecott, b) there are insufficient
funds from the reclamation reserve to be built up out of GMMV
operating revenues and c) payments are not available from UNOCAL.

SGV

     The Company and Crested currently own 100% of SGV, which
owns gold mineral properties in California.  Currently, the
property is in development and costs consist of drilling,
permitting, holding costs and administrative costs.  No
substantial mining has been completed, although a 2,800 foot
decline through the identified ore zones for an underground mine
was acquired in the purchase.  Because the mine is not in the
production stage and the Company's policy is to provide
reclamation on a unit-of-production basis, no environmental
liabilities have been accrued as of May 31, 1994.  Any
reclamation liability for SGV properties which currently exist is
insignificant.

Plateau

     The environmental obligations acquired with the acquisition
of Plateau include all environmental and reclamation obligations
relating to the Shootaring Mill.  Based on the bonding
requirements, Plateau transferred $2,500,000 to a trust account
to pay future costs of mill decommissioning, site reclamation and
long-term site surveillance.  In addition, Plateau has recorded
additional obligations of $11,284,600 as of May 31, 1994, for the
estimated holding and maintenance costs needed until the mill is
placed in service or decommissioning begins.  The estimated
future Shootaring Mill decommissioning and site reclamation costs
noted above ,as required by the NRC and the Utah Department of
Natural Resources, were determining factors in the consideration
paid by the Company

Executive Compensation

     The Company and Crested are committed to pay the estates of
certain of their officers an amount equal to one year's salary
for one year after their death and reduced amounts, to be set by
the Board of Directors, for a period up to five years thereafter.

Subsequent Events

     On August 25, 1994, Plateau Resources, Limited., a wholly
owned subsidiary of the Company signed a letter of intent with an
unrelated third party to sell part interest in Canyon Homesteads,
Inc., a wholly owned subsidiary of Plateau, and to develop the
Ticaboo Townsite, in south central Utah and other resort
properties near Lake Powell.  The total purchase price for a one-
half interest in Canyon Homesteads is $6,000,000.  The party has
made a non refundable earnest money payment of $100,000 to
Plateau to be credited to the purchase price, and will pay an
additional $900,000 within 30 days of the signing of the letter
of intent.  The next payment of $2,000,000 will be made 30 days
later with the balance of $3,000,000 to be paid out of cash flows
generated from the operations.  The development is anticipated to
include the following:  homesites, 18 hole golf course, boat
storage, trailer park, RV park, motel, condominiums, and other
commercial business. 

     On August 31, 1994, the Company and Crested agreed to
exercise an option to purchase a 57 acre parcel of land in the
City of Gunnison, CO. from Cyprus Climax Metals Company ("AMAX").

This land will be acquired in exchange for the Company's and
Crested's forgiveness of the next six quarters of advance minimum
royalty payments of molybdenum which would otherwise be due from
Cyprus to the respective Companies. The total purchase price of
the exchange given the current dealer oxide price is worth
approximately $266,250.  (See Note F.)

<PAGE>
<TABLE>
<CAPTION>
               SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                      BALANCE AT   ADDITIONS             BALANCE AT
                                      BEGINNING    CHARGED TO              END OF
                                      OF PERIOD    EXPENSES   DEDUCTIONS   PERIOD

Year Ended May 31, 1994
  Allowance for doubtful accounts
    Accounts and notes receivable:
      <S>                                <C>        <C>        <C> <S>    <C>
      Trade                              $4,000     $28,600    $   --     $32,600
      Related parties                     1,600         --         --     1,600

                                        $ 5,600    $28,600    $   --     $34,200
Year Ended May 31, 1993
  Allowance for doubtful accounts
    Accounts and notes receivable:
      Trade                             $10,300    $   --     $6,300     $4,000
      Related parties                     1,800         --        200     1,600

                                        $12,100    $   --     $6,500     $5,600
Year Ended May 31, 1992
  Allowance for doubtful accounts
    Accounts and notes receivable:
      Trade                              $5,100     $5,200     $   --     $10,300
      Related parties                       800      1,000         --     1,800
                                         $5,900     $6,200     $   --     $12,100
</TABLE>


                                  STEPHEN E. ROUNDS
                                   Attorney at Law

4635 EAST EIGHTEENTH AVENUE                         TELEPHONE  (303) 377-6997
DENVER, COLORADO 80220 USA                          FACSIMILE (303) 377-0231

April 15, 1995 


U.S. Energy Corp.
Board of Directors
877 North 8th West
Riverton, Wyoming 82501


Re: Registration Statement on Form S-1

Gentlemen:

The Brunton Company, a Wyoming corporation, proposes to offer and
sell, to the public, up to 150,000 common shares of U.S. Energy
Corp. ("Company"), a Wyoming corporation. My opinion is required in
connection with such transaction.

                       Documents Reviewed

I have examined originals, certified copies or other copies
identified to my satisfaction, of the following:

     1. Restated Articles of Incorporation, and Amendment to
Restated Articles of Incorporation, of the Company.

     2. Bylaws of the Company, as amended.

     3. All exhibits listed as incorporated by reference in Part II
of the registration statement on Form S-1, prepared by the Company
and filed with this opinion as an exhibit.

     4. The Company's registration statement on Form S-4 (SEC File
No. 33-72280), effective April 13, 1994.

     5. Certain minutes of proceedings of the Company board of
directors.

     6. Such other papers (including public documents) as I deem
appropriate under the circumstances.

I have also consulted with Company officers and representatives
(including but not limited to its transfer agent), and received
representations and assurances concerning same, as I have deemed
advisable or necessary under the circumstances. Although I have not
undertaken independent verification of the matters covered by this
paragraph, I have no reason to believe that the representations and
assurances received are materially inaccurate or false. 

<PAGE>

U.S. Energy Corp. 
April 15, 1995 
Page -2

                             Opinion

Subject to compliance with applicable state securities laws, and to
declaration of effectiveness of the Company's Form S-1 registration
statement, and based on my review of the documents listed above, it
is my opinion that the common shares to be offered and sold by
Brunton after date hereof are duly and validly issued, fully paid
and non-assessable common shares of the Company.

My opinion assumes that Brunton delivers a copy of the definitive
prospectus to each purchaser of the common shares, in compliance
with the Securities Act of 1933, as amended, and applicable rules
of the Securities and Exchange Commission.

I hereby consent to the filing of this opinion as an exhibit to the
registration statement on Form S-1. However, I do not admit that I
am in the category of those persons whose consent is required to be
so filed by Section 7(a) of the Securities Act of 1933.


                                        Yours Sincerely,

                                        s/Stephen E. Rounds
<PAGE>


                        ARTHUR ANDERSEN LLP





                                                                  
                                                     Exhibit 24.1








             CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
             _________________________________________



As independent public accountants, we hereby consent to the use of
our report (and to all references to our firm) included in or made
a part of this registration statement.


                                        s/ Arthur Andersen LLP


Denver, Colorado,
  April 28, 1995
[{"type": "S-1", "sequence": "1", "secsgml_size_bytes": 347247}]
{"company-data": {"conformed-name": "US ENERGY CORP", "cik": "0000101594", "assigned-sic": "1090", "irs-number": "830205516", "state-of-incorporation": "WY", "fiscal-year-end": "0531"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "033-59063", "film-number": "95534303"}, "business-address": {"street1": "877 NORTH 8TH WEST", "street2": "GLEN L LARSEN BLDG", "city": "RIVERTON", "state": "WY", "zip": "82501", "phone": "3078569271"}, "mail-address": {"street1": "877 NORTH 8TH WEST", "city": "RIVERTON", "state": "WY", "zip": "82501"}, "former-company": {"former-conformed-name": "WESTERN STATES MINING INC", "date-changed": "19851229"}}
SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                 FORM S-1

            REGISTRATION STATEMENT UNDER SECURITIES ACT OF 1933

                             U.S. ENERGY CORP.
           _____________________________________________________
          (Exact Name of registrant as specified in its charter)

                                  Wyoming                        
           _____________________________________________________
              (State or other jurisdiction of incorporation)      
         
                                   1090
          _______________________________________________________
         (Primary Standard Industrial Classification Code Number)

                                83-0205516
                    ___________________________________
                   (I.R.S. Employer Identification No.)

                   877 North 8th West, Riverton, Wyoming
                             Tel. 307/856-9271
                 ________________________________________
                  (Address and telephone of registrant's 
                       principal executive offices)

                             Daniel P. Svilar
       ____________________________________________________________
       (Name, address and telephone of agent for service of
process)

Approximate date of commencement of proposed sale to public: As
soon as practicable after this registration statement is declared
effective.

If the securities being registered on this Form are being offered
in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [ ]

                      Calculation of Registration Fee

                              Proposed      Proposed
Title of each                  maximum       maximum     Amount
class of          Amount      offering      aggregate      of
securities to      to be        price       offering     regis.
be registered   registered    per share       price       fee  

Common,         150,000(1)    $6.63(2)     $994,500(2)  $345.00  
$.01 par        shares

 Totals         150,000                    $994,500     $345.00
                shares
_____________________ 
(1) Shares registered are held by The Brunton Company, a
wholly-owned
subsidiary of the registrant.     
(2) Based on last sale price on NASDAQ/NMS for registrant's shares
on
April 11, 1995.
Cross Reference Sheet
                     under Rule 501(a)e

           Information Required in the Prospectus
                              
Item 1. Forepart of Registration        Facing page, front
Statement and Outside Front Cover       cover of Prospectus
of Prospectus

Item 2. Inside Front and Outside        Inside front and
Back Cover Pages of Prospectus          outside back
                                        Prosp. cover pages

Item 3. Summary Information,            Summary Information;
Risk Factors, and Ratio of              Risk Factors
Earnings to Fixed Charges

Item 4. Use of Proceeds                 Selling Security
                                        Holders

Item 5. Determination of                Not applicable.
Offering Price                          

Item 6. Dilution                        Not applicable.

Item 7. Selling Security Holders        Selling Security
                                        Holders

Item 8. Plan of Distribution            Not applicable.

Item 9. Description of                  Description of
Securities to be Registered             Securities.

Item 10. Interests of Named             Not applicable
Experts and Counsel

Item 11. Information With               Business
Respect to the Registrant

Item 12. Disclosure of                  Not applicable.
Commission Position on 
Indemnification for 
Securities Act Liabilities
U.S. ENERGY CORP.

                      150,000 COMMON SHARES
           __________________________________________

The Common Shares are offered for sale by The Brunton Company, a
Wyoming corporation ("Brunton"), a wholly-owned subsidiary of U.S.
Energy Corp. ("USE").  Common Shares of USE are traded on the
NASDAQ/NMS quotation system.  At April 11, 1995, the closing bid
price was $6.63 per share.  See "Market for USE Common shares and
Related Stockholder Matters."   
           __________________________________________  

These are Speculative Securities.  Such Securities Involve a High 
              Degree of Risk.  See "Risk Factors."
           __________________________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE 
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION, OR ANY
STATE SECURITIES COMMISSION, PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
          _____________________________________________

          The date of this Prospectus is April  , 1995

No one is authorized to give any information, or make any
representation on behalf of USE if not contained in this
Prospectus.  This Prospectus does not constitute an offer to sell,
or a solicitation of an offer to purchase, the securities offered
hereby, by any person in any jurisdiction in which such an offer or
solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so, or to any person
to whom it is unlawful to make such an offer, or solicitation of an
offer.

Neither delivery of this Prospectus nor any sale of the securities
being offered hereby, shall create an implication that there has
been no change in the information set forth herein since date of
this Prospectus.
           ___________________________________________
Available Information

USE is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other statements and
information with the Commission.  The reports and other documents
so filed can be inspected and copied at the Commission's public
reference room located at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's public reference
facilities at Commission regional offices located at: 7 World Trade
Center, 13th Floor, New York, New York 10048; and Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661.  Copies of such documents can be obtained at
prescribed rates by writing to the Securities and Exchange
Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549.

This Prospectus does not contain all of the information set forth
in the Registration Statement covering the USE Shares offered
hereby, certain portions of which have been omitted pursuant to
Commission rules and regulations.  Statements herein concerning any
such other information are not necessarily complete.  In each
instance where reference is made herein to such other information,
reference is made to the copies of such documents filed as exhibits
to the Registration Statement.  Each such statement is qualified in
its entirety by such reference.  

                    Incorporation of Certain
                     Documents by Reference

This Prospectus incorporates by reference documents not presented
herein or delivered herewith.  Documents relating to USE are
available without charge upon request to the Secretary, U.S. Energy
Corp., 877 North 8th West, Riverton, Wyoming 82501.  Telephone
requests may be directed to Sharon Miller at (307) 856-9271.

The following documents filed with the Commission by USE
(Commission File No. 0-6814) are incorporated herein by reference:
(a) USE Annual Report on Form 10-K for fiscal year ended May 31,
1994; (b) USE Quarterly Reports on Form 10-Q for quarters ended
August 31, 1994, November 30, 1994, and February 28, 1995; (c)  USE
Proxy Statement for Annual Meeting on December 9, 1994. 

All documents filed by USE under Section 13(a) or Section 14 of the
Exchange Act subsequent to date of this Prospectus shall be deemed
to be incorporated herein by reference and to be a part hereof from
the date of such filing.  Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by
reference, shall be deemed to be modified or superseded for
purposes hereof to the extent that a statement contained herein or
in any other subsequently filed document which also is, or is
deemed to be, incorporated herein by reference modifies or
supersedes such statement.  Any such statement so modified or
superseded shall not be deemed to constitute a part hereof, except
as so modified or superseded.
Summary of the Offering

The following summary is not intended to be complete and is
qualified in all respects by the more detailed information included
in this Prospectus.  

                           The Company

USE is in the general minerals business of acquiring, developing,
exploiting and/or selling mineral properties.  USE is now engaged
in two principal mineral sectors: uranium and gold.  Interests are
held in other mineral properties (principally molybdenum), but are
either nonoperating interests or undeveloped claims.  Other USE
business segments are commercial operations (professional and
recreational products manufacture and sales, real estate, and
general aviation), and construction operations.  Most USE
operations are conducted through a joint venture with Crested Corp.
("Crested", a majority-owned subsidiary), and various joint
subsidiaries of USE and Crested.

USE was incorporated in Wyoming in 1966.  All operations are in the
United States.  Principal executive offices are located at 877
North 8th Street West, Riverton, Wyoming 82501, telephone (307)
856-9271.

                          Risk Factors

An investment in the Common Shares of USE involves substantial
risks.  See "Risk Factors."

                          The Offering

Securities Offered (1). . . . . . .150,000 Common Shares.  
                                   See "Description of Securities."
Common Shares Outstanding
  Before and After Offering . . . .5,247,993 Shares

NASDAQ/NMS Symbol                  "USEG
_______________
(1)  All Common Shares offered are owned by and are being sold for
the account of Brunton.

                    Selling Security Holders

This Prospectus relates to the registration by USE of 150,000
common shares owned by The Brunton Company, for sale by Brunton
into the public market from time to time.  Brunton has had several
material transactions with USE within the last three fiscal years
(see "Certain Relationships and Related Transactions"), including
the loan by Brunton of $300,000 to USE in August, 1993,
subsequently converted by terms of the loan (in October, 1993) to
restricted USE common shares (such converted shares are included in
the shares offered by this Prospectus).
Brunton presently owns 211,205 USE common shares (4,538 shares
acquired prior to fiscal 1992, 50,000 shares purchased in fiscal
1993, 100,000 shares acquired by loan conversion in fiscal 1994,
and 56,667 shares purchased in the December 1994 private placement-
- -see the discussion of liquidity and capital resources for the nine
months ended February 28, 1995 under "Management's Discussion and
Analysis of Financial Condition and Results of Operations").  If
all 150,000 shares offered hereby are sold, Brunton will own 61,205
USE common shares (1.2 percent of the total outstanding shares),
not including an additional 150,000 shares underlying options
exercisable through April 30, 1998 (none exercised to Prospectus
date).  See "Certain Relationships and Related Transactions."

Brunton anticipates using proceeds from sale of the USE common
shares offered by this Prospectus for general working capital
requirements, however, a portion of the proceeds may be loaned to
USE.

                 USE  -  Selected Financial Data
May 31,
                   _______________________________________________________________

                       1994         1993        1992         1991         1990
                   ___________  ___________  ___________   __________  ___________
Current assets     $ 3,866,600  $ 1,650,300  $ 3,260,500   $7,302,300  $ 5,481,000
Current
  liabilities        1,291,700    1,592,100      681,900      816,000      634,400
Working capital      2,574,900       58,200    2,578,600    6,486,300    4,846,600
Total assets        33,090,300   24,037,200   24,583,000   20,500,100   13,151,200
Long-term 
  obligations(1)    16,612,500    2,900,000    4,540,400    3,244,100    4,036,100
Shareholders
  equity            12,559,100   15,063,200   14,982,900   15,045,500    8,087,800
(1)Includes $3,951,800, $1,695,600, $1,695,600, $725,900 and $725,900 of accrued
reclamation costs on uranium property at May 31, 1994, 1993, 1992, 1991 and 1990,
respectively.  See Note K of Notes to the audited Consolidated Financial
Statements.
February 28,
                                        ____________
                                        (unaudited)
                                    1995            1994
                               ____________     ____________
Current assets                 $  3,496,200     $  3,866,600
Current liabilities               3,092,900        1,291,700
Working capital                     404,000        2,574,900
Total assets                     33,379,000       34,496,800
Long-term obligations (2)        15,946,200       16,612,000
Shareholders' equity             12,071,400       12,599,100

(2)  See Notes 5 and 6 to the unaudited Consolidated Financial Statements.
May 31,
                  ________________________________________________________________

                     1994          1993        1992          1991          1990
                  ________________________________________________________________
Revenues          $ 8,776,300  $ 9,045,500  $ 6,353,600  $ 9,569,100  $ 6,552,300
Income (loss) 
  before equity 
  in income
  (loss) of 
  affiliates,
  provision for
  income taxes 
  and extraor-
  dinary item      (3,587,900)    (103,100)     819,200     6,082,900   4,601,600

Equity in
  income (loss)
  of affiliates      (390,700)    (444,700)    (324,900)      (96,100)   (417,800)

Net income (loss)  (3,370,800)    (221,900)     613,200     1,164,900   3,743,200

Income per share
  before extra-
  ordinary item        $ (.70)      $ (.05)      $  .09        $  .90      $  .80
Extraordinary 
  item                    --           --           .06           .62         .21
                       ______       ______       ______        ______      ______
Income (loss)
  before cumu-
  lative effect
  of accounting
  change                 (.70)        (.05)         .15          1.55        1.01
Cumulative effect
  at June 1, 1993
  of income 
  tax accounting
  change                 (.06)         --           --            --          --
                       ______       _______      ______        ______      ______
Net income (loss)
  per share(1)        $  (.76)      $  (.05)     $  .15        $ 1.55      $ 1.01
                       ______       _______      ______        ______      ______
                       ______       _______      ______        ______      ______

Cash dividends
  per share             -0-           -0-          -0-           -0-         -0-
(1)Per share amounts for years prior to fiscal 1991 have been
retroactively adjusted to reflect the 10% stock dividend declared
and paid to record shareholders as of November 1, 1990.
February 28,
                                       ____________
                                       (unaudited)
                                     1995           1994
                                _____________     ____________

Revenues                        $  6,394,300      $  6,587,200
Loss before
  equity in 
  loss of affiliates,
  provision for       
  income taxes and
  cumulative effect               (1,429,300)       (2,058,500)
Equity in income
  (loss) of
  affiliates                        (304,900)         (266,700)
Net income (loss)                 (1,315,800)       (2,019,300)
Income (loss) per share 
  before cumulative effect      $       (.27)     $       (.40)
Cumulative effect                      --                 (.06)
                                ____________      ____________
Net loss
  per share                     $       (.27)     $       (.46)
                                ____________      ____________
                                ____________      ____________

Cash dividends per share            -0-                -0-      

____________
Certain Considerations Relating to 
                      an Investment in USE

Prospective investors should note that the business of USE is
subject to certain risks, including the following:

Concerning Litigation. Because of USE and Crested litigation
against their partner in the Sheep Mountain Partners partnership
("SMP"), USE and Crested have been required to fund all standby
mine maintenance and related costs of the SMP partnership since the
spring of 1991.  Recovery by USE and Crested of their funds
advanced to the SMP partnership will depend on the outcome of the
litigation, which is presently uncertain.  See "Business-Uranium",
"Legal Proceedings", and the audited USE Consolidated Financial
Statements.

Sutter Gold Venture Investment. As of February 28, 1995, USE and
Crested have invested more than $12,100,000 to acquire, permit and
develop a gold property in California, held through subsidiary
Sutter Gold Company.  The amount of this investment represents a
significant portion of USE's consolidated assets.  However, there
is no assurance current efforts will be successful in financing the
mill construction and mine development costs needed to put the
property into production.  See "Information About USE-Gold-Lincoln
Mine."

Mineral Industry Risks. Generally, the business of USE is subject
to the risks of the minerals industry, including unanticipated
delay and expense in putting properties into production, commodity
price fluctuations, and variable environmental compliance costs. 
In addition, recent legislation has increased unpatented federal
mining claim holding costs.  Other legislation may be proposed
which, if enacted, would impose percentage royalties on production
from such lands.  Any increase in federal land property costs would
adversely affect operations on federal lands, however, the extent
of such impact cannot be presently assessed.  See "Business-Certain
Permits, Costs."  Operations on patented lands would not be
affected (the Lincoln Mine in Amador County, California, for
example).   

Reclamation Costs. USE is a joint venturer in GMMV and a partner of
SMP, which two entities are responsible for mine reclamation,
environmental restoration and decommissioning associated with
mineral properties and the Sweetwater Mill on Green Mountain, in
south central Wyoming.  Future costs to comply with these
obligations are now estimated at approximately $25,000,000.  If
actual costs are higher, USE could be adversely impacted.  There is
no assurance the properties will generate sufficient revenues to
fund reclamation, restoration and decommissioning costs in excess
of current estimates.  See Note K to the audited USE Consolidated
Financial Statements, and the notes to the unaudited USE
Consolidated Financial Statements, for further information. 
Current bonds and funds in escrow are deemed adequate for
reclamation and decommissioning liabilities associated with the
Shootaring Mill in Utah. 

Seasonality.  The mining and petroleum exploration and development
businesses may be considered seasonal to the extent properties are
located in areas where climate prevents access or reduces
activities during certain times of the year.  Exploration of mining
claims located in the Colorado Mineral Belt, and in certain areas
of Wyoming and Montana, is generally limited to the summer months
by rugged terrain and snowpack.  USE and affiliates have generally
had year-round access to the Ft. Peck, Montana oil wells.  The gold
properties near Sutter Creek, California are accessible year round,
as are the Plateau operations in Utah and the GMMV properties and
Sweetwater Mill in Wyoming.  Portions of USE commercial operations
are also seasonally affected, with aviation fuel sales at the fixed
base operation higher in summer months.
     
Uranium Contract Margins Uncertain. USE is not in arrears with
respect to uranium delivery obligations, except as may result from
the Illinois Power Company (see "Business-USE Legal Proceedings"). 
As of February 28, 1995, SMP had firm orders for an estimated
$29,573,000 of future uranium deliveries; USE and subsidiaries have
no other firm orders for future deliveries.  USE estimates one
percent of the SMP obligations will have been filled during the
last quarter of fiscal 1995.  The foregoing estimate of firm orders
was prepared assuming the $10.40 per pound price of U3O8 at February
28, 1995 would remain in effect for the duration of market-price
related supply contracts.  Approximate floor price in effect at
that date was used to estimate future delivery obligations under
base-price escalated contracts.  However, prices and quantities of
U3O8 required by utilities may vary substantially, as may the cost
to USE and subsidiaries to obtain inventory to supply the
contracts.  Profits on such future deliveries cannot be predicted.

Competition.  USE's business is highly competitive in the
exploration for and production of minerals and oil and gas, as well
as in its commercial and construction operations.  USE's
competitors include major mining and oil and gas companies, many of
which are larger than USE in all respects.  Competitive conditions
vary depending upon the mineral.  The location and composition of
mineral ore bodies are of great importance to the competitive
position of a mining company, as are the milling methods that must
be used to extract mineral from the ore.  Producers of high-grade
ore bearing readily extractable minerals are in advantageous
position.  Producers of one mineral may be able to efficiently
recover other minerals as by-products, with significant competitive
impact on primary producers.  Substantial capital costs for
equipment and mine-works are often needed.  Competitors that have
developed a property generally have incurred substantial fixed
costs which must precede mining undeveloped properties.  As a
result, owners of producing (or previously producing) properties
generally enjoy substantial competitive advantages over
organizations that propose to develop non-producing properties.  

In its other business segments, USE affiliate FNG encounters strong
competition with a number of larger civil engineering construction
firms in the western United States, and Brunton competes with
domestic and foreign sporting and professional equipment
manufacturers.  

Uranium Prices and Competition.  Uranium market prices in the
United States have declined from as high as $17.00 per pound in
1988 to less than $8.00 per pound in 1992, and recovered somewhat
to about $11.00 per pound in March 1995.  Further sustained price
increases in the spot market (to $14.00 per pound) are believed to
be required to create the need for United States utilities to seek
long term price stabilizing uranium supply contracts, however,
upward price movement cannot be assured.  USE would be adversely
affected if the United States nuclear utilities do not seek long
term uranium supply contracts in the 1990s.  See  "Business-Certain
Market Information."  Although the extent of such adverse impact
cannot be predicted, if uranium prices remained so depressed
through the 1990s that USE's properties and facilities were not put
into operation, the book value of such assets might decrease.   

USE believes that if and when market prices improve, it will be
able to compete with other uranium producers, primarily because it
holds significant uranium resource in place, along with the
facilities necessary to mine and mill the ore into uranium oxide,
which assets were acquired for much less than prior owners
reportedly had spent.  Applications have been submitted to upgrade
the mill facilities' licenses to operating levels, however, delays
in final permitting may be encountered, as the uranium refining
industry is tightly regulated by the NRC.  

Nonetheless, USE expects strong competition from low cost producers
in Canada, Australia and Africa (where uranium is a byproduct of
other mineral recovery processes), and from imports to the United
States of highly enriched uranium from the Commonwealth of
Independent States (formerly the Soviet Union).  See "Business-
Certain Market Information."  

Variable Revenues, Recent Losses, and Declining Working Capital. 
Due to the nature of USE business, there are from time to time
major increases in gross revenues from sale of mineral properties. 
During fiscal 1991, $7,193,600 was recognized from sale of a
partial interest in a uranium property to Kennecott Uranium Company
(a GMMV partner).  No such revenues were recognized in fiscal 1992,
1993 or 1994.  Further, USE realized net losses of $221,900 and
$3,370,800 in fiscal 1993 and 1994, respectively, and a $1,315,800
net loss for the nine months ended February 28, 1995.  To a
significant extent, these results reflect the variability of income
from mineral sales, however, USE is not totally dependent on
mineral sale revenues from year to year.  See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," for discussion of such items for the last three fiscal
years.  

Continued operating losses without offsetting replacements of
working capital will adversely affect USE.  See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" for information on future working capital requirements
and capital resources.

Potential Issuance of Preferred Stock. Under the USE Articles of
Incorporation and as permitted by the Wyoming Business Corporation
Act ("WBCA"), the USE board of directors has authority to create
series of preferred stock and to issue shares thereof, without the
approval of any USE shareholders.  The creation and issue of USE
preferred stock with dividend rights senior to the USE common
shares could adversely affect common stockholder participation in
future earnings through dividends that otherwise would be available
for distribution to common stockholders.  

Such preferred stock also could inhibit a takeover of USE.  Under
the WBCA, separate voting approval by classes of stock is required
for certain substantive corporate transactions.  If the interests
of preferred stockholders is perceived to be different from those
of the common stockholders, the preferred stockholders could
withhold approval of the transactions needed to effect the
takeover.   See "Description of Securities."

Potential Anti-Takeover Effects of Staggered Board.  The USE board
of directors is presently divided into three classes of two
directors each.  Pursuant to the USE Articles of Incorporation and
as permitted by the WBCA, the directors in each class serve a three
year term, and only those directors in one class are reelected each
year.  This board classification could stall a takeover of USE,
even if a majority of the common stock were to be held by persons
desiring a change in control of the board.  See "Description of
Securities."

                            Business

USE is principally engaged in the general minerals business.  This
segment involves the acquisition, exploration, sale and/or
development of mining properties, with primary interests in
uranium, gold and molybdenum properties in the western United
States.  USE also holds oil and gas interests in Montana and
Wyoming.

The other two business segments of USE are commercial operations
and construction operations.  See Footnote I to the audited
Consolidated Financial Statements.

A substantial portion of USE business, particularly property
acquisition and exploration, is conducted with its majority-owned
subsidiary, Crested Corp. ("Crested"), through a joint venture
("USECC") owned equally by USE and Crested, and through various
joint subsidiaries.

Minerals

Uranium

USE has acquired interests in several uranium properties in Wyoming
and Utah, including  uranium processing mills in Sweetwater County,
Wyoming ("Sweetwater Mill") and southeastern Utah ("Shootaring
Mill"), in anticipation of renewed demand for long term uranium
concentrate supply contracts by public utilities in the United
States which operate nuclear powered electrical generation
facilities.

All the uranium properties are located in areas which have produced
significant amounts of uranium in the 1970s and 1980s.   

The properties are:    

Unpatented lode mining claims on Green Mountain (Fremont County,
Wyoming) on which the (Round Park uranium deposit) is located, and
the Sweetwater Mill, (23 miles south of Green Mountain).  These
assets are held by the joint venture Green Mountain Mining Venture
("GMMV"), owned 50 percent by USE and USECC, and 50 percent by
Kennecott Uranium Company ("Kennecott"), a subsidiary of Kennecott
Corporation.  See "Green Mountain-Concerning Kennecott", below. 
All claims are accessible by county and United States Bureau of
Land Management ("BLM") access roads.  The proposed Jackpot Mine
into the Round Park deposit has had no previous operators, and
would be a new mine when opened.  The Big Eagle Mine and related
claim groups (which are part of the claims held by GMMV), are
accessible by county and private roads; the Big Eagle Mine was
first operated by Pathfinder Mines starting in the late 1970s.   

The Tony M and Frank M Mines (unpatented lode mining claims) in San
Juan County, Utah, accessible by county roads.  The mines
(originally developed by Plateau Resources Limited when owned by
Consumers Power Company, a Michigan public utility which also built
the nearby Shootaring Canyon Mill to process uranium ore out of
these mines), the Shootaring Canyon Mill, uranium mineralized
material stockpiled at the mill, and related mill support
facilities, are held by Plateau Resources Limited, a wholly-owned
USE subsidiary.

Unpatented lode mining claims, underground and open pit uranium
mines and mining equipment in the Crooks Gap area located on Sheep
Mountain, Fremont County, Wyoming (these claims are adjacent to and
west of the Big Eagle mining claims held by GMMV).  These assets
are held by the Sheep Mountain Partners partnership ("SMP"), the
partners of which are USE and Crested, doing business as the USECC
Joint Venture, and Nukem, Inc. ("NUKEM") through its wholly-owned
subsidiary Cycle Resource Investment Corporation ("CRIC").  The
Sheep Mountain Mines 1 and 2, accessible by county and private
roads, were first operated by Western Nuclear, Inc. in the late
1970s.

The above properties contain uranium mineralization in sandstones
of Tertiary age, as is typical of most Wyoming uranium deposits. 
Electric power to all the above Wyoming properties is furnished by
either Pacific Power & Light or Hot Springs Rural Electric
Association.
          
There is no assurance of renewed market demand by the domestic
nuclear utilities for uranium concentrates, which would result in
price increases for concentrates, sufficient to warrant
commencement of mining and milling operations.

Green Mountain

GMMV.  In fiscal 1990, USE and Crested sold 50 percent of their
interests in unpatented lode mining claims on Green Mountain
(hereafter, "Green Mountain Claims), and certain other rights, to
Kennecott for $15,000,000 cash (USE's share was $12,600,000, and
the balance was Crested's).  In fiscal 1991, USE and USECC ("USE
Parties") and Kennecott formed the Green Mountain Mining Venture
("GMMV") to develop, mine and mill uranium ore from the Green
Mountain Claims, and market uranium oxide concentrates to nuclear
powered utilities.  

Kennecott agreed to fund the first $50,000,000 of GMMV
expenditures, pursuant to Management Committee budgets. 
Thereafter, GMMV expenses will be shared by the parties generally
in accordance with their participating interests (50 percent
Kennecott, 50 percent USE Parties).  However, in addition to the
initial $50,000,000 of expenditures, Kennecott will pay a
disproportionate share (up to an additional $45,000,000) of GMMV
operating expenses, but only out of cash operating margins from
sales of processed uranium at more than $24.00/lb (for $30,000,000
of such operating expenses), and from sales of processed uranium at
more than $27.00/lb (for $15,000,000 of such operating expenses). 

Pursuant to the joint venture agreement, each party's participation
interest in the GMMV is subject to reduction for voluntary or
involuntary failure to pay its share of expenses as required in
approved budgets, so that in effect the interest held by each party
collateralizes its performance.  These provisions apply equally to
Kennecott's commitment to fund the initial $50,000,000 of GMMV
expenditures, so that if and to the extent Kennecott did not fund
Management Committee approved budgets, its interest in the venture
would be reduced proportionately.  However, a defaulting party
would remain liable for third party liabilities incurred during
GMMV operations, proportionate to its interest before reduction.

GMMV cash flows will be shared between Kennecott and the USE
Parties, according to their participation interests.  However, 105
of the Green Mountain Claims cover the Round Park uranium deposit,
currently believed to be the most significant mineralized resource
on Green Mountain; these 105 claims had been formerly owned solely
by USE.  Pursuant to agreement between USE and Crested, cash flow
from production out these 105 Green Mountain Claims will be
distributed only to USE and Kennecott, and GMMV expenditures from
such properties will be shared 50 percent by USE and 50 percent by
Kennecott.  

The USE Parties' share of GMMV cash flow resulting from the balance
of the properties (outside the 105 claims) previously owned by USE
and Crested together, will be shared equally by USE and Crested;
GMMV expenditures from such properties will be shared 25 percent
each by USE and Crested, and 50 percent by Kennecott.  Such latter
properties are expected to be developed after the Round Park
deposit is developed and placed into production.

The GMMV Management Committee has three Kennecott representatives
and two USECC representatives, acts by majority vote, and appoints
and supervises the project manager.  The USE Parties acted as
project manager during fiscal 1991 and 1992; in fiscal 1993,
Kennecott succeeded as project manager, by consent.  

While acting as project manager, the USE Parties received fees in
fiscal 1991, 1992 and part of 1993 for overhead costs and general
and administrative fees, based on a percentage of expenditures on
the project.  Since mid-fiscal 1993, USECC has continued work on a
contract basis at Kennecott's request.

Pre-development activities on the GMMV properties have included
environmental and mining equipment studies, mine permitting and
planning work, property maintenance, setting up a uranium marketing
program, and acquisition and monitoring of the Sweetwater Mill. 
For fiscal 1996, GMMV plans to build a sediment dam, sediment
basin, drainage diversion ditch, fuel storage facility and other
support facilities and improvements to existing facilities.

Properties and Mine Plan.  GMMV owns 443 Green Mountain Claims,
including the 105 claims on which the Round Park uranium deposit is
located.  Surface rights are owned by the United States Government
under management by the BLM.  In addition, other uranium
mineralization has been delineated in the Phase 2 and Whiskey Peak
deposits on these properties, which formerly belonged to USE and
Crested.  These deposits are undeveloped.  

Drilling and exploration work has been conducted on the Round Park
deposit, and USECC has constructed two portals for the Jackpot Mine
declines (see below).  Roads and utilities have been put in place,
which are satisfactory to support future mine development.  

GMMV also owns the Big Eagle Properties on Green Mountain, which
contain substantial uranium mineralization, and are adjacent to the
other GMMV mining claims.  The Big Eagle Properties contain one
underground and two open-pit mines, as well as related roads,
utilities, buildings, structures, equipment and a stockpile of ore.

The assets include 38,000 and 8,000 square foot buildings formerly
used by Pathfinder Mines Corporation ("PMC") in mining operations. 
Also included are three ore-hauling vehicles, each having a 100-ton
capacity.  Permits transferred to GMMV for the properties include:
a permit to mine, an air quality permit, and water discharge and
water quality permits.  GMMV owns the surface rights and the
mineral rights to the underlying unpatented lode mining claims. 

The Round Park mining claims contain a deposit of uranium which has
been estimated by USECC personnel to contain 52 million pounds of
U3O8 averaging .23% uranium oxide using a grade-thickness cut-off
of .6 (i.e., deposit areas were excluded unless deposit bed
thickness at intercept, times intercept grade of uranium
mineralization, exceeded .6).  GMMV plans to produce this deposit
from the Jackpot Mine, which will be driven underground from the
south side of Green Mountain when the market for uranium oxide
concentrates improves.  The first of several mineralization
horizons is about 2,300 feet down from the top of Green Mountain.
The mine plan provides for two declines to be driven from the side
of Green Mountain, extending about 10,400 feet into the deposit;
one decline will be used for ventilation and transportation of
personnel, and the other will convey ore, rock and waste out of the
mine.

USE anticipates mine development costs will not exceed $25,000,000
to begin production from the Round Park deposit.  However, cost
estimates may change as exploration and initial development
progress.  Kennecott has agreed to fund the initial $50,000,000 in
development costs including reclamation costs.  Additional costs
would be funded by operations and/or by cash assessments on the
venturers.
     
Sweetwater Mill.  On June 23, 1992, GMMV acquired the Sweetwater
uranium processing mill and associated properties located in
Sweetwater County, Wyoming, 23 miles south of the proposed Jackpot
Mine, from Union Oil Company of California ("UNOCAL"), primarily in
consideration of Kennecott and GMMV assuming environmental
liabilities, and decommissioning and reclamation obligations.

Kennecott is manager of the Sweetwater Mill, and as such will be
compensated by GMMV out of production.  Payments for pre-operating
management will be based on a sliding scale percentage of Mill cash
operating costs prior to Mill operation, and payments for operating
management will be based on 13 percent of mill cash operating costs
when processing ore.  Cash operating costs are defined as all costs
for labor (supervisory, operating, maintenance and laboratory),
reagents, utilities, materials and supplies (fuels, grinding balls
and other mill equipment, etc.), road and access maintenance,
environmental and regulatory costs (including permitting and
remediation costs), concentrate shipping costs, vehicle and
equipment operating costs, insurance, and employee health and
benefit costs.

Kennecott, as mill operator, has initiated discussions and
appropriate filings with the Nuclear Regulatory Commission ("NRC")
regarding amendments to the Source Material License to resume ore
processing at the Sweetwater Mill.  Separately, Kennecott has
applied to the NRC for permission to use a mill tailings cell to
hold low level tailings waste from an ion exchange plant owned by
USE and Crested in the Crooks Gap area. 

The Sweetwater Mill includes buildings, milling and related
equipment, real estate improvements, mining and mill site claims
and other real property interests, personal property and intangible
property (including government permits relating to operation of
those properties).  The major assets are the mill buildings and
equipment located on approximately 92 acres.

The mill was designed as a 3,000 ton per day ("tpd") facility. 
UNOCAL's subsidiary Minerals Exploration Company reportedly at
times processed in excess of 4,200 tpd.  USE believes the mill
adequate for processing projected rates of ore production out of
the Green Mountain Claims.  The mill is one of the newest uranium
milling facilities in the United States, and has been maintained in
good condition. 

As consideration for the Sweetwater Mill, GMMV agreed to indemnify
UNOCAL against certain reclamation and environmental liabilities,
which indemnification obligations are guaranteed by Kennecott
Corporation (parent of Kennecott Uranium Company).  GMMV has agreed
to be responsible for compliance with mill decommissioning and land
reclamation laws, for which the environmental and reclamation
bonding requirements are approximately $23,600,000.  

None of the GMMV future reclamation and closure costs are reflected
in the USE Consolidated Financial Statements (see Note K to USE
Consolidated Financial Statements).  UNOCAL has also agreed that if
GMMV incurs expenditures for environmental liabilities prior to the
earlier of commercial production by GMMV or February 1, 2001,
(which liabilities are not due solely to the operations of GMMV),
then UNOCAL will reimburse GMMV the first $8,000,000 of such
expenditures.  Any such reimbursement may be recovered by UNOCAL
from 20% of future cash flows from sale of uranium concentrates
processed through the mill.  In any event, until such time as
environmental and reclamation undertakings are liquidated against
the bonds, such costs are not deemed expenditures under Kennecott's
$50,000,000 development commitment (but bond costs may be charged
against such commitment).

The reclamation and environmental liabilities assumed by GMMV
concern two categories: (1) cleanup of the inactive open pit mine
site near the mill (the source of ore feedstock for the mill when
operating under UNOCAL), including water (heavy metals and other
contaminants) and tailings (heavy metals dust and other
contaminants requiring abatement and erosion control) associated
with the pit; and (2) decontamination and cleanup and disposal of
the mill building, equipment and tailings cells after mill
decommissioning.  Current liabilities for such efforts have been
established at approximately $17,028,000 by the Wyoming Department
of Environmental Quality ("WDEQ") for mine pit site matters
(exercising EPA-delegated jurisdiction to administer the Clean
Water Act and the Clean Air Act, and directly administering Wyoming
statutes on mined land reclamation), and by the NRC for tailings
cells and mill decontamination and cleanup.  The EPA has continuing
jurisdiction under the Resource Conservation and Recovery Act,
pertaining to any hazardous materials which may be on site when
cleanup work is started.

Although USE and the other GMMV parties are liable for all
reclamation and environmental compliance costs associated with mill
and site maintenance, as well as mill decontamination and cleanup
and site reclamation and cleanup after the mill is decommissioned,
USE believes it is unlikely USE would have to pay for such costs
directly.  First, based on current estimates of cleanup and
reclamation costs (reviewed annually by the oversight agencies),
such costs may be within the $50,000,000 development commitment of
Kennecott Uranium Company for GMMV.  These costs are not expected
to increase materially, if the mill is not put into full operation.

Second, to the extent GMMV is required to spend money on
reclamation and environmental liabilities related to mill and site
operations during ownership by Minerals Exploration Company, UNOCAL
has agreed to fund up to $8,000,000 of such costs (provided such
costs are incurred before February 1, 2001 and before mill
production resumes), which would be recoverable only out of future
mill production (see above).  Third, payment of reclamation and
environmental liabilities related to the mill is guaranteed by
Kennecott Corporation, parent of Kennecott Uranium Company.  See
"Concerning Kennecott", below.  Last, the GMMV will set aside a
portion of operating revenues to fund reclamation and environmental
liabilities when mining and milling operations are shut down.

Kennecott Corporation will be entitled to contribution from the USE
parties in proportion to their participation interests in GMMV, if
Kennecott Corporation is required to pay mill cleanup costs
directly pursuant to its guarantee.  Such payments by Kennecott
Corporation only would be required if the liabilities cannot be
satisfied within the initial $50,000,000 development commitment,
and then only to the extent there are insufficient funds from the
accumulated reclamation reserve.  In addition, if and to the extent
such liabilities resulted from UNOCAL's mill operations, and
payment of the liabilities was required before February 1, 2001 and
before mill production resumes, then up to $8,000,000 of that
amount would be paid by UNOCAL, before Kennecott Corporation would
be required to pay on its guarantee.  However, notwithstanding the
preceding, the extent of any ultimate USE liability for
contribution to mill cleanup costs cannot be predicted.
     
GMMV believes Minerals Exploration Company operated the mill in a
responsible manner, and that reclamation and environmental
liabilities for the mill and site as acquired from Minerals
Exploration Company are within the normal range of such costs for
similar operations in the western United States. 
     
GMMV reimbursed UNOCAL one-half of UNOCAL's mill maintenance costs
for the period January 1, 1991 to June 23, 1992.  Ongoing mill
maintenance expense is funded by Kennecott as part of its
development commitment.  

Concerning Kennecott.  Kennecott Corporation is a wholly-owned
United States corporation subsidiary of The RTZ Corporation PLC
("RTZ"), a United Kingdom public company.  RTZ is one of the
world's leading international natural resource companies and one of
the largest companies in the United Kingdom with a market
capitalization exceeding $9 billion.  Kennecott Corporation owns
and operates several mines through wholly-owned subsidiaries,
including the Bingham Canyon, Utah open pit copper mine which was
started in 1906.  

Kennecott Uranium Company is a wholly-owned United States
corporation subsidiary of Kennecott Corporation.  Based upon the
financial resources and results of operations of RTZ, upon
Kennecott Corporation's reported contributions to RTZ net earnings,
upon Kennecott Corporation's acceptance by the NRC as a financially
sound self-bonding entity for reclamation purposes (see Note K to
the USE Consolidated Financial Statements), and upon Kennecott
Uranium Company's $27,133,728 financial performance through May 31,
1994 in the Green Mountain project ($15,000,000 in 1990 to purchase
a one-half interest in the Green Mountain uranium properties from
USE and Crested, and $12,133,728 in GMMV expenditures from 1991
through May 31, 1994), USE believes Kennecott Uranium Corporation
will continue to have the ability to satisfy its obligations under
the GMMV joint venture agreement.  In the event such obligations
are not met, Kennecott Uranium Company's participation interest in
the GMMV would be reduced, and the USE parties' interest would be
increased.  See "Uranium-Green Mountain," above.

USE has no knowledge of any guarantee by Kennecott Corporation or
RTZ of the performance by Kennecott Uranium Company of Kennecott
Uranium Company's development commitment under the GMMV joint
venture agreement.  Further, USE has no knowledge whether earnings
of Kennecott Uranium Company are retained by it, or remitted to its
shareholder Kennecott Corporation.  Accordingly, performance by
Kennecott Uranium Company of its development commitment under the
GMMV joint venture agreement is not assured.

Permits.  In March 1993, GMMV applied to the WDEQ for a Permit to
Mine the Round Park deposit through the Jackpot Mine, for up to 22
years; this document presently is under review.  Until this Permit
is granted, no further construction of mine facilities is allowed,
no further underground mine development can occur, and the Round
Park Deposit cannot be mined.

A renewal application for a License to Explore, obtained from the
Wyoming Department of Environmental Quality, was submitted to the
WDEQ, and was approved on August 23, 1994.  This is an annual
renewal, which keeps prior exploration work in current status to
abate any site reclamation which otherwise would be required, until
after completion of all actual exploration activities.  Failure to
renew would activate the reclamation obligations, which is less
than $150,000.  Planned improvements to the GMMV properties in
fiscal 1995 will be made under the License to Explore.
    
Initial environmental studies have been submitted to appropriate
governmental regulators, and are being reviewed.  Applications to
appropriate water have been made, and an NPDES permit has been
obtained (expiring December 31, 1997).  Additional surface water,
weather and wetland studies have also been initiated.

In 1993, an application was submitted to the BLM for upgrading
roads to the Sweetwater Mill.

The WDEQ is the lead agency for review of environmental issues
associated with mining in Wyoming, and as such has authority to
examine landowners' and lessees' proposed uses of public lands for
compliance with the United States environmental statutes (the Clean
Water Act, the Clean Air Act, and others), as well as Wyoming laws.

This authority is exercised, in part, by WDEQ requiring proposed
mining plans to undergo environmental review prior to issuance of
a Permit to Mine, which may contain express conditions to mitigate
possible environmental impacts from operations.

In 1993, the BLM, as manager of Federal Lands, determined that the
potential effects of the Jackpot Mine (and associated work areas
and roads) on surface and ground waters, air quality, animal
habitat and local fauna at Green Mountain should be presented and
analyzed by an environmental impact statement ("EIS").  The EIS is
being prepared by the BLM (funded by the GMMV) and will be
submitted to the WDEQ.  Accordingly, the environmental assessment
application previously submitted by the BLM has been withdrawn. 
The EIS is nearly complete and, after public comment, will be
submitted to the WDEQ in the near future.  Following the WDEQ
technical review of the Jackpot Mine plan, the Permit Application
will be presented for public comment.  After the EIS has been
reviewed by the WDEQ, the Permit to Mine would be issued (with any
amendments to conditions required after public hearings and final
WDEQ review).

Uranium was mined on Green Mountain in the 1970s and 1980s.  USE
and Crested do not anticipate any adverse environmental impacts
from the Jackpot Mine which cannot be mitigated to acceptable
levels.  Accordingly, the Permit to Mine the Round Park deposit
through the Jackpot Mine portal is expected to be issued by the
WDEQ in due course, subject to delays from appeals of WDEQ
decisions by project opponents.

The Environmental Protection Agency has promulgated final rules for
radon emissions.  These regulations affect the mining and milling
of uranium and may require substantial expenditures for compliance.

GMMV (and SMP, for its properties, see below) may need to install
venting at mine sites, and must monitor radon emissions at the
mines, as well as wind speed, direction and other conditions.  USE
believes all its uranium operations are in compliance with these
rules.

Shootaring Canyon Mill

Acquisition of Plateau Resources.  On August 11, 1993, USE closed
the Stock Purchase Agreement ("Agreement") with Consumers Power
Company ("CPC"), by which USE purchased from CPC all outstanding
stock of Plateau Resources Limited ("Plateau").  Plateau, a Utah
corporation, owns the Shootaring Canyon uranium processing mill and
support facilities in southeastern Utah ("Shootaring Mill").  The
Shootaring Mill holds a source materials license from the NRC.  CPC
is a utility company with offices in Jackson, Michigan.

USE paid nominal cash consideration for the Plateau stock, but as
additional consideration, USE has agreed:

(a) to perform or cause the performance by Plateau of all studies,
remedial or other response actions or other activities necessary
from time to time for Plateau to comply with environmental
monitoring and other provisions of (i) federal and state
environmental laws relating to hazardous or toxic substances, and
(ii) the Uranium Mill Tailings Radiation Control Act, the Atomic
Energy Act of 1954, and administrative orders and licenses relating
to nuclear or radioactive substances or materials on the property
of or produced or released by Plateau; and

(b) to indemnify CPC from all liabilities and costs related to the
presence of hazardous substances or radioactive materials on
Plateau property, and to any future violation of laws and
administrative orders and licenses relating to the environment or
to nuclear or radioactive substances.

Prior to Agreement closing, CPC and affiliates paid Plateau
approximately $11,700,000 against prior outstanding loans to and
accounts receivable from CPC and its affiliates.  At closing,
Plateau transferred an additional $2,500,000 cash to fund the "NRC
Surety Trust Agreement" with a commercial bank as trustee.  The
trustee is to pay future costs of Shootaring Mill decommissioning,
site reclamation, and long term site surveillance, as directed by
the NRC.  The amount transferred to the trust is the minimum amount
now required by the NRC as financial assurance for clean up after
permanent shut down of the Shootaring Mill.

Also at closing, Plateau transferred $4,800,000 cash out of the
$11,700,000 to fund the "Agency Agreement" with a commercial bank. 
These funds will be available to indemnify CPC against possible
claims related to environmental or nuclear matters, as disclosed
above, and against third-party claims related to a tax benefit
transfer agreement between Plateau and the third-party, in the
event of a "disqualification event" as provided in such agreement. 
See Note K to the USE audited Consolidated Financial Statements.  

There are no present claims against funds held under either the
Trust Agreement or Agency Agreement.  Funds (including accrued
interest) not disbursed under the Trust and Agency Agreements will
be paid over to Plateau upon termination of such Agreements with
NRC concurrence.   

Prior to closing of the Stock Purchase Agreement, there was no
affiliation between USE and any USE affiliate, and Plateau.  There
is no affiliation between USE and CPC.  

The consideration paid by USE was determined by negotiation with
CPC, taking into account estimated annual Shootaring Mill holding
costs, and estimated future Mill decommissioning and site
reclamation costs as required by the NRC and the Utah Department of
Natural Resources, Division of Oil, Gas and Mining ("DOGM").  

The Plateau acquisition was negotiated and closed solely for the
account of USE, in light of potential NRC objections to selling
Plateau to the USECC joint venture.  Subsequent to closing, in
September 1993, USE and Crested agreed that after Plateau's
unencumbered cash has been depleted, USE and Crested each will
assume one-half of Plateau's obligations, and share equally in
Plateau operating cash flows, pursuant to the USECC Joint Venture.

Shootaring Mill and Facilities.  The Shootaring Mill is located in
south-eastern Utah, approximately 13 miles north of Lake Powell,
and 50 miles south of Hanksville, Utah via State Highway 276, then
four miles west on good gravel roads.  The entire facility occupies
18.9 acres of a 264.52 acre plant site.  The mill was designed to
process 750 tpd, but only operated on a trial basis for two months
in mid-summer 1982.  In 1984, Plateau suspended operations and put
the mill on standby because of the depressed uranium concentrate
market.

Included with mill assets are tailings cells, laboratory
facilities, equipment shop and inventory.  
The NRC issued a license to Plateau authorizing production of
uranium concentrates, however, since the mill was shut down, only
maintenance and required safety and environmental inspection
activities have been performed.  The current source materials
license with the NRC is for a standby operation only and expired on
December 31, 1993. Prior to expiration, USE applied for, and
expects either license renewal or extension of its expiration date
in due course.

Plateau owns approximately 90,000 tons of uranium mineralized
material stockpiled at the mill site. 

USE intends for Plateau to continue maintenance activities pending
evaluation of resuming Shootaring Mill operations to process
uranium ores to concentrates in anticipation of increased
concentrate prices.  NRC and DOGM approval will be required prior
to commencing such operations.

Plateau also owns Canyon Homesteads, Inc. ("Canyon"), which
developed the Ticaboo, Utah townsite 3.5 miles south of the mill,
including a 66 room motel, general store, laundromat facility, 98
single family home sites, 151 mobile home sites, and 26
recreational vehicle sites (all with utility access).  The townsite
is located on a State of Utah lease near Lake Powell, and is
planned to be operated as a commercial enterprise, for which
purpose in fiscal 1994 limited capital improvements and a general
refurbishing were effected (total costs approximately $400,000). 
USE may further develop the townsite, and seeks financial partners.

There have been no further material expenditures on the Ticaboo
townsite in fiscal 1995.  See "Commercial and Construction - Utah
Properties", below.

Sheep Mountain Partners ("SMP")

Partnership.  SMP is a Colorado general partnership formed in
December 1988 between USE and Crested, d/b/a USECC, and NUKEM, Inc.
through its wholly-owned subsidiary Cycle Resource Investment
Corporation ("CRIC").  NUKEM, of Stamford, Connecticut is a uranium
brokerage and trading concern.  During fiscal 1991, certain
disputes arose among members of SMP.  These matters are in
litigation.  See Item 3 - Legal Proceedings."  

In February 1988, USE and Crested acquired uranium mines and mining
equipment properties at Crooks Gap in south-central Fremont County,
Wyoming, from Western Nuclear, Inc. (a subsidiary of Phelps-Dodge).

USE and Crested, doing business as USECC, mined and sold uranium
ore from one of the underground mines in fiscal 1988 and 1989. 
These Crooks Gap properties are adjacent to the Green Mountain
uranium properties referred to above.

USE and Crested sold 50 percent of their interests in the
properties to NUKEM's subsidiary CRIC for cash; the parties
thereafter contributed the properties to SMP, in which USE and
Crested received an undivided 50 percent interest.  Each group was
to provide one-half of $350,000 to purchase equipment from Western
Nuclear, Inc.; USE and Crested also contributed their interests in
three uranium supply contracts to SMP and agreed to be responsible
for property reclamation obligations.  The agreement provided that
each partner generally had a 50 percent interest in SMP net
profits, and an obligation to contribute 50 percent of funds needed
for partnership programs or discharge of liabilities.  Capital
needs were to have been met by loans and credit lines.  

SMP was directed by a management committee, with three members
appointed by USE and Crested, and three members appointed by
NUKEM/CRIC.  The committee has not met since 1991.

Properties.  SMP owns 77 unpatented lode mining claims on the
Crooks Gap properties, including one open-pit and five underground
uranium mines, mining equipment, and an inventory of uranium ore. 
An ion-exchange plant (see below) is located near the SMP
properties, but is held by USECC and not SMP. Production from the
properties is subject to sliding-scale royalties payable to WNI;
the rates are from one to four percent on recovered uranium
concentrates.  Two Wyoming State leases (one for minerals covering
640 acres, and one for surface use covering 142 acres) expired in
early 1994, and will not be renewed.   

Various structures and equipment are located on the properties:
three operating and three non-operating mine headframes with
hoists; maintenance shops; offices; and other buildings, equipment
and supplies. 
   
SMP also has interests in 59 unpatented mining claims, one State
mineral lease and one State surface use lease, which have been
conveyed to Pathfinder Mines Corporation ("PMC").  The conveyance
originally was made to induce PMC to mill ore produced from the
properties, at PMC's mill.  These properties contain a previously-
mined open-pit uranium mine (the Congo pit) and three underground
mines.  PMC has the right to mine a portion of these properties
(the Congo area), by open-pit or in-situ techniques to certain
depths, without royalty or other obligations to SMP.  PMC has the
responsibility for reclamation work needed thereon as a result of
its activities.  If PMC mines any portion of the properties outside
the Congo area, a 3% royalty is owed to SMP.  Conversely, SMP has
the right to mine portions of the claims and leases outside the
Congo area (and specified surrounding zones) by underground mining
techniques, subject to a 3% royalty to PMC.  PMC has completed an
exploration program on a portion of these properties, and advises
it presently does not intend any further development.  The 59
claims and two leases may be reacquired from PMC by SMP.  PMC has
decommissioned and dismantled its uranium mill in the vicinity.

An ion exchange plant on the former PMC properties (and now held by
USECC) was used to remove natural soluble uranium from mine water. 
Decommissioning of this facility awaits final NRC approval.

Property Maintenance.  As operating manager for SMP, USECC is
responsible for exploration, mining, and care and maintenance of
SMP mineral properties.  USECC was to have been reimbursed for
certain expenditures on the properties.  Currently, USECC has a
limited care and maintenance staff on site to maintain the mines
and pump mine water to prevent flooding of the mines.  NUKEM/CRIC
have refused to allow SMP to pay USECC for care and maintenance
services since the spring of 1991.  

In 1988, USECC produced uranium from certain of the underground
mines located on the Crooks Gap properties.  Production ceased in
fiscal 1989, because uranium could be purchased from the spot
market at prices below SMP mining and milling costs.

Uranium Marketing.  NUKEM, Inc. was engaged by SMP to provide SMP
with financial expertise and marketing services.  SMP entered into
a marketing agreement with CRIC, which was assigned to and assumed
by NUKEM, to provide marketing and trading services for SMP, which
included acquiring uranium for SMP by purchasing or borrowing. 
Nukem was to be reimbursed at its direct costs for acquiring such
uranium for SMP.  USECC, SMP and Nukem had acquired seven long-term
contracts for sales of uranium to eight domestic utilities.  SMP
had paid annual nonaccountable fees of $300,000 for marketing to
NUKEM, but SMP ceased making such payments in the spring of 1991,
when NUKEM/CRIC refused to authorize payment of care and
maintenance costs.

SMP's uranium supply contracts either are base-price escalated or
market-related (referring to how price is determined for uranium to
be delivered).  Base-price escalated contracts set a floor price
which is escalated over the term of the contract to reflect changes
in the GNP price deflator.  The current base-price escalated
contract of SMP requires deliveries of from 94,200 to 424,100
pounds of uranium concentrates during various years in the 1990s. 
The amounts deliverable under the contract may be increased or
decreased by the utility, in amounts from 10% to 25%.  Prices of
uranium for deliveries under the base-escalated price contract
currently exceed prices at which uranium can be purchased in the
spot market.

Under the market-related contracts, the purchaser's cost depends on
quoted market prices and the price at which a willing seller will
sell its U3O8 during specified periods before delivery.  Some of
these contracts place a ceiling on the purchase price, substituting
a base-price escalated amount, if the market price exceeds a
certain level.  Under the terms of the various market-price related
contracts, SMP is required to deliver from 270,000 to 1,301,253
pounds of uranium annually from 1995 to 2000, which amounts may be
increased or decreased by specified percentages.  

Through fiscal 1994, USE and its affiliates have satisfied most of
these contracts with either uranium previously produced by SMP,
borrowed from others, or purchased on the open market.  A number of
disputes have arisen among USECC and its partner NUKEM/CRIC in SMP,
and USECC initiated litigation against NUKEM, CRIC and certain of
their affiliates.  See "USE Legal Proceedings."

However, performance under the SMP utility supply contracts has
been in dispute since fiscal 1993, and may continue past May 31,
1995; the cooperation of NUKEM to assure deliveries to customers
pending resolution of the SMP disputes, is not assured.  See "Legal
Proceedings".

Permits.  Necessary permits to operate current mines on SMP
properties have been issued by the State of Wyoming.  Amendments
are needed to open new mines within the permit area.  As a
condition to the issuance of the permits, an NPDES permit under the
Clean Water Act has been obtained.  Monitoring and treatment of
water removed from the mines and discharged in nearby Crooks Creek
is generally required.  During the past year, SMP did not discharge
wastewater into Crooks Creek, and the mine water is presently being
discharged into the McIntosh Pit.  

Gold
     
Lincoln Mine (California)

Sutter Gold Mining Company.  In fiscal 1991, USE acquired an
interest in the Lincoln Project (including the underground Lincoln
Mine) in the Mother Lode Mining District of Amador County,
California.  This property, formerly held by the Sutter Gold
Venture ("SGV"), a mining joint venture, is now wholly owned by
USECC Gold, a Wyoming limited liability company (owned by USE and
Crested).  Until the end of fiscal 1994, Seine River Resources Inc.
("SRRI", a Vancouver Stock Exchange listed company which is not
affiliated with USE or its subsidiaries) was a joint venture party
in SGV.  USECC Gold now is a subsidiary of Sutter Gold Mining
Company (see below).

The parties had intended to operate SGV as equal 50 percent
venturers.  However, because of SRRI defaults on its obligations to
USE, USE and Crested had acquired (through USECC Gold) by the end
of fiscal 1993 a 90 percent aggregate equity interest in the
Lincoln Project (and the interests in USECC Gold were owned 88.89
percent by USE, and 11.11 percent by Crested).  By the end of
fiscal 1994, SRRI owed USE and Crested $1,970,507 for SGV property
holding costs, permitting costs and mine maintenance expense
incurred and paid for by USE and Crested since March 1992,
including interest and management fees charged by USE and Crested. 
As of May 23, 1994 SRRI agreed to assign its remaining 10 percent
interest in SGV to USE as payment for the $1,970,507 owed USE and
Crested.  However, only the $1,389,272 of costs and expenses paid
for by USE and Crested was recorded; $581,235 for interest and
management fees was written off as uncollectible.  SRRI also issued
400,000 common shares of stock and delivered them to USE as final
payment of any deficiencies for pre-fiscal 1994 indebtedness (owed
by SRRI to SGV) which had been secured with SRRI's interest in SGV
and upon which USE and Crested acquired in lieu of foreclosure (see
Note E to the USE Consolidated Financial Statements).  A conveyance
of SRRI's 10% interest is being prepared for delivery to USE and
Crested pending the decision of Amador United Gold Mines on its
right of first refusal on the project.

Subsequent to the end of fiscal 1994, the Sutter Gold Venture was
terminated, USE and Crested formed a new Wyoming corporation
(Sutter Gold Mining Company), and agreed to exchange their
interests in USECC Gold for common stock of Sutter Gold Mining
Company (hereafter, "Sutter Gold").  Sutter Gold is owned 89
percent by USE and 11 percent by Crested; USECC Gold is a
subsidiary of Sutter Gold.

Sutter Gold continues to seek the capital funding needed to fund
mine development, construction of a gold mill and related
facilities, to put the gold mine into full production at an initial
rate of 300 tons per day.  To date, there are no agreements in
principle to obtain such financing.
  
For information on the initial formation of SGV, and the respective
interests of USE, Crested and SRRI at formation and thereafter, see
Note E to the audited USE Consolidated Financial Statements.

During fiscal years 1992, 1993 and 1994, SGV conducted
environmental studies, drafted initial mine and mill designs, mined
bulk samples from the Lincoln Mine for assay and mill design
purposes, installed an underground water treatment plant to treat
mine water seepage, and performed other work to support application
for operating permits.  See "Properties", below.

Properties.  Sutter Gold (through USECC Gold) holds approximately
14 acres of surface and mineral rights (owned), 362 acres of
surface rights (leased), 217 acres of mineral rights (leased), and
374 acres of mineral rights (owned), all on patented mining claims
near Sutter Creek, Amador County, California.  The properties are
located in the western Sierra Nevada Mountains (1,000 to 1,500 feet
elevation); year-round climate is temperate.  Access is by
California State Highway 16 from Sacramento to California State
Highway 49, then by paved county road approximately .4 miles
outside Sutter Creek.   

Total land holding costs are estimated at $574,000 for the two
fiscal years ending May 31, 1996, including $42,000 for payments on
two parcels (14 acres) purchased in 1994; $30,000 in one time costs
to acquire a surface easement and lease for land running from the
proposed mill site to California State Highway 49; payment of two
years' accrued royalties of $46,000, plus advance royalties coming
due in 1995 and 1996 totalling $96,000 on a surface and minerals
lease (with purchase option); payment of advance royalties and
lease rental payments coming due in 1995 and 1996 on other surface
and mineral properties, totalling $228,000; and property taxes of
$60,000 ($30,000 annually); and other miscellaneous lease payments.

Property taxes will increase to about $100,000 annually when the
mill is built and the mine is in production. 

The leases are for varying terms (the earliest expires in November
1995), and require rental fees, advance production royalties, real
property taxes and insurance.  Leases expiring before 2010 will
generally be extended, so long as minerals are continuously
produced from the property that is subject to the lease.  Other
leases may be extended for various periods on terms similar to
those contained in the original leases.  Production royalties are
from four to seven percent, and up to 20 percent for some areas of
high-grade ore.  The various leases have different methods of
calculating royalty payments (net smelter return, gross proceeds,
and net profits interest). 

Amador United Gold Mines ("Amador United") was a prior owner of
certain leases which it conveyed into the Lincoln Project when
owned by Meridian Minerals, in return for which Amador United
received a right of first refusal to buy the Lincoln Project (see
below) and a 20 percent net profits interest in production from any
of the Lincoln Project properties.  Although all of the properties
which Amador United conveyed into the Lincoln Project were
relinquished by Meridian as uneconomic or of marginal utility to
the Project, Amador United remains entitled to its net profits
interest.  "Net profits" will be determined by deducting from gross
revenues from sale of minerals produced by the Lincoln Project, an
amount equal to 105 percent of all costs and expenses in excess of
$6,000,000 which are directly or indirectly attributable and
necessary or incidental to the acquisition, exploration,
development, mining and marketing of minerals produced from all of
the properties comprising the Lincoln Project.  Costs and expenses
are defined to include (but not be limited to): ad valorem real
property and personal property taxes; reasonably anticipated
reclamation costs; salaries and wages of employees assigned to
property acquisition, exploration, development, mining and
marketing activities; travel expenses and transportation of
employees, material equipment and supplies; all payments to
contractors; assay, metallurgical testing and other analyses to
determine the quality and quantity of minerals on all of the
properties; costs to obtain environmental permits and other
permits, rights-of-way and similar rights, as incurred in
connection with acquisition, exploration, development, mining and
marketing activities; property acquisition and holding expenses;
costs for feasibility studies; costs for title curative work; and
1.25 percent monthly interest on such costs and expenses which are
not paid. 

Based on an estimated $15,000,000 of investments to date in the
Lincoln Project by Meridian and USE, and current estimates of up to
$17,974,000 additional investment required to put the properties
into full production, payment of any amount to Amador United for
its net profits interest will only occur after the Lincoln Project
has generated gross revenues in excess of the amount invested. 
Lease royalties burdening the Lincoln Project properties are in
addition to Amador United's net profits interest.

In connection with SRRI's transfer of interests in the Lincoln
Project to USE and Crested at formation of the SGV, and thereafter
upon USE's and Crested's acquisition of SRRI's remaining interests
in SGV due to default by SRRI, Amador United was provided notice of
its right of first refusal to acquire such interests for amounts
equal to USE's and Crested's advances to SRRI. Amador United has
made technical objections to the notices given, however, USE and
Crested believe these objections are without merit. 

In fiscal 1992, USE and Crested expended $2,537,400 on SGV for mine
development, mining and processing bulk samples of mineralization,
project permitting costs, holding costs, and related general and
administrative costs, which amount includes advances by USE and
Crested to cover SRRI's share of such costs.  In fiscal 1993 and
1994, SGV spent $1,266,500 and $1,088,536, respectively, for
exploration and feasibility work to further delineate the Lincoln,
Comet and other zones, and for land holding, permitting and related
costs.  All expenditures were funded by USE and Crested, including
SRRI's share of such costs.  To Prospectus date, Sutter Gold (and
predecessor SGV) has spent over $12,100,000 to acquire the Lincoln
Project, and on mine development, exploration and feasibility work,
permitting and mill equipment.

Geology and Reserves.  The minerals consulting firm Pincock, Allen
& Holt ("PAH") has prepared a prefeasibility study on the Lincoln
Project.  PAH reviewed core drilling data on the Lincoln Zone on
100-foot centers from the surface, and drilling on the Comet Zone
from both surface and underground.  PAH also reviewed data from
drilling on the Keystone Zone from surface on 200-foot centers. 
Total data is from 162 exploration core holes (surface and
underground), with total footage of 64,700 feet.  PAH based its
estimate of proven reserves on mineralized material within 25 feet
of sample information; probable reserves were based on material
located between 25 and 50 feet of sample information.   In nearly
all cases, the veins (approximately 17 in number, though at some
points several veins appear to briefly converge) in the three areas
sampled are believed by PAH to extend well beyond these limits. 

Using a cutoff grade of 0.25 ounces of gold per ton in place, PAH
estimates the Lincoln Project contains 194,740 tons of proven and
probable reserves grading 0.57 ounces of gold per ton.  If
operating economics indicate a lower cutoff grade is feasible, the
amounts of reserves would increase.

In fiscal 1992, SGV mined 8,000 tons of material (including waste
rock and low grade mineralization) out of drifts and raises off the
Stringbean Alley decline (see "Permits and Future Plans", below) in
a bulk sampling program to test mining techniques and milling
recoveries.  Milling results indicated at least 94 percent of the
gold in the ore should be recoverable with gravity, flotation and
cyanidation milling circuits (1,400 ounces of gold were recovered
in this program).  Subsequent metallurgical tests by the
engineering firm Brown & Root, Inc. (using test data from the
Lincoln Project developed by Hazen Research, Inc.) indicate mill
recovery should be in excess of 96 percent.  PAH believes the
recovery rate should be between 93 and 95 percent.

The geology within the Lincoln project is typical of the historic
Mother Lode region of California, with a steeply dipping to
vertical sequence of metavolcanic and metasedimentary rocks hosting
the gold-bearing veins.  Depending on location along the strike
length on the vein systems, the gold-bearing veins are slate,
metavolcanic greenstone, or an interbedded unit of slates and
volcanics.  The Lincoln Project covers over 11,000 feet of strike
length along the Mother Lode vein systems.   

Permits and Future Plans.  In August 1993, the Amador County Board
of Supervisors issued a Conditional Use Permit ("CUP") allowing
mining of the Lincoln Mine and milling of production, subject to
conditions relating to land use, environmental and public safety
issues, road construction and improvement matters, and site
reclamation.  The permit will allow construction of the mine and
mill facilities in stages as the project gets underway, thereby
reducing initial capital outlays.  Additional permits (for road
work, dust control and construction of mill and other surface
improvements) will be applied for in due course. 

Initial mining using standard cut-and-fill overhead stoping
techniques, is planned for the Lincoln and Comet Zones, by an
existing 15 feet by 12 feet by 2,800 feet decline (the Stringbean
Alley decline), which runs from the surface down through the Comet
and into the Lincoln Zone.  This decline was developed by Meridian
Minerals.  Screened tailings from the mill flotation circuit will
be used to back-fill the stopes and stabilize the wall rocks; this
recycling will also greatly reduce the volume of tailings going
into the tailings ponds.  In the pre-production stage, the
Stringbean Alley decline will be extended down to 750 feet, then a
drift driven back horizontally along the 750 foot level (above sea
level).    

The CUP requires that within 18 months after operations start up,
a new decline (to be named the Lincoln Decline) will have to be
completed running for 1,850 feet from the surface at the mill site
(1,340 feet above sea level) down to a new drift to be driven at
the 1,000 foot (above sea) level; the new decline will be used for
access of mining personnel and supplies to the underground
workings, as well as permit ore haulage up the decline by conveyor,
thus eliminating surface ore haulage from mine portal to the mill. 

Concurrently with production mining, Sutter Gold intends to
maintain an aggressive underground development program to delineate
(on an on-going basis) two to three years of developed ore in
sight.

Sutter Gold may require up to $17,974,000 financing to construct
the mill and prepare the mine for full scale production, and for
interim holding costs.  The mill design has been reviewed by PAH,
and Sutter Gold expects to follow PAH's recommendations in building
the recovery circuits.  The mill will be constructed to allow a 500
ton per day operations, but initially equipped so as to handle 300
tons per day throughput.  Exclusive of attached lab and other
support facilities, the central mill building is expected to cover
approximately 20,000 square feet, and will be constructed with
interior mezzanine levels to hold different banks of equipment. 
Adequate power is available at the boundaries of the Lincoln
Project from the local utility; water also is available from a
utility if needed, although the Lincoln Mine is expected to produce
adequate water for mining and milling operations.  

Molybdenum 

As holders of royalty, reversionary and certain other interests in
properties located at Mt. Emmons near Crested Butte, Colorado, USE
and Crested have received annual advance royalties of 50,000 pounds
of molybdenum, or cash equivalent (one-half to each), starting in
fiscal 1990, pursuant to agreements for sale of interests in the
Mt. Emmons properties to AMAX.  The properties were acquired in the
1970s, and sold to AMAX in 1980.  AMAX delineated a deposit of
molybdenum containing approximately 146 million tons of
mineralization averaging 0.43% molybdenum on the properties, making
the deposit one of the world's largest known primary molybdenum
deposits.

Advance royalties are paid in equal quarterly installments, until:
(i) commencement of production; (ii) failure to obtain certain
licenses, permits, etc., that are required for production; or (iii)
AMAX's return of the properties to the USE and Crested.  During
fiscal 1994, USE recognized $126,800 of advance royalty revenue
under this arrangement.  These royalties are shown in the
Statements of Operations as a component of gains from restructuring
mineral properties agreements.  See Note F to the audited USE
Consolidated Financial Statements.  The royalty payments reduce the
operating royalties (six percent of gross production proceeds)
which would otherwise be owed by AMAX in the event of production. 
There is no obligation to repay the advance royalties, if the
property is not placed in production.  AMAX is to pay $2,000,000 to
USE and Crested (one-half to each), if the Mt. Emmons properties
are put into production.

In fiscal 1995, USE and Crested reached agreement with AMAX (now
Cyprus Climax) to forego six quarters of advance royalties
(starting fourth quarter calendar 1994) for full payment for real
estate in Gunnison, Colorado owned by AMAX and the subject of a
purchase option held by USE and Crested.  The option exercise price
was valued at $266,250.

Also as part of the original AMAX transaction, interest free loans
were made to USE and Crested.  These loans were fully amortized by
the end of the first quarter of fiscal 1994 (see Notes F and G to
the audited USE Consolidated Financial Statements.  In the event
AMAX sells its interest in the properties, USE and Crested would
receive 15 percent of the first $25,000,000 received by AMAX.

Parador Mining (Nevada)

USE and Crested are sublessees and assignees from Parador Mining
Co., Inc. ("Parador"), on certain rights under two patented mining
claims located in the Bullfrog Mining District of Nye County,
Nevada.  The claims are immediately adjacent to and part of a gold
mine operated by Bond Gold Bullfrog, Inc. ("BGBI"), a non-
affiliated third party.  They have also been assigned certain
extralateral rights associated with the claims and certain royalty
rights relating to a prior lease on those properties.  The lease to
USE and Crested is for a ten year primary term, is subject to a
prior lease to BGBI on the properties, and allows USE and Crested
to explore for, develop and mine minerals from the claims.  If USE
and Crested conduct activities on the claims, they are entitled to
recover costs out of revenues from extracted minerals.  After
recovering any such costs, USE and Crested will pay Parador a
production royalty of 50 percent of the net value of production
sold from the claims.  

USE, Crested and Parador have informed BGBI that payments are owed
to them pursuant to extralateral rights on the claims.  BGBI in
turn has initiated legal proceedings to establish the rights of the
various parties in the claims.  Thereafter, Parador notified BGBI
that it had defaulted in its lease and terminated the lease.  BGBI
denies that it has defaulted.  See "Legal Proceedings".

Oil and Gas

Fort Peck Lustre Field (Montana).  USECC conducts oil production
operations at the Lustre Oil Field on the Ft. Peck Indian
Reservation in north-eastern Montana; five wells are producing, and
USE and Crested receive a fee based on oil produced.  USE is the
operator of record.  No further drilling is expected in this Field.

This fee and certain real property of USE and Crested, have been
pledged or mortgaged as security for a $1,000,000 line of credit
from a bank.

ENERGX, LTD.  Fort Peck Gas Project.  ENERGX, LTD., a Wyoming
corporation and a subsidiary of USE and Crested formed in fiscal
1994, signed on October 29, 1993 an "Agreement Between The
Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation
and ENERGX, LTD. to Explore, Develop and Produce Shallow Gas." 
This Agreement has been approved by the Secretary of the Interior
and the  United States Bureau of Indian Affairs.  ENERGX intends to
drill and test three exploratory wells, and otherwise develop the
area, with NuGas Resources (see below).  If ENERGX determines there
is potential for a natural gas field, ENERGX (and NuGas) will have
exclusive exploration rights for shallow gas (down to the top of
the Muddy formation, approximately 4,000 feet) on approximately
325,000 acres of tribal mineral lands on the Reservation for a
period of five years, and for successive five year terms, provided
ENERGX drills another five exploration wells during each term.  The
first three dry holes would be at ENERGX sole expense (and now will
be funded by NuGas-see below).  

Proceeds from production will be allocated to ENERGX (and now
NuGas-see below) for all wells' drilling and completion expense
(except for the initial three dry holes), lease operating expenses,
gas gathering and compression facilities, capital and operating
costs.  Net revenues will be allocated 40 percent to the Tribes and
60 percent to ENERGX.  Pursuant to United States Law, only the
Tribes may own beneficial interests in reservation minerals;
ENERGX' share of net revenues is compensation for operating
services.  The Tribes also own 10 percent (nondilutable) of ENERGX
common stock.

Two major gas transmission systems cross the Fort Peck reservation
(Northern Border and Williston Basin).

The Fort Peck tribal lands are believed to contain significant
shallow gas deposits, analogous to the Bowdoin Gas Field (eastern
Montana) and other Cretaceous age gas producing reservoirs in the
Northern Great Plains Gas Province.  Numerous wells drilled for
deep oil on the Fort Peck tribal lands have documented shallow gas
shows.  However, no reserves have been established for the acreage
subject to the Agreement with ENERGX.

     NuGas Agreement.  By the Joint Venture Agreement ("JVA") of
July 18, 1994, NuGas Resources (U.S.) Inc., Calgary, Alberta,
Canada will drill and complete (or abandon) at NuGas' sole expense,
eight exploratory shallow gas wells on the Fort Peck Reservation
(three before December 31, 1994, and five more by July 1, 1996), to
earn a one-half interest in ENERGX' rights under the Fort Peck
Shallow Gas Agreement (see above).  Well gathering, gas dehydration
and related equipment costs will be shared equally by NuGas and
ENERGX.  ENERGX Will be carried for the first eight exploratory
wells (see below).

NuGas has contributed $100,000 to pay for costs of acquiring leases
and easements on non-Tribal lands contiguous to Tribal lands, so as
to assemble adequate sized drilling units for the first three
exploratory wells.  Due to the unexpected complexity of assembling
the necessary land packages, NuGas and ENERGX have postponed the
drilling of the initial exploratory wells until the summer of 1995.

NuGas and ENERGX each will receive 50 percent of proceeds from gas
produced and sold out of the initial eight wells, until NuGas
receives 50 percent of such wells' drilling, completion, geological
and equipping costs; thereafter, distributions will be shared 30
percent each to NuGas and Energx, and 40 percent to the tribes
pursuant to the Fort Peck Shallow Gas Agreement.  NuGas will not be
entitled to recoup any of drilling and geological costs related to
up to three dry holes drilled in the initial eight well drilling
program.  All activities after the initial exploration drilling
program will be funded equally by NuGas and ENERGX. 

ENERGX received $200,000 under the JVA as a prospect generation
fee, and will be the operator of the initial exploration program.

NuGas is a subsidiary of a Toronto Stock Exchange company with
substantial experience in shallow gas exploration and production,
principally in the northern plains states and Canada, where the
company currently operates more than 450 shallow gas wells and
produces 25,000,000 cubic feet of gas per day.

     Powder River Basin.  ENERGX holds by lease approximately 960
acres of coalbed methane rights in  the Powder River Basin,
Campbell County, Wyoming, having drilled two coalbed methane
stratigraphic test wells, and four production wells to test for and
produce coalbed methane.  Casing has been set in each of the four
coalbed methane wells.  The coal is expected to produce commercial
quantities of methane, once the hydrostatic pressure is reduced by
pumping water out of the coalbed formation. 

One of the four wells is on water pump.  Until methane production
commences, methane reserves cannot be reliably estimated.

     Wind River Basin.  Approximately 38 sections (25,000 acres) of
BLM leases (10 year term) in Fremont County, WY are now held by
ENERGX, believed to be prospective of shallow coalbed methane and
conventional stratigraphic natural gas and oil deposits.  Acreage
in this part of the County has been leased by major oil and gas
companies in the past, but very little of the acreage has been
drilled.  ENERGX may negotiate farmout arrangements with other
companies to test the acreage (two large independent oil and gas
exploration and production companies have acreage near ENERGX's
positions).     

ENERGX operations to date have been funded with USECC equity
investments and advances, and transaction revenue (the NuGas
prospect generation fee).  Future operations are to be funded by a
combination of private equity financing by ENERGX, and by industry
and private investor participants on prospects.

Commercial and Construction

USE owns varying interests, alone and with Crested, in affiliated
companies in manufacturing and retailing, real estate,
transportation, and engineering businesses.  The affiliated
organizations include Brunton, Western Executive Air, Inc. ("WEA"),
Four Nines Gold, Inc. ("FNG"), and Plateau through its wholly-owned
subsidiary Canyon Homesteads, Inc.  Activities of these
subsidiaries and USE in these business sectors include a variety of
real estate operations (ownership and management of a commercial
office building, which includes the quarters where USE executive
offices are located, ownership and management of a trailer home
park in Riverton, Wyoming, and ownership and management of town
sites and a motel facility in Ticaboo, Utah).  WEA owns and
operates an aircraft fixed base operation with fuel sales, charter
planes and flight school in Riverton, Wyoming.  Manufacturing and
marketing of recreational products and professional engineering
products are carried on through Brunton.  FNG provides civil
engineering contracting primarily for large concrete structure and
pipe work in municipal sewage systems, irrigation systems and other
water control projects.  

Manufacturing

Brunton

Brunton operates in the industry segment of manufacture and sales
of outdoor professional and sporting products.  All common stock of
Brunton except for shares previously owned by USE was acquired as
of May 1994, in exchange for 276,470 registered common shares of
USE.

Brunton is the manufacturer of the original Brunton pocket transit
(developed by D.W. Brunton in 1884), and has been manufacturing and
marketing pocket transits to the professional surveying, mining,
geology and military markets world wide since 1972 when the product
line was purchased from a Denver company and moved to Riverton,
Wyoming. 

Brunton also manufactures and sells a line of sporting compass
products, and imports and distributes optical products and Lakota
cutlery, having acquired Lakota cutlery in 1982.   These products
are marketed through traditional sporting goods channels by
distributors, catalog houses, retailers and chain stores nationally
and internationally.  Additional markets include ad specialty,
military and the U.S. government.  A majority of the products are
marketed as quality items commanding premium prices.

Brunton sales for fiscal 1994 (compared to fiscal 1993) by product
line were:  35 percent (44 percent) sporting compasses; 26 percent
(26 percent) professional products; 27 percent (21 percent) optical
products; and 7 percent (9 percent) cutlery.  The balance of 1994
revenues were from interest income, paint shop custom work, and
warranty service.

No customer accounted for more than 10 percent of Brunton sales in
any of the three fiscal years ended May 31, 1994.  Major customer
revenue contributions within product lines are discussed below.  

Brunton has 34 full-time employees and 5 part-time employees, none
under collective bargaining agreements.  Employee relations are
considered satisfactory.

     Professional Products

     Pocket Transits and Accessories.  Brunton is a manufacturer of
pocket transits.  This instrument is a hand-held compass with a
mirrored protective cover and long bar sight, capable of
calculating both horizontal (compass bearings) and vertical
(inclination) angles.  Primary advantages of the pocket transit
include small size and accuracy.  

Several versions of this instrument are produced to satisfy the
needs of civil engineers, mining engineers, archaeologists,
foresters, geologists and military personnel.  Many units are
waterproof.  Numerous product options, high quality and ready
serviceability separate Brunton instruments from its competition. 
Suggested retail price for the pocket transit range from $187 to
$263 per unit.  Brunton also manufactures and sells non-magnetic
tripods and field accessories to the foregoing consumer groups.

     Marketing.  Professional products are sold on a direct basis
to 275 wholesale dealers, distributors and catalog supply houses
throughout the world.  In addition, Brunton markets professional
products to the U.S. government (GSA) and military organizations
including the U.S. Army.

     Competition.  Brunton faces competition for its pocket
transits with look-a-like models manufactured in the far east by
companies substantially larger than Brunton who include their
competing unit as one of several surveying type instruments
available from the company.  Despite larger competitors, and
despite somewhat higher prices for Brunton pocket transits,
management believes Brunton holds a consistent estimated 80 percent
United States market share for the pocket transit market.  This is
due to name brand recognition, highest quality workmanship,
excellent wholesale and consumer service and consistent advertising
programs.

     Seasonality.  Sales of pocket transits are seasonal with
increased sales in the spring and summer due to minerals
exploration and college/university field exercises.  Brunton
currently seeks to increase penetration of South American markets
to counter seasonality of North American sales.

     Major Customers.  One customer (Forestry Suppliers, Inc., a
catalogue supplier) accounted for 10 percent of professional
product sales in fiscal 1994 (15 percent in fiscal 1993).  Loss of
this customer would not have a material adverse effect on Brunton.

     Sporting Products

There are three lines of Brunton sporting products: compasses,
optics and cutlery.  Compasses and optics are marketed under the
Brunton name; cutlery is marketed under the Lakota label.  

     Compasses.  Brunton map compasses were first introduced in
1979 to the general sporting goods market.  To the best of
management's knowledge, Brunton compasses continue to be the only
100 percent made in USA map compasses.  A complete priced line of
compasses (22 different models) is offered, with a suggested retail
price range of $3.99 to $264, and are used by virtually any type of
outdoors person, from hunters to backpackers, boaters to mountain
climbers.  All sporting compasses are liquid damped, which means
that the compass housing contains a clear oil-based fluid to dampen
the action of the magnetic needle, which allows for quicker and
more accurate instrument readings.

     Optics.  Brunton optics include a range of high quality
binoculars and monoculars, which are manufactured primarily in
Japan and Korea to Brunton specifications.  Brunton optical
products are targeted to wholesale accounts that market to quality
conscious consumers willing to pay premium prices for quality
optical products.  Additional features are found on its optics,
including upgraded lenses and prisms, fully-coated optics, long eye
relief (so eyeglass wearers can enjoy full field of view), and lens
coatings (to significantly reduce both ultraviolet (UV) and
infrared (IR) light from entering the product).  Suggested retail
prices for the 11 standard optical products range from $129 to
$389.

Substantially all optics are manufactured for Brunton by one
Japanese firm.  Although the services of such firm could be
replaced if necessary, attendant delays would adversely impact
Brunton and could result in eroding market share.  Relations
between such firm and Brunton are considered excellent.  However,
continued erosion of the dollar against the yen could lead to price
increases which may be difficult for Brunton to pass along to
customers.      

     Cutlery.  Lakota cutlery offers high quality cutlery for the
outdoors person, with models that include unique lockback and fixed
blade designs.  Lakota cutlery is manufactured in Japan by quality
conscious subcontractors.  Leather sheaths and packaging are
assembled at Brunton headquarters.  A majority of Lakota designs
are for hunters, campers and fishermen.  Twenty models are
currently in the Lakota line, with a suggested retail price range
of $32 to $155.

The current cutlery manufacturer could be replaced if necessary,
although Brunton would be adversely affected depending on the lead
time required for a new firm to come on line.

     Marketing.  All Brunton sporting products are distributed
throughout the United States and overseas markets by its direct
sales force and manufacturers sales representatives, to over 1,000
retailers, including sporting goods retailers, mass merchants,
catalog houses, cutlery shops, and certain U.S. Army/Navy PX
stores.  In addition, Brunton sells some of nearly every model of
its products to corporations and other organizations for
promotional purposes, premium and employee gift award programs, and
corporate identity programs.  

In fiscal 1994, foreign sales represented 14 percent of sales (all
lines), and sales in the United States represented 86 percent of
sales.  These percentages are not expected to change materially in
fiscal 1995.

     Competition.  Competition in the compass line is provided by
several foreign firms, including Silva in Sweden and Suunto in
Finland.  Brunton is unable to determine its market share for
compass sales, as data therefor is unreliable, but believes it is
a substantial competitor in the United States.  Silva and Suunto
are believed to have larger market shares in the United States
compass market; such companies are believed to have resources
substantially greater than Brunton.

Lakota cutlery faces competition from over ten competitors, all of
which have larger United States market shares and greater marketing
and other resources than Brunton.

Brunton optical products compete with products from at least ten
other firms, all of which have a larger percentage of the United
States binocular market.  Most of these competitors have
substantially greater marketing and other resources.

     Seasonality.  All Brunton sporting products experience
seasonal sales, with stronger sales in July through December and
declining in January and February.

     Major Customers.  Two national discount chains accounted for
approximately 21 percent of compass sales in fiscal 1994, compared
to 20 percent in fiscal 1993.  Sales to one catalogue supplier
represented 18 percent of optical product sales in fiscal 1994,
compared to 35 percent in fiscal 1993.  Sales to one catalogue
supplier represented 13 percent of cutlery sales in fiscal 1994. 
The preceding percentages have not changed materially to date in
fiscal 1995.

Loss of any one of the major customers would not have a material
adverse effect on Brunton, however, loss of more than one in any
one product line could cause significant market share loss.

     Intellectual Property 

Brunton currently holds United States utility patent Nos. 4,175,333
(expires 2005), covering its pocket transit, and 5,079,846,
covering a liquid-type survival compass (expires 2009).  Eight
other United States utility patents are held which cover different
compass constructions, expiring 1993 to 1994, and one United States
utility patent (4,578,864) is held on a cutlery model (expires
2002).

Five United States design patents are held on compasses and
cutlery, which expire between 1998 and 2004.

Foreign patent protection in certain countries (principally Canada
and Europe) has been obtained on a limited number of products.
     
United States patent applications are filed for significant new
products, as developed.  No notice of adverse determinations has
been received with respect to pending applications.

Real Estate

Wyoming Properties.  USECC owns a 14-acre tract in Riverton,
Wyoming, with a two-story 30,400 square foot office building
(including underground parking).  The first floor is rented to
affiliates, nonaffiliates and government agencies; the second floor
is occupied by USE and Crested and is adequate for their executive
offices.  USECC also owns and operates Wind River Estates, a 100-
unit trailer park on 19.7 acres in Riverton.  The preceding two
properties are mortgaged to the State of Wyoming as security for
future reclamation work on the SMP properties.  

USECC owns a fixed base aircraft operation at the Riverton
Municipal Airport, including a 10,000 square foot aircraft hangar
and associated offices and facilities.  This operation is located
on land leased from the City of Riverton, for a term ending
December 16, 2005, with an option to renew on mutually agreeable
terms for five years.  The annual rent is presently $1,156
(adjusted annually to reflect changes in the Consumer Price Index),
plus a $0.02 fee per gallon of fuel sold.  

USE and Crested own 18 undeveloped lots on 26.8 acres of the Wind
River Airpark near the Riverton Municipal Airport, and three
mountain sites covering 16 acres in Fremont County, Wyoming.

USECC owns various buildings, 600 city lots and other properties at
the Jeffrey City townsite in south-central Wyoming.  More than
4,000 people resided in Jeffrey City in the early 1980s, when the
nearby Crooks Gap and Big Eagle uranium mining projects were
active.  The townsite may be utilized for worker housing as the
Jackpot Mine and Sweetwater Mill are put into operation.  

USE owns five city lots and a 20-acre tract with improvements
including two smaller office buildings and three other buildings
with 19,000 square feet of office facilities, 5,000 square feet of
laboratory space and repair and maintenance shops containing 8,000
square feet, all in Riverton, Wyoming.  

Colorado Properties.  In connection with the AMAX transaction for
the molybdenum properties near Crested Butte, Colorado, USECC
acquired an option from AMAX (now Cyprus Climax) to purchase (until
June, 2002) approximately 57 acres for $200,000 in Mountain Meadows
Business Park, Gunnison, Colorado.  The property is zoned
commercial and industrial, and is adjacent to Western State
College.  In fiscal 1995, USECC and Cyprus Climax agreed on
exercise of the option by foregoing six quarters of advance
royalties from Cyprus Climax (the option purchase price was
$200,000).  See "Molybdenum" above.

Thereafter, USE (together with Crested) signed option agreements
with Pangolin Corporation, a Park City, Utah developer, for sale of
the 57 acres, and a separate parcel owned in Gunnison County,
Colorado.  If both options are exercised, the combined purchase
price is US$1,851,920.  The acreage is not encumbered.

The first option (exercised in February, 1995) was for the 57
commercial and noncommercial zoned acres in the City of Gunnison,
Colorado; the purchase price was $970,300.  Pangolin has paid
$345,000 cash and $625,300 by its three year nonrecourse promissory
note.  19.25 acres have been deeded to Pangolin; the remaining
acreage secures the note, and will be released to the buyer against
principal payments on the note as development (mixed commercial and
residential) advances. 

The second option covers 472.5 acres of ranch land northwest of the
City of Gunnison, Colorado (purchase price $851,920).  Pangolin has
paid $10,000 for the option; on option exercise and closing,
Pangolin will pay $40,000 in cash and $801,920 by two nonrecourse
promissory notes (each with principal and unpaid interest due on
the third anniversary of closing).  At closing, 22.19 acres will be
deeded to Pangolin; different parcels of the remaining acreage will
secure the notes, and be released for principal payments in the
course of development.  The option expiration date of February 20,
1995 is being extended on a monthly basis in anticipation of
exercise and closing within fiscal 1995.
  
Both notes ($150,000 and $651,920) will require annual payments of
accrued interest: the larger note accrues interest at 7.5 percent;
the initial interest rate on the smaller note is 7.5 percent for 90
days after closing if all principal and interest is paid by the
ninetieth day, and 12 percent thereafter (with a $35,000 principal
payment on the first anniversary).  Separately, the Company (and
Crested Corp.) are negotiating a possible joint venture residential
lot development of an 88 acre parcel northwest of Crested Butte,
Colorado, previously the site of anthracite coal mining.  No
agreement has been signed to date on this parcel. 

Utah Properties.  Canyon Homesteads, Inc. (a Plateau subsidiary)
owns the Ticaboo Townsite in Ticaboo, Utah.  Canyon Homesteads was
the majority partner in a joint venture which developed the
townsite in the 1980s; subsequent to May 31, 1994, USE acquired the
minority interest in the venture from a nonaffiliate.  

The townsite is 3.5 miles south of the Shootaring Canyon Mill, and
includes a 66 room motel, general store, laundromat facility, 98
home sites, 151 mobile home sites, and 26 recreational vehicle
sites (all with utility access).  The townsite is located on a
State of Utah lease near Lake Powell.  In fiscal 1994, limited
capital improvements and a general refurbishing were effected by
USE (total costs approximately $400,000).  There have been no
similar material expenditures in fiscal 1995.  USE presently seeks
an operator/developer partner for upgrading this asset to a
commercial enterprise, located 13 miles from Lake Powell; no
agreements have been reached to date.  

Net Revenues by USE Segment

Minerals and construction operations have accounted for more than
15 percent of USE total revenues in the last three fiscal years. 
Percentage contributions by the three USE segments in the last
three fiscal years was: 

                  Percentage of Net Revenue During Year Ended

                           May 31,      May 31,    May 31,
                            1994         1993       1992 

Minerals Operations          50%          53%        26%
Commercial Operations        13%          10%        13%
Construction Operations      30%          22%        46%

See Note I to audited USE Consolidated Financial Statements for
information concerning a significant customer in minerals
operations.  Neither commercial nor construction operations are
dependent upon a single customer, or a few customers, the loss of
which would have a materially adverse effect on USE.

Uranium and Molybdenum Market Information

Uranium.  During recent years there have been several major
producers of uranium in the United States (Pathfinder Mines
Corporation, Chevron Resources, Uranium Resources Inc., Freeport-
McMoRan Resource Partners, L.P., Energy Fuels Nuclear, Inc.,
Ferrett Exploration, General Atomics and others).  There are
several major producers in Canada (Cameco, Cogema Canada, Ltd. and
Rio Algom); Australia (Energy Resources of Australia and 
Pancontinental Mining, Ltd.); Africa (Cogema and RTZ's Rossing 
unit), and Europe.  Many of these operations are in standby mode
due to current low prices for U3O8.  The market deteriorated as the
former Soviet Union, now known as the Commonwealth of Independent
States ("CIS"), increased exports to the western uranium spot
market, which slowed down the reduction of western inventories.

Uranium is primarily used in nuclear reactors that heat water to
drive turbines that generate electricity.  There are presently
about 425 commercial nuclear power plants worldwide either
operating, under construction or on order.  Current worldwide
consumption is about 150 million pounds of U3O8 per year, but
worldwide production is approximately 75 million pounds per year. 
Published reports indicate that approximately 31 percent of the
worldwide nuclear-powered electrical generating capacity is in the
U.S., 49 percent is in western Europe, and 14 percent is in the Far
East.  Although the reactors in western Europe have a greater
aggregate generating capacity and fuel usage, the supply of uranium
for those reactors has been obtained for relatively long periods,
and the market requiring the greatest supply of uranium for the
next few years is believed to be the United States.  The Asia
Pacific region may also develop into a significant uranium
consumer, due to announced plans for rapid expansion of nuclear
power programs in Japan and Korea.

Pursuant to Suspension Agreements signed in fiscal 1993 between the
United States Department of Commerce ("DOC") and certain of the
Republics of the Commonwealth of Independent States ("CIS"), to
rectify prior damage to domestic United States uranium producers
from dumping sales by certain CIS republics of U3O8, all spot sales
of U3O8 delivered into the U.S. now reflect quota restrictions on
U3O8 imports from the CIS.  However, there are provisions which
allow certain long-term uranium sales contracts entered into with
domestic utilities prior to March 5, 1992, to be grandfathered.

NUEXCO Exchange Value.  The market related contracts of SMP are
based on an average of the Nuexco Exchange Value ("NEV") for 2, 3
or more months before uranium delivery.  The high and low NEV
reported on U3O8 sales during USE's past five fiscal years are
shown
below.  NUEXCO Exchange Values are reported monthly and represent
NUEXCO's judgment of the price at which spot and near term
transactions for significant quantities could be concluded.  NEVs
for fiscal 1993 are higher for U.S. transactions, due to the impact
of CIS import restrictions since late 1992.  These prices ("US
NEV") were reported by NUEXCO for spot sales in the restricted U.S.
market.
                              NUEXCO EXCHANGE VALUE
                              _____________________

                               US $/pound of U3O8
               Years Ended      _________________
                 May 31,        High         Low
               ___________     ______      ______
                 1989          15.10         9.85
                 1990           9.80         8.70
                 1991          11.70         8.35
                 1992           9.05         7.75
                 1993          10.05         7.75
                 1994          10.20         9.25

US NEV at March 31, 1995 was $11.15.

On August 31, 1993, NUEXCO made a public release that clarified its
definition of the NEV with reference to restricted and unrestricted
terminology, so that the restricted market values apply to all
products and services delivered in the U.S. as well as non-CIS
origin products and services delivered outside the U.S.

In the U.S., uranium is generally supplied to electric utilities
under medium to long-term supply agreements, which require
deliveries more than one year after entry into the contract.  These
agreements are designed to provide both the producer-supplier and
the customer with comfort as to the amount of uranium desired and
the availability of supply at a predictable price.  Utilities
generally seek supply contracts at least two to three years before
their needs occur.  It is expected that a large portion of U.S.
demand will be secured by electric utilities entering into
contracts in the next two to four years.  There also is an active
spot market, through which approximately 5 to 10 percent of uranium
concentrate needs are satisfied.

NUEXCO reports that through the first six months of 1994, U.S.
utilities bought 6,300,000 lbs U3O8 in the spot and near term
market, and another 11,800,000 lbs. U3O8 was purchased under
outstanding long-term contracts.  A portion of the spot and near
term market sales may have supplied purchases under long-term
contracts.  While demand in 1994 appears to exceed domestic
production, there remains a near-term supply of U3O8 from domestic
producers' inventory, and from unrestricted (i.e., not under
quotas) foreign producers current production and inventory.  USE
expects these and other factors (e.g., weapons grade uranium
conversions) will contribute to moderate concentrate price
increases, which otherwise might be expected from the shortfall of
United States production meeting demand, into fiscal 1996, in spite
of increasing interest from U.S. utilities in renewing long-term
contracts at higher than spot market prices.  To date in fiscal
1995, long-term contract prices have increased moderately, and spot
prices have increased from $10.20 in fiscal 1994 to $11.15 at March
31, 1995.
 
Molybdenum

Molybdenum is a metallic element with applications in both
metallurgy and chemistry.  Principal consumers include the steel
industry, which uses molybdenum alloying agents to enhance strength
and other characteristics of its products, and the chemical, super-
alloy and electronics industries, which purchase molybdenum in
upgraded product forms.

The molybdenum market is cyclical with prices influenced by
production costs of foreign and domestic competition, world-wide
economic conditions, the U.S. dollar exchange rate, and other
factors such as the market for end-use products.  When molybdenum
prices rose dramatically in the late 1970s, for example, steel
alloys were modified to reduce reliance on molybdenum.  AMAX and
Cyprus Minerals Company were the two major primary producers of
molybdenum in the United States until late 1993, when the companies
merged.

Worldwide demand for molybdenum in 1989 was reportedly 210 million
pounds, its highest level ever.  However, production for that
period was about 233 million pounds, as the industry and prices
continue to be affected by co- and by-product production of
molybdenum by other metals operations, and by excess capacity of
the primary producers.  By-product producers of molybdenum
(primarily Chilean copper mining companies) dominate the molybdenum
market and have a major impact on available supplies.  It is
unlikely that any new major primary deposits will commence
production during fiscal 1995.

Molybdenum prices on the open spot market have increased
substantially ($3.35 per pound of molybdic oxide (the refined
product) in September 1994, to $10.50-11.50 per pound in April
1995).
 
Research and Development

USE has incurred no research and development expenditures, either
on its own account or sponsored by customers, during the past three
fiscal years. 

Environmental

USE operations are subject to various federal, state and local laws
and regulations regarding the discharge of materials into the
environment or otherwise relating to the protection of the
environment, including the Clean Air Act, the Clean Water Act, the
Resource Conservation and Recovery Act ("RCRA"), and the
Comprehensive Environmental Response Compensation Liability Act
("CERCLA").  With respect to mining operations conducted in
Wyoming, Wyoming's mine permitting statutes, Abandoned Mine
Reclamation Act and industrial development and siting laws and
regulations impact USE.  Similar laws in California affect Sutter
Gold Mining Company operations.  Utah statutes will effect
Plateau's operations.

To USE's knowledge, it is in compliance with current environmental
regulations.  To the extent that production by SMP, GMMV or Sutter
Gold is delayed, interrupted or discontinued due to need to meet
additional provisions which relate to environmental protection,
future USE earnings could be adversely affected.

Certain Permits, Costs

A number of legislative proposals and regulations have been
introduced in Congress and in the legislative bodies of various
states which, if enacted, would significantly affect the minerals
industry.  For example, in fiscal 1993 the Mining Law of 1872 was
revised to change methods of acquiring and maintaining mining
claims on public lands, by requiring the payment (two years in
advance) of an annual fee of $100 per claim for assessment rather
than performing $100 worth of work on each unpatented mining claim.

This law already has affected USE, as a number of unpatented claims
were dropped in fiscal 1993 due to high holding costs.  A limited
number of such claims are currently held.

Status and estimated future costs for permits not previously
disclosed in this Report follow:

Crooks Gap.  An inoperative ion exchange facility at Crooks Gap
currently holds a NRC license for possession of uranium operations
byproducts.  To date, a notice of minor violations was received
from the NRC, which USE has resolved.  USE has applied to the NRC
for permission to decommission and decontaminate the plant, dispose
low level waste into the Sweetwater Mill tailings cell, and keep
intact such of the facility as does not require dismantling.  Costs
for this two year effort (once approved by the NRC) are not
expected to exceed $150,000.  

SMP.  USE and Crested are not required to make additional
expenditures to comply with provisions of the mine permit and
licenses and to protect the environment at SMP, however, included
in general and administrative expenses are expenditures related to
preparation and filing of reports on maintaining the properties in
compliance with environmental regulations.  

GMMV.  During the twelve months ending May 31, 1995, it is
anticipated that expenditures by GMMV to comply with provisions of
the mine permits and licenses, or otherwise to protect the
environment, will be approximately $200,000, 50 percent of which
will be for capital expenditures. 

Sutter Gold.  In fiscal 1994, Sutter Gold spent approximately
$90,000 to build an underground mine water treatment and surface
disposal plant, in compliance with California environmental
regulations.  This plant will be adequate for future mine water
treatment needs, even after the Lincoln Mine is put into
production.  

A significant amount of the total capital requirements to put the
Lincoln Mine into production, will pay for road construction,
tailing ponds, mill circuit design and other capital items which
are required by the conditional use permit from the Amador County
Board of Supervisors.

Actual costs for compliance with environmental laws may vary
considerably from estimates, depending upon such factors as changes
in environmental regulation (e.g., the new Clean Air Act), and
conditions encountered in minerals exploration and mining.  

With respect to environmental compliance expenditures by GMMV,
there ultimately will be an effect on USE earnings since GMMV
operations will be accounted for by the equity method.  GMMV's
expenses for compliance with environmental laws (as well as other
matters) are not expected to materially affect USE from a cash flow
standpoint during the next two years, as Kennecott will fund the
first $50,000,000 of costs of GMMV.  USE does not anticipate that
expenditures of SMP, GMMV and SGV to comply with laws regulating
the discharge of materials into the environment, or which are
otherwise designed to protect the environment, will have any
substantial impact on the USE's competitive position. 

Employees

USE has 52 full-time employees.  Crested uses approximately 50
percent of the time of USE employees, and reimburses USE
accordingly.  Payroll expense has been shared by USE and Crested
since 1981.

Mining Claim Holdings

The majority of mining properties owned by USE and/or by USECC are
unpatented mining claims, valid title to which depends upon
numerous factual matters.  Due to changes in the 1872 Mining Law,
USE and/or its co-venturers had the obligation to pay a rental fee
of $200 per claim for years ending on September 1, 1993 and 1994 by
August 31, 1993, and thereafter $100 annual per claim in order to
preserve the right to possession of unpatented mining claims.  Due
to these changes in the 1872 Mining Law, USE dropped a large number
of claims to reduce holding costs.  In addition to annual rental
fees, there are technical requirements which must be met to
establish a valid mining claim.  Satisfaction of these technical
requirements cannot be assured.

As a result of the above changes in 1872 Mining Law, title to the
unpatented lode mining claims held by GMMV and SMP on the Wyoming
uranium properties now are maintained by annual filings with the
BLM of $100 per claim.  Such claim filings are current.   

                      USE Legal Proceedings

Concerning Sheep Mountain Partners
 
Arbitration. On June 26, 1991, CRIC submitted certain disputed
matters concerning SMP to arbitration before the American
Arbitration Association in Denver, Colorado, to which USE and
Crested filed a responsive pleading and counterclaim alleging
violations of contracts and duties by CRIC related to SMP.  CRIC
asserted that USE and Crested, d/b/a/ USECC, were in default under
the SMP partnership agreement ("SMP Agreement").  Prior to
initiation of arbitration proceedings, USE and Crested had notified
CRIC it was in default under the SMP Agreement.  The issues raised
in the arbitration proceedings were generally incorporated in the
Federal proceedings (see below), wherein the U.S. District Court of
Colorado stayed further proceedings in arbitration.  See
"Stipulated Arbitration", below.   

Federal Proceedings. On July 3, 1991, USE and Crested
("plaintiffs") filed Civil Action No. 91-B-1153 in the United
States District Court for the District of Colorado against CRIC,
Nukem, Inc. ("Nukem"), and various affiliates of CRIC and Nukem
(together, the "defendants"), alleging that CRIC and Nukem
misrepresented material facts to and concealed material information
from the plaintiffs to induce their entry into SMP Agreement and
various related agreements.  Plaintiffs also claim CRIC and Nukem
have wrongfully pursued a plan to obtain ownership of the USE-
Crested interests in SMP through various means, including
overcharging SMP for uranium "sold" to SMP by defendants. 
Plaintiffs further allege that defendants refused to provide a
complete accounting with respect to dealings in uranium with and on
behalf of SMP, and that certain defendants misappropriated SMP
property, and engaged in other wrongful acts relating to the
acquisition of uranium by SMP.
  
Plaintiffs requested that the court order rescission of the SMP
Agreement and related contracts, and ask the court to determine the
amounts payable to CRIC by USECC as a result of any such rescission
order to place the parties in status quo.  USE and Crested also
requested that the court order defendants to make a complete
accounting to them concerning the matters alleged in the Amended
Complaint.  They requested an award of damages (including punitive,
exemplary and treble damages, interest, costs and attorneys' fees)
in an amount to be determined at trial.  Plaintiffs had further
requested imposition of a constructive trust on all property of SMP
held by defendants, and on profits wrongfully realized by
defendants on transactions with SMP.

The defendants filed various motions, an answer and counterclaims
against plaintiffs, claiming plaintiffs had misappropriated a
partnership opportunity by being involved with Kennecott on the
Green Mountain uranium properties.  Defendants also requested
damages (including punitive, exemplary and treble damages, interest
costs and attorney fees).   

Stipulated Arbitration.  In fiscal 1994, the plaintiffs and
defendants agreed to proceed with exclusive, binding arbitration
before a panel of three arbitrators with respect to any and all
post-December 21, 1988 disputes, claims and controversies
(including those brought in the 1991 arbitration proceedings, the
Colorado State Court proceeding (see below), and the U.S. District
Court proceeding), that any party may assert against the other. 
Each party may file or amend its claims in the arbitration
proceeding, to assert all claims it believes it has.  All pre-
December 21, 1988 claims, disputes and controversies pending before
the U.S. District Court have been stayed by stipulation between the
parties, until the arbitrators enter an order and award in the
arbitration proceeding.   

In connection with agreeing to proceed to arbitration as stated
above, the plaintiffs have affirmed the Sheep Mountain Partners
partnership, and are proceeding on common law damages and other
claims in the arbitration.  Approximately $8.6 million cash,
comprising part of the damages claimed by plaintiffs, has been
placed in escrow by agreement of the parties pending resolution of
the disputes.  Plaintiffs are claiming additional substantial
amounts of damages.   

At Prospectus date, it is expected that the arbitration evidentiary
proceedings will be completed June 2, 1995, and the award of the
arbitrators is expected within 90 days thereafter.  As in most
litigation, there is no assurance of the outcome.
     
Colorado State Court Proceeding. On September 16, 1991, plaintiffs
filed Civil Action No. 91CV7082 in Denver District Court, seeking
reimbursement of $85,000 per month from the spring of 1991 for
maintaining the SMP underground uranium mines at Crooks Gap on a
standby basis.  On behalf of SMP, CRIC filed an answer, affirmative
defenses and a counterclaim against plaintiffs.  Plaintiffs filed
a motion for summary judgment; the court denied the motion and
stayed all proceedings pending resolution of the Federal
proceeding, which in turn have been stayed through arbitration (see
"Stipulated Arbitration" above).

BGBI Litigation Parador

On July 30, 1991, Bond Gold Bullfrog, Inc. ("BGBI") filed Civil
Action No. 11877 in the District Court of the Fifth Judicial
District of Nye County, Nevada, naming USE, Crested, USECC, Parador
and H. B. Layne Contractor, Inc. ("Layne"), as defendants.  The
complaint primarily concerns extralateral rights associated with
two patented mining claims owned by Parador and initially leased to
a predecessor of BGBI.  USE and Crested assert certain interests in
the claims under an April 1991 assignment and lease with Parador,
which claims are in and adjacent to BGBI's Bullfrog open pit and
underground mine.  The Bullfrog Mine reportedly produced
approximately 220,000 ounces of gold in 1990, 199,000 ounces of
gold in 1991, and 323,800 ounces of gold in 1993.

The BGBI complaint alleges Layne owns 20 unpatented mining claims
adjacent to or in the vicinity of the subject claims, which 20
claims are allegedly under lease by Layne to BGBI. BGBI seeks a
declaratory judgment on any extralateral rights of defendants to
the various claims at the Bullfrog Mine.  Parador, USE and Crested
had previously advised BGBI that they are entitled to royalty
payments with respect to extralateral rights of the subject claims
on minerals produced at the Bullfrog Mine, claiming that the lode
or vein containing the gold mineralization apexes on the Parador
claims and dips under the Layne claims.

BGBI also seeks quiet title to its leasehold interest in the
subject claims, alleging that the lease thereof to USE and Crested
is adverse to the interest claimed by BGBI, and that the assertions
by USE and Crested of an interest in the claims have no foundation.

BGBI seeks a determination that USE and Crested have no rights in
the Claims, and an order enjoining USE and Crested from asserting
any interest in them.  BGBI further claims that in attempting to
lease an interest in the subject claims to USE and Crested, Parador
breached the provisions of its lease to BGBI, and that Parador is
responsible for the legal fees and costs incurred by BGBI in the
quiet title action which may be offset against royalties.  Under an
arrangement to pay certain legal expenses of Parador, USE and
Crested may be responsible for any such amounts.

BGBI alleges that by entering into the Assignment and Lease of
Mining Claims with Parador, USE and Crested disrupted the
contractual relationship between BGBI and Parador.  In addition,
BGBI claims that the USECC-Parador agreement slanders BGBI's title
to the Claims.  BGBI seeks compensatory damages from Parador, USE
and Crested; punitive damages from USE and Crested; and costs and
other appropriate relief from Parador, USE and Crested, all in
amounts to be determined.

USE and Crested believe that they have rightfully acquired
interests in extralateral rights concerning the subject claims, and
have filed an answer, counterclaim against BGBI and cross-claim
against Layne asserting rights to royalties and other obligations
due from BGBI.

The parties have held discovery conferences and exchanged exhibits
and scheduled depositions.  USE and Crested filed a motion for
summary judgement, which was denied. This litigation is not
anticipated to have a material adverse impact on USE, regardless of
its outcome.  If USE's position concerning extralateral rights is
sustained, substantial additional revenues and income may be
received by USE and Crested.  Trial on the issue of extralateral
rights is scheduled for July 1995.

Concerning Illinois Power

On October 29, 1993 Illinois Power Company ("IPC") filed Civil
Action No. 93-2247 in United States District Court, Central
District of Illinois, naming USE, Crested, USECC, CRIC, Nulux Nukem
Luxemburg GmbH (NULUX), Dresdner Bank, and SMP, seeking a
declaratory judgment that IPC was entitled to terminate the 1988
uranium supply contract between IPC (a utility) and USECC.  Under
this contract, IPC agreed to purchase 1 million pounds of uranium
by increments from 1990 to 2000.  Contract prices started at $20.00
per pound plus escalator provisions, and currently are
substantially over spot market prices.

Plaintiff IPC claimed authority to terminate the contract (assigned
by USECC to SMP, and thereafter assigned by SMP to Nulux and
Dresdner Bank), under contract provision permitting termination in
the event a contract party "enters into any voluntary or
involuntary receivership, bankruptcy, or insolvency proceedings."

Plaintiff IPC alleged that when USE and Crested filed (in July
1991) a motion (in United States District Court, District of
Colorado) for appointment of USE and Crested as receiver pendente
lite for SMP and the SMP assets (pending resolution of the
litigation claims among the SMP partners), such filing constituted
"receivership proceedings" under the contract with IPC, giving IPC
power to terminate the contract.  Subsequent to filing their motion
for receiver, USE and Crested asked the court to defer ruling on
the motion for receiver.

No receiver has been appointed over USE, Crested, USECC or SMP or
their assets, in the United States District Court, District of
Colorado proceedings to date. 

Plaintiff IPC had notified USE (and SMP and the other SMP
partners), that IPC will not accept the nine uranium concentrate
deliveries anticipated under the contract, from October 31, 1993
through June 1996.

Dresdner Bank was dismissed from the case in fiscal 1994.  The
remaining defendants filed Motions for Summary Judgment. 
Subsequent to hearing on May 27, 1994, the Court granted
defendants' motions to dismiss IPC's complaint, and granted summary
judgment on all of the defendants' counterclaims against IPC.  A
trial to the court on the amounts of plaintiffs' damages presently
is set for October 23, 1995.

  Market for USE Common Shares and Related Stockholder Matters

Shares of USE common stock are traded on the over-the-counter
market, and prices are reported on a "last sale" basis by the
National Market System ("NMS") of the National Association of
Securities Dealers Automated Quotation System ("NASDAQ").   The
range by quarter of high and low sales prices for USE common stock
is set forth below for fiscal 1993, 1994, and the first three
quarters of fiscal 1995.

                                         High     Low
                                         _____   _____
       Fiscal year ending May 31, 1995
       _______________________________
       First quarter ended 8/31/94       $5.13   $3.88
       Second quarter ended 11/30/94      4.75    3.50 
       Third quarter ended 2/28/95        4.63    3.38  

       Fiscal year ending May 31, 1994
       _______________________________
       First quarter ended 8/31/93       $6.25   $4.25
       Second quarter ended 11/30/93      5.00    4.12
       Third quarter ended 2/28/94        4.12    3.75
       Fourth quarter ended 5/31/94       5.13    4.12

       Fiscal year ended May 31, 1993
       _______________________________
       Fourth quarter ended 5/31/93      $5.38   $2.50
       Third quarter ended 2/28/93        3.63    2.25
       Second quarter ended 11/30/92      3.75    2.63
       First quarter ended 8/31/92        4.25    2.88

At April 3, 1995, there were 837 stockholders of record for USE
common stock.
   
USE has never paid cash dividends on any class of stock.  There are
no contractual restrictions on USE's present or future ability to
pay cash dividends, however, USE intends to retain any earnings in
the near future for operations. 

            USE Management's Discussion and Analysis
        of Financial Condition and Results of Operations

The following is managements's discussion and analysis of those
significant factors which have affected USE's liquidity, capital
resources and results of operations during the periods covered in
the USE Consolidated Financial Statements included with this
Prospectus.                                

Liquidity and Capital Resources at February 28, 1995 (unaudited)

Working capital declined during the nine months ended February 28,
1995 by $2,170,900 to working capital of $404,000.  Cash and cash
equivalents decreased by $401,000 during the period ended February
28, 1995.  This decrease was primarily as a result of operating and
investing activities. 

USE utilized $268,400 in its investing activities during the nine
months ended February 28, 1995.  This was primarily as a result of
USE and its subsidiary Crested Corp. ("Crested") funding Sheep
Mountain Partners ("SMP"), Plateau Resources Limited ("Plateau"),
Energx, Ltd. ("Energx") and the Sutter Gold Mining Company
("SGMC").  As USE and Crested provide various services for GMMV and
SMP, the non-affiliated participants are invoiced for their
proportionate share of the approved operating costs.  GMMV is
current on its reimbursements to USE and Crested for all the
operating costs.  Due to disputes existing between the SMP
partners, USE and Crested have not been reimbursed for care and
maintenance costs expended on the SMP mineral properties since the
spring of 1991.

The other significant changes in current assets occurring during
the most recently completed period, were a decrease in accounts
receivable of $131,200 and an increase in inventory of $61,800. 
Inventories increased as a result of USE's subsidiary Brunton
expanding its optics product line. 

Other changes in working capital were increases in accounts payable
and accrued expenses of $672,100 and current portion of long term
debt of $1,128,400.  The increase in current portion of long term
debt is primarily due to the draw down by USE and Crested of a line
of credit with a bank.  The line of credit is for $1,000,000 and as
of February 28, 1995 USE and Crested had utilized $960,000 of the
credit facility leaving $40,000 available for operations.

The primary requirements for USE's working capital continue to be
the funding of on-going administrative expenses, including legal
costs incurred as a result of the SMP litigation and arbitration
with Nukem/CRIC; the mine and mill development and holding costs of
SGMC; holding costs of Plateau; development of gas properties of
Energx; uranium (U3O8) delivery costs, and property holding costs
of SMP.  As a result of the disputes between the SMP partners, USE
and Crested have been delivering certain of their respective
portions of the U3O8 concentrates required to fill various delivery
requirements on long-term U3O8 contracts with domestic utilities. 
Currently, Nukem/CRIC are making the SMP deliveries of U3O8.  It is
not known how long this arrangement will continue.  The capital
requirements to fill USE's and Crested's portion of the remaining
commitments in fiscal 1995 will depend on the spot market price of
uranium and is also dependent on the outcome of proceedings
involving Nukem/CRIC.

The primary source of USE's capital resources for the remainder of
fiscal 1995, will be (i) cash on hand; (ii) sale of an interest or
100% in mining and investment properties, (iii) sale of equipment;
(iv) private placement of USE's common stock; (v) settlement of
litigation; (vi) sale of royalties on mineral properties; (vii)
proceeds from the sale of uranium under the SMP contracts; (viii)
and borrowings from financial institutions.  Fees from oil
production, rentals of various real estate holdings and equipment,
aircraft chartering and the sale of aviation fuel will also provide
cash.  Additional working capital to that on hand at February 28,
1995 will be required to hold and maintain existing mineral
properties, permitting, the construction of a mill, and mine
development of SGMC, funding of litigation against Nukem/CRIC and
the development of Plateau associated properties and administration
costs.  USE and Crested are currently seeking a joint venture
partner and/or other means of financing the construction of the
SGMC mill and mine development.  

The funding of SMP care and maintenance costs may require
additional funding, depending on the outcome of the SMP
arbitration.  USE and Crested sought rescission of the SMP
Partnership Agreement as well as damages from Nukem/CRIC in U.S.
District Court.  The parties to the litigation agreed to a
consensual binding arbitration on claims accruing after the
formation of the SMP partnership.  In the opinion of management,
the arbitration proceedings are progressing favorably for USE and
Crested, however, it is premature at this time to predict the
outcome. It is currently anticipated that the arbitration hearings
will be concluded by June 2, 1995.  It is further anticipated that
the Arbitration Panel will enter its award  some time during August
or September 1995 depending on the Panel's availability.

During the quarter ended February 28, 1995, USE began selling
shares of its common stock through a private placement to
individual investors.  As of February 28, 1995 a total of 289,396
shares had been sold for a total of $868,188.  The balance of the
private placement was completed during March 1995.  The total
number of shares sold was 400,000 at $3.00 per share for total
proceeds of $1,200,000.  No commissions were paid.  USE has agreed
to either buy the stock back on October 15, 1995 or issue an
additional share for every three shares purchase or a total of
133,333 additional shares.  USE has further agreed to register all
the shares issued in the private placement by February 28, 1996.

USE is currently negotiating an additional private placement in
Canada of 1,000,000 shares of its common stock at market.  If this
private placement is completed, these monies will be used to
develop the Plateau properties.

Results of Operations

Nine Months Ended February 28, 1995 Compared to Nine Months Ended 
February 28, 1995 (unaudited)

Revenues for the period ended February 28, 1995 remained consistent
with the same period of the previous year; however the components
changed somewhat.

Commercial revenues increased by $3,377,300 primarily as a result
of the consolidation of sales from Brunton.  These revenues were
consolidated for the nine months ended February 28, 1995 due to the
acquisition of Brunton in May 1994.  Brunton revenues were not
consolidated during the same period of the prior year.

Revenues from mineral sales and mineral property transactions
decreased by $2,893,700 and $505,900, respectively, as a result of
USE reporting revenues from the deliveries of U3O8 to fill various
SMP contracts with domestic utilities and the final amortization of
the indebtedness to AMAX of $500,000 during the period ended August
31, 1993.  There were no similar U3O8 deliveries or amortization
activities in the current year.  The debt to AMAX was fully
amortized as of August 31, 1993.  

Construction operation revenues for the nine months ended February
28, 1995 decreased by $1,085,100 from the same period last year due
to decreased contract work performed by USE's subsidiary Four Nines
Gold, Inc. ("FNG").  

The costs and expenses associated with mineral operations decreased
primarily due to no U3O8 sales in fiscal 1995.  This decrease was
partially offset by an increase in legal costs in connection with
the SMP arbitration.  The commercial operations, and general and
administrative expenses increased primarily due to the Brunton
consolidation.

On June 1, 1993, USE implemented SFAS No. 109.  See Footnote 4 to
the unaudited USE Consolidated Financial Statements.  The
cumulative effect for the period ended February 28, 1994, of this
tax accounting change was a decrease of net income of $267,000.  No
charge for a change in tax accounting was made for the nine months
ended February 28, 1995.

Operations for the nine months ended February 28, 1995 resulted in
a net loss $1,315,800 as compared to a loss of $2,019,300 during
the same period of the previous year.

Liquidity and Capital Resources at May 31, 1994

Working Capital Components.  Net cash used in operating activities
and financing activities were $3,808,400 and $285,900, respectively
for fiscal 1994.  Cash provided by investing activities was
$4,796,400.  For the year, these activities resulted in a net
increase of $702,100 in cash.              

Working capital increased during the fiscal year ended May 31, 1994
by $2,516,700 to $2,574,900 (from $58,200 at May 31, 1993).  The
principal components of the increase were a $702,100 increase in
cash and cash equivalents, an increase of $1,344,200 in inventory
which is primarily as a result of the acquisition of Brunton, and
$251,600 of trade receivables.  The increase in cash resulted from
the acquisition and consolidation of Plateau through a stock
purchase agreement and the acquisition of Brunton (see Note F to
the USE Consolidated Financial Statements).  The trade receivable
increased primarily as a result of the acquisition of Brunton.  At
the time of the acquisition of Plateau, USE received $14,200,000 in
cash and the Shootaring Mill facilities for the assumption of
certain liabilities as described further in Note F to the
consolidated financial statements.  $7,300,000 of these funds were
deposited in trust accounts for the future settlement of an
estimated $2,500,000 reclamation liability relative to the Plateau
assets and $4,800,000 for the resolution of any other environmental
claims associated with the Shootaring Mill owned by Plateau.  The
remaining $6,900,000 of cash received from Plateau, together with
$293,500 of cash received when the remaining interest in Brunton
was acquired in May, 1994, gave USE $7,193,500 of cash from
investing activities that was used primarily to fund expenditures
made during 1994.

Cash was primarily used in operations and financing activities
during the period.  Cash was used in the development of mining
properties, primarily SGV's Lincoln gold project, in the amount of
$796,300, development of the Energx gas properties, $207,900,
purchases and modification of property and equipment, $855,800 and
the continued investment in affiliates, $760,500.  These activities
resulted in a net cash flow from investing activities of
$4,796,400.

Due to disputes among the SMP partners, USE and Crested have not
been reimbursed for care and maintenance costs for the SMP
properties since the spring of 1991.  Such costs, including the
running of a decline to reduce pumping and production costs, were
approximately $1,400,000 in fiscal 1994.

Capital Requirements - General:  The primary requirements for USE's
working capital during fiscal 1995 are expected to be the costs
associated with development activities of SGV, care and maintenance
costs of SMP, care and maintenance of the Plateau properties,
payments of holding fees for all mining claims, purchase of uranium
for delivery to utility customers of SMP, drilling and overhead
expenses of ENERGX, and corporate general and administrative
expenses, including costs associated with continuing litigation and
arbitration. 

Capital Requirements - SGV:  SGV's properties contain reserves of
gold.  A portion of those properties has been the subject of a
preliminary feasibility study for the development of the
underground Lincoln Mine.  The study estimated that for a 500 ton
per day ("tpd") mine/mill operation using a cyanide-flotation
process, up to $18,000,000 may be needed for mine site development,
mill and tailings construction, permitting and the like, to place
the proposed mine into full operation.  However, more recent
studies indicate a gravity milling process will produce
satisfactory gold recovery rates.  Thus, USE and Crested anticipate
building the gravity process system initially, estimated to cost
less than $3,000,000.  USE and Crested have already purchased a
used semiautogeneous grinding mill and other equipment for the
front end of the facility.

Although pre-production mine development and underground
exploration is substantially complete, capital resources in
addition to those currently held on hand, will be needed to
complete mine development and construct a mill facility.  The
timing of these expenditures will depend upon internal cash flows
or additional financing.

Capital Requirements - SMP:  SMP's activities continue to consist
of negotiation of uranium sales agreements, purchases and
borrowings of uranium to fill contracts, and maintenance of the
Crooks Gap mines in a standby mode.  There are no current plans to
mine the SMP Crooks Gap properties during fiscal 1995, however, USE
and Crested will continue to preserve the ore body and develop
concepts to reduce care and maintenance costs, including driving a
decline to reduce pumping costs (which also would reduce future
mining costs by reducing hoisting costs).  Although funds are
available in SMP's bank account, these funds are restricted and
since early 1991 SMP has not paid USE and Crested the operating
costs and fees associated with their services as operating manager
of the Crooks Gap properties; such accumulated costs and fees were
$3,643,100 at May 31, 1994. 

Notwithstanding disputes between the SMP partners, USE and Crested
have delivered an agreed-upon portion of the uranium concentrates
required to fill contract delivery requirements on certain long-
term U3O8 contracts since July 1, 1991.  Working capital was
required for the purchase of these pounds on a short-term basis,
until resold under delivery contracts.  However, there is no
assurance this protocol with NUKEM/CRIC will be in place for 1995
and thereafter.  If the SMP partners are unable to agree on how to
separately effect contract performance for the various SMP
customers, resulting delivery delays and/or incomplete deliveries
could adversely affect the contracts, and therefore USE.

Capital Requirements - GMMV:  Operations of GMMV are not requiring
USE's capital resources, as the initial $50,000,000 of expenses on
the GMMV properties is being paid by Kennecott.  USE and Crested
continue to project the proposed Jackpot Mine can be put into
production for less than $25,000,000.  However, depending on
results of exploration and development projects on the properties,
additional expenditures may be required.  GMMV expenditures for
fiscal 1995 will depend on whether one or both declines for the
proposed mine are started.  A decision by the management committee
of GMMV regarding the declines will be made after all necessary
permits are acquired.  Nonetheless, GMMV should not require any
funding from USE during fiscal 1995.

Capital Requirements - Plateau:During fiscal 1994 the annual care
and maintenance costs for the Shootaring Mill were $1,098,000.  It
is anticipated that these costs will continue until the mill is
either placed into production or decommissioned unless USE is able
to sell or Joint Venture a portion of the Plateau assets.

Capital Requirements - ENERGX:  Another requirement of USE's and
Crested's working capital is the continued funding of ENERGX
overhead expenses and drilling operations.  Subsequent to May 31,
1994, ENERGX entered into an agreement with a Canadian firm, NuGas,
to drill shallow gas wells on the Fort Peck indian reservation in
Montana.  NuGas as a condition of its earn-in to the properties is
required to fund the drilling of the first eight wells.  After the
first eight wells, Energx will be required to fund its share of all
future drilling.  It is currently anticipated that if the first
eight wells are not profitable, there will be no additional wells
drilled.  Therefore capital expenditures for Energx by USE are not
anticipated to be significant in fiscal 1995.

Long-Term Debt and Other Obligations: In connection with the
transfer of properties to AMAX in 1980, AMAX made long-term loans
to USE and Crested of $7,500,000 each.  AMAX later agreed to credit
each of USE and Crested $250,000 per quarter against principal, in
lieu of advance royalties due USE and Crested.  

Indebtedness to AMAX is now fully retired (the final $500,000 was
amortized by AMAX without the use of cash during the quarter ended
August 31, 1993, in accordance with previously negotiated
arrangements); this final $500,000 installment was recognized as
revenue from mineral property transactions, as have been previous
such installments.  These revenues from debt amortization did not
generate cash.

Long-term debt at May 31, 1994 was $1,678,600, the current portion
of which is $569,500 (see Note G to the audited USE Consolidated
Financial Statements), not including $600,000 of draw downs as of 
September 1, 1994 on the new credit line discussed below).

Reclamation Costs.  Prior to fiscal 1994, USE and Crested assumed
the reclamation obligations, environmental liabilities and
contingent liabilities for employee injuries, from mining the
Crooks Gap and other properties in the Sheep and Green Mountain
Mining Districts.  The reclamation obligations, which are
established by governmental regulators, were most recently set at
$1,451,800, which amount is shown on USE's balance sheet as a long-
term obligation.

To assure the reclamation work will be performed, regulatory
agencies require posting of a bond or other security.  USE and
Crested satisfied this requirement with respect to SMP properties
by mortgaging their executive office building and a trailer park in
Riverton, Wyoming.  A portion of the funds for the reclamation of
SMP's properties was to have been provided by SMP, which agreed to
pay up to $.50 per pound of uranium produced from its properties to
USE and Crested for reclamation work.  The status of this
commitment could be impacted by the ultimate settlement of the
litigation with SMP.

Reclamation obligations on the contiguous Big Eagle properties and
the Sweetwater Mill, estimated at approximately $23,600,000, have
been assumed by the GMMV venturers, and secured by a bank letter of
credit provided by Kennecott.  The reclamation and environmental
costs associated with the Sweetwater Mill will not commence prior
to conclusion of mining activities on Green Mountain.  As uranium
is processed through the Mill, a reclamation reserve will be funded
on a per unit of production basis.  Up to $8,000,000 (in 1990
dollars) in any reclamation costs which may be incurred prior to
commencement of production or 2001 will be paid for by UNOCAL.

Reclamation obligations of Plateau are covered by a $2,500,000 cash
bond to the U.S. Nuclear Regulatory Commission and a $4,800,000
cash deposit for the resolution of any environmental or nuclear
claims.  

Reclamation work on any of the above properties need not be fully
completed until a decision is made to abandon the properties, or as
otherwise required by regulatory agencies.  Reclamation and
environmental costs associated with any of these properties are not
expected to require USE funding in fiscal 1995, because such costs
are not anticipated to be incurred for many years.  

See Note K to the audited USE consolidated financial statements
regarding reclamation and environmental costs, and the funding
thereof.

Capital Resources:  The primary source of USE capital resources for
fiscal 1995 will be cash on hand, proceeds from sale of uranium
under SMP contracts, sale of certain marketable securities and
miscellaneous non-core assets, and proceeds from financing
activities.  Fees from oil production (Ft. Peck Lustre Field,
Montana), rentals of real estate holdings and equipment, aircraft
chartering and aviation fuel sales, also will provide cash. 

Additional sources of capital will be needed to develop and build
the mine and mill complex for the Lincoln Project, for which
capital costs Sutter Gold Mining Company presently is seeking
financing by joint venture partner or public offering of equity. 
If such financing cannot be obtained, USE and Crested will be
forced to either sell the Lincoln Project or continue funding
Sutter Gold's property holding costs.  Continued funding of such
costs could cause USE and Crested to incur short term working
capital needs.  At Prospectus date, no arrangements for funding
needed for the project are under contract or agreement in
principle.

To fund the ENERGX drilling on the Fort Peck Reservation as well as
other locations, USE will seek a joint venture partner or obtain
financing through banking institutions or the public market.  At
Prospectus date, no arrangements for such financing are under
contract or agreement in principle. 

Funding of SMP care and maintenance costs may require additional
funding, depending on the outcome of the SMP litigation.  See
"Business-Legal Proceedings."  Although management is of the
opinion that the SMP litigation will be resolved in favor of USE
and Crested, which will result in funds being available to repay
USE and Crested for advances to SMP, this outcome is not assured. 
In any event, further delays (at least to the end of fiscal 1995)
in resolution of the litigation are expected, and may cause short
term liquidity needs.      

USE believes available working capital, operating revenues and
anticipated financing operations will continue to be adequate to
fund working capital requirements.  However, with the exceptions of
GMMV and Plateau, USE will require additional sources of funding to
continue to develop and invest in its various mineral ventures.

As of the end of fiscal 1994, USE had negotiated a $1,000,000
commercial bank credit line, $300,000 of which was available for
uranium spot market purchases and $100,000 was available for short
term working capital.  USE continues to implement a program to
reduce costs generally.

Although USE currently is not in production on any mineral
properties, development work continues on several of its major
investments.  USE is not using hazardous substances and known
pollutants to any great degree in these activities.  Consequently,
recurring costs for managing hazardous substances, and capital
expenditures for monitoring hazardous substances or pollutants,
have not been significant.  Likewise, USE does not have properties
which require current remediation.  USE is not aware of any claims
for personal injury or property damages that need to be accrued or
funded.

USE has received a notification of tax deficiency from the Internal
Revenue Service for fiscal years ended May 31, 1989, 1990 and 1991.

USE has filed a response to the proposed deficiency, and has
requested an administrative appeal of the initial examiner's
deficiency finding.  To Prospectus date, USE has received a
preliminary indication that a major portion of the findings has
been resolved in favor of USE.  No written confirmation has been
received as of the date of filing.  USE is confident the matters
will be resolved favorably at the administrative appeals level. 
Until such time, if ever, as the deficiency claim goes to Tax Court
after exhaustion of administrative hearings, management is of the
opinion that this dispute is not a legal proceedings matter.

Results of Operations

Fiscal 1994 Compared Fiscal 1993

Overall, while revenues declined only slightly (by $269,200) in
fiscal 1994 to $8,776,300 (compared to $9,045,500 for the prior
year), costs and expenses increased substantially (by $3,215,600)
in fiscal 1994 to $12,364,200 (compared to $9,148,600 for 1993). 
Although operating losses were recorded for some activities, as
discussed below, two items contributed significantly to the overall
operating loss of $3,370,800 for the year.  First, general and
administrative expense increased by $741,500 to $2,696,800
(compared to $1,955,300), reflecting the one-time legal and
accounting expenses of acquiring Brunton (which closed at the end
of fiscal 1994), increased general and administrative expenses
associated with Sutter Gold, general and administrative expenses
associated with Plateau, and the write down of a note receivable to
market prior to its assumption by Crested.  Second, costs
associated with mineral operations, which are producing no
revenues, increased by $469,100 to $1,129,000 (compared to $659,900
for the prior year).  This increase is due primarily to the
litigation over the SMP and Parador disputes and increased
maintenance cost of heavy mining equipment due to underground
development work on the SMP properties.   

Mineral sales revenues increased primarily as a result of the sale
and delivery during the year of U3O8 in accordance with SMP utility
supply contracts, however an operating loss of $665,100 for the
year was recognized due to contracted price being lower than the
price at which USE could acquire the U3O8 and increased maintenance
costs on properties and equipment.  Construction contract revenues
increased by $579,900 (to $2,606,400 compared to $2,026,500 for
fiscal 1993), due to increased contract work by USE's subsidiary
Four Nines Gold, Inc. ("FNG"), resulting to an operating profit of
$317,500 for construction contract activities for the year.  

Interest income increased by $250,500 to $328,700 (compared to
$78,200 for fiscal 1993) because of higher cash balances from the
Plateau acquisition early in the year.

During the quarter ended August 31, 1993, USE implemented Statement
of Financial Accounting Standard No. 109 ("Accounting for Income
Taxes", hereafter "SFAS 109").  The cumulative effect of this tax
accounting change is a $267,000 decrease in net income for fiscal
1994.

Oil sales revenues (recorded for services provided by USE as
operator of the Ft. Peck Lustre Field) dropped by $102,600 to
$183,700 (compared to $286,300 in fiscal 1993) due to lower
production rates and lower prices for the first two quarters of
fiscal 1994.  Separately, but related to oil and gas activities,
certain start-up operations in coalbed methane gas contributed
$157,800 to 1994 costs and expenses.  

Results of Operations

Fiscal 1993 Compared to Fiscal 1992

During fiscal 1993, USE recorded $2,690,800 in revenues from the
sale of U3O8,which revenue was recognized as a result of the
dispute
between the SMP partners, which has resulted in USE and Crested
making their share of various deliveries under long-term supply
contracts, compared to $123,300 recognized from uranium sales in
fiscal 1992, due to higher delivery volumes in 1993.  A dispute
arose between SMP and a utility during 1993 regarding the price
calculation for delivery under a market related contract.  USE and
Crested elected to not make their portion of the delivery. 
CRIC/Nukem indemnified the utility and delivered their portion as
well as USE's and Crested's portion.  This matter may be resolved
as part of the on-going litigation and now arbitration with
Nukem/CRIC.

USE recognized $2,026,500 of construction revenues during fiscal
1993 as compared to construction revenues of $2,895,000 during
fiscal 1992, due to FNG not being successful in bidding as many
jobs during fiscal 1993.  

Revenues from gold sales of $498,300 were recognized during 1992,
being gold processed from a bulk sample at SGV.  There were no gold
sales during 1993.  During fiscal 1993, USE recorded revenues from
the sale of various pieces of equipment and securities (SRRI stock)
of $326,000 and $408,600, respectively.  No revenues from these
activities were recognized in fiscal 1992.

Revenues from the restructuring of mineral property agreements and
oil sales increased by $1,049,900 and $152,200.  This increase is
not due to increased activity, but as a result of the consolidation
of operations of Crested in 1993.  Operations of Crested were not
consolidated with USE in 1992, as the increase in ownership did not
occur until late May 1992.  

Management fee revenues decreased by $398,900 to $228,900 for
fiscal 1993, as a result of (i) a portion of the management fees
and other charges to SGV being reduced due to increased ownership
by USE, and (ii) reduced activities by USE and Crested at GMMV.

During fiscal 1993, interest revenues decreased by $123,800 as a
result of smaller amounts of cash being invested in interest
bearing accounts and reduced interest rates.

Oil production expenses increased by $46,100 as a result of
maintenance required on various equipment on the Ft. Peck Lustre
Field in Montana being operated by USE.  Oil prices for this
production averaged approximately $21.00 per barrel in both 1993
and 1992.  As no exploration is conducted in this field, and USE is
compensated for services with the rate based on share of net
production income, commodity price swings (if any) only would
affect the amount of income received during the year.  Year to year
changes in income from oil activities is not considered material to
USE operations.  

Cost of mineral sales were $2,617,600 for uranium sales to supply
SMP contracts.  For fiscal 1993, the average cost per pound for
uranium delivered was approximately $8.80, compared to
approximately $8.92 per pound in fiscal 1992.  During fiscal 1993,
the NUEXCO uranium spot price per pound ranged from $8.75 early in
the period, up to $10.50 mid-period, then back to $10.00 at the end
of the period.  The increases were largely due to import
restrictions levelled against the CIS (see "Business-Certain Market
Information-Uranium NUEXCO Exchange Value).  These commodity prices
favorably impacted uranium margins for fiscal 1993, as prices paid
by buyers under market-related utility contracts increased
according to contract terms, which enabled USE to purchase at or
below spot and supply at a profit.  

The decrease in construction costs of $880,500 is as a result of
the reduced amount of work performed by FNG during fiscal 1993.

During fiscal 1993, USE recorded an expense of $378,700 as a result
of the abandonment of certain mining claims.  This is an increase
in mining claim abandonment of $203,300 over the prior year.  It is
not anticipated that this is a recurring expense.

Mineral operations, commercial operations and general and
administrative expenses increased by $344,800, $847,600 and
$1,034,300, respectively.  These increases are primarily as a
result of the consolidation of operations from Crested into the USE
Consolidated Financial Statements during the year ended May 31,
1993.  Crested's operations were not consolidated during the year
ended May 31, 1992.  All operations for USE and Crested are
recorded on the books of USECC Joint Venture.  The increase in
these expenses of mineral operations, commercial operations and
general and administrative expense, do not reflect any increase in
activity or a material change in operations, but rather the
accounting treatment of the acquisition of additional equity in
Crested by USE in fiscal 1993.

Operations for fiscal 1993 resulted in a loss before provision for
income taxes and extraordinary item of $103,100.  Equity in loss of
affiliates of $444,700, along with minority interest in losses of
consolidated subsidiaries of $325,900, resulted in a loss of
$221,900.

Effects of Changes in Prices

Mining operations and the acquisition, development and disposition
of mineral properties are significantly affected by changes in
commodity prices.  As prices for a particular mineral increase,
prices for prospects for that mineral also increase, making
acquisitions of such properties costly, and dispositions
advantageous.  Conversely, a price decline facilitates acquisitions
of properties for that mineral, but makes sales of such properties
more difficult.  Operational impacts of changes in mineral
commodity prices are common in the mining industry.

Uranium and Gold.  Changes in the prices of uranium and gold affect
USE to the greatest extent.  When uranium prices were relatively
high in fiscal 1988, USE and Crested acquired the Crooks Gap
properties, and thereafter put the properties into production. 
When uranium prices fell sharply during fiscal 1989-1991, USECC
suspended mining operations for SMP, because uranium could be
purchased at prices less than the costs of producing uranium. 
Uranium production in the United States reportedly fell by 25
percent to 33 percent in 1990, due to the lowest prices for uranium
since the market developed in the 1960s.  However, these low prices
created opportunities for acquiring the Sweetwater Mill and the
Shootaring Canyon Mill.

Changes in uranium prices directly affect the profitability of
SMP's uranium supply agreements with utilities.  Certain of those
agreements become advantageous to USE when the spot market price
for uranium falls significantly below the price which a utility has
agreed to pay.  Some of the supply agreements of SMP were acquired
before the fall of spot market prices during fiscal 1989-1991. 
Those fixed-price contracts, which have contract prices exceeding
current spot market rates, are currently advantageous to USE, as
the uranium to fill them can be readily obtained at favorable
prices.  Although such contracts benefit SMP and USE in a falling
market, a corresponding adverse impact would not be anticipated in
the event of substantially increased prices.  SMP would produce
uranium from its Crooks Gap properties to fill those contracts, in
the event of a prolonged increase in the spot market price above
the contract prices.

For information on the particular impacts changing uranium spot
prices may have had on operations, see the period to period
discussions of Results of Operations, above.

USE believes SGV's Lincoln Mine will be profitable with gold prices
over $290 per ounce.  Recent price improvements for gold (from
approximately $340 per ounce in fiscal 1993 to approximately $390
per ounce at April 3, 1995) would positively impact operating
margins at the Lincoln Mine, if such prices are sustained, when,
and if, the mine becomes operational.

Molybdenum and Oil.  Changes in oil prices are not expected to
materially affect USE with respect to either its oil production
fees.  However, a significant increase in the price of molybdenum
would increase the likelihood that the Mt. Emmons properties will
be developed by AMAX, and in the interim would increase income from
advance molybdenum royalties.

                Directors and Executive Officers

The directors of USE are divided into three classes of two persons
each.  Directors are elected until the third succeeding annual
meeting and until their successors have been duly elected or
appointed and qualified or until death, resignation or removal.  

 Name, age and               Positions         Director         
  designation                with USE            since
_____________________   ___________________    ________

John L. Larsen (63)      Chairman, CEO and        1966            
                         President (c)(d)(e)              

Max T. Evans (70)        Secretary                1978
                         (a)(c)(e)

Harold F. Herron (41)    Vice President           1989
                         (b)(c)(e)

David W. Brenman (38)    (b)(d)                   1989

Don C. Anderson (67)     Geologist (c)            1990

Nick Bebout (43)         (a)(b)(d)                1989

(a)  Member of the nominating committee.
(b)  Member of the compensation/stock option committee.
(c)  Member of the executive committee.
(d)  Member of the audit committee.
(e)  ESOP trustee.

Executive officers are elected by the Board at annual directors'
meetings, which follow each Annual Shareholders' Meeting, to serve
until the officer's successor has been duly elected and qualified,
or until death, resignation or removal by the Board.

Robert Scott Lorimer, 44, has been the Controller and Chief
Financial Officer for both USE and Crested for more than the past
five years.  Mr. Lorimer has also been the Chief Financial Officer
for both of those companies, since May 25, 1991, and their
Treasurer since December 14, 1990.  There are no understandings
between Mr. Lorimer and any other person, pursuant to which he was
named as an officer, and he has no family relationship with any of
the other executive officers or directors of USE or Crested.     

Daniel P. Svilar, 66, has been general counsel for both USE and
Crested for more than the past five years.  He has also served as
Secretary and a director of Crested and Assistant Secretary for
USE.  He serves at the will of the USE and Crested Boards of
Directors.  There are no understandings between Mr. Svilar and any
other person pursuant to which he was named as an officer.  He has
no family relationships with any of the other executive officers or
directors of the USE or Crested, except Nick Bebout, a director of
USE and Mr. Svilar's nephew.  

Family Relationships.

Harold F. Herron, a director and vice-president, is the son-in-law
of John L. Larsen, a principal shareholder, director and Chief
Executive Officer of USE.  Nick Bebout, a director, is a nephew of
Daniel P. Svilar, a principal shareholder and USE general counsel. 
There are no other family relationships among the executive
officers or directors of USE.

Business Experience and Other Directorships

John L. Larsen has been an officer and director of USE since 1966. 
He is a director of USE subsidiary Ruby Mining Company, and an
officer and director of Crested Corp.  Crested and Ruby have
registered classes of equity securities under the Exchange Act. 
Mr. Larsen is an officer and director of Plateau Resources Limited,
a private Utah corporation and wholly-owned USE subsidiary.

Max T. Evans has been principally employed as an officer and chief
geologist of USE and Crested for more than the past five years.  He
is a director of Crested.  Mr. Evans received B.S. and M.S. degrees
in geology from Brigham Young University.  Mr. Evans is an officer
and director of Plateau Resources Limited.

Harold F. Herron has been a director of USE, and its Vice-President
since 1989.  Since 1976, Mr. Herron has been an employee of
Brunton, and since 1987 he has been its president.  Mr. Herron is
a director of Ruby and NWG, which have registered equity securities
under the Exchange Act.  Mr. Herron received an M.B.A. degree from
the University of Wyoming after receiving a B.S. degree in Business
Administration from the University of Nebraska at Omaha.  Mr.
Herron is an officer and director of Plateau Resources Limited.

David W. Brenman has been a director of USE since January 1989. 
Since September 1988, Mr. Brenman has been a self-employed
financial consultant.  In that capacity, Mr. Brenman has assisted
USE and Crested in negotiating certain financing arrangements. 
From February 1987 through September 1988, Mr. Brenman was a vice-
president of project financing for Lloyd's International Corp., a
wholly-owned subsidiary of Lloyd's Bank, PLC.  From October 1984
through February 1987, Mr. Brenman was president, and continues to
be a director of Cogenco International, Inc., a company engaged in
the electric cogeneration industry, which has a class of equity
securities registered under the Exchange Act.  Mr. Brenman has an
L.L.M. degree in taxation from New York University and a J.D.
degree from the University of Denver.

Don C. Anderson has been a geologist for USE since January 1990 and
a member of its Board since May 1990.  Mr. Anderson was Manager of
Exploration and Development for Pathfinder Mines Corporation, a
major domestic uranium mining and milling corporation, from 1976
until retirement in 1988.  Previously, he was Mine Manager for
Pathfinder's predecessor, Utah International, Inc., from 1965 to
1976.  He received a B. S. degree in geology from Brigham Young
University.

Nick Bebout has been a director of USE since 1989.  He is a
director and president of NUCOR, Inc., a private corporation
providing exploration and development drilling services to the
mineral and oil and gas industries.  Mr. Bebout is also president
and a director of S.W. Financial Corp. ("SWF"), a corporation which
is evaluating potential acquisitions or business combinations with
other entities, but has no other current operations.  SWF is
currently subject to certain periodic reporting requirements under
Section 15(d) of the Exchange Act.  
                                
Executive Compensation
                                
Under a Management Agreement dated August 1, 1981, the Company and
Crested share certain general and administrative expenses,
including compensation of the officers and directors of the
companies (but excluding directors' fees) which have been paid
through the USECC Joint Venture ("USECC").  Substantially all the
work efforts of the officers of the Company and Crested are devoted
to the business of both the Company and Crested.  

All USECC personnel are Company employees, in order to utilize the
Company's ESOP as an employee benefit mechanism.  The Company
charges USECC for the direct and indirect costs of its employees
for time spent on USECC matters, and USECC charges one-half of that
amount to each of Crested and the Company.

The following table sets forth the compensation paid to the USE
Chief Executive Officer, and those of the four most highly
compensated USE executive officers who were paid more than $100,000
cash in any of the three fiscal years ended May 31, 1994.  The
table includes compensation paid such persons by Crested and
Brunton for such persons' services to such subsidiaries.
SUMMARY COMPENSATION TABLE

                                                              Long Term Compensation
                                                           ____________________________
                             Annual Compensation              Awards    Payouts
                           ____________________________________________________________
(a)                (b)       (c)        (d)     (e)       (f)         (g)         (h)       (i)
                                               Other
Name                                           Annual   Restricted                       All Other
and                                            Compen-    Stock                   LTIP    Compen-
Principal                  Salary      Bonus   sation    Award(s)    Options/   Payouts   sation
Position           Year      ($)        ($)      ($)       ($)         (#)        ($)     ($)(4)
__________________________________________________________________________________________________
John L. Larsen      1994  $148,239   $  7,028     --     $9,600(1)      -0-         --     $14,394
  CEO,              1993   164,968      4,016     --      7,200(1)    100,000(2)    --      15,026
  President         1992   144,024    406,357     --        --        100,100(3)    --      22,844

Daniel P. Svilar    1994   112,753     64,984     --      8,640(1)      -0-         --      17,300
  Asst. Secretary   1993   108,000      2,991     --      6,480(1)      -0-         --      11,100
                    1992   108,000      5,088     --        --         66,000(3)    --      11,309

Harold F. Herron    1994   105,983     18,268     --        --          -0-         --       9,743
    Vice President  1993    99,469     12,617     --        --          -0-         --       4,824
                    1992    87,609      3,155     --        --         11,000(3)    --       4,481

R. Scott Lorimer    1994    92,799     43,461     --      6,181(1)      -0-         --      13,260
  Treasurer         1993    78,921      2,196     --      4,548(1)      -0-         --       8,111
                    1992    77,192      3,652     --        --         29,700(3)    --       8,084

____________

(1)  Bonus shares equal to 20% of original bonus shares issued FY
1990, multiplied by $4.00 in 1994 and $3.00 in 1993, the closing
bid price on issue dates.  These shares are subject to forfeiture
on termination of employment, except retirement, death or
disability.

(2)  10-year non-qualified option at $2.00 per share.

(3)  10-year non-qualified option at $2.90 per share.

(4)  Dollar values for ESOP contributions and 401K matching
contributions.
Executive Compensation Plans and Employment Agreements

To provide incentive to Mr. Larsen for his efforts in having GMMV
develop a producing mine as soon as possible, in fiscal 1993 the
USE Board adopted a long-term incentive arrangement under which Mr.
Larsen is to be paid a non-recurring $1,000,000 cash bonus,
provided that the Nuexco Exchange Value of uranium oxide
concentrates has been maintained at $25.00 per pound for six
consecutive months, and provided further that USE has received
cumulative cash distributions of at least $10,000,000 from GMMV as
a producing property.  It is not expected that this cash bonus will
become payable in fiscal 1995.  

The Company has adopted a plan to pay the estates of Messrs.
Larsen, Evans and Svilar amounts equivalent to the salaries they
are receiving at the time of their death, for a period of one year
after death, and reduced amounts for up to five years thereafter. 
The amounts to be paid in such subsequent years have not yet been
established, but would be established by the Boards of the Company
and Crested.

Mr. Svilar has an employment agreement with the Company and
Crested, which provides for an annual salary in excess of $100,000,
with the condition that Mr. Svilar pay an unspecified amount of
expenses incurred by him on behalf of the Company and its
affiliates.  In the event Mr. Svilar's employment is involuntarily
terminated, he is to receive an amount equal to the salary he was
being paid at termination, for a two year period.  If he should
voluntarily terminate his employment, the Company and Crested will
pay him that salary for nine months thereafter.  The foregoing is
in addition to Mr. Svilar's Executive Severance and Non-Compete
Agreement with the Company (see below).

In fiscal 1992, the Company signed Executive Severance and Non-
Compete Agreements with Messrs. Larsen, Evans, Svilar and Lorimer,
providing for payment to such person upon termination of his
employment with the Company, occurring within three years after a
change in control of the Company, of an amount equal to (i)
severance pay in an amount equal to three times the average annual
compensation over the prior five taxable years ending before change
in control, (ii) legal fees and expenses incurred by such persons
as result of termination, and (iii) the difference between market
value of securities issuable on exercise of vested options to
purchase securities in USE, and the options' exercise price.  These
Agreements also provide that for the three years following
termination, the terminated individual will not compete with USE in
most of the western United States in regards to exploration and
development activities for uranium, molybdenum, silver or gold. 
For such non-compete covenant, such person will be paid monthly
over a three year period an agreed amount for the value of such
covenants (depending on the individual, ranging from $66,667 up to
$86,667).  These Agreements are intended to benefit the Company's
shareholders, by enabling such persons to negotiate with a hostile
takeover offeror and assist the Board concerning the fairness of a
takeover, without the distraction of possible tenure insecurity
following a change in control.  At Prospectus date, USE Company is
not aware of any proposed hostile takeover.

USE and Crested provide all of their employees with certain forms
of insurance coverage, including life and health insurance.  The
health insurance plan does not discriminate in favor of executive
employees; life insurance of $50,000 is provided to each member of
upper management (which includes all persons in the compensation
table), $25,000 of such coverage is provided to middle-management
employees, and $15,000 of such coverage is provided to other
employees.

Employee Stock Ownership Plan ("ESOP").  USE has adopted an ESOP,
to encourage ownership of USE Common Stock by employees and provide
a source of retirement income to them.  The ESOP is a combination
stock bonus plan and money purchase pension plan.  It is expected
that the ESOP will continue to invest primarily in the Common
Stock.  Messrs. Larsen, Herron and Evans are the ESOP trustees.

Contributions to the stock bonus plan portion of the ESOP are
discretionary and are limited to a maximum of 15% of the covered
employees' compensation for each year ended May 31.  Contributions
to the money purchase portion of the ESOP are mandatory (fixed at
ten percent of the compensation of covered employees for each
year), are not dependent upon profits or the presence of
accumulated earnings, and may be made in cash or shares of Company
Common Stock.

The Company made a contribution of 46,332 shares to the ESOP for
fiscal 1994, all of which were contributed under the money purchase
pension plan.  At the time the shares were contributed, the market
price was $4.00 per share, for a total contribution valued at
$185,000 which has been funded by the Company.  Crested and the
Company are each responsible for one-half of that amount (i.e.,
$92,500), and Crested currently owes its one-half to the Company.

Employees are eligible to participate in the ESOP on the first day
of the plan year (June 1) following completion of one year of
service in which at least 1,000 hours are credited.  Each
employee's participation in the ESOP continues until the ESOP's
anniversary date coinciding with or next following termination of
service by reason of retirement, disability or death.  In these
cases, the participant will share in the allocation of USE's
contributions for the ESOP year in which the retirement, death or
disability occurs, and will have a fully-vested interest in
allocations to the participant's account.

An employee's participation in the ESOP does not cease upon
termination of employment.  If the employment of a participant in
the ESOP is terminated for reasons other than disability, death, or
retirement (unless the employee receives a lump sum distribution
upon the termination of employment), participation continues
following the termination, until five consecutive one-year breaks
in service have been incurred.  An employee is deemed to have
incurred a one-year break in service during any year in which 500
or fewer hours of service are completed.

Employee interests in the ESOP are earned pursuant to a seven year
vesting schedule.  Upon completion of three years of service for
the Company, the employee is vested as to 20% of the employee's
account in the ESOP, and thereafter at the rate of 20% per year. 
Any portion of an employee's ESOP account which is not vested is
forfeited upon termination of employment for any reason, other than
retirement, disability, or death.

The 46,332 shares issued to the ESOP for fiscal 1994 included 3,165
shares allocated to John L. Larsen's account, 1,962 shares
allocated to Max T. Evans' account, 713 shares allocated to Harold
F. Herron's account, 4,325 shares allocated to Daniel P. Svilar's
account, and 3,315 shares allocated to R. Scott Lorimer's account,
for a total of 13,480 shares allocated to accounts for all
executive officers as a group (five persons).  The accounts of the
executive officers are fully vested, as they have all been employed
by the Company and USECC for more than the past seven years. 
Allocations of shares for fiscal 1995 have not been made with
respect to any participant in the ESOP.

The maximum loan outstanding during fiscal 1993 under a loan
arrangement between USE and the ESOP, was $1,014,300 at May 31,
1994 for loans made in fiscal 1992 and 1991.  Interest owed by the
ESOP was not booked by USE.  Crested pays one-half of the amounts
contributed to the ESOP by USE.  Because the loans are expected to
be repaid by contributions to the ESOP, Crested may be considered
to indirectly owe one-half of the loan amounts to USE.

During fiscal 1994, the Company was issued a proposed adjustment
from the Internal Revenue Service ("IRS")  indicating that the ESOP
was not in compliance with certain sections of the Internal Revenue
Code.  Based on management's response to the IRS notice, the IRS
has determined that the ESOP has complied with applicable sections
of the Internal Revenue Code, subject to operation of the ESOP in
compliance with ESOP provisions and applicable law and rules.  No
Company deductions were disallowed by the IRS.

Stock Option Plan.  USE has a combined incentive stock option/non-
qualified stock option plan, reserving an aggregate of 550,000
shares of Common Stock for issuance upon exercise of options
granted thereunder.  Awards under the plan are made by a committee
of two or more persons selected by the Board (presently Messrs.
Bebout and Brenman).  The committee establishes the exercise
periods and exercise prices for options granted under the plan. 
Total grants to officers and directors as a group may not exceed
275,000 shares.

Options expire no later than ten years from the date of grant, and
on termination of employment, except in cases of death, disability
or retirement.  Subject to the ten year maximum period, upon the
death, retirement or permanent and total disability of an optionee,
options are exercisable for three months (in case of retirement or
disability) or one year (in case of death) after such event.  In
fiscal 1994, conditions relating to periods of Company service
before vesting of stock purchased on exercise of the non-qualified
options were removed.

For fiscal 1994, no qualified or non-qualified options were
granted.

The following table shows unexercised options, how much thereof
were exercisable, and the dollar values for in-the-money options,
at May 31, 1994.

Aggregated Option/SAR Exercises in Last Fiscal year and FY-End
Option/SAR Values
(a)                    (b)              (c)             (d)                 (e) 
                                                                            Value of
                                                         Number of         Unexercised
                                                        Unexercised       In-the-Money
                                                        Options/SARs      Options/SARs
                                                          FY-End (#)        FY-End($)

                    Shares Acquired        Value        Exercisable/        Exercisable/
Name                on Exercise (#)     Realized($)     Unexercisable       Unexercisable
John L. Larsen,         -0-                -0-            100,000            $200,000(1)
  CEO, President                                        exercisable        exercisable and
                                                                             unexercised

                                                          100,100            $110,110(2)
                                                        exercisable        exercisable and
                                                                             unexercised

Max T. Evans,           -0-                -0-             57,200            $ 62,920(2)
  Secretary                                             exercisable        exercisable and
                                                                             unexercised

Harold F. Herron,       -0-                -0-             11,000            $ 12,100(2)
 Vice President                                         exercisable        exercisable and
                                                                             unexercised

Daniel P. Svilar        -0-                -0-             66,000            $ 72,600(2)
 Assistant Secretary                                    exercisable        exercisable and
                                                                             unexercised

R. Scott Lorimer        -0-                -0-             29,700            $ 32,370(2)
   Treasurer                                            exercisable        exercisable and
                                                                             unexercised

(1)Equal to $4.00 closing bid on last trading day in FY 1994, less
$2.00 per share option exercise price, multiplied by all shares
exercisable.

(2)Equal to $4.00 closing bid on last trading day in FY 1994, less
$2.90 per share option exercise price, multiplied by all shares
exercisable.
Restricted Stock Plans.  USE has issued stock bonuses to various
executive officers and directors of USE and others.  These shares
are subject to forfeiture to the issuer by the grantee if
employment terminates otherwise than for death, retirement or
disability.  If the required service is completed, the risk of
forfeiture lapses and the shares become the unrestricted property
of the holder.  Messrs. Larsen, Evans, Svilar, Herron, Lorimer and
all executive officers as a group (five persons) received 13,200,
8,250, 11,880, 9,900, 7,920 and 51,150 shares of Common Stock,
respectively, under this restricted stock plan through fiscal 1993.

In fiscal 1994, another 7,500 shares were issued to such persons as
a bonus (20% of the 1990 shares).  Additional bonuses of 20% of the
original shares will be issued annually through fiscal 1997.  The
expenses relating to these stock issuances are shared equally by
the Company and Crested.

The Company has also issued restricted stock bonuses to non-
employee directors.  A total of 5,500 shares are held by the two
directors who are not also employees of the Company (one-half to
each).  See "Directors' Fees and Other Directors' Compensation".

Subsidiary Plans.  During the year ended May 31, 1991, Brunton
adopted a salary deduction plan intended to qualify as a deferred
compensation plan under Internal Revenue Code Section 401(k). 
Harold F. Herron and John L. Larsen are the only Company officers
who are able to participate in this retirement plan.  The fiscal
1994 acquisition of Brunton by the Company has not affected the
Brunton 401(k) plan.

Other than as set forth above, neither USE nor any of its
subsidiaries have any pension, stock option, bonus, share
appreciation, rights or other plans pursuant to which they
compensate the executive officers and directors of USE.  Other than
as set forth above, no executive officer received other
compensation in any form which, with respect to any individual
named in the Cash Compensation Table, exceeded ten percent of the
compensation reported for that person, nor did all executive
officers as a group receive other compensation in any form which
exceeded ten percent of the compensation reported for the group.

Directors' Fees and Other Compensation

The Company pays non-employee directors a fee of $150 per meeting
attended.  All directors are reimbursed for expenses incurred with
attending meetings.

Prior to fiscal 1992, the Board authorized the Executive Committee
to make loans to members of the Board, or to guarantee their
obligations in amounts of up to $50,000, if such loans or surety
arrangements would benefit USE.  Any loans or surety arrangements
for directors which are in excess of $50,000 will require Board
rather than Executive Committee approval.  USE loaned $25,000 to
David W. Brenman under this plan prior to fiscal 1991.  The loan to
Mr. Brenman bears interest at the prime rate of the Chase Manhattan
Bank and was due September 1, 1994, but has been extended to
September 1, 1995 by Board vote (Mr.Brenman abstaining).  The loan
was provided as partial consideration for Mr. Brenman's
representation of the Company to the financial community in New
York City.  The loan to Mr. Brenman originally was approved by the
executive committee.

Pursuant to shareholder approval of the 1992 Stock Compensation
Plan for Outside Directors at the 1992 Annual Meeting, in fiscal
1993 the Board issued 5,000 shares of Common Stock each to outside
directors Brenman, Anderson and Bebout, which shares vest 1,000
shares to each on the 1992 Annual Meeting date and each succeeding
four Annual Meetings through 1996.

         Certain Relationships and Related Transactions

Purchase of Common Shares [Fiscal 1995].  From December, 1994
through Prospectus date, certain affiliates of USE purchased 96,700
restricted common shares from USE (pursuant to the private
placement offer of 400,000 shares) at $3.00 per share (total
purchases $290,100), as follows:  Daniel P. Svilar, general counsel
(16,700 shares, through a family partnership); R. Scott Lorimer,
chief financial officer (8,333 shares); Brunton (56,667 shares);
Max T. Evans, officer and director (6,667 shares); Nick Bebout,
director (8,333 shares, through Nucor, Inc., an affiliate of Mr.
Bebout).  

Transactions with Brunton [Fiscal 1993 and 1994].  In fiscal 1993
and early fiscal 1994, USE and Crested had entered into financing
arrangements with Brunton totalling $1,173,260, as set forth below.

These transactions were effected prior to the acquisition of
Brunton by USE at the end of fiscal 1994.

     Sale and Lease Back.  In November, 1992 USE and Crested sold
Brunton certain aircraft and heavy equipment for $404,000, and
Brunton leased the items back to USE and Crested for seven years
(level payments amortizing purchase price with interest at prime
plus two points, subject to Brunton's renegotiating term and
interest after three years).  Brunton funded the loan with bank
financing secured with the items sold and the lease.

     Loan, Stock Sale and Option.  By agreement of April 30, 1993,
Brunton (i) loaned USE and Crested $211,800 and $76,760,
respectively, secured by borrowers' 3,607,000 Brunton shares
(2,647,500 owned by USE and 959,500 owned by Crested), with the
loans (maturity of April, 2003) bearing interest at prime plus 2.5
points; (ii) purchased 50,000 shares of restricted USE Common Stock
for $137,500 ($2.75 each) and 160,000 shares of restricted Crested
Common Stock for $43,200 ($.27 each); and (iii) received options
through April 30, 1998 to purchase 150,000 shares of restricted USE
Common Stock for $525,000 ($3.50 each) and 300,000 shares of
restricted Crested Common Stock for $120,000 ($.40 each).

In fiscal 1994, the April 30, 1993 loans to USE and Crested
($288,560 principal) were repaid and the collateral Brunton shares
released back to USE and Crested.  In late fiscal 1994, all common
stock of Brunton (except for Brunton shares previously owned by
USE) was acquired in exchange for 276,470 registered common shares
of USE.

     Convertible Loan.  In August 1993, Brunton loaned USE $300,000
(without security), due October 19, 1993.  The loan, bearing
interest at 10 percent per annum, was convertible in whole or part
at Brunton's election into shares of USE Common Stock at the rate
of one share for $3.00 of debt (100,000 shares maximum).  In fiscal
1994 (but prior to USE's acquisition of Brunton), the debt was
converted to 100,000 shares of USE Common Stock.

Transactions Concerning Sutter Gold Venture.  During fiscal 1991,
USE acquired an interest in an underground gold mine (the "Lincoln
Mine") being developed in the Mother Lode Gold Mining District of
Amador County, California.  Until the end of fiscal 1994, the
leasehold interests had been held by and operations on the
properties conducted through the Sutter Gold Venture ("SGV"), a
joint venture between Seine River Resources Inc. ("SRRI", a
Vancouver Stock Exchange listed company not affiliated with USE or
Crested), and USECC Gold Limited Liability Company ("USECC Gold"). 
USECC Gold, in turn, had been owned 89 percent by USE and 11
percent by Crested.  

The parties had intended to operate SGV as equal 50 percent
venturers.  However, because of SRRI defaults on its obligations to
USE, USE and Crested had acquired (through USECC Gold) by the end
of fiscal 1993 a 90 percent aggregate equity interest in the
Lincoln Project.  By the end of fiscal 1994, SRRI owed the Company
and Crested $1,970,507 for property holding, permitting and mine
maintenance costs incurred and paid for by the Company and Crested
since March 1992, including interest and management fees charged by
the Company and Crested.

As of May 23, 1994 SRRI agreed to assign its remaining 10 percent
working interest in the Lincoln Project for the $1,970,507 owed the
Company and Crested.  However, only the $1,389,272 of costs and
expenses paid for by the Company and Crested was recorded; $581,235
for interest and management fees was written off as uncollectible. 
SRRI also issued 400,000 common shares of stock and delivered same
to the Company as final payment of any deficiencies for pre-fiscal
1994 indebtedness which SRRI had owed to the Company and Crested,
which had been secured by SRRI's interests and acquired by the
Company and Crested in lieu of foreclosure when SRRI defaulted on
its payments.  

Subsequent to the end of fiscal 1994, the SGV was terminated, the
Company and Crested formed a new Wyoming corporation (Sutter Gold
Mining Company), and agreed to exchange their respective interests
in USECC Gold for common stock of Sutter Gold Mining Company, in
the same percentage interests as the parties hold interests in
USECC Gold (which latter entity will continue to hold the property
interests of record, as a wholly-owned subsidiary of Sutter Gold
Mining Company).

A conditional use permit for the Lincoln Mine was issued by the
Amador County Board of Supervisors in August, 1993.  USE and
Crested are exploring different sources of capital to develop the
Mine and build a milling complex, however, at Proxy Statement date
no financing agreements have been signed and there is no assurance
needed capital will be available.

Transactions with Sheep Mountain Partners ("SMP").  In fiscal 1989,
USE and Crested through USECC sold a one-half interest in the Sheep
Mountain properties to Cycle Resource Investment Corporation
("CRIC"), a wholly-owned subsidiary of Nukem, Inc., and thereafter
USECC and CRIC contributed their 50% interests in the properties to
a new Colorado partnership, SMP, which was organized to further
develop and mine the uranium claims, market uranium and acquire
additional uranium sales contracts.  Due to disputes (in
arbitration proceedings at Proxy Statement date) with CRIC and
Nukem, necessary mine maintenance has been funded by USECC alone
without reimbursement from SMP.  At May 31, 1993, USE and Crested
had expended $2,056,900 on SMP mine maintenance and $136,500 for
the purchase of U3O8, all of which is owed USE and Crested by SMP. 
For fiscal 1994, USE and Crested spent an additional $1,449,700 on
SMP property maintenance, none of which has been reimbursed by SMP.

At May 31, 1994, accumulated SMP property maintenance costs and
fees owed USE and Crested were $3,643,100 ($4,127,229 at February
28, 1995).

Transactions with Directors.  Three of USE's directors, Messrs.
Larsen, Evans and Herron, are trustees of the ESOP.  In that
capacity they have an obligation to act in the best interests of
the ESOP participants.  This duty may conflict with their
obligations as directors of USE in times of adverse market
conditions for the Common Stock, or in the event of a tender offer
or other significant transaction.

In general, the ESOP trustees exercise dispositive powers over
shares held by the ESOP, and exercise voting powers with respect to
ESOP shares that have not been allocated to a participant's
account.  In addition, the Department of Labor has taken the
position that in certain circumstances ESOP trustees may not rely
solely upon voting or dispositive decisions expressed by plan
participants, and must investigate whether those expressions
represent the desires of the participants, and are in their best
interests.

Harold F. Herron, son-in-law of John L. Larsen, has been living in
and caring for a house owned by USE until such time as the property
was sold.  In fiscal 1995, Mr. Herron purchased the house for
$260,000, the appraised value of the property, and was reimbursed
by USE for leasehold improvements totaling $22,800.

Other Information.  USE has adopted a stock repurchase plan under
which it may purchase up to 275,000 shares of its Common Stock. 
These shares would be purchased in part to provide a source of
shares for issuance upon the exercise of various outstanding
options.

Three of John L. Larsen's sons are employed by USE (as manager of
USECC's commercial operations, uranium marketing manager, and as
chief pilot, respectively).  Mr. Larsen's brother is employed by
USE as drilling superintendent.  Collectively, the four individuals
received $224,900 in compensation for those services during the
fiscal year ended May 31, 1994.  That expense was shared by USE and
Crested, in accordance with the compensation arrangements for all
employees.

Certain Indebtedness

Transactions Involving USECC.  USE and Crested conduct the bulk of
their activities through their equally-owned joint venture, USECC. 
From time to time USE and Crested advance funds to or make payments
on behalf of USECC in furtherance of their joint activities.  These
advances and payments create intercompany debt between USE and
Crested.  The party extending funds is subsequently reimbursed by
the other venturer.  USE had a note receivable of $3,792,800 from
Crested at May 31, 1994.  The largest aggregate debt of Crested to
USE during fiscal 1994 was $3,792,800.

Debt Associated with USE's ESOP. During the year ended May 31,
1994, USE made a contribution of 46,332 shares of Common Stock to
the ESOP.  Because Crested engages USE's employees to discharge
substantially all of its functions, these contributions benefitted
Crested.  As a result, Crested owes USE $92,500 for one-half of
USE's contribution to the ESOP.  Regular and substantial
contributions by the USE to the ESOP are required to maintain the
ESOP in effect.  In fiscal 1993 USE contributed 46,591 shares of
Common Stock to the ESOP, for one-half of which Crested owes USE
$87,360.

Loans to Three Directors.  In fiscal 1992 USE loaned Mr. Evans
$24,200 against his promissory note due April 30,1993 and bearing
annual interest at ten percent.  This loan is secured with 7,500 of
Mr. Evans' shares of Common Stock.  Also in fiscal 1992, USE loaned
Mr. John L. Larsen $147,000 and further agreed to consolidation of
such new loan with outstanding indebtedness of $99,008 owed USE by
members of his immediate family (total debt $246,008), against Mr.
Larsen's promissory note for the total amount due April 30, 1993
and bearing annual interest at ten percent.  The Board approved
these transactions to obtain a higher interest rate of return on
the funds compared to commercial rates, and to avoid having USE
stock prices depressed from such persons selling their shares to
meet personal obligations.  The loan maturities were extended to
October 30, 1994, and again to May 31, 1996.  At May 31, 1994, the
Larsen family indebtedness totaled $432,200, of which $322,800 is
represented by notes secured by 120,600 shares of USE's Common
Stock.

In fiscal 1995, USE made a five year non-recourse loan in the
amount of $112,170 to Harold F. Herron.  The loan is secured by
30,000 shares of USE's Common Stock, bears interest at a rate of 7%
and is payable at maturity.  The Board approved the loan to obtain
a higher interest rate of return on the funds compared to
commercial rates, and to avoid having USE stock prices depressed
from such persons selling their shares to meet personal
obligations.  See Transactions with Directors above.

Other Debt.  At June 1, 1990, a brother of Nick Bebout, a director
of USE, and nephew of Daniel P. Svilar, general counsel, was
indebted to USE in the amount of approximately $408,800.  This loan
was made in 1983, prior to the time Mr. Nick Bebout became a
director.  The non-recourse note was secured by 60,000 shares of
USE's Common Stock and did not bear interest.  During fiscal 1991,
Mr. Bebout repaid $36,200 of the loan.  At May 23, 1994, the
principal amount of the debt was $372,600.  

In fiscal 1993, the Board (Nick Bebout abstaining), extended
maturity of this $372,600 loan and the maturity of a separate
$72,700 loan (from Crested made in 1987, which Mr. Bebout secured
with 20,000 shares of USE Common Stock), to October 30, 1994.  In
fiscal 1994, Crested assumed the liability for the non-recourse
loan to USE in exchange for the 60,000 shares of USE's Common Stock
at $260,600 (the market value of the pledged shares on the date of
the assumption).  At the same time Crested accepted 22,000 shares
(the pledged shares plus 2,000 stock dividend shares received in
1990) of USE's Common Stock as full payment of the $72,700 non-
recourse loan made by Crested to Mr. Bebout.

                    Description of Securities

The USE Articles of Incorporation authorize issuance of 20,000,000
shares of common stock, $.01 par value, and 100,000 shares of
preferred stock, $.01 par value.  

Common Stock. Holders of USE common stock are entitled to receive
dividends when and as declared by the USE Board of Directors out of
funds legally available therefor.  

Holders of USE common stock are entitled to one vote per share on
all matters upon which such holders are entitled to vote, and
further have the right to cumulate their votes in elections of
directors to the USE Board of Directors.  Cumulation is effected by
multiplication of shares held by the number of director nominees,
and voting is by casting the product as desired among the nominees;
directors are elected by a plurality of votes cast.  

Pursuant to the USE Articles and the Wyoming Management Stability
Act, shares of USE common stock held by Crested may be voted by
Crested in elections of USE directors, so long as USE conducts
substantial business in Wyoming and is "qualified" under such Act
as having assets in excess of $10,000,000, with a class of stock
listed on NASDAQ or on a principal exchange. 

In the event of dissolution, liquidation or winding up of USE,
holders of USE common stock are entitled to share ratably in assets
remaining after creditors (including holders of any preferred
stock, as to liquidation preferences) have been paid.

All outstanding shares of USE common stock (including the USE
Shares offered for sale by this Prospectus) have been fully paid
and nonassessable.

Preferred Stock. The USE Board of Directors is authorized to issue
shares of preferred stock in one or more series, with such rights
to redemption, liquidation preference, dividends, voting and other
matters as determined by the Board of Directors, without
authorization from the USE stockholders.  Accordingly, the USE
Board of Directors could issue preferred shares with dividend
rights senior to the common shares.  Under the WBCA, separate
classes of stock are entitled to vote separately on certain
substantive transactions (e.g., a merger or sale of most of the
company assets), with approval of the transaction subject to
approval by each class.

No shares of USE preferred stock have been issued, and no series
thereof has been established to date.  

                             Experts

The consolidated financial statements of USE included in this
Prospectus have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of
said firm as experts in giving said reports.  Reference is made to
said report which includes an explanatory paragraph that describes
the litigation discussed in notes E, F, and K to the USE
consolidated financial statements.

                          Legal Matters

Stephen E. Rounds, Denver, Colorado, has acted as special counsel
to USE in connection with this offering.
U.S. ENERGY CORP. AND AFFILIATES

               Condensed Consolidated Balance Sheets

                              ASSETS
                                        February 28,      May 31,
                                            1995           1994
                                        ____________   ____________
                                         (Unaudited)    (Unaudited)
CURRENT ASSETS:
   Cash                                  $  780,700    $1,181,700 
   Accounts receivable
     Trade                                  791,000     1,009,800 
     Related parties                        254,100       166,500 
   Inventory                              1,486,400     1,424,600 
   Deferred federal income tax current       36,000        --     
   Deferred compensation                     12,200        12,200 
   Other                                    135,800        71,800 
                                       ____________  ____________ 

       TOTAL CURRENT ASSETS               3,496,200     3,866,600 

INVESTMENTS
   Affiliates                             2,980,600     2,807,900 
   Other                                  7,637,700     7,728,500 
                                       ____________  ____________ 

                                         10,618,300    10,536,400 

PROPERTIES AND EQUIPMENT                 26,890,800    26,252,200 
   Less accumulated depreciation, 
   depletion and amortization            (9,507,500)   (8,874,000)
                                       ____________  ____________ 

                                         17,383,300    17,378,200 

OTHER ASSETS:
   Accounts and notes receivable:
     Real estate sale and other             652,400        28,700 
     Affiliates and related parties          25,000        25,000 
     Employees                              498,500       366,000 
   Buildings and improvements
     held for sale                          496,200       758,200 
   Deferred compensation, long-term           8,100        17,300 
   Deposits and other                       117,200       113,900 
                                       ____________  ____________ 

                                          1,797,400     1,309,100 
                                       ____________  ____________ 

                                        $33,295,200   $33,090,300 
                                       ____________  ____________ 
                                       ____________  ____________ 

     See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

               Condensed Consolidated Balance Sheets

               LIABILITIES AND SHAREHOLDERS' EQUITY

                                        February 28,      May 31,
                                            1995           1994
                                        ____________   ____________
                                         (Unaudited)    (Unaudited)

CURRENT LIABILITIES:
   Accounts payable and 
     accrued expenses                    $1,394,300    $  722,200 
   Current portion of long-term debt      1,697,900       569,500 
                                       ____________  ____________ 

     TOTAL CURRENT LIABILITIES            3,092,200     1,291,700 

LONG-TERM DEBT (See Note 5)                 918,700     1,109,100 

RECLAMATION LIABILITY (See Notes 6)       3,951,800     3,951,800 

OTHER ACCRUED LIABILITIES
   (See Note 6)                          10,892,500    11,284,600 

DEFERRED TAX LIABILITY                      183,200       267,000 

COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST                           815,300     1,326,400 

Common stock, 187,817 and 169,300
    shares forfeitable                    1,370,100     1,300,600 

SHAREHOLDERS' EQUITY:
   Preferred stock, $.01 par value;
     authorized, 100,000 shares;
     none issued or outstanding               --            --    
   Common stock, $.01 par value;
     authorized, 20,000,000 shares;
     issued, 5,002,486 and 4,693,090         49,900        46,800 
   Additional paid-in capital            17,729,900    16,784,800 
   Retained earnings (deficit)           (2,501,600)   (1,185,800)
   Treasury stock, 758,276 shares,
     at cost                             (2,192,500)   (2,072,400)
   Unallocated ESOP contribution         (1,014,300)   (1,014,300)
                                       ____________  ____________ 

                                         12,071,400    12,559,100 
                                       ____________  ____________ 

                                        $33,295,200   $33,090,300 
                                       ____________  ____________ 
                                       ____________  ____________ 

          See notes to consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES
                   Consolidated Statements of Operations
                                (Unaudited)

                           Three Months Ended         Nine Months Ended
                              February 28,              February 28,
                         ________________________   _______________________

                            1995         1994         1995         1994
                         ___________  __________   __________   __________

REVENUES:
 Mineral sales          $    --       $   --       $   --         $2,893,700 
 Oil sales                   47,400      51,100       138,200        141,900 
 Commercial revenues      1,268,600     123,700     4,032,200        461,700 
 Gain from
  restructuring 
  mining properties 
  agreements                 --          33,400        85,500        591,400 
 Construction contract
  revenues                   29,100     120,400       919,600      2,004,700 
 Gain on sale of assets     975,000        --       1,288,900         30,300 
 Interest                    81,100      61,000       254,200        162,000 
 Management fees
  and other                  77,000      98,000       215,700        301,500 
                         __________   __________    _________      __________

                          2,478,200     487,600     6,934,300      6,587,200 
                         __________   __________    _________      __________

COSTS AND EXPENSES:
 Cost of mineral sales       --          --           --           2,927,400 
 Mineral operations         299,300     262,500     1,005,500        700,900 
 Construction costs          36,500     106,000       790,500      1,774,300 
 General and 
  administrative          1,127,300     787,400     2,783,200      1,859,400 
 Commercial operations    1,195,100     366,900     3,466,800      1,004,600 
 Oil production              24,100     106,200        52,700        259,900 
 Loss on sale
  of investments             --          29,800        89,900         31,800 
 Interest                    72,400      26,900       175,000         87,400 
                         __________   __________    _________      __________

                          2,754,700   1,685,700     8,363,600      8,645,700 
                         __________   __________   __________      __________
Three Months Ended         Three Months Ended
                               February 28,              February 28,
                         _______________________    _________________________

                            1995         1994          1995          1994
                         __________   __________    ___________  ____________
Income (Loss) Before 
 Equity Income of 
 Affiliate, Provision 
 for Income Taxes
 and Extraordinary Item    (276,500) (1,198,100)   (1,429,300)  (2,058,500)
Minority Interest in
 Loss of Consolidated 
 Subsidiaries                76,200     299,600       418,400      572,900 
Equity in Income of 
 Affiliates-net            (128,100)    (95,400)     (304,900)    (266,700) 
                         ___________  __________   ___________  ___________
Income (Loss) Before 
 Provision for 
 Income Taxes
 and Cumulative 
 Effect                    (328,400)   (993,900)   (1,315,800)  (1,752,300)
Provision for 
 Income Taxes                --          --           --           --     
                         ___________  __________   ___________  ___________ 
Income (Loss) Before 
 Cumulative Effect 
 of Accounting Changes     (328,400)   (993,900)   (1,315,800)  (1,752,300)
Cumulative Effect 
 at June 1, 1993
 of Income Tax 
 Accounting Changes          --          --           --          (267,000)
                         ___________  __________   ___________  ___________

NET INCOME (LOSS)         $(328,400)  $(993,900)  $(1,315,800) $(2,019,300)
                         ___________  __________   ___________  ___________
NET INCOME (LOSS)
 PER SHARE                $    (.07)  $    (.22)   $    (.27)   $    (.46)
                         ___________  ___________  ___________  ___________
                         ___________  ___________  ___________  ___________
WEIGHTED AVERAGE
 NUMBER OF SHARES
 OUTSTANDING              5,012,216    4,473,468    4,877,776    4,402,658 
                         ___________  ___________  ___________  ___________
                         ___________  ___________  ___________  ___________

         See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES
              Condensed Consolidated Statements of Cash Flows
                                (Unaudited)
                                                       Nine Months Ended
                                                         February 28,
                                                 _____________________________

                                                     1995           1994
                                                  ___________    ___________
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income (loss)                          $(1,315,800)   $(2,019,300)
     Adjustments to reconcile net income
     (loss) to net cash used in
     operating activities:
         Minority interest in (gain) loss 
           of consolidated subsidiaries            (418,400)      (572,900)
         Depreciation, depletion and 
           amortization                             577,300        710,600 
         Non-cash compensation                       69,500         82,300 
         Gain from restructuring mineral
            properties agreements                    --           (500,000)
         Equity in loss of affiliates               304,900        266,700 
         Gain on sale of assets                  (1,288,900)       (27,900)
         Loss (gain) on sale of investments          89,900         (3,400)
         Cumulative effect of 
           accounting changes                       (83,800)       267,000 
         Change in deferred income taxes            (36,000)        --     
       Net changes in components 
         of working capital                         282,600     (1,138,100)
                                                 ___________    ___________
NET CASH PROVIDED BY (USED IN)
      OPERATING ACTIVITIES                       (1,818,700)    (2,935,000)
                                                 ___________    ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
     Investments in affiliates                     (476,800)    (1,095,300)
     Investments other                             (198,400)        --     
     Purchase of property and equipment            (141,000)      (632,200)
     Proceeds from sale of assets                   969,100         55,100 
     Development of mining claims                  (341,400)      (624,100)
     Development of gas properties                 (147,700)        --     
     Increase in note receivable                   (128,200)       (36,800)
     Proceeds from sale of investments              199,300         --     
     Cash acquired in purchase 
       of subsidiary                                 --          6,900,000 
     Deposits and other                              (3,300)       172,300 
                                                 ___________    __________
NET CASH PROVIDED BY (USED IN)
     INVESTING ACTIVITIES                          (268,400)     4,739,000 
                                                 ___________    __________
CASH FLOWS FROM FINANCING ACTIVITIES:
     Private placement of common stock              868,100         --     
     Company stock purchased by 
       consolidated affiliate                      (120,000)        --     
     Additions to long-term debt                  1,740,800        368,400 
     Payments on long-term debt                    (802,800)      (630,800)
                                                 ___________   ____________
NET CASH PROVIDED BY (USED IN)
     FINANCING ACTIVITIES                         1,686,100       (262,400)
                                                 ___________   ____________

  The accompanying notes to consolidated financial statements are an integral 
  part of these statements.
U.S. ENERGY CORP. AND AFFILIATES

              Condensed Consolidated Statements of Cash Flows
                                (Unaudited)

                                                       Nine Months Ended
                                                         February 28,
                                                ____________    ___________

                                                    1995            1994
                                                ____________    ___________

NET INCREASE (DECREASE) IN CASH 
  AND CASH EQUIVALENTS                           $ (401,000)    $1,541,600 

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                             1,181,700        479,600 
                                                 ___________    ___________
CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                                  $  780,700     $2,021,200 
                                                 ___________    ___________
                                                 ___________    ___________

SUPPLEMENTAL DISCLOSURES:
  Income tax paid                                $  118,900     $   --     
                                                 ___________    ___________
                                                 ___________    ___________

  Interest paid                                  $  175,000     $   60,500 
                                                 ___________    ___________
                                                 ___________    ___________

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Acquisition of unowned portion of 
   affiliate with Company stock                  $   80,000     $   --     
                                                 ___________    ___________
                                                 ___________    ___________

  Common stock issued in lieu of 
   payment of long-term debt                     $   --         $  300,000 
                                                 ___________    ___________
                                                 ___________    ___________

  Negotiate settlement on accounts payable
   for asset previously capitalized              $   --         $  155,000 
                                                 ___________    ___________
                                                 ___________    ___________

         See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

      Notes to Condensed Consolidated Financial Statements

     1)   The Condensed Consolidated Balance Sheet as of February
28, 1995, the Condensed Consolidated Statements of Operations for
the nine months ended February 28, 1995 and 1994, and the Condensed
Consolidated Statements of Cash Flows for the nine months ended
February 28, 1995 and 1994, have been prepared by the Registrant
without audit.  The Condensed Consolidated Balance Sheet as of May
31, 1994, has been taken from the audited financial statements
included in the Registrant's Annual Report on Form 10-K for the
period then ended.  In the opinion of the Registrant, the
accompanying financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the financial position of Registrant as of February 28, 1995
and May 31, 1994, the results of operations for the nine months
ended February 28, 1995 and 1994, and the cash flows for the nine
months then ended.

     2)   Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted.  It is suggested that these financial statements be read
in conjunction with the Registrant's May 31, 1994 Form 10-K.   The
results of operations for the periods ended February 28, 1995 and
1994 are not necessarily indicative of the operating results for
the full year.

     3)   The consolidated financial statements of the Registrant
include 100% of the accounts of USECB Joint Venture (USECB) which
is owned 50% by the Registrant and 50% by the Registrant's
subsidiary, Crested Corp. (Crested).  The consolidated financial
statements also reflect 100% of the accounts of its majority-owned
subsidiaries: The Brunton Company (100%), Energx Ltd. (90%),
Crested (51.9%), USECC Gold Limited Liability Company (100%),
Plateau Resources Limited (100%) and Four Nines Gold, Inc. (50.9%) 
All material intercompany profits and balances have been
eliminated. 

     4)   Effective June 1, 1993, the Registrant adopted Statement
of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes".  This statement requires recognition of deferred
income tax assets and liabilities for the expected future income
tax consequences, based on enacted tax laws, of temporary
differences between the financial reporting and tax bases of
assets, liabilities and carryforwards.

     In contrast to the previous method, SFAS No. 109 requires
recognition of deferred tax assets for the expected future effects
of all deductible temporary differences, loss carryforwards and tax
credit carryforwards.  Deferred tax assets are then reduced, if
deemed necessary, by a valuation allowance for any tax benefits
which, based on current circumstances, are not assured of
realization.

     As a result of adopting SFAS No. 109, the Registrant
recognized a cumulative provision for change in accounting
principle of $267,000 or $(0.06) per common share as of the
beginning of the fiscal year.  The provision is included under the
caption "cumulative effect at June 1, 1993 of income tax accounting
change" in the accompanying condensed consolidated statements of
operations. 

     5)   Debt as of February 28, 1995 consists of a $960,000
operating line of credit; two property loans totaling $274,900;
various equipment and other loans totaling $199,200; and debt
attributable to consolidated affiliates of $1,029,200 on Brunton
and $153,300 on Four Nines Gold.  Certain inter-affiliate loans
were eliminated during consolidation.

     6)   Accrued reclamation obligations of $3,951,800 are the
Registrant's share of a reclamation liability at the Crooks Gap
Mining District and the full obligation at the Shootaring Uranium
Mill.  The reclamation work may be performed over several years.

     7)   Net income (loss) per share is computed using the
weighted average number of common shares outstanding during each
period.  The dilutive effect of stock options is not included in
the computation, as it is not material.
Report of Independent Public Accountants

To the Board of Directors and Shareholders
U.S. Energy Corp.
Riverton, Wyoming

We have audited the accompanying consolidated balance sheets of
U.S. Energy Corp. (the "Company"), a Wyoming corporation, and
affiliates as of May 31, 1994 and 1993, and the related
consolidated statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended May 31,
1994.  These financial statements and the schedules referred to
below are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statements and schedules based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of U.S.
Energy Corp. and affiliates as of May 31, 1994 and 1993, and the
results of their operations and their cash flows for each of the
three years in the period ended May 31, 1994, in conformity with
generally accepted accounting principles.

As discussed further in Notes E, F and K, the Company and its 52%-
owned subsidiary, Crested Corp., (together referred to as "USECC")
are involved in litigation with their 50/50 partner in Sheep
Mountain Partners ("SMP"), Cycle Resource Investment Corporation
("CRIC").  USECC and CRIC have filed various claims and
counterclaims against each other alleging violations of the SMP
Partnership Agreement among other various allegations.  As a
consequence of this litigation, USECC has been required to fund all
of the expenditures of SMP, resulting in advances of $3,643,100. 
USECC has expensed its equity portion of these advances as of May
31, 1994.  Recovery of the remaining investment and advances of
$2,042,400 is dependent upon the outcome of the litigation, which
is uncertain at this time, and accordingly, the accompanying
financial statements do not reflect any adjustments that might
result from this litigation.  The Company is currently
participating in arbitration proceedings on this matter and expects
some resolution early in 1995.
Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole.  The schedules listed
in the index of financial statements are presented for purposes of
complying with the Securities and Exchange Commission's rules and
are not part of the basic financial statements.  These schedules
have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, fairly state
in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken
as a whole. 

     As discussed in Notes B and H to the consolidated financial
statements, effective June 1, 1993, the Company changed its method
of accounting for income taxes.

ARTHUR ANDERSEN LLP

Denver, Colorado,
September 1, 1994.
U.S. ENERGY CORP. AND AFFILIATES

                      CONSOLIDATED BALANCE SHEETS

                                ASSETS
                                                   May 31,
                                              __________________________

                                                 1994           1993
                                              ___________   ____________
CURRENT ASSETS:
   Cash and cash equivalents                  $1,181,700     $  479,600 
   Accounts and notes receivable (Note C):
     Trade, net of allowance of $32,600
       and $4,000 for doubtful accounts        1,009,800        758,200 
     Related parties, net of allowance
       of $1,600 and $1,600 for 
       doubtful accounts                         166,500        242,400 
   Inventory (Note B)                          1,424,600         80,400 
   Deferred compensation (Note J)                 12,200         40,800 
   Other                                          71,800         48,900 
                                            ____________   ____________ 

     TOTAL CURRENT ASSETS                      3,866,600      1,650,300 
                                            ____________   ____________ 

INVESTMENTS AND ADVANCES  (Notes E and F):
   Affiliates                                  2,807,900      2,706,700 
   Restricted investments (Note F)             7,728,500            800 
                                            ____________   ____________ 

                                              10,536,400      2,707,500 

PROPERTIES AND EQUIPMENT
   (Notes B, C, D and F):
   Land and mobile home park                   2,803,100      2,794,300 
   Buildings and improvements                  5,728,600      5,237,500 
   Aircraft and other equipment                6,237,800      6,160,800 
   Developed oil properties, 
     full cost method                          1,769,800      1,769,800 
   Undeveloped gas properties                    207,900        --      
   Mineral properties and mine
     development costs                         9,505,000      8,510,000 
                                            ____________   ____________ 

                                              26,252,200     24,472,400 
   Less accumulated depreciation, 
     depletion and amortization               (8,874,000)    (8,182,800)
                                            ____________   ____________ 

                                              17,378,200     16,289,600 
                                            ____________   ____________ 
(continued)
U.S. ENERGY CORP. AND AFFILIATES

                      CONSOLIDATED BALANCE SHEETS

                                ASSETS
                             (continued)

                                                   May 31,
                                              __________________________

                                                 1994           1993
                                              ___________   ____________

OTHER ASSETS:
   Notes receivable:
     Trade                                        28,700         15,200 
     Affiliates                                   25,000         25,000 
     Employees (Note C)                          366,000        435,800 
     Shareholder (Note C)                         --            445,300 
     Joint venture partner (Note F)               --          1,275,500 
   Buildings and improvements held for sale      758,200        758,200 
   Long-term deferred compensation (Note J)       17,300         29,400 
   Deposits and other                            113,900        405,400 
                                            ____________   ____________ 

                                               1,309,100      3,389,800 
                                            ____________   ____________ 

                                             $33,090,300    $24,037,200 
                                            ____________   ____________ 

The accompanying notes to financial statements are an integral part 
of these balance sheets.
U.S. ENERGY CORP. AND AFFILIATES

                      CONSOLIDATED BALANCE SHEETS

                 LIABILITIES AND SHAREHOLDERS' EQUITY

                                                   May 31,
                                       ______________________________

                                             1994           1993
                                         ____________   ____________
CURRENT LIABILITIES:
   Accounts payable and 
     accrued expenses                     $  722,200     $  963,000 
   Current portion of 
     long-term debt (Note G)                 569,500        629,100 
                                        ____________   ____________ 

     TOTAL CURRENT LIABILITIES             1,291,700      1,592,100 

LONG-TERM DEBT (Notes F and G)             1,109,100      1,204,400 

RECLAMATION LIABILITY (Note K)             3,951,800      1,695,600 

OTHER ACCRUED LIABILITIES (Note F)        11,284,600         --     

DEFERRED GAIN ON SALE OF ASSETS
   (Note C)                                   --            249,800 

DEFERRED TAX LIABILITY (Note H)              267,000         --     

COMMITMENTS AND CONTINGENCIES
   (Note K)

MINORITY INTERESTS                         1,326,400      2,986,800 

FORFEITABLE COMMON STOCK,
   $.01 par value; issued 169,300
     and 155,780, shares, 
     respectively, forfeitable
     until earned (Notes C and J)          1,300,600      1,245,300 

(continued)
U.S. ENERGY CORP. AND AFFILIATES

                      CONSOLIDATED BALANCE SHEETS

                 LIABILITIES AND SHAREHOLDERS' EQUITY
                              (continued)

                                                   May 31,
                                       ______________________________

                                             1994           1993
                                         ____________   ____________

SHAREHOLDERS' EQUITY (Notes C and J):
   Preferred stock, $.01 par value; 
     authorized, 100,000 shares; 
     none issued or outstanding               --             --     
   Common stock, $.01 par value;
     authorized, 20,000,000 shares; 
     issued 4,693,090 and
     4,257,288 shares, respectively           46,800         42,500 
   Additional paid-in capital             16,784,800     15,050,900 
   (Accumulated deficit)/
     retained earnings                    (1,185,800)     2,185,000 
   Treasury stock at cost,
     718,276 and 440,301 
     shares, respectively                 (2,072,400)    (1,200,900)
   Unallocated ESOP contribution          (1,014,300)    (1,014,300)
                                        ____________  _____________ 

                                          12,559,100     15,063,200 
                                        ____________   ____________ 

                                         $33,090,300    $24,037,200 
                                        ____________   ____________ 

The accompanying notes to financial statements are an integral part 
of these balance sheets.
U.S. ENERGY CORP. AND AFFILIATES

                   CONSOLIDATED STATEMENTS OF OPERATIONS

                                                 Year Ended May 31,
                                       ___________________________________

                                           1994         1993        1992
                                        __________  __________  _________
REVENUES:
  Mineral sales                         $3,732,500  $2,690,800  $  621,600 
  Construction contract revenues         2,606,400   2,026,500   2,895,000 
  Commercial operations                  1,165,100     894,400     817,200 
  Oil sales                                183,700     286,300     134,100 
  Gain on sale of assets (Note F)           52,800     326,000     --      
  Gain on sale of investments              --          408,600     --      
  Gain from restructuring mineral
     properties agreements (Note F)        626,800   2,105,800   1,055,900 
  Interest                                 328,700      78,200     202,000 
  Management fees and other (Note C)        80,300     228,900     627,800 
                                         __________  __________  _________

                                         8,776,300   9,045,500   6,353,600 
                                         __________  __________  _________

COSTS AND EXPENSES:
  Cost of minerals sold                  3,895,400   2,617,600     619,200 
  Mineral operations                     1,129,000     659,900     315,100 
  Construction costs                     2,288,900   1,760,400   2,640,900 
  Commercial operations                  1,989,400   1,573,000     725,400 
  Oil production                            89,800     122,400      76,300 
  General and administrative             2,696,800   1,955,300     921,000 
  Abandonment of mining claims             --          378,700     175,400 
  Gas operations                           157,800      --         --      
  Interest and other                       117,100      81,300      61,100 
                                        __________  __________   _________

                                        12,364,200   9,148,600   5,534,400 
                                        __________  __________   _________

INCOME (LOSS) BEFORE MINORITY
  INTEREST IN LOSS, EQUITY 
  IN INCOME (LOSS) OF
  AFFILIATES, PROVISION 
  FOR INCOME TAXES AND 
  EXTRAORDINARY ITEM                    (3,587,900)   (103,100)    819,200 

MINORITY INTEREST IN LOSS OF
  CONSOLIDATED SUBSIDIARIES                874,800     325,900      58,900 

EQUITY IN LOSS OF AFFILIATES              (390,700)   (444,700)   (324,900)
                                        __________  __________   __________

The accompanying notes to financial statements are an integral part
of these statements.

(continued)
U.S. ENERGY CORP. AND AFFILIATES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (continued)

                                                Year Ended May 31,
                                        __________________________________

                                           1994         1993        1992
                                        __________  __________   _________

INCOME (LOSS) BEFORE PROVISION FOR
  INCOME TAXES AND EXTRAORDINARY ITEM   $(3,103,800) $(221,900)  $ 553,200 

PROVISION FOR INCOME TAXES (Note H)         --          --         197,300 
                                        ___________  __________  _________ 

INCOME (LOSS) BEFORE
  EXTRAORDINARY ITEM                    (3,103,800)   (221,900)    355,900 

EXTRAORDINARY ITEM
  Utilization of net operating loss
     carryforward (Notes E and H)           --          --         257,300 
                                        ___________  __________  _________ 
INCOME (LOSS) BEFORE CUMULATIVE
  EFFECT OF ACCOUNTING CHANGE           (3,103,800)   (221,900)    613,200 

CUMULATIVE EFFECT AT JUNE 1, 1993
  OF INCOME TAX ACCOUNTING CHANGE
  (Notes B and H)                         (267,000)     --         --      
                                        ___________  __________  _________ 

NET INCOME (LOSS)                      $(3,370,800)  $(221,900)  $ 613,200
                                        ___________  __________  _________ 
(continued)

The accompanying notes to consolidated financial statements are an integral
part of these statements.
U.S. ENERGY CORP. AND AFFILIATES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (continued)

                                                Year Ended May 31,
                                        __________________________________

                                           1994         1993        1992
                                        __________  __________   _________

EARNINGS PER SHARE AMOUNTS:
  Income (loss) Before 
     Extraordinary Item                $      (.70)  $    (.05)  $     .09 
  Extraordinary Item                        --            --           .06 
                                        ___________  __________  _________ 
  Income (loss) before cumulative
     effect of accounting change              (.70)       (.05)        .15 
  Cumulative effect at June 1, 1993
     of income tax accounting change          (.06)       --          --     
                                        ___________  __________  _________ 

NET INCOME (LOSS) PER SHARE            $      (.76)  $    (.05)  $     .15 
                                        ___________  __________  _________ 
                                        ___________  __________  _________ 

WEIGHTED AVERAGE SHARES OUTSTANDING      4,431,469   4,248,848   4,228,165 
                                        ___________  __________  _________ 
                                        ___________  __________  _________ 
The accompanying notes to financial statements are an integral part
of these statements.
U.S. ENERGY CORP. AND AFFILIATES

                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                           Common Stock                 (Accumulated     Treasury Stock
                         __________________  Additional   Deficit)/   ____________________   Unallocated      Total
                                               Paid-In    Retained                              ESOP       Shareholders'
                          Shares     Amount    Capital     Earning    Shares      Amount    Contribution      Equity
                         _________  _______  ___________  __________  _______   __________  _____________  ____________
Balance, May 31, 1991    4,103,289  $41,100  $14,531,500  $1,793,700   51,267  $ (310,100)  $(1,010,700)   $15,045,500

Funding of ESOP             49,599      500      173,100     --         --          --          --             173,600
Other                          313     --        --          --         --          --          --               --     
Loan to ESOP to 
 purchase common stock       --        --        --          --         --          --          (3,600)         (3,600)
Issuance of common stock 
 to third party for 
 services rendered           5,000     --        18,700      --         --          --          --              18,700
Common stock owned by
 Crested Corp.               --        --        --          --      387,384    (882,200)       --            (882,200)
Issuance and forfeiture
 of common stock bonus       5,000     --        26,300      --        1,650      (8,600)       --              17,700
Net income                   --        --        --         613,200     --          --          --             613,200
                         _________  _______  ___________  __________  _______   __________   ___________   ___________

Balance, May 31, 1992    4,163,201    4,600   14,749,600  2,406,900  440,301  (1,200,900)    (1,014,300)    14,982,900

Funding of ESOP             49,087      400      183,000        --       --         --          --             183,400 
Issuance of common stock
 to affiliate for cash      50,000      500      137,000        --       --         --          --             137,500 
Common stock issued to a
 third party in prior year
 that was forfeitable       (5,000)    --        (18,700)       --       --         --          --             (18,700)
 
Net loss                     --        --         --       (221,900)     --         --          --            (221,900)
                         _________  _______  ___________  __________  _______   __________   ___________   ___________

Balance, May 31, 1993    4,257,288  $42,500  $15,050,900  $2,185,000  440,301  $(1,200,900)  $(1,014,300)  $15,063,200
                         _________  _______  ___________  __________  _______   __________   ___________   ___________
                         _________  _______  ___________  __________  _______   __________   ___________   ___________
The accompanying notes to financial statements are an integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES

                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                              (continued)

                           Common Stock                 (Accumulated     Treasury Stock
                         __________________  Additional   Deficit)/   ____________________   Unallocated      Total
                                               Paid-In    Retained                              ESOP       Shareholders'
                          Shares     Amount    Capital     Earning    Shares      Amount    Contribution      Equity
                         _________  _______  ___________  __________  _______   __________  _____________  ____________
Balance, May 31, 1993    4,257,288  $42,500  $15,050,900  $2,185,000  440,301  $(1,200,900)  $(1,014,300)  $15,063,200

Funding of ESOP             46,332      400      184,900      --         --         --            --           185,300
Issuance of common stock 
 to affiliate in lieu of 
 payment of loan           100,000    1,000      299,000      --         --         --            --           300,000
Issuance of common stock 
 to purchase an affiliate  276,470    2,800    1,197,100      --         --         --            --         1,199,900
Issuance of common stock
 to third party for
 services rendered           7,000      100       26,900      --         --         --            --            27,000
Issuance of common stock
 to an employee for
 services rendered           1,000     --          4,300      --         --         --            --             4,300 
Issuance of common stock     5,000     --         21,700      --         --         --            --            21,700
Common stock owned by 
 Brunton                     --        --          --         --      150,000     (437,500)       --          (437,500)
Common stock owned by  
 Crested Corp.               --        --          --         --      127,975     (434,000)       --          (434,000)
Net loss                     --        --          --     (3,370,800)    --         --            --        (3,370,800)
                         _________  _______  ___________  __________  _______   __________   ___________   ___________

Balance, May 31, 1994    4,693,090  $46,800  $16,784,800 $(1,185,800) 718,276  $(2,072,400)  $(1,014,300)  $12,559,100
                         _________  _______  ___________  __________  _______   __________   ___________   ___________
Shareholders' Equity at May 31, 1994 does not include 169,300 shares 
currently issued but forfeitable if certain conditions are not met by
the recipients.  However, both the "Outstanding Shares at September 7, 
1994" on the cover page and the "Weighted Average Shares Outstanding"
on the Consolidated Statement of Operations include the forfeitable 
shares.  These two line items also include the 665,359 shares of common
stock held by a majority-owned subsidiary, which, through consolidation, 
are treated as treasury shares.

The accompanying notes to financial statements are an integral part 
of these statements.
U.S. ENERGY CORP. AND AFFILIATES

                  CONSOLIDATED STATEMENTS  OF CASH FLOWS

                                                 Year Ended May 31,
                                          ____________________________________

                                             1994          1993         1992
                                          __________    _________    _________
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                      $(3,370,800) $  (221,900) $   613,200
   Adjustments to reconcile
    net income to net cash used 
    in operating activities:
      Minority interest in loss of
        consolidated subsidiaries           (874,800)    (325,900)     (58,900)
      Depreciation, depletion and 
        amortization                         720,200      908,400      876,100 
      Abandoned mining claims                  --         378,700      175,400 
      Gain from restructuring mineral
        properties agreements               (500,000)  (2,000,000)  (1,000,000)
      Unrealized gain on investment            --           --        (180,800)
      Equity in (income)
        loss from affiliates                 390,700      444,700      264,900 
      Gain on sale of assets                 (52,800)    (326,000)       --
      (Gain) loss on sale/write down
        of marketable equity securities         --        (408,600)       --
      Common stock issued to fund ESOP       185,300      183,400       86,800
      Non-cash compensation                   75,900       55,600        --    
      Common stock exchanged 
       for services                           34,300        --          18,700
      Other                                 (149,900)    (246,400)     (21,400)
      Net changes in:
        Accounts and notes receivable        468,700     (406,800)    (719,000)
        Inventory                             (9,100)     407,300     (450,900)
        Other assets                          (4,000)      62,200       (2,000)
        Accounts payable and 
          accrued expenses                  (573,700)     557,900       27,900 
        Other liabilities                   (415,400)       --           --    
        Income taxes payable                   --           --        (289,800)
        Deferred tax liability               267,000        --           --    
                                          __________    _________    _________

NET CASH USED IN OPERATING ACTIVITIES     (3,808,400)   (937,400)     (659,800)
                                          __________    _________    _________

(continued)
U.S. ENERGY CORP. AND AFFILIATES

                  CONSOLIDATED STATEMENTS  OF CASH FLOWS

                                                 Year Ended May 31,
                                          ____________________________________

                                             1994          1993         1992
                                          __________    _________    _________
CASH FLOWS FROM INVESTING ACTIVITIES:
  Cash acquired in purchase
   of subsidiaries                       $7,193,500   $    --      $  344,100 
  Development of mining properties         (796,300)    (740,500)  (2,129,000)
  Development of gas properties            (207,900)       --          --
  Proceeds from sale of property 
    and equipment                           149,700      848,800       --
  Proceeds from sale of investments            --        611,200       --
  Purchases of property and equipment      (855,800)    (656,700)    (218,700)
  Changes in notes receivable                73,700     (173,400)    (110,800)
  Investments in affiliates                (760,500)  (1,108,600)    (770,400)
                                          __________  __________   __________
NET CASH PROVIDED BY (USED IN)
   INVESTING ACTIVITIES                   4,796,400   (1,219,200)  (2,884,800)
                                          __________  __________   __________

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock      --         137,500       --
  Loan to ESOP                                --          --           (3,600)
  Increase in long-term debt                368,400      914,600      326,100 
  Principal payments on long-term debt     (654,300)    (202,700)    (583,400)
                                          __________  __________   __________
NET CASH (USED IN) PROVIDED BY 
   FINANCING ACTIVITIES                    (285,900)     849,400     (260,900)
                                          __________  __________   __________

NET INCREASE (DECREASE) IN CASH AND 
   AND CASH EQUIVALENTS                     702,100    (1,307,200)  (3,805,500)

CASH AND CASH EQUIVALENTS,
  Beginning of year                         479,600     1,786,800    5,592,300 
                                         __________   ___________  ___________
CASH AND CASH EQUIVALENTS,
  End of year                            $1,181,700   $   479,600  $ 1,786,800
                                         __________   ___________  ___________
                                         __________   ___________  ___________

SUPPLEMENTAL DISCLOSURES:
   Interest paid                         $    --      $    79,100  $    54,000
                                         __________   ___________  ___________ 
                                         __________   ___________  ___________ 

   Income taxes paid                     $    --      $   --       $   290,000
                                         __________   ___________  ___________
                                         __________   ___________  ___________

(continued)

The accompanying notes to financial statements are an integral part 
of these statements.
U.S. ENERGY CORP.

                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (continued)
                                                 Year Ended May 31,
                                       _____________________________________

                                            1994        1993        1992
                                       ___________   _________   ___________

Non-cash investing and financing activities:

   Issuance of common stock 
     to acquire affiliate              $1,199,900    $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Issuance of common stock 
     in lieu of payment 
     on debt to affiliate              $  300,000    $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Release of forfeitable common
     stock bonus to third party        $   18,000    $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Issuance of common stock 
     to officers and employees
     for services rendered             $  104,400    $   --      $   729,300 
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Change in valuation of 
     reclamation liability             $  (243,800)  $   --      $   121,900 
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Conversion of SRRI receivable 
     to investment upon SRRI 
     loan default                      $ 1,857,800   $   --      $ 1,777,800
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Undeveloped mining properties 
     contributed to the Green
     Mountain Mining Venture           $   243,800   $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Cancellation of accounts 
     receivable for common 
     stock of affiliate                $    --       $   --      $   809,200 
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 
   Acquisition of USE common 
     stock in exchange for 
     shareholder notes receivable      $   445,300   $   --      $   --    
                                       ___________   _________   ___________ 
                                       ___________   _________   ___________ 

The accompanying notes to consolidated financial statements are an integral 
part of these statements.
U.S. ENERGY CORP.

              CONSOLIDATED STATEMENTS OF CASH FLOWS

                           (continued)

Significant assets acquired and liabilities assumed in acquisition
of subsidiaries:

     Reclamation liability         $  2,500,000 
     Other accrued liabilities       11,700,000 
     Restricted investments          (7,300,000)
     Other                              293,500 
                                   ____________ 
     Net cash acquired in 
       purchase of subsidiaries    $  7,193,500 
                                   ____________ 

The accompanying notes to consolidated financial statements are an
integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   MAY 31, 1994, 1993 AND 1992

A.   BUSINESS ORGANIZATION AND DESCRIPTION:

     U.S. Energy Corp. (the "Company" or "USE") was incorporated
in the State of Wyoming on January 26, 1966 under the name of
Western States Mining & Contracting, Inc.  The name was
subsequently changed to U.S. Energy Corp.  The Company engages in
the acquisition, exploration, sale and/or development of mineral
properties, mining and marketing of minerals.  Principal mineral
interests are in uranium, gold, and molybdenum.  The Company also
holds various real and personal properties used in commercial
operations and engages in the exploration, development and
production of petroleum and methane gas.  Most of these
activities are conducted through the joint venture discussed
below and in Note B.  The Company, through its wholly-owned
subsidiary, The Brunton Company ("Brunton"), the remaining 56% of
which was acquired at fiscal 1994 yearend (see Note C), also
engages in the manufacturing and/or marketing of compasses and
the distribution of outdoor recreational products, including
knives and binoculars.  In addition, through its majority owned
subsidiary, Four Nines Gold, Inc. ("FNG"), the Company engages in
projects such as the construction of municipal sewage systems,
irrigation projects and other civil engineering matters.

     The Company and its 52%-owned subsidiary, Crested Corp.
("Crested") (see Note E) are engaged in two ventures to develop
certain uranium properties, one with Kennecott Uranium Company
("Kennecott") known as Green Mountain Mining Venture ("GMMV"),
formed on June 1, 1990, and the second, a partnership with Nukem,
Inc. ("Nukem") through its wholly-owned subsidiary Cycle Resource
Investment Corporation ("CRIC"), known as Sheep Mountain Partners
("SMP").  During fiscal 1991, the Company and Crested formed
USECC Gold Limited Liability Company ("USECC Gold"), and with
Seine River Resources Inc. ("SRRI") established the Sutter Gold
Venture ("SGV") to develop certain gold properties located in
California.  The remaining interest of SRRI was acquired by the
Company and Crested during fiscal 1994 (see Note F).

     During fiscal 1994, the Company also acquired 100% of the
outstanding stock of Plateau Resources Limited ("Plateau"), which
owns a uranium mill and support facilities in Southeastern Utah. 
Currently the mill is nonoperating but being maintained.  See a
further discussion of the acquisition details in Note F.
B.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

     The consolidated financial statements of USE and affiliates
include the accounts of the Company, the accounts of its
majority-owned subsidiaries: Brunton (100%), Plateau Resources
Ltd ("Plateau") (100%), Energx, Ltd ("Energx") (90%), FNG
(50.9%), USECC Gold (100%), Crested (52%) and USECC Joint Venture
("USECC"), a joint venture through which USE and Crested conduct
the bulk of their operations.  USECC is owned equally by the
Company and Crested.  USECC owns the buildings and other
equipment (see Note D) used by the Company and has invested in
SMP (see Notes E and F).  The accompanying consolidated balance
sheets include the accounts of USE, Brunton, Plateau, Energx,
FNG, USECC, USECC Gold and Crested for 1994 and USE, FNG, USECC,
USECC Gold and Crested for 1993.  The accompanying consolidated
statements of operations include USE, Plateau, ENERGX, FNG,
USECC, USECC Gold and Crested for fiscal 1994, and USE, FNG,
USECC, USECC Gold and Crested for fiscal 1993.  Brunton was not
consolidated in the statement of operations and cash flows in
1994 or prior because the Company acquired it on May 20, 1994. 
Crested was not consolidated in the statements of operations and
cash flows prior to fiscal 1993 because the Company acquired its
controlling interest on May 26, 1992.  Consequently, the
accompanying consolidated statements of operations include USE,
FNG, USECC Gold and one-half of the accounts of USECC for fiscal
1992.  

     Investments in other joint ventures and 20% to 50% owned
companies are accounted for by the equity method (Note E). 
Investments of less than 20% in companies are accounted for by
the cost method.  All material intercompany profits, transactions
and balances have been eliminated.

Unaudited Pro Forma Condensed Consolidated Results of Operations

     The following unaudited pro forma consolidated results of
operations assume that the acquisitions of the controlling
interests in Brunton and Plateau occurred at the beginning of
fiscal years 1994 and 1993.  The following condensed unaudited
consolidated results therefore include the accounts of USE, USECC
Gold, FNG, Crested, USECC, Brunton, Plateau and Energx:
May 31,
                                      ___________________________

                                          1994           1993
                                      _____________  ____________
                                       (Unaudited)    (Unaudited)

     Revenues                          $12,895,100    $12,607,200
     (Loss) income before 
       cumulative effect of 
       accounting changes               (2,848,200)        45,600
     Net (loss) income                  (3,115,200)        45,600
     Net (loss) income per share              (.70)           .01

Cash Equivalents

     The Company considers all highly liquid investments with
original maturities of three months or less to be cash
equivalents.

Marketable Equity Securities

     Marketable equity securities are carried at lower of
aggregate cost or market.  Net unrealized losses on non-current
marketable equity securities are included in shareholders' equity
unless such losses are considered to be other than temporary, in
which case the losses are charged to operations.

Inventories

     Inventories consist primarily of outdoor recreational
products including compasses, knives and binoculars.  Other
inventory includes aviation fuel, associated aircraft parts,
mining supplies, purchased uranium and gold ore stockpile. 
Manufactured and retail inventories are stated using the average
cost method of accounting for inventories.  Finished goods and
work in process inventories include related materials, labor and
applied overhead.  Other inventory is stated at the lower of cost
or market.

     Inventories consist of the following:

                                                May 31,
                                      __________________________

                                          1994         1993(A)
                                       ___________   __________
     Outdoor Recreational Products
       Raw materials                   $  508,900     $   --   
       Work in process                    161,600         --   
       Finished goods                     664,600         --   
     Other                                 89,500        80,400
                                      ___________     _________

                                       $1,424,600     $  80,400
                                      ___________     _________
                                      ___________     _________
(A)There was no outdoor recreational products inventory at
May 31, 1993 because the controlling interest in Brunton was not
acquired until fiscal 1994.

Properties and Equipment

     Land, buildings, improvements, aircraft and other equipment
are carried at cost.

     Depreciation of buildings and improvements, aircraft and
other equipment is provided principally by the straight-line
method over estimated useful lives ranging from three to forty-
five years.

     The Company capitalizes all costs incidental to the
acquisition, exploration and development of mineral properties as
incurred.  The costs of mine development are deferred until
production begins on the basis that they will be recovered
through future mining operations.  Once commercial production
begins, mine development costs incurred to maintain production
will be expensed.  Capitalized costs are charged to operations at
the time the Company determines that no economic ore bodies exist
on such properties.  An impairment allowance is charged to
operations at such time when, in the opinion of management, the
carrying value of the property exceeds its expected future
economic benefit.  Costs and expenses related to general
corporate overhead are expensed as incurred.

     The Company and Crested have acquired substantial mining
property assets and associated facilities at minimal cash cost,
primarily through the assumption of reclamation and environmental
liabilities.  Certain of these assets are owned by various
ventures in which the Company is either a partner or venturer. 
The market value of these assets and the reclamation and
environmental liabilities associated with them are not reflected
in the accompanying balance sheets (see Note K).

     Proceeds from the sale of undeveloped mineral properties are
treated as a recovery of costs with any excess of proceeds over
cost recognized as gain.

     The Company follows the full-cost method of accounting for
oil and gas properties whereby all costs incurred in the
acquisition, exploration and development of the properties,
including unproductive wells, are capitalized, limited to the
present value of the estimated proved reserves and the lower of
cost or estimated fair value of unproved properties.

     Depreciation, depletion and amortization of oil properties
is provided by the unit of production method based on the
estimated reserves to be recovered.

Revenue Recognition

     Advance royalties which are payable only from future
production or which are non-refundable are recognized as revenue
when received (see Note F).  Non-refundable option deposits are
recognized as revenue when the option expires.

     Sales of gold, uranium and oil are recognized upon delivery.

Revenues are recognized from the rental of certain assets as they
are rented.  

     Revenue from long-term construction contracts is recognized
on the percentage-of-completion method determined by the ratio of
costs incurred to management's estimate of total anticipated
costs.  If estimated total costs on any contract indicate a loss,
the Company provides currently for the total anticipated loss on
the contract.  Billings on uncompleted long-term contracts may be
greater than or less than incurred costs and estimated earnings,
and are shown as current liabilities or current assets in the
accompanying balance sheets.

     Revenue from sales of outdoor recreational products are
recognized upon shipment of products.

Income Taxes

     Effective June 1, 1993, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes".  This statement requires recognition of deferred
income tax assets and liabilities for the expected future income
tax consequences, based on enacted tax laws, of temporary
differences between the financial reporting and tax basis of
assets, liabilities and carryforwards.

     In contrast to the previous method, SFAS No. 109 requires
recognition of deferred tax assets for the expected future
effects of all deductible temporary differences, loss
carryforwards and tax credit carryforwards.  Deferred tax assets
are then reduced, if deemed necessary, by a valuation allowance
for any tax benefits which, based on current circumstances, are
not assured of realization.

     The Company previously followed Accounting Principles Board
Opinion No. 11 whereby deferred income taxes were provided to
reflect the tax effect of timing differences.

     As a result of adopting SFAS No. 109, the Company recognized
a cumulative provision for change in accounting principle of
$267,000 or $(0.06) per common share as of the beginning of the
fiscal year.  The provision is included under the caption
"cumulative effect at June 1, 1993 of income tax accounting
change" in the accompanying Consolidated Statements of
Operations.

Net Income (Loss) Per Share

     Net income (loss) per share is computed using the weighted
average number of common shares outstanding during each period. 
The dilutive effect of stock options is not included in the
computation, as it is not material.

Reclassifications

     Certain reclassifications have been made in the 1993 and
1992 financial statements to conform to the classifications used
in 1994.

C.   RELATED-PARTY TRANSACTIONS:

     In November 1993, USE and Brunton executed an Agreement and
Plan of Share Exchange ("Exchange Agreement") which closed in
late May 1994.  The Exchange Agreement provided for the Exchange
of 276,470 shares of USE common stock for all 5,529,200
outstanding shares of Brunton's common stock, which were not
owned by USE.  Brunton is now owned 100% by USE as of
May 31, 1994.  The transaction was accounted for as a purchase.

     The Company and Crested provide management and
administrative services for affiliates under the terms of various
management agreements.  The Company provides all employee
services required by Crested.  In exchange, Crested reimburses
the Company for its share of the costs for providing such
employees.  Revenues from services by the Company to affiliates
other than Crested were $80,300, $113,000 and $252,800 in fiscal
1994, 1993 and 1992, respectively.

     At May 31, 1994, the Company's President and immediate
family were indebted to the Company in the amount of $432,200, of
which $322,800 is represented by notes secured by 120,600 shares
of the Company's common stock.

     The Company holds a $260,600 non-interest bearing, non-
recourse promissory note from an affiliate.  The note is secured
by 60,000 shares of the Company's common stock and is due
October 30, 1994.  This note is eliminated in consolidation.

     On May 26, 1992, the Company received 1,618,746 shares of
Crested common stock in exchange for the cancellation of accounts
receivable of $809,300 due the Company from Crested.  The receipt
of these shares increased the Company's ownership in Crested to
52.9%.  Therefore, both the balance sheet and statement of
operations have been consolidated with the Company for fiscal
years ended May 31, 1994 and 1993, but the statement of
operations was not consolidated for fiscal 1992.

     In November 1992, the Company entered into a sale/leaseback
agreement as the lessee, and sold certain machinery and equipment
to Brunton.  This machinery and equipment is being leased from
the affiliate on a month to month basis for $6,800.  The Company
had deferred the gain of $249,800 on this sale as of May 31,
1993.  The deferred gain was eliminated in consolidation as of
May 31, 1994 (Note B).

     In April 1993, the Company received a $211,800 advance from
an affiliate and sold 50,000 shares of common stock to this
affiliate for $2.75 per share, which approximated market value. 
The advance is in the form of a note to be repaid by 2003, with
interest at 2.5% above prime.  This note was paid off during
fiscal 1994.  As further consideration for the note, the Company
granted the affiliate options for 150,000 common shares at $3.50
per share.  These options are exercisable over a five year
period.  None of these options have been exercised as of May 31,
1994.

D.   USECC JOINT VENTURE:

     USECC operates the Glen L. Larsen office complex; Wind River
Estates, a 100-unit mobile home park; an aircraft hangar with a
fixed base operation, office space and certain aircraft; holds
interests in various mineral operations including SMP and GMMV;
conducts oil and gas operations; and transacts all operating and
payroll expenses, except for specific expenses allocated directly
to each venturer.  The joint venture agreement also provides for
the allocation of certain operating expenses to other affiliates.

E.   INVESTMENTS AND ADVANCES:

     The Company's investment in and advances to affiliates are
as follows:

                                          Carrying Value at May 31,
                                          _________________________
                          Consolidated
                            Ownership        1994          1993
                           ___________    __________     __________
Equity Method:
  GMMV                        50.0%       $ 724,800      $  724,800
  Brunton (Note B, 
     consolidated
     at end of 1994)          43.6%           --            737,400
  Ruby Mining Company         26.7%          40,700          57,000
  SMP (Note F)                50.0%       2,042,400       1,187,500
                                         ___________    ___________

                                          $2,807,900     $2,706,700
                                         ___________    ___________
                                         ___________    ___________

     Equity income (loss) from investments and writedowns of
investments accounted for by the equity method are as follows:

                                       Year Ended May 31,
                                ________________________________

                                   1994          1993          1992
                                __________    __________     ________
Crested Corp. 
  (consolidated 
  beginning in 1993)           $   --         $   --         $ 115,100 
SMP (Note F)                    (514,800)      (532,000)      (497,400)
Brunton (Note B)                 140,500         85,600         61,900 
Ruby Mining Company              (16,400)         1,700         (4,500)
GMMV                               --             --             --    
                               _________      _________      _________

                                (390,700)      (444,700)      (324,900)

Equity investment 
  extraordinary item               --             --            60,000 
                               _________      _________      _________ 

                               $(390,700)     $(444,700)     $(264,900)
                               _________      _________      _________ 
                               _________      _________      _________
There is currently litigation and arbitration proceedings
with the Company's partner in the SMP partnership, as discussed
further in Note K.  Because of the litigation and arbitration,
the Company has funded all recent advances to SMP in the amount
of $3,643,100 for standby mine care and maintenance, the rental
of certain mining equipment and administrative costs during
fiscal 1992, 1993 and 1994.  These advances are included in the
above investment account and while they have been reduced by the
Company's equity share of SMP's expenses, the Company considers
the $3,643,100 to be a receivable from SMP.  Whether or not the
$3,643,100 of advances are recovered will depend on the outcome
of the litigation and arbitration with Nukem and its wholly-owned
subsidiary CRIC as further discussed in Note K.

     SMP has entered into various market related and base price
escalated uranium sales contracts with certain utilities which
require delivery of an estimated 270,000 to 1,301,253 pounds of
uranium annually from 1995 through 2000.  These contracts also
allow for the quantities to be substantially increased by the
utilities.  Until the disputes between the SMP partners are
resolved, the Company and Crested are arranging for the purchase
and delivery of their portion of the contracts or are allowing
NUKEM and CRIC to make the entire delivery.  The deliveries will
be satisfied by purchases in the spot market, existing purchase
contracts, uranium inventories or by producing from SMP
properties.  Production will not be commenced, however, until
uranium prices rise substantially.  Most market related sales
contracts can be settled through spot market purchases.  All base
price sales contracts exceed the spot market price as of May 31,
1994.  Revenues from such uranium sales of $2,893,800, $2,690,800
and $123,300 have been included in the accompanying consolidated
statements of operations for the years ended May 31, 1994, 1993
and 1992, which would normally have been sales of SMP.

     During fiscal 1993, GMMV began expensing certain general and
administrative, maintenance and holding costs.  The Company has
not recognized an equity loss in GMMV for fiscal 1994 and 1993
because Kennecott is committed to fund 100% of the first
$50,000,000 of development and operating costs of the Joint
Venture.  The Company's investment in GMMV of $724,800 in the
accompanying balance sheets is substantially lower than its
equity in GMMV.

     Condensed combined statements of operations of the Company's
equity investees include GMMV, SMP, Brunton and Ruby Mining
Company ("Ruby") for 1994, 1993 and 1992.  Condensed combined
balance sheets do not include Brunton for 1994 as Brunton's
balance sheet was consolidated into USE as of May 31, 1994.
CONDENSED COMBINED BALANCE SHEETS -  EQUITY INVESTEES

                                         May 31,
                              _____________________________

                                 1994              1993
                              ____________     ____________

Current assets                $    720,700     $  2,677,100
Non-current assets              48,795,700       47,953,900
                              ____________     ____________

                              $ 49,516,400     $ 50,631,000
                              ____________     ____________

Current liabilities           $  6,429,000     $  5,432,900
Other long-term debt            23,621,600       24,423,900
Excess in assets                19,365,800       20,774,200
                              ____________     ____________

                              $ 49,516,400     $ 50,631,000
                              ____________     ____________
                              ____________     ____________

 CONDENSED COMBINED STATEMENTS OF OPERATIONS - EQUITY INVESTEES

                                   Year Ended May 31,
                      __________________________________________

                          1994           1993           1992
                       ___________    ___________    ___________

Revenues              $    17,000    $ 3,604,800    $ 3,845,500 
Less costs 
  and expenses          2,980,300      8,500,500      4,690,200 
                      ___________    ___________    ___________ 
Net loss              $(2,963,300)   $(4,895,700)   $  (844,700)
                      ___________    ___________    ___________ 
                      ___________    ___________    ___________ 

F.   MINERAL CLAIMS TRANSACTIONS AND MINING PROPERTIES:

GMMV

     During fiscal 1990, the Company and Crested entered into an
agreement with Kennecott, a wholly-owned, indirect subsidiary of
The RTZ Corporation PLC, for Kennecott to acquire a 50% interest
in certain uranium mineral properties known as the Green Mountain
Properties.  The purchase price was $15,000,000 of which
$6,000,000 was received in fiscal 1990 and $9,000,000 was
received in fiscal 1991.  Before they were contributed to GMMV,
the Green Mountain Properties were owned by the Company, with a
portion owned by USECC.

     The Boards of Directors of the Company and Crested adopted a
method of apportioning the initial consideration of $15,000,000,
on a ratio of 84% to the Company and 16% to Crested.  This
division was based on analyses of the projected cash flows of the
properties contributed by USE and USECC.

     Kennecott committed to fund 100% of the first $50 million of
capital contributions to the joint venture.  Kennecott will also
pay additional amounts if certain future operating margins are
achieved.  Because the Company held 100% of the claims containing
the Round Park Deposit portion of the Green Mountain properties,
it has the right to receive 50% of the cash flows from the
operations relating to that portion of GMMV properties.  With
respect to portions of GMMV properties previously held by USECC,
the Company and Crested share in cash flows attributable to their
combined 50% interest in GMMV.

     GMMV has incurred $12,133,700 in the development and
operations of the above uranium mineral properties through May
31, 1994.  This was funded by Kennecott out of the $50 million
funding commitment.  As previously mentioned, the Company's
carrying value of its investment in GMMV is $724,800 at May 31,
1994, which is substantially lower than its equity basis in GMMV.

Reclamation obligations of GMMV are discussed in Note K. 
Development of the properties continues in anticipation of future
uranium price increases.

SMP

     During fiscal 1989, USE and Crested, through USECC, entered
into an agreement to sell a 50% interest in their Sheep Mountain
properties to Nukem's subsidiary CRIC.  USECC and CRIC
immediately contributed their 50% interests in the properties to
a newly-formed partnership, SMP.  SMP was established to further
develop and mine the uranium claims on Sheep Mountain, acquire
uranium supply contracts and market uranium.  In 1989 USECC
agreed to assign three uranium delivery contracts to SMP.  USECC,
however, remained solely responsible for the reclamation of the
properties and future environmental liabilities.  SMP agreed to
deposit up to $.50 per pound of U3O8 as it is produced from the
properties for reclamation obligations.  See Notes E and K for a
description of the investment and a discussion of related
litigation.

AMAX Transactions

     During prior years, the Company and Crested conveyed
interests in mining claims to AMAX Inc. ("AMAX") in exchange for
cash, royalties, and other consideration including interest-free
loans, due in 2010.  In connection with a renegotiation of
various rights and duties of the parties, AMAX agreed to amortize
the principal amount of those loans to the Company and Crested by
$250,000 each quarter, subject to certain conditions and until
AMAX put the properties into production, which has not occurred. 
The amortization of these loans is complete as of May 31, 1994.

     In addition, AMAX pays the Company and Crested an annual
advance royalty of 50,000 pounds of molybdenum (or its cash
equivalent).  AMAX is entitled to a credit against future
royalties for any advance royalty payments made, but such
royalties are not refundable if the properties are not placed
into production.  The Company recognized $126,800, $105,800 and
$55,900 of revenue from the advance royalty payments in fiscal
1994, 1993 and 1992, respectively.

     AMAX may elect to return the properties to the Company and
Crested which would cancel the advance royalty obligation.  If
AMAX formally decides to place the properties into production, it
will pay $2,000,000 to the Company and Crested, and if AMAX sells
the properties, the Company and Crested will receive 15% of the
first $25 million received by AMAX.

Sutter Gold Venture

     During fiscal 1991, the Company acquired a one-half interest
in Sutter Gold Venture ("SGV"), a joint venture formalized to
acquire mineral leases and develop and mine gold from properties
in California.  The Company, in conjunction with Crested, formed
USECC Gold and transferred one-ninth of its interest in SGV to
Crested in exchange for Crested's agreement to pay one-ninth of
the Company's acquisition costs for its interest in the joint
venture, plus accrued interest as described below.  

     The Company acquired its interest in SGV for: (i) $4,500,000
of the $5,000,000 purchase price of SGV's properties; (ii) an
agreement to fund predecessor holding costs and the initial
development costs of SGV totalling $500,000; and (iii) its
agreement to provide its share of costs and assessments of SGV. 
SRRI, the other initial venturer in SGV, provided $500,000 of the
property purchase price, and agreed to pay $2,000,000 to the
Company to equalize their investments in SGV.  The Company and
SRRI agreed that they would each initially hold 50% interests in
SGV.

     SRRI issued a $2,000,000 note to the Company, bearing
interest at 10% per annum.  The note provided that $500,000 of
principal and accrued interest was due April 12, 1991, and the
balance of $1,500,000 was due October 12, 1991, with interest.  
If the installments were not paid when due, the interests of the
Company and SRRI in SGV were to be adjusted to equal the
percentage of the $5,000,000 purchase price of SGV's properties
that each of them provides.

     Crested's purchase price for its interest in SGV was: (i)
$500,000 (one-ninth of the $4,500,000 provided by the Company to
purchase the SGV properties) with interest; (ii) an agreement to
pay the Company $55,556 (one-ninth of the initial $500,000 of
predecessor holding costs and initial development costs of SGV
which the Company agreed to pay) with interest; and (iii) an
agreement to fund one-ninth of the assessments and liabilities
imposed on the Company-Crested ownership interest in SGV.  In
exchange, Crested received one-ninth of the Company's interest in
SGV, which initially entitled it to a 5.6% interest in the
project.  Crested was also entitled to one-ninth of any payments
on the $2,000,000 note by SRRI.

     In exchange for an agreement to issue 475,000 shares of
SRRI's common stock (one-ninth to Crested and eight-ninths to the
Company), SRRI obtained an extension of the due date for the
initial $500,000 note obligation to July 16, 1991.  Payment was
not received by the extended due date, and the 50% interest of
SRRI in SGV was reduced to 40%, with a corresponding increase in
the Company-Crested interest to 60%.  Payment was not received on
the remaining portion of the debt by the final due date and USECC
Gold's percentage interest in SGV increased to 90%.  During May
1994, the Company, Crested and SRRI reached an agreement under
which SRRI gave up all rights, title and interest in SGV and
delivered 400,000 shares of its common stock in exchange for
forgiveness of all accounts and notes payable by SRRI to the
Company and Crested.  Consequently, USE and Crested own 100% of
SGV.

     SGV is in the development stage at May 31, 1994 and is
primarily engaged in mine development, exploration and
feasibility work, permitting and acquisition of mill equipment. 
Limited revenues have been generated to date from processed ore
samples.  The related mining costs were recognized along with all
general and administrative type costs.  All acquisition and other
mine development costs have been capitalized, amounting to
$9,317,300 at May 31, 1994.

Plateau Resources Limited

     On August 11, 1993, the Company concluded the June 30, 1993
Stock Purchase Agreement ("SPA") with Consumers Power Company
("CPC"), by which the Company purchased from CPC all of the
outstanding stock of Plateau Resources Limited ("Plateau"). 
Plateau, a Utah corporation, owns the Shootaring Canyon Uranium
Mill and support facilities in southeastern Utah.  At the present
time, Plateau has applied to renew its materials license with the
United States Nuclear Regulatory Commission ("NRC").  See
paragraph (b) below.
      
     In 1984, because of a severely depressed uranium market for
uranium concentrates, Plateau indefinitely extended the
suspension of operations of its uranium processing facility and
ceased development of the Ticaboo Townsite project.  Therefore,
the acquisition as discussed below consisted of non-operating
assets with no reportable continuing operations.  The Company
paid nominal cash consideration for the Plateau stock.  As
additional consideration, the Company agreed:

     (a) to perform or cause the performance by Plateau of all
studies, remedial or other response actions or other activities
necessary from time to time for Plateau to comply with
environmental monitoring, site exit and other provisions of (i)
federal and state environmental laws relating to hazardous or
toxic substances, and (ii) the Uranium Mill Tailings Radiation
Control Act, the Atomic Energy Act of 1954, and administrative
orders and licenses relating to nuclear or radioactive substances
or materials on the property of or produced or released by
Plateau; and

     (b) to indemnify CPC from all liabilities and costs related
to the presence of hazardous substances or radioactive materials
on Plateau property, and of any future violation of laws and
administrative orders and licenses relating to the environment or
to nuclear or radioactive substances.

     At closing of the SPA, Plateau's assets included $14,200,000
in cash and cash equivalents.  Of this amount, $2,500,000 was
transferred at closing by Plateau to fund the "NRC Surety Trust
Agreement" with a commercial bank as trustee.  The trustee is to
pay future costs of mill decommissioning, site reclamation, and
long term site surveillance, as directed by the NRC.  The amount
transferred to the trust is the minimum amount now required by
the NRC as financial assurance for clean up after permanent shut
down of the mill.

     Also at  closing, $4,800,000 was transferred by Plateau to
fund the "Agency Agreement" with a commercial bank.  These funds
will be available to indemnify CPC against possible claims
related to environmental or nuclear matters, as disclosed above,
and against third-party claims related to a tax benefit transfer
agreement between Plateau and the third-party, in the event of a
"disqualification event" as provided in such agreement.  The
$4,800,000 and $2,500,000 are reflected as Restricted
Investments.  No value has been recorded by the Company for the
mill and related operating assets received in the transaction
because of their current nonoperating nature and the lack of cash
flow from any operations in the foreseeable future.  The Company
recorded the specified $2,500,000 reclamation liability, an
additional liability for $4,800,000 related to an indemnification
of other possible claims against Plateau and recorded a liability
of $6,900,000 for estimated care and maintenance costs on the
mill.  Certain care and maintenance costs incurred during the
year reduced this liability to $6,484,600 at yearend.  Together
with the $4,800,000 indemnification reserve, these estimated
obligations are recorded as Other Accrued Liabilities of
$11,284,000 in the accompanying consolidated financial
statements.

     Since the date of acquisition, there has been only minimal
subsequent operations because the future operating and holding
costs of most of the facilities acquired were accrued as part of
the acquisition transaction and included Other Accrued
Liabilities.

Energx

     During fiscal 1994, USE and Crested formed Energx to engage
in the exploration, development and operation of natural gas
properties.  Energx currently has leased properties in Wyoming
and the Fort Peck Indian Reservation, Montana.  Energx is owned
by USE (45%), Crested (45%), the Assiniboine and Sioux Tribes
(10%).

G.   LONG-TERM DEBT:

     The last quarterly amortization of $250,000 each for the
non-interest bearing loans from AMAX to USE and Crested were
recognized in fiscal 1994 (Note F).

     The Company's debt includes the $200,000 revolving line of
credit of Brunton with a commercial bank.  The line of credit
accrues interest at 9.75% and expires on April 27, 1995 .  As of
May 31, 1994, $161,000 was outstanding on the line of credit. 
Brunton has two installment notes bearing interest at 8% secured
by generally all of the assets of Brunton.  FNG also has various
installment notes bearing interest from 6.9% to 11.5% which are
secured by FNG equipment with maturity dates through 1997.

     The components of debt as of May 31, 1994 and 1993 are as
follows:
May 31,
                                       __________________________

                                          1994            1993
                                       __________      __________
   Non-interest bearing note to
     AMAX USE portion (Note F)         $    --        $ 250,000
   Non-interest bearing note to
     AMAX Crested portion (Note F)          --          250,000
   Installment note - secured 
     by equipment, interest at 8%, 
     matures February 1996               220,200          --
   Installment notes - secured 
     by real estate, interest at
     7.9% - 8%, matures 1998-2004        287,600          --
   Brunton installment notes             770,000          --
   Brunton line of credit                161,000          --
   FNG installment notes                 157,800        805,000
   FNG line of credit                       --          213,500 
   Notes payable - other                  82,000        315,000 
                                      __________     __________ 

                                       1,678,600      1,833,500 
   Less current portion                 (569,500)      (629,100)
                                      __________     __________ 

                                      $1,109,100     $1,204,400
                                      __________     __________ 
                                      __________     __________ 

     Principal requirements on debt for the five years after May
31, 1994 are as follows: 1995 - $569,500; 1996 - $232,900; 1997 -
$142,800, 1998 - $129,400, and thereafter - $604,000.

   Subsequent to yearend, USE and Crested obtained a $1,000,000
line of credit from a bank.  The line of credit bears interest at
the banks prime rate plus .5% (8.5% initially) and matures on
June 23, 1995.  The line of credit is secured by certain
receivables and a share of the net proceeds of production from
certain oil and gas wells.  As of September 1, 1994, $600,000 had
been drawn under this agreement.

H.   INCOME TAXES:

     The Company adopted SFAS 109 during fiscal 1994.
The components of deferred taxes as of May 31, 1994 are as
follows:

                                                    May 31,
                                                     1994
                                               ____________
     Deferred tax assets:
       Deferred compensation                   $     26,800 
       Deferred gain on sale of assets               84,500 
       Net operating loss carryforwards           4,601,100 
       Capital loss carryforwards                   452,000 
       Tax Credits                                  325,000 
       Other                                         36,000 
                                               ____________ 

     Total deferred tax assets                 $  5,525,400 
                                               ____________ 

     Deferred tax liabilities:
       Accelerated depreciation for tax          (1,112,900)
       Development and exploration costs         (2,039,900)
                                               ____________ 

     Total deferred tax liabilities              (3,152,800)
                                               ____________ 

                                               $  2,372,600 

     Valuation allowance                       $ (2,639,600)
                                               ____________ 

     Net deferred tax liability                $    267,000 
                                               ____________ 
                                               ____________
The Company has established a valuation allowance of
$2,639,600 against deferred tax assets due to the losses incurred
by the Company in fiscal 1994 and 1993.  The Company's ability to
generate future taxable income to utilize the NOL and capital
loss carryforwards is uncertain.

     For the years ended May 31, 1993 and 1992, the tax effect of
deferred taxes resulting from timing differences in the
recognition of revenues and expenses for tax and financial
statement purposes are as follows:

                                         Year Ended May 31,
                                    ____________________________
                                        1993             1992
                                    _____________   ____________
Gain on sale of property 
  and equipment                     $   (81,800)    $    --     
Operating loss
  carryforwards for
  income tax 
  reporting purposes                   (311,200)       (563,700)
Deferred compensation 
  expense                               (55,600)        (75,800)
Exploration and 
  development costs                     437,700         737,900 
Depreciation                             54,000          50,300 
Other                                   (43,100)         48,600 
                                    ___________      __________ 

Deferred income taxes                     --            197,300 
Less operating loss 
  carryforwards
  recognized for
  financial reporting 
  purposes                                --            197,300 
                                    ___________      __________ 

Net deferred 
  income taxes                      $     --        $    --     
                                    ___________      __________ 
                                    ___________      __________ 

     The income tax provision (benefit) is different from the
amounts computed by applying the federal income tax rate to
income before taxes.  The reasons for these differences are as
follows:
Year Ended May 31,
                            ___________________________________

                               1994           1993        1992
                            ___________    _________   _________
Expected federal 
  income tax                $(1,055,300)   $  --       $ 208,500 
Other                           --            --         (11,200)
SFAS 109 allowance            1,055,300       --            --
                            ___________    _________   _________ 
Income tax provision            --            --         197,300 
Extraordinary item - 
  net operating
  loss carryforwards            --            --         197,300 
                            ___________    _________   __________
Provision for
  (benefit from)
  income taxes less
  net operating
  loss carryforwards        $   --         $  --       $    --
                            ___________    _________   __________
                            ___________    _________   __________

There were no taxes payable as of May 31, 1994 or 1993.

     At May 31, 1994, the Company and its subsidiaries had
available, for federal income tax purposes, net operating loss
carryforwards of approximately $13,150,000, which will expire
from 1995 to 2009 and investment tax credit carryforwards of
$325,000 which, if not used, will expire from 1995 to 2001.  The
Internal Revenue Code contains provisions which limit the NOL
carryforwards available which can be used in a given year when
significant changes in company ownership interests occur.  In
addition, the NOL and credit amounts are subject to examination
by the tax authorities.

     The Internal Revenue Service has audited the Company's and
affiliates' tax returns through fiscal 1986, and their income tax
liabilities are settled through that year.  The IRS has recently
audited the Company's and affiliates' fiscal years 1989, 1990 and
1991 tax returns.  The Company has received a deficiency letter
for the years 1989 through 1991.  The Company has submitted a
written appeal to protest the findings of the examining agent. 
Management believes the Company will prevail on the significant
issues in dispute, and therefore, that significant liabilities
will not result from the findings.

I.   SEGMENTS AND MAJOR CUSTOMERS:

     The Company's primary business activity is minerals
operations.  Other reportable industry segments included
commercial operations, primarily real estate activities and
operation of an airport fixed base operation and construction
operations.  The following is information related to industry
segments:
Year Ended May 31, 1994
                      ______________________________________________________

                       Minerals     Commercial   Construction
                      Operations    Operations    Operations    Consolidated
                      __________    ___________  ___________    ___________

Revenues              $4,359,300   $ 1,165,100   $2,606,400     $ 8,130,800
                      ___________   __________   __________ 
                      ___________   __________   __________ 
Interest and
  other revenues                                                    645,500
                                                                ___________

  Total Revenues                                                $ 8,776,300 
                                                                ___________
                                                                ___________ 
Operating 
  profit (loss)       $ (665,100)  $  (824,300)  $  317,500     $(1,171,900)
                      ___________  ___________   __________ 
                      ___________  ___________   __________   
Interest and
  other revenues                                                    645,500
General corporate 
  and other expenses                                             (2,186,700)
Equity in loss 
  of affiliates                                                    (390,700)
Cumulative effect 
  of income tax 
  accounting change                                                (267,000)
                                                                ___________
Loss before income
  taxes and cumu-
  lative effect                                                 $(3,103,800)
                                                                ___________
                                                                ___________ 
Identifiable assets
  at May 31, 1994     $17,745,200  $ 6,464,000   $  371,200     $24,580,400
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Investments in
  affiliates                                                      2,807,900 
Corporate asset s                                                 5,702,000 
                                                                ___________
  Total assets 
    at May 31, 1994                                             $33,090,300 
                                                                ___________ 
                                                                ___________ 
Capital expenditures  $1,190,700   $   441,600   $   19,800 
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Depreciation,
  depletion and
  amortization        $     --     $   505,600   $  160,200

                      ___________  ___________   __________ 
                      ___________  ___________   __________
Year Ended May 31, 1993
                      ______________________________________________________

                       Minerals     Commercial   Construction
                      Operations    Operations    Operations   Consolidated
                      __________    ___________  ___________   ___________

Revenues              $4,796,600   $   894,400   $2,026,500    $ 7,717,500
                      ___________   __________   __________ 
                      ___________   __________   __________ 
Interest and
  other revenues                                                 1,328,000
                                                               ___________

  Total Revenues                                               $ 9,045,500 
                                                               ___________
                                                               ___________ 
Operating 
  profit (loss)       $1,140,400   $  (678,600)  $  266,100    $   727,900
                      ___________  ___________   __________ 
                      ___________  ___________   __________   
Interest and
  other revenues                                                 1,328,000
General corporate 
  and other expenses                                            (1,833,100)
Equity in loss 
  of affiliates                                                   (444,700)
Loss before income
  taxes and extra-
  ordinary item                                                $  (221,900)
                                                               ___________
                                                               ___________ 
Identifiable assets
  at May 31, 1993     $ 8,765,100  $ 5,605,800   $1,190,200    $15,561,100
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Investments in
  affiliates                                                     2,706,700 
Corporate assets                                                 5,769,400 
                                                               ___________
  Total assets 
    at May 31, 1993                                            $24,037,200 
                                                               ___________ 
                                                               ___________ 
Capital expenditures  $    3,300   $   169,800   $  819,900 
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Depreciation,
  depletion and
  amortization        $     --     $   419,400   $  162,200

                      ___________  ___________   __________ 
                      ___________  ___________   __________
Year Ended May 31, 1992
                      ______________________________________________________

                       Minerals     Commercial   Construction
                      Operations    Operations    Operations   Consolidated
                      __________    ___________  ___________   ____________

Revenues              $1,677,500   $   817,200   $2,895,000    $ 5,389,700
                      ___________   __________   __________ 
                      ___________   __________   __________ 
Interest and
  other revenues                                                   963,900
                                                               ___________

  Total Revenues                                               $ 6,353,600 
                                                               ___________
                                                               ___________ 

Operating profit      $  567,900   $    91,800   $  254,100    $   913,800
                      ___________  ___________   __________ 
                      ___________  ___________   __________   
Interest and
  other revenues                                                   963,900
General corporate 
  and other expenses                                              (999,600)
Equity in loss 
  of affiliates                                                   (324,900)
Income before income
  taxes and extra-
  ordinary item                                                $   553,200
                                                               ___________
                                                               ___________ 
Identifiable assets
  at May 31, 1992     $ 8,059,900  $ 6,368,400   $  583,400    $15,011,700
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Investments in
  affiliates                                                     1,985,700 
Corporate assets                                                 7,585,600 
                                                               ___________
  Total assets 
    at May 31, 1992                                            $24,583,000 
                                                               ___________ 
                                                               ___________ 
Capital expenditures  $    1,600   $   228,600   $  336,100 
                      ___________  ___________   __________ 
                      ___________  ___________   __________ 
Depreciation,
  depletion and
  amortization        $     --     $   266,700   $  126,100

                      ___________  ___________   __________ 
                      ___________  ___________   __________
During fiscal 1994, 1993 and 1992, approximately 14%, 44%
and 62% of mineral revenues were from amortization of principal
on the AMAX notes and annual advance royalties of molybdenum from
AMAX.  During fiscal 1994, 1993 and 1992, 86%, 56% and 7%,
respectively, of mineral revenues were from sales of uranium.

     The Company subleases excess office space, contracts
aircraft for charter flights and sells aviation fuel.  Commercial
revenues in the statements of operations consist of mining
equipment, office and other real property rentals, charter
flights and fuel sales.

J.   SHAREHOLDERS' EQUITY:

     The Board of Directors has adopted the U.S. Energy Corp.
1989 Stock Option Plan (the "Option Plan") for the benefit of
USE's key employees.  550,000 shares of the Company's $.01 par
value common stock have been reserved for issuance under the
Option Plan.  During fiscal 1990, the Company issued options to
certain of its executive officers, Board members and others. 
44,000 incentive options were issued at purchase prices ranging
from $7.84  per share to $8.62 per share.  231,000 non-qualified
options were also issued at exercise prices from $6.27 to $8.62
per share.  The options will expire on January 2, 2000, with the
exception of those issued to the Company's Chief Executive
Officer, which will expire January 2, 1996.

     The Board of Directors of USE adopted the U.S. Energy Corp.
1989 Employee Stock Ownership Plan ("ESOP") in 1989, for the
benefit of USE's employees.  During fiscal 1994, 1993 and 1992,
the Board of Directors of USE contributed 46,332, 49,087 and
49,599, shares to the ESOP at prices of $4.00, $3.75 and $3.50
per share, respectively.  The Company is responsible for one-half
of these contributions of $92,500, $91,700 and $86,800 in fiscal
1994, 1993 and 1992, respectively.  Crested is responsible for
the remainder (see Note C).  USE has loaned the ESOP $1,014,300
to purchase 125,000 shares from the Company and 38,550 shares on
the open market.  These loans, which are secured by pledges of
the stock purchased with the loan proceeds, bear interest at the
rate of 10% per annum and are due in fiscal 1995 and 1996.

     During fiscal 1991, the Board of Directors of both the
Company and Crested issued shares of stock as bonuses to certain
directors, employees and third parties.  The stock bonus shares
have been reflected outside of the Shareholders' Equity section
in the accompanying balance sheets because such shares are
forfeitable to the Company and Crested until earned.  Crested is
responsible for one half of the compensation expense related to
these issuances (see Note C).  Compensation expense will be
recognized over the various earn out periods.  As of May 31,
1994, 1993 and 1992, the Company had compensation expense of
$116,700, $271,700 and $293,200, respectively, resulting from
these issuances.  During fiscal 1993, the Company's Board of
Directors amended the stock bonus plan.  As a result, the earn
out dates have been extended until retirement, which is the earn
out date of the amended stock bonus plan.  The new plan grants a
stock bonus of 20% of the previous plan per year for five years. 
Additional information related to these stock issuances is set
forth in the following table:

   Issue             Number                 Issue        Total
    Date            of Shares  Issuer       Price    Compensation
   May 1990          44,330     USE       $  8.86      $392,925
   June 1990         46,530     USE         10.00       465,300
   June 1990         15,400     USE         10.00       154,000
   June 1990         11,000     USE         10.00       110,000
   June 1990         25,000     Crested      1.0625      26,562
   December 1990     22,500     Crested       .50        11,250
   January 1993      18,520     USE          3.00        55,560
   January 1993       6,500     Crested       .22         1,430
   January 1994      18,520     USE          4.00        74,080
   January 1994       6,500     Crested       .28         1,828

     No shares were earned in fiscal 1993 or 1992; however, 5,000
shares were earned and released in fiscal 1994. 

     In April 1993, the Board of Directors of USE authorized the
issuance of 50,000 shares of its common stock at $2.75 per share
to an affiliate for cash in an effort to increase the Company's
operating capital.  USE also granted Brunton options for 150,000
common shares at $3.50 per share.  No options have been exercised
as of May 31, 1994.

     On November 11, 1993, the Company issued 100,000 shares of
its common stock at $3.00 per share to Brunton in lieu of payment
on a $300,000 line of credit.

K.   COMMITMENTS, CONTINGENCIES AND OTHER:

Legal Proceedings

SMP

     Arbitration Proceeding Concerning SMP.  During fiscal 1992,
NUKEM's wholly-owned subsidiary Cycle Resource Investment
Corporation ("CRIC") instituted arbitration proceedings against
the Company and Crested.  CRIC claimed that the Company and
Crested violated the SMP partnership agreement by assigning
amounts equal to any SMP cash distributions to USECC derived from
sales of uranium under SMP supply contracts.  CRIC also asserted
that by entering into the GMMV agreement, the Company and Crested
misappropriated a business opportunity of SMP.  CRIC seeks
damages and certain equitable remedies from the Company and
Crested, in an amount to be determined and seeks to expel the
Company and Crested from the SMP Partnership.  The Company and
Crested do not believe their entry into the GMMV agreement
violated the restraints on transfer of SMP property set forth in
the SMP agreement.  They have vigorously defended themselves
against the allegations of CRIC.  

     Federal Court Action Concerning SMP.  On July 3, 1991, the
Company and Crested filed a civil action in the U. S. District
Court of Colorado against Nukem, CRIC and their affiliates,
alleging that Nukem, CRIC and their affiliates fraudulently
misrepresented facts and concealed information from the Company
and Crested to induce their entry into the agreements forming SMP
and seeks rescission, damages and other relief.  The Company and
Crested further alleged that NUKEM and CRIC have refused to
provide information about transactions by CRIC and its affiliates
with SMP, and that the defendants had engaged in various wrongful
acts relating to financing and acquisition of uranium for SMP. 
NUKEM and CRIC filed an answer and a variety of counterclaims
against the Company and Crested.  NUKEM's affiliates (excluding
CRIC) were thereafter dismissed from the lawsuit.  The U. S.
District Court granted the motion of the Company and Crested to
stay the above arbitration initiated by CRIC and also ordered the
Company and Crested to amend their complaint.  On April 6, 1992,
the Company and Crested filed an amended complaint against NUKEM
and CRIC setting out the alleged fraud with particularity, and
NUKEM and CRIC filed answers and counterclaims to the amended
complaint.  

     State Court Action Concerning SMP.  On September 16, 1991,
USECC filed a civil action in the Denver District Court against
SMP seeking reimbursement of $85,000 per month since the spring
of 1991 for the care and maintenance of the SMP underground
uranium mines and properties in south-central Wyoming.  On May
11, 1993, the Denver District Court stayed all proceedings until
the U.S. District Court for Colorado case is resolved.

     Summary.  The discovery stage in the case filed by the
Company and Crested on July 3, 1991 in the U. S. District Court
of Colorado against NUKEM, CRIC et al  has been protracted and
vigorously contested by all parties.  On November 6, 1993, the
remaining parties in that suit, NUKEM and CRIC, verbally agreed
with the Company and Crested that the majority of the litigation
post the formation of SMP, would be handled through consensual
arbitration with the American Arbitration Association ("AAA"). 
The agreement to arbitrate was finally reduced to writing and
executed effective on February 7, 1994.  The arbitration
proceeding commenced on June 27, 1994 before a three member AAA
arbitration panel.  Given the amount of evidence to be addressed
and the availability of the members of the panel and counsel, it
is currently estimated that arbitration proceedings will not be
concluded until early 1995.  Pursuant to a court order requiring
an election of remedies, the Company and Crested elected to
affirm the SMP Partnership and seek the remedies of common law
damages, damages as provided under the Racketeer Influenced and
Corrupt Organization(s) Act (RICO) and other remedies, in lieu of
asking that the SMP Partnership be rescinded.  

Illinois Power

     Illinois Power Company ("IPC"), one of the utilities with
whom SMP has a long-term uranium supply contract, unilaterally
sought to terminate the contract on October 28, 1993 and filed
suit contemporaneously in the Federal District Court, Danville,
Illinois, against the Company, Crested, CRIC, SMP, Nukem
Luxemburg GmbH ("NULUX") and the Dresdner Bank, seeking a
declaratory judgment that the contract with USECC, which was
assigned to SMP and thereafter to NULUX, had been breached by
USECC filing of a Motion for Appointment of Receiver in the SMP
litigation.  The Dresdner Bank was dismissed from the case, and
the remaining defendants filed answers denying IPC's allegations
and filed counterclaims for damages due under the IPC contract. 
These defendants also filed Motions for Summary Judgment and a
hearing was held on the motions on May 27, 1994.  On September 1,
1994, the U. S. District Court for the Central District of
Illinois granted the defendants' motions for summary judgment
against IPC dismissing IPC's complaint, and further granted those
defendant's counterclaims against IPC for breach of contract by
IPC.  A scheduling conference has been set by the Court for
September 30, 1994 to determine the amount of damages, if any, to
be awarded to the Company.

Reclamation and Environmental Liabilities

     Most of the Company's mine development, exploration and
operating activities are subject to federal and state regulations
that require the Company to protect the environment.  The Company
attempts to conduct its mining operations so as to comply with
these regulations, but they are continually changing and
generally becoming more restrictive.  Consequently, the Company's
current estimates of its reclamation obligations and its current
level of expenditures to perform ongoing reclamation may change
in the future.  At the present time, however, the Company cannot
predict the outcome of future regulation or its impact on costs. 
Nonetheless, the Company has recorded its best estimate of future
reclamation and closure costs based on currently available facts
and technology and enacted laws and regulations.  Certain
regulatory agencies, such as the Nuclear Regulatory Commission,
the Bureau of Land Management and the Wyoming Department of
Environmental Quality review the Company's reclamation,
environmental and decommissioning liabilities, and the Company
believes its recorded amounts are consistent with those reviews
and related bonding requirements.  To the extent that planned
production on its properties is delayed, interrupted or
discontinued because of regulation or the economics of the
properties, the future earnings of the Company would be adversely
affected.  The Company believes it has accrued all necessary
reclamation costs and there are no additional contingent losses
on unasserted claims to be disclosed or recorded in the
reclamation liability.  The Company has not disposed of any
properties for which it has a commitment or is liable for any
known environmental liabilities.

     The majority of the Company's environmental obligations
relate to former mining properties acquired by the Company. 
Since the Company currently does not have properties in
production, the Company's policy of providing for future
reclamation and mine closure costs on a unit-of-production basis
has not resulted in any significant annual expenditures or costs.

For the obligations recorded on acquired properties, including
site-restoration, closure and monitoring costs, actual
expenditures for reclamation will occur over a number of years,
and since these properties are all considered future production
properties, those expenditures, particularly the closure costs,
may not be incurred for many years.  The Company also does not
believe that any significant capital expenditures to monitor or
reduce hazardous substances or other environmental impacts are
currently required.  As a result, the near term reclamation
obligations are not expected to have a significant impact on the
Company's liquidity.

     As of May 31, 1994, the Company has recorded estimated
reclamation obligations, including standby costs, of $15,236,400,
as reflected in reclamation and other long-term liabilities in
the accompanying financial statements.  In addition, the GMMV
joint venture, in which the Company is a 50% equity investor, has
recorded a $23,600,000 liability for future reclamation and
closure costs.  None of these liabilities have been discounted,
and the Company has not recorded any potential offsetting
recoveries from other responsible parties or from any insurance
companies.

     The Company currently has four mineral properties or
investments that account for most of its environmental
obligations.  The Company is a partner in SMP, a joint venturer
of GMMV and owner of SGV and Plateau.  The environmental
obligations and the nature and extent of cost sharing
arrangements with other potentially responsible parties, as well
as any uncertainties with respect to joint and several liability
of each are discussed in the following paragraphs:

SMP

     The Company and Crested agreed to assume the reclamation
obligations, environmental liabilities and liabilities for
injuries to employees in mining operations with respect to the
Crooks Gap properties, which are part of the SMP venture.  The
reclamation obligations, which are established by regulatory
authorities, were reviewed by the Company and the regulatory
authorities during fiscal 1994 and the balance in the reclamation
liability account at May 31, 1994 of $1,451,800 was determined by
the Company to be adequate.  The obligation will be satisfied
over the life of the mining project which is estimated to be at
least 20 years.  The Company and Crested self bonded this
obligation by mortgaging certain of their real estate holdings. 
A portion of the funds for the reclamation of SMP's properties is
expected to be provided by SMP which has agreed to pay up to $.50
per pound of uranium to the Company and Crested for reclamation
work, as the uranium is produced from the properties.  The
current arbitration proceedings with Nukem and CRIC could result
in changes to these agreements between the parties.

GMMV

     During fiscal 1991, the Company and Crested acquired
developed minerals properties on Green Mountain known as the Big
Eagle Property.  In connection with that acquisition, the Company
and Crested agreed to assume reclamation and other environmental
liabilities associated with the property.  Reclamation
obligations imposed by regulatory authorities were established at
$7,300,000 at the time of acquisition.  Immediately after the
acquisition, the Company and Crested transferred a one-half
interest in them to Kennecott, and Kennecott, the Company and
Crested contributed the Big Eagle properties to GMMV, which
assumed the reclamation and other environmental liabilities. 
Kennecott holds a commercial bank letter of credit as security
for the performance of the reclamation obligations for the
benefit of GMMV.

     During fiscal 1993, GMMV entered into an agreement to
acquire the Sweetwater uranium mill and related properties from
UNOCAL.  GMMV's consideration for the acquisition of the
Sweetwater Mill Property was the assumption of all environmental
liabilities and reclamation bonding obligations.  The
environmental obligations of GMMV are guaranteed by Kennecott
Corporation (parent of Kennecott Uranium Company, the other joint
venture partner).  However, UNOCAL also agreed that if GMMV
incurs expenditures for environmental liabilities prior to the
earlier of commercial production by GMMV or February 1, 2001
(which liabilities are not due solely to the operations of GMMV),
UNOCAL will reimburse GMMV the first $8,000,000 of such
expenditures.  Any such reimbursement may be recovered by UNOCAL
from 20% of future cash flows from sale of uranium concentrates
processed through the Mill.  In any event, until such time as
environmental and reclamation undertakings are liquidated against
Kennecott Corporation, such costs are not deemed expenditures
under Kennecott's $50,000,000 development commitment (although
bond costs may be charged against this development commitment).

     The reclamation and environmental liabilities assumed by
GMMV concern two categories: (1) cleanup of an inactive open mine
pit site near the Mill, including water (heavy metals and other
contaminants) and tailings (heavy metals and other dust
contaminant abatement and erosion control) associated with the
pit, and (2) decontamination and cleanup and disposal of the Mill
building and equipment and tailings cells after Mill
decommissioning.  Current liabilities for such efforts have been
established at approximately $16,314,000 by the Wyoming
Department of Environmental Quality for mine pit site matters
(exercising EPA-delegated jurisdiction to administer the Clean
Water Act and the Clean Air Act, and directly administering
Wyoming statutes on mined land reclamation), and by the NRC for
decontamination and cleanup of the Mill and Mill tailings cells. 
The EPA has continuing jurisdiction under the Resource
Conservation and Recovery Act, pertaining to any hazardous
materials which may be on site when cleanup work is started.

     Although USE and the other GMMV parties are liable for all
reclamation and environmental compliance costs associated with
Mill and site maintenance, as well as Mill decontamination and
cleanup and site reclamation and cleanup after the Mill is
decommissioned, USE believes it is unlikely USE will have to pay
for such costs directly.  First, based on current estimates of
cleanup and reclamation costs (reviewed annually by the oversight
agencies), such costs may be within the $50,000,000 development
commitment of Kennecott Uranium Company for GMMV.  These costs
are not expected to increase materially, if the Mill is not put
into full operation.  Second, to the extent GMMV is required to
spend money on reclamation and environmental liabilities related
to previous Mill and site operations during ownership by Minerals
Exploration Company (a UNOCAL subsidiary), UNOCAL has agreed to
fund up to $8,000,000 of such costs (provided such costs are
incurred before February 1, 2001 and before Mill production
resumes), which would be recoverable only out of future Mill
production (see above).  Third, payment of the GMMV reclamation
and environmental liabilities related to the mill is guaranteed
by Kennecott Corporation, parent of Kennecott Uranium Company. 
Last, GMMV will set aside a portion of operating revenues to fund
reclamation and environmental liabilities once mining and milling
commences.  To date, ongoing Mill maintenance expense is funded
by Kennecott as part of its development commitment.

     Kennecott Corporation will be entitled to contribution from
the USE parties in proportion to their participation interests in
GMMV, if Kennecott Corporation is required to pay Mill cleanup
costs directly pursuant to its guarantee.  Such payments by
Kennecott  Corporation only would be reimbursed if the
liabilities cannot be satisfied within the initial $50,000,000
expenditure commitment, and then only to the extent there are
insufficient funds from the reclamation reserve (to be built up
out of GMMV operating revenues).  In addition, if and to the
extent such liabilities resulted from UNOCAL's Mill operations,
and payment of the liabilities was required before February 1,
2001 and before Mill production resumes, then up to $8,000,000 of
that amount would be paid by UNOCAL, before Kennecott Corporation
would be required to pay on its guarantee. Accordingly, although
the extent of any ultimate USE liability for contribution to Mill
cleanup costs cannot be predicted, USE and Crested will only be
required to pay its proportional share of Mill cleanup if a) the
liabilities cannot be satisfied with the initial $50,000,000
expenditure commitment from Kennecott, b) there are insufficient
funds from the reclamation reserve to be built up out of GMMV
operating revenues and c) payments are not available from UNOCAL.

SGV

     The Company and Crested currently own 100% of SGV, which
owns gold mineral properties in California.  Currently, the
property is in development and costs consist of drilling,
permitting, holding costs and administrative costs.  No
substantial mining has been completed, although a 2,800 foot
decline through the identified ore zones for an underground mine
was acquired in the purchase.  Because the mine is not in the
production stage and the Company's policy is to provide
reclamation on a unit-of-production basis, no environmental
liabilities have been accrued as of May 31, 1994.  Any
reclamation liability for SGV properties which currently exist is
insignificant.

Plateau

     The environmental obligations acquired with the acquisition
of Plateau include all environmental and reclamation obligations
relating to the Shootaring Mill.  Based on the bonding
requirements, Plateau transferred $2,500,000 to a trust account
to pay future costs of mill decommissioning, site reclamation and
long-term site surveillance.  In addition, Plateau has recorded
additional obligations of $11,284,600 as of May 31, 1994, for the
estimated holding and maintenance costs needed until the mill is
placed in service or decommissioning begins.  The estimated
future Shootaring Mill decommissioning and site reclamation costs
noted above ,as required by the NRC and the Utah Department of
Natural Resources, were determining factors in the consideration
paid by the Company

Executive Compensation

     The Company and Crested are committed to pay the estates of
certain of their officers an amount equal to one year's salary
for one year after their death and reduced amounts, to be set by
the Board of Directors, for a period up to five years thereafter.

Subsequent Events

     On August 25, 1994, Plateau Resources, Limited., a wholly
owned subsidiary of the Company signed a letter of intent with an
unrelated third party to sell part interest in Canyon Homesteads,
Inc., a wholly owned subsidiary of Plateau, and to develop the
Ticaboo Townsite, in south central Utah and other resort
properties near Lake Powell.  The total purchase price for a one-
half interest in Canyon Homesteads is $6,000,000.  The party has
made a non refundable earnest money payment of $100,000 to
Plateau to be credited to the purchase price, and will pay an
additional $900,000 within 30 days of the signing of the letter
of intent.  The next payment of $2,000,000 will be made 30 days
later with the balance of $3,000,000 to be paid out of cash flows
generated from the operations.  The development is anticipated to
include the following:  homesites, 18 hole golf course, boat
storage, trailer park, RV park, motel, condominiums, and other
commercial business. 

     On August 31, 1994, the Company and Crested agreed to
exercise an option to purchase a 57 acre parcel of land in the
City of Gunnison, CO. from Cyprus Climax Metals Company ("AMAX").

This land will be acquired in exchange for the Company's and
Crested's forgiveness of the next six quarters of advance minimum
royalty payments of molybdenum which would otherwise be due from
Cyprus to the respective Companies. The total purchase price of
the exchange given the current dealer oxide price is worth
approximately $266,250.  (See Note F.)
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                      BALANCE AT   ADDITIONS             BALANCE AT
                                      BEGINNING    CHARGED TO              END OF
                                      OF PERIOD    EXPENSES   DEDUCTIONS   PERIOD

Year Ended May 31, 1994
  Allowance for doubtful accounts
    Accounts and notes receivable:
Trade                              $4,000     $28,600    $   --     $32,600
      Related parties                     1,600         --         --     1,600

                                        $ 5,600    $28,600    $   --     $34,200
Year Ended May 31, 1993
  Allowance for doubtful accounts
    Accounts and notes receivable:
      Trade                             $10,300    $   --     $6,300     $4,000
      Related parties                     1,800         --        200     1,600

                                        $12,100    $   --     $6,500     $5,600
Year Ended May 31, 1992
  Allowance for doubtful accounts
    Accounts and notes receivable:
      Trade                              $5,100     $5,200     $   --     $10,300
      Related parties                       800      1,000         --     1,800
                                         $5,900     $6,200     $   --     $12,100
STEPHEN E. ROUNDS
                                   Attorney at Law

4635 EAST EIGHTEENTH AVENUE                         TELEPHONE  (303) 377-6997
DENVER, COLORADO 80220 USA                          FACSIMILE (303) 377-0231

April 15, 1995 

U.S. Energy Corp.
Board of Directors
877 North 8th West
Riverton, Wyoming 82501

Re: Registration Statement on Form S-1

Gentlemen:

The Brunton Company, a Wyoming corporation, proposes to offer and
sell, to the public, up to 150,000 common shares of U.S. Energy
Corp. ("Company"), a Wyoming corporation. My opinion is required in
connection with such transaction.

                       Documents Reviewed

I have examined originals, certified copies or other copies
identified to my satisfaction, of the following:

     1. Restated Articles of Incorporation, and Amendment to
Restated Articles of Incorporation, of the Company.

     2. Bylaws of the Company, as amended.

     3. All exhibits listed as incorporated by reference in Part II
of the registration statement on Form S-1, prepared by the Company
and filed with this opinion as an exhibit.

     4. The Company's registration statement on Form S-4 (SEC File
No. 33-72280), effective April 13, 1994.

     5. Certain minutes of proceedings of the Company board of
directors.

     6. Such other papers (including public documents) as I deem
appropriate under the circumstances.

I have also consulted with Company officers and representatives
(including but not limited to its transfer agent), and received
representations and assurances concerning same, as I have deemed
advisable or necessary under the circumstances. Although I have not
undertaken independent verification of the matters covered by this
paragraph, I have no reason to believe that the representations and
assurances received are materially inaccurate or false.
U.S. Energy Corp. 
April 15, 1995 
Page -2

                             Opinion

Subject to compliance with applicable state securities laws, and to
declaration of effectiveness of the Company's Form S-1 registration
statement, and based on my review of the documents listed above, it
is my opinion that the common shares to be offered and sold by
Brunton after date hereof are duly and validly issued, fully paid
and non-assessable common shares of the Company.

My opinion assumes that Brunton delivers a copy of the definitive
prospectus to each purchaser of the common shares, in compliance
with the Securities Act of 1933, as amended, and applicable rules
of the Securities and Exchange Commission.

I hereby consent to the filing of this opinion as an exhibit to the
registration statement on Form S-1. However, I do not admit that I
am in the category of those persons whose consent is required to be
so filed by Section 7(a) of the Securities Act of 1933.

                                        Yours Sincerely,

                                        s/Stephen E. Rounds
ARTHUR ANDERSEN LLP

                                                                  
                                                     Exhibit 24.1

             CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
             _________________________________________

As independent public accountants, we hereby consent to the use of
our report (and to all references to our firm) included in or made
a part of this registration statement.

                                        s/ Arthur Andersen LLP

Denver, Colorado,
  April 28, 1995