SEC File No.  333-
                                  
                 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 82501
                          Tel. 307/856-9271
        -----------------------------------------------------
 (Address and telephone of registrant's principal executive offices)
                                  
                          Daniel P. Svilar
             877 North 8th West, Riverton, Wyoming 82501
                          Tel. 307/856-9271
        -----------------------------------------------------
    (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.

The Registrant hereby amends this Registration Statement on such date
or  dates  as may be necessary to delay its effective date until  the
Registrant  the  file  a further amendment which specifically  states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, or  until
the Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may determine.

If  any  of  the securities being registered on this Form are  to  be
offered  on a delayed or continuous basis pursuant to Rule 415  under
the Securities Act of 1993 check the following box.    X
<PAGE>
                   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 unit     price           fee

Warrant(1)        Up to 11(2)         N/A        N/A            (5)

Common Stock
  $0.01 par     252,901 shares(3)  $20.50   $5,184,470(4)   $1,788.00

(1)   The  Warrant entitles the holder to purchase 200,000 shares  of
Registrant's common stock $0.01 par value, for $5.00 per share at any
time prior to 12:00 o'clock midnight January 9, 1997.
(2)   One Warrant is currently outstanding, but that Warrant  may  be
divided  into or combined with up to ten other warrants  which  carry
the  same  (proportional) rights upon presentation.  The  Warrant  is
being  registered  under  the  Securities  Act  of  1933  solely   to
accommodate  the registration of the Warrant Shares for sale  to  the
public.
(3)  200,000 shares of common stock (the "Warrant Shares") are to  be
issued  by  Registrant  upon  exercise of  the  Warrants  by  current
nonaffiliated shareholders of the Registrant; 52,901 shares of common
stock  are  held  by 30 employees of Registrant, none  of  which  are
directors or officers of Registrant (see the "Selling Shareholders");
all of the shares are being registered for sale to the public.
(4)   Pursuant to Rule 457(c), the registration fee is based  on  the
average  high and low prices of Registrant's common stock (traded  on
NASDAQ/NMS) as of June 11, 1996.
(5)  Pursuant to Rule 457(g) no separate registration fee is required
with respect to the Warrants.
<PAGE>
Cross Reference Sheet
                         under Rule 501(1)e
               Information Required in the Prospectus

Item 1. Forepart of Registration        Facing page, outside front
Statement and Outside Front Cover       cover of Prospectus

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

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

Item 4. Use of Proceeds                 Not applicable

Item 5. Determination of                Not applicable
Offering Price

Item 6. Dilution                        Not applicable

Item 7. Selling Security Holders        Holders of the Warrants;
                                        Selling Shareholders

Item 8. Plan of Distribution            Plan of Distribution

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

Item 10. Interests of Named             Not applicable
Experts and Counsel

Item 11. Information With Respect       Business and Properties
to the Registrant

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

<PAGE>
Preliminary Prospectus                  Subject to Completion
                                        June ____, 1996

                        U.S. ENERGY CORP.
                                
                      252,901 COMMON SHARES
       --------------------------------------------------
                                
The securities offered by this Prospectus are 252,901 shares (the
"Common  Shares")  of  common stock, par value  $0.01  per  share
("Common  Stock"),  of U.S. Energy Corp., a  Wyoming  corporation
("Registrant",  "Company" or "USE"). Of the total Common  Shares,
200,000  shares (the "Warrant Shares") are to be issued upon  the
exercise  of  that  certain Warrant To  Purchase  200,000  Common
Shares  of  U.S. Energy Corp. dated as of January  9,  1996  (the
"Warrant")  granted  to  Shamrock  Partners  Ltd.,  111  Veterans
Square,  Media,  Pennsylvania  ("Holder"),  as  compensation  for
services  to  the Company as a financial consultant and  advisor.
The  Warrant entitles the Holder to purchase at any time or  from
time  to  time  until 12:00 O'clock Midnight, Mountain  Time,  on
January 9, 1997 (the "Expiration Date"), 200,000 shares of Common
Stock of Registrant a  price of $5.00 per share.  The Warrant may
be  divided or combined with up to ten (10) other warrants  which
carry the same (proportional) rights ("Warrants"), but the Holder
of  the  Warrant  and  the  holders of any  such  other  Warrants
(collectively  the "Holders of the Warrants")  may  not  sell  or
otherwise  transfer the Warrant or Warrants for  a  period  which
exceeds  the  Expiration Date of the Warrant.   Accordingly,  the
Warrant   is   being   registered  solely  to   accommodate   the
registration  of  the  Warrant Shares  for  sale  to  the  public
following  their  issuance  upon  exercise  of  the  Warrant   or
Warrants.   The  remaining 52,901 Common Shares offered  by  this
Prospectus for sale to the public are held by 30 employees of the
Company,  none of whom are directors or officers of  the  Company
(the "Selling Shareholders").

                These are Speculative Securities.
         Such Securities Involve a High Degree of Risk.
            See "Risk Factors" starting on page 6.
                                
  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION,OR ANY STATE SECURITIES COMMISSION.
   NOR HAS THE COMMISSION, OR ANY STATE SECURITIES COMMISSION,
    PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
    ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
The  Warrant  Shares will be offered from time  to  time  by  the
Holders of the Warrants following issuance upon exercise  of  the
Warrants.  The remaining 52,901 Common Shares held by the Selling
Shareholders  will be offered from time to time  by  the  Selling
Shareholders.  It is expected that all of the Common Shares  will
be  offered  at  market  prices from time to  time.  Registrant's
Common Stock is traded on the NASDAQ/NMS quotation system.  As of
June  11,  1996,  the  closing bid price for Registrant's  Common
Stock  was  $20.625 per share.  See "Market for USE Common  Stock
and  Related  Stockholder Matters."  There  are  no  underwriting
arrangements  known  to  Registrant.  Any  selling  discounts  or
commissions  will  be paid by the sellers of the  Common  Shares.
See "Plan of Distribution".  The Company will pay the cost of the
registration estimated at $10,000 for registering the Warrant and
Common Shares.

Except  for  the $5.00 per share exercise price for  the  Warrant
Shares,  the Company will not receive any proceeds from the  sale
of the Common Shares.

       --------------------------------------------------
         The date of this Prospectus is June ____, 1996.
       --------------------------------------------------

Information   contained  herein  is  subject  to  completion   or
amendment.  A registration statement relating to these securities
has  been  filed  with  the Securities and  Exchange  Commission.
These  securities  may  not be sold nor  may  offers  to  buy  be
accepted  prior  to  the time the registration statement  becomes
effective.  This prospectus shall not constitute an offer to sell
or  the  solicitation of an offer to buy nor shall there  be  any
sale  of  these  securities in any State  in  which  such  offer,
solicitation  or sale would be unlawful prior to registration  or
qualification under the securities laws of any such State.

The Common Shares have been registered for sale to public, by the
filing of the Registration Statement (of which this Prospectus is
a   part)   with   the   Securities   and   Exchange   Commission
("Commission")  under  the Securities Act  of  1933,  as  amended
("1933  Act").  No one is authorized to give any information,  or
make  any  representation on behalf of the Company,  the  Warrant
Holders  or  the  Selling Shareholders 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.
<PAGE>
Neither  delivery of this Prospectus nor sale of  the  securities
offered  hereby, shall create an implication that there has  been
no  change in the information set forth herein since date of this
Prospectus.   The Prospectus will be supplemented to reflect  any
material changes in the Company or its business in the course  of
the offering.

                      AVAILABLE INFORMATION

Registrant  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 and its exhibits,  covering  the
Common Shares offered hereby, certain portions of which have been
omitted  pursuant  to  Commission rules  and  regulations.   Each
statement made in this Prospectus concerning a document filed  as
an  exhibit  to the Registration Statement, is qualified  in  its
entirety by reference to such exhibit for a complete statement of
its   provisions.    Any  interested  party   may   inspect   the
Registration  Statement  (and  any amendments  thereto)  and  its
exhibits,  without charge, at the public reference facilities  of
the Commission at its offices as stated above.

                     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

Registrant  is  in  the general minerals business  of  acquiring,
exploring,  developing  and/or  selling  or  leasing  of  mineral
properties  and,  from  time to time,  mining  and  marketing  of
minerals.   The  Company is now engaged in two principal  mineral
sectors: uranium and gold. Its minerals business with respect  to
uranium and gold can be characterized as in the development stage
according  to the Commission's definition of that term. Interests
are  held  in  other mineral properties (principally molybdenum),
but  are  either  non-operating interests or undeveloped  claims.
The Company also carries on a small oil and gas operation.  Other
USE  business segments are commercial operations (real estate and
general aviation) and construction operations.

Most  USE  operations are conducted through a joint venture  with
Crested    Corp.,    a   majority-owned   Colorado    corporation
("Crested"),and  various joint subsidiaries of USE  and  Crested.
The  joint  venture  with  Crested is hereafter  referred  to  as
"USECC."

Manufacturing  and/or marketing of professional and  recreational
outdoor  products  was  conducted  through  The  Brunton  Company
("Brunton"), a wholly-owned USE subsidiary.  On February 16, 1996
Registrant  sold all of the shares of Brunton to Silva Production
AB  for  $4,300,000  plus  45% of the net  profits  before  taxes
derived  from  the sale of Brunton products for  four  years  and
three months.

The  sale will eliminate Brunton's manufacturing and/or marketing
of  professional  and  recreational  outdoor  products  from  the
commercial  segment of Registrant's business as  of  January  31,
1996,  except  to  the extent that there are net profit  payments
from  Silva over the next four years, of which there  can  be  no
assurance.   For the fiscal year ended May 31, 1995 and  for  the
nine months ended February 29, 1996, Brunton's sales provided 49%
and   26%,   respectively,  of  net  revenues   of   USE   before
reclassification  to  reflect Brunton as discontinued  operations
with  respect  to  the Company (see "Business  and  Properties  -
Brunton" for details of this transaction, and Risk Factor  2  for
additional information on the impact of this transaction).

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

                          The Offering

Securities Offered (1)                       252,901  shares
                                             of Common Stock(2)
USE Common Stock Outstanding
  Before and After Offering                  6,666,309 shares(3)

NASDAQ/NMS Symbol                            "USEG"
________________

(1)    See  "Description  of  Securities."   (2)  See  "Plan   of
Distribution."   (3)   Assumes issuance of  all  200,000  Warrant
Shares  upon  exercise  of the Warrants by  the  Holders  of  the
Warrants.
<PAGE>
                          Risk Factors

An  investment  in the Common Shares involves substantial  risks,
including the risks of USE's failure to obtain necessary  capital
to  put  its  principal  mineral properties  into  production,  a
recurrence  of  low uranium prices, litigation  and  competition.
See "RISK FACTORS" beginning on the next page.

                 Issuance of the Warrant Shares

The  Warrant Shares, consisting of 200,000 shares of Registrant's
Common Stock, will be issued by Registrant from time to time upon
exercise  of the Warrant or those Warrants that result  from  the
division  and/or recombination of the Warrant currently  held  by
Shamrock   Partners  Ltd.   See  "Description  of  Securities   -
Warrants"  for information concerning the terms of the  Warrants.
Only  one  Warrant is outstanding on the date of this Prospectus,
but the Holder has requested that the Warrant be divided into six
Warrants  covering an aggregate of 200,000 Warrant Shares  to  be
registered in the following manner:

Rafi Khan                               145,000   Warrant Shares
Shamrock Partners, Ltd.                  10,000   Warrant Shares
Shamrock Partners International, Inc.    20,000   Warrant Shares
The Leasing Group, Inc.                   8,400   Warrant Shares
Diana L. Manes                            4,300   Warrant Shares
Andrew Z. Furtak                         12,300   Warrant Shares

When the Warrant has been so divided, the Holders of the Warrants
may  not  sell  or otherwise transfer the Warrants for  a  period
which exceeds the Expiration Date of the Warrants.

                 Issuance of Other Common Shares

The  remaining 52,901 Common Shares are held by employees of  the
Company,  none of whom are directors or officers of  the  Company
(see  "Selling Shareholders".  Of these 32,901 shares were issued
as  bonus  compensation  to  Company  employees  pursuant  to   a
resolution of the Company's Board of Directors at a meeting  held
on  December  22, 1995 and 20,000 Common Shares  were  issued  to
Keith  G. Larsen pursuant to letter agreement dated December  21,
1994  as  replacement for 20,000 shares of the  Company's  Common
Stock  purchased  by him on the open market  and  loaned  to  the
Company  to  complete the acquisition by the Company  of  Ticaboo
Development,  Inc.,  a Utah corporation ("TDI")  pursuant  to  an
Agreement  and  Plan of Reorganization dated  September  2,  1994
among  the  Company, TDI and Gladys L. May, Kenneth  E.  May  and
Vicki Juhl Guier.
<PAGE>
                          RISK FACTORS

Prospective investors should note that the Company's business  is
subject to certain risks, including the following:

1.  Working Capital Requirements.  Registrant's cash requirements
for   fiscal  1997  are  the  funding  of  on-going  general  and
administrative  expenses, including legal  costs  incurred  as  a
result     of    the    Sheep    Mountain    Partners     ("SMP")
arbitration/litigation proceedings described below; mine and mill
development  and  holding  costs  of  the  Sutter  gold  property
described  below;  holding (standby) costs for the  uranium  mill
owned  by  Plateau  Resources Limited, a 100% subsidiary  of  the
Company  ("Plateau"), in southeastern Utah;  SMP mines  care  and
maintenance costs; and costs to acquire uranium oxide  which  the
Company may be obligated to deliver under the SMP contracts.   As
a  result of the disputes between the SMP partners (see "Business
and  Properties  -  Legal Proceedings - Sheep  Mountain  Partners
Arbitration/Litigation),  Registrant  and   Crested   have   been
delivering  certain  of the U3O8 concentrates  required  to  fill
various  delivery requirements on long-term U3O8  contracts  with
domestic utilities.  Recently, Nukem, Inc. ("Nukem") and its 100%
subsidiary  Cycle Resource Investment Corporation  ("CRIC")  have
made  most  of the SMP deliveries of U3O8.  It is not  known  how
long this arrangement will continue.  The capital requirements to
fill   Registrant's  and  Crested's  portion  of  the   remaining
commitments in fiscal 1997 will depend on the timing of  payments
to the Registrant and Crested by Nukem/CRIC under the arbitration
award,  whether  SMP  will  be  wound  up  and  dissolved  as   a
partnership    and   its   assets   distributed    to    partners
Registrant/Crested  and Nukem/CRIC, and  whether  a  receiver  is
appointed   by  the  court  to  oversee  SMP  contract   delivery
obligations pending dissolution of SMP.

The  primary source of Registrant's capital resources for the  of
first  half  fiscal 1997, will be (i) cash on hand  February  29,
1996;  (ii) Registrant's share of cash received from the sale  of
the  Wind  River Estates Mobile Home Park by USECC (see  "Certain
Relationships  and  Related  Transactions  -  Transactions   with
Arrowstar  Investments, Inc."); (iii) possible sale of equity  or
interests in investment properties or other affiliated companies;
(iv)  sale of equipment; (v) proceeds from the resolution of  the
SMP  arbitration/litigation; (vi) sale of royalties or  interests
in  mineral  properties; (vii) proceeds from the sale of  uranium
under  the  SMP  contracts, and (viii) borrowings from  financial
institutions.   Construction revenues from  the  Company's  50.9%
subsidiary,  Four  Nines  Gold,  Inc.  ("FNG"),  fees  from   oil
production, rentals of various real estate holdings and equipment
and the sale of aviation fuel are also expected to provide cash.

Registrant's  working capital increased during  the  nine  months
ended  February  29,  1996 by $1,115,000 to  working  capital  of
$1,137,000 principally due to the sale of the 812,432  shares  of
the  Company's common stock in June and July 1995,  resulting  in
net  proceeds  to  Registrant of $2,842,200.  Registrant's  other
investing  activities provided $1,183,600 during the nine  months
ended  February 29, 1996.  This increase in cash was a result  of
proceeds  from  the  sale  of assets, $77,700  and  the  sale  of
Brunton,  $3,300,000.   These increases in  cash  were  partially
offset by investments in affiliates due to Registrant funding the
activities  of  Plateau and Registrant and Crested funding  their
interest in SMP, as well as funding their 90% subsidiary, Energx,
Ltd.  ("Energx") in the oil and gas business, Plateau and  Sutter
Gold  Mining Company ("SGMC").  Additionally, the Registrant  and
its  affiliates (1) purchased $1,021,100 of additional  equipment
(2)  developed mineral properties, $349,200 and (3) developed gas
properties  $23,400  during the nine months  ended  February  29,
1996.

Monthly operating expense to hold properties and fund general and
administrative expense is estimated at $300,000 to  $350,000  for
the   first  half  of  fiscal  1997.   Revenues  from  commercial
operations   are  expected  to  provide  approximately   $110,000
monthly.  Operating expense estimates reflect elimination of most
legal  expenses  associated  with the SMP  arbitration/litigation
proceedings,  because  an  Order and Award  was  entered  by  the
arbitration panel on April 18, 1996 (see "Business and Properties
- -  Legal  Proceedings  -  Sheep  Mountain  Partners  Arbitration/
Litigation").

Working capital in addition to funds on hand at February 29, 1996
and    funds    provided   from   the   award    in    the    SMP
arbitration/litigation  and the sale of the  Wind  River  Estates
Mobile  Home  Park  will be required to fund the  mine  and  mill
permitting  and  the construction of a gold processing  mill  and
mine  development of SGMC.  Registrant and Crested are  currently
seeking  means  of financing the construction of  the  SGMC  gold
processing  mill  and  mine development,  but  there  can  be  no
assurance that such financing can be arranged.

See  "Management's Discussion and Analysis of Financial Condition
and  Results of Operations" for additional information on working
capital requirements and capital resources.  See also Risk Factor
2 below.

2.   Loss  of  Future Operating Income Due to Brunton  Sale.   In
fiscal  1995, 49% of Registrant's net revenues were  provided  by
Brunton's  professional  and outdoor recreational  product  sales
(26%   in  the  nine  months  ended  February  29,  1996   before
reclassification  to  reflect Brunton as discontinued  operations
with respect to the Company).  Brunton was sold in February 1996.
The  inability to include Brunton's operations with  Registrant's
other  operating revenues in the future could result in continued
operating  losses for Registrant, unless Registrant  is  able  to
develop other profitable businesses, such as Registrant's uranium
business or the construction business of FNG, to replace  profits
from  Brunton.   Continued  operating losses  without  offsetting
replacements  of  working  capital  will  adversely  affect   the
Company's ability to continue its operations as described in this
Prospectus.   See  also  Risk Factor 1  above  and  "Management's
Discussion  and  Analysis of Financial Condition and  Results  of
Operations."

3.    Sutter  Gold  -  No  Current  Mining  Operations  or   Gold
Production.   As of May 31, 1995, USE and Crested  have  invested
more  than  $11,000,000  in capitalized  costs  (in  addition  to
approximately  $3,000,000 in costs that have  been  expensed)  to
acquire,  permit and develop a gold property in California,  held
through   a   subsidiary,  Sutter  Gold  Mining  Company.    This
investment represents a significant portion of USE's consolidated
assets.  There is no assurance current efforts will be successful
in  financing  the  mill construction and mine development  costs
needed  to put the property into full production.  If third-party
financing  cannot  be  obtained  and  USE  is  unable   to   fund
development and production costs from internally generated  funds
over the next two years the property may be sold at a loss.   See
"Business and Properties - Gold - Lincoln Project (California)".

4.   Additional Shares to Market; Possible Dilution.  In addition
to  the  Common Shares registered for sale by the Holders of  the
Warrants  and  the  Selling Shareholders, as  described  in  this
Prospectus,  Registrant registered 457,780 shares of  its  Common
Stock under the 1933 Act for sale by certain shareholders on Form
S-3  (SEC File No. 333-1967), which was declared effective by the
Commission on April 4, 1996.

Registrant  also  sold 812,432 shares of its  common  stock  (the
"Placement  Shares") to private investors in June and July  1995.
As  compensation for their services as Placement Agent, on a best
efforts  basis, for the Placement Shares, Registrant granted  RAF
Financial  Corporation ("RAF") and Robert Long ("Long"),  one  of
its  officers, warrants to purchase 81,243 shares of  USE  common
stock  for  $4.80  per  share  until  July  25,  2000  (the  "RAF
Warrants").   The Placement Shares, the RAF Warrants  and  81,243
shares of USE common stock underlying the RAF Warrants (the  "RAF
Shares")  were  registered under the 1933 Act for resale  by  the
holders   of  such  Placement  Shares  and  by  RAF   and   Long,
respectively, by Registrant filing its Registration Statement  on
Form  S-3  with the Commission (SEC File No. 33-64773) which  was
declared  effective by the Commission on February 28, 1996.   RAF
and Long exercised their RAF Warrants on March 7, 1996 and May 1,
1996, respectively, which generated aggregate cash proceeds t the
Company  of $389,966.  The public sale of the 457,780  shares  of
Registrant's  Common Stock by certain shareholders,  the  812,432
Placement Shares and the 81,243 RAF Shares as well as the 252,901
Common  Shares to be sold pursuant to this Prospectus may depress
the market price for the Company's common stock.

Registrant  may also issue additional common stock in  a  private
placement or a public offering pursuant to the 1933 Act if needed
for  future  working  capital (see Risk  Factor  1  above).   The
issuance  of  such additional shares could result in dilution  to
the  equity of outstanding shareholders of Registrant,  depending
on  the price at which such shares are issued and sold, and would
result  in  some dilution to the voting power of the  outstanding
shares of Registrant's common stock.

5.   Project Delay.  Registrant's minerals business is subject to
the risk of unanticipated delays in developing and permitting its
uranium  and  gold  projects.   Such  delays  may  be  caused  by
fluctuations  in  commodity prices (see Risk  Factor  6),  mining
risks  (see  Risk  Factor  9),  difficulty  in  arranging  needed
financing,   unanticipated  permitting  requirements   or   legal
obstruction  in the permitting process by project  opponents.  In
addition  to  adding  to  project  capital  costs  (and  possibly
operating costs), such delays, if protracted, could result  in  a
write  off  of  all  or a portion of the carrying  value  of  the
delayed   project   and/or  could  trigger  certain   reclamation
obligations sooner than planned.

6.   Commodity Price Fluctuations.  The ability of the Company to
develop and operate its uranium and gold projects profitably  can
be  significantly  affected by changes in  the  market  price  of
uranium  and gold, respectively.  Until very recently,  the  spot
market  price  for uranium concentrates has been depressed  since
1988  and  has  been below $8.00 per pound as recently  as  1992.
(See   Business  and  Properties  -  Uranium  -  Uranium   Market
Information"  for additional information on the  uranium  markets
and  pricing.)  Uranium prices are subject to a number of factors
beyond  Registrant's control including imports  of  uranium  from
Russia  and  other CIS countries, the amount of uranium  produced
and  sold  from the blending of highly enriched uranium recovered
from  U. S. and Russian nuclear weapons to produce lower enriched
uranium  for nuclear fuel, the build up by utilities  of  uranium
fuel  inventories  and  the sale of excess inventories  into  the
market,  the  rate  of  consumption  of  uranium  inventories  by
utilities,  the rate of uranium production in the United  States,
Canada,  Australia and elsewhere by other producers and the  rate
of  new construction of nuclear generating facilities, verses the
rate  of shutdown and decommissioning of older nuclear generating
facilities, particularly in the United States.

Market prices for uranium concentrates in the United States  have
recovered  to between $16.25 and $16.50 per pound as of  May  31,
1996.   The  Company believes that if the price remains  at  this
level  or  higher, United States utilities will  seek  long  term
price  stabilizing uranium supply contracts.  If the  Company  is
able  to  obtain long term uranium supply contracts with  assured
prices  exceeding $18.00 per pound, that should be sufficient  to
operate Plateau's Utah uranium properties profitably.  It  should
also  be  sufficient  to proceed with development  of  the  Green
Mountain  Mining Venture ("GMMV") Jackpot Mine and  operation  of
the  Sweetwater uranium mill, although there can be no  assurance
that Kennecott Uranium Company ("Kennecott"), which controls  the
management  committee  of GMMV, would be  of  the  same  opinion.
There  also  can  be no assurance that this recent  upward  price
movement will continue.  USE would be adversely affected  if  the
United  States utilities with nuclear power plants  do  not  seek
long  term  uranium supply contracts during the  balance  of  the
1990s.   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  and  USE
could  be  required to reclaim or restore such properties  sooner
than planned (see Risk Factor 11).

The market price of gold has fluctuated widely and is affected by
numerous   factors   beyond  the  Company's  control,   including
international  economic  trends, currency exchange  fluctuations,
expectations for inflation, the extent of forward sales  of  gold
by  other  producers, consumption patterns (such as purchases  of
gold   jewelry  and  the  development  of  gold  coin  programs),
purchases and sales of gold bullion holdings by central banks  or
other  large  gold  bullion  holders or  dealers  and  global  or
regional  political events, particularly in major  gold-producing
countries  such as South Africa and some of the CIS (Commonwealth
of  Independent  States - formerly the Soviet  Union)  countries.
Gold  market  prices  are also affected by  worldwide  production
levels,  which  have  increased in recent  years,  but  currently
appear to be decreasing somewhat.  The aggregate effect of  these
factors,  all  of  which  are beyond the  Company's  control,  is
impossible  for the Company to predict.  In addition, the  market
price  of  gold has on occasion been subject to rapid  short-term
changes  because of market speculation.  As of June 11, 1996  the
Comex spot price of gold was $384.20 per ounce.

7.    Proposed  Federal Legislation.  The U.S. Congress  has,  in
legislative sessions in recent years, actively considered several
proposals  for  major revision of the General Mining  Law,  which
governs  mining  claims and related activities on federal  public
lands.   If  any  of the recent proposals become  law,  it  could
result in the imposition of a royalty upon production of minerals
from   federal  lands  and  new  requirements  for   mined   land
reclamation and other environmental control measures.  It remains
unclear  whether the current Congress will pass such  legislation
and,  if  passed,  the  extent such new legislation  will  affect
existing  mining  claims  and  operations.   The  effect  of  any
revision  of  the General Mining Law on the Company's  operations
cannot be determined conclusively until such revision is enacted;
however,  such legislation could materially increase the carrying
costs   of  the  Green  Mountain  mineral  properties,  the   SMP
properties  and  some of Plateau's mineral properties  which  are
located  on federal unpatented mining claims, and could  increase
both the capital and operating costs for such projects and impair
the Company's ability to hold or develop such properties, as well
as other mineral prospects on federal unpatented mining claims.

8.   Exploration  Risks.  Mineral exploration,  particularly  for
gold,  is  highly speculative in nature, involves many risks  and
frequently is nonproductive.  There can be no assurance that  the
Company's  efforts  at  the  Sutter  Gold  Project  to   identify
additional  gold  ore  reserves will  be  successful.   Moreover,
substantial expenditures are required to establish additional ore
reserves  through drilling, to determine metallurgical  processes
to  extract  the metal from the ore and to construct  mining  and
processing  facilities.  During the time  required  to  establish
additional   ore   reserves,  determine  suitable   metallurgical
processes  and  construct such mining and processing  facilities,
the  economic  feasibility of production may  change  because  of
fluctuating gold prices (see Risk Factor 6).

9.  Mining Risks and Insurance.  The business of uranium and gold
mining  generally  is subject to a number of risks  and  hazards,
including environmental hazards, industrial accidents, explosions
and  rock  falls,  earthquakes, flooding,  interruptions  due  to
weather  conditions  and other acts of  God.   Such  risks  could
result  in  damage  to  or  destruction of  Registrant's  mineral
properties and production facilities, as well as to properties of
others  in  the area, personal injury, environmental  damage  and
process and production delays, causing Registrant monetary losses
and  possible legal liability.  While the Company maintains,  and
intends  to continue to maintain, liability, property damage  and
other  insurance consistent with industry practice, no  assurance
can  be  given that such insurance will continue to be available,
be  available at economically acceptable premiums or be  adequate
to cover any resulting liability.

10.    Title  to  Properties.   Nearly  all  the  uranium  mining
properties  held  by  GMMV,  SMP,  and  Plateau  are  on  federal
unpatented  claims.  Unpatented claims are located  upon  federal
public  land  pursuant to procedure established  by  the  General
Mining  Law  (see  also  Risk Factor 7).   Requirements  for  the
location  of  a valid mining claim on public land depend  on  the
type  of  claim being staked, but generally include discovery  of
valuable  minerals,  erecting a discovery  monument  and  posting
thereon  a  location notice, marking the boundaries of the  claim
with  monuments,  and filing a certificate of location  with  the
county in which the claim is located and with the U. S. Bureau of
Land Management ("BLM").  If the statutes and regulations for the
location of a mining claim are complied with, the locator obtains
a  valid possessory right to the contained minerals.  To preserve
an  otherwise  valid  claim, a claimant must  also  annually  pay
certain rental fees to the federal government (currently $100 per
claim)  and  make certain additional filings with the county  and
the  BLM.  Failure to pay such fees or make the required  filings
may  render  the  mining claim void or voidable.  Because  mining
claims are self-initiated and self-maintained, they possess  some
unique  vulnerabilities  not  associated  with  other  types   of
property interests. It is impossible to ascertain the validity of
unpatented  mining claims solely from public real estate  records
and  it can be difficult or impossible to confirm that all of the
requisite  steps have been followed for location and  maintenance
of  a  claim.  If the validity of an unpatented mining  claim  is
challenged  by  the government, the claimant has  the  burden  of
proving  the  present  economic feasibility  of  mining  minerals
located  thereon.  Thus, it is conceivable that during  times  of
falling metal prices, claims which were valid when located  could
become  invalid  if  challenged.  Disputes can  also  arise  with
adjoining property owners for encroachment or under the  doctrine
of extralateral rights (see Risk Factor 16).

11.   Reclamation  and  Environmental Liabilities.   Registrant's
projects and 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  and   the
Comprehensive Environmental Response Compensation Liability  Act.
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  will
impact  USE.   Similar laws in California affect SGMC  operations
and  in  Utah  will  affect Plateau's operations.   In  addition,
Registrant's  uranium mill in Utah and the GMMV mill  in  Wyoming
are  subject to jurisdiction of the Nuclear Regulatory Commission
("NRC").

To  Registrant's knowledge, it is in compliance in  all  material
respects  with current environmental regulations.  To the  extent
that  production by SMP, GMMV or SGMC is delayed, interrupted  or
discontinued  due to need to satisfy present or  future  laws  or
regulations which relate to environmental protection, future  USE
earnings could be adversely affected.  For additional information
concerning  the  effect such environmental laws  and  regulations
have  on  the  Company's capital expenditures, see "Business  and
Properties  -  Environmental and Notes F and K to  the  Company's
Consolidated Financial Statements.

USE  is a joint venturer in the GMMV, which entity is responsible
for    mine    reclamation,   environmental    restoration    and
decommissioning  associated  with  mineral  properties  on  Green
Mountain,  in  south central Wyoming, and the  nearby  Sweetwater
Mill.   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  Company's  Consolidated
Financial  Statements, and the notes to the  Company's  unaudited
Consolidated  Financial  Statements  for  fiscal  quarter   ended
February  29, 1996, for further information.  Current  bonds  and
funds   in  escrow  are  deemed  adequate  for  reclamation   and
decommissioning  liabilities associated with the Shootaring  Mill
in Utah.

USE   and  Crested  have  assumed  the  reclamation  obligations,
environmental liabilities and contingent liabilities for employee
injuries, from mining the SMP properties 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  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 concentrates produced from  its
properties  to USE and Crested for reclamation work.  The  status
of  this  commitment could be impacted by the ultimate resolution
of  the arbitration/litigation with Nukem/CRIC (see Business  and
Properties-Legal Proceedings-Sheep Mountain Partners Arbitration/
Litigation).

The  GMMV  and Sweetwater Mill reclamation liabilities  are  self
bonded  by Kennecott pursuant to written agreements with the  NRC
and  the State of Wyoming, and accordingly these liabilities  are
not recorded in the USE or Crested financial statements.  The SMP
and  Plateau reclamation liabilities were recorded at  $1,451,800
and $2,500,000 respectively (total $3,951,800) in the audited USE
Consolidated  Financial Statements.  A cash bond of approximately
$40,000  is  posted for miscellaneous reclamation  costs  at  the
Sutter  gold  property (carried under "Other Assets-Deposits  and
Other"  on  the  USE  financial  statements).   Reclamation   and
environmental obligations for the oil and gas properties held  by
USE  are  deemed  insignificant and manageable  in  the  ordinary
course of business.

12.   Possible Losses on Uranium Contracts.  As of May 31,  1995,
SMP  held  contracts  for delivery of an  estimated  5.5  million
pounds of U3O8 to domestic utilities from 1996 through 2000.  The
arbitration panel found that another contract for 980,000  pounds
of  U3O8 to be delivered from 1996 to 2000 was to be assigned  to
SMP   by  Nukem/CRIC.   See  "Business  and  Properties  -  Legal
Proceedings  -  Sheep Mountain Partners Litigation/ Arbitration".
Actual quantities of U3O8 purchased by utilities over that period
of  time  may  vary  by  10 to 25 percent,  as  provided  in  the
contracts  (see  "Business  and  Properties  -  Uranium  -  Sheep
Mountain Partners - SMP Marketing"), and profit or loss to SMP on
the deliveries will depend on the cost of inventory.  Profits  on
such  future deliveries cannot be predicted, however,  management
of  the Company does not anticipate any material losses from  the
sales  of  U3O8 pursuant to these contracts.  As of the  date  of
this   Prospectus,  the  prices  under  the  one  remaining  base
escalated  contract  exceed the current  market  price,  however,
there  can be no assurance this situation will not change in  the
future.

Increases  in  the  spot market price would  increase  USE's  and
Crested's  cost  of  delivering on certain of the  SMP  contracts
prior   to  the  time  that  their  uranium  properties  are   in
production, thus reducing potential profits or possibly producing
losses,  while  spot market price decreases would  be  likely  to
increase  profits  on such contracts.  USE  recorded  a  loss  of
$162,900  in fiscal 1994 on deliveries of its portion of  certain
of  the  SMP  contracts,  as the cost  of  uranium  exceeded  the
contracted  price.  Due to the SMP dispute, earlier  arrangements
between the partners to deliver their shares of the SMP contracts
in  spite  of  the  dispute  were  abandoned,  and  USE  made  no
deliveries (and therefore recorded no revenues or losses) on  any
SMP  contracts  during fiscal 1995.  For the  nine  months  ended
February  29, 1996 Registrant recorded a gross profit of $350,000
from mineral sales transactions.

13   Competition.   There  is keen competition  in  the  domestic
minerals industry and the oil and gas business for properties and
capital.  USE's competitors include a number of major mining  and
oil  and gas companies, most of which are larger than USE in  all
respects.    In   the   production  and  marketing   of   uranium
concentrates there are more than 10 major international  entities
(some  of which are government controlled) that are significantly
larger  and better capitalized than USE.  Although the Registrant
presently is not engaged in the mining or milling of uranium, and
therefore should not be counted in the top ten uranium producers,
the Registrant's competitive stature may improve significantly at
such time as it commences uranium mining and production.

The  location and composition of mineral ore bodies are of  great
importance  to  the  competitive position of  a  mining  company.
Producers of high-grade ore with readily extractable minerals are
in  an  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.   As
a   result,  owners  of  producing  properties,  particularly  if
purchase  contracts  for the production are in  place,  generally
enjoy substantial competitive advantages over organizations  that
propose to develop non-producing properties.  Competition is also
keen  in the search for mineral properties and prospects  and  in
the employment and retention of qualified personnel.

USE  believes that with the recent improvements in market  prices
for  uranium concentrates, it will be able to compete with  other
uranium producers, primarily because it holds significant uranium
resources  in place, along with the necessary mining and  milling
facilities,  all  of  which it acquired for little  or  no  cost.
Applications have been submitted to upgrade the mill licenses  to
operating  levels,  however, delays in final  permitting  may  be
encountered,  as  the  uranium  refining  industry   is   closely
regulated by the NRC.

Nonetheless,  USE  expects competition from larger  producers  in
Canada,  Australia  and Africa, as well  as  from  U.S.  in  situ
producers of uranium and other producers that recover uranium  as
a byproduct of other mineral recovery processes, and from uranium
recovered  from  the  de-enrichment of  highly  enriched  uranium
obtained  from  the  dismantlement of U.S.  and  Russian  nuclear
weapons  and  sold in the market by the United States  Enrichment
Corporation  and/or the United States Department  of  Energy,  as
well  as  from imports to the United States of uranium  from  the
Commonwealth  of Independent States (formerly the Soviet  Union).
See   "Business  and  Properties  -  Uranium  -  Uranium   Market
Information" and "NUEXCO Exchange Value".

USE's  affiliate FNG encounters strong competition with a  number
of  larger  civil engineering construction firms in  the  western
United States.

14   Reserves Estimates.  While the ore reserve estimates at GMMV
Round  Park ore deposit in Wyoming and SGMC's Lincoln project  in
California  have  been reviewed by independent consultants,  such
ore  reserve  estimates are necessarily imprecise and  depend  to
some   extent  on  statistical  inferences  drawn  from   limited
drilling,  which may, on occasion, prove unreliable.  Should  the
Company  encounter mineralization or formations  at  any  of  its
mines  or  projects different from those predicted  by  drilling,
sampling and similar examinations, ore reserve estimates may have
to  be adjusted and mining plans may have to be altered in a  way
that  could adversely affect the Company's operations.  Moreover,
short-term  operating factors relating to the ore reserves,  such
as  the  need  for sequential development of ore bodies  and  the
processing  of new or different ore grades, may adversely  affect
the Company's profitability in any particular accounting period.

15   Variable Revenues and Recent Losses.  Due to the  nature  of
USE's  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  from  fiscal  1992
through fiscal 1995.  Further, USE realized a net gain in  fiscal
1992  of $613,000, but net losses were realized from fiscal  1993
through  fiscal  1995  (in the respective  amounts  of  $221,900,
$3,370,800 and $2,070,600).

16   Bullfrog  Litigation.  Registrant,  Crested, Parador  Mining
Company,  Inc.  ("Parador")  and H.  B.  Layne  Contractor,  Inc.
("Layne")  are  defendants  and counter-  or  cross-claimants  in
certain  litigation in the District Court of Nye County,  Nevada,
brought  by Bond Gold Bullfrog Inc. ("BGBI") in July 1991.   BGBI
(now  known as Barrick Bullfrog, Inc.) is an affiliate of Barrick
Corp.,  a  large  international gold  producer  headquartered  in
Toronto,  Canada.  The litigation primarily concerns extralateral
rights  associated  with  two patented  mining  claims  owned  by
Parador  and  initially leased to a predecessor  of  BGBI,  which
claims  are  in  and  adjacent to BGBI's Bullfrog  open  pit  and
underground  mine.  USE and Crested assert certain  interests  in
the claims under an April 1991 assignment and lease from Parador,
which is subject to the lease to BGBI's predecessor.

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
claims leased to BGBI by  Layne.

BGBI  seeks  to  quiet  title to its leasehold  interest  in  the
subject claims, alleging that Parador's 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
asserts  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.

A  partial  or  bifurcated trial to the court of the extralateral
rights  issues was held on December 11 and 12, 1995.  The purpose
of the hearing was to determine whether the Bullfrog orebody is a
"vein, lode or ledge" as described in the General Mining Law and,
if  so, whether the facts of the case warrant the application  of
the doctrine of extralateral rights as set forth in such statute.
Although  the Court sat as both the finder of fact and  law  with
respect  to  such issues, the Court concluded that the  questions
are  ultimately  one of law which must be decided  based  on  the
testimony  and  exhibits introduced at the trial  concerning  the
description  of  the orebody.  Registrant and defendants  Crested
Corp. and Parador presented five experts in the field of geology,
including the person who was responsible for the discovery of the
gold  deposit  at  the mine.  All five experts  opined  that  the
deposit  was  a lode and it apexed on a portion of Parador's  two
mining  claims.   The defendant Layne presented a single  witness
who  testified that there was no apex within the Parador  claims.
The  Court nevertheless found that Parador had failed to meet its
burden  of  proof and therefore Parador, Registrant  and  Crested
have  no  right, title and interest in the minerals lying beneath
the  claims of Layne pursuant to extralateral rights.  The  Court
entered  a  partial judgment in favor of Layne and  ordered  that
Parador  pay Court costs to Layne.  Defendants intend  to  appeal
the  Court's ruling as erroneous as a matter of law at such  time
as it is appropriate to do so.

The partial trial did not address any of the other issues pending
in  the  litigation  other  than those  required  to  decide  the
question  of  whether  the  doctrine of  extralateral  rights  is
applicable  to  this  case.  All other claims  and  counterclaims
remain pending before the Court and no hearing date has been  set
for those issues.

If USE's and Crested's position concerning extralateral rights is
ultimately sustained, substantial additional revenues and  income
may  be  received by USE and Crested from royalties payable  with
respect  to  gold produced from the Bullfrog Mine.  If,  however,
the  final decision of the appellate court is adverse to USE  and
Crested,  an  award  of damages against USE and  Crested  in  any
substantial  amount by this Court could have a  material  adverse
effect  on  the  ability of USE and Crested  to  carry  on  their
business in the manner described in this Prospectus.

17.   Potential  Issuance  of  Preferred  Stock.  Under  the  USE
Restated   Articles  of  Incorporation,  as  amended   ("Restated
Articles")  and as permitted by the Wyoming Business  Corporation
Act  ("WBCA"), the Registrant's 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
Company's  Common Stock could adversely affect common stockholder
participation in future earnings through dividends that otherwise
would  be  available for distribution to holders  of  the  Common
Stock, including those purchasing the Common Shares.

Such  preferred  stock  also  could inhibit  a  takeover  of  the
Company.  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.

18.    Potential   Anti-Takeover  Effects  of  Staggered   Board.
Registrant's Board of Directors is presently divided  into  three
classes  of  two  directors each.  Pursuant to the  USE  Restated
Articles  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."

                           THE COMPANY

Registrant  is  in  the general minerals business  of  acquiring,
exploring,  developing  and/or  selling  or  leasing  of  mineral
properties  and,  from  time to time,  mining  and  marketing  of
minerals.   The  Company is now engaged in two principal  mineral
sectors: uranium and gold. Its minerals business with respect  to
uranium and gold can be characterized as in the development stage
according  to the Commission's definition of that term. Interests
are  held  in  other mineral properties (principally molybdenum),
but  are  either  non-operating interests or undeveloped  claims.
The Company also carries on a small oil and gas operation.  Other
USE  business segments are commercial operations (real estate and
general aviation) and construction operations.

Most  operations  are  conducted through  a  joint  venture  with
Crested  Corp., a majority-owned Colorado Corporation ("Crested")
and  various  joint subsidiaries of USE and Crested.   The  joint
venture  with  Crested  is referred to as "USECC."   Construction
operations   are  carried  on  primarily  through   USE's   50.9%
subsidiary  Four Nines Gold, Inc. ("FNG"). USE and Crested's  oil
and  gas operations in Montana and Wyoming are carried on through
Energx  Ltd.  ("Energx"), a 90% subsidiary  of  the  Company  and
Crested.

Prior   to  February  16,  1996  the  Company  engaged   in   the
manufacturing  and/or marketing of professional and  recreational
outdoor  products  through The Brunton  Company,  a  wholly-owned
subsidiary ("Brunton").  On February 16, 1996 Registrant sold all
of  the  shares of Brunton to Silva Production AB for  $4,300,000
plus 45% of the net profits before taxes derived from the sale of
Brunton products for four years and three months.  The sale  will
eliminate    Brunton's   manufacturing   and/or   marketing    of
professional   and   recreational  outdoor  products   from   the
commercial segment of Registrant's business, except to the extent
that  there are net profit payments from Silva over the next four
years,  of which there can be no assurance.  For the fiscal  year
ended  May  31, 1995 and for the nine months ended  February  29,
1996  (before reclassification to reflect Brunton as discontinued
operations with respect to the Company), Brunton's sales provided
approximately 49% and 26%, respectively, of net revenues of  USE.
On  the  other  hand, the February 1996 receipt of  approximately
$2,900,000  in  net  cash from the sale (and future  payments  on
Silva's $1,000,000 promissory note and any profits payments) will
enhance  the  Company's  financial  condition  and  medium   term
liquidity  as well as providing additional resources to  put  the
Company's  Utah  uranium  mill into  operation  and  develop  the
Company's uranium and gold properties.

The sale was prompted in part by Registrant's desire to focus  on
its  core business of acquiring and developing mineral properties
and mining and marketing minerals, particularly uranium and gold.
Registrant plans to consolidate all of its uranium assets into  a
single  subsidiary and finance the startup of its mines and  mill
operations with debt or equity funding.  Of course, there can  be
no  assurance uranium prices will remain at their current  level,
that  Registrant will succeed in its efforts to obtain  long-term
uranium   supply  contracts  required  to  operate  its   uranium
properties  profitably, or that the required  financing  will  be
available to put such properties into operation.

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

The  Company  and Crested originally were independent  companies,
with two common affiliates (John L. Larsen and Max T. Evans).  In
1980,  USE  and  Crested formed a joint venture  to  do  business
together  (unless  one  or the other elected  not  to  pursue  an
individual  project).   As a result of  USE  funding  certain  of
Crested's obligations from time to time (due to Crested's lack of
cash  on hand), and later payment of the debts by Crested issuing
common  stock to USE, Crested became a majority owned  subsidiary
of USE in fiscal 1993.

Except for approximately 1,400 ounces of gold recovered in fiscal
1992  in  a bulk sampling program at the Sutter gold property  in
California, the Company has not received revenues from the mining
of  either uranium or gold during its five fiscal years ended May
31,  1995  or  the nine months ended February 29, 1996.   Mineral
revenues  have  been  received from sales of mineral  properties,
advance  royalties in respect of the Company's  interests  in  an
undeveloped  molybdenum property that was sold to  AMAX  Inc.  in
1980,  and  from  sales of uranium under certain of  the  utility
supply  contracts held by Sheep Mountain Partners ("SMP"),  as  a
result of USE and Crested delivering their one-half share or  all
of  the  uranium  and  receiving sales proceeds  therefrom.   The
majority of profits on these deliveries have been retained by SMP
in  an interest bearing account which is to be distributed  by  a
panel  of  arbitrators.   See "Business and  Properties  -  Legal
Proceedings  -  Sheep  Mountain Partners Arbitration/Litigation."
Commencement  of  uranium mining from the  Jackpot  (Round  Park)
deposit  in  Wyoming may result in utility supply  contracts  for
Green  Mountain Mining Venture ("GMMV"), of which USE and Crested
are   joint  venture  partners  with  Kennecott  Uranium  Company
("Kennecott"), and/or commencement of mining operations from  the
properties  held  by  Plateau Resources  Limited  ("Plateau"),  a
wholly-owned  subsidiary of USE, in Utah may  result  in  utility
supply  contracts  for  Plateau.   There  can  be  no  assurance,
however,  that such mining operations will commence, or that  new
utility supply contracts will result.
<PAGE>
The  following  tables  set  forth  certain  selected  historical
financial  data  with  respect to the  Company  for  the  periods
indicated.   It is derived from and should be read in conjunction
with  the  Company's  Consolidated Financial Statements  included
elsewhere in this Prospectus.
<TABLE>
                    SELECTED FINANCIAL DATA
<CAPTION>
                                                  May 31,
                    -------------------------------------------------------------
                             1994           1993           1992            1991
                             ----           ----           ----            ----
<S>                      <C>            <C>            <C>            <C>                <C>
Current assets           $ 3,866,600    $ 1,650,300    $ 3,260,500    $ 7,302,300
Current liabilities        1,291,700      1,592,100        681,900        816,000
Working capital            2,574,900         58,200      2,578,600      6,486,300
Total assets              33,090,300     24,037,200     24,583,000     20,500,100
Long-term
  obligations(1)          16,612,500      2,900,000      4,540,400      3,244,100
Shareholders' equity      12,559,100     15,063,200     14,982,900     15,045,500
</TABLE>

<TABLE>
<CAPTION>
                         May 31, 1995(3)   February 29, 1996(3)
                           (unaudited)         (unaudited)
                         ---------------    ------------------
<S>                        <C>                  <C>
Current assets             $ 3,390,100          $ 2,228,700
Current liabilities          3,368,200            1,091,000
Working capital                 21,900            1,137,700
Total assets                33,384,500           34,950,900
Long-term
obligations(1)(2)           15,769,600           15,416,400
Shareholders' equity        12,168,400           16,007,700
</TABLE>

 (1) Includes $3,951,800, $3,951,800, $1,695,600, $1,695,600, and
$725,900  of reclamation liabilities, and additional  amounts  of
other accrued liabilities, on uranium properties at May 31, 1995,
1994, 1993, 1992, and 1991, respectively.  See Notes F and  K  to
the  Consolidated  Financial Statements for  Registrant's  fiscal
year ended May 31, 1995.

(2)   See  Notes 4 and 5 to the unaudited Condensed  Consolidated
Financial  Statements for fiscal quarter and  nine  months  ended
February 29, 1996.

(3)   Reflects  the reclassification for amounts associated  with
the  operations  of Brunton as discontinued because  Brunton  was
sold by Registrant as of January 31, 1996.  See Notes 1 and 3  to
the unaudited Condensed Consolidated Financial Statements for the
fiscal quarter and nine months ended February 29, 1996.


<TABLE>
<CAPTION>
                                      Years Ended May 31,
                          --------------------------------------------------------------------
                              1995             1994             1993            1992           1991
                              ----             ----             ----            ----           ----
<S>                       <C>              <C>              <C>             <C>            <C>
Revenues                  $ 9,148,000      $ 8,776,300      $ 9,045,500     $ 6,353,600    $ 9,569,100
Income (loss) before
 equity in income
 (loss) of affiliates,
 provision for
 income taxes and
  extraordinary item       (2,281,500)      (3,587,900)        (103,100)        819,200      6,082,900

Equity in (loss) of
 affiliates                  (442,300)        (390,700)        (444,700)       (324,900)       (96,100)

Net  income (loss)         (2,070,600)      (3,370,800)        (221,900)        613,200      6,164,900

Income (loss) per
 share before
  extraordinary item       $     (.42)     $      (.70)     $      (.05)    $       .09    $       .93
Extraordinary item             --              --                --                 .06            .62
                          -----------      -----------      -----------     -----------    -----------
Income (loss) per
 share before
 cumulative effect
   of accounting change          (.42)            (.70)            (.05)            .15           1.55
Cumulative effect at
 June 1, 1993 of income
 tax accounting change          --                (.06)          --              --             --
                          -----------      -----------      -----------     -----------    -----------
Net income (loss)
  per share               $      (.42)     $      (.76)     $      (.05)    $       .15    $   1.55
                          -----------      -----------      -----------     -----------    -----------
                          -----------      -----------      -----------     -----------    -----------
Cash dividends
 per share                $    -0-         $    -0-         $   -0-         $   -0-        $  -0-
                          -----------      -----------      -----------     -----------    -----------
                          -----------      -----------      -----------     -----------    -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                     Three Months Ended               Nine Months Ended
                                  --------------------------     ----------------------------
                                  February 29    February 28     February 29,    February 28,
                                      1996          1995            1996            1995
                                      ----          ----            ----            ----
                                  (Unaudited)    (Unaudited)     (Unaudited)     (Unaudited)
                                  -----------    -----------     -----------     ------------
<S>                               <C>            <C>             <C>             <C>
Revenues                          $ 1,875,600    $ 1,386,300     $ 8,151,800     $ 3,638,500

Loss before equity in
  loss of affiliates
  and provision for
  income taxes                     (1,290,900)      (218,400)     (1,882,500)     (1,551,200)
Equity in loss
  of affiliates - net                (115,700)      (128,100)       (281,600)       (304,900)
Loss from continuing
  operations                       (1,074,400)      (270,300)     (1,765,400)     (1,437,700)
Income (loss) from
  discontinued operations
  net of income taxes                  (9,200)       (58,100)        308,900         121,900
Gain on disposal of
  discontinued operations
  net of income taxes               2,295,700          --          2,295,700           --
Income (loss) from
    discontinue  operations         2,286,500        (58,100)      2,604,600         121,900
Net income (loss)                   1,212,100       (328,400)        839,200      (1,315,800)
Loss from continuing
  operations per share                   (.17)          (.06)           (.28)           (.29)
Net income (loss) per share       $       .19    $      (.07)    $       .14     $      (.27)
Cash dividends per share              -0-             -0-             -0-             -0-
</TABLE>
<PAGE>
                     BUSINESS AND PROPERTIES

Uranium

Registrant has interests in several uranium properties in Wyoming
and  Utah  and in uranium processing mills in Sweetwater  County,
Wyoming  ("Sweetwater Mill") and in southeastern Garfield County,
Utah ("Shootaring Mill").  All the uranium bearing properties are
located  in  areas  which  have produced significant  amounts  of
uranium in the 1970s and 1980s.

The property interests are:

Unpatented lode mining claims on Green Mountain (Fremont  County,
Wyoming),   including  105  claims   on  which  the  Round   Park
(Jackpot)uranium  deposit is located, and  the  Sweetwater  Mill,
(approximately  23  miles  south of the proposed  Jackpot  Mine).
These  assets  are  held  by the Green  Mountain  Mining  Venture
("GMMV"),  owned  50 percent by the Company  and  USECC,  and  50
percent  by Kennecott Uranium Company ("Kennecott"), a subsidiary
of  Kennecott Corporation.  All claims are accessible  by  county
and United States Bureau of Land Management ("BLM") access roads.
Exploration and delineation of the principal uranium resources in
the   proposed   Jackpot  Mine  into  the   deposit   have   been
substantially   completed.   The  BLM  has   prepared   a   final
Environmental Impact Statement ("EIS") for the proposed mine and,
following a period of public comment on the preliminary and final
EIS,  on  April  24, 1996 the BLM signed the Record  of  Decision
approving  the  Jackpot  Mine Plan of Operations.   The  proposed
Jackpot  Mine has had no previous operators, and would be  a  new
mine  when  opened.  The Big Eagle Mine and related claim  groups
(which  are  near the proposed Jackpot Mine and 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
Corporation ("PMC") starting in the late 1970s.

Unpatented  lode mining claims, underground and open pit  uranium
mines  and  mining equipment in the Crooks Gap area,  located  on
Sheep  Mountain  in  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 USECC, and Nukem, Inc. ("NUKEM"), through  its
wholly-owned  subsidiary  Cycle Resource  Investment  Corporation
("CRIC").   The  Sheep Mountain Mines 1 and 2 are  accessible  by
county  and  private  roads and were first  operated  by  Western
Nuclear, Inc. in the late 1970s.

The  SMP  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.

The  Tony M Mine and the Frank M property are underground uranium
deposits  in  San Juan County, Utah located on Utah state  mining
leases.  These properties are accessible by county roads.

The  Tony M mine was originally developed by Plateau at the  time
Plateau  was owned by Consumers Power Company, a Michigan  public
utility.   Significant areas of uranium mineralization have  been
accessed   and  delineated  by  the  prior  owner's   underground
workings.  When the Tony M Mine was in production, while  Plateau
was  owned by Consumers Power Company, it produced ore containing
from three to eight pounds of uranium concentrates per ton.  Some
of  this ore was processed at the Shootaring Mill into U3O8,  the
saleable product.  The Company has a contract with Nuclear  Fuels
Services calling for transfer of the Tony M mine and the Frank  M
properties to the Company upon approval by the State of Utah of a
new   bond  securing  Plateau's  obligations  to  reclaim   these
properties.  In addition, the nearby Shootaring Mill,  low  grade
uranium  ore stockpiled at the Tony M mine and at the  mill,  and
related mill support facilities, are held by Plateau.

Plateau  also  owns  the Velvet Mine and  the  nearby  Wood  Mine
complex  in  the  Lisbon Valley area in southeastern  Utah.   The
Velvet Mine was fully developed and permitted by its prior  owner
and  is  approximately 178 miles by road to the Shootaring  Mill.
The  Wood  Mine  complex was formerly an operating  mine  with  a
remaining  undeveloped resource.  Access  to  this  would  be  by
extending  a drift approximately 2,500 feet from the former  Wood
Mine.  The Wood Mine property is not permitted at this time,  but
the  Company does not expect difficulty in obtaining a new permit
because  the  surface facilities would occupy the  site  that  is
already disturbed from previous operations.

Green Mountain Project

GMMV.   In fiscal 1990, USE and Crested sold 50 percent of  their
interests  in  certain  unpatented lode mining  claims  on  Green
Mountain  (hereafter, "Green Mountain Claims), and certain  other
rights, to Kennecott for $15,000,000 cash (Registrant's share  of
the proceeds was $12,600,000, and the balance was Crested's).  In
fiscal  1991, Registrant and USECC ("USE Parties") and  Kennecott
formed  the GMMV to develop, mine and mill uranium ore  from  the
Green  Mountain  Claims,  and market uranium  oxide  concentrates
(U3O8) to utilities using nuclear power to generate electricity.

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).  Kennecott will also  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   the   next
$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 (including Kennecott's commitment to
fund  the initial $50,000,000 of GMMV expenditures), so  that  in
effect  the  interest  held  by  each  party  collateralizes  its
performance.  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  (Jackpot)
uranium  deposit,  currently believed to be the most  significant
mineralized  resource on Green Mountain.  These 105  claims  were
formerly  owned solely by USE.  Pursuant to an agreement  between
USE  and  Crested, cash flow from production of  uranium  out  of
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 (Jackpot) deposit is developed and  placed
into  production and may be accessed through the proposed tunnels
at the Jackpot Mine.

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 and has continued as
project  manager  since  then.  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, acquisition and monitoring of the  Sweetwater
Mill  and  application to the U. S. Nuclear Regulatory Commission
("NRC") to convert the Sweetwater Mill license from standby to an
operating  license.  For fiscal 1996, GMMV plans  to  complete  a
sediment dam, sediment basin and drainage diversion ditch,  build
a  fuel  storage facility and other support facilities  and  make
improvements to existing facilities.

Properties  and  Mine  Plan.  GMMV owns  a  total  of  443  Green
Mountain Claims, including the 105 claims on which the Round Park
(Jackpot)  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 (Jackpot) deposit, and USECC has constructed two portals for
the Jackpot Mine declines.  Roads and utilities have been put  in
place,  which  are believed to be 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 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 mineral rights to the underlying
unpatented lode mining claims.

The  Round  Park  (Jackpot) mining claims contain  a  deposit  of
uranium  which has been estimated by USECC 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 expects to mine  this
deposit  from the Jackpot Mine, which will be driven  underground
from  the  south  side of Green Mountain.  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.

Registrant  expects  mine  development  costs  will  not   exceed
$25,000,000  to  begin production from the Round  Park  (Jackpot)
deposit.   However, cost estimates may change as exploration  and
initial  development progress.  Pursuant to the  GMMV  agreement,
Kennecott   has  agreed  to  fund  the  initial  $50,000,000   in
development  costs  including reclamation costs.   To  date  such
expenditures  total approximately $16,000,000.  Additional  costs
would  be funded by operations and/or by cash assessments on  the
venturers.

Sweetwater  Mill.  In fiscal 1993, 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;  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.

Mill  holding  costs are paid by GMMV and funded by Kennecott  as
part of its $50 million funding commitment.

Kennecott,  as  mill  operator,  has  initiated  discussions  and
appropriate  filings  with the 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  United  States Environmental Protection Agency  ("EPA")  has
advised  Kennecott, as operator of the GMMV,  that  if  Kennecott
would level the tailings within the existing tailings impoundment
and  install a new liner with leak detection capability  the  EPA
would  allow  the use of the existing 60 acre tailings  cell  for
milling  operations.   The Company anticipates  that  this  would
result  in substantial cost savings to GMMV and reduce  the  time
required for the Sweetwater Mill to resume operations.

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
processed in excess of 4,200 tpd for sustained periods.  The mill
is  one  of  the newest uranium milling facilities in the  United
States,  and has been maintained in good condition.   UNOCAL  has
reported  that  the mill buildings and equipment have  historical
costs of $10,500,000 and $26,900,000, respectively.

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  will   be
approximately $24,100,000 once the Jackpot Mine Permit is granted
by  the  WDEQ.  None of the GMMV future reclamation  and  closure
costs   are  reflected  in  Registrant's  Consolidated  Financial
Statements (see Note K to USE Consolidated Financial Statements).

UNOCAL   has   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
consist  of 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  $16,322,900  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 the GMMV is 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  appear
to  be within the $50,000,000 development commitment of Kennecott
for GMMV.  These costs are not expected to increase materially if
the  mill is not put into 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.  Last, the GMMV  will  set
aside  a  portion  of operating revenues to fund reclamation  and
environmental liabilities when mining and milling operations  are
finally 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  contributions
would be required only if the liabilities cannot be satisfied  by
Kennecott  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.

Permitting.  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.  Following preparation of a final EIS by the  BLM,
including a series of public meetings and a period for receipt of
written comments on both the preliminary and final EIS, on  April
24,  1996 the BLM signed the Record of Decision ("ROD") approving
the  Jackpot Mine Plan of Operations.  With the entry of the ROD,
the  WDEQ  is  expected  to issue the operating  permit  for  the
Jackpot  Mine  in June 1996.  Until this Permit  is  granted,  no
further  construction of mine facilities is allowed;  no  further
underground  mine  development can  occur,  and  the  Round  Park
(Jackpot) Deposit cannot be mined.

The  Jackpot  Mine  Plan of Operations and a combination  of  the
alternatives analyzed in the EIS will allow for the  disposal  of
mine  waste rock in the Big Eagle Mine pits and the upgrading  of
existing roads and the construction of new haul road segments for
transport  of  ore to the Sweetwater Mill.  These roads  will  be
subject  to  modification in alignment necessary to  minimize  or
avoid adverse impacts to riparian and cultural resources.

Prior  to initiation of mining operations, GMMV proposes  further
underground exploration in the area; if this exploration fails to
identify uranium resources with future development potential, the
project  will not proceed.  If uranium resources with development
potential  are discovered, GMMV proposes to begin mining  in  the
mid-to late-1990s.

The  mine plan estimates that the Jackpot Mine will produce about
3,000 tons of uranium ore per day and will have an expected  mine
life  of 13 to 22 years.  It will utilize the existing Big  Eagle
Mine  facilities located about two miles west of the Jackpot Mine
site.   As  many  as 250 workers will be required  during  mining
operations.  The maximum area of new disturbance required for the
project  will  be 289 acres.  This disturbance will  include  118
acres  for mine site development and 171 acres for transportation
corridor  construction and/or improvement.  When uranium reserves
have  been  depleted, the mine portals will be  plugged  and  the
ground  surface  recontoured  and reclaimed  to  blend  with  the
natural  landscape.  Also, surface structures  will  be  removed,
roads  closed  per landowner or BLM request, and disturbed  areas
reclaimed.

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 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 of the  uranium
operations  in which it owns an interest, are in compliance  with
these rules.

During the fiscal year ending May 31, 1995, expenditures by  GMMV
to  comply  with provisions of the mine permits and licenses,  or
otherwise   to   protect  the  environment,  were   approximately
$200,000,  of  which approximately 50 percent  were  for  capital
expenditures.  There ultimately will be an effect on USE earnings
from  environmental compliance expenditures by GMMV,  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  cash  flow
during  the  next  two years, as Kennecott will  fund  the  first
$50,000,000 of costs of GMMV, of which only about $15,799,100 had
been expended as of GMMV's year end at December 31, 1995.

Concerning  Kennecott.  Kennecott Corporation is  a  wholly-owned
United  States 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.

Registrant is not aware 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  parent  Kennecott  Corporation.   Accordingly,
performance  by  Kennecott  Uranium Company  of  its  development
commitment under the GMMV joint venture agreement is not assured.

Shootaring Canyon Mill

Acquisition  of  Plateau  Resources. In August  1993,  Registrant
purchased  from  Consumers  Power Company  ("CPC"),  all  of  the
outstanding  stock of Plateau, which  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.

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

(a)  to perform or cause Plateau to perform 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.

At  closing, Plateau transferred $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 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 an agreement between  Plateau  and
the  third-party.   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.

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 the Company, in light of potential NRC objections  to
selling  Plateau  to  the  USECC joint  venture.   Subsequent  to
closing,  in September 1993, the Company 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.  The Company has also applied to the NRC  to
convert the source materials license from standby to operational.

Plateau  owns  approximately 90,000 tons of  uranium  mineralized
material  ore  stockpiled  at  the mill  site  and  approximately
172,000  tons of mineralized material stockpiled at  the  Tony  M
Mine.

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

Ticaboo Townsite

Plateau  also  owns  all  of  the  outstanding  stock  of  Canyon
Homesteads, Inc. ("Canyon"), a Utah corporation, which  developed
the  Ticaboo,  Utah  townsite 3.5 miles south of  the  Shootaring
mill.   The  Ticaboo  site includes a 66 room motel,  convenience
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 being operated as  a  commercial
enterprise.   USE  and  Crested  plan  to  further  develop   the
townsite,  and  have  been seeking financial  partners.   Interim
funding for limited improvements on the commercial operations was
provided  by  a  private corporation affiliated with  a  John  L.
Larsen,  Chairman  of  the Board, President and  Chief  Executive
Officer   of   USE.   See  "Certain  Relationships  and   Related
Transactions - Transactions with Arrowstar Investments, Inc.".

Sheep Mountain Partners ("SMP")

Partnership.   SMP  is a Colorado general partnership  formed  on
December  21,  1988 between 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 the partners of SMP.  These disputes resulted in litigation
and  subsequent  arbitration from which an Order  and  Award  was
issued  on  April  18,  1996.   See "Legal  Proceedings  -  Sheep
Mountain Partners Arbitration/Litigation".

In  February 1988, USE and Crested acquired uranium mines, mining
equipment  and mineralized properties (Sheep Mountain  Mines)  at
Crooks Gap in south-central Fremont County, Wyoming, from Western
Nuclear,  Inc.  (a subsidiary of Phelps-Dodge Corporation).   USE
and  Crested, doing business as USECC, mined and sold uranium ore
from  one  of  the  underground mines in fiscal  1988  and  1989.
Production  ceased  in  fiscal 1989,  because  uranium  could  be
purchased  from  the spot market at prices below SMP  mining  and
milling costs.  These Crooks Gap properties are adjacent  to  the
Green Mountain Project.

The Company and Crested sold 50 percent of their interests in the
Crooks  Gap 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  provided one-half of $350,000 (later reduced to  $315,000)
to  purchase  equipment from Western Nuclear, Inc.;  the  Company
and  Crested  also contributed their interests in  three  uranium
supply contracts to SMP and agreed to be responsible for property
reclamation obligations.  The SMP Partnership 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, credit  lines  and
contributions.

SMP  was  directed by a management committee, with three  members
appointed  by  USECC, and three members appointed by  Nukem/CRIC.
The  committee  has  not  met  since  1991  because  of  the  SMP
arbitration/litigation.

Properties.   SMP owns 77 unpatented lode mining  claims  on  the
Crooks   Gap   properties,  including  two  open-pit   and   five
underground  uranium  mines  and an  inventory  of  uranium  ore.
Production  from  the  properties  is  subject  to  sliding-scale
royalties  payable to Western Nuclear, Inc.; the rates  are  from
one to four percent on recovered uranium concentrates.

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.  An ion-exchange plant is  located  near
the SMP properties, but is held by USECC and not SMP.

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").   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 conducted an  exploration
program  on  a portion of these properties, and has  advised  the
Company that it 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  two  uranium  mills  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.  The Company, on behalf of USECC, has submitted a plan  to
the  NRC  to decommission this facility.  However, management  is
reviewing the economics of relicensing this facility as part of a
potential in-situ leach uranium mining operation.

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 by SMP
for  certain expenditures on the properties.  During the pendency
of the SMP arbitration/litigation Nukem/CRIC refused to allow SMP
to  pay  USECC for care and maintenance and other work  performed
since  the  spring  of  1991.  See "Management's  Discussion  and
Analysis  of  Financial  Condition and Results  of  Operations  -
Liquidity  and  Capital  Resources at  May  31,  1995  -  Capital
Requirements  -  SMP".  As part of the Order and  Award  made  on
April  18,  1996, the Arbitration Panel awarded USECC  $2,065,989
for  Nukem/CRIC's 50% share of care and maintenance expenses  for
the  SMP  properties plus interest of $446,834 to March 31,  1996
and  per  diem cost of $616 thereafter.  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.

SMP  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  seven
long-term  contracts  (five remaining) for sales  of  uranium  to
eight domestic utilities.  Under the marketing agreement SMP  was
to  have  paid  Nukem 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.  As part of its April 18, 1996 Order
and  Award  the  Arbitration  Panel awarded  Nukem  $612,500  for
USECC's  50%  share  of  such marketing fees  plus  $216,460  for
interest on unpaid fees and per diem costs of $170 from March 31,
1996.

SMP's uranium supply contracts are either 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 delivery of 130,000 pounds  of
uranium  concentrates  through  1997.   Prices  of  uranium   for
deliveries  under  the  base-price escalated  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 903,200
to  1,213,800 pounds of uranium annually from 1996 to 2000, which
amounts may be increased or decreased by specified percentages.

Through  fiscal 1995, USE and its affiliates have satisfied  most
of  these contracts with uranium concentrates previously produced
by  SMP,  borrowed from others, or purchased on the open  market.
The  future  role  of  Nukem  in making  deliveries  under  these
contracts on behalf of SMP cannot be assured notwithstanding  the
April  18, 1996 Order and Award.  See "Legal Proceedings -  Sheep
Mountain Partners Arbitration/Litigation."

Permits.   Permits  to operate existing 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
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.

Uranium  Market  Information.  In 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).  Many of these operations are now in standby mode due to
recent  low  prices for U3O8.  There are currently 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.   Several  members  of  the Commonwealth  of  Independent
States  ("CIS"),  also  export uranium  to  the  western  markets
although  the  amount of such exports to the  United  States  and
European markets is currently limited.

Uranium is primarily used in nuclear reactors that heat water  to
drive  turbines that generate electricity.  There  are  presently
some   542  commercial  nuclear  power  plants  worldwide  either
operating, under construction or planned.  Of them, 45 are  under
construction  and 53 are planned.  Current worldwide  consumption
is  about  150  million pounds of U3O8 per  year,  but  worldwide
production  is only about 82 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  is  also developing into a significant uranium  consumer,
due  to  announced  plans for rapid expansion  of  nuclear  power
programs  in  Japan,  Korea, Taiwan and the  Russian  Federation.
This  region accounts for most of the 98 power plants  which  are
ordered or under construction.

Pursuant to Suspension Agreements signed in October 1993  between
the  United States Department of Commerce ("DOC") and certain  of
the  Republics  of the CIS, to rectify prior damage  to  domestic
United  States uranium producers from dumping sales  of  U3O8  by
certain CIS republics, 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 six 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
       Years Ended             US $/pound of U3O8
         May 31,               High            Low
          1991                11.70           8.35
          1992                 9.05           7.75
          1993                10.05           7.75
          1994                10.20           9.25
          1995                11.00           9.50
          1996                16.50          11.85

US NEV was $16.50 as of May 31, 1996.

NUEXCO's  restricted  market values ("U.S.  NEV")  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 one to three years.
There  also is an active spot market, through which approximately
5 to 10 percent of uranium concentrate needs are satisfied.

While  total  demand in 1995 exceeded domestic production,  there
remains  a  near-term  supply of U3O8  equivalent  from  domestic
producers'  inventory,  and from unrestricted  (i.e.,  not  under
quotas) foreign producers current production and inventory.   The
Company  expects  these and other factors  (e.g.,  weapons  grade
uranium   conversions)  will  moderate  price  increases,   which
otherwise might be expected from the  shortfall of United  States
production  meeting demand, in spite of increasing interest  from
U.S.  utilities  in renewing long-term contracts at  higher  than
spot  market prices.  To date in fiscal 1996, spot market  prices
have increased approximately 40% from May 31, 1995.

Gold

Lincoln Project (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 in a mining joint venture known as the  Sutter
Gold Venture ("SGV").  The entire interest of SGV is now owned by
USECC  Gold  L.L.C., a Wyoming limited liability company  ("USECC
Gold).  Until the end of fiscal 1994, Seine River Resources Inc.,
a  Vancouver Stock Exchange listed company ("SRRI"), which is not
affiliated with USE or its subsidiaries was a joint venture party
in  SGV.   USECC  Gold  is  a subsidiary of  Sutter  Gold  Mining
Company, a Wyoming corporation ("SGMC").

SGMC   expects  to  commence  additional  exploration  and   mine
development  as  soon as it is able to raise sufficient  funding.
Although  SGMC  is  in discussions regarding  funding  proposals,
there  can  be  no assurance that such proposals will  result  in
actual funding.  See "Permits and Future Plans."

USECC  Gold  and  SRRI had intended to operate SGV  as  equal  50
percent  venturers.   However, because of SRRI  defaults  on  its
obligations, USE and Crested 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 which USE and Crested acquired in
lieu of foreclosure (see Note F to the USE Consolidated Financial
Statements).   SRRI's  10%  interest was  delivered  to  USE  and
Crested in fiscal 1994.

Subsequent to the end of fiscal 1994, the Sutter Gold Venture was
terminated,  USE and Crested formed SGMC, and agreed to  exchange
their  interests  in  USECC Gold for common  stock  of  SGMC  and
founders stock was issued to various individuals.  As of May  31,
199  a  private placement of 896,364 shares was made to  a  small
group  of investors.  SGMC is owned 74 percent by USE, 9  percent
by  Crested and 17 percent by private investors; USECC Gold is  a
subsidiary of SGMC.

During   fiscal   years   1992  through   1995,   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.   SGMC  (through  its subsidiary  USECC  Gold)  holds
approximately 14 acres of surface and mineral rights (owned), 436
acres  of  surface rights (leased), 158 acres of  mineral  rights
(leased),  and  380  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  at  from 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 $418,200 for  the  two
fiscal  years ending May 31, 1997, including $77,400 for payments
on  two  parcels (14 acres) purchased in 1994; payment of advance
royalties and lease rental payments due in 1995 and 1996 on other
surface  and mineral properties, totalling $340,840; 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
February  1998),  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  or  minimum  payments are made.   Other  leases  may  be
extended  for various periods on terms similar to those contained
in  the  original leases.  Production royalties are from four  to
six  percent.   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 to the Lincoln Project when  the
project was owned by Meridian Minerals Company ("Meridian").   In
return for its conveyance of such leases Amador United received a
right  of  first  refusal to buy the Lincoln  Project  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 to 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.

A  separate holder of four of the properties that were  assembled
by  Meridian  into  the Lincoln Project holds  a  5  percent  net
profits  interest on production from such properties,  which  was
granted  by Meridian when it acquired the properties.   The  "net
profits" generally will be determined in the same manner  as  the
Amador  United net profits interest (i.e., gross mineral revenues
less  an  amount equal to 105 percent of numerous  categories  of
costs  and  expenses).   An additional 0.5  percent  net  smelter
return  royalty  is  held by a consultant to a  lessee  prior  to
Meridian's  acquisition  of  the properties,  which  0.5  percent
interest covers the same four properties in the Lincoln Project.

There  has been an estimated $16,000,000 of spending to  date  in
the  Lincoln  Project by Meridian and USECC Gold.   Since  fiscal
1991,  USE  and Crested have expended $11,373,000 to acquire  the
Lincoln  Project and for mine development, mining and  processing
bulk samples of mineralization, exploration, feasibility studies,
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.  The amount of  such
expenditures  during  the  1996  fiscal  year  was  approximately
$637,300.

Current  estimates  call  for up to  $15  million  of  additional
investment  to put the properties into full production.   Payment
of  any  amount  to Amador United and the other  holders  of  net
profits  interests will only occur after the Lincoln Project  has
generated  gross revenues in excess of the amount  invested  plus
interest.    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 objected to the notices given,  however,
USE and Crested believe these objections are without merit.

Geology  and  Reserves.   The minerals consulting  firm  Pincock,
Allen  &  Holt  ("PAH") prepared a prefeasibility  study  of  the
Lincoln Project in fiscal 1994.  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.

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 tonnages for the stated reserves would be increased.

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 could be in excess  of  96
percent.  PAH has estimated the recovery rate as 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, 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) need to 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.  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 to permit ore  haulage  up  the
decline  by conveyor, thus eliminating ore haulage on the surface
from mine portal to the mill.

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

Preliminary  estimates  are that SGMC  will  require  up  to  $15
million financing to construct the mill and prepare the mine  for
full  scale production, and for interim holding costs.  The  mill
design  is being finalized and will be reviewed by PAH or another
engineering firm , and SGMC expects to follow PAH's or such other
firm'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  less
than  15,000  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 are entitled to receive annual advance royalties
of  50,000 pounds of molybdenum, or cash equivalent (one-half  to
each).  AMAX Inc. (which merged with Cyprus Minerals Company  and
was  renamed  Cyprus  Amax Minerals Company  in  November,  1993)
delineated  a deposit of molybdenum containing approximately  146
million   tons  of  mineralization  averaging  0.43%   molybdenum
disulfide on the properties.

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 1995, USE  recognized  $85,500  of
advance  royalty revenue under this arrangement.  These royalties
are  shown  in  the Consolidated Statements of  Operations  as  a
component   of   gains  from  restructuring  mineral   properties
agreements.   See  Note  F  to  the  USE  Consolidated  Financial
Statements.  The royalty payments reduce the operating  royalties
(six  percent of gross production proceeds) which would otherwise
be  due from Cyprus Amax from production.  There is no obligation
to  repay the advance royalties if the property is not placed  in
production.  The Agreement with AMAX also provides that  USE  and
Crested  are  to receive $2,000,000 (one-half to each),  at  such
time as the Mt. Emmons properties are put into production and, 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.  The Company has asserted that  the  reported
merger  of AMAX into Cyprus Minerals Company was a sale of AMAX's
interest in the properties which would entitle USE and Crested to
such  payment.  Cyprus Amax has rejected such assertion  and  the
Company is considering its remedies.

Subsequent  to  May  31, 1994, USE and Crested reached  agreement
with  Cyprus  Amax  to forego six quarters of  advance  royalties
(starting fourth quarter calendar 1994) as payment for the option
exercise  price  for  certain real estate in  Gunnison,  Colorado
owned by Cyprus Amax and the subject of a purchase option held by
USE  and  Crested.   The  option  exercise  price  is  valued  at
$266,250.  USE and Crested exercised their option in August, 1994
and  subsequently  sold that property for $970,300  in  cash  and
notes  receivable.  The advance royalties are to  resume  in  the
second quarter of calendar 1996.

Molybdenum Market Information

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  and  the  rate of production  of  foreign  and
domestic  primary  and by-product producers, world-wide  economic
conditions  particularly in the steel industry, the  U.S.  dollar
exchange  rate, and other factors such as the rate of consumption
of  molybdenum in 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 November 1993,  when  the
companies merged.

Worldwide  demand for molybdenum in calendar 1995 was  reportedly
220  million pounds, its highest level ever.  Production for that
period  was  about 220 million pounds.  There is however,  excess
capacity  from  the primary molybdenum mines which are  currently
not  producing.   In  addition, by-product molybdenum  (primarily
from  Chilean  copper mining companies) has  a  major  impact  on
available  supplies.  It is unlikely that any major  new  primary
deposits will be developed during fiscal 1997.

Molybdenum   prices   on   the   open   spot   market   increased
substantially,  from $3.35 per pound of technical molybdic  oxide
(the principal product) in September 1994, to $15.50 - $17.50 per
pound  in  February 1995.  However, by May 31,  1996  prices  had
declined to $3.00 - $3.35 per pound.

Parador Mining (Nevada)

The Company 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 (now  known  as  Barrick
Bullfrog, Inc.).  The Company and Crested 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 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  BGBI  had  defaulted  in its lease  and  that  Parador  had
terminated  the  lease.  BGBI denies that it  has  defaulted.   A
partial  trial  to  the  court in December  1995  resulted  in  a
decision  that Parador had failed to meet its burden of proof  to
establish  that  its  claims are entitled to assert  extralateral
rights  and that Registrant, Parador and Crested have  no  right,
title  or  interest  in  the adjacent  BGBI  claims.   Registrant
intends to appeal this ruling as erroneous as a matter of law  at
such time as it is appropriate to do so.  See Risk Factor 16  and
"Legal Proceedings - BBGI Litigation".

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; four 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  owned 45% by  USE, 45% by Crested, and  10%  by  the
Assiniboine  and  Sioux  Tribes,  signed  in  October   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.   In the fourth quarter of calendar 1995 Energx  drilled
and  tested  three exploratory wells, in conjunction  with  NuGas
Resources  U.S. Inc. ("NuGas").  These three were all dry  holes.
Energx  (and  NuGas) plan to drill and test five more exploratory
wells in July 1996.  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.  The Agreement is renewable for successive five year
terms,  provided  Energx  drills another five  exploration  wells
during  each term.  The first three dry holes would be funded  by
NuGas.

With  additional  fee  and Tribal allotted acreage  assembled  by
Energx  and  NuGas, and the 170,000 acres subject  to  a  farmout
agreement with Placid Oil (see below), Energx and NuGas now  have
positions  in approximately 500,000 contiguous acres  within  the
Fort Peck Indian Reservation.  The Tribes will not participate in
the fee acreage.

During  the initial exploration program, proceeds from production
will  be  allocated to NuGas to recoup the initial  eight  wells'
drilling  and  completion expense (except for  up  to  three  dry
holes, see "NuGas Resources (U.S.) Inc. Agreement"),  Thereafter,
net  revenues will be allocated 40 percent to the Tribes  and  60
percent to Energx and NuGas.  Pursuant to United States Law, only
the  Tribes may own beneficial interests in reservation minerals;
Energx'  and  NuGas'  share of net revenues is  compensation  for
operating services.

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

NuGas  Resources  (U.S.) Inc. Agreement.  By  the  Joint  Venture
Agreement  ("JVA")  with Energx dated July  18,  1994,  NuGas  is
obligated to Energx to drill and complete (or abandon) at  NuGas'
sole  expense, eight exploratory shallow gas wells  on  the  Fort
Peck Reservation (three before December 31, 1994, now extended to
late  fall 1995, and five more by July 1, 1996), to earn  a  one-
half  interest in Energx' rights under the Fort Peck Shallow  Gas
Agreement.  Well gathering, gas dehydration and related equipment
costs  will  be shared equally by NuGas and Energx.  Energx  will
not  be required to contribute to the costs of drilling the first
eight exploratory wells.

NuGas  has  contributed $100,000 to pay for  costs  of  acquiring
leases  and  easements on non-Tribal lands contiguous  to  Tribal
lands,  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
postponed  the  drilling of the initial exploratory  wells  until
late in the fall of 1995.

NuGas  and  Energx each will receive 50 percent of proceeds  from
gas  produced and sold from 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 is the operator of record.

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 500 shallow gas  wells  and
produces 30,000,000 cubic feet of gas per day.

Farmout  Agreement.   In  October 1995,  Placid  Oil  Company,  a
subsidiary  of Occidental Petroleum and other parties  (hereafter
together  referred  to as "Placid"), signed a  Farmout  Agreement
with Energx and NuGas.  Under the agreement, Energx and NuGas  as
operator  have the right to drill and complete shallow gas  wells
on  approximately  170,000 acres of non-Tribal lands  within  the
Fort  Peck  Indian  Reservation,  at  the  sole  expense  of  the
operator.   The Farmout Agreement contemplates three phases:  (i)
drilling  and completion (or abandonment) of three test wells  on
widely  dispersed drilling locations; (ii) subject to performance
of  (i),  continuous drilling and completion (or abandonment)  of
option  wells,  also on widely dispersed drilling locations;  and
(iii)  subject  to  performance of (i), continuous  drilling  and
completion  (or abandonment) of additional wells  on  blocks  not
covered by (i) and (ii).  The first three wells are to be drilled
on specific sections within the 170,000 acres.

Drilling  of the first test well commenced in October  1995;  the
last  of  the  three  wells is to be drilled  and  completed  (or
abandoned)  within 45 days of the commencement  of  drilling  the
first  well.  Upon completion of the last test well,  and  on  or
before  June  1,  1996, the operator has the option  to  continue
drilling on the acreage until March 31, 1997, with not more  than
30 days to elapse between completion (or abandonment) date for  a
well and commencement of drilling of the next well, until all the
acreage has been fully developed.

On  or  before  the March 31, 1997 Farmout Agreement  termination
date, the operator shall make an election as to each lease in the
acreage that is undeveloped or which covers lands not included in
a  producing unit from the drilling of test or option  wells,  to
(i) continuously drill wells so as to fully develop the lease  on
160 acre units, (ii) pay Placid $35.00/acre rental on the desired
acreage, or (iii) forego the subject acreage and reassign it back
to Placid.

In  addition to lessor royalties, Placid will receive a 6 percent
overriding  royalty interest on the acreage developed  under  the
Farmout  Agreement.   Operator will reimburse  Placid  for  delay
rentals on the acreage until placed into production.

Energx  has agreed with NuGas that NuGas' payment of all drilling
and  completion  (or abandonment) costs on the three  test  wells
under  the Farmout Agreement will constitute performance by NuGas
as  to  the  first  three wells required under  the  Energx/NuGas
agreement.   In  turn, the Tribes have agreed that  drilling  and
completion  (or  abandonment) of the three test wells  under  the
Farmout Agreement will be accepted in lieu of drilling the  first
three  test  wells  required  under the  Fort  Peck  Shallow  Gas
Agreement.   Energx will be an equal participant  with  NuGas  in
paying  for  the  Farmout Agreement option  wells'  drilling  and
completion   (or  abandonment)  costs  and  production   proceeds
therefrom.

Wind   River   Basin,   Wyoming  -   Monument   Butte   Prospect.
Approximately  13,000  acres of BLM  leases  (10  year  term)  in
Fremont County, WY are now held by Energx, and are believed to be
prospective   of   shallow  coalbed  methane   and   conventional
stratigraphic natural gas and oil deposits.  Acreage in this part
of  the  basin has been leased by major oil and gas companies  in
the past, but very little of the Energx acreage has been drilled.
Energx  expects  to  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).   Energx  expects  to  fund   future
operations  by a combination of private equity financing  and  by
seeking industry and private investor participation on prospects.
However,  due  to depressed gas prices in calendar  1995,  equity
financing  as  well  as joint venture industry  participation  of
natural  and  coalbed methane gas projects has been difficult  to
obtain.   Accordingly, in fiscal 1996 Energx  is  monitoring  its
acreage  positions (other than Fort Peck) to evaluate whether  to
continue  paying the acreage holding costs and/or drill  to  earn
acreage  rights  (as applicable), or to turn operations  over  to
another  company  in the industry in exchange for  an  overriding
royalty from future production payable to Energx.

Brunton.

On  February 16, 1996 Registrant completed the sale of  8,267,450
shares of common stock, $0.01 par value, (the "Stock") of Brunton
to  Silva  Production  AB,  a closely  held  Swedish  corporation
("Silva"),  pursuant to the terms of a Stock  Purchase  Agreement
dated   January  30,  1996  (the  "Agreement")  by  and   between
Registrant and Silva.  Brunton is engaged in the manufacture  and
marketing  of professional and recreational outdoor products  and
at  the  time  of its sale Brunton was 100% owned by  Registrant.
The sale was prompted in part by Registrant's desire to focus  on
its  core business of acquiring and developing mineral properties
and mining and marketing minerals, particularly uranium and gold.
The Stock constitutes all of the issued and outstanding shares of
Brunton  owned by Registrant as of the date of the sale including
90,750 shares held in Brunton's treasury.

The  purchase  price for the Stock was $4,300,000,  which  was  a
negotiated  price  based on an Adjusted Shareholder's  Equity  in
Brunton  (as defined in the Agreement) as of January 31, 1996  of
$2,399,103.   Registrant  received $300,000  upon  execution  and
delivery  of  the  Agreement, approximately  $3,000,000  by  wire
transfer from Silva at closing and an agreement by Silva  to  pay
Registrant  $1,000,000 in three annual installments  of  $333,333
together  with  interest  at  the rate  of  7%  per  annum,  such
installments to be paid on February 15, 1997, February  15,  1998
and February 15, 1999.

In  addition,  Silva  agreed that, in the operation  of  Brunton,
Silva  will  cause the existing Brunton products  and  operations
(including  lasers  and  other new products  being  developed  by
Brunton  at the time of the sale) to be a separate profit  center
and to pay Registrant 45% of the net profits before taxes derived
from  that  profit center for a period of four  years  and  three
months  commencing February 1, 1996.  The first such net  profits
payment  will be made on or before July 15, 1997 for  the  period
from February 1, 1996 through April 30, 1997, if net profits  are
earned for such period.  Additional net profits payments will  be
made,  on July 15, 1998, July 15, 1999 and July 15, 2000, if  net
profits  are  earned for the corresponding twelve  month  period.
There can be no assurance that Brunton will earn net profits  for
any  such period and therefore there can be no assurance that any
such net profits payment will be received by Registrant.

The  assets  of Brunton that were acquired by Silva  through  the
purchase  of  the  Stock consist of certain real  estate  housing
Brunton's  headquarters and manufacturing operations in Riverton,
Wyoming;   Brunton's   working  capital;  equipment,   inventory,
machinery,  personal  property and all of Brunton's  intellectual
property   rights.   Certain  items  of  equipment  and  personal
property  were withheld by the Registrant from the Agreement  and
transferred from Brunton to Registrant, by mutual agreement  with
Silva,  for Registrant's assumption of the indebtedness  thereon.
Such  items include and depreciated mining equipment, real estate
not   used   in  Brunton  operations,  and  miscellaneous   other
equipment,  as  well  as  225,556 shares of  Registrant's  common
stock, par value $0.01 per share, and options to purchase 150,000
shares  of Registrant's common stock for $3.50 per share; 160,000
shares  of  Crested  Corp. common stock, par  value  $0.001,  and
options  to  purchase  (from Crested  Corp.)  300,000  shares  of
Crested Corp. common stock for $0.40 per share, all of which were
previously owned by Brunton.  125,556 shares of USE (and  options
to  purchase 75,000 shares of USE), plus 60,000 shares of Crested
(and   options  to  purchase  150,000  shares  of  Crested)  were
transferred to Plateau in partial payment of debt owed to Plateau
by  USECC.   The  remaining 100,000 USE shares  (and  options  to
purchase  75,000  USE shares), plus 100,000 Crested  shares  (and
options  to  purchase 150,000 shares of Crested) were transferred
to SGMC.

Also at closing, the Registrant paid Brunton $171,685 for accrued
rentals  on mining equipment owned by Brunton and transferred  to
Registrant  at closing, and the Registrant paid off  $273,000  in
bank  debt  previously incurred by Brunton in connection  with  a
loan to the Registrant.

The  sale will eliminate Brunton's manufacturing and/or marketing
of  professional  and  recreational  outdoor  products  from  the
commercial segment of Registrant's business, except to the extent
that  there are net profit payments from Silva over the next four
years,  of which there can be no assurance.  For the fiscal  year
ended  May 31, 1995, Brunton's sales provided 49% of net revenues
of  USE  (26% for the nine months ended February 29, 1996  before
reclassification  to  reflect Brunton as discontinued  operations
with respect to the Company).  The inability to include Brunton's
operations  with  Registrant's other operating  revenues  in  the
future could result in continued operating losses for Registrant,
unless Registrant is able to develop other profitable businesses,
such  as  Registrant's  uranium business  or  FNG's  construction
business,  to replace profits from Brunton.  Continued  operating
losses  without offsetting replacements of working  capital  will
adversely  affect  USE's ability to continue  its  operations  as
described  in this Prospectus.  See also Risk Factor 2 above  and
"Management's Discussion and Analysis of Financial Condition  and
Results  of  Operations  -  Liquidity and  Capital  Resources  at
February 29, 1996 (unaudited)" and Results of Operations".

On  the  other  hand, receipt in February 1996  of  approximately
$2,900,000  in  net  cash from the sale (and future  payments  on
Silva's $1,000,000 promissory note and any profits payments) will
enhance  the  Company's  financial  condition  and  medium   term
liquidity  as well as providing additional resources to  put  the
Company's  Plateau uranium mill into operation  and  develop  the
Company's uranium and gold properties.

Real Estate and Other Commercial Operations

Registrant  owns  varying interests, alone and with  Crested,  in
affiliated companies engaged in real estate, transportation,  and
commercial  businesses.   The  affiliated  organizations  include
Western  Executive Air, Inc. ("WEA") and Canyon Homesteads,  Inc.
(through  Plateau).   Activities of these subsidiaries  in  these
business sectors include ownership and management of a commercial
office  building, the townsite of Jeffrey City, Wyoming  and  the
townsite  and commercial facilities in Ticaboo, Utah.   Until  it
was  sold  in April 1996, USECC also owned and managed  a  mobile
home  park in Riverton, Wyoming.  See "Certain Relationships  and
Related  Transactions - Transactions with Arrowstar  Investments,
Inc.".   WEA  owns and operates an aircraft fixed base  operation
with  fuel  sales  and  flight  instruction  and  maintenance  in
Riverton, Wyoming.

USECC

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. The preceding property is  mortgaged  to  the
State  of Wyoming as security for future reclamation work on  the
SMP properties.

USECC  also owns a fixed base aircraft operation at the  Riverton
Municipal Airport, including a 10,000 square foot aircraft hangar
and 7,000 square feet of 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.

In  November 1995, USECC exercised an option to acquire  a  7,200
square  foot hangar at the Riverton airport, for $75,000, from  a
private  Wyoming  corporation affiliated  with  John  L.  Larsen,
Chairman,  President and Chief Executive Officer of the  Company.
See   "Certain   Relationships   and   Related   Transactions   -
Transactions with Arrowstar Investments, Inc.".

USE and Crested also 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, 290 city lots and/or tracts  other
properties at the Jeffrey City townsite in south-central Wyoming.
Nearly  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.   In
the  interim  Registrant and Crested have sold  17  lots  for  an
aggregate of $32,000 during fiscal 1996.  In addition,  in  April
25,  1996,  the Registrant and Crested entered into an  agreement
with  a  non-related party to sell 10 six-plex townhouses located
in   Jeffrey  City  for  $500,000,  conditioned  upon   purchaser
obtaining  financing for the full amount within  60  days.   Full
real  estate  title  will be transferred to  the  purchaser  upon
closing,  however, if purchaser removes the townhouses, purchaser
must  reclaim the land and the real property where the townhouses
were  located  will  be assigned and conveyed  back  to  USE  and
Crested by quitclaim deed for full consideration of $10.00.

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   Mt.  Emmons  molybdenum  properties  near  Crested   Butte,
Colorado, USECC acquired an option from AMAX (now Cyprus Amax) to
purchase  (until June, 2002) approximately 57 acres for  $200,000
in  Mountain  Meadows  Business Park,  Gunnison,  Colorado.   See
"Molybdenum"  above.   The  property  is  zoned  commercial   and
industrial, and is adjacent to Western State College.  In  fiscal
1995,  USECC and Cyprus Amax agreed on exercise of the option  by
USE  and  Crested  agreeing to forego  six  quarters  of  advance
royalties  from  Cyprus  Amax  (the  option  purchase  price  was
$200,000),  plus payment of certain expenses i.e.  real  property
taxes   from  1987  and  other  expenses  amounting  to  $19,358.
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.

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   paid
$345,000  cash and $625,300 in three year nonrecourse  promissory
notes,  of  which  $137,900 was paid  during  fiscal  1995.   The
remaining  note  bears interest at 7.5% per annum.   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  $822,460).
Pangolin  paid  $10,000 for the option; on  option  exercise  and
closing,  Pangolin  paid  $46,090 in cash  and  $776,370  by  two
nonrecourse  promissory  notes (each with  principal  and  unpaid
interest  due  on  the third anniversary of  closing  except  for
$35,000 on the first anniversary).  At closing, 22.19 acres  were
deeded  to  Pangolin; different parcels of the remaining  acreage
secure the notes, and will be released for principal payments  in
the  course  of development.  The sale was accounted  for  as  an
installment  sale and thus the gain on sale was deferred,  to  be
recorded as the notes are paid.

Both  notes ($145,500 and $630,870) will require annual  payments
of  accrued  interest: the larger note accrues  interest  at  7.5
percent;  the initial interest rate on the smaller note  was  7.5
percent through August 28, 1995 and 12 percent thereafter (with a
$35,000 principal payment on the first anniversary).

Utah  Properties.  Canyon Homesteads, Inc. (a Plateau subsidiary)
owns  a  majority  interest in a joint venture  which  holds  the
Ticaboo Townsite in Ticaboo, Utah (see "Uranium-Shootaring Canyon
Mill - Ticaboo Townsite, above).  In fiscal 1994, a swimming pool
was  built  at the motel.  In fiscal 1995, USE agreed to  acquire
the  minority  interest in the joint venture from a nonaffiliate.
Further recreational improvements to the townsite are planned for
fiscal  1996, to develop a commercial operation directed to  Lake
Powell  tourists.   However,  as the  anticipated  joint  venture
partners did not fund development plans in fiscal 1995, (and  the
proposed  joint ventures for such purpose were not  formed),  and
USE and Crested have not been successful in finding other sources
of development funding, limited interim funding has been provided
by  Arrowstar  Investments, Inc.  See "Certain Relationships  and
Related  Transactions - Transactions with Arrowstar  Investments,
Inc.".

Construction

Four  Nines Gold, Inc.  On May 5, 1995 FNG was awarded a 14 month
$2,584,434  contract  by  the City  of  Lead,  South  Dakota  for
municipal  road  and drainage construction, and rock  slide  area
stabilization.  As of April 30, 1996, change orders by  the  City
of  Lead  have increased the contract to $3,609,604 and  FNG  had
performed 88% percent of the contract, billing $3,208,408  (after
$75,000 retainage by the City of Lead against completion  of  the
project),  of  which $3,133,408 had been paid. FNG  continues  to
expect the contract to be profitable

On  September  13,  1995 FNG was awarded a separate  construction
contract  for  $618,270 by the United States  Department  of  the
Interior,  Bureau of Reclamation, for the Minor  Laterals,  North
Canal,  Stage  5,  Belle Fourche Unit, South  Dakota.   The  work
consists  of  constructing 3.81 miles of pipeline,  approximately
1.4  miles  of gravel-surfaced road, removing existing reinforced
concrete  hydraulic  structures  and  constructing  miscellaneous
concrete  structures which include four inlets.  As of April  30,
1996 FNG had completed 92% of the contract, billing $535,515  and
having  received payment for $385,808.  This contract may  result
in a small loss to FNG.

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.

Research and Development

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

Environmental

Registrant's 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  and  regulations   in
California  affect  SGMC  operations and  in  Utah,  will  effect
Plateau's operations.

To  the Company's knowledge, currently it is in compliance in all
material  respects with existing environmental  regulations.   To
the  extent  that  production by SMP, GMMV or  SGMC  is  delayed,
interrupted  or discontinued due to need to satisfy  existing  or
new  provisions which relate to environmental protection,  future
USE earnings could be adversely affected.

Crooks  Gap.  An inoperative ion exchange facility at Crooks  Gap
currently   holds  a  NRC  license  for  possession  of   uranium
operations byproducts.  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.   However,
management  of  USE and Crested are reviewing  the  economics  of
relicensing  this facility as part of a potential  in-situ  leach
uranium mining operation.

Other  Environmental  Costs.  Actual costs  for  compliance  with
environmental   laws  may  vary  considerably   from   estimates,
depending upon such factors as changes in environmental laws  and
regulation   (e.g.,  the  new  Clean  Air  Act),  and  conditions
encountered in minerals exploration and mining.  Registrant  does
not  anticipate that expenditures 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   adverse  impact  on  the  Registrant's  competitive
position.

Employees

USE has 54 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  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  are  obligated to pay $100 per  claim  annually  in
order  to  preserve the right to possession of unpatented  mining
claims.  In addition to annual rental fee obligations there are a
number of technical requirements which must be met to establish a
valid mining claim.  Satisfaction of these technical requirements
cannot be assured.  See Risk Factors 7 and 10.

Legal Proceedings

Sheep Mountain Partners Arbitration/Litigation

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 also "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  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 asked 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  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, including an application to
stay  judicial  process  and compel arbitration  and  to  dismiss
certain  of  plaintiff's claims.  The defendants  also  filed  an
answer  and counterclaims against plaintiffs, claiming plaintiffs
breached  the  SMP  Agreement and misappropriated  a  partnership
opportunity  by  providing  certain  information  about  SMP   to
Kennecott and entering into the GMMV with Kennecott involving the
Green  Mountain  uranium properties.  The defendants  also  claim
that  plaintiffs wrongfully sold an interest in SMP to  Kennecott
through  the  GMMV  without CRIC's consent and without  providing
CRIC  a  right of first refusal to purchase such interests;  that
Registrant breached the uranium marketing agreement between  CRIC
and  SMP,  which had been assigned by CRIC to Nukem, by  agreeing
with  Kennecott in the GMMV that Kennecott could market  all  the
uranium   from  Green  Mountain,  thereby  depriving   Nukem   of
commissions  to  be earned under such marketing  agreement;  that
Registrant  and  Crested  interfered  with  certain  SMP   supply
contracts, costing CRIC legal fees and costs; that CRIC and Nukem
are  entitled to be indemnified for purchases of uranium made  on
behalf  of  SMP;  that Registrant and Crested failed  to  perform
their  obligations under an Operating Agreement  with  SMP  in  a
proper  manner,  resulting  in  additional  costs  to  SMP;  that
Registrant and Crested overcharged SMP for certain services under
the  SMP  Partnership Agreement and refused to allow SMP  to  pay
certain  marketing  fees  to Nukem under  the  Uranium  Marketing
Agreement;   that  Registrant  and  Crested  breached   the   SMP
Partnership  Agreement  by failing to  maintain  a  toll  milling
agreement  with  Pathfinder Mines Corporation, thereby  rendering
SMP's  uranium  resources  worthless;  and  that  Registrant  and
Crested  have  engaged in vexatious litigation against  CRIC  and
Nukem.   Defendants  also requested damages (including  punitive,
exemplary  and  treble  damages under RICO,  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 (the "Panel") with respect to
any   and  all  post-December  21,  1988  disputes,  claims   and
controversies  (including those brought in the  1991  arbitration
proceedings, the U.S. District Court proceeding and the  Colorado
State  Court  proceeding described below),  that  any  party  may
assert  against  the other.  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
Panel enters an order and award in the arbitration proceeding.

In  connection with agreeing to proceed to arbitration as  stated
above,  the  Registrant and Crested affirmed the  Sheep  Mountain
Partners  partnership, and proceeded on common  law  damages  and
other claims in the arbitration.  Approximately $18 million cash,
comprising part of the damages claimed by plaintiffs, was  placed
in  escrow by agreement of the parties pending resolution of  the
disputes.

The arbitration evidentiary proceedings were completed on May 31,
1995,  following  which the parties filed  with  the  arbitrators
proposed  findings of fact and conclusions of  law  and  proposed
order,  award,  briefs of law and responses to the other  party's
submittals.  NUKEM and CRIC sought damages against USECC  in  the
amount  of $47,122,535.  For its claims, USECC sought damages  of
approximately  $258  million from Nukem and  CRIC,  which  amount
USECC  requested  be trebled under the Racketeer  Influenced  and
Corrupt   Organizations  Act  ("RICO")  and  similar  state   law
provisions.

On  April  18, 1996 the arbitration Panel entered an  Arbitration
Order  and Award (the "Order").  The Panel found in favor of  the
Registrant  and Crested on certain claims made by the  Registrant
and  Crested (including the claims for reimbursement  of  standby
maintenance expense and other expenses on the SMP mines), and  in
favor  of  Nukem/CRIC and against the Registrant and  Crested  on
certain other claims.

The  Registrant  and  Crested were awarded  monetary  damages  of
approximately  $7.4 million, which amount is after  deduction  of
monetary  damages which the panel awarded in favor of  Nukem/CRIC
and against the Registrant and Crested.  An additional amount  of
approximately  $4.8  million was awarded  by  the  Panel  to  the
Registrant and Crested, to be paid out of cash funds held in  SMP
bank  accounts, which accounts have been accruing operating funds
from   SMP  since  the  arbitration/litigation  proceedings  were
commenced.   It is anticipated that such payment out of  the  SMP
bank accounts will be made in the first quarter of fiscal 1997.

The  Panel  ordered that one utility supply contract for  980,000
pounds  of uranium oxide held by Nukem/CRIC belonged to SMP,  and
ordered  such contract assigned to SMP.  The contract expires  in
2000.

The  fraud and RICO claims of the Registrant and Crested  against
Nukem and CRIC were dismissed.

The timing and assurance of payment by Nukem/CRIC to the
Registrant and Crested of the $7.4 million monetary damages is
presently uncertain. On April 30, 1996 Nukem/CRIC filed with the
Panel two motions to correct the arbitration award, claming to
have discovered errors and inconsistencies in two of the 36
claims addressed in the Order that they allege improperly
increased the award of damages to Registrant and Crested by an
aggregate amount exceeding $14 million.  They have also written a
letter to the bank holding most of the SMP escrowed proceeds
instructing the bank to take no action with respect to releasing
funds from the SMP escrow account without prior notification to
them.  On May 15, 1996, Registrant and Crested filed the Order
(under seal with respect to certain portions containing
commercially sensitive information) with the United States
District Court for the District of Colorado (the "Court") and a
petition for confirmation of the Order.  At a hearing on May 24,
1996 the Court remanded the Order to the Panel for limited review
of the motions filed by Nukem/CRIC.  The petition for
confirmation of the Order and motions filed by Registrant and
Crested for dissolution of SMP, for the appointment of a receiver
to oversee the obligations of SMP to make delivery of uranium
concentrates to utilities and supervise the formal dissolution of
SMP, and for an order directing distribution of the escrowed
proceeds, were stayed by the Court pending a ruling by the Panel
on the two motions filed by Nukem/CRIC. The impact of the
arbitration Order cannot be determined until the Panel rules on
the Nukem/CRIC motions to correct the award and the Court
considers such ruling.  The motions filed by Registrant and
Crested to confirm the Order and Award and appointment of a
receiver have been stayed pending such ruling.

The Panel did not order SMP dissolved.  The Registrant and
Crested have filed a motion with the Court seeking judicial
dissolution of SMP.  Pending a favorable ruling on that motion
the Registrant and Crested may seek to reach an agreement with
Nukem/CRIC on dissolution of SMP.  If a dissolution is not
achievable through negotiation, the Registrant and Crested may
renew its motion for judicial intervention and the appointment of
a receiver by the courts, to wind up the partnership affairs and
distribute assets after payment of liabilities.  The timing and
ultimate resolution of the partnership dissolution matter
presently is uncertain.  Pending such resolution, the Registrant
and Crested are hopeful that delivery obligations under the
various SMP  utility supply contracts can be met through the
cooperation of Nukem/CRIC.

Colorado State Court Proceeding. On September 16, 1991,  USE  and
Crested filed Civil Action No. 91CV7082 in Denver District  Court
against SMP, 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

The  Company  and Crested are defendants and counter-  or  cross-
claimants  in  certain litigation in the District  Court  of  Nye
County,  Nevada, brought by Bond Gold Bullfrog Inc.  ("BGBI")  in
July  1995.   BGBI (now known as Barrick Bullfrog,  Inc.)  is  an
affiliate  of Barrick Corp., a large international gold  producer
headquartered  in  Toronto,  Canada.   The  litigation  primarily
concerns extralateral rights associated with two patented  mining
claims  owned  by  Parador Mining Company  Inc.  ("Parador")  and
initially  leased to a predecessor of BGBI, which claims  are  in
and  adjacent  to BGBI's Bullfrog open pit and underground  mine.
USE  and Crested assert certain interests in the claims under  an
April 1991 assignment and lease with Parador, which is subject to
the lease to BGBI's predecessor.

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
claims leased to BGBI by a third party.

BGBI  seeks  to  quiet  title to its leasehold  interest  in  the
subject claims, alleging that Parador's 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 asserts 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.

A  partial  or  bifurcated trial to the court of the extralateral
rights  issues was held on December 11 and 12, 1995.  The purpose
of the hearing was to determine whether the Bullfrog orebody is a
"vein, lode or ledge" as described in the General Mining Law and,
if  so, whether the facts of the case warrant the application  of
the doctrine of extralateral rights as set forth in such statute.
Although  the Court sat as both the finder of fact and  law  with
respect  to  such issues, the Court concluded that the  questions
are  ultimately  one of law which must be decided  based  on  the
testimony  and  exhibits introduced at the trial  concerning  the
description  of  the orebody.  Registrant and defendants  Crested
Corp. and Parador presented five experts in the field of geology,
including the person who was responsible for the discovery of the
gold  deposit  at  the mine.  All five experts  opined  that  the
deposit  was  a lode and it apexed on a portion of Parador's  two
mining  claims.   The defendant Layne presented a single  witness
who  testified that there was no apex within the Parador  claims.
The  Court nevertheless found that Parador had failed to meet its
burden  of  proof and therefore Parador, Registrant  and  Crested
have  no  right, title and interest in the minerals lying beneath
the  claims of Layne pursuant to extralateral rights.  The  Court
entered  a  partial judgment in favor of Layne and  ordered  that
Parador  pay Court costs to Layne.  Defendants intend  to  appeal
the  Court's ruling as erroneous as a matter of law at such  time
as it is appropriate to do so.

The partial trial did not address any of the other issues pending
in  the  litigation  other  than those  required  to  decide  the
question  of  whether  the  doctrine of  extralateral  rights  is
applicable  to  this  case.  All other claims  and  counterclaims
remain pending before the Court and no hearing date has been  set
for those issues.

If USE's and Crested's position concerning extralateral rights is
ultimately sustained, substantial additional revenues and  income
may  be  received by USE and Crested from royalties payable  with
respect  to  gold produced from the Bullfrog Mine.  If,  however,
the  final decision of the appellate court is adverse to USE  and
Crested,  an  award  of damages against USE and  Crested  in  any
substantial  amount by this Court could have a  material  adverse
effect  on  the  ability of USE and Crested  to  carry  on  their
business in the manner described in this Prospectus.


  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 1994 and 1995, and the  nine
months ended February 29, 1996.

                                           High      Low

     Fiscal year ended May 31, 1996
       First quarter ended 8/31/95         $5.67     $4.13
       Second quarter ended 11/30/95        5.38      3.13
       Third quarter ended 2/29/96         19.00      3.50
       Fourth quarter ended 5/31/96        25.00     13.00

     Fiscal year ended 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
       Fourth quarter ended 5/31/95         7.55      4.63

     Fiscal year ended 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

       (b) Holders

At  June 5, 1996, the closing bid price was $21.625 per share and
there were 722 shareholders of record for USE common stock.

USE  has  not paid any cash dividends with respect to its  common
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.

              MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources at February 29, 1996 (unaudited)

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

Liquidity and Capital Resources

Working  capital increased during the nine months ended  February
29,  1996  by $1,115,800 to working capital of $1,137,700.   Cash
and  cash equivalents increased by $918,500 to $1,279,100  during
the  period  ended  February 29, 1996.   This  increase  was  the
result  of  financing  activities  and  Registrant's  sale  of  a
subsidiary.

In  June  and  July 1995, the Registrant sold 812,432  restricted
common  shares  in  a  private  placement  for  net  proceeds  of
$2,842,200  The Registrant registered these shares with  the  SEC
during  the  Quarter ended February 29, 1996 for  resale  by  the
holders   of  such  shares.   In  connection  with  this  private
placement, warrants to purchase 81,243 common shares at $4.80 per
share,  40,622  of which were exercised in March  of  1996,  were
issued  to  the selling agent.  The balance of the  warrants  are
exercisable through July 25, 2000.

The  Registrant  investing activities provided $1,183,600  during
the  nine months ended February 29, 1996.  This increase in  cash
was  a result of proceeds from the sale of assets $77,700 and the
sale of the Brunton Company, $3,300,000.  These increases in cash
were  partially offset by investments in affiliates  due  to  the
Registrant  and  its  subsidiary Crested funding  Sheep  Mountain
Partners ("SMP"), Plateau Resources Limited ("Plateau"),  Energx,
Ltd. ("Energx") and the Sutter Gold Mining Company ("SGMC").   As
the  Registrant 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 the Registrant and Crested  for
all  the  operating costs.  Due to disputes existing between  the
SMP partners, the Registrant and Crested have not been reimbursed
for  care  and  maintenance costs expended  on  the  SMP  mineral
properties   since   the  spring  of  1991.   Additionally,   the
Registrant   and  its  affiliates  (1)purchased   $1,021,100   of
additional  equipment (2) developed mineral properties,  $349,200
and  (3) developed gas properties $23,400 during the nine  months
ended  February 29, 1996.

During  the  quarter ended February 29, 1996 the Registrant  sold
all of its 100% interest in The Brunton Company to Silva A.B.  of
Sweden.   Gross proceeds from the sale were $4,300,000  of  which
$3,300,000  was paid in cash and $1,000,000 in a Promissory  Note
which  is  payable in three payments of $333,333 on February  15,
1997,  1998 and 1999.  The Note from Silva bears interest  at  7%
per  annum  which  is  due  with the principal  payments.   Other
conditions  of  the sale were the assumption of certain  accounts
payable,  accounts  receivable, and  a  Note  in  the  amount  of
$279,104  with  a bank, and the return of certain  equipment  and
aircraft  which  secures  the Note.   Another  condition  to  the
closing was the retirement of this debt.

Additionally,  The  Brunton Company returned  to  the  Registrant
160,000  shares  of  Crested common stock and 225,556  shares  of
Registrant's common stock along with options to purchase  150,000
shares  of Registrants common stock and 300,000 shares of Crested
common  stock.   The  Registrant, upon return  of  these  shares,
transferred 100,000 shares and 125,556 shares of the common stock
to  SGMC  and Plateau respectively, along with 75,000 options  to
purchase   Registrant's   Common  Stock   to   each   transferee.
Additionally,  the  Registrant  transferred  60,000  shares   and
100,000  shares  of  Crested common stock  to  Plateau  and  SGMC
respectively,  along  with  150,000 options  to  purchase  common
shares of Crested to each transferee. The transfer of such  stock
and  options to Plateau was made in partial payment of debt  owed
to  Plateau by USECC.  The net gain recognized after the transfer
of  assets,  assumption of debt and receivables, along  with  tax
provisions, was $2,295,700.

Other  changes  in  working capital were a decrease  in  accounts
payable  and  accrued expenses of $1,444,900 and  a  decrease  in
lines of credit by $1,140,000.  The Registrant and Crested have a
line  of  credit  for  $1,000,000, with  $0  outstanding   as  of
February  29,  1996.   Four  Nines  Gold  ("FNG"),  has   $79,000
outstanding on its line of credit.

The  primary  requirements for the Registrant's  working  capital
continue  to be the funding of on-going administrative  expenses,
the  mine and mill development and holding costs of SGMC; holding
costs  of Plateau; and uranium (U3O8) delivery costs and property
holding  costs of SMP.  As a result of the disputes  between  the
SMP  partners  (see "Legal Proceedings - Sheep Mountain  Partners
Arbitration/Litigation), the Registrant  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 have made most of the SMP deliveries of U3O8.   It  is
not  known how long this arrangement will continue.  The  capital
requirements  to fill the Registrant's and Crested's  portion  of
the  remaining commitments in fiscal 1996 will depend on the spot
market  price  of  uranium and on the outcome of the  arbitration
proceedings involving Nukem/CRIC.

The  primary source of the Registrant's capital resources for the
remainder of fiscal 1996, will be (i) cash on hand; (ii) possible
sale   of  equity  or  interests  in  investment  properties   or
affiliated companies; (iii) sale of equipment; (iv) resolution of
pending  arbitration/litigation; (v) sale of future royalties  or
interests in mineral properties; (vi) proceeds from the  sale  of
uranium  under  the  SMP contracts, (vii)  and  borrowings  under
existing  lines of credit.  Construction revenues from FNG,  fees
from oil production, rentals of various real estate holdings  and
equipment, aircraft chartering and the sale of aviation fuel will
also provide cash.

Existing  working  capital is sufficient  to  hold  and  maintain
existing mineral properties, obtain and maintain required permits
for   operation  and  development  of  such  properties  and  pay
administration costs for the balance of fiscal 1996  and  beyond.
Additional working capital to that on hand at February  29,  1996
will  be  required,  however,  for the  construction  of  a  gold
processing mill and mine development for SGMC and the development
of   Plateau's  properties.   The  Registrant  and  Crested   are
currently seeking financing for the construction of the SGMC gold
processing  mill and mine development.  The funding of  SMP  care
and  maintenance costs may require additional funding,  depending
on  the  timing of payments from the Order and Award with respect
to  the SMP arbitration.  See "Legal Proceedings - Sheep Mountain
Partners Arbitration/Litigation".

Results of Operations

Three  and Nine Months Ended February 29, 1996 Compared to  Three
and Nine Months Ended February 28, 1995

Revenues  for  the  nine  month and  three  month  periods  ended
February   29,   1996  increased  by  $4,513,300  and   $489,300,
respectively, primarily due to an increase in mineral  sales,   a
mineral   option,  and  an  increase  in  construction   contract
revenues.

Revenues  from  mineral  sales and  option  were  $3,116,700  and
$942,400  for the nine and three months ended February 29,  1996.
There  were  no similar U3O8 deliveries or option activities  for
the same period in the prior year.

Construction  contract  revenues for the nine  and  three  months
ended  February  29,  1996 increased by $2,450,000  and  $523,400
respectively  from profitable contracts awarded  late  in  fiscal
1995 to the Registrant's subsidiary FNG.

Management  fees  and other revenues increased  by  $168,400  and
decreased by $62,300 for the nine and three months ended February
29,  1996.   The increase is primarily as a result  of  increased
revenues  generated by operations of a motel,  convenience  store
and  restaurant at the Registrant's town of Ticaboo  in  southern
Utah.

The  costs  of mineral sales were $2,766,700 for the nine  months
and  $942,400 for the three months ended February 29,  1996,  for
which there were no corresponding costs during the same period in
1995.   Cost  and  expenses  associated with  mineral  operations
decreased  by $403,100 and $108,400, respectively, for  the  nine
and  three months ended February 29, 1996, compared to  the  nine
and  three months ended February 28, 1995, primarily as a  result
of  a  decrease  in  legal  costs  in  connection  with  the  SMP
arbitration.   The cost of construction activities  increased  by
$1,779,200,  and $437,900, respectively for the  nine  month  and
three month periods ended February 29, 1996 compared to the  same
periods in 1995 as a result of increased contract work.

General  and  administrative expenses increased by  $496,700  and
decreased by $340,600, respectively for the nine and three months
ended  February 29, 1996 compared to the comparable 1995 periods.
The  increase was due to additional expenses associated with  the
FNG's   contracts.   Additionally,  interest  expense  which   is
included  in  general  and administrative  expense  increased  by
$46,200  during  the  nine  months ended  February  29,  1996  as
compared  to the same period in 1995.  General and administration
expenses also increased due to the Christmas bonus paid in  stock
to  certain employees during the quarter ended February 29,  1996
and  to  the  shares  of  stock issued  in  February  1996  under
Registrant's  Restricted Stock Bonus Plan.  The  total  of  these
stock  issuances  was  compensation of  $297,400.   Officers  and
directors were not issued any stock compensation (see Note  6  to
the USE Condensed Consolidated Financial Statements for the Three
and  Nine Months Ended February 29, 1996).  Commercial operations
expenses remained relatively constant.

Operations  for  the nine months and three months ended  February
29,  1996  resulted  in  a  loss from  continuing  operations  of
$1,765,400 and $1,074,400, respectively, as compared to a loss of
$1,437,700  and $270,300 during the same periods of the  previous
year. During the nine months and quarter ended February 29,  1996
the  Registrant recorded a gain of $2,295,700 net of  $50,000  in
taxes,  on  the sale of Brunton.  No such gain was recognized  in
the prior year's periods. Due to the discontinuance of operations
from  Brunton  during the quarter ended February  29,  1996,  all
income  from Brunton is shown as discontinued operations  on  the
Statements  of Operations for the quarter and nine  months  ended
February  29,  1995.  During the nine months  and  quarter  ended
February  29, 1996 the Registrant recognized income  of  $308,900
and  a  loss of $9,200, respectively, from Brunton's discontinued
operations  as  compared  to a gain of $121,900  and  a  loss  of
$58,100  for  the  corresponding periods of the prior  year.  The
Registrant  therefore recognized a net income of $839,200  ($0.14
per share) compared to a loss of $1,315,800 ($0.27 per share) for
the  nine  month period and net income of $1,212,100  ($0.19  per
share)  compared to a loss of $328,400 ($0.07 per share) for  the
three month period, of the previous year.

Liquidity and Capital Resources at May 31, 1995

Working   Capital  Components.   Net  cash  used   in   operating
activities and investing activities was $2,479,700 and  $537,300,
respectively  for  fiscal 1995.  For the year,  these  activities
resulted  in  a net cash decrease of $630,400.  Cash provided  by
financing  activities was $2,386,600.  This was due primarily  to
the  draw  down  of an operating line with a commercial  bank  of
$960,000  and  a  private placement in November 1994  of  400,000
shares  of  the Company's common stock at $3.00 per  share.   The
Company  was  obligated to either buy back the stock  in  October
1995 at $3.50 per share or issue an additional share of stock for
every  three  shares purchased during the private placement,  and
register  both  the  private placement and additional  shares  by
February  28,  1996.   Subsequent to May 31,  1995,  the  Company
issued the additional 133,336 common shares.

Working  capital decreased during the fiscal year ended  May  31,
1995  by $2,552,900 to $22,000 (from $2,574,900 at May 31, 1994).
The  principal components of the decrease were a $630,400 decline
in  cash  and cash equivalents, a $1,553,900 increase in accounts
payable and accrued expenses, and a $1,366,000 increase in  lines
of  credit.  These were partially offset by increases in accounts
receivable of $539,400, and in inventory of $142,700.

Cash  was  primarily used in operations and investing  activities
during  the period.  Cash was used in the development  of  mining
properties,  primarily  SGMC's Lincoln gold  project  ($455,100),
development  of  the Energx gas properties ($218,200),  purchases
and  modification  of property and equipment ($178,900)  and  the
continued investment in affiliates, primarily SMP ($830,500).

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 $878,500 in fiscal 1995.

Capital  Requirements  - General:  The primary  requirements  for
USE's  working capital during fiscal 1996 are expected to be  the
costs  associated  with  SGMC  property  leases  and  payment  on
purchased  properties, and development activities of  SGMC;  care
and maintenance costs of SMP; care and maintenance of the Plateau
uranium  properties in Utah;  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 - SGMC:  SGMC'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 with respect to  currently
defined   reserves,  capital  resources  in  addition  to   those
currently  on  hand, will be needed to expand reserves,  complete
mine  development and construct a mill facility.  The  timing  of
these  expenditures  will  depend  upon  internal  cash  flow  or
additional  financing  or finding a joint venture  partner.   The
holding costs are estimated at $418,200 for the two fiscal  years
ending May 31, 1997.

Capital  Requirements - SMP:  There are no current plans to  mine
the  SMP Crooks Gap properties during fiscal 1996.  However,  USE
and  Crested will continue to preserve the ore bodies 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 of $15,037,800 as of August 1995,
these  funds  are  restricted and subject to a  decision  by  the
Arbitration  Panel.  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 $4,521,600  at  May  31,  1995.
Until  resolved, USECC will have to continue funding  SMP's  care
and maintenance expenditures.  Such expenditures were $878,500 in
fiscal  1995.  The  dispute between the SMP  participants  should
largely be resolved in fiscal 1996.

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.   However,
during  fiscal  1995  all  of  the deliveries  to  fill  the  SMP
contracts  were  made by Nukem/CRIC.  It is  uncertain  what  the
protocol  will be on future SMP deliveries.  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 1996 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 1996.

Capital  Requirements - Plateau:  During fiscal 1995  the  annual
care and maintenance costs for the Shootaring Mill were $465,900.
It  is anticipated that these costs will continue until the  mill
is either placed into production or ,decommissioned and will be a
cash  drain to USE 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.  Energx holds  several
gas  leases  and  in  fiscal 1995 was participating  in  two  gas
ventures.   One  venture on the Fort Peck Indian  Reservation  in
Montana  with NuGas, a Canadian firm, requires NuGas to fund  the
drilling   of   the   first  eight  wells.   Therefore,   capital
expenditures  by  USE on this venture are not anticipated  to  be
significant  in  1996.  The second venture, in Montana,  required
that  Energx, as a condition of its earn-in to the venture,  fund
the  drilling of seven exploratory wells.  However, in  September
1995 Energx terminated its interest in this second venture.

Long-Term Debt and Other Obligations:  Long-term debt at May  31,
1995,  was  $1,161,400, the current portion of which is  $232,900
(see   Note   G   to  the  USE  audited  Consolidated   Financial
Statements).

Reclamation Costs.  Prior to fiscal 1995, 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 resolution
of the arbitration/litigation with Nukem/CRIC.

Reclamation  obligations on the contiguous Big  Eagle  properties
and   the   Sweetwater  Mill  are  estimated   at   approximately
$23,960,000.   These obligations have been assumed  by  the  GMMV
venturers  and  secured by a bank letter of  credit  provided  by
Kennecott.   The major part of the reclamation and  environmental
costs associated with the Sweetwater Mill are not expected to  be
paid  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 posted with the U. S. Nuclear Regulatory Commission and
a  $4,800,000  cash  deposit  which will  be  available  for  the
resolution of any environmental or nuclear claims if Plateau does
not  begin  decommissioning the mill complex prior to June  1997.
See "Uranium - Shootaring Canyon Mill."

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 a material amount of  USE  funding  in
fiscal 1996.

See  Note  K to the USE audited Consolidated Financial Statements
for  further  information regarding reclamation and environmental
costs, and the funding thereof.

Capital  Resources:  The primary source of USE capital  resources
for  fiscal 1996 will be cash on hand, a private placement of the
Company's common stock, 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.

In June and July 1995, the Company sold 812,432 restricted common
shares  in  a  private placement for net proceeds  of  $2,827,300
($4.00  per  share).   Resale  of these  shares  by  the  private
investors will be registered with the SEC in November  1995.   In
connection  with  this  private placement, warrants  to  purchase
81,243  common  shares  at $4.80 per share  were  issued  to  the
selling agent.  The registration statement also will cover resale
of the common shares underlying the warrants.  These warrants are
exercisable through July 28, 2000 and both the warrants  and  the
underlying shares of common stock issuable upon exercise of  such
warrants  will be included in the Company's Form S-3 registration
statement.

Additional capital will be needed to develop and build  the  mine
and mill complex for the SGMC Lincoln Project.  SGMC presently is
seeking financing for the Project (see - "Description of Business-
Gold").   If  such financing cannot be obtained, USE and  Crested
will  be  forced to either sell the Lincoln Project  or  continue
funding SGMC's property holding costs.  Continued funding of such
costs  could  cause USE and Crested to look for other  short-term
working capital resources.

To  fund the Energx drilling on the Fort Peck Reservation as well
as  other locations USE plans to seek a joint venture partner  or
obtain  financing  through  banking institutions  or  the  public
market.

Funding  of SMP care and maintenance costs may require additional
advances  by  USECC,  depending  on  the  outcome  of   the   SMP
arbitration/litigation.  See "Legal Proceedings - Sheep  Mountain
Partners Arbitration/Litigation."  Although USE management is  of
the  opinion that the SMP arbitration/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  may  also
cause short-term liquidity requirements.

In fiscal 1995, USE had a $1,000,000 commercial bank credit line.
Borrowings of $960,000 under the credit line were outstanding  at
May  31,  1995.  In July 1995, the Company paid off this line  of
credit  with some of the funds from the private placement of  USE
common  shares and renegotiated the line for an additional twelve
months.   As of September 1, 1995, the entire $1,000,000  of  the
new line was available.

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  significant  extent  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  and USECC received a notification of tax deficiency from the
Internal  Revenue Service for fiscal years ended  May  31,  1989,
1990  and 1991.  USE filed a response to the proposed deficiency,
and  has  requested  an  administrative  appeal  of  the  initial
examiner's  deficiency  finding.  To date,  USE  has  received  a
preliminary indication that a major portion of the findings  have
been  resolved in favor of USE.  However, no written confirmation
has  been  received  as  of Prospectus  date,  and  therefore  no
quantitative  amount of tax deficiency can  be  determined.   USE
does not believe the remaining issues will have a material effect
on  its  financial condition or results of operations.   Further,
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.

USE  believes available cash, operating revenues, borrowing under
its  current line of credit  and subsequent financing  activities
will  be adequate to fund working capital requirements.  However,
with  the exception of GMMV, USE will require additional  sources
of  funding or joint venture partners to continue its development
of  and  investment  in its various mineral ventures,  as  stated
above.

Results of Operations

Fiscal 1995 Compared To Fiscal 1994

The  revenues  increased slightly in fiscal  1995  to  $9,148,000
(compared  to  $8,776,300 in fiscal 1994), and  total  costs  and
expenses   declined  slightly  in  fiscal  1995  to   $11,429,500
(compared  to  $12,364,200 in fiscal 1994).  This resulted  in  a
reduction (from a loss of $3,370,800 in fiscal 1994) in  the  net
operating  loss by $1,300,200 to a loss of $2,070,600  in  fiscal
1995.   The  improvement in operations can be attributed  to  two
major  events,  the  sale of property and  the  consolidation  of
Brunton's statement of operations.  (Brunton's operation were not
consolidated  in 1994 as the acquisition of Brunton  occurred  in
May 1994.)

Gain  on  sales  of assets increased by $1,229,600 during  fiscal
1995 compared to the corresponding period of the prior year.  The
increase  is  due to the sale of certain real estate in  Colorado
for $951,600; receipt by Plateau of an option payment of $100,000
for certain properties in Utah; and sale by Energx of an interest
in  a  gas property for $195,900.  During fiscal 1994, there were
only sales of miscellaneous equipment for $52,800.

There  were no mineral sales in fiscal 1995, as a result  of  the
SMP  arbitration, to compare with the $3,732,500 in revenues from
the  sale  of  U3O8  in  fiscal  1994.   However,  this  had   no
significant  effect on the net operating losses  because  of  the
corresponding  reduction  in the cost of  sales.   During  fiscal
1994,  USE  and  Crested made all or a portion  (50  percent)  of
certain  of  the  uranium  deliveries  required  under  the   SMP
contracts.  However, during fiscal 1995, USE and Crested have not
been  allowed to make such deliveries, due to disputes  with  the
other  SMP partners; under agreements reached on an interim basis
for   the   remainder  of  time  required  for  the  SMP  dispute
resolution,  all  deliveries have been made by Nukem.   Once  the
arbitration proceedings are concluded, deliveries will be made in
accordance with the decision of the arbitration panel.

The  consolidated  statement of operations  for  fiscal  1995  of
Brunton is reflected as recreational product sales of $4,452,300.
This  increase  in revenues was offset by increases  in  cost  of
goods  sold, and general and administrative and interest expenses
as  a result of the consolidation.  This resulted in a net effect
of  $296,400 to the fiscal 1995 consolidated operations.   Legal,
accounting  and related expenses of the Brunton acquisition  were
approximately $50,000.  Although the revenues from  Brunton  were
not  consolidated  for  fiscal  1994,  Brunton  had  revenues  of
$4,118,800  during  that period, and a net  operating  income  of
$386,700.

In  fiscal  1995,  $1,069,600 was incurred in legal,  arbitration
fees  and  expert  fees  incurred  in  connection  with  the  SMP
arbitration/litigation,  compared to  $576,500  in  fiscal  1994.
Such expense will be reduced in fiscal 1996.

The  reduction in mineral property transactions is related to the
Mt.  Emmons molybdenum property, in which USE and Crested have  a
six  percent  gross royalty.  In addition to the  gross  royalty,
there were promissory notes of $7,500,000 each issued to USE  and
Crested in 1980, with provision for advance royalties.  In  1985,
AMAX,  USE and Crested agreed to amortize the notes at an  annual
rate  of  $1,000,000 each to USE and Crested ($250,000 each,  per
quarter),  in  lieu  of most of the advance  royalties.   Advance
royalties  of  50,000  pounds  of molybdic  oxide  (or  its  cash
equivalent)  remains  payable.  During  fiscal  1994,  the  final
$500,000  was  amortized  on the long term  note,  so  there  was
consequently  no amortization of such debt in fiscal  1995.   The
remaining  component of the decrease in gain  from  restructuring
mining  properties agreements, is as a result of the  fluctuation
of  the market price of molybdenum, which is paid in kind by AMAX
in lieu of cash payment of the advance royalty.

Construction operation revenues for the year ended May  31,  1995
decreased  by $1,303,000 from the previous year due to  decreased
contract work performed by USE's subsidiary Four Nines Gold, Inc.
("FNG").  The reason for this decrease can be attributed  to  FNG
not  being successful in the bidding process for new construction
work.   During fiscal 1995, FNG spent the majority  of  its  time
bidding  on  a  large ($3,500,000) contract for  structure  work.
Late  in  fiscal  1995, FNG was awarded this  contract  which  is
projected to be profitable.  Long term growth and profits for the
construction  segment is based on FNG's ability to  competitively
bid  for  work  and  at the same time remain profitable.   It  is
anticipated that FNG will grow, however, there will be periods of
time  that  show  declines in revenue, as was experienced  during
fiscal 1995.

On June 1, 1993, USE implemented SFAS No. 109.  See Footnote 2 to
the USE Consolidated Financial Statements.  The cumulative effect
for  the  year ended May 31, 1994, of this tax accounting  change
was  a  decrease  of net income of $267,000.   No  provision  for
income taxes was necessary in fiscal 1995.

Interest  income  increased to $479,900  from  $328,700  for  the
previous  year  as a result of higher overall interest  rates  on
invested cash.

Interest  expense  increased to $279,000  from  $117,000  due  to
higher borrowing levels related to the line of credit and overall
higher interest rates.

Fiscal 1994 Compared To 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  SGMC,  general  and   administrative
expenses  (including permitting costs) 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 in  an
operating profit of $317,500 for construction contract activities
for the year.

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.  See Business - Oil and  Gas
- - Energx."

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.

Effects of Changes in Prices

Mining  operations and the acquisition, development and  sale  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 sales  advantageous.
Conversely,   a   price  decline  facilitates   acquisitions   of
properties  containing  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 the  acquisition  of  the
Sweetwater Mill and the Shootaring 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,
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 sustained increase  in  the  spot
market price above the contract prices.

USE  believes  SGMC's Lincoln Mine will be profitable  with  gold
prices  over  $290  per ounce.  The price of  gold  has  remained
relatively  stable over the past year between $370 and  $410  per
ounce.

Molybdenum  and  Oil.   Changes  in  prices  of  molybdenum   and
petroleum are not expected to materially affect USE with  respect
to either its molybdenum advance royalties or its fees associated
with  oil  production.  A significant sustained increase  in  the
price  of molybdenum could increase the likelihood that  the  Mt.
Emmons properties will be developed, but such an increase is  not
anticipated in fiscal 1996.

                DIRECTORS AND EXECUTIVE OFFICERS

Business  Experience  and Other Directorships  of  Directors  and
Nominees.

John  L.  Larsen,  64,  Chairman,  Chief  Executive  Officer  and
President.   Mr.  Larsen  has  been principally  employed  as  an
officer and director of the Company and Crested for more than the
past  five  years.   He  is  also a  director  of  the  Company's
subsidiary,  Ruby  Mining Company ("Ruby")  and  of  The  Brunton
Company.   Crested  and  Ruby have registered  equity  securities
under the Securities Exchange Act of 1934.

Max  T.  Evans, 71, director and Secretary.  Mr. Evans  has  been
principally  employed as an officer and chief  geologist  of  the
Company  and  Crested for more than the past five years.   He  is
President and a director of Crested.  Mr. Evans received B.S. and
M.S. degrees in geology from Brigham Young University.

Harold  F.  Herron, 42, director and Vice President.  Mr.  Herron
has  been the Company's Vice-President since January 1989.   From
1976,  Mr. Herron has been an employee of Brunton, a manufacturer
and/or  marketer of compasses, binoculars and knives,  which  the
Company sold to Silva Production AB in February 1996.  Initially,
he  was  Brunton's sales manager, and since 1987 he has been  its
President.  Mr. Herron is a director of Ruby and Northwest  Gold,
Inc.,  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.

David  W.  Brenman, 40  has been a director of the Company  since
January 1989.  Since September 1988, Mr. Brenman has been a self-
employed financial consultant.  In that capacity, Mr. Brenman has
assisted the Company 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 registered  equity  securities
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, 69, has been a Company director since May 1990.
From  January  1990  until mid-fiscal 1993, Mr.  Anderson  was  a
geologist   for  the  Company.   Mr.  Anderson  was  Manager   of
Exploration  and Development for Pathfinder Mines Corporation,  a
major domestic uranium mining and milling corporation, from  1976
until  his  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,  46, has been a Company director since  1989.   Mr.
Bebout  is  a director and President of NUCOR, Inc. ("NUCOR"),  a
privately-held   corporation  that   provides   exploration   and
development  drilling services to the mineral  and  oil  and  gas
industries, since 1987.  Prior to that time, Mr. Bebout was  Vice
President  of  NUCOR from 1984. Mr. Bebout is  also  an  officer,
director  and owner of other privately-held entities involved  in
the resources industry.

Information Concerning Executive Officers Who Are Not Directors

The  following information is provided pursuant to  Item  401  of
Reg. S-B, regarding the executive officers of the Company who are
not also directors.

Daniel  P. Svilar, age 67, has been General Counsel for  USE  and
Crested for more than the past five years.  He also has served as
Secretary  and a director of Crested, and Assistant Secretary  of
USE.  His positions of General Counsel to, and as officers of the
companies, are at the will of each board of directors.  There are
no  understandings  between  Mr.  Svilar  and  any  other  person
pursuant to which he was named as officer or General Counsel.  He
has  no  family  relationships with any of  the  other  executive
officers  or directors of USE or Crested, except his nephew  Nick
Bebout is a USE director.  During the past five years, Mr. Svilar
has not been involved in any Reg. S-B Item 401(d) proceeding.

Robert  Scott  Lorimer,  age 45, has been  Controller  and  Chief
Accounting  Officer for USE and Crested for more  than  the  past
five  years.   Mr. Lorimer also has been Chief Financial  Officer
for  both companies since May 25, 1991, and their Treasurer since
December  14,  1990.   He serves at the will  of  the  Boards  of
Directors.   There are no understandings between Mr. Lorimer  and
any  other person, pursuant to which he was named an officer, and
he  has  no  family relationship with any of the other  executive
officers  or directors of USE or Crested.  During the  past  five
years,  he  has  not been involved in any Reg.  S-B  Item  401(d)
listed proceeding.

Family Relationships.

Harold  F. Herron, a director and vice-president, is the  son-in-
law  of  John  L.  Larsen,  a  principal  shareholder,  Chairman,
President  and  CEO.  Nick Bebout, a director,  is  a  nephew  of
Daniel  P.  Svilar, a principal shareholder and General  Counsel.
There  are  no  other  family relationships among  the  executive
officers or directors of the Company.

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
$100,000  cash  in any of the three fiscal years  ended  May  31,
1995.   The  table  includes compensation paid  such  persons  by
Crested   and  Brunton  for  such  persons'  services   to   such
subsidiaries.
<PAGE>
<TABLE>
                        SUMMARY COMPENSATION TABLE
<CAPTION>
                                                                   Long Term Compensation
                                                           ----------------------------------
                                Annual Compensation                Awards           Payouts
                            -----------------------------------------------------------------  
(a)                  (b)       (c)       (d)      (e)         (f)         (g)          (h)         (i)
                                                 Other
Name                                             Annual    Restricted                           All Other
and                                              Compen-     Stock      Options/       LTIP      Compen-
Principal                     Salary    Bonus    sation     Award(s)      SARs       Payouts     sation
Position             Year      ($)       ($)      ($)         ($)         (#)          ($)       ($)(3)
- ---------------------------------------------------------------------------------------------------------
<S>                  <C>    <C>        <C>         <C>     <C>            <S>          <C>      <C>
John L. Larsen       1995   $144,023   $2,751      --      $9,000(1)      -0-          --       $13,361
  CEO                1994    148,239    7,028      --       9,600(1)      -0-          --        14,394
  President          1993    164,968    4,016      --       7,200(1)    100,000(2)     --        16,718


Daniel P. Svilar     1995    112,615    2,076      --       8,100(1)      -0-          --        11,008
  Asst. Secretary    1994    112,753   64,984      --       8,640(1)      -0-          --        17,300
                     1993    108,000    2,001      --       6,480(1)      -0-          --        12,862

Harold F. Herron     1995    117,238    2,033      --         --          -0-          --         6,626
  Vice President     1994    105,983   18,268      --         --          -0-          --         9,743
                     1993     99,469   12,617      --         --          -0-          --         3,626


R. Scott Lorimer     1995    112,403    2,098      --     5,681(1)     -0-         --     10,989
  Treasurer          1994     92,799   43,461      --     6,181(1)     -0-         --     13,260
                     1993     78,921    2,196      --     4,548(1)     -0-         --      9,400

</TABLE>

 (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  for
     retirement, death or disability.

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

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


<PAGE>
Executive Compensation Plans and Employment Agreements

To  provide  incentive to Mr. Larsen for his  efforts  in  having
Green Mountain Mining Venture (" 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 1996.

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  a  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
with  respect  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
annually).    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.   As  of  this
Prospectus  date, the Company is unaware of any proposed  hostile
takeover.

The  Company  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").  An ESOP has been adopted
to  encourage ownership of USE Common Stock by employees, and  to
provide  a  source  of retirement income to  them.   Because  the
persons performing duties for Crested are employees of USE,  they
benefit from the ESOP and the other compensation plans of USE, as
described below.  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  USE  Common  Stock.   Messrs.
Larsen, Herron and Evans are the trustees of the ESOP.

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 37,204 shares to the ESOP for
fiscal  1995,  all  of  which were contributed  under  the  money
purchase  pension plan.  At the time the shares were contributed,
the  market  price was $5.375 per share, for a total contribution
valued  at  $199,971.50  which has been funded  by  the  Company.
Crested and the Company are each responsible for one-half of that
amount  (i.e., $99,985.75), 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  37,204  shares issued to the ESOP for fiscal  1995  included
2,276  shares allocated to John L. Larsen's account, 1,422 shares
allocated  to  Max  T.  Evans' account, 582 shares  allocated  to
Harold  F. Herron's account, 2,048 shares allocated to Daniel  P.
Svilar's  account,  and  2,045  shares  allocated  to  R.   Scott
Lorimer's  account,  for  a total of 8,373  shares  allocated  to
accounts  for  all executive officers as a group (five  persons).
Shares  forfeited  by terminated employees  who  were  not  fully
vested  were  reallocated to plan participants and included  159,
100,  40,  143 and 143 shares to the accounts of Messrs.  Larsen,
Evans, Herron, Svilar and Lorimer, respectively.  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 1996 have not been  made
with respect to any participant in the ESOP.

The  maximum  loan outstanding during fiscal 1995  under  a  loan
arrangement  between the Company and the ESOP, was $1,014,300  at
May  31,  1995 for loans made in fiscal 1992 and 1991.   Interest
owed by the ESOP was not booked by the Company.  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.

Stock  Option  Plan.  The Company 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.  Herron, Bebout and Brenman).  The committee  establishes
the  exercise  periods and exercise prices  for  options  granted
under the plan.  The Board ultimately ratifies the actions of the
committee.  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  upon  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  1995,  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, 1995.

       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
                                             at FY-End (#)      at FY-End($)
                      Shares       Value
                   Acquired on    Realized    Exercisable/      Exercisable
Name               Exercise (#)     ($)      Unexercisable     Unexercisable
- -----------------------------------------------------------------------------
John L. Larsen,       -0-           -0-         100,000         $388,000(1)
  CEO, President                              exercisable     exercisable and
                                                                unexercised

                                                100,100         $248,248(2)
                                              exercisable     exercisable and
                                                                unexercised

Max T. Evans,         -0-           -0-          57,200         $141,856(2)
  Secretary                                   exercisable     exercisable and
                                                                unexercised

Harold F. Herron,     -0-           -0-          11,000          $27,280(2)
  Vice President                              exercisable     exercisable and
                                                                unexercised

Daniel P. Svilar      -0-           -0-          66,000         $163,680(2)
  Asst. Secretary                             exercisable     exercisable and
                                                                unexercised

R. Scott Lorimer      -0-           -0-          29,700          $73,656(2)
  Treasurer                                   exercisable     exercisable and
                                                                unexercised

  (1)  Equal to $5.38 closing bid on last trading day in FY 1995,
less  $2.00  per share option exercise price, multiplied  by  all
shares exercisable.

(2)   Equal to $5.38 closing bid on last trading day in FY  1994,
less  $2.90  per share option exercise price, multiplied  by  all
shares exercisable.
<PAGE>
Restricted  Stock  Plans.  The Company and  Crested  have  issued
stock bonuses to various executive officers and directors of  the
Company  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,  Lorimer  and all executive officers  as  a  group  (four
persons)  received  20,400,  12,750, 18,360,  12,240  and  63,750
shares of Common Stock, respectively, under this restricted stock
plan  through  fiscal 1995.  Additional bonuses  of  20%  of  the
original  shares (7,500) will be issued annually  through  fiscal
1997.   The expenses relating to these stock issuances are shared
equally by the Company and Crested.

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 the Company 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 the  Company.
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.

Other Options and Shares Compensation Proposals

As  of  December  22, 1995, the Registrant's board  of  directors
amended  the  Registrant's  1989  Incentive  Stock  Option  Plan,
without  shareholder approval, to increase the number of  options
issuable  to  employees  (not  including  executive  officers  or
directors of the Registrant) from the present 275,000 options  up
to  the  increased  number of 700,000 options.   All  such  newly
authorized  options will be nonqualified under  IRS  regulations.
Under  the  Plan  as amended, the board of directors  has  issued
nonqualified  options  to  purchase a total  of  360,000  shares,
subject to continued employment and exercisable at 20% per  year,
to  employees;  the exercise price of the options is  $4.00  (the
fair  market price at December 22, 1995), subject to  the  market
price of the shares being above $8.00 per share for 30 days after
grant date.

The board of directors also has proposed, subject to approval  by
the  shareholders  at  the next annual  meeting,  a  stock  award
program  for  the  executive  officers  and  directors   of   the
Registrant, for the award of common shares to each individual, as
of March 1 of each year of continued employment.  The first award
is  tentatively  set to be March 1, 1997, in  amounts  of  20,000
shares  for  from  three  to  5 years per  officer  or  director,
however,  no awards shall be made until a formal plan is  adopted
and  approved  by  the shareholders and then  only  upon  further
decision  of  the compensation committee as to other features  of
the  plan  (including payment of taxes for the grantees with  pay
back  arrangements) which may be desirable.  The stock award plan
will conform to the Commission's proposed Rule 16b-3 for purposes
of  complying  with Sections 16(a) and (b) of  the  Exchange  Act
regarding shortswing profit prohibitions.

The  board  of directors expects both the amended 1989  Incentive
Stock  Option  Plan,  and (subject to shareholder  approval)  the
stock  award program for officers and directors, to be registered
with the Commission on Form S-8 in calendar 1996.


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 the Company.   Any  loans  or
surety  arrangements for directors which are in excess of $50,000
will require Board rather than Executive Committee approval.  The
Company 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.
<PAGE>
         CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions  with  Crested  Involving  Sheep  Mountain  Partners
("SMP").   In fiscal 1989, the Company 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  with  CRIC
and  Nukem, necessary mine maintenance has been funded  by  USECC
alone without reimbursement from SMP.  For fiscal 1995 and eleven
months  of fiscal 1996, the Company has advanced Crested's  share
of   SMP   property  maintenance  in  the  aggregate  amount   of
approximately $402,700 none of which has been reimbursed  by  SMP
or Crested.

Transactions  with Crested Involving  Plateau.  In  August  1993,
the  Company entered into an agreement to acquire all the  issued
and   outstanding  common  stock  of  Plateau  Resources  Limited
("Plateau"),  a  Utah  corporation.   Plateau  owns   a   uranium
processing  mill  and support facilities and certain  other  real
estate  assets  in southeastern Utah.  The Company  paid  nominal
cash consideration for the Plateau stock and agreed to assume all
environmental  liabilities and reclamation  bonding  obligations.
Prior  to  closing the agreement, Plateau transferred  $2,500,000
cash  to fund the NRC Surety Trust Agreement to pay future  costs
of  mill  decommissioning, site reclamation  and  long-term  site
surveillance.   Plateau also transferred $4,800,000  cash  to  an
Agency   Agreement  to  indemnify  the  seller  against  possible
environmental  or  nuclear claims.  At the  date  of  acquisition
Plateau  held an additional $6.9 million of unencumbered cash  to
be  used  for  care and maintenance costs on the mill  and  other
assets acquired.  Most of the unencumbered cash has been used for
care  and  maintenance  costs  and  loaned  to  the  Company  for
development  of  certain  properties  held  by  the  Company  and
Crested.  Although Crested has no ownership in Plateau, Directors
of the Company and Crested have agreed to divide equally one-half
of  the obligations incurred in excess of the total $14.2 million
described  above  and will share in one-half of  all  cash  flows
derived from operations of these assets.

Plateau  also  owns  all  of  the  outstanding  stock  of  Canyon
Homesteads, Inc. ("Canyon"), a Utah corporation, which  developed
the  Ticaboo,  Utah townsite 3.5 miles south of  the  mill.   The
Ticaboo  site  includes  a  66  room  motel,  convenience  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 being operated as a commercial  enterprise.
The Company and Crested plan to further develop the townsite, and
have been seeking financial partners.

Transactions  with  Arrowstar Investments Inc.   In  April  1995,
Canyon entered into an agreement with First-N-Last LLC ("FNL",  a
Utah  limited liability company), to develop and operate  certain
assets  in  Utah near the Ticaboo townsite.  Under the agreement,
Canyon  contributed to FNL an operating service station and  boat
storage  operation, and Arrowstar Investments, Inc. ("Arrowstar",
the  other  member of FNL) agreed to contribute  up  to  $150,000
cash.   Arrowstar also agreed to contribute to FNL up to  another
$50,000  as  needed.   The  purpose of  FNL  is  to  remodel  the
contributed assets, build a convenience store and gift shop,  and
operate  the upgraded facility.  Profits were to be allocated  90
percent to Arrowstar until recovery of its cash investment,  then
75  percent  to  Arrowstar until it had  received  $215,000  cash
(including  investment),  and  50 percent  to  Arrowstar  and  50
percent   to   Canyon  thereafter.   Arrowstar   is   a   private
corporation;   the  spouse  of  John  L.  Larsen   (a   principal
stockholder, Chairman of the Board, President and Chief Executive
Officer of Registrant) in joint tenancy with his three sons  (who
are  not affiliates of the Company or Crested) are directors  and
shareholders of Arrowstar. Plateau (and the Company, as its  sole
shareholder) approved the arrangement because neither Plateau nor
USE  had  (nor could they acquire on favorable terms)  the  funds
required to upgrade the facility.

In  June  1995,  USECC signed a six year option to  acquire  from
Arrowstar  a  7,200  square foot hangar at the Riverton  Regional
Airport.  The option purchase price originally was agreed  to  be
$110,000;  subsequently, Arrowstar and USE  agreed  the  purchase
price  would  be  $75,000 which was the value of the  hangar  and
leasehold  determined by an independent market  value  appraisal.
USECC  exercised  the  option as of November  1,  1995  and  paid
$30,000  against the purchase price.  The balance was to be  paid
by a promissory note of USECC for $45,000 payable over five years
with interest at the rate of 10% per annum on the unpaid balance.
Arrowstar acquired the property for cash from the prior owner  in
1992,  at  which  time neither the Company  or  Crested  had  any
interest  in acquiring the property.  USECC expects  to  use  the
facility in connection with expanded municipal airport traffic in
the  coming  years  and in the interim for airplane  and  vehicle
storage purposes.

On  April 26, 1996 USECC sold its Wind River Estates Mobile  Home
Park  (including various personal property) in Riverton,  Wyoming
to  Arrowstar  for  $804,000,  the appraised  value.   The  total
purchase  price consists of $500,000 cash; Arrowstar's  unsecured
10%  promissory  note due 2006 for $56,000; cancellation  of  the
promissory note that USECC gave Arrowstar in connection with  the
purchase of the hangar described above, which note was valued  at
$47,934  including accrued interest; and $161,378.34 by Arrowstar
assigning  to  USECC  its entire interest in First-N-Last  L.L.C.
with   respect   to   the   Ticaboo   assets   described   above.
Additionally,  USECC  credited  Arrowstar  $38,687  against   the
purchase  price for the Wind River Estates mobile home  park  for
goodwill due to Arrowstar's investing in First-N-Last at the time
that neither Plateau nor USE or Crested had the funds required to
upgrade the facility.

Transactions  with Directors.  Three of the Company'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 the Company 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.

In  fiscal 1995, Harold F. Herron, son-in-law of John L.  Larsen,
purchased  a  house from the Company for $260,000, the  appraised
value  of  the  property, and was reimbursed by the  Company  for
leasehold improvements totaling $22,830, incurred by him while he
was living in and caring for the house prior to its sale.

Other  Information.  The Company 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 the Company  (as
manager of USECC's commercial operations, uranium fuels marketing
director,  and  as  chief pilot, respectively) and  Mr.  Larsen's
brother,  now  deceased was employed as drilling  superintendent.
Mr.  Larsen's  son-in-law  Harold F. Herron  is  an  officer  and
director of the Company, and president and a director of Brunton.
Collectively,  the  five individuals received  $512,000  in  cash
compensation (paid by the Company, Crested and Brunton) for those
services during the fiscal year ended May 31, 1995, which  amount
includes  $117,441 cash compensation paid Mr. Herron (principally
in his capacity as president of Brunton, and also for his service
as  a  Company vice president, see Executive Compensation above).
The  foregoing compensation expense (excluding compensation  paid
by  Brunton  to  Mr. Herron, and one of Mr. Larsen's  sons  as  a
Brunton  officer)  was  shared by the  Company  and  Crested,  in
accordance with the compensation arrangements for all employees.

The  Company  and  Crested provide management and  administrative
services  for  affiliates under the terms of  various  management
agreements.  Revenues from services by the Company to  affiliates
other  than  Crested were $88,300 in fiscal 1995 and  $80,300  in
fiscal 1994.  The Company provides all employee services required
by  Crested.  In exchange Crested is obligated to the Company for
its share of the costs for providing such employees.

Transactions  Involving USECC.  The Company and  Crested  conduct
the  bulk  of their activities through their equally-owned  joint
venture,  USECC.   From  time to time  the  Company  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  the  Company   and
Crested.  The party extending funds is subsequently reimbursed by
the  other  venturer.   The  Company had  a  note  receivable  of
$4,163,315 from Crested at May 31, 1995 ($3,792,800 during fiscal
1994).

Debt  Associated with USE's ESOP. During the year ended  May  31,
1995,  the Company made a contribution of 37,204 shares of Common
Stock  to  the  ESOP.   Because  Crested  engages  the  Company's
employees to discharge substantially all of its functions,  these
contributions benefited Crested.  As a result, Crested  owes  the
Company $99,985.75 for one-half of the Company's contribution  to
the  ESOP.  Regular and substantial contributions by the  Company
to  the  ESOP  are required to maintain the ESOP in  effect.   In
fiscal 1994 the Company contributed 46,332 shares of Common Stock
to  the  ESOP,  for  one-half of which Crested owes  the  Company
$92,664.

Loans to Three Directors.  In fiscal 1992 the Company 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,  the Company loaned Mr. John L. Larsen $147,000 and further
agreed  to  consolidation  of  such  new  loan  with  outstanding
indebtedness  of  $99,008  owed the Company  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 the  USE
stock prices depressed from such persons selling their shares  to
meet personal obligations.  The loan maturities were extended  to
October   30,   1996.   At  May  31,  1995,  the  Larsen   family
indebtedness totaled $496,830 (of which $348,130 was  secured  by
120,600  shares  of  the Company's Common  Stock);  the  family's
indebtedness was $432,200 at May 31, 1994 (of which $322,800  was
secured  by  120,600 shares of the Company's Common Stock).   The
preceding  amounts  do not include the loan to  Mr.  Herron,  see
below.

In fiscal 1995, the Company 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 the Company'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 the USE  stock
prices  depressed  from Mr. Herron selling  his  shares  to  meet
personal obligations.
<PAGE>
        Security Ownership of Certain Beneficial Owners
                         and Management

      The  following lists (i) all record holders who, as of  May
24,  1996,  beneficially  owned more than  five  percent  of  the
outstanding  shares of Common Stock, as reported in filings  with
the  Commission  or as otherwise known to the Company,  and  (ii)
share  ownership of directors and executive officers.  Except  as
otherwise  noted,  each  holder exercises  the  sole  voting  and
dispositive  powers over the shares listed opposite the  holder's
name.  It should be noted that voting and dispositive powers over
certain  shares are shared by two or more of the listed  holders.
Such securities are reported opposite each holder having a shared
interest therein.
<PAGE>
<TABLE>
<CAPTION>
                                        Amount and Nature of Beneficial Ownership
                            ------------------------------------------------------------------
                               Voting Rights       Dispositive Rights      Total     Percent
Name and address            -------------------    ------------------    Beneficail    of
of beneficial owner          Sole       Shared      Sole      Shared     Ownership   Class(1)
- --------------------         ----       ------      ----      ------     ---------   --------
<S>                         <C>         <C>        <C>        <C>        <C>          <C>
John L. Larsen(2)*          592,432     688,871    548,136    926,542    1,495,079    22.4%
201 Hill Street
Riverton, WY 82501

Max T. Evans(3)*            119,577     676,259     93,589    913,931    1,020,270    15.6%
1410 Smith Road
Riverton, WY 82501
                                     
Harold F. Herron(4)*         99,176     180,093     94,251    417,765      512,016     7.9%
3425 Riverside Road
Riverton, WY 82501

Daniel P. Svilar(5)*        154,371     532,626    116,163    532,626      686,997    10.5%
357 Indiana Street
Hudson, WY 82515

Michael D. Zwickl(6)         61,069     510,359     61,069    510,359      571,428     8.8%
137 North Beech Street
Casper, WY 82601

Kathleen R. Martin(7)         -0-       510,359      -0-      510,359      510,359     7.9%
309 North Broadway
Riverton, WY 82501

Crested Corp.               510,359     510,359    510,359      -0-        510,359     7.9%
877 North 8th West
Riverton, WY 82501

U.S. Energy Corp. ESOP(8)   165,900       -0-      403,572      -0-        403,572     6.2%
877 North 8th West
Riverton, WY 82501

R. Scott Lorimer(9)*         57,181       -0-       29,702      -0-         57,181      **
11 Korell Court
Riverton, WY 82501

Don C. Anderson(10)*         26,155       -0-        8,155      -0-         26,155      **
875 Rio Virgin Drive, #247
St. George, UT 84770

Nick Bebout(11)*             10,550      11,111      9,550     11,111       21,661      **
4424 Skylane Diver
Riverton, WY 82501

David W. Brenman(12)*         7,750       -0-        6,750      -0-          7,750      **
1775 Sherman Street
Suite 1001
Denver, CO 80203
</TABLE>
*   USE director and/or officer.
** Less than one percent.

(1) Percent of class is computed by dividing the number of shares
beneficially  owned including any options held by  the  reporting
person  or  group, by the number of shares outstanding  plus  the
shares underlying the options held by that person or group.

(2) Mr. Larsen exercises sole voting powers over 242,036 directly
owned shares, 106,000 shares held in joint tenancy with his wife,
20,400  shares  subject to forfeiture, 200,100 shares  underlying
options  and 23,896 shares held in the U.S. Energy Corp. Employee
Stock  Ownership  Plan  ("ESOP")  account  established  for   his
benefit.  The directly owned shares include 27,500 shares  gifted
to  his  wife,  that have remained in Mr. Larsen's name.   Shares
over  which shared voting rights are exercised consist of 522,971
shares  held  by corporations of which Mr. Larsen is a  director,
and  165,900  shares  held  by the  ESOP,  which  have  not  been
allocated  to  accounts  established for specific  beneficiaries.
The shares held by corporations of which Mr. Larsen is a director
consist of 510,359 shares held by Crested and 12,612 shares  held
by  Ruby.   Mr. Larsen shares voting and dispositive rights  over
such shares with the other directors of those corporations.   Mr.
Larsen  shares voting powers over the unallocated ESOP shares  in
his  capacity  as an ESOP Trustee with the other  ESOP  Trustees.
Shares  over which sole dispositive rights are exercised  consist
of  directly owned shares, joint tenancy shares and options, less
the  27,500  shares  gifted, but not transferred,  to  his  wife.
Shares  for  which shared dispositive powers are held consist  of
the  403,572 shares held by the ESOP, the shares held by  Crested
and  Ruby.  The shares shown as beneficially owned by Mr.  Larsen
do  not  include 42,350 shares owned directly by  his  wife,  who
exercises  the  sole  investment and  voting  powers  over  those
shares.

(3)  Shares  over  which Mr. Evans exercises sole  voting  powers
consist  of 36,389 directly owned shares which are held in  joint
tenancy  with  his  wife,  12,750 shares subject  to  forfeiture,
57,200  shares underlying options and 13,238 shares held  in  the
ESOP  account established for his benefit.  Shares for which  Mr.
Evans holds sole dispositive powers consist of his directly  held
shares and the shares underlying his options.  Shares over  which
Mr. Evans exercises shared voting rights consist of those held by
Crested  and  the  unallocated ESOP shares.  He exercises  shared
dispositive rights over the shares held by Crested and the  ESOP.
Mr.  Evans  shares  voting and dispositive power  over  Crested's
shares  with  the  remaining directors of that  company,  and  he
shares voting and dispositive powers over unallocated ESOP shares
with the other ESOP Trustees.

(4)  Mr. Herron exercises sole voting powers over 71,251 directly
owned shares, 12,000 shares held for his minor children under the
Wyoming  Uniform  Transfers to Minors Act (the  Minor's  shares),
11,000  shares underlying options and 4,925 shares  held  in  the
ESOP  account  established  for his  benefit.   Sole  dispositive
powers  are exercised over the directly held shares, the  Minor's
shares  and the shares underlying options.  Mr. Herron  exercises
shared  voting rights over 12,612 shares held by Ruby  and  1,581
shares  held  by  Northwest Gold, Inc. ("NWG")  and  the  165,900
unallocated ESOP shares.  Shared dispositive rights are exercised
over the shares held by the ESOP, and the shares held by Ruby and
NWG.   Mr. Herron exercises shared dispositive and voting  powers
over  the  shares  held by Ruby and NWG as a  director  of  those
companies  with  the  other directors  of  those  companies.   He
exercises  shared voting powers over unallocated ESOP  shares  in
his  capacity  as an ESOP Trustee with the other  ESOP  Trustees.
The  shares  shown  as beneficially owned by Mr.  Herron  do  not
include 3,030 shares owned directly by his wife who exercises the
sole voting and dispositive powers over those shares.

(5)  Mr. Svilar exercises sole voting powers over 28,884 directly
owned shares, 379 shares held in an individual retirement account
("IRA")  established for his benefit, 7,700 shares held in  joint
tenancy  with  his wife, 1,000 shares held as custodian  for  his
minor  child  under the Wyoming Uniform Transfers to  Minors  Act
(the Minor's shares), 18,360 shares subject to forfeiture, 66,000
shares  underlying options and 19,848 shares  held  in  the  ESOP
account  established for his benefit.  He holds sole  dispositive
power  over  his directly held shares, IRA shares, joint  tenancy
shares,  Minor's  shares and the shares underlying  his  options.
The  shares over which he exercises shared voting and dispositive
rights  consist  of  12,200 shares held  jointly  with  a  family
member,  and  the 510,359 shares held by Crested, over  which  he
exercises  shared  voting and dispositive  powers  as  a  Crested
director with the other Crested directors, and 22,267 shares held
by a nonaffiliated company of which Mr. Svilar is a partner.

(6)  Mr. Zwickl exercises sole voting and dispositive powers over
4,000  directly  held  shares,  4,444  shares  held  in  an   IRA
established  for his benefit and 53,625 shares held  by  two  (2)
limited partnerships.  He is the sole officer and director of the
corporate  general partner of those partnerships.  As a  director
of  Crested,  Mr. Zwickl exercises shared voting and  dispositive
powers  over  the 510,359 shares held by Crested with  the  other
Crested directors.

(7)  Consists  of shares held by Crested over which  Mrs.  Martin
exercises  shared voting and dispositive powers as a director  or
Crested  with the other Crested directors.  The shares  shown  as
beneficially owned by Mrs. Martin do not include 220 shares owned
directly  by  her  husband  who exercises  the  sole  voting  and
dispositive powers over those shares.

(8) The ESOP holds 403,572 shares, 165,900 of which have not been
allocated  to  accounts  of individual plan  beneficiaries.   The
Trustees exercise the voting rights over the unallocated  shares.
Plan participants exercise voting rights over allocated shares.

(9)  Mr.  Lorimer  exercises sole voting powers over  the  listed
shares  which  consist of 2 directly held shares,  12,240  shares
subject  to  forfeiture,  29,700 shares  underlying  options  and
15,239  shares  held  in  the ESOP account  established  for  his
benefit.  Mr. Lorimer exercises sole dispositive powers over  his
directly held shares and the shares underlying his options.

(10) Includes 5,100 directly held shares, 3,055 shares in an  IRA
established  for  his  benefit  and  18,000  shares  subject   to
forfeiture.   Mr.  Anderson exercises  sole  voting  rights  with
respect  to  the 26,155 shares, and sole dispositive rights  over
the directly held shares and shares held in his IRA.

(11)  Consists of 9,500 shares held directly, 50 shares  held  in
joint  tenancy with his wife, 1,000 shares subject to  forfeiture
and  11,111 shares held by a privately held company of which  Mr.
Bebout  is  an officer, director and principal shareholder.   Mr.
Bebout exercises shared investment and voting powers with respect
to  the  shares  held by the private company.  He exercises  sole
voting  and  investment powers over the directly held shares  and
joint tenancy shares.

(12)  Consists  of  6,750 shares held directly and  1,000  shares
subject to forfeiture.  Mr. Brenman exercises sole voting  powers
over the 7,750 listed shares and sole dispositive powers over the
6,750 directly held shares.

                   DESCRIPTION OF SECURITIES

The  Company's  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 Common Stock are entitled  to  receive
dividends when and as declared by the Board of Directors  out  of
funds legally available therefor.

Holders of 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 Company's 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  Company's Articles and the Wyoming  Management
Stability  Act, shares of Common Stock held by Crested  (510,359)
may  be  voted by Crested, shares of Common Stock held by Plateau
(125,556) may be voted by Plateau and shares of Common Stock held
by  SGMC  (100,000)  may be voted by SGMC  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 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 common stock  (including  the  Common
Shares offered for sale by this Prospectus) have been fully  paid
and are nonassessable.

Preferred  Stock. The Company's 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  Wyoming
Business  Corporation Act, 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.

Warrants.   The Warrants consist of (i) that certain  Warrant  to
Purchase 200,000 Common Shares of U.S. Energy Corp. dated January
9,  1996  (the  "Warrant") that Registrant  granted  to  Shamrock
Partners Ltd, 111 Veterans Square, Media, Pennsylvania ("Holder")
as  compensation  for  services  to  Registrant  as  a  financial
consultant and advisor, on a nonexclusive basis, under a one year
agreement  between Registrant and Holder also  dated  January  9,
1996;  (ii)  up to ten (10) other warrants which carry  the  same
(proportional)  rights ("Warrants") that may be substituted  upon
surrender  of  the  Warrant for division or  recombination.   The
Warrant or such substitute Warrants entitle the holders ("Holders
of  the Warrants") to purchase an aggregate of 200,000 shares  of
Registrant's common stock at any time or from time to time  until
12:00  o'clock Midnight, Mountain Time, on January 9,  1997  (the
"Expiration Date") at a price of $5.00 per share.  The Holder  or
Holders  of  the  Warrants are not entitled to any  rights  of  a
shareholder in the Company by virtue of holding the Warrants.

The Warrant carries certain rights to registration under the 1933
Act  as  more specifically described in the Warrant, but  if  the
Company  so  registers  the Warrants solely  to  accommodate  the
registration  of the Warrant Shares, as Registrant  has  done  by
filing the Registration Statement, of which this Prospectus is  a
part, with the Commission in accordance with the 1933 Act and the
regulations  pursuant  thereto, the  Holder  or  Holders  of  the
Warrants  may not sell or otherwise transfer the Warrants  for  a
period of 24 months after the effective date of such Registration
Statement,  which period prevents such sale or  transfer  of  the
Warrants  prior  to  their Expiration  Date.   The  Warrants  are
governed by and construed in accordance with the laws of Wyoming.

                      PLAN OF DISTRIBUTION

When issued by Registrant upon exercise of the Warrants, the
Warrant Shares will be offered from time to time by the Holders
of the Warrants or their agents at market prices from time to
time.  Selling commissions will be paid by the sellers of the
Warrant Shares.  Except for the Warrant exercise price of $5.00
per share to be paid upon exercise of the Warrants, no sales
proceeds will be paid to the Company or any subsidiary of the
Company from the sale of the Warrant Shares.  The remaining
52,901 Common Shares which are being registered for sale to the
public by the filing of the Registration Statement, of which this
Prospectus is a part, with the Commission in accordance with the
1933 Act and the regulations pursuant thereto, will be offered
from time to time by the Selling Shareholders or their agents at
market prices from time to time.  Selling commissions will be
paid by the Selling Shareholders.  No sales proceeds will be paid
to the Company or any subsidiary of the Company from the sale of
these Common Shares.  The Common Shares may be offered from time
to time by the Holders of the Warrants or the Selling
Shareholders (i) in transactions in the over-the-counter market,
automated inter-dealer system on which the Company's Common Stock
is then listed, in negotiated transactions or a combination of
such methods of sale, and (ii) at market prices prevailing at the
time of sale, at prices related to such prevailing market prices,
or at negotiated prices.  The Holders of the Warrants or the
Selling Shareholders may effect such transactions directly with
the broker-dealers.  Such broker-dealers may receive compensation
in the form of discounts, concessions or commissions from the
Holders of the Warrants and/or the purchasers of the Common
Shares for whom such broker-dealers may act as agents or to whom
they may sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary
commissions).  Sales of the Common Shares may be made pursuant to
this Prospectus or pursuant to Rule 144 adopted under the 1933
Act.

No  underwriting  arrangements exist  as  of  the  date  of  this
Prospectus.   Upon being advised of any underwriting arrangements
that  may be entered into by the Holders of the Warrants  or  the
Selling  Shareholders  after the date  of  this  Prospectus,  the
Company will prepare and file a post-effective amendment to  this
Registration Statement including a supplement to this  Prospectus
to disclose the name of such underwriters and such arrangements.

Expense of any sales pursuant to this Prospectus will be borne by
the  Holders of the Warrants or the Selling Shareholders,  except
that  the  Company is paying certain of the expenses,  which  are
estimated at $10,000, of registering the Common Shares under  the
1933  Act and under the laws of one state selected by the Holder,
consisting  of  all  costs  incurred  in  connection   with   the
preparation of the Registration Statement (except for any fees of
counsel  for  the Holders of the Warrants).  The Holders  of  the
Warrants or the Selling Shareholders will pay or assume brokerage
commissions, or underwriting discounts, incurred in the  sale  of
the  Common Shares, which commissions or discounts are not  being
paid or assumed by the Company.

                     HOLDERS OF THE WARRANTS

Only  one  Warrant is outstanding on the date of this  Prospectus
and  the  Holder of that Warrant is Shamrock Partners, Ltd.   The
Holder  has  requested  that  the Warrant  be  divided  into  six
Warrants  covering an aggregate of 200,000 Warrant  Shares.   The
names of the Holders of the Warrants after such division and  the
amount of Registrant's Common Stock owned by such Holders of  the
Warrants (including Warrant Shares to be issued upon exercise  of
such  Warrants)  prior to and after the offering  are  set  forth
below:

                                              No. of         Shares of
                           Shares of          Common          Common
                          Common Stock     Shares to be     Stock to be
                          Owned Prior       Offered by      Owned After
          Name            to Offering    this Prospectus     Offering
- -----------------------   ------------   ---------------    ------------
Rafi Khan                   154,000         145,000            9,000
Shamrock Partners, Ltd.      12,039          10,000            2,039
Shamrock Partners
  International, Inc.        20,000          20,000           20,000
The Leasing Group, Inc.       8,400           8,400            8,400
Diana L. Manes                4,300           4,300            4,300
Andrew Z. Furtak             12,300          12,300           12,300

None  of  the  Holders of the Warrants have  held  any  position,
office  or have had any material relationship with Registrant  or
any  of its affiliates within the past three years except for the
investment  banking consulting agreement that Registrant  entered
into with Shamrock Partners, Ltd., on a nonexclusive basis for  a
one  year  term, effective January 9, 1996, subject  to  renewal.
The   Warrant   was  granted  to  Shamrock  Partners,   Ltd.   As
compensation for its services under that agreement.

                      SELLING SHAREHOLDERS

The  following  is  a  listing of the Selling  Shareholders,  the
amount  of  Common  Shares to be offered for  each  such  Selling
Shareholder's account and the amount of USE's Common Stock  owned
by  each Selling Shareholder prior to the offering and to be held
by  such  Selling Shareholder after completion of  the  offering.
Except  as noted below, none of the Selling Shareholders (i)  has
had  any position, office or other material relationship with the
Registrant or any of its affiliates within the past three  years,
or  (ii) to the knowledge of the Company, will own one percent or
more  of  the Company's outstanding common stock after completion
of the offering.  It is anticipated each Selling Shareholder will
own none of the Common Shares hereby offered, after completion of
the offering.
<PAGE>
                                                                   No. of
                                 No. of            No. of        Shares of
                              Common Shares    Shares of USE     USE Common
                              to be Offered     Common Stock    Stock to be
                                by Selling      Owned Prior     Owned After
       Name                    Shareholder      to Offering*      Offering
       ----                   -------------    -------------    -----------
Keith G. Larsen(1)                21,774          111,603         89,829
Mark J. Larsen(2)                  1,577          115,196        113,619
George F. Smith(3)                 2,135           40,532         38,397
Michael E. Sweeney(4)              2,949           55,875         52,926
Richard P. Larsen(1)               1,774           55,627         53,853
Thomas M. Evans(2)                   941           23,651         22,710
Kenneth J. Webber(2)               1,478           31,571         30,093
M. Shane Larsen(2)                   994           30,879         29,885
Albert E. Dearth(5)                2,083           10,066          7,983
N. Hal Clyde(2)                    1,106            7,133          6,027
Glenn Dooley(6)                      113              113            -0-
Hershel R. Dike(2)                   906            4,421          3,515
Jeff T. Harding(2)                 1,066            4,472          3,406
Paul J. Hemschoot, Jr.(2)            974              974            -0-
Noel Holbert(2)                    1,062            6,753          5,691
Mitch M. LeClair(2)                1,047            4,607          3,560
Bruno J. Masson (2)                  261              261            -0-
Sharon Miller(2)                     723            4,033          3,310
Steven P. Morrill(2)                 884            1,438            554
Bryon G. Mowry(2)                    122              122            -0-
Pat G. Reeb(2)                       986            4,099          3,113
Steven D. Richmond(2)                986            2,383          1,397
Marilyn Sampson(2)                   401              672            271
Mark Smith(2)                      1,049            6,681          5,632
James E. Steinhoff(2)              1,018            6,622          5,604
John Turner(2)                        87               87            -0-
Randall R. Van Vleet(2)            1,741           19,724         17,983
Helen D. VonFeldt(2)                 501            3,228          2,727
Stanley S. Wegner(2)                 996            6,428          5,432
Daryl P. Winters(2)                1,167            1,952            785

*    Includes  shares  held  directly, shares  held  in  the  USE
     Employee   Stock   Ownership  Plan  (the   "ESOP")   account
     established for the benefit of employee shares held  jointly
     and  shares held directly by immediate family members in the
     same household.

(1)  USE  employee  and  director of  Northwest  Gold,  Inc.,  an
     affiliate of USE.

(2)  USE employee.

(3)  USE  employee  and  director  of  Ruby  Mining  Company,  an
     affiliate of USE.

(4)  USE  employee, director of Four Nines Gold, Inc.;  President
     and   director  of  Sutter  Gold  Mining  Company  and  Vice
     President  of  USECC  Gold Limited  Liability  Company,  all
     affiliates of the Company.

(5)  USE   employee;  President,  Chief  Operating  Officer   and
     director of Plateau Resources Limited, a 100% subsidiary  of
     USE.

(6)  USE employee; Vice President of Plateau Resources Limited, a
     100% subsidiary of USE.


                            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 and K to  the  USE
consolidated financial statements.

The  balance  sheet of the Green Mountain Mining  Venture  as  of
December  31,  1995  and  1994, and  the  related  statements  of
operations, changes in venture partners' capital and  cash  flows
for  the  years ended December 31, 1995, 1994 and  1993  and  the
period  from  inception  to December 31,  1995  included  in  the
registration statement of which this Prospectus is a  part,  have
been  audited  by Coopers & Lybrand LLP, independent accountants,
as  indicated  in  their  report with  respect  thereto  and  are
included  in  said  registration statement in reliance  upon  the
authority of such firm as experts in accounting and auditing.

                         LEGAL MATTERS

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

<PAGE>
                 Report of Independent Public Accountants


To the Board of Directors and Shareholders of
U.S. Energy Corp.:


We have audited the accompanying consolidated balance sheets of
U.S. Energy Corp. (the "Company") (a Wyoming corporation) and
affiliates as of May 31, 1995 and 1994, and the related
consolidated statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended May 31,
1995.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion
on these financial statements 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, 1995 and 1994, and the
results of their operations and their cash flows for each of the
three years in the period ended May 31, 1995, 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 and arbitration with their 50/50 partner
in Sheep Mountain Partners ("SMP"), Nukem, Inc. and its subsidiary
Cycle Resource Investment Corporation ("CRIC"). USECC, CRIC and
Nukem have filed claims and counterclaims against each other
alleging violations of the SMP Partnership Agreement among other
various allegations.  As a consequence of this litigation and
arbitration, USECC has been required to fund all of the
expenditures to maintain the SMP mineral properties on standby,
resulting in advances to SMP of $4,521,600.  USECC has expensed its
equity portion of these advances as of May 31, 1995.  Recovery of
the remaining  investment and advances of  $2,481,600 is dependent
<PAGE>
upon the outcome of the litigation and arbitration, which is
uncertain at this time.  Most of the litigation claims were
consensually submitted to binding arbitration.  The evidentiary
stage of the arbitration proceedings are concluded and damage
claims have been submitted to the arbitration panel.  USECC is
seeking damages in excess of $200 million.  Nukem and CRIC are
seeking damages of approximately $48 million.  The resolution of
these matters is not anticipated until December 1995.  Counsel for
the Company has indicated that an evaluation of the likelihood of
an unfavorable outcome or any estimate of the amount or range of
potential loss is premature at this time given the state of the
proceedings.  Accordingly, the accompanying financial statements do
not reflect any adjustments that might result from this litigation
and arbitration.

     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,
August 28, 1995.

<PAGE>
<TABLE>
                        U.S. ENERGY CORP. AND AFFILIATES
                          CONSOLIDATED BALANCE SHEETS
                                     ASSETS
<CAPTION>
                                                        May 31,
                                            ------------------------------
                                                1995            1994
                                                ----            ----
CURRENT ASSETS:
<S>                                        <C>              <C>
 Cash and cash equivalents                  $   551,300     $ 1,181,700 
 Accounts and notes receivable (Note C):
   Trade, net of allowance of $51,000
     and $32,600 for doubtful accounts        1,484,100       1,009,800 
   Related parties, net of
     allowance of $1,600 and
     $1,600 for doubtful accounts               231,600         166,500 
 Inventory (Note B)                           1,567,300       1,424,600 
 Current portion long-term 
   notes receivable (Note F)                     74,400            --   
 Other                                          149,300          84,000 
                                            ------------    ------------
   TOTAL CURRENT ASSETS                       4,058,000       3,866,600 

INVESTMENTS AND ADVANCES (Notes E and F):
 Affiliates                                   3,244,600       2,807,900 
 Restricted investments                       7,757,400       7,728,500 
                                            ------------    ------------
                                             11,002,000      10,536,400 

PROPERTIES AND EQUIPMENT
 (Notes B, C, D and F):
 Land and mobile home park                    2,771,900       2,803,100 
 Buildings and improvements                   6,010,800       5,918,800 
 Aircraft and other equipment                 6,104,000       6,047,600 
 Developed oil properties,
   full cost method                           1,769,800       1,769,800 
 Undeveloped gas properties                     422,000         207,900 
 Mineral properties and mine
  development costs                          10,121,700       9,505,000 
                                            ------------    ------------
                                             27,200,200      26,252,200 
 Less accumulated depreciation, 
 depletion and amortization                  (9,700,800)     (8,874,000)
                                            ------------    ------------
                                             17,499,400      17,378,200 
                                            ------------    ------------
</TABLE>
(Continued)




          The accompanying notes to consolidated financial statements 
                 are an integral part of these balance sheets.
<PAGE>
                        U.S. ENERGY CORP. AND AFFILIATES
                          CONSOLIDATED BALANCE SHEETS
                                     ASSETS
                                  (Continued)
<TABLE>
<CAPTION>
                                                        May 31,
                                               -------------------------
                                                  1995            1994
                                                  ----            ----
OTHER ASSETS:
<S>                                         <C>             <C>
 Accounts and notes receivable:
   Real estate sales and other (Note F)         945,700          28,700 
   Affiliates and related parties                25,000          25,000 
   Employees (Note C)                           505,100         366,000 
 Buildings and improvements held for sale         7,500         758,200 
 Long-term deferred compensation (Note J)         5,100          17,300 
 Deposits and other                             117,200         113,900 
                                            ------------    ------------
                                              1,605,600       1,309,100 
                                            ------------    ------------
                                            $34,165,000     $33,090,300 
                                            ------------    ------------
                                            ------------    ------------
</TABLE>
<TABLE>
                          CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
                                                        May 31,
                                           -----------------------------
                                                 1995           1994
                                                 ----           ----
CURRENT LIABILITIES:
<S>                                         <C>             <C>
 Accounts payable and accrued expenses      $ 2,276,100     $   722,200 
 Lines of credit (Note G)                     1,527,000         161,000 
 Current portion of long-term 
   debt (Note G)                                232,900         408,500 
                                            ------------    ------------
   TOTAL CURRENT LIABILITIES                  4,036,000       1,291,700 

LONG-TERM DEBT (Note G)                         928,500       1,109,100 

RECLAMATION LIABILITY (Notes F and K)         3,951,800       3,951,800 

OTHER ACCRUED LIABILITIES (Note F)           10,818,700      11,284,600 

DEFERRED TAX LIABILITY (Note H)                 183,300         267,000 
</TABLE>
(Continued)


          The accompanying notes to consolidated financial statements 
                 are an integral part of these balance sheets.
<PAGE>
                        U.S. ENERGY CORP. AND AFFILIATES
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
                      LIABILITIES AND SHAREHOLDERS' EQUITY
                                  (Continued)
<CAPTION>
                                                         May 31,
                                             ---------------------------
                                                 1995            1994
                                                 ----            ----
<S>                                         <C>             <C>
COMMITMENTS AND CONTINGENCIES (Note K)

MINORITY INTERESTS                              708,200       1,326,400 

FORFEITABLE COMMON STOCK,
 $.01 par value; issued 187,820 and
 169,300, shares, respectively, 
   forfeitable until earned 
   (Notes C and J)                            1,370,100       1,300,600 

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 5,262,794 and 4,693,090
   shares, respectively                          52,500          46,800 
 Additional paid-in capital                  18,629,000      16,784,800 
 Accumulated deficit                         (3,256,400)     (1,185,800)
 Treasury stock at cost,
   769,943 and 713,276 
   shares, respectively                      (2,242,400)     (2,072,400)
 Unallocated ESOP contribution               (1,014,300)     (1,014,300)
                                            ------------    ------------
                                             12,168,400      12,559,100 
                                            ------------    ------------
                                            $34,165,000     $33,090,300 
                                            ------------    ------------
                                            ------------    ------------
</TABLE>










          The accompanying notes to consolidated financial statements 
                 are an integral part of these balance sheets.
<PAGE>
<TABLE>
                        U.S. ENERGY CORP. AND AFFILIATES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                             Year Ended May 31,
                                  -----------------------------------------
                                       1995         1994          1993
                                       ----         ----          ----
<S>                               <C>           <C>           <C>
REVENUES:
 Mineral sales (Note E)           $   --        $ 3,732,500   $ 2,690,800 
 Construction contract revenues     1,303,400     2,606,400     2,026,500 
 Commercial operations              1,253,200     1,165,100       894,400 
 Recreational product sales
 (Notes A and B)                    4,452,300       --            --      
 Oil sales                            194,500       183,700       286,300 
 Gain on sales of assets (Note F)   1,282,400        52,800       326,000 
 Gain on sale of investments          --            --            408,600 
 Gain from restructuring mineral
   properties agreements (Note F)      85,500       626,800     2,105,800 
 Interest                             479,900       328,700        78,200 
 Management fees and other
   (Note C)                            96,800        80,300       228,900 
                                  ------------  ------------  ------------
                                    9,148,000     8,776,300     9,045,500 
                                  ------------  ------------  ------------
COSTS AND EXPENSES:
 Cost of minerals sold                 --         3,895,400     2,617,600 
 Mineral operations                 1,654,300     1,129,000       659,900 
 Construction costs                 1,038,300     2,288,900     1,760,400 
 Commercial operations              2,070,100     1,989,400     1,573,000 
 Cost of recreational
   products sold                    2,407,000       --            --      
 Oil production                        78,100        89,800       122,400 
 General and administrative         3,606,100     2,696,800     1,955,300 
 Abandonment of mining claims         --            --            378,700 
 Gas operations                       206,600       157,800       --      
 Loss on sale of investments           90,000       --            --      
 Interest                             279,000       117,100        81,300 
                                  ------------  ------------  ------------
                                   11,429,500    12,364,200     9,148,600 
                                  ------------  ------------  ------------
LOSS  BEFORE MINORITY INTEREST
 IN LOSS, EQUITY IN LOSS OF
 AFFILIATES AND INCOME TAXES       (2,281,500)   (3,587,900)     (103,100)

MINORITY INTEREST IN LOSS OF
 CONSOLIDATED SUBSIDIARIES            653,200       874,800       325,900 

EQUITY IN LOSS OF AFFILIATES         (442,300)     (390,700)     (444,700)
                                  ------------  ------------  ------------
</TABLE>
(Continued)

          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
<PAGE>
<TABLE>
                        U.S. ENERGY CORP. AND AFFILIATES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Continued)

<CAPTION>
                                               Year Ended May 31,
                                  -----------------------------------------
                                       1995          1994         1993
                                       ----          ----         ----
<S>                               <C>           <C>           <C>
LOSS BEFORE INCOME TAXES          $(2,070,600)  $(3,103,800)  $  (221,900)

INCOME TAXES (Note H)                 --            --            --      
                                  ------------  ------------  ------------
LOSS BEFORE CUMULATIVE
 EFFECT OF ACCOUNTING CHANGE       (2,070,600)   (3,103,800)     (221,900)

CUMULATIVE EFFECT AT JUNE 1, 1993
 OF INCOME TAX ACCOUNTING CHANGE
 (Notes B and H)                       --          (267,000)     --       
                                  ------------  ------------  ------------
NET LOSS                          $(2,070,600)  $(3,370,800)  $  (221,900)
                                  ------------  ------------  ------------
                                  ------------  ------------  ------------
LOSS PER SHARE AMOUNTS:
 Loss before cumulative
   effect of accounting change    $      (.42)  $      (.70)  $      (.05)
 Cumulative effect at
   June 1, 1993 of income
   tax accounting change              --               (.06)         --   
                                  ------------  ------------  ------------
NET LOSS PER SHARE                $      (.42)  $      (.76)  $      (.05)
                                  ------------  ------------  ------------
                                  ------------  ------------  ------------
WEIGHTED AVERAGE SHARES
 OUTSTANDING                        4,977,050     4,431,469     4,248,848 
                                  ------------  ------------  ------------
                                  ------------  ------------  ------------
</TABLE>













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

                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
                                                             (Accumulated
                                                Additional     Deficit)/                              Unallocated        Total
                             Common Stock        Paid-In       Retained          Treasury Stock           ESOP       Shareholders'
                            Shares     Amount    Capital        Earnings      Shares      Amount      Contribution       Equity   
                          ---------   -------   -----------   -----------    -------   ------------   ------------   ------------- 

<S>                       <C>         <C>       <C>           <C>            <C>       <C>            <C>             <C>
Balance, May 31, 1992     4,163,201   $41,600   $14,749,600   $ 2,406,900    435,301   $(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    435,301    (1,200,900)    (1,014,300)     15,063,200















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

                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                                             (Accumulated
                                                Additional     Deficit)/                              Unallocated        Total
                             Common Stock        Paid-In       Retained          Treasury Stock           ESOP       Shareholders'
                            Shares     Amount    Capital       Earnings      Shares       Amount      Contribution       Equity
                          ---------   -------   -----------   -----------    -------   ------------   ------------   ------------- 
<S>                       <C>          <C>       <C>            <C>          <C>        <C>            <C>             <C>
Balance, May 31, 1993     4,257,288    42,500    15,050,900     2,185,000    435,301    (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 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)   713,276   $(2,072,400)   $(1,014,300)    $12,559,100
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------



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

                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
                                                             (Accumulated
                                                Additional     Deficit)/                              Unallocated        Total
                             Common Stock        Paid-In       Retained          Treasury Stock           ESOP       Shareholders'
                            Shares     Amount    Capital       Earnings      Shares       Amount      Contribution       Equity   
                          ---------   -------   -----------   -----------    -------   ------------   ------------   ------------- 
<S>                       <C>         <C>       <C>           <C>            <C>       <C>            <C>             <C>
Balance, May 31, 1994     4,693,090   $46,800   $16,784,800   $(1,185,800)   713,276   $(2,072,400)   $(1,014,300)    $12,559,100

Funding of ESOP              37,204       400       199,600        --          --          --              --             200,000
Issuance of common
 stock through private
 placement (Note J)         400,000     4,000     1,196,000        --         56,667      (170,000)        --           1,030,000
Issuance of common
 stock to third party
 for services rendered        5,000      --          23,100        --          --          --              --              23,100
Issuance of common stock 
 for exercised option       107,500     1,100       345,700        --          --          --              --             346,800
Issuance of common stock
 to buyout third party
 in property venture         20,000       200        79,800        --          --          --              --              80,000
Net loss                     --          --           --       (2,070,600)     --          --              --          (2,070,600)
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------
Balance May 31, 1995      5,262,794   $52,500   $18,629,000   $(3,256,400)   769,943   $(2,242,400)   $(1,014,300)    $12,168,000
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------
</TABLE>
Shareholders' Equity at May 31, 1995 does not include 187,820 shares
currently issued but forfeitable if certain conditions are not met by the
recipients.  However, both the "Outstanding Shares at August 25, 1995" 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 717,026 shares of common stock held by a majority-owned
subsidiary, which, in consolidation, are treated as treasury shares.


          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
<PAGE>
<TABLE>
                         U.S. ENERGY CORP. AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                   Year Ended May 31,
                                       ------------------------------------------
                                           1995           1994           1993
                                           ----           ----           ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                   <C>            <C>            <C>
 Net loss                              $(2,070,600)   $(3,370,800)   $  (221,900)
 Adjustments to reconcile net 
 loss to net cash used in
 operating activities:
   Minority interest in loss of
     consolidated subsidiaries            (653,200)      (874,800)      (325,900)
   Depreciation, depletion 
     and amortization                      766,200        720,200        908,400 
   Abandoned mining claims                    --            --           378,700 
   Gain from restructuring
     mineral properties
     agreements                               --         (500,000)    (2,000,000)
   Equity in loss from affiliates          442,300        390,700        444,700 
   Gain on sale of assets               (1,282,400)       (52,800)      (326,000)
   (Gain) loss on sale of
     marketable equity securities           90,000          --          (408,600)
   Common stock issued to fund ESOP        200,000        185,300        183,400 
   Non-cash compensation                    69,500         75,900         55,600 
   Common stock exchanged 
     for services                           23,100         34,300         --     
   Other                                  (318,200)      (149,900)      (246,400)
   Net changes in:
     Accounts receivable                  (539,400)       468,700       (406,800)
     Inventory                            (142,700)        (9,100)       407,300 
     Other assets                          (68,600)        (4,000)        62,200 
     Accounts payable and
      accrued expenses                   1,553,900       (573,700)       557,900 
     Other liabilities                    (465,900)      (415,400)        --     
     Deferred tax liability                (83,700)       267,000         --     
                                       -----------    -----------    ----------- 
NET CASH USED IN
 OPERATING ACTIVITIES                   (2,479,700)    (3,808,400)      (937,400)
                                       -----------    -----------    ----------- 
</TABLE>
(Continued)






           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.
<PAGE>
<TABLE>
                         U.S. ENERGY CORP. AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (continued)
<CAPTION>
                                                    Year Ended May 31,
                                        -----------------------------------------
                                           1995           1994           1993
                                           ----           ----           ----
<S>                                    <C>            <C>            <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
 Cash acquired in purchase 
   of subsidiaries                           --         7,193,500         --     
 Development of mining properties         (455,100)      (796,300)      (740,500)
 Development of gas properties            (218,200)      (207,900)        --     
 Proceeds from sale of
   property and equipment                  854,300        149,700        848,800 
 Proceeds from sale of investments         199,300          --           611,200 
 Purchases of property
   and equipment                          (178,900)      (855,800)      (656,700)
 Changes in notes receivable                91,800         73,700       (173,400)
 Investments in affiliates                (830,500)      (760,500)    (1,108,600)
                                       -----------    -----------    ----------- 
NET CASH (USED IN) PROVIDED BY 
 INVESTING ACTIVITIES                     (537,300)     4,796,400     (1,219,200)
                                       -----------    -----------    ----------- 
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance
   of common stock                       1,376,800          --           137,500 
 Proceeds from long-term debt              626,400        368,400        914,600 
 Net proceeds from lines of credit       1,366,000          --            --     
 Repayments of long-term debt             (982,600)      (654,300)      (202,700)
                                       -----------    -----------    ----------- 
NET CASH PROVIDED BY (USED IN)
 FINANCING ACTIVITIES                    2,386,600       (285,900)       849,400 
                                       -----------    -----------    ----------- 
NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                  $  (630,400)   $   702,100    $(1,307,200)

CASH AND CASH EQUIVALENTS,
 Beginning of year                       1,181,700        479,600      1,786,800 
                                       -----------    -----------    ----------- 
CASH AND CASH EQUIVALENTS,
 End of year                           $   551,300    $ 1,181,700    $   479,600 
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
</TABLE>
(Continued)





           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.
<PAGE>
<TABLE>
                         U.S. ENERGY CORP. AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (continued)
<CAPTION>
                                                   Year Ended May 31,
                                       ------------------------------------------
                                           1995           1994           1993
                                           ----           ----           ----
<S>                                   <C>             <C>            <C>
SUPPLEMENTAL DISCLOSURES:
 Interest paid                         $   242,100    $   114,200    $    79,100 
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Income taxes paid                     $   --         $   --         $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 

Non-cash investing and financing activities:

 Notes received for sale of assets     $ 1,550,000    $   --         $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Issuance of common stock
   to acquire affiliate                $    80,000    $ 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    $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Change in valuation of
   reclamation liability               $   --         $  (243,800)   $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Conversion of SRRI 
   receivable to investment
   upon SRRI loan default              $   --         $ 1,857,800    $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
</TABLE>



           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.
<PAGE>
<TABLE>
                         U.S. ENERGY CORP. AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (continued)
<CAPTION>
                                                   Year Ended May 31,
                                       ------------------------------------------
                                           1995           1994           1993
                                           ----           ----           ----
<S>                                    <C>            <C>            <C> 

 Undeveloped mining properties
   contributed to the Green
   Mountain Mining Venture             $   --         $   243,800    $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Acquisition of USE common
   stock in exchange for
   shareholder notes receivable        $   --         $   445,300    $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 

</TABLE>

Significant assets acquired and liabilities assumed
in 1994 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, 1995, 1994 AND 1993


A.   BUSINESS ORGANIZATION AND DESCRIPTION:

     U.S. Energy Corp. (the "Company" or "USE") was incorporated in
the State of Wyoming on January 26, 1966.  The Company engages in
the acquisition, exploration, holding, 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"), (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 1995, 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, "SGMC").

     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>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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%), SGMC
(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, SGMC and Crested for
both 1995 and 1994.  The accompanying consolidated statements of
operations include USE, Brunton, Plateau, Energx, FNG, USECC, SGMC
and Crested for fiscal 1995, and USE, Plateau, Energx, FNG, USECC,
SGMC and Crested for fiscal 1994.  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.  The accompanying
consolidated statement of operations for fiscal 1993 includes USE,
FNG, USECC, SGMC and Crested.

     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.

Cash Equivalents

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

Investments

     The Company adopted Statement of Financial Accounting
Standards No. 115 ("SFAS No. 115"), "Accounting for Certain
Investments in Debt and Equity Securities" in fiscal 1995.  Based
on the provisions of SFAS No. 115, the Company accounts for
investments as held-to-maturity.  Held-to-maturity securities are
measured at amortized cost and are carried at the lower of
aggregate cost or fair market value.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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,
                                     -----------------------
                                        1995         1994   
                                     ----------   ----------
    Outdoor Recreational Products:
      Raw materials                  $  385,100   $  508,900
      Work in process                   201,100      161,600
      Finished goods                    895,000      664,600
    Other                                86,100       89,500
                                     ----------   ----------
                                     $1,567,300   $1,424,600
                                     ----------   ----------
                                     ----------   ----------

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

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     The Company capitalizes all costs incidental to the
acquisition, exploration, holding 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 cost 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.

     Statement of Financial Accounting Standards No. 121 ("SFAS No.
121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued in March 1995.  The
provisions of SFAS No. 121 require the Company to evaluate the
carrying value of its long-term assets when certain events occur
that may effect the realizability of its assets.  SFAS No. 121 is
required to be adopted in fiscal 1996.  The Company has not
determined the impact, if any, the adoption of SFAS No. 121 will
have on its financial position or results of operations.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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 and uranium are recognized upon delivery. 
Revenues are recognized from the rental of certain assets as they
are rented.  Revenue from commercial operations are recognized as
goods and services are delivered.  Oil sales revenue is recognized
as the oil is produced (see Notes D and F.)

     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 No. 109 ("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.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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 Loss Per Share

     Net 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, because they were antidilutive.

Reclassifications

     Certain reclassifications have been made in the 1994 and 1993
financial statements to conform to the classifications used in
1995.

C.   RELATED-PARTY TRANSACTIONS:

     In November 1993, USE and Brunton executed an Agreement and
Plan of Share 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 was
therefore 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 is obligated to the Company for its
share of the costs for providing such employees.  Revenues from
services by the Company to affiliates other than Crested were
$88,300, $80,300 and  $113,000 in fiscal 1995, 1994 and 1993,
respectively.

     At May 31, 1995, the Company's President and immediate family
were indebted to the Company in the amount of $609,000, of which
$460,300 is represented by notes secured by 150,600 shares of the
Company's common stock.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     On August 19, 1994, the Company sold a house in Riverton,
Wyoming, to Harold F. Herron, Vice President of the Company for an
amount equal to a current independent appraisal.  At the same time
the Company loaned to Mr. Herron the sum of $112,170 secured by
30,000 shares of the Company's common stock for a period of five
years.  This amount is included in the $609,000 discussed above.

     As of May 31, 1995, 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, 1995.  This note is eliminated in consolidation.

     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, 1995.

     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, 1995
and 1994 (Note B).

     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 to the Company from Crested.  The
receipt of these shares increased the Company's ownership in
Crested to 52.9%.  Therefore, both the balance sheets and
statements of operation have been consolidated with the Company for
all years presented.

     On June 14, 1995, USECC signed a six year option to acquire a
7,200 square foot hangar at the Riverton Regional Airport, for
$110,000, from a private company affiliated with a director of USE
and Crested.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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 properties and ventures 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 restricted investments are in place to secure
various decommissioning costs, reclamation and holding costs. 
Investments are comprised of debt securities issued by the U. S.
Treasury that mature at varying times from three months to one year
from the original purchase date.  As of May 31, 1995, the cost of
debt securities was a reasonable approximation of fair market
value.

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

                       Consolidated   Carrying Value at May 31,
                         Ownership       1995          1994
                       -------------  ----------    ----------
Equity Method:
 GMMV                      50.0%      $  724,800    $  724,800 
 Ruby Mining Company       26.7%          38,200        40,700 
 SMP (Note F)              50.0%       2,481,600     2,042,400 
                                      ----------    ---------- 
                                      $3,244,600    $2,807,900 
                                      ----------    ---------- 
                                      ----------    ---------- 
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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

                                   Year Ended May 31,
                          ------------------------------------
                             1995         1994         1993
                           ---------    ---------   ----------
    SMP (Note F)          $(439,200)   $(514,800)   $(532,000)
    Brunton (Note B)
     (consolidated
     beginning in 1995)       --         140,500       85,600 
    Ruby Mining Company      (3,100)     (16,400)       1,700 
    GMMV                      --          --           --     
                          ---------    ---------    --------- 
                          $(442,300)   $(390,700)   $(444,700)
                          ---------    ---------    --------- 
                          ---------    ---------    --------- 

     There are 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 provided funding to SMP in the amount of $4,521,600 for
standby mine care and maintenance, the rental of certain mining
equipment and administrative costs as of May 31, 1995.  These
advances are included in the above investment account net of the
Company's equity share of SMP's expenses.  The Company considers
the $4,521,600 to be a receivable from SMP.  Whether or not the
$4,521,600 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 903,200 to 1,213,800 pounds of
uranium annually from 1996 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, 1995.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

Revenues from such uranium sales of $2,893,800 and $2,690,800 have
been included in the accompanying consolidated statements of
operations for the years ended May 31, 1994 and 1993, which would
normally have been sales of SMP.  All sales contracts were filled
by Nukem in 1995, and as a result, no revenues from uranium sales
were recognized during 1995.  The cash from uranium sales is
accumulating in SMP's bank accounts which as of May 31, 1995
amounted to $7,505,000.

     GMMV expenses certain general and administrative, maintenance
and holding costs.  However, the Company has not recognized equity
losses in GMMV 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 $727,000 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 and Ruby Mining Company ("Ruby)
for 1995 and GMMV, SMP, Brunton and Ruby for 1994 and 1993. 
Condensed combined balance sheets do not include Brunton for 1994
as Brunton's balance sheet was consolidated with USE as of May 31,
1994.  
<TABLE>
           CONDENSED COMBINED BALANCE SHEETS -  EQUITY INVESTEES
<CAPTION>
                                          May 31,
                                  ----------------------------
                                      1995            1994
                                  ------------    ------------
<S>                               <C>             <C>
Current assets                    $  8,408,500    $    720,700
Non-current assets                  49,211,100      48,795,700
                                  ------------    ------------
                                  $ 57,619,600    $ 49,516,400
                                  ------------    ------------
                                  ------------    ------------
Current liabilities               $  7,312,700    $  6,529,000
Other long-term debt                30,782,900      23,621,600
Excess in assets                    19,524,000      19,365,800
                                  ------------    ------------
                                  $ 57,619,600    $ 49,516,400
                                  ------------    ------------
                                  ------------    ------------
</TABLE>
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)
<TABLE>
      CONDENSED COMBINED STATEMENTS OF OPERATIONS - EQUITY INVESTEES
<CAPTION>
                                Year Ended May 31,
                   ------------------------------------------
                       1995           1994           1993
                    -----------    -----------    -----------

<S>                <C>            <C>            <C>
Revenues           $   368,300    $ 4,570,500    $ 3,604,800 
Less costs and
  expenses          (1,402,400)    (7,336,800)    (8,500,500)
                   -----------    -----------    ----------- 
Net loss           $(1,034,100)   $(2,766,300)   $(4,895,700)
                   -----------    -----------    ----------- 
                   -----------    -----------    ----------- 

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

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     GMMV has incurred $14,316,300 in the development and
operations of the above uranium mineral properties through May 31,
1995.  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 $727,000 at May 31, 1995, 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 last
quarterly amortization of $250,000 for a non-interest bearing loan
from AMAX in lieu of advance royalties, was recognized in the first
quarter of fiscal 1994.

     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.  If AMAX sells the
properties, the Company and Crested will receive 15% of the first
$25 million received by AMAX.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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 $85,500, $126,800 and $105,800 of revenue from
the advance royalty payments in fiscal 1995, 1994 and 1993,
respectively.

     In fiscal 1995, USECC and Cyprus Amax agreed on exercise of
the option by USE and Crested agreeing to forego six quarters of
advance royalties from Cyprus Amax (the option purchase price was
$200,000).  See "Minerals - 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 otherwise encumbered and was sold in fiscal
1995.

     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 paid $345,000
cash and $625,300 in three year nonrecourse promissory notes, of
which $137,900 was paid during fiscal 1995.  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 remaining note bears interest at 7.5% per annum.

     The second option covers 472.5 acres of ranch land northwest
of the City of Gunnison, Colorado (purchase price $822,460). 
Pangolin paid $10,000 for the option; on option exercise and
closing, Pangolin paid $46,090 in cash and $776,370 by two
nonrecourse promissory notes (each with principal and unpaid
interest due on the third anniversary of closing except for $35,000
on the first anniversary).  At closing, 22.19 acres were deeded to
Pangolin; different parcels of the remaining acreage secure the
notes, and will be released for principal payments in the course of
development.  The sale was accounted for as an installment sale and
thus the gain on sale was deferred to be recorded as the notes are
paid.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

Sutter Gold Mining Company

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

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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.  During fiscal 1995, 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,
"SGMC").

     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. 

     SGMC is in the development stage at May 31, 1995, 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 $10,374,400
at May 31, 1995.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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 $6,018,700 at yearend.  Together with the $4,800,000
indemnification reserve, these estimated obligations are recorded
as Other Accrued Liabilities of $10,818,700 in the accompanying
consolidated financial statements.

     On August 25, 1994, Plateau signed a letter of intent with an
unrelated third party to sell part interest in Canyon Homesteads,
Inc. ("CHI"), 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 was to be $6,000,000.  The party
had made a non refundable earnest payment of $100,000 to Plateau to
be credited to the purchase price, with the remainder to be paid in
cash from the purchaser and out of operations, at specified times. 
In fiscal 1995 the purchaser defaulted, and as a result, the
$100,000 was recognized as income in fiscal 1995.

     CHI entered into a joint venture with Arrowstar Investments,
Inc. ("AII") to develop on a 50/50 basis, certain properties at the
Ticaboo Townsite.  AII is owned by certain shareholders of the
Company.  As of May 31, 1995, the Company has recorded $112,400
related to AII's initial funding commitment to the joint venture
which is included in accounts receivable trade on the accompanying
Balance Sheet.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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%) and the Assiniboine and Sioux Tribes (10%).

     During fiscal 1995, Energx sold a 50% interest in the leases
on the Fort Peck Indian Reservation for the sum of $200,000 plus
$100,000 to be used only for the acquisition and consolidation of
additional leases, and for committing to drill 8 exploratory wells. 
This resulted in a gain of $197,000 being recorded on this
undeveloped property sale.  Energx is in the lease acquisition
stage on this property.   No exploratory wells have been drilled to
date.

G.   DEBT:

     During fiscal 1995, USE and Crested obtained a $1,000,000 line
of credit from a bank.  The line of credit accrued interest at the
banks prime rate plus .5% (8.5% initially) and matured on July 23,
1995.  The weighted average interest rate for 1995 for the line of
credit was 9.82%.  $960,000 is outstanding as of May 31, 1995. 
Subsequently this line was repaid with funds received in the July
8, 1995 private placement.  The Company has renegotiated this
$1,000,000 line of credit and extended the maturity date to July
23, 1996.  The line of credit is secured by certain real property
and a share of the net proceeds of production from certain oil and
gas wells.  No amounts are currently outstanding on this line of
credit.

     The Company's debt also includes the $500,000 revolving line
of credit of Brunton with a commercial bank.  The line of credit
accrues interest at 1% above prime and expires in August, 1995.  As
of May 31, 1995, $387,000 was outstanding on the line of credit. 
Brunton also has a $200,000 line of credit that matures in August
1995.  No amounts are outstanding as of May 31, 1995.  Both of the
Brunton lines of credit were renegotiated for $500,000 and $250,000
respectively to mature August 2, 1996 with interest at 1% over bank
index rate.  The weighted average for these lines for 1995 was
9.35%.  FNG holds a $200,000 line of credit with a commercial bank. 
This line of credit accrues interest at 2.25% over the bank's prime
rate and expires on February 28, 1996, $180,000 was outstanding as
of May 31, 1995.  The weighted average rate for 1995 for this line
of credit was 10.29%
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     Brunton has two installment notes bearing interest at 8.25%
secured generally by all the assets of Brunton.  FNG also has
various installment notes bearing interest from 7.5% to 11.75%
which are secured by FNG equipment with maturity dates through
1997.  

     The components of debt as of May 31, 1995 and 1994 are as
follows:

</TABLE>
<TABLE>
<CAPTION>
                                                                    May 31,
                                                          --------------------------
                                                             1995             1994
                                                          ----------      ----------
<S>                                                       <C>             <C>  
Installment note - secured by equipment, 
         interest at 8%, matures February 1996            $   84,600      $  220,200 
Installment notes - secured by real estate,
         interest at 7.9% - 8%, matures 1998-2004            270,500         287,600 
Brunton installment notes                                    722,700         770,000 
FNG installment notes                                         57,200         157,800 
Notes payable - other                                         26,400          82,000 
                                                          ----------      ---------- 
                                                           1,161,400       1,517,600 
         Less current portion                               (232,900)       (408,500)
                                                          ----------      ---------- 
                                                          $  928,500      $1,109,100 
                                                          ----------      ---------- 
                                                          ----------      ---------- 
</TABLE>
     Principal requirements on debt for the five years after May
31, 1995 are as follows: 1996 - $232,900; 1997 - $121,100; 1998 -
$107,100; 1999 - $200,500; 2000 - $344,100 and thereafter $155,700.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

H.   INCOME TAXES:

     The Company adopted SFAS 109 during fiscal 1994.

     The components of deferred taxes as of May 31, 1995 and 1994
are as follows:
<TABLE>
<CAPTION>
                                                May 31,
                                       -------------------------
                                         1995           1994
                                       ----------    ----------
<S>                                    <C>           <C>
Deferred tax assets:
 Deferred compensation                 $   50,400    $   26,300 
 Deferred gain on sale of assets          143,900        85,000 
 Net operating loss carryforwards       6,535,200     4,601,100 
 Capital loss carryforwards               182,100       452,000 
 Tax Credits                              325,000       325,000 
 Other                                     33,000        36,000 
                                       ----------    ---------- 
Total deferred tax assets               7,269,600     5,525,400 
                                       ----------    ---------- 
Deferred tax liabilities:
 Accelerated depreciation for tax      (1,073,400)   (1,112,900)
 Development and exploration costs     (2,095,700)   (2,039,900)
                                       ----------    ---------- 
Total deferred tax liabilities         (3,169,100)   (3,152,800)
                                       ----------    ---------- 
                                        4,100,500     2,372,600 

Valuation allowance                    (4,283,800)   (2,639,600)
                                       ----------    ---------- 
Net deferred tax liability             $ (183,300)   $ (267,000)
                                       ----------    ---------- 
                                       ----------    ---------- 
</TABLE>
     The Company has established a valuation allowance of
$4,224,900 against deferred tax assets due to the losses incurred
by the Company in fiscal 1995, 1994 and 1993.  The Company's
ability to generate future taxable income to utilize the NOL and
capital loss carryforwards is uncertain.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     For the year ended May 31, 1993, the tax effect of deferred
taxes resulting from timing differences in the recognition of
revenues and expenses for tax and financial statement purposes were
as follows.
                                              May 31,
                                               1993
                                             ---------
    Gain on sale of property and equipment  $ (81,800)
    Operating loss carryforwards for
      income tax reporting purposes          (311,200)
    Deferred compensation expense             (55,600)
    Exploration and development costs         437,700 
    Depreciation                               54,000 
    Other                                     (43,100)
                                            --------- 
      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:
<TABLE>
<CAPTION>
                                          Year Ended May 31,
                               -------------------------------------
                                  1995           1994          1993
                               ----------    -----------     -------
<S>                            <C>           <C>            <C>
Expected federal income tax    $ (704,000)   $(1,055,300)   $  --   
Utilization of capital
 loss carryforward               (269,900)       --            --   
Net operating losses not
 previously benefitted           (670,300)       --            --   
Valuation allowance             1,644,200      1,055,300       --   
                               ----------    -----------    -------- 
 Income tax provision          $  --         $   --         $  --   
                               ----------    -----------    -------- 
                               ----------    -----------    -------- 
</TABLE>
     There were no taxes payable as of May 31, 1995, 1994 or 1993.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 1995, 1994 AND 1993
                                  (continued)

     At May 31, 1995, the Company and its subsidiaries had available,
for federal income tax purposes, net operating loss carryforwards of
approximately $19,221,000 which will expire from 1996 to 2010 and
investment tax credit carryforwards of $325,000 which, if not used, will
expire from 1996 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', which includes USECC, 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 the sale of minerals and
the acquisition, exploration, holding development and sale of mineral
bearing properties although the Company has no producing mines. Other
reportable industry segments included commercial operations, primarily
manufacturing and distribution of outdoor recreation products, real
estate activities and operation of an airport fixed base operation and
construction operations.  The following is information related to these
industry segments:
<PAGE>
                        U.S. ENERGY CORP. AND AFFILIATES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 1995, 1994 AND 1993
                                  (continued)
<TABLE>
<CAPTION>
                                        Year Ended May 31, 1995
                         ------------------------------------------------------
                                        Commercial  Construction
                          Minerals      Operations   Operations   Consolidated
                         -----------    ----------  ------------  ------------
<S>                      <C>            <C>          <C>          <C>
Revenues                 $    85,500    $5,705,500   $1,303,400   $ 7,094,400 
                         -----------    ----------   ----------
                         -----------    ----------   ----------
Interest and
 other revenues                                                     2,053,600 
                                                                  ----------- 
   Total Revenues                                                 $ 9,148,000 
                                                                  ----------- 
                                                                  ----------- 
Operating (loss) profit  $(1,568,800)   $1,228,400   $  265,100   $   (75,300)
                         -----------    ----------   ----------
                         -----------    ----------   ----------
Interest and
 other revenues                                                     2,053,600 
General corporate 
 and other expenses                                                (3,606,600)
Equity in loss
 of affiliates                                                       (442,300)
                                                                  ----------- 
Loss before income taxes                                          $(2,070,600)
                                                                  ----------- 
                                                                  ----------- 
Identifiable assets
 at May 31, 1995         $18,518,300    $9,074,300   $  292,700   $27,885,300 
                         -----------    ----------   ----------
                         -----------    ----------   ----------
Investments
 in affiliates                                                      3,244,600 
Corporate assets                                                    3,035,100 
                                                                  ----------- 
 Total assets
   at May 31, 1995                                                $34,492,700 
                                                                  ----------- 
                                                                  ----------- 
Capital expenditures     $   455,100    $  186,400   $   28,100
                         -----------    ----------   ----------
                         -----------    ----------   ----------
Depreciation, depletion
 and amortization        $    --        $  637,600   $  116,500
                         -----------    ----------   ----------
                         -----------    ----------   ----------                         U.S. ENERGY CORP. AND AFFILIATES
</TABLE>
<PAGE>
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MAY 31, 1995, 1994 AND 1993
                                   (continued)
<TABLE>
<CAPTION>
                                        Year Ended May 31, 1994               
                        -------------------------------------------------------
                                      Commercial   Construction
                         Minerals     Operations    Operations    Consolidated
                        ----------    ----------   ------------   ------------
<S>                     <C>           <C>           <C>           <C>
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)
Loss before income taxes
 and cumulative effect                                            $(3,103,800)
                                                                  ----------- 
                                                                  ----------- 
Identifiable assets
 at May 31, 1994        $17,745,200   $8,898,400    $  371,200    $27,014,800 
                        -----------   ----------    ---------- 
                        -----------   ----------    ---------- 
Investments
 in affiliates                                                      2,807,900 
Corporate assets                                                    3,267,600 
                                                                  ----------- 
 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 
                        -----------   ----------    ---------- 
                        -----------   ----------    ---------- 
</TABLE>
<PAGE>
                         U.S. ENERGY CORP. AND AFFILIATES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MAY 31, 1995, 1994 AND 1993
                                   (continued)
<TABLE>
<CAPTION>
                                        Year Ended May 31, 1993
                        -------------------------------------------------------
                                      Commercial   Construction
                          Minerals    Operations    Operations    Consolidated
                        ------------  ----------     -----------  ------------
<S>                     <C>           <C>           <C>           <C>
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 extraordinary 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
                        ------------  ----------    -----------
                        ------------  ----------    -----------
</TABLE>
<PAGE>
                         U.S. ENERGY CORP. AND AFFILIATES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MAY 31, 1995, 1994 AND 1993
                                   (continued)

     During fiscal 1994 and 1993, approximately 14% and 44% of
mineral revenues were from amortization of principal on the AMAX
notes and annual advance royalties of molybdenum from AMAX.  During
fiscal 1994 and 1993, 86% and 56%, respectively, of mineral
revenues were from sales of uranium.  There were no uranium sales
during fiscal 1995.

     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. 
Commercial operations for 1995 include the operations of Brunton.

J.   SHAREHOLDERS' EQUITY:

     In March 1995, the Company completed a private placement of
400,000 shares of stock at $3.00 per share.  The majority of the
proceeds were from employees of the Company.  This offering carried
terms by which the Company, at its option, would either redeem the
common shares sold from each investor, at a cash redemption price
of $3.50 per share or issue one additional common share for each
three shares originally purchased.  Management of the Company
intends to issue the additional common shares (133,333 shares). 
The Company is obligated to register all shares issued in
connection with this private placement by January 1996.

     In June and July, 1995 the Company sold common stock at $4.00
per share (812,432 shares, net proceeds to the Company of
$2,827,300).  In connection with this private placement, warrants
to purchase 81,243 USE common shares at $4.80 per share are to be
issued to the selling agent.  These warrants are exercisable
through July 25, 2000.

     The Board of Directors adopted the U.S. Energy Corp. 1989
Stock Option Plan (the "Option Plan") for the benefit of USE's key
employees.  The Option Plan, later amended reserves 550,000 shares
of the Company's $.01 par value common stock for issuance under the
Option Plan.  During fiscal 1992, the Company issued options to
certain of its executive officers, Board members and others. 
371,200 non-qualified options were issued at purchase prices
ranging from $2.00 per share to $2.90 per share.  The options will
expire on April 14, 2002 and April 30, 2002.  During fiscal 1995,
options were exercised for the purchase of 7,500 shares.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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 1995, 1994 and 1993, the
Board of Directors of USE contributed 37,204, 46,332 and 49,087,
shares to the ESOP at prices of $5.38, $4.00 and $3.75 per share,
respectively.  The Company is responsible for one-half of these
contributions amounting to $100,000, $92,500 and $91,700 in fiscal
1995, 1994 and 1993, 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 1996.

     The Board of Directors of both the Company and Crested issue
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, 1995, 1994 and 1993, the Company had
compensation expense of $200,000, $116,700 and $271,700,
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              40,300      USE        $  9.75        $392,925
June 1990             66,300      USE          11.00         729,300
November 1990
  (stock dividend)    10,660      USE           N.A.           N.A. 
June 1990             25,000      Crested       1.06          26,562
December 1990          7,500      Crested        .50           3,750
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
January 1995          18,520      USE           3.75          69,450
January 1995           6,500      Crested        .19           1,219
<PAGE>
                        U.S. ENERGY CORP. AND AFFILIATES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 1995, 1994 AND 1993
                                  (continued)

     No shares were earned out in fiscal 1993 or 1995; however,
5,000 shares of USE stock were earned out and released to a third
party in fiscal 1994.  During fiscal 1993, the Company's Board of
Directors amended the stock bonus plan.  As a result, the earn out
dates of certain individuals were extended until retirement, which
is the earn out date of the amended stock bonus plan.  The amended
plan grants a stock-bonus of 20% of the previous plan per year for
five years.  Also included in forfeitable common stock are 15,000
shares to directors which are vesting at 20% a year beginning in
November 1992, of which 9,000 are earned out but not released as of
May 31, 1995.

     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 this affiliate options for
150,000 common shares at $3.50 per share.  None of these options
have been exercised as of May 31, 1995.

     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

Sheep Mountain Partners (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 to the Green
Mountain Mining Venture (GMMV) the 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.  
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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
seek 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.  Certain of 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, agreed with the Company and
Crested that the majority of the claims post the formation of SMP
on December 21, 1988, 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 hearing commenced
on June 27, 1994 before a three member AAA arbitration panel. 
After 73 hearing days and some 15,000 pages of testimony, the
parties rested their cases on May 31, 1995.  Per order of the
Panel, the parties filed their proposed Findings of Fact and
Conclusions of Law, Award and a brief of the law on August 7, 1995. 
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

Each side shall submit responsive proposed findings of fact and
conclusions of law, responsive proposed award and reply briefs by
September 21, 1995.  The Panel will make its Order and Award within
90 days thereafter, unless the period of time is extended.  

     Nukem and CRIC are seeking $47,172,535 against USE and USECC
and the right to purchase USECC's interest in SMP for $2,350,000. 
USE and Crested are seeking the dissolution of the SMP Partnership,
the return of the Sheep Mountain Mining properties and damages
against Nukem and CRIC in excess of $200,000,000 with requests that
they be trebled under RICO and COCCA.  USECC has denied all the
allegations made by CRIC and denied any liability.  The Company and
counsel believe that an evaluation of the likelihood of an
unfavorable outcome and any estimate of the amount or range of
potential loss is premature at this time given to the state of the
proceedings.  The resolution of these matters by the arbitration
panel is expected by December 1995 or early calendar 1996.  The
Company also expects to vigorously pursue all pre-SMP Partnership
claims which have been reserved by the parties before the Federal
Court once the arbitration proceedings are completed.

     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
Luxembourg 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.  After
various negotiating sessions the parties reached agreement in June
1995 to settle the case by entering into an amendment to the
original agreement to increase the price per pound of U3O8 delivered
to IPC and provide for 3 deliveries totalling 486,443 lbs. U3O8 in
1995, 1996 and 1997.  The first delivery of 226,443 lbs. U3O8 was
made on June 30, 1995.  This amendment to the IPC contract will be
subject to the decision of the Arbitration Panel.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     Declaratory Judgment Action on Extralateral Rights.  On July
30, 1991, Bond Gold Bullfrog, Inc. ("BGBI") filed Civil Action No.
11877 in the District Court of the Fifth Judicial District, Nye
County, Nevada naming USE, Crested, Parador Mining Company, Inc.
("Parador") and H.B. Layne Contractor, Inc. (Layne) as defendants. 
The complaint primarily concerns extralateral rights associated
with two patented mining claims (the "Claims") owned by Parador
which were initially leased to a predecessor of BGBI and
subsequently, the residuals of that lease were assigned and leased
by Parador to USE and Crested.  Parador, USE and Crested answered
the complaint, filed a counterclaim against the Plaintiff and a
cross claim against Layne.  Pursuant to the Nevada Rules of Civil
Procedure, the parties through their attorneys have met and
prepared a report outlining various matters required by the Nevada
Rules regarding discovery and depositions.  Parador has notified
BGBI that it has terminated the lease to a predecessor of BGBI of
its two patented claims (being part of the Bullfrog Open Pit Mine). 
On or about June 30, 1993, Layne filed a motion for summary
judgment against Parador, USE and Crested claiming there is no
issue of material fact and Layne is entitled to judgment as a
matter of law.  Parador, USE and Crested are preparing a response
to this motion.  Pursuant to the Assignment and Lease of Mining
Claims entered into as of April 1, 1991 between USE, Crested and
Parador, USE and Crested are to receive 50% of damages or
production royalties due Parador from production of precious metals
out of the mined lode or veins dipping down from where the lode
apexes on Parador's mining claims.  USE agreed to advance $200,000
to cover attorney and other costs and fees which may be first
recovered out of production royalties or damages.  Any expenditures
over $200,000 shall be borne solely by USE and Crested.  If Bond
Gold should produce precious metals from within the boundaries of
Parador's Claims which are not related to extralateral rights,
Parador shall receive 100% of the royalties.  If USE and Crested
mine precious metals from the Claims, Parador shall receive a
royalty of 40% NSR.  Depositions have been taken in the case and
Layne has filed the above Motion for Summary Judgment.  The parties
agreed to stay the motion until discovery is completed.  The Court
set the trial on the issue of extralateral rights for July 17,
1995, but recently notified the parties that because of a conflict,
the case will not be heard until December 11, 1995.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     As of May 31, 1995, the Company has recorded estimated
reclamation obligations, including standby costs, of $14,770,500,
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 $23,960,000 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 SGMC 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, 1995 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.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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
$16,322,900 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.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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.

SGMC

     The Company and Crested currently own 100% of SGMC, 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, 1995. 
Any reclamation liability for SGMC properties which currently exist
is insignificant.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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 $10,818,700 as of May 31, 1995, 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.
<PAGE>
                         PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements.

                        U.S. ENERGY CORP. AND AFFILIATES

                     Condensed Consolidated Balance Sheets

<TABLE>
                                     ASSETS
<CAPTION>
                                       February 29,              May 31,
                                          1996                    1995
                                       ------------            -----------
                                       (Unaudited)             (Unaudited)
<S>                                    <C>                     <C>
CURRENT ASSETS:
  Cash                                 $  1,279,100            $   360,600 
  Accounts receivable
    Trade                                   425,300                709,700 
    Related parties                         312,000                231,600
  Inventory                                  86,200                 86,100
  Current portion long-term 
    notes receivables                        38,300                 74,400 
  Other                                      87,800                 86,100 
  Net Current Assets of
    Discontinued Operations                  --                  1,841,600 
                                       ------------           ------------ 
    TOTAL CURRENT ASSETS                  2,228,700              3,390,100 
                                                        
INVESTMENTS AND ADVANCES
  Affiliates                              4,159,500              3,244,600 
  Restricted                              8,056,900              7,757,400 
                                       ------------           ------------ 
                                         12,216,400             11,002,000 

PROPERTIES AND EQUIPMENT                 28,101,900             27,079,200 
  Less accumulated depreciation, 
    depletion and amortization          (10,176,900)            (9,659,400)
                                       ------------           ------------ 
                                         17,925,000             17,419,800 
OTHER ASSETS:
  Accounts and notes receivable:
    Real estate and other                 1,905,600                912,700 
    Affiliates and related parties           25,000                 25,000 
    Employees                               525,500                505,100 
  Buildings and improvements 
    held for sale                             7,500                  7,500 
  Deferred compensation, long-term            --                     5,100 
  Deposits and other                        117,200                117,200 
                                       ------------           ------------
                                          2,580,800              1,572,600 
                                       ------------           ------------ 
                                       $ 34,950,900           $ 33,384,500 
                                       ------------           ------------ 
                                       ------------           ------------ 
</TABLE>
           See notes to condensed consolidated financial statements. 
<PAGE>
                        U.S. ENERGY CORP. AND AFFILIATES

                     Condensed Consolidated Balance Sheets

<TABLE>
                      LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
                                        February 29,           May 31,
                                           1996                 1995
                                        -----------           -----------
<S>                                     <C>                   <C>
CURRENT LIABILITIES:                    (Unaudited)           (Unaudited)
  Accounts payable and 
    accrued expenses                    $   622,100           $ 2,067,000 
  Income taxes payable                       50,000                --     
  Line of credit                             --                 1,140,000 
  Current portion of long-term debt         418,900               161,200 
                                        -----------           ----------- 
    TOTAL CURRENT LIABILITIES             1,091,000             3,368,200 

LONG-TERM DEBT (See Note 4)                 651,300               277,500 

RECLAMATION LIABILITY (See Note 5)        3,951,800             3,951,800 

OTHER ACCRUED LIABILITIES (See Note 5)   10,546,300            10,818,700 

DEFERRED TAX LIABILITY                      267,000               183,300 

NET NONCURRENT LIABILITIES OF
  DISCONTINUED OPERATIONS                    --                   538,300 

COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST                           949,300               708,200 

Common stock, 187,817
  shares forfeitable                      1,486,500             1,370,100 

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, 6,379,066 and 5,262,794          62,300                52,500 
  Additional paid-in capital             21,619,300            18,629,000 
  Retained earnings (deficit)            (2,417,200)           (3,256,400)
  Treasury stock, 769,943 
    shares, at cost                      (2,242,400)           (2,242,400)
  Unallocated ESOP contribution          (1,014,300)           (1,014,300)
                                        -----------           ----------- 
                                         16,007,700            12,168,400 
                                        -----------           ----------- 
                                        $34,950,900           $33,384,500 
                                        -----------           ----------- 
                                        -----------           ----------- 
</TABLE>
           See notes to condensed consolidated financial statements.
<PAGE>
                         U.S. ENERGY CORP. AND AFFILIATES
<TABLE>
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
<CAPTION>
                            Three Months Ended           Nine Months Ended
                                 February                    February
                          ------------------------  -------------------------
                           29, 1996     28, 1995     29, 1996      28, 1995
                          ----------   -----------  -----------   -----------
<S>                       <C>          <C>          <C>           <C>
REVENUES:
Mineral sales
 and option               $  942,400   $   --       $ 3,116,700   $    --     
Oil sales                     55,200       47,400       137,300       138,200 
Commercial revenues          161,100      178,700       684,400       741,500 
Gain on restructuring
 mining properties
 agreements                   --           --            --            85,500 
Construction contract
 revenues                    552,500       29,100     3,369,600       919,600 
Gain on sale of assets        24,100      975,000        68,300     1,288,900 
Interest                     125,700       79,200       391,400       249,100 
Management and 
 other fees                   14,600       76,900       384,100       215,700 
                          ----------   ----------   -----------   ----------- 
                           1,875,600    1,386,300     8,151,800     3,638,500 
                          ----------   ----------   -----------   ----------- 
COSTS AND EXPENSES:
 Costs of mineral sales      942,400       --         2,766,700        --     
 Mineral operations          190,900      299,300       602,400     1,005,500 
 Construction costs          474,400       36,500     2,569,700       790,500 
 Abandoned gas leases         --           --           328,700        --     
 General and 
   administrative            959,200      618,600     1,965,800     1,469,100 
 Commercial operations       490,300      580,100     1,558,600     1,670,500 
 Oil production               36,700       24,100        68,100        52,700 
 Loss on sale 
   of investments             --           --            --            89,900 
 Interest                     72,600       46,100       174,300       111,500 
                          ----------   ----------   -----------   ----------- 
                           3,166,500    1,604,700     10,034,300    5,189,700 
                          ----------   ----------   -----------   ----------- 
</TABLE>
(Continued)








            See notes to condensed consolidated financial statements.
<PAGE>
                         U.S. ENERGY CORP. AND AFFILIATES
<TABLE>
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
                                   (Continued)
<CAPTION>
                            Three Months Ended           Nine Months Ended
                                 February                    February
                          ------------------------  --------------------------
                           29, 1996     28, 1995     29, 1996      28, 1995
                          ----------   -----------  -----------   ------------
<S>                       <C>          <C>          <C>           <C>
Loss before 
 Equity In Loss
 of Affiliates,
 Provision for 
 Income Taxes             (1,290,900)    (218,400)   (1,882,500)   (1,551,200)

Minority Interest in 
 Loss of Consolidated
 Subsidiaries                332,200       76,200        398,700      418,400 

Equity in Loss of
 Affiliates-net             (115,700)    (128,100)     (281,600)     (304,900)

Provision for 
 Income Taxes                 --           --            --            --     
                          ----------   ----------   -----------   ----------- 
Loss from Continuing
 Operations               (1,074,400)    (270,300)   (1,765,400)   (1,437,700)
                          ----------   ----------   -----------   ----------- 
Discontinued Operations
 (Note 8)
Income from Discontinued
 Operations Net of
 Income Taxes of $0           (9,200)     (58,100)      308,900       121,900 

Gain on Disposal of
 Subsidiary Operations
 in Discontinued
 Segment Net of Income 
 Taxes of $50,000          2,295,700       --         2,295,700        --     
                          ----------   ----------   -----------   ----------- 
   
Income (Loss) from
 Discontinued Operations   2,286,500      (58,100)    2,604,600       121,900 
                          ----------   ----------   -----------   ----------- 

NET INCOME (LOSS)         $1,212,100   $ (328,400)  $   839,200   $(1,315,800)
                          ----------   ----------   -----------   ----------- 
                          ----------   ----------   -----------   ----------- 
</TABLE>
(Continued)

            See notes to condensed consolidated financial statements.
<PAGE>
                         U.S. ENERGY CORP. AND AFFILIATES
<TABLE>
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
                                   (Continued)

<CAPTION>
                            Three Months Ended           Nine Months Ended
                                 February                    February
                          ------------------------  --------------------------
                           29, 1996     28, 1995     29, 1996       28, 1995
                          ----------   -----------  -----------   ------------
<S>                       <C>          <C>          <C>           <C>    
NET INCOME (LOSS) PER SHARE
 Loss from Continuing
   Operations             $     (.17)  $     (.06)  $      (.28)  $      (.29)
 Income (Loss) from 
   Discontinued
   Operations                    .00         (.01)          .05           .02 
 Gain on Disposal
   of Subsidiary
   Operating in
   Discontinued
   Segment                       .36       --               .37        --     
                          ----------   ----------   -----------   ----------- 
NET INCOME (LOSS)
 PER SHARE                $      .19   $     (.07)  $       .14   $      (.27)
                          ----------   ----------   -----------   ----------- 
                          ----------   ----------   -----------   ----------- 
 
WEIGHTED AVERAGE
 NUMBER OF SHARES
 OUTSTANDING               6,364,089    5,012,216     6,142,925     4,877,776 
                          ----------   ----------   -----------   ----------- 
                          ----------   ----------   -----------   ----------- 
</TABLE>


















            See notes to condensed consolidated financial statements.
<PAGE>
                        U.S. ENERGY CORP. AND AFFILIATES
<TABLE>
                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)
<CAPTION>

                                                  Nine Months Ended
                                                        February
                                              ---------------------------
                                                29, 1996       28, 1996
                                              -----------     -----------
<S>                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income (Loss)                            $   839,200     $(1,315,800)
 Adjustments to reconcile
 net income to net cash used
 in operating activities:
   Minority interest in loss 
     of consolidated subsidiaries                (398,700)       (418,400)
   Depreciation, depletion
     and amortization                             623,900         577,300 
   Non-cash compensation                          297,400          69,500 
   Abandoned mineral leases                       328,700          --     
   Equity in loss of affiliates                   281,600         304,900 
   (Gain) on sale assets                          (68,300)     (1,288,900)
   (Gain) on sale of subsidiary                (2,345,700)          --    
   Net assets disposed of in connection
     with sale of subsidiary                   (1,939,000)         --     
   Loss (gain) on sale of investments              --              89,900 
   Cumulative effect of accounting changes         --             (83,800)
   Change in deferred income taxes                 83,700         (36,000)
 Net changes in components
  of working capital                              640,500         282,600 
                                              -----------     ----------- 
NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                         (1,656,700)      (1,818,700)

CASH FLOWS FROM INVESTING ACTIVITIES:
 Investments in affiliates                       (556,700)       (476,800)
 Investments in other                            (299,500)       (198,400)
 Purchase of property and equipment            (1,021,100)       (141,000)
 Proceeds from sale of assets                      77,700         969,100 
 Proceeds from sale of subsidiary               3,300,000          --     
 Development of mining properties                (349,200)       (341,400)
 Development of gas properties                    (23,400)       (147,700)
 Change in notes receivable                        55,800        (128,200)
 Proceeds from sale of investments                 --             199,300 
 Deposits and other                                --              (3,300)
                                              -----------     ----------- 
NET CASH USED IN INVESTING ACTIVITIES           1,183,600        (268,400)
                                              -----------     ----------- 
</TABLE>
(Continued)

           See notes to condensed consolidated financial statements.
<PAGE>
                        U.S. ENERGY CORP. AND AFFILIATES
<TABLE>
                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)
<CAPTION>
                                                  Nine Months Ended
                                                       February
                                              ---------------------------
                                                29, 1996       28, 1996
                                              -----------     -----------
<S>                                           <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
 Private placement of common stock              2,842,200         868,100 
 Cancellation of stock for services               (23,100)          --     
 Company stock purchased by
   consolidated affiliate                          --            (120,000)
 Additions to long-term debt                    1,348,500       1,740,800 
 Payment on long-term debt                     (2,966,700)       (802,800)
                                              -----------     ----------- 
NET CASH PROVIDED BY FINANCING ACTIVITIES       1,200,900       1,686,100 
                                              -----------     ----------- 
NET INCREASE (DECREASE) IN CASH 
 AND CASH EQUIVALENTS                             727,800        (401,000)

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                              551,300       1,181,700 
                                              -----------     ----------- 
CASH AND CASH EQUIVALENTS AT
 END OF PERIOD                                $ 1,279,100     $   780,700 
                                              -----------     ----------- 
                                              -----------     ----------- 
SUPPLEMENTAL DISCLOSURES:
 Income tax paid                              $    --         $   118,900 
                                              -----------     ----------- 
                                              -----------     ----------- 
 Interest paid                                $   221,200     $   175,000 
                                              -----------     ----------- 
                                              -----------     ----------- 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
 Acquisition of unowned portion of
   affiliate with Company stock               $    --         $    80,000 
                                              -----------     ----------- 
                                              -----------     ----------- 

NOTES RECEIVABLE OBTAINED IN
 CONNECTION WITH SALE OF SUBSIDIARY           $ 1,000,000     $    --     
                                              -----------     ----------- 
                                              -----------     ----------- 

</TABLE>



           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 Sheets as of February
29, 1996 and May 31, 1995, the Condensed Consolidated Statements of
Operations for the three and nine months ended February 29, 1996
and February 28, 1995, and the Condensed Consolidated Statements of
Cash Flows for the nine months ended February 29, 1996 and February
28, 1995, have been prepared by the Registrant without audit.  In
the opinion of the Registrant, the accompanying financial
statements contain all adjustments (consisting of only normal
recurring accruals and reclassifications for amounts associated
with the discontinued operations of The Brunton Company ("Brunton")
which was sold by the Registrant as of January 1996) necessary to
present fairly the financial position of Registrant as of February
29, 1996 and May 31, 1995, the results of operations for the three
and nine months ended February 29, 1996 and February 28, 1995 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, 1995 Form 10-K.   The
results of operations for the periods ended February 29, 1996 and
February 28, 1995 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: Energx Ltd. (90%), Crested (51.9%), USECC Gold
Limited Liability Company (100%), Plateau Resources Limited (100%)
and Four Nines Gold, Inc. (50.9%).  The Consolidated Financial
Statements reflect the operations of Brunton as discontinued
because Brunton was sold as of January 31, 1996.  The 1995
Consolidated Financial Statements have been reclassified for
amounts associated with the discontinued operations of Brunton. 
Brunton manufactures and sells outdoor recreation products.  All
material intercompany profits and balances have been eliminated.

     4)   Debt as of February 29, 1996 consists of various
equipment and other property loans totaling $351,900 and debt
attributable to consolidated affiliates of $718,300 on Four Nines
Gold.  Certain inter-affiliate loans were eliminated through
consolidation.
<PAGE>
                     U.S. ENERGY CORP. AND AFFILIATES

           Notes to Condensed Consolidated Financial Statements
                                (Continued)


     5)   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. 
In addition, Plateau has recorded additional obligations of
$10,546,301 for the estimated holding and maintenance costs needed
until the mill is placed in service or decommissioning begins.

     6)   During the nine months ended February 29, 1996, the
Registrant completed a private placement of 812,432 of restricted
common shares which resulted in net proceeds to the Company of 
$2,842,200.  The Registrant also cancelled 5,000 shares of its
common stock which had previously been issued for professional
services.  On January 5, 1996, the Registrant issued 32,901 shares
of common stock to certain of its employees for a Christmas bonus,
which represented $180,626 in compensation, one half of which was
paid by Crested. No officers or directors received such stock.  On
February 21, 1996 the Registrant issued 7,700 shares under the
Deferred Compensation Plan for a total compensation of $116,385.50
one half of which was paid by Crested.

     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.

     8)   The Registrant has reflected the operations of Brunton as
discontinued in each of the accompanying consolidated financial
statements presented because the Registrant sold its 100% interest
in Brunton to Silva A.B. of Sweden (Silva) during the third quarter
of 1996.  The purchase price paid by Silva was $4,300,000 and was
in the form of $3,300,000 of cash and a $1,000,000 Promissory Note. 
This note will be paid to the Registrant in three annual equal
installments of $333,333 beginning February 15, 1996 and will
accrue interest at 7%.  The sale of Brunton resulted in a gain of
approximately $2,295,700.

     Sales from Brunton's operations were $244,100 and $2,819,100
for the three and nine months ended February 29, 1996,
respectively, and $1,089,900 and $3,259,200 for the three and nine
months ended February 28, 1995, respectively.

     The effective income tax rate for discontinued operations
differs from the U.S. statutory tax rate primarily as a result of
the utilization of net operating loss carryforwards.

<PAGE>




                     Report of Independent Accountants


To the Members of the Management Committee of
Green Mountain Mining Venture
Riverton, Wyoming

We have audited the accompanying balance sheet of Green Mountain
Mining Venture (A Joint Venture in the Development Stage) as of
December 31, 1994 and 1993, and the related statements of
operations, changes in Venture partners' capital, and cash flows
for the years ended December 31, 1994, 1993 and 1992, and the
period from inception (June 1, 1990) to December 31, 1994.  These
financial statements are the responsibility of the Venture's
management.  Our responsibility is to express an opinion on these
financial statements 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 Green
Mountain Mining Venture as of December 31, 1994 and 1993, and the
results of its operations and its cash flows for the years ended
December 31, 1994, 1993 and 1992, and the period from inception
(June 1, 1990) to December 31, 1994, in conformity with generally
accepted accounting principles.




Salt Lake City, Utah
April 10, 1995
<PAGE>
                       GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                               BALANCE SHEET
                     as of December 31, 1994 and 1993
                               ------------


                                          1994           1993
                                       -----------    -----------
Assets:

 Property and equipment (Note 3):
   Mineral properties and mine
     development costs                 $21,887,857    $21,604,663
   Buildings                            24,815,009     24,815,009
                                       -----------    -----------

     Total assets                      $46,702,866    $46,419,672
                                       -----------    -----------

Liabilities and Partners' Capital:

 Due to USECC                          $    62,386    $   102,182

 Reclamation liabilities (Note 3)       23,619,000     23,619,000
                                       -----------    -----------

     Total liabilities                  23,682,386     23,722,182
                                       -----------    -----------
 Commitments (Note 3)

 Partners' capital:
   Kennecott Uranium Company            11,510,240     11,348,745
   USECC                                11,510,240     11,348,745
                                       -----------    -----------
                                        23,019,480     22,697,490
                                       -----------    -----------
     Total liabilities and 
      partners' capital                $46,702,866    $46,419,672
                                       -----------    -----------



The accompanying notes are an integral part of these financial
statements.
<PAGE>
                          GREEN MOUNTAIN MINING VENTURE
                    (A Joint Venture in the Development Stage)

                             STATEMENT OF OPERATIONS
              for the years ended December 31, 1994, 1993 and 1992,
                   and the period from inception (June 1, 1990)
                               to December 31, 1994
                                   ------------


                                                                 Period from
                                                                inception to
                                                                December 31,
                       1994           1993           1992           1994
                    ___________    ___________    ___________    ____________

Costs and expenses:
  Maintenance and 
    holding costs   $ 1,877,528    $ 1,982,005    $ 2,061,349    $ 5,921,782
  Marketing costs        85,676         83,977         69,445        247,598
                    ___________    ___________    ___________    ____________

    Net loss        $ 1,963,194    $ 2,065,982    $ 2,130,794    $ 6,169,380
                    ___________    ___________    ___________    ____________



The accompanying notes are an integral part of these financial statements.
<PAGE>
                                      GREEN MOUNTAIN MINING VENTURE
                               (A Joint Venture in the Development Stage)

                            STATEMENT OF CHANGES IN VENTURE PARTNERS' CAPITAL
                          for the years ended December 31, 1994, 1993 and 1992,
                              and the period from inception (June 1, 1990)
                                          to December 31, 1994
                                               __________
<TABLE>
<CAPTION>
                                                                                     Period from
                                                                                    inception to
                                                                                    December 31,
                                           1994           1993          1992            1994   
                                       ___________    ___________    ___________    ____________

<S>                                   <C>            <C>            <C>            <C>
Balance at beginning of period:
  Kennecott Uranium Company           $ 11,348,745   $ 11,049,433   $ 10,478,378   $     - 
  USECC                                 11,348,745     11,049,433     10,478,378         - 
    

Capital contributions (Note 1):
  Kennecott Uranium Company              1,143,097      1,332,303      1,636,452     14,594,930
  USECC                                  1,143,097      1,332,303      1,636,452     14,594,930 

Net loss:
  Kennecott Uranium Company               (981,602)    (1,032,991)    (1,065,397)    (3,084,690)
  USECC                                   (981,602)    (1,032,991)    (1,065,397)    (3,084,690)

Balance at end of period:
  Kennecott Uranium Company             11,510,240     11,348,745     11,049,433     11,510,240 
  USECC                                 11,510,240     11,348,745     11,049,433        11,510,240

</TABLE>


The accompanying notes are an integral part of these financial statements.
<PAGE>
                                       GREEN MOUNTAIN MINING VENTURE
                                (A Joint Venture in the Development Stage)

                                          STATEMENT OF CASH FLOWS
                          for the years ended December 31, 1994, 1993 and 1992, 
                               and the period from inception (June 1, 1990) 
                                           to December 31, 1994
                                               ____________
<TABLE>
<CAPTION>
                                                                                        Period from
                                                                                       inception to
                                                                                       December 31,
                                                1994           1993           1992         1994
                                             __________     __________     __________  ____________
<S>                                        <C>            <C>            <C>            <C>
Cash flows used in operating activities:
  Net loss                                 $(1,963,194)   $(2,065,982)   $(2,130,794)   $(6,169,380)
  Increase (decrease) in due to USECC          (34,782)        51,947         -              17,165 
                                           ___________    ___________    ___________    ___________ 

Net cash used in operating  activities      (1,997,986)    (2,014,035)    (2,130,794)    (6,152,215)
                                           ___________    ___________    ___________    ___________ 
Cash flows used in investing activities:
  Cost of buildings, mineral properties
    and mine development                      (283,194)      (666,975)      (698,298)    (7,355,866)
  Increase (decrease) in due to USECC           (5,014)        16,404       (443,812)        45,221 
                                           ___________    ___________    ___________    ___________ 

Net cash used in investing  activities        (288,198)      (650,571)    (1,142,110)    (7,310,645)
                                           ___________    ___________    ___________    ___________ 
Cash flows from financing activities:
  Capital contributions                      2,286,194      2,664,606      3,272,904     13,462,860 
                                           ___________    ___________    ___________    ___________ 

Net change in cash and cash equivalents    $    -         $    -         $    -         $    -      
                                           ___________    ___________    ___________    ___________ 
                                           ___________    ___________    ___________    ___________ 
Cash and cash equivalents:
  At beginning of period                   $    -         $    -         $    -         $    -      
  At end of period                              -              -              -              -      
                                           ___________    ___________    ___________    ___________ 
                                           ___________    ___________    ___________    ___________ 

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
                       GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                       NOTES TO FINANCIAL STATEMENTS
                                          

1.   Organization of the Joint Venture:

     Green Mountain Mining Venture ("GMMV" or the "Venture") is a
     joint venture with a 30 year life, formed by U.S. Energy Corp.
     ("USE"), Crested Corp. ("Crested") and Kennecott Uranium
     Company ("Kennecott"), the Venture partners, to develop mining
     claims and produce uranium from the Green Mountain properties
     located in south-central Wyoming.  Kennecott has a 50%
     interest in GMMV, and USE and Crested ("USECC") collectively
     have a 50% interest.  GMMV was formed June 1, 1990, with each
     partner contributing its portion of the Green Mountain
     properties.  Thereafter, the partners are required to
     contribute funds based upon their respective participating
     interests, subject to certain provisions as provided for in
     the joint venture agreement.

     Kennecott has agreed to contribute the first $50 million of
     operating and development expenses.  Through December 31,
     1994, Kennecott has contributed $13,462,808 to the Venture for
     operating and development expenses.  During this period, 50%
     of the capital contributions made by Kennecott are allocated
     to USECC.  The cash flows from the Venture will be allocated
     50% to Kennecott and 50% to USECC.  The allocation of the
     USECC portion of cash flows will be determined by the
     ownership interests of USE and Crested in the various GMMV
     properties.

     Effective October 29, 1992, Kennecott replaced USECC as
     manager of the Venture.  Kennecott contracts with USECC to
     perform work on behalf of the Venture.

     Through December 31, 1994, the activities of the Venture have
     consisted primarily of the development and maintenance of the
     Green Mountain properties.  Additional development is required
     prior to the commencement of commercial production.  Such
     commencement is not expected to occur until uranium prices
     increase significantly above current levels.  Therefore, the
     Venture is considered to be in the development stage as
     defined in Statement of Financial Accounting Standards No. 7.
<PAGE>
                       GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                 NOTES TO FINANCIAL STATEMENTS, Continued

2.    Summary of Significant Accounting Policies:

      Mineral properties contributed to the Venture were recorded
      at the partners' historical cost at the date of contribution. 
      Costs incurred in the acquisition of mineral properties are 
      deferred  until  the  properties  are  put  into  operation,
      sold or abandoned.  Mine development costs incurred either
      to expand the capacity of operating mines, develop new ore
      bodies or develop mine areas substantially in advance of
      production are capitalized and will be charged to operations
      on the units-of-production method over the estimated reserves
      to be recovered.  Mine development costs incurred to maintain
      production will be included in operating costs and expenses. 
      Maintenance and holding costs are expensed as incurred.

      The cost of mining equipment, less estimated salvage value
      will be depreciated on the units-of-production method over
      the estimated reserves to be recovered or on the straight-
      line method over the estimated life of the equipment,
      whichever is shorter.  The cost of buildings will be
      depreciated on the straight-line method.  Costs of repairs
      and maintenance are expensed as incurred.  Expenditures that
      substantially extend the useful lives of assets are
      capitalized.  When assets are retired or otherwise disposed
      all applicable costs and accumulated depreciation are removed
      from the accounts and any resulting gain or loss is
      recognized currently.

      No provision has been made for federal, state and local
      income taxes, credits, or benefits since tax liabilities are
      the responsibility of the individual partners.


3.    Buildings, Mineral Properties and Mine Development Costs:

      USECC conducts operations at the mine site on behalf of the
      Venture.  All accounts payable are due to USECC for costs
      incurred by USECC in the normal course of business on behalf
      of GMMV.  Through December 31, 1994 Kennecott had reimbursed
      USECC for substantially all development costs incurred.  

<PAGE>
                       GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                 NOTES TO FINANCIAL STATEMENTS, Continued

3.    Buildings, Mineral Properties and Mine Development Costs,
      Continued:

      Building, mineral property and mine development costs
      incurred by each of the Venture partners are as follows: 

                                                        Period from
                                                         inception
             Year Ended     Year Ended    Year Ended      through
            December 31,   December 31,   December 31,   December 31,
                1994           1993          1992          1994
            ___________    ___________    ___________    ___________

USECC       $   145,712    $   296,869    $   319,110    $ 4,698,908
Kennecott       137,482        370,106        379,188      2,656,958
            ___________    ___________     __________    ___________

  Total     $   283,194    $   666,975     $  698,298    $ 7,355,866


     In December 1990, GMMV acquired additional mineral properties
     in exchange for the assumption of reclamation liabilities
     associated with those properties of $7.3 million.  In 1992,
     GMMV acquired an established uranium processing mill (the
     Sweetwater Mill) in exchange for the assumption of reclamation
     liabilities associated with this property of $16.3 million. 
     Such amounts represent the estimated costs at the acquisition
     date to reclaim these properties.  Kennecott, on behalf of
     GMMV, is self-bonded in the amount of $24.3 million, which is
     payable to the Wyoming Department of Environmental Quality and
     the U.S. Nuclear Regulatory Commission in the event GMMV does
     not properly reclaim the above properties or violates the
     Wyoming Environmental Quality Act.  If production does not
     commence before the year 1900, the seller is liable for the
     first $8 million of the reclamation costs at the Sweetwater
     Mill.

     The Venture properties contain approximately 16 square miles,
     of which 8,860 acres are unpatented lode mining claims and
     1,280 acres are state leases subject to a royalty of 5% of the
     gross value of uranium bearing ore mined  and  removed  from 
     said  lands.   The  state  leases will expire August 1996 and
     May 1901.  All fees required to hold the unpatented mining
     claims have been paid to the state of Wyoming for the period
     ended December 31, 1994.
<PAGE>
                       GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                 NOTES TO FINANCIAL STATEMENTS, Continued

3.   Buildings, Mineral Properties and Mine Development Costs,
     Continued:

     At December 31, 1994 and 1993, costs capitalized as property
     and equipment are composed of the following:

                                   1994             1993
                                ___________      ___________

      Acquisition costs         $39,347,000      $39,347,000
      Development costs           7,355,866        7,072,672
                                ___________      ___________

                                $46,702,866      $46,419,672
                                ___________      ___________

     Acquisition costs include the partners' initial contribution
     of $15,727,000 of mineral properties and buildings recorded at
     the contributing partners' historical cost and $23,619,000 of
     mineral properties and buildings acquired in exchange for the
     assumption of reclamation liabilities noted above.

<PAGE>
                             PART II
             INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.  Other Expenses of Issuance and Distribution.

Legal                    $ 6,000*
Audit                      2,000*
SEC and
state fees                 2,000*
                         $10,000*

* Estimate

Item 14.  Indemnification of Directors and Officers.

The Wyoming Business Corporation Act ("WBCA"), W.S. 17-16-850  et
seq.,  provides for indemnification of the registrant's officers,
directors,  employees, and agents against liabilities which  they
may  incur  in such capacities.  A summarization of circumstances
in  which such indemnification may be available follows,  but  is
qualified  by reference to registrant's Articles of Incorporation
and the text of the statute.

In  general,  any officer, director, employee, or  agent  may  be
indemnified  against expenses, fines, settlements,  or  judgments
arising  in  connection  with a legal proceeding  to  which  such
person  is  a  party, as a result of such relationship,  if  that
person's actions were in good faith, were believed by him or  her
to  be  in  (or  at  least  not  opposed  to)  registrant's  best
interests, and in the case of any criminal proceeding, he or  she
had  no  reasonable  cause to believe  his  or  her  conduct  was
unlawful.   Unless such person is successful upon the  merits  in
such  an  action,  indemnification may be awarded  only  after  a
determination by decision of the board of directors (by directors
not  at  the  time  parties  to the proceeding)  or  by  majority
shareholder   vote  (excluding  shares  held  or  controlled   by
directors who are at the time parties to the proceeding),  or  by
opinion of special legal counsel.

The  circumstances under which indemnification would be  made  in
connection with an action brought on behalf of the registrant are
generally  the  same as stated above, except that indemnification
is permitted only for reasonable expenses.

In  addition,  registrant  has statutory  authority  to  purchase
insurance  to  protect  its officers, directors,  employees,  and
agents against any liabilities asserted against them, or incurred
in  connection  with their service in such capacities.   Further,
registrant may advance or reimburse funds to a director who is  a
party  to  a  proceeding,  for reasonable  expenses  incurred  in
connection with a proceeding.

Item 15.  Recent Sales of Unregistered Securities.

(a)(1)   In  August, 1993 Registrant sold a $300,000  convertible
promissory   note  to  The  Brunton  Company,  which   note   was
subsequently converted (on October 19, 1993) to 100,000 shares of
common stock of the Registrant at $3.00 per share.

    (2)  From November 28, 1995 to March 31, 1995 Registrant sold
400,000 restricted shares of its common stock, principally to its
officers and employees or members of their immediate families out
of a total 400,000 shares offered.

    (3)  From June 8, 1995 July 28, 1995, Registrant sold 812,432
restricted shares of its common stock to accredited investors  at
$4.00 per share, out of 1,750,000 shares offered.

   (4)  On September 15, 1994, Registrant delivered 20,000 shares
of  its  Common  Stock, that Registrant borrowed  from  Keith  G.
Larsen,  to Gladys L. May (13,334 shares), Kenneth E. May  (3,333
shares)  and  Vicki Juhl Guier (3,333) shares in exchange  for  a
total  of  9,000  common  shares  of  Ticaboo  Development,  Inc.
("TDI"), a Utah Corporation, pursuant to an Agreement and Plan of
Reorganization  dated September 2, 1994 (the  "Agreement")  among
Registrant,  TDI and TDI's three shareholders named  above.   The
20,000 shares of Registrant's Common Stock was acquired by  Keith
G.  Larsen (who is not an affiliate of Registrant) in open market
transactions  and was used by Registrant to acquire  all  of  the
outstanding shares of TDI pursuant to the terms of the Agreement.
In  December 21, 1994 Registrant issued to Keith G. Larsen 20,000
restricted shares of its Common Stock to replace the 20,000  free
trading  shares  borrowed  from him to complete  the  transaction
described above.

    (5)   In March 1996 Registrant issued the Warrant to Shamrock
Partners,  Ltd.  as  compensation for  services  as  a  financial
consultant and advisor under an agreement dated January 9, 1996.

    (6)  In January 1996 Registrant issued an aggregate of 32,901
shares  of its common stock to 30 employees as a Christmas  bonus
for services performed during the 1995 calendar year.

(b)(1), (2), (4), (5) and (6).  No underwriters were involved  in
transactions  (a)(1),  (2),  (4), (5)  and  (6).   RAF  Financial
Corporation was placement agent for the (a)(3) private  offering,
receiving  a  10  percent  sales  commission  and  a  3   percent
nonaccountable expense allowance on shares sold, and warrants  to
purchase 10 percent of total shares sold.

(c)(1)  See above.

   (2)  Shares were offered at $3.00.

   (3)  Shares were offered at $4.00.

   (4)  See (a)(4) above.

   (5)  See (a)(5) above.

   (6)  See (a)(6) above.

    (d)(1), (4), (5) and (6). The securities referenced in (a)(1),
(4), (5) and (6) were offered and sold in reliance on the section
4(2) exemption from section 5 registration.

    (d)(2)  and  (3).  The common stock issued and  sold  in  the
private placements were offered and have been sold in reliance on
the  section  4(2) exemption from registration, and Rule  506  of
Regulation D thereunder.  Total nonaccredited purchasers  in  the
two  private  placements were 34; the balance of  investors  were
accredited  persons.   Further,  Registrant  believes   the   two
placements  were different offerings, not subject to  integration
under Commission criteria.

Item 16.  Exhibits and Financial Statement Schedules.

(a)   The  following financial statements are filed as a part  of
this registration statement:

(1)   Consolidated Financial Statements (audited only for  fiscal
periods ending May 31)

   Registrant and Affiliates                             Page No.

   Report of Independent Public Accountants               101-102
   Consolidated Balance Sheets
     May 31, 1995 and 1994-                               103-105
     February 29, 1996                                    152-153

   Consolidated Statements of Operations
     for the Years Ended May 31, 1995 and 1994,           106-107
     Nine Months Ended February 29, 1996
     and February 28, 1995                                154-156

   Consolidated Statements of Shareholders'
     Equity for the Years Ended
     May 31, 1995, 1994 and 1993                          108-110

   Consolidated Statements of Cash Flows for
     the Years Ended May 31, 1995, 1994 and 1993          111-114
     Nine Months Ended February 29, 1996
     and February 28, 1995                                157-158

   Notes to Consolidated Financial Statements
     for the Years Ended May 31, 1995, 1994 and 1993      115-151
     Nine Months Ended February 29, 1996                  159-160

(2)  Financial Statement Schedules

   (i) Registrant and Affiliates - Not applicable

   (ii)  Financials and Schedules of Affiliates

        (a)  Green Mountain Mining Venture

             Report of Independent Public Accountants         161

             Balance Sheet - December 31, 1994 and 1993       162

             Statement of Operations for the Period
              from June 1, 1990 (Date of Inception)
              through December 31, 1994                       163

             Statement of Changes in Partners'
              Capital for the Period from
              June 1, 1990 (Date of Inception)
              through December 31, 1994                       164

             Statement of Cash Flows for
              the Period from June 1, 1990
             (Date of Inception) through December 31, 1994    165

             Notes to Financial Statements                166-169

        (b)  Sheep Mountain Partners

         USE's partner in SMP, Nukem/CRIC, has refused to provide
         certain  information concerning SMP to SMP's independent
         public  accountants.  The information requested concerns
         partnership  costs  for uranium  purchases.   USECC  and
         Nukem/CRIC disagree as to whether uranium costs  of  the
         partnership  means: (i) the price which Nukem/CRIC  pays
         for  purchases  of uranium for SMP; or  (ii)  the  price
         which CRIC charges SMP for uranium.
         
         As  a  result,  the independent public accountants  have
         informed  USE  that  they have been unable  to  complete
         their audit of SMP, and are unable to render a report on
         SMP's  financial statements.  USE and SMP's  independent
         public   accountants  are  seeking  to   resolve   these
         uncertainties so that SMP's financial statements may  be
         finalized  and  filed.  When and if  these  matters  are
         resolved, the following SMP financial statements will be
         filed under cover of an amendment.
<PAGE>
             Balance Sheets - May 31, 1995 and 1994

             Statements of Operations - Years Ended
             May 31, 1995, 1994 and 1993

             Statements of Changes in Partners' Capital
              Years Ended May 31, 1995, 1994 and 1993

             Statements of Cash Flows - Years Ended
              May 31, 1995, 1994 and 1993

             Notes to the Financial Statements

             Schedules to SMP's Financial Statements

*To be filed by amendment to registration statement.

    All other schedules have been omitted because the information
is  not applicable or because the information is included in  the
financial statements.

(b)  Exhibits.

Exhibit No.                                            Reference

3.1    USE Restated Articles of Incorporation             [4]

3.1(a) USE Articles of Amendment to
       Restated Articles of Incorporation                 [2]

3.2    USE Bylaws, as amended through April 22, 1992      [2]

4.1    Warrant to Purchase 200,000 Common Shares of USE   180

4.2    USE 1989 Incentive Stock Option Plan,
       as amended through 1/94                            187

4.3    USE Restricted Stock Bonus Plan,
       as amended through 2/94                            199

5.1    Opinion of Stephen E. Rounds, Esq.                   *

10.1   USECC Joint Venture Agreement - Amended            [5]

10.2   Management Agreement with USECC                    [3]

10.4   Contract for Sale of Stock of Brunton
       to Silva A.B.                                     [13]

10.5   Assignment and Lease - Parador                     [3]
<PAGE>
10.6   Employment Agreement - Daniel P. Svilar            [4]

10.7   Airport Ground Lease - City of Riverton            [3]

10.8   Executive Officer Death Benefit Plan               [4]

10.9   Big Eagle Acquisition Agreement with PMC           [6]

10.11  Sweetwater Mill Acquisition Agreement              [3]

10.12  Ft. Peck Agreement - Drilling
       and Production Services                            [3]

10.13  USE/Seine River Letter Agreement - SGV             [8]

10.14  Agreement to Sell SGV Interest to Crested          [3]

10.18  Master Agreement - Mt. Emmons/AMAX                 [9]

10.20  Promissory Notes - ESOP/USE                       [10]

10.21  Self Bond Agreement - Crooks Gap Properties        [5]

10.22  Security Agreement - ESOP Loans                   [11]

10.27  Mineral Properties Agreement
       Congo Area - PMC                                   [4]

10.28  Memorandum of Joint Venture Agreement - GMMV       [4]

10.29  Memorandum of Partnership Agreement  - SMP         [5]

10.32  Employee Stock Ownership Plan                      [5]

10.33  1989 Stock Option Plan                             [5]

10.34  Form of Stock Option and Schedule - 1989 Plan      [4]

10.35  Severance Agreement (Form)                         [2]

10.36  1992 Stock Compensation Plan
       Non-Employee Directors                             [2]

10.37  Executive Compensation (John L. Larsen)            [2]

10.38  Executive Compensation
       (Non-qualified Options)                            [2]

10.39  ESOP and Option Plan Amendments (1992)             [2]

10.40  Plateau Acquisition -
       Stock Purchase Agreement and Related Exhibits      [7]
<PAGE>
10.41  Option and Sales Agreements
       Gunnison Property Parcel A                         [1]

10.42  Option and Sales Agreements
       Gunnison Property Parcel B                         [1]

10.43  Option Agreement - USE and Arrowstar
       Aircraft Hanger                                    [1]

10.44  Amendment to Contract with Arrowstar or Hangar     200

10.45  Contract for Sale of Wind River Estates           [12]

10.46  Contract for sale of Jeffrey City Six-Plex        [12]

10.47  Development Agreement with First N-Last            206

10.48  Operating Agreement with First-N-Last              214

22.1   Subsidiaries of Registrant                         [2]

23.1   Consent of Arthur Andersen, LLP                    236

23.2   Consent of Coopers & Lybrand                         *

23.3   Consent of Stephen E. Rounds, Esq.                    *

*      To be filed by Amendment

[1]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1995.

[2]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1992.

[3]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1991.

[4]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1990.

[5]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1989.

[6]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's  Form  10-Q  for  the  period  ended
       February 28, 1991.
<PAGE>
[7]    Incorporated   by  reference  from  exhibit   A   to   the
       Registrant's  Form 8-K reporting an event  of  August  11,
       1993.

[8]    Incorporated  by  reference  from  exhibit  28.1  to   the
       Registrant's  Form 8-K reporting an event of  October  12,
       1990.

[9]    Incorporated  by reference from the like-numbered  exhibit
       to  a  Schedule  13D filed by AMAX on or about  August  3,
       1987.

[10]   Incorporated by reference from exhibit 2 to Amendment  No.
       6  of a Schedule 13D filed by John L. Larsen, reporting an
       event of May 28, 1991.

[11]   Incorporated  by reference from exhibit 3 to Amendment  No
       4. of a Schedule 13D filed by John L. Larsen, reporting an
       event of January 2, 1990.

[12]   Incorporated   by  reference  from  an  exhibit   to   the
       Registrant's Post-Effective Amendment No. 1 to  Form  S-3,
       SEC File No. 333-1967.

[13]   Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's  Form 8-K,  reporting  an  event  of
       February 26, 1996.

Item 17.  Undertakings.

The registrant hereby undertakes:

(a)(1)   To file, during any period in which offers or sales  are
being  made,  a  post-effective amendment  to  this  registration
statement:

      (i)  To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;

      (ii)   To  reflect in the prospectus any  facts  or  events
arising  after the effective date of the registrations  statement
(or  the  most  recent post-effective amendment  thereof)  which,
individually or in the aggregate, represent a fundamental  change
in the information set forth in the registration statement;

      (iii)  To include any material information with respect  to
the   plan  of  distribution  not  previously  disclosed  in  the
registration statement or any material change to such information
in the registration statement.

(a)(2)  That, for the purpose of determining any liability  under
the  Securities  Act of 1933, each such post-effective  amendment
shall  be  deemed to be a new registration statement relating  to
the   securities  offered  therein,  and  the  offering  of  such
securities  at that time shall be deemed to be the  initial  bona
fide offering thereof.

(a)(3)   To remove from registration by means of a post-effective
amendment  any  of the securities being registered  which  remain
unsold at the termination of this offering.

(h)  Insofar as indemnification for liabilities arising under the
Securities  Act  of  1933,  as  amended,  may  be  permitted   to
directors,  officers, and controlling persons of the  registrant,
the  registrant  has  been advised that in  the  opinion  of  the
Securities  and  Exchange  Commission  such  indemnification   is
against public policy as expressed in the Act, and is, therefore,
unenforceable.   In  the event that a claim  for  indemnification
against  such  liabilities  (other  than  the  payment   by   the
registrant  of expenses incurred or paid by a director,  officer,
or controlling person of the registrant in the successful defense
of  any  action suit or proceeding) is asserted by such  officer,
director, or controlling person in connection with the securities
being  registered, the registrant will, unless in the opinion  of
its counsel the matter has been settled by controlling precedent,
submit  to  a  court of appropriate jurisdiction the question  of
whether  such indemnification by it is against public  policy  as
expressed  in  the  Act  and  will  be  governed  by  the   final
adjudication of such issue.

<PAGE>
                           SIGNATURES

Pursuant  to the requirements of the Securities Act of 1933,  the
Registrant has duly caused this Registration Statement on Form S-
1  to  be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Riverton, Wyoming, on June 14, 1996.

                                   U.S. ENERGY CORP.
                                   (Registrant)


Date:  June 14, 1996           By:   s/ John L. Larsen
                                   ------------------------------
                                   JOHN L. LARSEN, President
                                   and Chief Executive Officer

In  accordance  with the requirements of the  Securities  Act  of
1933,  this  Registration Statement was signed by  the  following
persons in the capacities and on the dates stated.


Date:  June 14, 1996           By:   s/ John L. Larsen
                                   ------------------------------
                                   JOHN L. LARSEN, President
                                   and Director

Date:  June 12, 1996           By:   s/ Max T. Evans
                                   ------------------------------
                                   MAX T. EVANS, Director

Date:  June 14, 1996           By:   s/ Harold F. Herron
                                   ------------------------------
                                   HAROLD F. HERRON, Director

Date:  June 14, 1996           By:   s/ Nick Bebout
                                   ------------------------------
                                   NICK BEBOUT, Director

Date:  June ____, 1996         By:
                                   ------------------------------
                                   DON C. ANDERSON, Director

Date:  June ____, 1996         By:
                                   -------------------------------
                                   DAVID W. BRENMAN, Director


Date:  June 14, 1996           By:   s/ Robert Scott Lorimer
                                   ------------------------------
                                   ROBERT SCOTT LORIMER,
                                   Principal Financial Officer
                                   and Chief Accounting Officer
[{"type": "S-1", "sequence": "1", "description": "FORM S-1 REGISTRATION STATEMENT", "secsgml_size_bytes": 483979}]
{"company-data": {"conformed-name": "US ENERGY CORP", "cik": "0000101594", "assigned-sic": "3829", "irs-number": "830205516", "state-of-incorporation": "WY", "fiscal-year-end": "0531"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-06189", "film-number": "96582413"}, "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"}}
SEC File No.  333-
                                  
                 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 82501
                          Tel. 307/856-9271
        -----------------------------------------------------
 (Address and telephone of registrant's principal executive offices)
                                  
                          Daniel P. Svilar
             877 North 8th West, Riverton, Wyoming 82501
                          Tel. 307/856-9271
        -----------------------------------------------------
    (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.

The Registrant hereby amends this Registration Statement on such date
or  dates  as may be necessary to delay its effective date until  the
Registrant  the  file  a further amendment which specifically  states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, or  until
the Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may determine.

If  any  of  the securities being registered on this Form are  to  be
offered  on a delayed or continuous basis pursuant to Rule 415  under
the Securities Act of 1993 check the following box.    X
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 unit     price           fee

Warrant(1)        Up to 11(2)         N/A        N/A            (5)

Common Stock
  $0.01 par     252,901 shares(3)  $20.50   $5,184,470(4)   $1,788.00

(1)   The  Warrant entitles the holder to purchase 200,000 shares  of
Registrant's common stock $0.01 par value, for $5.00 per share at any
time prior to 12:00 o'clock midnight January 9, 1997.
(2)   One Warrant is currently outstanding, but that Warrant  may  be
divided  into or combined with up to ten other warrants  which  carry
the  same  (proportional) rights upon presentation.  The  Warrant  is
being  registered  under  the  Securities  Act  of  1933  solely   to
accommodate  the registration of the Warrant Shares for sale  to  the
public.
(3)  200,000 shares of common stock (the "Warrant Shares") are to  be
issued  by  Registrant  upon  exercise of  the  Warrants  by  current
nonaffiliated shareholders of the Registrant; 52,901 shares of common
stock  are  held  by 30 employees of Registrant, none  of  which  are
directors or officers of Registrant (see the "Selling Shareholders");
all of the shares are being registered for sale to the public.
(4)   Pursuant to Rule 457(c), the registration fee is based  on  the
average  high and low prices of Registrant's common stock (traded  on
NASDAQ/NMS) as of June 11, 1996.
(5)  Pursuant to Rule 457(g) no separate registration fee is required
with respect to the Warrants.
Cross Reference Sheet
                         under Rule 501(1)e
               Information Required in the Prospectus

Item 1. Forepart of Registration        Facing page, outside front
Statement and Outside Front Cover       cover of Prospectus

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

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

Item 4. Use of Proceeds                 Not applicable

Item 5. Determination of                Not applicable
Offering Price

Item 6. Dilution                        Not applicable

Item 7. Selling Security Holders        Holders of the Warrants;
                                        Selling Shareholders

Item 8. Plan of Distribution            Plan of Distribution

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

Item 10. Interests of Named             Not applicable
Experts and Counsel

Item 11. Information With Respect       Business and Properties
to the Registrant

Item 12. Disclosure of Commission       Not applicable
Position on Indemnification for
Securities Act Liabilities
Preliminary Prospectus                  Subject to Completion
                                        June ____, 1996

                        U.S. ENERGY CORP.
                                
                      252,901 COMMON SHARES
       --------------------------------------------------
                                
The securities offered by this Prospectus are 252,901 shares (the
"Common  Shares")  of  common stock, par value  $0.01  per  share
("Common  Stock"),  of U.S. Energy Corp., a  Wyoming  corporation
("Registrant",  "Company" or "USE"). Of the total Common  Shares,
200,000  shares (the "Warrant Shares") are to be issued upon  the
exercise  of  that  certain Warrant To  Purchase  200,000  Common
Shares  of  U.S. Energy Corp. dated as of January  9,  1996  (the
"Warrant")  granted  to  Shamrock  Partners  Ltd.,  111  Veterans
Square,  Media,  Pennsylvania  ("Holder"),  as  compensation  for
services  to  the Company as a financial consultant and  advisor.
The  Warrant entitles the Holder to purchase at any time or  from
time  to  time  until 12:00 O'clock Midnight, Mountain  Time,  on
January 9, 1997 (the "Expiration Date"), 200,000 shares of Common
Stock of Registrant a  price of $5.00 per share.  The Warrant may
be  divided or combined with up to ten (10) other warrants  which
carry the same (proportional) rights ("Warrants"), but the Holder
of  the  Warrant  and  the  holders of any  such  other  Warrants
(collectively  the "Holders of the Warrants")  may  not  sell  or
otherwise  transfer the Warrant or Warrants for  a  period  which
exceeds  the  Expiration Date of the Warrant.   Accordingly,  the
Warrant   is   being   registered  solely  to   accommodate   the
registration  of  the  Warrant Shares  for  sale  to  the  public
following  their  issuance  upon  exercise  of  the  Warrant   or
Warrants.   The  remaining 52,901 Common Shares offered  by  this
Prospectus for sale to the public are held by 30 employees of the
Company,  none of whom are directors or officers of  the  Company
(the "Selling Shareholders").

                These are Speculative Securities.
         Such Securities Involve a High Degree of Risk.
            See "Risk Factors" starting on page 6.
                                
  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION,OR ANY STATE SECURITIES COMMISSION.
   NOR HAS THE 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  Warrant  Shares will be offered from time  to  time  by  the
Holders of the Warrants following issuance upon exercise  of  the
Warrants.  The remaining 52,901 Common Shares held by the Selling
Shareholders  will be offered from time to time  by  the  Selling
Shareholders.  It is expected that all of the Common Shares  will
be  offered  at  market  prices from time to  time.  Registrant's
Common Stock is traded on the NASDAQ/NMS quotation system.  As of
June  11,  1996,  the  closing bid price for Registrant's  Common
Stock  was  $20.625 per share.  See "Market for USE Common  Stock
and  Related  Stockholder Matters."  There  are  no  underwriting
arrangements  known  to  Registrant.  Any  selling  discounts  or
commissions  will  be paid by the sellers of the  Common  Shares.
See "Plan of Distribution".  The Company will pay the cost of the
registration estimated at $10,000 for registering the Warrant and
Common Shares.

Except  for  the $5.00 per share exercise price for  the  Warrant
Shares,  the Company will not receive any proceeds from the  sale
of the Common Shares.

       --------------------------------------------------
         The date of this Prospectus is June ____, 1996.
       --------------------------------------------------

Information   contained  herein  is  subject  to  completion   or
amendment.  A registration statement relating to these securities
has  been  filed  with  the Securities and  Exchange  Commission.
These  securities  may  not be sold nor  may  offers  to  buy  be
accepted  prior  to  the time the registration statement  becomes
effective.  This prospectus shall not constitute an offer to sell
or  the  solicitation of an offer to buy nor shall there  be  any
sale  of  these  securities in any State  in  which  such  offer,
solicitation  or sale would be unlawful prior to registration  or
qualification under the securities laws of any such State.

The Common Shares have been registered for sale to public, by the
filing of the Registration Statement (of which this Prospectus is
a   part)   with   the   Securities   and   Exchange   Commission
("Commission")  under  the Securities Act  of  1933,  as  amended
("1933  Act").  No one is authorized to give any information,  or
make  any  representation on behalf of the Company,  the  Warrant
Holders  or  the  Selling Shareholders 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.
Neither  delivery of this Prospectus nor sale of  the  securities
offered  hereby, shall create an implication that there has  been
no  change in the information set forth herein since date of this
Prospectus.   The Prospectus will be supplemented to reflect  any
material changes in the Company or its business in the course  of
the offering.

                      AVAILABLE INFORMATION

Registrant  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 and its exhibits,  covering  the
Common Shares offered hereby, certain portions of which have been
omitted  pursuant  to  Commission rules  and  regulations.   Each
statement made in this Prospectus concerning a document filed  as
an  exhibit  to the Registration Statement, is qualified  in  its
entirety by reference to such exhibit for a complete statement of
its   provisions.    Any  interested  party   may   inspect   the
Registration  Statement  (and  any amendments  thereto)  and  its
exhibits,  without charge, at the public reference facilities  of
the Commission at its offices as stated above.

                     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

Registrant  is  in  the general minerals business  of  acquiring,
exploring,  developing  and/or  selling  or  leasing  of  mineral
properties  and,  from  time to time,  mining  and  marketing  of
minerals.   The  Company is now engaged in two principal  mineral
sectors: uranium and gold. Its minerals business with respect  to
uranium and gold can be characterized as in the development stage
according  to the Commission's definition of that term. Interests
are  held  in  other mineral properties (principally molybdenum),
but  are  either  non-operating interests or undeveloped  claims.
The Company also carries on a small oil and gas operation.  Other
USE  business segments are commercial operations (real estate and
general aviation) and construction operations.

Most  USE  operations are conducted through a joint venture  with
Crested    Corp.,    a   majority-owned   Colorado    corporation
("Crested"),and  various joint subsidiaries of USE  and  Crested.
The  joint  venture  with  Crested is hereafter  referred  to  as
"USECC."

Manufacturing  and/or marketing of professional and  recreational
outdoor  products  was  conducted  through  The  Brunton  Company
("Brunton"), a wholly-owned USE subsidiary.  On February 16, 1996
Registrant  sold all of the shares of Brunton to Silva Production
AB  for  $4,300,000  plus  45% of the net  profits  before  taxes
derived  from  the sale of Brunton products for  four  years  and
three months.

The  sale will eliminate Brunton's manufacturing and/or marketing
of  professional  and  recreational  outdoor  products  from  the
commercial  segment of Registrant's business as  of  January  31,
1996,  except  to  the extent that there are net profit  payments
from  Silva over the next four years, of which there  can  be  no
assurance.   For the fiscal year ended May 31, 1995 and  for  the
nine months ended February 29, 1996, Brunton's sales provided 49%
and   26%,   respectively,  of  net  revenues   of   USE   before
reclassification  to  reflect Brunton as discontinued  operations
with  respect  to  the Company (see "Business  and  Properties  -
Brunton" for details of this transaction, and Risk Factor  2  for
additional information on the impact of this transaction).

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

                          The Offering

Securities Offered (1)                       252,901  shares
                                             of Common Stock(2)
USE Common Stock Outstanding
  Before and After Offering                  6,666,309 shares(3)

NASDAQ/NMS Symbol                            "USEG"
________________

(1)    See  "Description  of  Securities."   (2)  See  "Plan   of
Distribution."   (3)   Assumes issuance of  all  200,000  Warrant
Shares  upon  exercise  of the Warrants by  the  Holders  of  the
Warrants.
Risk Factors

An  investment  in the Common Shares involves substantial  risks,
including the risks of USE's failure to obtain necessary  capital
to  put  its  principal  mineral properties  into  production,  a
recurrence  of  low uranium prices, litigation  and  competition.
See "RISK FACTORS" beginning on the next page.

                 Issuance of the Warrant Shares

The  Warrant Shares, consisting of 200,000 shares of Registrant's
Common Stock, will be issued by Registrant from time to time upon
exercise  of the Warrant or those Warrants that result  from  the
division  and/or recombination of the Warrant currently  held  by
Shamrock   Partners  Ltd.   See  "Description  of  Securities   -
Warrants"  for information concerning the terms of the  Warrants.
Only  one  Warrant is outstanding on the date of this Prospectus,
but the Holder has requested that the Warrant be divided into six
Warrants  covering an aggregate of 200,000 Warrant Shares  to  be
registered in the following manner:

Rafi Khan                               145,000   Warrant Shares
Shamrock Partners, Ltd.                  10,000   Warrant Shares
Shamrock Partners International, Inc.    20,000   Warrant Shares
The Leasing Group, Inc.                   8,400   Warrant Shares
Diana L. Manes                            4,300   Warrant Shares
Andrew Z. Furtak                         12,300   Warrant Shares

When the Warrant has been so divided, the Holders of the Warrants
may  not  sell  or otherwise transfer the Warrants for  a  period
which exceeds the Expiration Date of the Warrants.

                 Issuance of Other Common Shares

The  remaining 52,901 Common Shares are held by employees of  the
Company,  none of whom are directors or officers of  the  Company
(see  "Selling Shareholders".  Of these 32,901 shares were issued
as  bonus  compensation  to  Company  employees  pursuant  to   a
resolution of the Company's Board of Directors at a meeting  held
on  December  22, 1995 and 20,000 Common Shares  were  issued  to
Keith  G. Larsen pursuant to letter agreement dated December  21,
1994  as  replacement for 20,000 shares of the  Company's  Common
Stock  purchased  by him on the open market  and  loaned  to  the
Company  to  complete the acquisition by the Company  of  Ticaboo
Development,  Inc.,  a Utah corporation ("TDI")  pursuant  to  an
Agreement  and  Plan of Reorganization dated  September  2,  1994
among  the  Company, TDI and Gladys L. May, Kenneth  E.  May  and
Vicki Juhl Guier.
RISK FACTORS

Prospective investors should note that the Company's business  is
subject to certain risks, including the following:

1.  Working Capital Requirements.  Registrant's cash requirements
for   fiscal  1997  are  the  funding  of  on-going  general  and
administrative  expenses, including legal  costs  incurred  as  a
result     of    the    Sheep    Mountain    Partners     ("SMP")
arbitration/litigation proceedings described below; mine and mill
development  and  holding  costs  of  the  Sutter  gold  property
described  below;  holding (standby) costs for the  uranium  mill
owned  by  Plateau  Resources Limited, a 100% subsidiary  of  the
Company  ("Plateau"), in southeastern Utah;  SMP mines  care  and
maintenance costs; and costs to acquire uranium oxide  which  the
Company may be obligated to deliver under the SMP contracts.   As
a  result of the disputes between the SMP partners (see "Business
and  Properties  -  Legal Proceedings - Sheep  Mountain  Partners
Arbitration/Litigation),  Registrant  and   Crested   have   been
delivering  certain  of the U3O8 concentrates  required  to  fill
various  delivery requirements on long-term U3O8  contracts  with
domestic utilities.  Recently, Nukem, Inc. ("Nukem") and its 100%
subsidiary  Cycle Resource Investment Corporation  ("CRIC")  have
made  most  of the SMP deliveries of U3O8.  It is not  known  how
long this arrangement will continue.  The capital requirements to
fill   Registrant's  and  Crested's  portion  of  the   remaining
commitments in fiscal 1997 will depend on the timing of  payments
to the Registrant and Crested by Nukem/CRIC under the arbitration
award,  whether  SMP  will  be  wound  up  and  dissolved  as   a
partnership    and   its   assets   distributed    to    partners
Registrant/Crested  and Nukem/CRIC, and  whether  a  receiver  is
appointed   by  the  court  to  oversee  SMP  contract   delivery
obligations pending dissolution of SMP.

The  primary source of Registrant's capital resources for the  of
first  half  fiscal 1997, will be (i) cash on hand  February  29,
1996;  (ii) Registrant's share of cash received from the sale  of
the  Wind  River Estates Mobile Home Park by USECC (see  "Certain
Relationships  and  Related  Transactions  -  Transactions   with
Arrowstar  Investments, Inc."); (iii) possible sale of equity  or
interests in investment properties or other affiliated companies;
(iv)  sale of equipment; (v) proceeds from the resolution of  the
SMP  arbitration/litigation; (vi) sale of royalties or  interests
in  mineral  properties; (vii) proceeds from the sale of  uranium
under  the  SMP  contracts, and (viii) borrowings from  financial
institutions.   Construction revenues from  the  Company's  50.9%
subsidiary,  Four  Nines  Gold,  Inc.  ("FNG"),  fees  from   oil
production, rentals of various real estate holdings and equipment
and the sale of aviation fuel are also expected to provide cash.

Registrant's  working capital increased during  the  nine  months
ended  February  29,  1996 by $1,115,000 to  working  capital  of
$1,137,000 principally due to the sale of the 812,432  shares  of
the  Company's common stock in June and July 1995,  resulting  in
net  proceeds  to  Registrant of $2,842,200.  Registrant's  other
investing  activities provided $1,183,600 during the nine  months
ended  February 29, 1996.  This increase in cash was a result  of
proceeds  from  the  sale  of assets, $77,700  and  the  sale  of
Brunton,  $3,300,000.   These increases in  cash  were  partially
offset by investments in affiliates due to Registrant funding the
activities  of  Plateau and Registrant and Crested funding  their
interest in SMP, as well as funding their 90% subsidiary, Energx,
Ltd.  ("Energx") in the oil and gas business, Plateau and  Sutter
Gold  Mining Company ("SGMC").  Additionally, the Registrant  and
its  affiliates (1) purchased $1,021,100 of additional  equipment
(2)  developed mineral properties, $349,200 and (3) developed gas
properties  $23,400  during the nine months  ended  February  29,
1996.

Monthly operating expense to hold properties and fund general and
administrative expense is estimated at $300,000 to  $350,000  for
the   first  half  of  fiscal  1997.   Revenues  from  commercial
operations   are  expected  to  provide  approximately   $110,000
monthly.  Operating expense estimates reflect elimination of most
legal  expenses  associated  with the SMP  arbitration/litigation
proceedings,  because  an  Order and Award  was  entered  by  the
arbitration panel on April 18, 1996 (see "Business and Properties
- -  Legal  Proceedings  -  Sheep  Mountain  Partners  Arbitration/
Litigation").

Working capital in addition to funds on hand at February 29, 1996
and    funds    provided   from   the   award    in    the    SMP
arbitration/litigation  and the sale of the  Wind  River  Estates
Mobile  Home  Park  will be required to fund the  mine  and  mill
permitting  and  the construction of a gold processing  mill  and
mine  development of SGMC.  Registrant and Crested are  currently
seeking  means  of financing the construction of  the  SGMC  gold
processing  mill  and  mine development,  but  there  can  be  no
assurance that such financing can be arranged.

See  "Management's Discussion and Analysis of Financial Condition
and  Results of Operations" for additional information on working
capital requirements and capital resources.  See also Risk Factor
2 below.

2.   Loss  of  Future Operating Income Due to Brunton  Sale.   In
fiscal  1995, 49% of Registrant's net revenues were  provided  by
Brunton's  professional  and outdoor recreational  product  sales
(26%   in  the  nine  months  ended  February  29,  1996   before
reclassification  to  reflect Brunton as discontinued  operations
with respect to the Company).  Brunton was sold in February 1996.
The  inability to include Brunton's operations with  Registrant's
other  operating revenues in the future could result in continued
operating  losses for Registrant, unless Registrant  is  able  to
develop other profitable businesses, such as Registrant's uranium
business or the construction business of FNG, to replace  profits
from  Brunton.   Continued  operating losses  without  offsetting
replacements  of  working  capital  will  adversely  affect   the
Company's ability to continue its operations as described in this
Prospectus.   See  also  Risk Factor 1  above  and  "Management's
Discussion  and  Analysis of Financial Condition and  Results  of
Operations."

3.    Sutter  Gold  -  No  Current  Mining  Operations  or   Gold
Production.   As of May 31, 1995, USE and Crested  have  invested
more  than  $11,000,000  in capitalized  costs  (in  addition  to
approximately  $3,000,000 in costs that have  been  expensed)  to
acquire,  permit and develop a gold property in California,  held
through   a   subsidiary,  Sutter  Gold  Mining  Company.    This
investment represents a significant portion of USE's consolidated
assets.  There is no assurance current efforts will be successful
in  financing  the  mill construction and mine development  costs
needed  to put the property into full production.  If third-party
financing  cannot  be  obtained  and  USE  is  unable   to   fund
development and production costs from internally generated  funds
over the next two years the property may be sold at a loss.   See
"Business and Properties - Gold - Lincoln Project (California)".

4.   Additional Shares to Market; Possible Dilution.  In addition
to  the  Common Shares registered for sale by the Holders of  the
Warrants  and  the  Selling Shareholders, as  described  in  this
Prospectus,  Registrant registered 457,780 shares of  its  Common
Stock under the 1933 Act for sale by certain shareholders on Form
S-3  (SEC File No. 333-1967), which was declared effective by the
Commission on April 4, 1996.

Registrant  also  sold 812,432 shares of its  common  stock  (the
"Placement  Shares") to private investors in June and July  1995.
As  compensation for their services as Placement Agent, on a best
efforts  basis, for the Placement Shares, Registrant granted  RAF
Financial  Corporation ("RAF") and Robert Long ("Long"),  one  of
its  officers, warrants to purchase 81,243 shares of  USE  common
stock  for  $4.80  per  share  until  July  25,  2000  (the  "RAF
Warrants").   The Placement Shares, the RAF Warrants  and  81,243
shares of USE common stock underlying the RAF Warrants (the  "RAF
Shares")  were  registered under the 1933 Act for resale  by  the
holders   of  such  Placement  Shares  and  by  RAF   and   Long,
respectively, by Registrant filing its Registration Statement  on
Form  S-3  with the Commission (SEC File No. 33-64773) which  was
declared  effective by the Commission on February 28, 1996.   RAF
and Long exercised their RAF Warrants on March 7, 1996 and May 1,
1996, respectively, which generated aggregate cash proceeds t the
Company  of $389,966.  The public sale of the 457,780  shares  of
Registrant's  Common Stock by certain shareholders,  the  812,432
Placement Shares and the 81,243 RAF Shares as well as the 252,901
Common  Shares to be sold pursuant to this Prospectus may depress
the market price for the Company's common stock.

Registrant  may also issue additional common stock in  a  private
placement or a public offering pursuant to the 1933 Act if needed
for  future  working  capital (see Risk  Factor  1  above).   The
issuance  of  such additional shares could result in dilution  to
the  equity of outstanding shareholders of Registrant,  depending
on  the price at which such shares are issued and sold, and would
result  in  some dilution to the voting power of the  outstanding
shares of Registrant's common stock.

5.   Project Delay.  Registrant's minerals business is subject to
the risk of unanticipated delays in developing and permitting its
uranium  and  gold  projects.   Such  delays  may  be  caused  by
fluctuations  in  commodity prices (see Risk  Factor  6),  mining
risks  (see  Risk  Factor  9),  difficulty  in  arranging  needed
financing,   unanticipated  permitting  requirements   or   legal
obstruction  in the permitting process by project  opponents.  In
addition  to  adding  to  project  capital  costs  (and  possibly
operating costs), such delays, if protracted, could result  in  a
write  off  of  all  or a portion of the carrying  value  of  the
delayed   project   and/or  could  trigger  certain   reclamation
obligations sooner than planned.

6.   Commodity Price Fluctuations.  The ability of the Company to
develop and operate its uranium and gold projects profitably  can
be  significantly  affected by changes in  the  market  price  of
uranium  and gold, respectively.  Until very recently,  the  spot
market  price  for uranium concentrates has been depressed  since
1988  and  has  been below $8.00 per pound as recently  as  1992.
(See   Business  and  Properties  -  Uranium  -  Uranium   Market
Information"  for additional information on the  uranium  markets
and  pricing.)  Uranium prices are subject to a number of factors
beyond  Registrant's control including imports  of  uranium  from
Russia  and  other CIS countries, the amount of uranium  produced
and  sold  from the blending of highly enriched uranium recovered
from  U. S. and Russian nuclear weapons to produce lower enriched
uranium  for nuclear fuel, the build up by utilities  of  uranium
fuel  inventories  and  the sale of excess inventories  into  the
market,  the  rate  of  consumption  of  uranium  inventories  by
utilities,  the rate of uranium production in the United  States,
Canada,  Australia and elsewhere by other producers and the  rate
of  new construction of nuclear generating facilities, verses the
rate  of shutdown and decommissioning of older nuclear generating
facilities, particularly in the United States.

Market prices for uranium concentrates in the United States  have
recovered  to between $16.25 and $16.50 per pound as of  May  31,
1996.   The  Company believes that if the price remains  at  this
level  or  higher, United States utilities will  seek  long  term
price  stabilizing uranium supply contracts.  If the  Company  is
able  to  obtain long term uranium supply contracts with  assured
prices  exceeding $18.00 per pound, that should be sufficient  to
operate Plateau's Utah uranium properties profitably.  It  should
also  be  sufficient  to proceed with development  of  the  Green
Mountain  Mining Venture ("GMMV") Jackpot Mine and  operation  of
the  Sweetwater uranium mill, although there can be no  assurance
that Kennecott Uranium Company ("Kennecott"), which controls  the
management  committee  of GMMV, would be  of  the  same  opinion.
There  also  can  be no assurance that this recent  upward  price
movement will continue.  USE would be adversely affected  if  the
United  States utilities with nuclear power plants  do  not  seek
long  term  uranium supply contracts during the  balance  of  the
1990s.   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  and  USE
could  be  required to reclaim or restore such properties  sooner
than planned (see Risk Factor 11).

The market price of gold has fluctuated widely and is affected by
numerous   factors   beyond  the  Company's  control,   including
international  economic  trends, currency exchange  fluctuations,
expectations for inflation, the extent of forward sales  of  gold
by  other  producers, consumption patterns (such as purchases  of
gold   jewelry  and  the  development  of  gold  coin  programs),
purchases and sales of gold bullion holdings by central banks  or
other  large  gold  bullion  holders or  dealers  and  global  or
regional  political events, particularly in major  gold-producing
countries  such as South Africa and some of the CIS (Commonwealth
of  Independent  States - formerly the Soviet  Union)  countries.
Gold  market  prices  are also affected by  worldwide  production
levels,  which  have  increased in recent  years,  but  currently
appear to be decreasing somewhat.  The aggregate effect of  these
factors,  all  of  which  are beyond the  Company's  control,  is
impossible  for the Company to predict.  In addition, the  market
price  of  gold has on occasion been subject to rapid  short-term
changes  because of market speculation.  As of June 11, 1996  the
Comex spot price of gold was $384.20 per ounce.

7.    Proposed  Federal Legislation.  The U.S. Congress  has,  in
legislative sessions in recent years, actively considered several
proposals  for  major revision of the General Mining  Law,  which
governs  mining  claims and related activities on federal  public
lands.   If  any  of the recent proposals become  law,  it  could
result in the imposition of a royalty upon production of minerals
from   federal  lands  and  new  requirements  for   mined   land
reclamation and other environmental control measures.  It remains
unclear  whether the current Congress will pass such  legislation
and,  if  passed,  the  extent such new legislation  will  affect
existing  mining  claims  and  operations.   The  effect  of  any
revision  of  the General Mining Law on the Company's  operations
cannot be determined conclusively until such revision is enacted;
however,  such legislation could materially increase the carrying
costs   of  the  Green  Mountain  mineral  properties,  the   SMP
properties  and  some of Plateau's mineral properties  which  are
located  on federal unpatented mining claims, and could  increase
both the capital and operating costs for such projects and impair
the Company's ability to hold or develop such properties, as well
as other mineral prospects on federal unpatented mining claims.

8.   Exploration  Risks.  Mineral exploration,  particularly  for
gold,  is  highly speculative in nature, involves many risks  and
frequently is nonproductive.  There can be no assurance that  the
Company's  efforts  at  the  Sutter  Gold  Project  to   identify
additional  gold  ore  reserves will  be  successful.   Moreover,
substantial expenditures are required to establish additional ore
reserves  through drilling, to determine metallurgical  processes
to  extract  the metal from the ore and to construct  mining  and
processing  facilities.  During the time  required  to  establish
additional   ore   reserves,  determine  suitable   metallurgical
processes  and  construct such mining and processing  facilities,
the  economic  feasibility of production may  change  because  of
fluctuating gold prices (see Risk Factor 6).

9.  Mining Risks and Insurance.  The business of uranium and gold
mining  generally  is subject to a number of risks  and  hazards,
including environmental hazards, industrial accidents, explosions
and  rock  falls,  earthquakes, flooding,  interruptions  due  to
weather  conditions  and other acts of  God.   Such  risks  could
result  in  damage  to  or  destruction of  Registrant's  mineral
properties and production facilities, as well as to properties of
others  in  the area, personal injury, environmental  damage  and
process and production delays, causing Registrant monetary losses
and  possible legal liability.  While the Company maintains,  and
intends  to continue to maintain, liability, property damage  and
other  insurance consistent with industry practice, no  assurance
can  be  given that such insurance will continue to be available,
be  available at economically acceptable premiums or be  adequate
to cover any resulting liability.

10.    Title  to  Properties.   Nearly  all  the  uranium  mining
properties  held  by  GMMV,  SMP,  and  Plateau  are  on  federal
unpatented  claims.  Unpatented claims are located  upon  federal
public  land  pursuant to procedure established  by  the  General
Mining  Law  (see  also  Risk Factor 7).   Requirements  for  the
location  of  a valid mining claim on public land depend  on  the
type  of  claim being staked, but generally include discovery  of
valuable  minerals,  erecting a discovery  monument  and  posting
thereon  a  location notice, marking the boundaries of the  claim
with  monuments,  and filing a certificate of location  with  the
county in which the claim is located and with the U. S. Bureau of
Land Management ("BLM").  If the statutes and regulations for the
location of a mining claim are complied with, the locator obtains
a  valid possessory right to the contained minerals.  To preserve
an  otherwise  valid  claim, a claimant must  also  annually  pay
certain rental fees to the federal government (currently $100 per
claim)  and  make certain additional filings with the county  and
the  BLM.  Failure to pay such fees or make the required  filings
may  render  the  mining claim void or voidable.  Because  mining
claims are self-initiated and self-maintained, they possess  some
unique  vulnerabilities  not  associated  with  other  types   of
property interests. It is impossible to ascertain the validity of
unpatented  mining claims solely from public real estate  records
and  it can be difficult or impossible to confirm that all of the
requisite  steps have been followed for location and  maintenance
of  a  claim.  If the validity of an unpatented mining  claim  is
challenged  by  the government, the claimant has  the  burden  of
proving  the  present  economic feasibility  of  mining  minerals
located  thereon.  Thus, it is conceivable that during  times  of
falling metal prices, claims which were valid when located  could
become  invalid  if  challenged.  Disputes can  also  arise  with
adjoining property owners for encroachment or under the  doctrine
of extralateral rights (see Risk Factor 16).

11.   Reclamation  and  Environmental Liabilities.   Registrant's
projects and 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  and   the
Comprehensive Environmental Response Compensation Liability  Act.
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  will
impact  USE.   Similar laws in California affect SGMC  operations
and  in  Utah  will  affect Plateau's operations.   In  addition,
Registrant's  uranium mill in Utah and the GMMV mill  in  Wyoming
are  subject to jurisdiction of the Nuclear Regulatory Commission
("NRC").

To  Registrant's knowledge, it is in compliance in  all  material
respects  with current environmental regulations.  To the  extent
that  production by SMP, GMMV or SGMC is delayed, interrupted  or
discontinued  due to need to satisfy present or  future  laws  or
regulations which relate to environmental protection, future  USE
earnings could be adversely affected.  For additional information
concerning  the  effect such environmental laws  and  regulations
have  on  the  Company's capital expenditures, see "Business  and
Properties  -  Environmental and Notes F and K to  the  Company's
Consolidated Financial Statements.

USE  is a joint venturer in the GMMV, which entity is responsible
for    mine    reclamation,   environmental    restoration    and
decommissioning  associated  with  mineral  properties  on  Green
Mountain,  in  south central Wyoming, and the  nearby  Sweetwater
Mill.   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  Company's  Consolidated
Financial  Statements, and the notes to the  Company's  unaudited
Consolidated  Financial  Statements  for  fiscal  quarter   ended
February  29, 1996, for further information.  Current  bonds  and
funds   in  escrow  are  deemed  adequate  for  reclamation   and
decommissioning  liabilities associated with the Shootaring  Mill
in Utah.

USE   and  Crested  have  assumed  the  reclamation  obligations,
environmental liabilities and contingent liabilities for employee
injuries, from mining the SMP properties 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  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 concentrates produced from  its
properties  to USE and Crested for reclamation work.  The  status
of  this  commitment could be impacted by the ultimate resolution
of  the arbitration/litigation with Nukem/CRIC (see Business  and
Properties-Legal Proceedings-Sheep Mountain Partners Arbitration/
Litigation).

The  GMMV  and Sweetwater Mill reclamation liabilities  are  self
bonded  by Kennecott pursuant to written agreements with the  NRC
and  the State of Wyoming, and accordingly these liabilities  are
not recorded in the USE or Crested financial statements.  The SMP
and  Plateau reclamation liabilities were recorded at  $1,451,800
and $2,500,000 respectively (total $3,951,800) in the audited USE
Consolidated  Financial Statements.  A cash bond of approximately
$40,000  is  posted for miscellaneous reclamation  costs  at  the
Sutter  gold  property (carried under "Other Assets-Deposits  and
Other"  on  the  USE  financial  statements).   Reclamation   and
environmental obligations for the oil and gas properties held  by
USE  are  deemed  insignificant and manageable  in  the  ordinary
course of business.

12.   Possible Losses on Uranium Contracts.  As of May 31,  1995,
SMP  held  contracts  for delivery of an  estimated  5.5  million
pounds of U3O8 to domestic utilities from 1996 through 2000.  The
arbitration panel found that another contract for 980,000  pounds
of  U3O8 to be delivered from 1996 to 2000 was to be assigned  to
SMP   by  Nukem/CRIC.   See  "Business  and  Properties  -  Legal
Proceedings  -  Sheep Mountain Partners Litigation/ Arbitration".
Actual quantities of U3O8 purchased by utilities over that period
of  time  may  vary  by  10 to 25 percent,  as  provided  in  the
contracts  (see  "Business  and  Properties  -  Uranium  -  Sheep
Mountain Partners - SMP Marketing"), and profit or loss to SMP on
the deliveries will depend on the cost of inventory.  Profits  on
such  future deliveries cannot be predicted, however,  management
of  the Company does not anticipate any material losses from  the
sales  of  U3O8 pursuant to these contracts.  As of the  date  of
this   Prospectus,  the  prices  under  the  one  remaining  base
escalated  contract  exceed the current  market  price,  however,
there  can be no assurance this situation will not change in  the
future.

Increases  in  the  spot market price would  increase  USE's  and
Crested's  cost  of  delivering on certain of the  SMP  contracts
prior   to  the  time  that  their  uranium  properties  are   in
production, thus reducing potential profits or possibly producing
losses,  while  spot market price decreases would  be  likely  to
increase  profits  on such contracts.  USE  recorded  a  loss  of
$162,900  in fiscal 1994 on deliveries of its portion of  certain
of  the  SMP  contracts,  as the cost  of  uranium  exceeded  the
contracted  price.  Due to the SMP dispute, earlier  arrangements
between the partners to deliver their shares of the SMP contracts
in  spite  of  the  dispute  were  abandoned,  and  USE  made  no
deliveries (and therefore recorded no revenues or losses) on  any
SMP  contracts  during fiscal 1995.  For the  nine  months  ended
February  29, 1996 Registrant recorded a gross profit of $350,000
from mineral sales transactions.

13   Competition.   There  is keen competition  in  the  domestic
minerals industry and the oil and gas business for properties and
capital.  USE's competitors include a number of major mining  and
oil  and gas companies, most of which are larger than USE in  all
respects.    In   the   production  and  marketing   of   uranium
concentrates there are more than 10 major international  entities
(some  of which are government controlled) that are significantly
larger  and better capitalized than USE.  Although the Registrant
presently is not engaged in the mining or milling of uranium, and
therefore should not be counted in the top ten uranium producers,
the Registrant's competitive stature may improve significantly at
such time as it commences uranium mining and production.

The  location and composition of mineral ore bodies are of  great
importance  to  the  competitive position of  a  mining  company.
Producers of high-grade ore with readily extractable minerals are
in  an  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.   As
a   result,  owners  of  producing  properties,  particularly  if
purchase  contracts  for the production are in  place,  generally
enjoy substantial competitive advantages over organizations  that
propose to develop non-producing properties.  Competition is also
keen  in the search for mineral properties and prospects  and  in
the employment and retention of qualified personnel.

USE  believes that with the recent improvements in market  prices
for  uranium concentrates, it will be able to compete with  other
uranium producers, primarily because it holds significant uranium
resources  in place, along with the necessary mining and  milling
facilities,  all  of  which it acquired for little  or  no  cost.
Applications have been submitted to upgrade the mill licenses  to
operating  levels,  however, delays in final  permitting  may  be
encountered,  as  the  uranium  refining  industry   is   closely
regulated by the NRC.

Nonetheless,  USE  expects competition from larger  producers  in
Canada,  Australia  and Africa, as well  as  from  U.S.  in  situ
producers of uranium and other producers that recover uranium  as
a byproduct of other mineral recovery processes, and from uranium
recovered  from  the  de-enrichment of  highly  enriched  uranium
obtained  from  the  dismantlement of U.S.  and  Russian  nuclear
weapons  and  sold in the market by the United States  Enrichment
Corporation  and/or the United States Department  of  Energy,  as
well  as  from imports to the United States of uranium  from  the
Commonwealth  of Independent States (formerly the Soviet  Union).
See   "Business  and  Properties  -  Uranium  -  Uranium   Market
Information" and "NUEXCO Exchange Value".

USE's  affiliate FNG encounters strong competition with a  number
of  larger  civil engineering construction firms in  the  western
United States.

14   Reserves Estimates.  While the ore reserve estimates at GMMV
Round  Park ore deposit in Wyoming and SGMC's Lincoln project  in
California  have  been reviewed by independent consultants,  such
ore  reserve  estimates are necessarily imprecise and  depend  to
some   extent  on  statistical  inferences  drawn  from   limited
drilling,  which may, on occasion, prove unreliable.  Should  the
Company  encounter mineralization or formations  at  any  of  its
mines  or  projects different from those predicted  by  drilling,
sampling and similar examinations, ore reserve estimates may have
to  be adjusted and mining plans may have to be altered in a  way
that  could adversely affect the Company's operations.  Moreover,
short-term  operating factors relating to the ore reserves,  such
as  the  need  for sequential development of ore bodies  and  the
processing  of new or different ore grades, may adversely  affect
the Company's profitability in any particular accounting period.

15   Variable Revenues and Recent Losses.  Due to the  nature  of
USE's  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  from  fiscal  1992
through fiscal 1995.  Further, USE realized a net gain in  fiscal
1992  of $613,000, but net losses were realized from fiscal  1993
through  fiscal  1995  (in the respective  amounts  of  $221,900,
$3,370,800 and $2,070,600).

16   Bullfrog  Litigation.  Registrant,  Crested, Parador  Mining
Company,  Inc.  ("Parador")  and H.  B.  Layne  Contractor,  Inc.
("Layne")  are  defendants  and counter-  or  cross-claimants  in
certain  litigation in the District Court of Nye County,  Nevada,
brought  by Bond Gold Bullfrog Inc. ("BGBI") in July 1991.   BGBI
(now  known as Barrick Bullfrog, Inc.) is an affiliate of Barrick
Corp.,  a  large  international gold  producer  headquartered  in
Toronto,  Canada.  The litigation primarily concerns extralateral
rights  associated  with  two patented  mining  claims  owned  by
Parador  and  initially leased to a predecessor  of  BGBI,  which
claims  are  in  and  adjacent to BGBI's Bullfrog  open  pit  and
underground  mine.  USE and Crested assert certain  interests  in
the claims under an April 1991 assignment and lease from Parador,
which is subject to the lease to BGBI's predecessor.

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
claims leased to BGBI by  Layne.

BGBI  seeks  to  quiet  title to its leasehold  interest  in  the
subject claims, alleging that Parador's 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
asserts  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.

A  partial  or  bifurcated trial to the court of the extralateral
rights  issues was held on December 11 and 12, 1995.  The purpose
of the hearing was to determine whether the Bullfrog orebody is a
"vein, lode or ledge" as described in the General Mining Law and,
if  so, whether the facts of the case warrant the application  of
the doctrine of extralateral rights as set forth in such statute.
Although  the Court sat as both the finder of fact and  law  with
respect  to  such issues, the Court concluded that the  questions
are  ultimately  one of law which must be decided  based  on  the
testimony  and  exhibits introduced at the trial  concerning  the
description  of  the orebody.  Registrant and defendants  Crested
Corp. and Parador presented five experts in the field of geology,
including the person who was responsible for the discovery of the
gold  deposit  at  the mine.  All five experts  opined  that  the
deposit  was  a lode and it apexed on a portion of Parador's  two
mining  claims.   The defendant Layne presented a single  witness
who  testified that there was no apex within the Parador  claims.
The  Court nevertheless found that Parador had failed to meet its
burden  of  proof and therefore Parador, Registrant  and  Crested
have  no  right, title and interest in the minerals lying beneath
the  claims of Layne pursuant to extralateral rights.  The  Court
entered  a  partial judgment in favor of Layne and  ordered  that
Parador  pay Court costs to Layne.  Defendants intend  to  appeal
the  Court's ruling as erroneous as a matter of law at such  time
as it is appropriate to do so.

The partial trial did not address any of the other issues pending
in  the  litigation  other  than those  required  to  decide  the
question  of  whether  the  doctrine of  extralateral  rights  is
applicable  to  this  case.  All other claims  and  counterclaims
remain pending before the Court and no hearing date has been  set
for those issues.

If USE's and Crested's position concerning extralateral rights is
ultimately sustained, substantial additional revenues and  income
may  be  received by USE and Crested from royalties payable  with
respect  to  gold produced from the Bullfrog Mine.  If,  however,
the  final decision of the appellate court is adverse to USE  and
Crested,  an  award  of damages against USE and  Crested  in  any
substantial  amount by this Court could have a  material  adverse
effect  on  the  ability of USE and Crested  to  carry  on  their
business in the manner described in this Prospectus.

17.   Potential  Issuance  of  Preferred  Stock.  Under  the  USE
Restated   Articles  of  Incorporation,  as  amended   ("Restated
Articles")  and as permitted by the Wyoming Business  Corporation
Act  ("WBCA"), the Registrant's 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
Company's  Common Stock could adversely affect common stockholder
participation in future earnings through dividends that otherwise
would  be  available for distribution to holders  of  the  Common
Stock, including those purchasing the Common Shares.

Such  preferred  stock  also  could inhibit  a  takeover  of  the
Company.  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.

18.    Potential   Anti-Takeover  Effects  of  Staggered   Board.
Registrant's Board of Directors is presently divided  into  three
classes  of  two  directors each.  Pursuant to the  USE  Restated
Articles  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."

                           THE COMPANY

Registrant  is  in  the general minerals business  of  acquiring,
exploring,  developing  and/or  selling  or  leasing  of  mineral
properties  and,  from  time to time,  mining  and  marketing  of
minerals.   The  Company is now engaged in two principal  mineral
sectors: uranium and gold. Its minerals business with respect  to
uranium and gold can be characterized as in the development stage
according  to the Commission's definition of that term. Interests
are  held  in  other mineral properties (principally molybdenum),
but  are  either  non-operating interests or undeveloped  claims.
The Company also carries on a small oil and gas operation.  Other
USE  business segments are commercial operations (real estate and
general aviation) and construction operations.

Most  operations  are  conducted through  a  joint  venture  with
Crested  Corp., a majority-owned Colorado Corporation ("Crested")
and  various  joint subsidiaries of USE and Crested.   The  joint
venture  with  Crested  is referred to as "USECC."   Construction
operations   are  carried  on  primarily  through   USE's   50.9%
subsidiary  Four Nines Gold, Inc. ("FNG"). USE and Crested's  oil
and  gas operations in Montana and Wyoming are carried on through
Energx  Ltd.  ("Energx"), a 90% subsidiary  of  the  Company  and
Crested.

Prior   to  February  16,  1996  the  Company  engaged   in   the
manufacturing  and/or marketing of professional and  recreational
outdoor  products  through The Brunton  Company,  a  wholly-owned
subsidiary ("Brunton").  On February 16, 1996 Registrant sold all
of  the  shares of Brunton to Silva Production AB for  $4,300,000
plus 45% of the net profits before taxes derived from the sale of
Brunton products for four years and three months.  The sale  will
eliminate    Brunton's   manufacturing   and/or   marketing    of
professional   and   recreational  outdoor  products   from   the
commercial segment of Registrant's business, except to the extent
that  there are net profit payments from Silva over the next four
years,  of which there can be no assurance.  For the fiscal  year
ended  May  31, 1995 and for the nine months ended  February  29,
1996  (before reclassification to reflect Brunton as discontinued
operations with respect to the Company), Brunton's sales provided
approximately 49% and 26%, respectively, of net revenues of  USE.
On  the  other  hand, the February 1996 receipt of  approximately
$2,900,000  in  net  cash from the sale (and future  payments  on
Silva's $1,000,000 promissory note and any profits payments) will
enhance  the  Company's  financial  condition  and  medium   term
liquidity  as well as providing additional resources to  put  the
Company's  Utah  uranium  mill into  operation  and  develop  the
Company's uranium and gold properties.

The sale was prompted in part by Registrant's desire to focus  on
its  core business of acquiring and developing mineral properties
and mining and marketing minerals, particularly uranium and gold.
Registrant plans to consolidate all of its uranium assets into  a
single  subsidiary and finance the startup of its mines and  mill
operations with debt or equity funding.  Of course, there can  be
no  assurance uranium prices will remain at their current  level,
that  Registrant will succeed in its efforts to obtain  long-term
uranium   supply  contracts  required  to  operate  its   uranium
properties  profitably, or that the required  financing  will  be
available to put such properties into operation.

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

The  Company  and Crested originally were independent  companies,
with two common affiliates (John L. Larsen and Max T. Evans).  In
1980,  USE  and  Crested formed a joint venture  to  do  business
together  (unless  one  or the other elected  not  to  pursue  an
individual  project).   As a result of  USE  funding  certain  of
Crested's obligations from time to time (due to Crested's lack of
cash  on hand), and later payment of the debts by Crested issuing
common  stock to USE, Crested became a majority owned  subsidiary
of USE in fiscal 1993.

Except for approximately 1,400 ounces of gold recovered in fiscal
1992  in  a bulk sampling program at the Sutter gold property  in
California, the Company has not received revenues from the mining
of  either uranium or gold during its five fiscal years ended May
31,  1995  or  the nine months ended February 29, 1996.   Mineral
revenues  have  been  received from sales of mineral  properties,
advance  royalties in respect of the Company's  interests  in  an
undeveloped  molybdenum property that was sold to  AMAX  Inc.  in
1980,  and  from  sales of uranium under certain of  the  utility
supply  contracts held by Sheep Mountain Partners ("SMP"),  as  a
result of USE and Crested delivering their one-half share or  all
of  the  uranium  and  receiving sales proceeds  therefrom.   The
majority of profits on these deliveries have been retained by SMP
in  an interest bearing account which is to be distributed  by  a
panel  of  arbitrators.   See "Business and  Properties  -  Legal
Proceedings  -  Sheep  Mountain Partners Arbitration/Litigation."
Commencement  of  uranium mining from the  Jackpot  (Round  Park)
deposit  in  Wyoming may result in utility supply  contracts  for
Green  Mountain Mining Venture ("GMMV"), of which USE and Crested
are   joint  venture  partners  with  Kennecott  Uranium  Company
("Kennecott"), and/or commencement of mining operations from  the
properties  held  by  Plateau Resources  Limited  ("Plateau"),  a
wholly-owned  subsidiary of USE, in Utah may  result  in  utility
supply  contracts  for  Plateau.   There  can  be  no  assurance,
however,  that such mining operations will commence, or that  new
utility supply contracts will result.
The  following  tables  set  forth  certain  selected  historical
financial  data  with  respect to the  Company  for  the  periods
indicated.   It is derived from and should be read in conjunction
with  the  Company's  Consolidated Financial Statements  included
elsewhere in this Prospectus.

                    SELECTED FINANCIAL DATA
May 31,
                    -------------------------------------------------------------
                             1994           1993           1992            1991
                             ----           ----           ----            ----
Current assets           $ 3,866,600    $ 1,650,300    $ 3,260,500    $ 7,302,300
Current liabilities        1,291,700      1,592,100        681,900        816,000
Working capital            2,574,900         58,200      2,578,600      6,486,300
Total assets              33,090,300     24,037,200     24,583,000     20,500,100
Long-term
  obligations(1)          16,612,500      2,900,000      4,540,400      3,244,100
Shareholders' equity      12,559,100     15,063,200     14,982,900     15,045,500
May 31, 1995(3)   February 29, 1996(3)
                           (unaudited)         (unaudited)
                         ---------------    ------------------
Current assets             $ 3,390,100          $ 2,228,700
Current liabilities          3,368,200            1,091,000
Working capital                 21,900            1,137,700
Total assets                33,384,500           34,950,900
Long-term
obligations(1)(2)           15,769,600           15,416,400
Shareholders' equity        12,168,400           16,007,700
(1) Includes $3,951,800, $3,951,800, $1,695,600, $1,695,600, and
$725,900  of reclamation liabilities, and additional  amounts  of
other accrued liabilities, on uranium properties at May 31, 1995,
1994, 1993, 1992, and 1991, respectively.  See Notes F and  K  to
the  Consolidated  Financial Statements for  Registrant's  fiscal
year ended May 31, 1995.

(2)   See  Notes 4 and 5 to the unaudited Condensed  Consolidated
Financial  Statements for fiscal quarter and  nine  months  ended
February 29, 1996.

(3)   Reflects  the reclassification for amounts associated  with
the  operations  of Brunton as discontinued because  Brunton  was
sold by Registrant as of January 31, 1996.  See Notes 1 and 3  to
the unaudited Condensed Consolidated Financial Statements for the
fiscal quarter and nine months ended February 29, 1996.
Years Ended May 31,
                          --------------------------------------------------------------------
                              1995             1994             1993            1992           1991
                              ----             ----             ----            ----           ----
Revenues                  $ 9,148,000      $ 8,776,300      $ 9,045,500     $ 6,353,600    $ 9,569,100
Income (loss) before
 equity in income
 (loss) of affiliates,
 provision for
 income taxes and
  extraordinary item       (2,281,500)      (3,587,900)        (103,100)        819,200      6,082,900

Equity in (loss) of
 affiliates                  (442,300)        (390,700)        (444,700)       (324,900)       (96,100)

Net  income (loss)         (2,070,600)      (3,370,800)        (221,900)        613,200      6,164,900

Income (loss) per
 share before
  extraordinary item       $     (.42)     $      (.70)     $      (.05)    $       .09    $       .93
Extraordinary item             --              --                --                 .06            .62
                          -----------      -----------      -----------     -----------    -----------
Income (loss) per
 share before
 cumulative effect
   of accounting change          (.42)            (.70)            (.05)            .15           1.55
Cumulative effect at
 June 1, 1993 of income
 tax accounting change          --                (.06)          --              --             --
                          -----------      -----------      -----------     -----------    -----------
Net income (loss)
  per share               $      (.42)     $      (.76)     $      (.05)    $       .15    $   1.55
                          -----------      -----------      -----------     -----------    -----------
                          -----------      -----------      -----------     -----------    -----------
Cash dividends
 per share                $    -0-         $    -0-         $   -0-         $   -0-        $  -0-
                          -----------      -----------      -----------     -----------    -----------
                          -----------      -----------      -----------     -----------    -----------
Three Months Ended               Nine Months Ended
                                  --------------------------     ----------------------------
                                  February 29    February 28     February 29,    February 28,
                                      1996          1995            1996            1995
                                      ----          ----            ----            ----
                                  (Unaudited)    (Unaudited)     (Unaudited)     (Unaudited)
                                  -----------    -----------     -----------     ------------
Revenues                          $ 1,875,600    $ 1,386,300     $ 8,151,800     $ 3,638,500

Loss before equity in
  loss of affiliates
  and provision for
  income taxes                     (1,290,900)      (218,400)     (1,882,500)     (1,551,200)
Equity in loss
  of affiliates - net                (115,700)      (128,100)       (281,600)       (304,900)
Loss from continuing
  operations                       (1,074,400)      (270,300)     (1,765,400)     (1,437,700)
Income (loss) from
  discontinued operations
  net of income taxes                  (9,200)       (58,100)        308,900         121,900
Gain on disposal of
  discontinued operations
  net of income taxes               2,295,700          --          2,295,700           --
Income (loss) from
    discontinue  operations         2,286,500        (58,100)      2,604,600         121,900
Net income (loss)                   1,212,100       (328,400)        839,200      (1,315,800)
Loss from continuing
  operations per share                   (.17)          (.06)           (.28)           (.29)
Net income (loss) per share       $       .19    $      (.07)    $       .14     $      (.27)
Cash dividends per share              -0-             -0-             -0-             -0-
BUSINESS AND PROPERTIES

Uranium

Registrant has interests in several uranium properties in Wyoming
and  Utah  and in uranium processing mills in Sweetwater  County,
Wyoming  ("Sweetwater Mill") and in southeastern Garfield County,
Utah ("Shootaring Mill").  All the uranium bearing properties are
located  in  areas  which  have produced significant  amounts  of
uranium in the 1970s and 1980s.

The property interests are:

Unpatented lode mining claims on Green Mountain (Fremont  County,
Wyoming),   including  105  claims   on  which  the  Round   Park
(Jackpot)uranium  deposit is located, and  the  Sweetwater  Mill,
(approximately  23  miles  south of the proposed  Jackpot  Mine).
These  assets  are  held  by the Green  Mountain  Mining  Venture
("GMMV"),  owned  50 percent by the Company  and  USECC,  and  50
percent  by Kennecott Uranium Company ("Kennecott"), a subsidiary
of  Kennecott Corporation.  All claims are accessible  by  county
and United States Bureau of Land Management ("BLM") access roads.
Exploration and delineation of the principal uranium resources in
the   proposed   Jackpot  Mine  into  the   deposit   have   been
substantially   completed.   The  BLM  has   prepared   a   final
Environmental Impact Statement ("EIS") for the proposed mine and,
following a period of public comment on the preliminary and final
EIS,  on  April  24, 1996 the BLM signed the Record  of  Decision
approving  the  Jackpot  Mine Plan of Operations.   The  proposed
Jackpot  Mine has had no previous operators, and would be  a  new
mine  when  opened.  The Big Eagle Mine and related claim  groups
(which  are  near the proposed Jackpot Mine and 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
Corporation ("PMC") starting in the late 1970s.

Unpatented  lode mining claims, underground and open pit  uranium
mines  and  mining equipment in the Crooks Gap area,  located  on
Sheep  Mountain  in  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 USECC, and Nukem, Inc. ("NUKEM"), through  its
wholly-owned  subsidiary  Cycle Resource  Investment  Corporation
("CRIC").   The  Sheep Mountain Mines 1 and 2 are  accessible  by
county  and  private  roads and were first  operated  by  Western
Nuclear, Inc. in the late 1970s.

The  SMP  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.

The  Tony M Mine and the Frank M property are underground uranium
deposits  in  San Juan County, Utah located on Utah state  mining
leases.  These properties are accessible by county roads.

The  Tony M mine was originally developed by Plateau at the  time
Plateau  was owned by Consumers Power Company, a Michigan  public
utility.   Significant areas of uranium mineralization have  been
accessed   and  delineated  by  the  prior  owner's   underground
workings.  When the Tony M Mine was in production, while  Plateau
was  owned by Consumers Power Company, it produced ore containing
from three to eight pounds of uranium concentrates per ton.  Some
of  this ore was processed at the Shootaring Mill into U3O8,  the
saleable product.  The Company has a contract with Nuclear  Fuels
Services calling for transfer of the Tony M mine and the Frank  M
properties to the Company upon approval by the State of Utah of a
new   bond  securing  Plateau's  obligations  to  reclaim   these
properties.  In addition, the nearby Shootaring Mill,  low  grade
uranium  ore stockpiled at the Tony M mine and at the  mill,  and
related mill support facilities, are held by Plateau.

Plateau  also  owns  the Velvet Mine and  the  nearby  Wood  Mine
complex  in  the  Lisbon Valley area in southeastern  Utah.   The
Velvet Mine was fully developed and permitted by its prior  owner
and  is  approximately 178 miles by road to the Shootaring  Mill.
The  Wood  Mine  complex was formerly an operating  mine  with  a
remaining  undeveloped resource.  Access  to  this  would  be  by
extending  a drift approximately 2,500 feet from the former  Wood
Mine.  The Wood Mine property is not permitted at this time,  but
the  Company does not expect difficulty in obtaining a new permit
because  the  surface facilities would occupy the  site  that  is
already disturbed from previous operations.

Green Mountain Project

GMMV.   In fiscal 1990, USE and Crested sold 50 percent of  their
interests  in  certain  unpatented lode mining  claims  on  Green
Mountain  (hereafter, "Green Mountain Claims), and certain  other
rights, to Kennecott for $15,000,000 cash (Registrant's share  of
the proceeds was $12,600,000, and the balance was Crested's).  In
fiscal  1991, Registrant and USECC ("USE Parties") and  Kennecott
formed  the GMMV to develop, mine and mill uranium ore  from  the
Green  Mountain  Claims,  and market uranium  oxide  concentrates
(U3O8) to utilities using nuclear power to generate electricity.

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).  Kennecott will also  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   the   next
$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 (including Kennecott's commitment to
fund  the initial $50,000,000 of GMMV expenditures), so  that  in
effect  the  interest  held  by  each  party  collateralizes  its
performance.  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  (Jackpot)
uranium  deposit,  currently believed to be the most  significant
mineralized  resource on Green Mountain.  These 105  claims  were
formerly  owned solely by USE.  Pursuant to an agreement  between
USE  and  Crested, cash flow from production of  uranium  out  of
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 (Jackpot) deposit is developed and  placed
into  production and may be accessed through the proposed tunnels
at the Jackpot Mine.

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 and has continued as
project  manager  since  then.  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, acquisition and monitoring of the  Sweetwater
Mill  and  application to the U. S. Nuclear Regulatory Commission
("NRC") to convert the Sweetwater Mill license from standby to an
operating  license.  For fiscal 1996, GMMV plans  to  complete  a
sediment dam, sediment basin and drainage diversion ditch,  build
a  fuel  storage facility and other support facilities  and  make
improvements to existing facilities.

Properties  and  Mine  Plan.  GMMV owns  a  total  of  443  Green
Mountain Claims, including the 105 claims on which the Round Park
(Jackpot)  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 (Jackpot) deposit, and USECC has constructed two portals for
the Jackpot Mine declines.  Roads and utilities have been put  in
place,  which  are believed to be 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 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 mineral rights to the underlying
unpatented lode mining claims.

The  Round  Park  (Jackpot) mining claims contain  a  deposit  of
uranium  which has been estimated by USECC 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 expects to mine  this
deposit  from the Jackpot Mine, which will be driven  underground
from  the  south  side of Green Mountain.  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.

Registrant  expects  mine  development  costs  will  not   exceed
$25,000,000  to  begin production from the Round  Park  (Jackpot)
deposit.   However, cost estimates may change as exploration  and
initial  development progress.  Pursuant to the  GMMV  agreement,
Kennecott   has  agreed  to  fund  the  initial  $50,000,000   in
development  costs  including reclamation costs.   To  date  such
expenditures  total approximately $16,000,000.  Additional  costs
would  be funded by operations and/or by cash assessments on  the
venturers.

Sweetwater  Mill.  In fiscal 1993, 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;  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.

Mill  holding  costs are paid by GMMV and funded by Kennecott  as
part of its $50 million funding commitment.

Kennecott,  as  mill  operator,  has  initiated  discussions  and
appropriate  filings  with the 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  United  States Environmental Protection Agency  ("EPA")  has
advised  Kennecott, as operator of the GMMV,  that  if  Kennecott
would level the tailings within the existing tailings impoundment
and  install a new liner with leak detection capability  the  EPA
would  allow  the use of the existing 60 acre tailings  cell  for
milling  operations.   The Company anticipates  that  this  would
result  in substantial cost savings to GMMV and reduce  the  time
required for the Sweetwater Mill to resume operations.

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
processed in excess of 4,200 tpd for sustained periods.  The mill
is  one  of  the newest uranium milling facilities in the  United
States,  and has been maintained in good condition.   UNOCAL  has
reported  that  the mill buildings and equipment have  historical
costs of $10,500,000 and $26,900,000, respectively.

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  will   be
approximately $24,100,000 once the Jackpot Mine Permit is granted
by  the  WDEQ.  None of the GMMV future reclamation  and  closure
costs   are  reflected  in  Registrant's  Consolidated  Financial
Statements (see Note K to USE Consolidated Financial Statements).

UNOCAL   has   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
consist  of 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  $16,322,900  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 the GMMV is 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  appear
to  be within the $50,000,000 development commitment of Kennecott
for GMMV.  These costs are not expected to increase materially if
the  mill is not put into 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.  Last, the GMMV  will  set
aside  a  portion  of operating revenues to fund reclamation  and
environmental liabilities when mining and milling operations  are
finally 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  contributions
would be required only if the liabilities cannot be satisfied  by
Kennecott  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.

Permitting.  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.  Following preparation of a final EIS by the  BLM,
including a series of public meetings and a period for receipt of
written comments on both the preliminary and final EIS, on  April
24,  1996 the BLM signed the Record of Decision ("ROD") approving
the  Jackpot Mine Plan of Operations.  With the entry of the ROD,
the  WDEQ  is  expected  to issue the operating  permit  for  the
Jackpot  Mine  in June 1996.  Until this Permit  is  granted,  no
further  construction of mine facilities is allowed;  no  further
underground  mine  development can  occur,  and  the  Round  Park
(Jackpot) Deposit cannot be mined.

The  Jackpot  Mine  Plan of Operations and a combination  of  the
alternatives analyzed in the EIS will allow for the  disposal  of
mine  waste rock in the Big Eagle Mine pits and the upgrading  of
existing roads and the construction of new haul road segments for
transport  of  ore to the Sweetwater Mill.  These roads  will  be
subject  to  modification in alignment necessary to  minimize  or
avoid adverse impacts to riparian and cultural resources.

Prior  to initiation of mining operations, GMMV proposes  further
underground exploration in the area; if this exploration fails to
identify uranium resources with future development potential, the
project  will not proceed.  If uranium resources with development
potential  are discovered, GMMV proposes to begin mining  in  the
mid-to late-1990s.

The  mine plan estimates that the Jackpot Mine will produce about
3,000 tons of uranium ore per day and will have an expected  mine
life  of 13 to 22 years.  It will utilize the existing Big  Eagle
Mine  facilities located about two miles west of the Jackpot Mine
site.   As  many  as 250 workers will be required  during  mining
operations.  The maximum area of new disturbance required for the
project  will  be 289 acres.  This disturbance will  include  118
acres  for mine site development and 171 acres for transportation
corridor  construction and/or improvement.  When uranium reserves
have  been  depleted, the mine portals will be  plugged  and  the
ground  surface  recontoured  and reclaimed  to  blend  with  the
natural  landscape.  Also, surface structures  will  be  removed,
roads  closed  per landowner or BLM request, and disturbed  areas
reclaimed.

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 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 of the  uranium
operations  in which it owns an interest, are in compliance  with
these rules.

During the fiscal year ending May 31, 1995, expenditures by  GMMV
to  comply  with provisions of the mine permits and licenses,  or
otherwise   to   protect  the  environment,  were   approximately
$200,000,  of  which approximately 50 percent  were  for  capital
expenditures.  There ultimately will be an effect on USE earnings
from  environmental compliance expenditures by GMMV,  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  cash  flow
during  the  next  two years, as Kennecott will  fund  the  first
$50,000,000 of costs of GMMV, of which only about $15,799,100 had
been expended as of GMMV's year end at December 31, 1995.

Concerning  Kennecott.  Kennecott Corporation is  a  wholly-owned
United  States 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.

Registrant is not aware 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  parent  Kennecott  Corporation.   Accordingly,
performance  by  Kennecott  Uranium Company  of  its  development
commitment under the GMMV joint venture agreement is not assured.

Shootaring Canyon Mill

Acquisition  of  Plateau  Resources. In August  1993,  Registrant
purchased  from  Consumers  Power Company  ("CPC"),  all  of  the
outstanding  stock of Plateau, which  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.

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

(a)  to perform or cause Plateau to perform 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.

At  closing, Plateau transferred $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 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 an agreement between  Plateau  and
the  third-party.   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.

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 the Company, in light of potential NRC objections  to
selling  Plateau  to  the  USECC joint  venture.   Subsequent  to
closing,  in September 1993, the Company 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.  The Company has also applied to the NRC  to
convert the source materials license from standby to operational.

Plateau  owns  approximately 90,000 tons of  uranium  mineralized
material  ore  stockpiled  at  the mill  site  and  approximately
172,000  tons of mineralized material stockpiled at  the  Tony  M
Mine.

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

Ticaboo Townsite

Plateau  also  owns  all  of  the  outstanding  stock  of  Canyon
Homesteads, Inc. ("Canyon"), a Utah corporation, which  developed
the  Ticaboo,  Utah  townsite 3.5 miles south of  the  Shootaring
mill.   The  Ticaboo  site includes a 66 room motel,  convenience
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 being operated as  a  commercial
enterprise.   USE  and  Crested  plan  to  further  develop   the
townsite,  and  have  been seeking financial  partners.   Interim
funding for limited improvements on the commercial operations was
provided  by  a  private corporation affiliated with  a  John  L.
Larsen,  Chairman  of  the Board, President and  Chief  Executive
Officer   of   USE.   See  "Certain  Relationships  and   Related
Transactions - Transactions with Arrowstar Investments, Inc.".

Sheep Mountain Partners ("SMP")

Partnership.   SMP  is a Colorado general partnership  formed  on
December  21,  1988 between 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 the partners of SMP.  These disputes resulted in litigation
and  subsequent  arbitration from which an Order  and  Award  was
issued  on  April  18,  1996.   See "Legal  Proceedings  -  Sheep
Mountain Partners Arbitration/Litigation".

In  February 1988, USE and Crested acquired uranium mines, mining
equipment  and mineralized properties (Sheep Mountain  Mines)  at
Crooks Gap in south-central Fremont County, Wyoming, from Western
Nuclear,  Inc.  (a subsidiary of Phelps-Dodge Corporation).   USE
and  Crested, doing business as USECC, mined and sold uranium ore
from  one  of  the  underground mines in fiscal  1988  and  1989.
Production  ceased  in  fiscal 1989,  because  uranium  could  be
purchased  from  the spot market at prices below SMP  mining  and
milling costs.  These Crooks Gap properties are adjacent  to  the
Green Mountain Project.

The Company and Crested sold 50 percent of their interests in the
Crooks  Gap 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  provided one-half of $350,000 (later reduced to  $315,000)
to  purchase  equipment from Western Nuclear, Inc.;  the  Company
and  Crested  also contributed their interests in  three  uranium
supply contracts to SMP and agreed to be responsible for property
reclamation obligations.  The SMP Partnership 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, credit  lines  and
contributions.

SMP  was  directed by a management committee, with three  members
appointed  by  USECC, and three members appointed by  Nukem/CRIC.
The  committee  has  not  met  since  1991  because  of  the  SMP
arbitration/litigation.

Properties.   SMP owns 77 unpatented lode mining  claims  on  the
Crooks   Gap   properties,  including  two  open-pit   and   five
underground  uranium  mines  and an  inventory  of  uranium  ore.
Production  from  the  properties  is  subject  to  sliding-scale
royalties  payable to Western Nuclear, Inc.; the rates  are  from
one to four percent on recovered uranium concentrates.

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.  An ion-exchange plant is  located  near
the SMP properties, but is held by USECC and not SMP.

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").   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 conducted an  exploration
program  on  a portion of these properties, and has  advised  the
Company that it 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  two  uranium  mills  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.  The Company, on behalf of USECC, has submitted a plan  to
the  NRC  to decommission this facility.  However, management  is
reviewing the economics of relicensing this facility as part of a
potential in-situ leach uranium mining operation.

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 by SMP
for  certain expenditures on the properties.  During the pendency
of the SMP arbitration/litigation Nukem/CRIC refused to allow SMP
to  pay  USECC for care and maintenance and other work  performed
since  the  spring  of  1991.  See "Management's  Discussion  and
Analysis  of  Financial  Condition and Results  of  Operations  -
Liquidity  and  Capital  Resources at  May  31,  1995  -  Capital
Requirements  -  SMP".  As part of the Order and  Award  made  on
April  18,  1996, the Arbitration Panel awarded USECC  $2,065,989
for  Nukem/CRIC's 50% share of care and maintenance expenses  for
the  SMP  properties plus interest of $446,834 to March 31,  1996
and  per  diem cost of $616 thereafter.  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.

SMP  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  seven
long-term  contracts  (five remaining) for sales  of  uranium  to
eight domestic utilities.  Under the marketing agreement SMP  was
to  have  paid  Nukem 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.  As part of its April 18, 1996 Order
and  Award  the  Arbitration  Panel awarded  Nukem  $612,500  for
USECC's  50%  share  of  such marketing fees  plus  $216,460  for
interest on unpaid fees and per diem costs of $170 from March 31,
1996.

SMP's uranium supply contracts are either 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 delivery of 130,000 pounds  of
uranium  concentrates  through  1997.   Prices  of  uranium   for
deliveries  under  the  base-price escalated  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 903,200
to  1,213,800 pounds of uranium annually from 1996 to 2000, which
amounts may be increased or decreased by specified percentages.

Through  fiscal 1995, USE and its affiliates have satisfied  most
of  these contracts with uranium concentrates previously produced
by  SMP,  borrowed from others, or purchased on the open  market.
The  future  role  of  Nukem  in making  deliveries  under  these
contracts on behalf of SMP cannot be assured notwithstanding  the
April  18, 1996 Order and Award.  See "Legal Proceedings -  Sheep
Mountain Partners Arbitration/Litigation."

Permits.   Permits  to operate existing 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
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.

Uranium  Market  Information.  In 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).  Many of these operations are now in standby mode due to
recent  low  prices for U3O8.  There are currently 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.   Several  members  of  the Commonwealth  of  Independent
States  ("CIS"),  also  export uranium  to  the  western  markets
although  the  amount of such exports to the  United  States  and
European markets is currently limited.

Uranium is primarily used in nuclear reactors that heat water  to
drive  turbines that generate electricity.  There  are  presently
some   542  commercial  nuclear  power  plants  worldwide  either
operating, under construction or planned.  Of them, 45 are  under
construction  and 53 are planned.  Current worldwide  consumption
is  about  150  million pounds of U3O8 per  year,  but  worldwide
production  is only about 82 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  is  also developing into a significant uranium  consumer,
due  to  announced  plans for rapid expansion  of  nuclear  power
programs  in  Japan,  Korea, Taiwan and the  Russian  Federation.
This  region accounts for most of the 98 power plants  which  are
ordered or under construction.

Pursuant to Suspension Agreements signed in October 1993  between
the  United States Department of Commerce ("DOC") and certain  of
the  Republics  of the CIS, to rectify prior damage  to  domestic
United  States uranium producers from dumping sales  of  U3O8  by
certain CIS republics, 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 six 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
       Years Ended             US $/pound of U3O8
         May 31,               High            Low
          1991                11.70           8.35
          1992                 9.05           7.75
          1993                10.05           7.75
          1994                10.20           9.25
          1995                11.00           9.50
          1996                16.50          11.85

US NEV was $16.50 as of May 31, 1996.

NUEXCO's  restricted  market values ("U.S.  NEV")  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 one to three years.
There  also is an active spot market, through which approximately
5 to 10 percent of uranium concentrate needs are satisfied.

While  total  demand in 1995 exceeded domestic production,  there
remains  a  near-term  supply of U3O8  equivalent  from  domestic
producers'  inventory,  and from unrestricted  (i.e.,  not  under
quotas) foreign producers current production and inventory.   The
Company  expects  these and other factors  (e.g.,  weapons  grade
uranium   conversions)  will  moderate  price  increases,   which
otherwise might be expected from the  shortfall of United  States
production  meeting demand, in spite of increasing interest  from
U.S.  utilities  in renewing long-term contracts at  higher  than
spot  market prices.  To date in fiscal 1996, spot market  prices
have increased approximately 40% from May 31, 1995.

Gold

Lincoln Project (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 in a mining joint venture known as the  Sutter
Gold Venture ("SGV").  The entire interest of SGV is now owned by
USECC  Gold  L.L.C., a Wyoming limited liability company  ("USECC
Gold).  Until the end of fiscal 1994, Seine River Resources Inc.,
a  Vancouver Stock Exchange listed company ("SRRI"), which is not
affiliated with USE or its subsidiaries was a joint venture party
in  SGV.   USECC  Gold  is  a subsidiary of  Sutter  Gold  Mining
Company, a Wyoming corporation ("SGMC").

SGMC   expects  to  commence  additional  exploration  and   mine
development  as  soon as it is able to raise sufficient  funding.
Although  SGMC  is  in discussions regarding  funding  proposals,
there  can  be  no assurance that such proposals will  result  in
actual funding.  See "Permits and Future Plans."

USECC  Gold  and  SRRI had intended to operate SGV  as  equal  50
percent  venturers.   However, because of SRRI  defaults  on  its
obligations, USE and Crested 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 which USE and Crested acquired in
lieu of foreclosure (see Note F to the USE Consolidated Financial
Statements).   SRRI's  10%  interest was  delivered  to  USE  and
Crested in fiscal 1994.

Subsequent to the end of fiscal 1994, the Sutter Gold Venture was
terminated,  USE and Crested formed SGMC, and agreed to  exchange
their  interests  in  USECC Gold for common  stock  of  SGMC  and
founders stock was issued to various individuals.  As of May  31,
199  a  private placement of 896,364 shares was made to  a  small
group  of investors.  SGMC is owned 74 percent by USE, 9  percent
by  Crested and 17 percent by private investors; USECC Gold is  a
subsidiary of SGMC.

During   fiscal   years   1992  through   1995,   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.   SGMC  (through  its subsidiary  USECC  Gold)  holds
approximately 14 acres of surface and mineral rights (owned), 436
acres  of  surface rights (leased), 158 acres of  mineral  rights
(leased),  and  380  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  at  from 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 $418,200 for  the  two
fiscal  years ending May 31, 1997, including $77,400 for payments
on  two  parcels (14 acres) purchased in 1994; payment of advance
royalties and lease rental payments due in 1995 and 1996 on other
surface  and mineral properties, totalling $340,840; 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
February  1998),  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  or  minimum  payments are made.   Other  leases  may  be
extended  for various periods on terms similar to those contained
in  the  original leases.  Production royalties are from four  to
six  percent.   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 to the Lincoln Project when  the
project was owned by Meridian Minerals Company ("Meridian").   In
return for its conveyance of such leases Amador United received a
right  of  first  refusal to buy the Lincoln  Project  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 to 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.

A  separate holder of four of the properties that were  assembled
by  Meridian  into  the Lincoln Project holds  a  5  percent  net
profits  interest on production from such properties,  which  was
granted  by Meridian when it acquired the properties.   The  "net
profits" generally will be determined in the same manner  as  the
Amador  United net profits interest (i.e., gross mineral revenues
less  an  amount equal to 105 percent of numerous  categories  of
costs  and  expenses).   An additional 0.5  percent  net  smelter
return  royalty  is  held by a consultant to a  lessee  prior  to
Meridian's  acquisition  of  the properties,  which  0.5  percent
interest covers the same four properties in the Lincoln Project.

There  has been an estimated $16,000,000 of spending to  date  in
the  Lincoln  Project by Meridian and USECC Gold.   Since  fiscal
1991,  USE  and Crested have expended $11,373,000 to acquire  the
Lincoln  Project and for mine development, mining and  processing
bulk samples of mineralization, exploration, feasibility studies,
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.  The amount of  such
expenditures  during  the  1996  fiscal  year  was  approximately
$637,300.

Current  estimates  call  for up to  $15  million  of  additional
investment  to put the properties into full production.   Payment
of  any  amount  to Amador United and the other  holders  of  net
profits  interests will only occur after the Lincoln Project  has
generated  gross revenues in excess of the amount  invested  plus
interest.    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 objected to the notices given,  however,
USE and Crested believe these objections are without merit.

Geology  and  Reserves.   The minerals consulting  firm  Pincock,
Allen  &  Holt  ("PAH") prepared a prefeasibility  study  of  the
Lincoln Project in fiscal 1994.  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.

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 tonnages for the stated reserves would be increased.

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 could be in excess  of  96
percent.  PAH has estimated the recovery rate as 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, 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) need to 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.  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 to permit ore  haulage  up  the
decline  by conveyor, thus eliminating ore haulage on the surface
from mine portal to the mill.

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

Preliminary  estimates  are that SGMC  will  require  up  to  $15
million financing to construct the mill and prepare the mine  for
full  scale production, and for interim holding costs.  The  mill
design  is being finalized and will be reviewed by PAH or another
engineering firm , and SGMC expects to follow PAH's or such other
firm'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  less
than  15,000  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 are entitled to receive annual advance royalties
of  50,000 pounds of molybdenum, or cash equivalent (one-half  to
each).  AMAX Inc. (which merged with Cyprus Minerals Company  and
was  renamed  Cyprus  Amax Minerals Company  in  November,  1993)
delineated  a deposit of molybdenum containing approximately  146
million   tons  of  mineralization  averaging  0.43%   molybdenum
disulfide on the properties.

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 1995, USE  recognized  $85,500  of
advance  royalty revenue under this arrangement.  These royalties
are  shown  in  the Consolidated Statements of  Operations  as  a
component   of   gains  from  restructuring  mineral   properties
agreements.   See  Note  F  to  the  USE  Consolidated  Financial
Statements.  The royalty payments reduce the operating  royalties
(six  percent of gross production proceeds) which would otherwise
be  due from Cyprus Amax from production.  There is no obligation
to  repay the advance royalties if the property is not placed  in
production.  The Agreement with AMAX also provides that  USE  and
Crested  are  to receive $2,000,000 (one-half to each),  at  such
time as the Mt. Emmons properties are put into production and, 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.  The Company has asserted that  the  reported
merger  of AMAX into Cyprus Minerals Company was a sale of AMAX's
interest in the properties which would entitle USE and Crested to
such  payment.  Cyprus Amax has rejected such assertion  and  the
Company is considering its remedies.

Subsequent  to  May  31, 1994, USE and Crested reached  agreement
with  Cyprus  Amax  to forego six quarters of  advance  royalties
(starting fourth quarter calendar 1994) as payment for the option
exercise  price  for  certain real estate in  Gunnison,  Colorado
owned by Cyprus Amax and the subject of a purchase option held by
USE  and  Crested.   The  option  exercise  price  is  valued  at
$266,250.  USE and Crested exercised their option in August, 1994
and  subsequently  sold that property for $970,300  in  cash  and
notes  receivable.  The advance royalties are to  resume  in  the
second quarter of calendar 1996.

Molybdenum Market Information

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  and  the  rate of production  of  foreign  and
domestic  primary  and by-product producers, world-wide  economic
conditions  particularly in the steel industry, the  U.S.  dollar
exchange  rate, and other factors such as the rate of consumption
of  molybdenum in 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 November 1993,  when  the
companies merged.

Worldwide  demand for molybdenum in calendar 1995 was  reportedly
220  million pounds, its highest level ever.  Production for that
period  was  about 220 million pounds.  There is however,  excess
capacity  from  the primary molybdenum mines which are  currently
not  producing.   In  addition, by-product molybdenum  (primarily
from  Chilean  copper mining companies) has  a  major  impact  on
available  supplies.  It is unlikely that any major  new  primary
deposits will be developed during fiscal 1997.

Molybdenum   prices   on   the   open   spot   market   increased
substantially,  from $3.35 per pound of technical molybdic  oxide
(the principal product) in September 1994, to $15.50 - $17.50 per
pound  in  February 1995.  However, by May 31,  1996  prices  had
declined to $3.00 - $3.35 per pound.

Parador Mining (Nevada)

The Company 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 (now  known  as  Barrick
Bullfrog, Inc.).  The Company and Crested 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 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  BGBI  had  defaulted  in its lease  and  that  Parador  had
terminated  the  lease.  BGBI denies that it  has  defaulted.   A
partial  trial  to  the  court in December  1995  resulted  in  a
decision  that Parador had failed to meet its burden of proof  to
establish  that  its  claims are entitled to assert  extralateral
rights  and that Registrant, Parador and Crested have  no  right,
title  or  interest  in  the adjacent  BGBI  claims.   Registrant
intends to appeal this ruling as erroneous as a matter of law  at
such time as it is appropriate to do so.  See Risk Factor 16  and
"Legal Proceedings - BBGI Litigation".

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; four 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  owned 45% by  USE, 45% by Crested, and  10%  by  the
Assiniboine  and  Sioux  Tribes,  signed  in  October   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.   In the fourth quarter of calendar 1995 Energx  drilled
and  tested  three exploratory wells, in conjunction  with  NuGas
Resources  U.S. Inc. ("NuGas").  These three were all dry  holes.
Energx  (and  NuGas) plan to drill and test five more exploratory
wells in July 1996.  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.  The Agreement is renewable for successive five year
terms,  provided  Energx  drills another five  exploration  wells
during  each term.  The first three dry holes would be funded  by
NuGas.

With  additional  fee  and Tribal allotted acreage  assembled  by
Energx  and  NuGas, and the 170,000 acres subject  to  a  farmout
agreement with Placid Oil (see below), Energx and NuGas now  have
positions  in approximately 500,000 contiguous acres  within  the
Fort Peck Indian Reservation.  The Tribes will not participate in
the fee acreage.

During  the initial exploration program, proceeds from production
will  be  allocated to NuGas to recoup the initial  eight  wells'
drilling  and  completion expense (except for  up  to  three  dry
holes, see "NuGas Resources (U.S.) Inc. Agreement"),  Thereafter,
net  revenues will be allocated 40 percent to the Tribes  and  60
percent to Energx and NuGas.  Pursuant to United States Law, only
the  Tribes may own beneficial interests in reservation minerals;
Energx'  and  NuGas'  share of net revenues is  compensation  for
operating services.

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

NuGas  Resources  (U.S.) Inc. Agreement.  By  the  Joint  Venture
Agreement  ("JVA")  with Energx dated July  18,  1994,  NuGas  is
obligated to Energx to drill and complete (or abandon) at  NuGas'
sole  expense, eight exploratory shallow gas wells  on  the  Fort
Peck Reservation (three before December 31, 1994, now extended to
late  fall 1995, and five more by July 1, 1996), to earn  a  one-
half  interest in Energx' rights under the Fort Peck Shallow  Gas
Agreement.  Well gathering, gas dehydration and related equipment
costs  will  be shared equally by NuGas and Energx.  Energx  will
not  be required to contribute to the costs of drilling the first
eight exploratory wells.

NuGas  has  contributed $100,000 to pay for  costs  of  acquiring
leases  and  easements on non-Tribal lands contiguous  to  Tribal
lands,  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
postponed  the  drilling of the initial exploratory  wells  until
late in the fall of 1995.

NuGas  and  Energx each will receive 50 percent of proceeds  from
gas  produced and sold from 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 is the operator of record.

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 500 shallow gas  wells  and
produces 30,000,000 cubic feet of gas per day.

Farmout  Agreement.   In  October 1995,  Placid  Oil  Company,  a
subsidiary  of Occidental Petroleum and other parties  (hereafter
together  referred  to as "Placid"), signed a  Farmout  Agreement
with Energx and NuGas.  Under the agreement, Energx and NuGas  as
operator  have the right to drill and complete shallow gas  wells
on  approximately  170,000 acres of non-Tribal lands  within  the
Fort  Peck  Indian  Reservation,  at  the  sole  expense  of  the
operator.   The Farmout Agreement contemplates three phases:  (i)
drilling  and completion (or abandonment) of three test wells  on
widely  dispersed drilling locations; (ii) subject to performance
of  (i),  continuous drilling and completion (or abandonment)  of
option  wells,  also on widely dispersed drilling locations;  and
(iii)  subject  to  performance of (i), continuous  drilling  and
completion  (or abandonment) of additional wells  on  blocks  not
covered by (i) and (ii).  The first three wells are to be drilled
on specific sections within the 170,000 acres.

Drilling  of the first test well commenced in October  1995;  the
last  of  the  three  wells is to be drilled  and  completed  (or
abandoned)  within 45 days of the commencement  of  drilling  the
first  well.  Upon completion of the last test well,  and  on  or
before  June  1,  1996, the operator has the option  to  continue
drilling on the acreage until March 31, 1997, with not more  than
30 days to elapse between completion (or abandonment) date for  a
well and commencement of drilling of the next well, until all the
acreage has been fully developed.

On  or  before  the March 31, 1997 Farmout Agreement  termination
date, the operator shall make an election as to each lease in the
acreage that is undeveloped or which covers lands not included in
a  producing unit from the drilling of test or option  wells,  to
(i) continuously drill wells so as to fully develop the lease  on
160 acre units, (ii) pay Placid $35.00/acre rental on the desired
acreage, or (iii) forego the subject acreage and reassign it back
to Placid.

In  addition to lessor royalties, Placid will receive a 6 percent
overriding  royalty interest on the acreage developed  under  the
Farmout  Agreement.   Operator will reimburse  Placid  for  delay
rentals on the acreage until placed into production.

Energx  has agreed with NuGas that NuGas' payment of all drilling
and  completion  (or abandonment) costs on the three  test  wells
under  the Farmout Agreement will constitute performance by NuGas
as  to  the  first  three wells required under  the  Energx/NuGas
agreement.   In  turn, the Tribes have agreed that  drilling  and
completion  (or  abandonment) of the three test wells  under  the
Farmout Agreement will be accepted in lieu of drilling the  first
three  test  wells  required  under the  Fort  Peck  Shallow  Gas
Agreement.   Energx will be an equal participant  with  NuGas  in
paying  for  the  Farmout Agreement option  wells'  drilling  and
completion   (or  abandonment)  costs  and  production   proceeds
therefrom.

Wind   River   Basin,   Wyoming  -   Monument   Butte   Prospect.
Approximately  13,000  acres of BLM  leases  (10  year  term)  in
Fremont County, WY are now held by Energx, and are believed to be
prospective   of   shallow  coalbed  methane   and   conventional
stratigraphic natural gas and oil deposits.  Acreage in this part
of  the  basin has been leased by major oil and gas companies  in
the past, but very little of the Energx acreage has been drilled.
Energx  expects  to  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).   Energx  expects  to  fund   future
operations  by a combination of private equity financing  and  by
seeking industry and private investor participation on prospects.
However,  due  to depressed gas prices in calendar  1995,  equity
financing  as  well  as joint venture industry  participation  of
natural  and  coalbed methane gas projects has been difficult  to
obtain.   Accordingly, in fiscal 1996 Energx  is  monitoring  its
acreage  positions (other than Fort Peck) to evaluate whether  to
continue  paying the acreage holding costs and/or drill  to  earn
acreage  rights  (as applicable), or to turn operations  over  to
another  company  in the industry in exchange for  an  overriding
royalty from future production payable to Energx.

Brunton.

On  February 16, 1996 Registrant completed the sale of  8,267,450
shares of common stock, $0.01 par value, (the "Stock") of Brunton
to  Silva  Production  AB,  a closely  held  Swedish  corporation
("Silva"),  pursuant to the terms of a Stock  Purchase  Agreement
dated   January  30,  1996  (the  "Agreement")  by  and   between
Registrant and Silva.  Brunton is engaged in the manufacture  and
marketing  of professional and recreational outdoor products  and
at  the  time  of its sale Brunton was 100% owned by  Registrant.
The sale was prompted in part by Registrant's desire to focus  on
its  core business of acquiring and developing mineral properties
and mining and marketing minerals, particularly uranium and gold.
The Stock constitutes all of the issued and outstanding shares of
Brunton  owned by Registrant as of the date of the sale including
90,750 shares held in Brunton's treasury.

The  purchase  price for the Stock was $4,300,000,  which  was  a
negotiated  price  based on an Adjusted Shareholder's  Equity  in
Brunton  (as defined in the Agreement) as of January 31, 1996  of
$2,399,103.   Registrant  received $300,000  upon  execution  and
delivery  of  the  Agreement, approximately  $3,000,000  by  wire
transfer from Silva at closing and an agreement by Silva  to  pay
Registrant  $1,000,000 in three annual installments  of  $333,333
together  with  interest  at  the rate  of  7%  per  annum,  such
installments to be paid on February 15, 1997, February  15,  1998
and February 15, 1999.

In  addition,  Silva  agreed that, in the operation  of  Brunton,
Silva  will  cause the existing Brunton products  and  operations
(including  lasers  and  other new products  being  developed  by
Brunton  at the time of the sale) to be a separate profit  center
and to pay Registrant 45% of the net profits before taxes derived
from  that  profit center for a period of four  years  and  three
months  commencing February 1, 1996.  The first such net  profits
payment  will be made on or before July 15, 1997 for  the  period
from February 1, 1996 through April 30, 1997, if net profits  are
earned for such period.  Additional net profits payments will  be
made,  on July 15, 1998, July 15, 1999 and July 15, 2000, if  net
profits  are  earned for the corresponding twelve  month  period.
There can be no assurance that Brunton will earn net profits  for
any  such period and therefore there can be no assurance that any
such net profits payment will be received by Registrant.

The  assets  of Brunton that were acquired by Silva  through  the
purchase  of  the  Stock consist of certain real  estate  housing
Brunton's  headquarters and manufacturing operations in Riverton,
Wyoming;   Brunton's   working  capital;  equipment,   inventory,
machinery,  personal  property and all of Brunton's  intellectual
property   rights.   Certain  items  of  equipment  and  personal
property  were withheld by the Registrant from the Agreement  and
transferred from Brunton to Registrant, by mutual agreement  with
Silva,  for Registrant's assumption of the indebtedness  thereon.
Such  items include and depreciated mining equipment, real estate
not   used   in  Brunton  operations,  and  miscellaneous   other
equipment,  as  well  as  225,556 shares of  Registrant's  common
stock, par value $0.01 per share, and options to purchase 150,000
shares  of Registrant's common stock for $3.50 per share; 160,000
shares  of  Crested  Corp. common stock, par  value  $0.001,  and
options  to  purchase  (from Crested  Corp.)  300,000  shares  of
Crested Corp. common stock for $0.40 per share, all of which were
previously owned by Brunton.  125,556 shares of USE (and  options
to  purchase 75,000 shares of USE), plus 60,000 shares of Crested
(and   options  to  purchase  150,000  shares  of  Crested)  were
transferred to Plateau in partial payment of debt owed to Plateau
by  USECC.   The  remaining 100,000 USE shares  (and  options  to
purchase  75,000  USE shares), plus 100,000 Crested  shares  (and
options  to  purchase 150,000 shares of Crested) were transferred
to SGMC.

Also at closing, the Registrant paid Brunton $171,685 for accrued
rentals  on mining equipment owned by Brunton and transferred  to
Registrant  at closing, and the Registrant paid off  $273,000  in
bank  debt  previously incurred by Brunton in connection  with  a
loan to the Registrant.

The  sale will eliminate Brunton's manufacturing and/or marketing
of  professional  and  recreational  outdoor  products  from  the
commercial segment of Registrant's business, except to the extent
that  there are net profit payments from Silva over the next four
years,  of which there can be no assurance.  For the fiscal  year
ended  May 31, 1995, Brunton's sales provided 49% of net revenues
of  USE  (26% for the nine months ended February 29, 1996  before
reclassification  to  reflect Brunton as discontinued  operations
with respect to the Company).  The inability to include Brunton's
operations  with  Registrant's other operating  revenues  in  the
future could result in continued operating losses for Registrant,
unless Registrant is able to develop other profitable businesses,
such  as  Registrant's  uranium business  or  FNG's  construction
business,  to replace profits from Brunton.  Continued  operating
losses  without offsetting replacements of working  capital  will
adversely  affect  USE's ability to continue  its  operations  as
described  in this Prospectus.  See also Risk Factor 2 above  and
"Management's Discussion and Analysis of Financial Condition  and
Results  of  Operations  -  Liquidity and  Capital  Resources  at
February 29, 1996 (unaudited)" and Results of Operations".

On  the  other  hand, receipt in February 1996  of  approximately
$2,900,000  in  net  cash from the sale (and future  payments  on
Silva's $1,000,000 promissory note and any profits payments) will
enhance  the  Company's  financial  condition  and  medium   term
liquidity  as well as providing additional resources to  put  the
Company's  Plateau uranium mill into operation  and  develop  the
Company's uranium and gold properties.

Real Estate and Other Commercial Operations

Registrant  owns  varying interests, alone and with  Crested,  in
affiliated companies engaged in real estate, transportation,  and
commercial  businesses.   The  affiliated  organizations  include
Western  Executive Air, Inc. ("WEA") and Canyon Homesteads,  Inc.
(through  Plateau).   Activities of these subsidiaries  in  these
business sectors include ownership and management of a commercial
office  building, the townsite of Jeffrey City, Wyoming  and  the
townsite  and commercial facilities in Ticaboo, Utah.   Until  it
was  sold  in April 1996, USECC also owned and managed  a  mobile
home  park in Riverton, Wyoming.  See "Certain Relationships  and
Related  Transactions - Transactions with Arrowstar  Investments,
Inc.".   WEA  owns and operates an aircraft fixed base  operation
with  fuel  sales  and  flight  instruction  and  maintenance  in
Riverton, Wyoming.

USECC

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. The preceding property is  mortgaged  to  the
State  of Wyoming as security for future reclamation work on  the
SMP properties.

USECC  also owns a fixed base aircraft operation at the  Riverton
Municipal Airport, including a 10,000 square foot aircraft hangar
and 7,000 square feet of 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.

In  November 1995, USECC exercised an option to acquire  a  7,200
square  foot hangar at the Riverton airport, for $75,000, from  a
private  Wyoming  corporation affiliated  with  John  L.  Larsen,
Chairman,  President and Chief Executive Officer of the  Company.
See   "Certain   Relationships   and   Related   Transactions   -
Transactions with Arrowstar Investments, Inc.".

USE and Crested also 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, 290 city lots and/or tracts  other
properties at the Jeffrey City townsite in south-central Wyoming.
Nearly  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.   In
the  interim  Registrant and Crested have sold  17  lots  for  an
aggregate of $32,000 during fiscal 1996.  In addition,  in  April
25,  1996,  the Registrant and Crested entered into an  agreement
with  a  non-related party to sell 10 six-plex townhouses located
in   Jeffrey  City  for  $500,000,  conditioned  upon   purchaser
obtaining  financing for the full amount within  60  days.   Full
real  estate  title  will be transferred to  the  purchaser  upon
closing,  however, if purchaser removes the townhouses, purchaser
must  reclaim the land and the real property where the townhouses
were  located  will  be assigned and conveyed  back  to  USE  and
Crested by quitclaim deed for full consideration of $10.00.

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   Mt.  Emmons  molybdenum  properties  near  Crested   Butte,
Colorado, USECC acquired an option from AMAX (now Cyprus Amax) to
purchase  (until June, 2002) approximately 57 acres for  $200,000
in  Mountain  Meadows  Business Park,  Gunnison,  Colorado.   See
"Molybdenum"  above.   The  property  is  zoned  commercial   and
industrial, and is adjacent to Western State College.  In  fiscal
1995,  USECC and Cyprus Amax agreed on exercise of the option  by
USE  and  Crested  agreeing to forego  six  quarters  of  advance
royalties  from  Cyprus  Amax  (the  option  purchase  price  was
$200,000),  plus payment of certain expenses i.e.  real  property
taxes   from  1987  and  other  expenses  amounting  to  $19,358.
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.

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   paid
$345,000  cash and $625,300 in three year nonrecourse  promissory
notes,  of  which  $137,900 was paid  during  fiscal  1995.   The
remaining  note  bears interest at 7.5% per annum.   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  $822,460).
Pangolin  paid  $10,000 for the option; on  option  exercise  and
closing,  Pangolin  paid  $46,090 in cash  and  $776,370  by  two
nonrecourse  promissory  notes (each with  principal  and  unpaid
interest  due  on  the third anniversary of  closing  except  for
$35,000 on the first anniversary).  At closing, 22.19 acres  were
deeded  to  Pangolin; different parcels of the remaining  acreage
secure the notes, and will be released for principal payments  in
the  course  of development.  The sale was accounted  for  as  an
installment  sale and thus the gain on sale was deferred,  to  be
recorded as the notes are paid.

Both  notes ($145,500 and $630,870) will require annual  payments
of  accrued  interest: the larger note accrues  interest  at  7.5
percent;  the initial interest rate on the smaller note  was  7.5
percent through August 28, 1995 and 12 percent thereafter (with a
$35,000 principal payment on the first anniversary).

Utah  Properties.  Canyon Homesteads, Inc. (a Plateau subsidiary)
owns  a  majority  interest in a joint venture  which  holds  the
Ticaboo Townsite in Ticaboo, Utah (see "Uranium-Shootaring Canyon
Mill - Ticaboo Townsite, above).  In fiscal 1994, a swimming pool
was  built  at the motel.  In fiscal 1995, USE agreed to  acquire
the  minority  interest in the joint venture from a nonaffiliate.
Further recreational improvements to the townsite are planned for
fiscal  1996, to develop a commercial operation directed to  Lake
Powell  tourists.   However,  as the  anticipated  joint  venture
partners did not fund development plans in fiscal 1995, (and  the
proposed  joint ventures for such purpose were not  formed),  and
USE and Crested have not been successful in finding other sources
of development funding, limited interim funding has been provided
by  Arrowstar  Investments, Inc.  See "Certain Relationships  and
Related  Transactions - Transactions with Arrowstar  Investments,
Inc.".

Construction

Four  Nines Gold, Inc.  On May 5, 1995 FNG was awarded a 14 month
$2,584,434  contract  by  the City  of  Lead,  South  Dakota  for
municipal  road  and drainage construction, and rock  slide  area
stabilization.  As of April 30, 1996, change orders by  the  City
of  Lead  have increased the contract to $3,609,604 and  FNG  had
performed 88% percent of the contract, billing $3,208,408  (after
$75,000 retainage by the City of Lead against completion  of  the
project),  of  which $3,133,408 had been paid. FNG  continues  to
expect the contract to be profitable

On  September  13,  1995 FNG was awarded a separate  construction
contract  for  $618,270 by the United States  Department  of  the
Interior,  Bureau of Reclamation, for the Minor  Laterals,  North
Canal,  Stage  5,  Belle Fourche Unit, South  Dakota.   The  work
consists  of  constructing 3.81 miles of pipeline,  approximately
1.4  miles  of gravel-surfaced road, removing existing reinforced
concrete  hydraulic  structures  and  constructing  miscellaneous
concrete  structures which include four inlets.  As of April  30,
1996 FNG had completed 92% of the contract, billing $535,515  and
having  received payment for $385,808.  This contract may  result
in a small loss to FNG.

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.

Research and Development

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

Environmental

Registrant's 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  and  regulations   in
California  affect  SGMC  operations and  in  Utah,  will  effect
Plateau's operations.

To  the Company's knowledge, currently it is in compliance in all
material  respects with existing environmental  regulations.   To
the  extent  that  production by SMP, GMMV or  SGMC  is  delayed,
interrupted  or discontinued due to need to satisfy  existing  or
new  provisions which relate to environmental protection,  future
USE earnings could be adversely affected.

Crooks  Gap.  An inoperative ion exchange facility at Crooks  Gap
currently   holds  a  NRC  license  for  possession  of   uranium
operations byproducts.  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.   However,
management  of  USE and Crested are reviewing  the  economics  of
relicensing  this facility as part of a potential  in-situ  leach
uranium mining operation.

Other  Environmental  Costs.  Actual costs  for  compliance  with
environmental   laws  may  vary  considerably   from   estimates,
depending upon such factors as changes in environmental laws  and
regulation   (e.g.,  the  new  Clean  Air  Act),  and  conditions
encountered in minerals exploration and mining.  Registrant  does
not  anticipate that expenditures 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   adverse  impact  on  the  Registrant's  competitive
position.

Employees

USE has 54 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  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  are  obligated to pay $100 per  claim  annually  in
order  to  preserve the right to possession of unpatented  mining
claims.  In addition to annual rental fee obligations there are a
number of technical requirements which must be met to establish a
valid mining claim.  Satisfaction of these technical requirements
cannot be assured.  See Risk Factors 7 and 10.

Legal Proceedings

Sheep Mountain Partners Arbitration/Litigation

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 also "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  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 asked 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  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, including an application to
stay  judicial  process  and compel arbitration  and  to  dismiss
certain  of  plaintiff's claims.  The defendants  also  filed  an
answer  and counterclaims against plaintiffs, claiming plaintiffs
breached  the  SMP  Agreement and misappropriated  a  partnership
opportunity  by  providing  certain  information  about  SMP   to
Kennecott and entering into the GMMV with Kennecott involving the
Green  Mountain  uranium properties.  The defendants  also  claim
that  plaintiffs wrongfully sold an interest in SMP to  Kennecott
through  the  GMMV  without CRIC's consent and without  providing
CRIC  a  right of first refusal to purchase such interests;  that
Registrant breached the uranium marketing agreement between  CRIC
and  SMP,  which had been assigned by CRIC to Nukem, by  agreeing
with  Kennecott in the GMMV that Kennecott could market  all  the
uranium   from  Green  Mountain,  thereby  depriving   Nukem   of
commissions  to  be earned under such marketing  agreement;  that
Registrant  and  Crested  interfered  with  certain  SMP   supply
contracts, costing CRIC legal fees and costs; that CRIC and Nukem
are  entitled to be indemnified for purchases of uranium made  on
behalf  of  SMP;  that Registrant and Crested failed  to  perform
their  obligations under an Operating Agreement  with  SMP  in  a
proper  manner,  resulting  in  additional  costs  to  SMP;  that
Registrant and Crested overcharged SMP for certain services under
the  SMP  Partnership Agreement and refused to allow SMP  to  pay
certain  marketing  fees  to Nukem under  the  Uranium  Marketing
Agreement;   that  Registrant  and  Crested  breached   the   SMP
Partnership  Agreement  by failing to  maintain  a  toll  milling
agreement  with  Pathfinder Mines Corporation, thereby  rendering
SMP's  uranium  resources  worthless;  and  that  Registrant  and
Crested  have  engaged in vexatious litigation against  CRIC  and
Nukem.   Defendants  also requested damages (including  punitive,
exemplary  and  treble  damages under RICO,  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 (the "Panel") with respect to
any   and  all  post-December  21,  1988  disputes,  claims   and
controversies  (including those brought in the  1991  arbitration
proceedings, the U.S. District Court proceeding and the  Colorado
State  Court  proceeding described below),  that  any  party  may
assert  against  the other.  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
Panel enters an order and award in the arbitration proceeding.

In  connection with agreeing to proceed to arbitration as  stated
above,  the  Registrant and Crested affirmed the  Sheep  Mountain
Partners  partnership, and proceeded on common  law  damages  and
other claims in the arbitration.  Approximately $18 million cash,
comprising part of the damages claimed by plaintiffs, was  placed
in  escrow by agreement of the parties pending resolution of  the
disputes.

The arbitration evidentiary proceedings were completed on May 31,
1995,  following  which the parties filed  with  the  arbitrators
proposed  findings of fact and conclusions of  law  and  proposed
order,  award,  briefs of law and responses to the other  party's
submittals.  NUKEM and CRIC sought damages against USECC  in  the
amount  of $47,122,535.  For its claims, USECC sought damages  of
approximately  $258  million from Nukem and  CRIC,  which  amount
USECC  requested  be trebled under the Racketeer  Influenced  and
Corrupt   Organizations  Act  ("RICO")  and  similar  state   law
provisions.

On  April  18, 1996 the arbitration Panel entered an  Arbitration
Order  and Award (the "Order").  The Panel found in favor of  the
Registrant  and Crested on certain claims made by the  Registrant
and  Crested (including the claims for reimbursement  of  standby
maintenance expense and other expenses on the SMP mines), and  in
favor  of  Nukem/CRIC and against the Registrant and  Crested  on
certain other claims.

The  Registrant  and  Crested were awarded  monetary  damages  of
approximately  $7.4 million, which amount is after  deduction  of
monetary  damages which the panel awarded in favor of  Nukem/CRIC
and against the Registrant and Crested.  An additional amount  of
approximately  $4.8  million was awarded  by  the  Panel  to  the
Registrant and Crested, to be paid out of cash funds held in  SMP
bank  accounts, which accounts have been accruing operating funds
from   SMP  since  the  arbitration/litigation  proceedings  were
commenced.   It is anticipated that such payment out of  the  SMP
bank accounts will be made in the first quarter of fiscal 1997.

The  Panel  ordered that one utility supply contract for  980,000
pounds  of uranium oxide held by Nukem/CRIC belonged to SMP,  and
ordered  such contract assigned to SMP.  The contract expires  in
2000.

The  fraud and RICO claims of the Registrant and Crested  against
Nukem and CRIC were dismissed.

The timing and assurance of payment by Nukem/CRIC to the
Registrant and Crested of the $7.4 million monetary damages is
presently uncertain. On April 30, 1996 Nukem/CRIC filed with the
Panel two motions to correct the arbitration award, claming to
have discovered errors and inconsistencies in two of the 36
claims addressed in the Order that they allege improperly
increased the award of damages to Registrant and Crested by an
aggregate amount exceeding $14 million.  They have also written a
letter to the bank holding most of the SMP escrowed proceeds
instructing the bank to take no action with respect to releasing
funds from the SMP escrow account without prior notification to
them.  On May 15, 1996, Registrant and Crested filed the Order
(under seal with respect to certain portions containing
commercially sensitive information) with the United States
District Court for the District of Colorado (the "Court") and a
petition for confirmation of the Order.  At a hearing on May 24,
1996 the Court remanded the Order to the Panel for limited review
of the motions filed by Nukem/CRIC.  The petition for
confirmation of the Order and motions filed by Registrant and
Crested for dissolution of SMP, for the appointment of a receiver
to oversee the obligations of SMP to make delivery of uranium
concentrates to utilities and supervise the formal dissolution of
SMP, and for an order directing distribution of the escrowed
proceeds, were stayed by the Court pending a ruling by the Panel
on the two motions filed by Nukem/CRIC. The impact of the
arbitration Order cannot be determined until the Panel rules on
the Nukem/CRIC motions to correct the award and the Court
considers such ruling.  The motions filed by Registrant and
Crested to confirm the Order and Award and appointment of a
receiver have been stayed pending such ruling.

The Panel did not order SMP dissolved.  The Registrant and
Crested have filed a motion with the Court seeking judicial
dissolution of SMP.  Pending a favorable ruling on that motion
the Registrant and Crested may seek to reach an agreement with
Nukem/CRIC on dissolution of SMP.  If a dissolution is not
achievable through negotiation, the Registrant and Crested may
renew its motion for judicial intervention and the appointment of
a receiver by the courts, to wind up the partnership affairs and
distribute assets after payment of liabilities.  The timing and
ultimate resolution of the partnership dissolution matter
presently is uncertain.  Pending such resolution, the Registrant
and Crested are hopeful that delivery obligations under the
various SMP  utility supply contracts can be met through the
cooperation of Nukem/CRIC.

Colorado State Court Proceeding. On September 16, 1991,  USE  and
Crested filed Civil Action No. 91CV7082 in Denver District  Court
against SMP, 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

The  Company  and Crested are defendants and counter-  or  cross-
claimants  in  certain litigation in the District  Court  of  Nye
County,  Nevada, brought by Bond Gold Bullfrog Inc.  ("BGBI")  in
July  1995.   BGBI (now known as Barrick Bullfrog,  Inc.)  is  an
affiliate  of Barrick Corp., a large international gold  producer
headquartered  in  Toronto,  Canada.   The  litigation  primarily
concerns extralateral rights associated with two patented  mining
claims  owned  by  Parador Mining Company  Inc.  ("Parador")  and
initially  leased to a predecessor of BGBI, which claims  are  in
and  adjacent  to BGBI's Bullfrog open pit and underground  mine.
USE  and Crested assert certain interests in the claims under  an
April 1991 assignment and lease with Parador, which is subject to
the lease to BGBI's predecessor.

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
claims leased to BGBI by a third party.

BGBI  seeks  to  quiet  title to its leasehold  interest  in  the
subject claims, alleging that Parador's 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 asserts 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.

A  partial  or  bifurcated trial to the court of the extralateral
rights  issues was held on December 11 and 12, 1995.  The purpose
of the hearing was to determine whether the Bullfrog orebody is a
"vein, lode or ledge" as described in the General Mining Law and,
if  so, whether the facts of the case warrant the application  of
the doctrine of extralateral rights as set forth in such statute.
Although  the Court sat as both the finder of fact and  law  with
respect  to  such issues, the Court concluded that the  questions
are  ultimately  one of law which must be decided  based  on  the
testimony  and  exhibits introduced at the trial  concerning  the
description  of  the orebody.  Registrant and defendants  Crested
Corp. and Parador presented five experts in the field of geology,
including the person who was responsible for the discovery of the
gold  deposit  at  the mine.  All five experts  opined  that  the
deposit  was  a lode and it apexed on a portion of Parador's  two
mining  claims.   The defendant Layne presented a single  witness
who  testified that there was no apex within the Parador  claims.
The  Court nevertheless found that Parador had failed to meet its
burden  of  proof and therefore Parador, Registrant  and  Crested
have  no  right, title and interest in the minerals lying beneath
the  claims of Layne pursuant to extralateral rights.  The  Court
entered  a  partial judgment in favor of Layne and  ordered  that
Parador  pay Court costs to Layne.  Defendants intend  to  appeal
the  Court's ruling as erroneous as a matter of law at such  time
as it is appropriate to do so.

The partial trial did not address any of the other issues pending
in  the  litigation  other  than those  required  to  decide  the
question  of  whether  the  doctrine of  extralateral  rights  is
applicable  to  this  case.  All other claims  and  counterclaims
remain pending before the Court and no hearing date has been  set
for those issues.

If USE's and Crested's position concerning extralateral rights is
ultimately sustained, substantial additional revenues and  income
may  be  received by USE and Crested from royalties payable  with
respect  to  gold produced from the Bullfrog Mine.  If,  however,
the  final decision of the appellate court is adverse to USE  and
Crested,  an  award  of damages against USE and  Crested  in  any
substantial  amount by this Court could have a  material  adverse
effect  on  the  ability of USE and Crested  to  carry  on  their
business in the manner described in this Prospectus.

  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 1994 and 1995, and the  nine
months ended February 29, 1996.

                                           High      Low

     Fiscal year ended May 31, 1996
       First quarter ended 8/31/95         $5.67     $4.13
       Second quarter ended 11/30/95        5.38      3.13
       Third quarter ended 2/29/96         19.00      3.50
       Fourth quarter ended 5/31/96        25.00     13.00

     Fiscal year ended 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
       Fourth quarter ended 5/31/95         7.55      4.63

     Fiscal year ended 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

       (b) Holders

At  June 5, 1996, the closing bid price was $21.625 per share and
there were 722 shareholders of record for USE common stock.

USE  has  not paid any cash dividends with respect to its  common
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.

              MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources at February 29, 1996 (unaudited)

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

Liquidity and Capital Resources

Working  capital increased during the nine months ended  February
29,  1996  by $1,115,800 to working capital of $1,137,700.   Cash
and  cash equivalents increased by $918,500 to $1,279,100  during
the  period  ended  February 29, 1996.   This  increase  was  the
result  of  financing  activities  and  Registrant's  sale  of  a
subsidiary.

In  June  and  July 1995, the Registrant sold 812,432  restricted
common  shares  in  a  private  placement  for  net  proceeds  of
$2,842,200  The Registrant registered these shares with  the  SEC
during  the  Quarter ended February 29, 1996 for  resale  by  the
holders   of  such  shares.   In  connection  with  this  private
placement, warrants to purchase 81,243 common shares at $4.80 per
share,  40,622  of which were exercised in March  of  1996,  were
issued  to  the selling agent.  The balance of the  warrants  are
exercisable through July 25, 2000.

The  Registrant  investing activities provided $1,183,600  during
the  nine months ended February 29, 1996.  This increase in  cash
was  a result of proceeds from the sale of assets $77,700 and the
sale of the Brunton Company, $3,300,000.  These increases in cash
were  partially offset by investments in affiliates  due  to  the
Registrant  and  its  subsidiary Crested funding  Sheep  Mountain
Partners ("SMP"), Plateau Resources Limited ("Plateau"),  Energx,
Ltd. ("Energx") and the Sutter Gold Mining Company ("SGMC").   As
the  Registrant 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 the Registrant and Crested  for
all  the  operating costs.  Due to disputes existing between  the
SMP partners, the Registrant and Crested have not been reimbursed
for  care  and  maintenance costs expended  on  the  SMP  mineral
properties   since   the  spring  of  1991.   Additionally,   the
Registrant   and  its  affiliates  (1)purchased   $1,021,100   of
additional  equipment (2) developed mineral properties,  $349,200
and  (3) developed gas properties $23,400 during the nine  months
ended  February 29, 1996.

During  the  quarter ended February 29, 1996 the Registrant  sold
all of its 100% interest in The Brunton Company to Silva A.B.  of
Sweden.   Gross proceeds from the sale were $4,300,000  of  which
$3,300,000  was paid in cash and $1,000,000 in a Promissory  Note
which  is  payable in three payments of $333,333 on February  15,
1997,  1998 and 1999.  The Note from Silva bears interest  at  7%
per  annum  which  is  due  with the principal  payments.   Other
conditions  of  the sale were the assumption of certain  accounts
payable,  accounts  receivable, and  a  Note  in  the  amount  of
$279,104  with  a bank, and the return of certain  equipment  and
aircraft  which  secures  the Note.   Another  condition  to  the
closing was the retirement of this debt.

Additionally,  The  Brunton Company returned  to  the  Registrant
160,000  shares  of  Crested common stock and 225,556  shares  of
Registrant's common stock along with options to purchase  150,000
shares  of Registrants common stock and 300,000 shares of Crested
common  stock.   The  Registrant, upon return  of  these  shares,
transferred 100,000 shares and 125,556 shares of the common stock
to  SGMC  and Plateau respectively, along with 75,000 options  to
purchase   Registrant's   Common  Stock   to   each   transferee.
Additionally,  the  Registrant  transferred  60,000  shares   and
100,000  shares  of  Crested common stock  to  Plateau  and  SGMC
respectively,  along  with  150,000 options  to  purchase  common
shares of Crested to each transferee. The transfer of such  stock
and  options to Plateau was made in partial payment of debt  owed
to  Plateau by USECC.  The net gain recognized after the transfer
of  assets,  assumption of debt and receivables, along  with  tax
provisions, was $2,295,700.

Other  changes  in  working capital were a decrease  in  accounts
payable  and  accrued expenses of $1,444,900 and  a  decrease  in
lines of credit by $1,140,000.  The Registrant and Crested have a
line  of  credit  for  $1,000,000, with  $0  outstanding   as  of
February  29,  1996.   Four  Nines  Gold  ("FNG"),  has   $79,000
outstanding on its line of credit.

The  primary  requirements for the Registrant's  working  capital
continue  to be the funding of on-going administrative  expenses,
the  mine and mill development and holding costs of SGMC; holding
costs  of Plateau; and uranium (U3O8) delivery costs and property
holding  costs of SMP.  As a result of the disputes  between  the
SMP  partners  (see "Legal Proceedings - Sheep Mountain  Partners
Arbitration/Litigation), the Registrant  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 have made most of the SMP deliveries of U3O8.   It  is
not  known how long this arrangement will continue.  The  capital
requirements  to fill the Registrant's and Crested's  portion  of
the  remaining commitments in fiscal 1996 will depend on the spot
market  price  of  uranium and on the outcome of the  arbitration
proceedings involving Nukem/CRIC.

The  primary source of the Registrant's capital resources for the
remainder of fiscal 1996, will be (i) cash on hand; (ii) possible
sale   of  equity  or  interests  in  investment  properties   or
affiliated companies; (iii) sale of equipment; (iv) resolution of
pending  arbitration/litigation; (v) sale of future royalties  or
interests in mineral properties; (vi) proceeds from the  sale  of
uranium  under  the  SMP contracts, (vii)  and  borrowings  under
existing  lines of credit.  Construction revenues from FNG,  fees
from oil production, rentals of various real estate holdings  and
equipment, aircraft chartering and the sale of aviation fuel will
also provide cash.

Existing  working  capital is sufficient  to  hold  and  maintain
existing mineral properties, obtain and maintain required permits
for   operation  and  development  of  such  properties  and  pay
administration costs for the balance of fiscal 1996  and  beyond.
Additional working capital to that on hand at February  29,  1996
will  be  required,  however,  for the  construction  of  a  gold
processing mill and mine development for SGMC and the development
of   Plateau's  properties.   The  Registrant  and  Crested   are
currently seeking financing for the construction of the SGMC gold
processing  mill and mine development.  The funding of  SMP  care
and  maintenance costs may require additional funding,  depending
on  the  timing of payments from the Order and Award with respect
to  the SMP arbitration.  See "Legal Proceedings - Sheep Mountain
Partners Arbitration/Litigation".

Results of Operations

Three  and Nine Months Ended February 29, 1996 Compared to  Three
and Nine Months Ended February 28, 1995

Revenues  for  the  nine  month and  three  month  periods  ended
February   29,   1996  increased  by  $4,513,300  and   $489,300,
respectively, primarily due to an increase in mineral  sales,   a
mineral   option,  and  an  increase  in  construction   contract
revenues.

Revenues  from  mineral  sales and  option  were  $3,116,700  and
$942,400  for the nine and three months ended February 29,  1996.
There  were  no similar U3O8 deliveries or option activities  for
the same period in the prior year.

Construction  contract  revenues for the nine  and  three  months
ended  February  29,  1996 increased by $2,450,000  and  $523,400
respectively  from profitable contracts awarded  late  in  fiscal
1995 to the Registrant's subsidiary FNG.

Management  fees  and other revenues increased  by  $168,400  and
decreased by $62,300 for the nine and three months ended February
29,  1996.   The increase is primarily as a result  of  increased
revenues  generated by operations of a motel,  convenience  store
and  restaurant at the Registrant's town of Ticaboo  in  southern
Utah.

The  costs  of mineral sales were $2,766,700 for the nine  months
and  $942,400 for the three months ended February 29,  1996,  for
which there were no corresponding costs during the same period in
1995.   Cost  and  expenses  associated with  mineral  operations
decreased  by $403,100 and $108,400, respectively, for  the  nine
and  three months ended February 29, 1996, compared to  the  nine
and  three months ended February 28, 1995, primarily as a  result
of  a  decrease  in  legal  costs  in  connection  with  the  SMP
arbitration.   The cost of construction activities  increased  by
$1,779,200,  and $437,900, respectively for the  nine  month  and
three month periods ended February 29, 1996 compared to the  same
periods in 1995 as a result of increased contract work.

General  and  administrative expenses increased by  $496,700  and
decreased by $340,600, respectively for the nine and three months
ended  February 29, 1996 compared to the comparable 1995 periods.
The  increase was due to additional expenses associated with  the
FNG's   contracts.   Additionally,  interest  expense  which   is
included  in  general  and administrative  expense  increased  by
$46,200  during  the  nine  months ended  February  29,  1996  as
compared  to the same period in 1995.  General and administration
expenses also increased due to the Christmas bonus paid in  stock
to  certain employees during the quarter ended February 29,  1996
and  to  the  shares  of  stock issued  in  February  1996  under
Registrant's  Restricted Stock Bonus Plan.  The  total  of  these
stock  issuances  was  compensation of  $297,400.   Officers  and
directors were not issued any stock compensation (see Note  6  to
the USE Condensed Consolidated Financial Statements for the Three
and  Nine Months Ended February 29, 1996).  Commercial operations
expenses remained relatively constant.

Operations  for  the nine months and three months ended  February
29,  1996  resulted  in  a  loss from  continuing  operations  of
$1,765,400 and $1,074,400, respectively, as compared to a loss of
$1,437,700  and $270,300 during the same periods of the  previous
year. During the nine months and quarter ended February 29,  1996
the  Registrant recorded a gain of $2,295,700 net of  $50,000  in
taxes,  on  the sale of Brunton.  No such gain was recognized  in
the prior year's periods. Due to the discontinuance of operations
from  Brunton  during the quarter ended February  29,  1996,  all
income  from Brunton is shown as discontinued operations  on  the
Statements  of Operations for the quarter and nine  months  ended
February  29,  1995.  During the nine months  and  quarter  ended
February  29, 1996 the Registrant recognized income  of  $308,900
and  a  loss of $9,200, respectively, from Brunton's discontinued
operations  as  compared  to a gain of $121,900  and  a  loss  of
$58,100  for  the  corresponding periods of the prior  year.  The
Registrant  therefore recognized a net income of $839,200  ($0.14
per share) compared to a loss of $1,315,800 ($0.27 per share) for
the  nine  month period and net income of $1,212,100  ($0.19  per
share)  compared to a loss of $328,400 ($0.07 per share) for  the
three month period, of the previous year.

Liquidity and Capital Resources at May 31, 1995

Working   Capital  Components.   Net  cash  used   in   operating
activities and investing activities was $2,479,700 and  $537,300,
respectively  for  fiscal 1995.  For the year,  these  activities
resulted  in  a net cash decrease of $630,400.  Cash provided  by
financing  activities was $2,386,600.  This was due primarily  to
the  draw  down  of an operating line with a commercial  bank  of
$960,000  and  a  private placement in November 1994  of  400,000
shares  of  the Company's common stock at $3.00 per  share.   The
Company  was  obligated to either buy back the stock  in  October
1995 at $3.50 per share or issue an additional share of stock for
every  three  shares purchased during the private placement,  and
register  both  the  private placement and additional  shares  by
February  28,  1996.   Subsequent to May 31,  1995,  the  Company
issued the additional 133,336 common shares.

Working  capital decreased during the fiscal year ended  May  31,
1995  by $2,552,900 to $22,000 (from $2,574,900 at May 31, 1994).
The  principal components of the decrease were a $630,400 decline
in  cash  and cash equivalents, a $1,553,900 increase in accounts
payable and accrued expenses, and a $1,366,000 increase in  lines
of  credit.  These were partially offset by increases in accounts
receivable of $539,400, and in inventory of $142,700.

Cash  was  primarily used in operations and investing  activities
during  the period.  Cash was used in the development  of  mining
properties,  primarily  SGMC's Lincoln gold  project  ($455,100),
development  of  the Energx gas properties ($218,200),  purchases
and  modification  of property and equipment ($178,900)  and  the
continued investment in affiliates, primarily SMP ($830,500).

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 $878,500 in fiscal 1995.

Capital  Requirements  - General:  The primary  requirements  for
USE's  working capital during fiscal 1996 are expected to be  the
costs  associated  with  SGMC  property  leases  and  payment  on
purchased  properties, and development activities of  SGMC;  care
and maintenance costs of SMP; care and maintenance of the Plateau
uranium  properties in Utah;  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 - SGMC:  SGMC'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 with respect to  currently
defined   reserves,  capital  resources  in  addition  to   those
currently  on  hand, will be needed to expand reserves,  complete
mine  development and construct a mill facility.  The  timing  of
these  expenditures  will  depend  upon  internal  cash  flow  or
additional  financing  or finding a joint venture  partner.   The
holding costs are estimated at $418,200 for the two fiscal  years
ending May 31, 1997.

Capital  Requirements - SMP:  There are no current plans to  mine
the  SMP Crooks Gap properties during fiscal 1996.  However,  USE
and  Crested will continue to preserve the ore bodies 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 of $15,037,800 as of August 1995,
these  funds  are  restricted and subject to a  decision  by  the
Arbitration  Panel.  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 $4,521,600  at  May  31,  1995.
Until  resolved, USECC will have to continue funding  SMP's  care
and maintenance expenditures.  Such expenditures were $878,500 in
fiscal  1995.  The  dispute between the SMP  participants  should
largely be resolved in fiscal 1996.

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.   However,
during  fiscal  1995  all  of  the deliveries  to  fill  the  SMP
contracts  were  made by Nukem/CRIC.  It is  uncertain  what  the
protocol  will be on future SMP deliveries.  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 1996 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 1996.

Capital  Requirements - Plateau:  During fiscal 1995  the  annual
care and maintenance costs for the Shootaring Mill were $465,900.
It  is anticipated that these costs will continue until the  mill
is either placed into production or ,decommissioned and will be a
cash  drain to USE 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.  Energx holds  several
gas  leases  and  in  fiscal 1995 was participating  in  two  gas
ventures.   One  venture on the Fort Peck Indian  Reservation  in
Montana  with NuGas, a Canadian firm, requires NuGas to fund  the
drilling   of   the   first  eight  wells.   Therefore,   capital
expenditures  by  USE on this venture are not anticipated  to  be
significant  in  1996.  The second venture, in Montana,  required
that  Energx, as a condition of its earn-in to the venture,  fund
the  drilling of seven exploratory wells.  However, in  September
1995 Energx terminated its interest in this second venture.

Long-Term Debt and Other Obligations:  Long-term debt at May  31,
1995,  was  $1,161,400, the current portion of which is  $232,900
(see   Note   G   to  the  USE  audited  Consolidated   Financial
Statements).

Reclamation Costs.  Prior to fiscal 1995, 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 resolution
of the arbitration/litigation with Nukem/CRIC.

Reclamation  obligations on the contiguous Big  Eagle  properties
and   the   Sweetwater  Mill  are  estimated   at   approximately
$23,960,000.   These obligations have been assumed  by  the  GMMV
venturers  and  secured by a bank letter of  credit  provided  by
Kennecott.   The major part of the reclamation and  environmental
costs associated with the Sweetwater Mill are not expected to  be
paid  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 posted with the U. S. Nuclear Regulatory Commission and
a  $4,800,000  cash  deposit  which will  be  available  for  the
resolution of any environmental or nuclear claims if Plateau does
not  begin  decommissioning the mill complex prior to June  1997.
See "Uranium - Shootaring Canyon Mill."

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 a material amount of  USE  funding  in
fiscal 1996.

See  Note  K to the USE audited Consolidated Financial Statements
for  further  information regarding reclamation and environmental
costs, and the funding thereof.

Capital  Resources:  The primary source of USE capital  resources
for  fiscal 1996 will be cash on hand, a private placement of the
Company's common stock, 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.

In June and July 1995, the Company sold 812,432 restricted common
shares  in  a  private placement for net proceeds  of  $2,827,300
($4.00  per  share).   Resale  of these  shares  by  the  private
investors will be registered with the SEC in November  1995.   In
connection  with  this  private placement, warrants  to  purchase
81,243  common  shares  at $4.80 per share  were  issued  to  the
selling agent.  The registration statement also will cover resale
of the common shares underlying the warrants.  These warrants are
exercisable through July 28, 2000 and both the warrants  and  the
underlying shares of common stock issuable upon exercise of  such
warrants  will be included in the Company's Form S-3 registration
statement.

Additional capital will be needed to develop and build  the  mine
and mill complex for the SGMC Lincoln Project.  SGMC presently is
seeking financing for the Project (see - "Description of Business-
Gold").   If  such financing cannot be obtained, USE and  Crested
will  be  forced to either sell the Lincoln Project  or  continue
funding SGMC's property holding costs.  Continued funding of such
costs  could  cause USE and Crested to look for other  short-term
working capital resources.

To  fund the Energx drilling on the Fort Peck Reservation as well
as  other locations USE plans to seek a joint venture partner  or
obtain  financing  through  banking institutions  or  the  public
market.

Funding  of SMP care and maintenance costs may require additional
advances  by  USECC,  depending  on  the  outcome  of   the   SMP
arbitration/litigation.  See "Legal Proceedings - Sheep  Mountain
Partners Arbitration/Litigation."  Although USE management is  of
the  opinion that the SMP arbitration/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  may  also
cause short-term liquidity requirements.

In fiscal 1995, USE had a $1,000,000 commercial bank credit line.
Borrowings of $960,000 under the credit line were outstanding  at
May  31,  1995.  In July 1995, the Company paid off this line  of
credit  with some of the funds from the private placement of  USE
common  shares and renegotiated the line for an additional twelve
months.   As of September 1, 1995, the entire $1,000,000  of  the
new line was available.

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  significant  extent  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  and USECC received a notification of tax deficiency from the
Internal  Revenue Service for fiscal years ended  May  31,  1989,
1990  and 1991.  USE filed a response to the proposed deficiency,
and  has  requested  an  administrative  appeal  of  the  initial
examiner's  deficiency  finding.  To date,  USE  has  received  a
preliminary indication that a major portion of the findings  have
been  resolved in favor of USE.  However, no written confirmation
has  been  received  as  of Prospectus  date,  and  therefore  no
quantitative  amount of tax deficiency can  be  determined.   USE
does not believe the remaining issues will have a material effect
on  its  financial condition or results of operations.   Further,
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.

USE  believes available cash, operating revenues, borrowing under
its  current line of credit  and subsequent financing  activities
will  be adequate to fund working capital requirements.  However,
with  the exception of GMMV, USE will require additional  sources
of  funding or joint venture partners to continue its development
of  and  investment  in its various mineral ventures,  as  stated
above.

Results of Operations

Fiscal 1995 Compared To Fiscal 1994

The  revenues  increased slightly in fiscal  1995  to  $9,148,000
(compared  to  $8,776,300 in fiscal 1994), and  total  costs  and
expenses   declined  slightly  in  fiscal  1995  to   $11,429,500
(compared  to  $12,364,200 in fiscal 1994).  This resulted  in  a
reduction (from a loss of $3,370,800 in fiscal 1994) in  the  net
operating  loss by $1,300,200 to a loss of $2,070,600  in  fiscal
1995.   The  improvement in operations can be attributed  to  two
major  events,  the  sale of property and  the  consolidation  of
Brunton's statement of operations.  (Brunton's operation were not
consolidated  in 1994 as the acquisition of Brunton  occurred  in
May 1994.)

Gain  on  sales  of assets increased by $1,229,600 during  fiscal
1995 compared to the corresponding period of the prior year.  The
increase  is  due to the sale of certain real estate in  Colorado
for $951,600; receipt by Plateau of an option payment of $100,000
for certain properties in Utah; and sale by Energx of an interest
in  a  gas property for $195,900.  During fiscal 1994, there were
only sales of miscellaneous equipment for $52,800.

There  were no mineral sales in fiscal 1995, as a result  of  the
SMP  arbitration, to compare with the $3,732,500 in revenues from
the  sale  of  U3O8  in  fiscal  1994.   However,  this  had   no
significant  effect on the net operating losses  because  of  the
corresponding  reduction  in the cost of  sales.   During  fiscal
1994,  USE  and  Crested made all or a portion  (50  percent)  of
certain  of  the  uranium  deliveries  required  under  the   SMP
contracts.  However, during fiscal 1995, USE and Crested have not
been  allowed to make such deliveries, due to disputes  with  the
other  SMP partners; under agreements reached on an interim basis
for   the   remainder  of  time  required  for  the  SMP  dispute
resolution,  all  deliveries have been made by Nukem.   Once  the
arbitration proceedings are concluded, deliveries will be made in
accordance with the decision of the arbitration panel.

The  consolidated  statement of operations  for  fiscal  1995  of
Brunton is reflected as recreational product sales of $4,452,300.
This  increase  in revenues was offset by increases  in  cost  of
goods  sold, and general and administrative and interest expenses
as  a result of the consolidation.  This resulted in a net effect
of  $296,400 to the fiscal 1995 consolidated operations.   Legal,
accounting  and related expenses of the Brunton acquisition  were
approximately $50,000.  Although the revenues from  Brunton  were
not  consolidated  for  fiscal  1994,  Brunton  had  revenues  of
$4,118,800  during  that period, and a net  operating  income  of
$386,700.

In  fiscal  1995,  $1,069,600 was incurred in legal,  arbitration
fees  and  expert  fees  incurred  in  connection  with  the  SMP
arbitration/litigation,  compared to  $576,500  in  fiscal  1994.
Such expense will be reduced in fiscal 1996.

The  reduction in mineral property transactions is related to the
Mt.  Emmons molybdenum property, in which USE and Crested have  a
six  percent  gross royalty.  In addition to the  gross  royalty,
there were promissory notes of $7,500,000 each issued to USE  and
Crested in 1980, with provision for advance royalties.  In  1985,
AMAX,  USE and Crested agreed to amortize the notes at an  annual
rate  of  $1,000,000 each to USE and Crested ($250,000 each,  per
quarter),  in  lieu  of most of the advance  royalties.   Advance
royalties  of  50,000  pounds  of molybdic  oxide  (or  its  cash
equivalent)  remains  payable.  During  fiscal  1994,  the  final
$500,000  was  amortized  on the long term  note,  so  there  was
consequently  no amortization of such debt in fiscal  1995.   The
remaining  component of the decrease in gain  from  restructuring
mining  properties agreements, is as a result of the  fluctuation
of  the market price of molybdenum, which is paid in kind by AMAX
in lieu of cash payment of the advance royalty.

Construction operation revenues for the year ended May  31,  1995
decreased  by $1,303,000 from the previous year due to  decreased
contract work performed by USE's subsidiary Four Nines Gold, Inc.
("FNG").  The reason for this decrease can be attributed  to  FNG
not  being successful in the bidding process for new construction
work.   During fiscal 1995, FNG spent the majority  of  its  time
bidding  on  a  large ($3,500,000) contract for  structure  work.
Late  in  fiscal  1995, FNG was awarded this  contract  which  is
projected to be profitable.  Long term growth and profits for the
construction  segment is based on FNG's ability to  competitively
bid  for  work  and  at the same time remain profitable.   It  is
anticipated that FNG will grow, however, there will be periods of
time  that  show  declines in revenue, as was experienced  during
fiscal 1995.

On June 1, 1993, USE implemented SFAS No. 109.  See Footnote 2 to
the USE Consolidated Financial Statements.  The cumulative effect
for  the  year ended May 31, 1994, of this tax accounting  change
was  a  decrease  of net income of $267,000.   No  provision  for
income taxes was necessary in fiscal 1995.

Interest  income  increased to $479,900  from  $328,700  for  the
previous  year  as a result of higher overall interest  rates  on
invested cash.

Interest  expense  increased to $279,000  from  $117,000  due  to
higher borrowing levels related to the line of credit and overall
higher interest rates.

Fiscal 1994 Compared To 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  SGMC,  general  and   administrative
expenses  (including permitting costs) 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 in  an
operating profit of $317,500 for construction contract activities
for the year.

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.  See Business - Oil and  Gas
- - Energx."

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.

Effects of Changes in Prices

Mining  operations and the acquisition, development and  sale  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 sales  advantageous.
Conversely,   a   price  decline  facilitates   acquisitions   of
properties  containing  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 the  acquisition  of  the
Sweetwater Mill and the Shootaring 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,
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 sustained increase  in  the  spot
market price above the contract prices.

USE  believes  SGMC's Lincoln Mine will be profitable  with  gold
prices  over  $290  per ounce.  The price of  gold  has  remained
relatively  stable over the past year between $370 and  $410  per
ounce.

Molybdenum  and  Oil.   Changes  in  prices  of  molybdenum   and
petroleum are not expected to materially affect USE with  respect
to either its molybdenum advance royalties or its fees associated
with  oil  production.  A significant sustained increase  in  the
price  of molybdenum could increase the likelihood that  the  Mt.
Emmons properties will be developed, but such an increase is  not
anticipated in fiscal 1996.

                DIRECTORS AND EXECUTIVE OFFICERS

Business  Experience  and Other Directorships  of  Directors  and
Nominees.

John  L.  Larsen,  64,  Chairman,  Chief  Executive  Officer  and
President.   Mr.  Larsen  has  been principally  employed  as  an
officer and director of the Company and Crested for more than the
past  five  years.   He  is  also a  director  of  the  Company's
subsidiary,  Ruby  Mining Company ("Ruby")  and  of  The  Brunton
Company.   Crested  and  Ruby have registered  equity  securities
under the Securities Exchange Act of 1934.

Max  T.  Evans, 71, director and Secretary.  Mr. Evans  has  been
principally  employed as an officer and chief  geologist  of  the
Company  and  Crested for more than the past five years.   He  is
President and a director of Crested.  Mr. Evans received B.S. and
M.S. degrees in geology from Brigham Young University.

Harold  F.  Herron, 42, director and Vice President.  Mr.  Herron
has  been the Company's Vice-President since January 1989.   From
1976,  Mr. Herron has been an employee of Brunton, a manufacturer
and/or  marketer of compasses, binoculars and knives,  which  the
Company sold to Silva Production AB in February 1996.  Initially,
he  was  Brunton's sales manager, and since 1987 he has been  its
President.  Mr. Herron is a director of Ruby and Northwest  Gold,
Inc.,  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.

David  W.  Brenman, 40  has been a director of the Company  since
January 1989.  Since September 1988, Mr. Brenman has been a self-
employed financial consultant.  In that capacity, Mr. Brenman has
assisted the Company 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 registered  equity  securities
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, 69, has been a Company director since May 1990.
From  January  1990  until mid-fiscal 1993, Mr.  Anderson  was  a
geologist   for  the  Company.   Mr.  Anderson  was  Manager   of
Exploration  and Development for Pathfinder Mines Corporation,  a
major domestic uranium mining and milling corporation, from  1976
until  his  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,  46, has been a Company director since  1989.   Mr.
Bebout  is  a director and President of NUCOR, Inc. ("NUCOR"),  a
privately-held   corporation  that   provides   exploration   and
development  drilling services to the mineral  and  oil  and  gas
industries, since 1987.  Prior to that time, Mr. Bebout was  Vice
President  of  NUCOR from 1984. Mr. Bebout is  also  an  officer,
director  and owner of other privately-held entities involved  in
the resources industry.

Information Concerning Executive Officers Who Are Not Directors

The  following information is provided pursuant to  Item  401  of
Reg. S-B, regarding the executive officers of the Company who are
not also directors.

Daniel  P. Svilar, age 67, has been General Counsel for  USE  and
Crested for more than the past five years.  He also has served as
Secretary  and a director of Crested, and Assistant Secretary  of
USE.  His positions of General Counsel to, and as officers of the
companies, are at the will of each board of directors.  There are
no  understandings  between  Mr.  Svilar  and  any  other  person
pursuant to which he was named as officer or General Counsel.  He
has  no  family  relationships with any of  the  other  executive
officers  or directors of USE or Crested, except his nephew  Nick
Bebout is a USE director.  During the past five years, Mr. Svilar
has not been involved in any Reg. S-B Item 401(d) proceeding.

Robert  Scott  Lorimer,  age 45, has been  Controller  and  Chief
Accounting  Officer for USE and Crested for more  than  the  past
five  years.   Mr. Lorimer also has been Chief Financial  Officer
for  both companies since May 25, 1991, and their Treasurer since
December  14,  1990.   He serves at the will  of  the  Boards  of
Directors.   There are no understandings between Mr. Lorimer  and
any  other person, pursuant to which he was named an officer, and
he  has  no  family relationship with any of the other  executive
officers  or directors of USE or Crested.  During the  past  five
years,  he  has  not been involved in any Reg.  S-B  Item  401(d)
listed proceeding.

Family Relationships.

Harold  F. Herron, a director and vice-president, is the  son-in-
law  of  John  L.  Larsen,  a  principal  shareholder,  Chairman,
President  and  CEO.  Nick Bebout, a director,  is  a  nephew  of
Daniel  P.  Svilar, a principal shareholder and General  Counsel.
There  are  no  other  family relationships among  the  executive
officers or directors of the Company.

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
$100,000  cash  in any of the three fiscal years  ended  May  31,
1995.   The  table  includes compensation paid  such  persons  by
Crested   and  Brunton  for  such  persons'  services   to   such
subsidiaries.
SUMMARY COMPENSATION TABLE
Long Term Compensation
                                                           ----------------------------------
                                Annual Compensation                Awards           Payouts
                            -----------------------------------------------------------------  
(a)                  (b)       (c)       (d)      (e)         (f)         (g)          (h)         (i)
                                                 Other
Name                                             Annual    Restricted                           All Other
and                                              Compen-     Stock      Options/       LTIP      Compen-
Principal                     Salary    Bonus    sation     Award(s)      SARs       Payouts     sation
Position             Year      ($)       ($)      ($)         ($)         (#)          ($)       ($)(3)
- ---------------------------------------------------------------------------------------------------------
John L. Larsen       1995   $144,023   $2,751      --      $9,000(1)      -0-          --       $13,361
  CEO                1994    148,239    7,028      --       9,600(1)      -0-          --        14,394
  President          1993    164,968    4,016      --       7,200(1)    100,000(2)     --        16,718

Daniel P. Svilar     1995    112,615    2,076      --       8,100(1)      -0-          --        11,008
  Asst. Secretary    1994    112,753   64,984      --       8,640(1)      -0-          --        17,300
                     1993    108,000    2,001      --       6,480(1)      -0-          --        12,862

Harold F. Herron     1995    117,238    2,033      --         --          -0-          --         6,626
  Vice President     1994    105,983   18,268      --         --          -0-          --         9,743
                     1993     99,469   12,617      --         --          -0-          --         3,626

R. Scott Lorimer     1995    112,403    2,098      --     5,681(1)     -0-         --     10,989
  Treasurer          1994     92,799   43,461      --     6,181(1)     -0-         --     13,260
                     1993     78,921    2,196      --     4,548(1)     -0-         --      9,400
(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  for
     retirement, death or disability.

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

(3)  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
Green Mountain Mining Venture (" 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 1996.

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  a  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
with  respect  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
annually).    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.   As  of  this
Prospectus  date, the Company is unaware of any proposed  hostile
takeover.

The  Company  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").  An ESOP has been adopted
to  encourage ownership of USE Common Stock by employees, and  to
provide  a  source  of retirement income to  them.   Because  the
persons performing duties for Crested are employees of USE,  they
benefit from the ESOP and the other compensation plans of USE, as
described below.  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  USE  Common  Stock.   Messrs.
Larsen, Herron and Evans are the trustees of the ESOP.

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 37,204 shares to the ESOP for
fiscal  1995,  all  of  which were contributed  under  the  money
purchase  pension plan.  At the time the shares were contributed,
the  market  price was $5.375 per share, for a total contribution
valued  at  $199,971.50  which has been funded  by  the  Company.
Crested and the Company are each responsible for one-half of that
amount  (i.e., $99,985.75), 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  37,204  shares issued to the ESOP for fiscal  1995  included
2,276  shares allocated to John L. Larsen's account, 1,422 shares
allocated  to  Max  T.  Evans' account, 582 shares  allocated  to
Harold  F. Herron's account, 2,048 shares allocated to Daniel  P.
Svilar's  account,  and  2,045  shares  allocated  to  R.   Scott
Lorimer's  account,  for  a total of 8,373  shares  allocated  to
accounts  for  all executive officers as a group (five  persons).
Shares  forfeited  by terminated employees  who  were  not  fully
vested  were  reallocated to plan participants and included  159,
100,  40,  143 and 143 shares to the accounts of Messrs.  Larsen,
Evans, Herron, Svilar and Lorimer, respectively.  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 1996 have not been  made
with respect to any participant in the ESOP.

The  maximum  loan outstanding during fiscal 1995  under  a  loan
arrangement  between the Company and the ESOP, was $1,014,300  at
May  31,  1995 for loans made in fiscal 1992 and 1991.   Interest
owed by the ESOP was not booked by the Company.  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.

Stock  Option  Plan.  The Company 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.  Herron, Bebout and Brenman).  The committee  establishes
the  exercise  periods and exercise prices  for  options  granted
under the plan.  The Board ultimately ratifies the actions of the
committee.  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  upon  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  1995,  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, 1995.

       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
                                             at FY-End (#)      at FY-End($)
                      Shares       Value
                   Acquired on    Realized    Exercisable/      Exercisable
Name               Exercise (#)     ($)      Unexercisable     Unexercisable
- -----------------------------------------------------------------------------
John L. Larsen,       -0-           -0-         100,000         $388,000(1)
  CEO, President                              exercisable     exercisable and
                                                                unexercised

                                                100,100         $248,248(2)
                                              exercisable     exercisable and
                                                                unexercised

Max T. Evans,         -0-           -0-          57,200         $141,856(2)
  Secretary                                   exercisable     exercisable and
                                                                unexercised

Harold F. Herron,     -0-           -0-          11,000          $27,280(2)
  Vice President                              exercisable     exercisable and
                                                                unexercised

Daniel P. Svilar      -0-           -0-          66,000         $163,680(2)
  Asst. Secretary                             exercisable     exercisable and
                                                                unexercised

R. Scott Lorimer      -0-           -0-          29,700          $73,656(2)
  Treasurer                                   exercisable     exercisable and
                                                                unexercised

  (1)  Equal to $5.38 closing bid on last trading day in FY 1995,
less  $2.00  per share option exercise price, multiplied  by  all
shares exercisable.

(2)   Equal to $5.38 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.  The Company and  Crested  have  issued
stock bonuses to various executive officers and directors of  the
Company  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,  Lorimer  and all executive officers  as  a  group  (four
persons)  received  20,400,  12,750, 18,360,  12,240  and  63,750
shares of Common Stock, respectively, under this restricted stock
plan  through  fiscal 1995.  Additional bonuses  of  20%  of  the
original  shares (7,500) will be issued annually  through  fiscal
1997.   The expenses relating to these stock issuances are shared
equally by the Company and Crested.

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 the Company 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 the  Company.
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.

Other Options and Shares Compensation Proposals

As  of  December  22, 1995, the Registrant's board  of  directors
amended  the  Registrant's  1989  Incentive  Stock  Option  Plan,
without  shareholder approval, to increase the number of  options
issuable  to  employees  (not  including  executive  officers  or
directors of the Registrant) from the present 275,000 options  up
to  the  increased  number of 700,000 options.   All  such  newly
authorized  options will be nonqualified under  IRS  regulations.
Under  the  Plan  as amended, the board of directors  has  issued
nonqualified  options  to  purchase a total  of  360,000  shares,
subject to continued employment and exercisable at 20% per  year,
to  employees;  the exercise price of the options is  $4.00  (the
fair  market price at December 22, 1995), subject to  the  market
price of the shares being above $8.00 per share for 30 days after
grant date.

The board of directors also has proposed, subject to approval  by
the  shareholders  at  the next annual  meeting,  a  stock  award
program  for  the  executive  officers  and  directors   of   the
Registrant, for the award of common shares to each individual, as
of March 1 of each year of continued employment.  The first award
is  tentatively  set to be March 1, 1997, in  amounts  of  20,000
shares  for  from  three  to  5 years per  officer  or  director,
however,  no awards shall be made until a formal plan is  adopted
and  approved  by  the shareholders and then  only  upon  further
decision  of  the compensation committee as to other features  of
the  plan  (including payment of taxes for the grantees with  pay
back  arrangements) which may be desirable.  The stock award plan
will conform to the Commission's proposed Rule 16b-3 for purposes
of  complying  with Sections 16(a) and (b) of  the  Exchange  Act
regarding shortswing profit prohibitions.

The  board  of directors expects both the amended 1989  Incentive
Stock  Option  Plan,  and (subject to shareholder  approval)  the
stock  award program for officers and directors, to be registered
with the Commission on Form S-8 in calendar 1996.

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 the Company.   Any  loans  or
surety  arrangements for directors which are in excess of $50,000
will require Board rather than Executive Committee approval.  The
Company 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

Transactions  with  Crested  Involving  Sheep  Mountain  Partners
("SMP").   In fiscal 1989, the Company 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  with  CRIC
and  Nukem, necessary mine maintenance has been funded  by  USECC
alone without reimbursement from SMP.  For fiscal 1995 and eleven
months  of fiscal 1996, the Company has advanced Crested's  share
of   SMP   property  maintenance  in  the  aggregate  amount   of
approximately $402,700 none of which has been reimbursed  by  SMP
or Crested.

Transactions  with Crested Involving  Plateau.  In  August  1993,
the  Company entered into an agreement to acquire all the  issued
and   outstanding  common  stock  of  Plateau  Resources  Limited
("Plateau"),  a  Utah  corporation.   Plateau  owns   a   uranium
processing  mill  and support facilities and certain  other  real
estate  assets  in southeastern Utah.  The Company  paid  nominal
cash consideration for the Plateau stock and agreed to assume all
environmental  liabilities and reclamation  bonding  obligations.
Prior  to  closing the agreement, Plateau transferred  $2,500,000
cash  to fund the NRC Surety Trust Agreement to pay future  costs
of  mill  decommissioning, site reclamation  and  long-term  site
surveillance.   Plateau also transferred $4,800,000  cash  to  an
Agency   Agreement  to  indemnify  the  seller  against  possible
environmental  or  nuclear claims.  At the  date  of  acquisition
Plateau  held an additional $6.9 million of unencumbered cash  to
be  used  for  care and maintenance costs on the mill  and  other
assets acquired.  Most of the unencumbered cash has been used for
care  and  maintenance  costs  and  loaned  to  the  Company  for
development  of  certain  properties  held  by  the  Company  and
Crested.  Although Crested has no ownership in Plateau, Directors
of the Company and Crested have agreed to divide equally one-half
of  the obligations incurred in excess of the total $14.2 million
described  above  and will share in one-half of  all  cash  flows
derived from operations of these assets.

Plateau  also  owns  all  of  the  outstanding  stock  of  Canyon
Homesteads, Inc. ("Canyon"), a Utah corporation, which  developed
the  Ticaboo,  Utah townsite 3.5 miles south of  the  mill.   The
Ticaboo  site  includes  a  66  room  motel,  convenience  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 being operated as a commercial  enterprise.
The Company and Crested plan to further develop the townsite, and
have been seeking financial partners.

Transactions  with  Arrowstar Investments Inc.   In  April  1995,
Canyon entered into an agreement with First-N-Last LLC ("FNL",  a
Utah  limited liability company), to develop and operate  certain
assets  in  Utah near the Ticaboo townsite.  Under the agreement,
Canyon  contributed to FNL an operating service station and  boat
storage  operation, and Arrowstar Investments, Inc. ("Arrowstar",
the  other  member of FNL) agreed to contribute  up  to  $150,000
cash.   Arrowstar also agreed to contribute to FNL up to  another
$50,000  as  needed.   The  purpose of  FNL  is  to  remodel  the
contributed assets, build a convenience store and gift shop,  and
operate  the upgraded facility.  Profits were to be allocated  90
percent to Arrowstar until recovery of its cash investment,  then
75  percent  to  Arrowstar until it had  received  $215,000  cash
(including  investment),  and  50 percent  to  Arrowstar  and  50
percent   to   Canyon  thereafter.   Arrowstar   is   a   private
corporation;   the  spouse  of  John  L.  Larsen   (a   principal
stockholder, Chairman of the Board, President and Chief Executive
Officer of Registrant) in joint tenancy with his three sons  (who
are  not affiliates of the Company or Crested) are directors  and
shareholders of Arrowstar. Plateau (and the Company, as its  sole
shareholder) approved the arrangement because neither Plateau nor
USE  had  (nor could they acquire on favorable terms)  the  funds
required to upgrade the facility.

In  June  1995,  USECC signed a six year option to  acquire  from
Arrowstar  a  7,200  square foot hangar at the Riverton  Regional
Airport.  The option purchase price originally was agreed  to  be
$110,000;  subsequently, Arrowstar and USE  agreed  the  purchase
price  would  be  $75,000 which was the value of the  hangar  and
leasehold  determined by an independent market  value  appraisal.
USECC  exercised  the  option as of November  1,  1995  and  paid
$30,000  against the purchase price.  The balance was to be  paid
by a promissory note of USECC for $45,000 payable over five years
with interest at the rate of 10% per annum on the unpaid balance.
Arrowstar acquired the property for cash from the prior owner  in
1992,  at  which  time neither the Company  or  Crested  had  any
interest  in acquiring the property.  USECC expects  to  use  the
facility in connection with expanded municipal airport traffic in
the  coming  years  and in the interim for airplane  and  vehicle
storage purposes.

On  April 26, 1996 USECC sold its Wind River Estates Mobile  Home
Park  (including various personal property) in Riverton,  Wyoming
to  Arrowstar  for  $804,000,  the appraised  value.   The  total
purchase  price consists of $500,000 cash; Arrowstar's  unsecured
10%  promissory  note due 2006 for $56,000; cancellation  of  the
promissory note that USECC gave Arrowstar in connection with  the
purchase of the hangar described above, which note was valued  at
$47,934  including accrued interest; and $161,378.34 by Arrowstar
assigning  to  USECC  its entire interest in First-N-Last  L.L.C.
with   respect   to   the   Ticaboo   assets   described   above.
Additionally,  USECC  credited  Arrowstar  $38,687  against   the
purchase  price for the Wind River Estates mobile home  park  for
goodwill due to Arrowstar's investing in First-N-Last at the time
that neither Plateau nor USE or Crested had the funds required to
upgrade the facility.

Transactions  with Directors.  Three of the Company'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 the Company 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.

In  fiscal 1995, Harold F. Herron, son-in-law of John L.  Larsen,
purchased  a  house from the Company for $260,000, the  appraised
value  of  the  property, and was reimbursed by the  Company  for
leasehold improvements totaling $22,830, incurred by him while he
was living in and caring for the house prior to its sale.

Other  Information.  The Company 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 the Company  (as
manager of USECC's commercial operations, uranium fuels marketing
director,  and  as  chief pilot, respectively) and  Mr.  Larsen's
brother,  now  deceased was employed as drilling  superintendent.
Mr.  Larsen's  son-in-law  Harold F. Herron  is  an  officer  and
director of the Company, and president and a director of Brunton.
Collectively,  the  five individuals received  $512,000  in  cash
compensation (paid by the Company, Crested and Brunton) for those
services during the fiscal year ended May 31, 1995, which  amount
includes  $117,441 cash compensation paid Mr. Herron (principally
in his capacity as president of Brunton, and also for his service
as  a  Company vice president, see Executive Compensation above).
The  foregoing compensation expense (excluding compensation  paid
by  Brunton  to  Mr. Herron, and one of Mr. Larsen's  sons  as  a
Brunton  officer)  was  shared by the  Company  and  Crested,  in
accordance with the compensation arrangements for all employees.

The  Company  and  Crested provide management and  administrative
services  for  affiliates under the terms of  various  management
agreements.  Revenues from services by the Company to  affiliates
other  than  Crested were $88,300 in fiscal 1995 and  $80,300  in
fiscal 1994.  The Company provides all employee services required
by  Crested.  In exchange Crested is obligated to the Company for
its share of the costs for providing such employees.

Transactions  Involving USECC.  The Company and  Crested  conduct
the  bulk  of their activities through their equally-owned  joint
venture,  USECC.   From  time to time  the  Company  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  the  Company   and
Crested.  The party extending funds is subsequently reimbursed by
the  other  venturer.   The  Company had  a  note  receivable  of
$4,163,315 from Crested at May 31, 1995 ($3,792,800 during fiscal
1994).

Debt  Associated with USE's ESOP. During the year ended  May  31,
1995,  the Company made a contribution of 37,204 shares of Common
Stock  to  the  ESOP.   Because  Crested  engages  the  Company's
employees to discharge substantially all of its functions,  these
contributions benefited Crested.  As a result, Crested  owes  the
Company $99,985.75 for one-half of the Company's contribution  to
the  ESOP.  Regular and substantial contributions by the  Company
to  the  ESOP  are required to maintain the ESOP in  effect.   In
fiscal 1994 the Company contributed 46,332 shares of Common Stock
to  the  ESOP,  for  one-half of which Crested owes  the  Company
$92,664.

Loans to Three Directors.  In fiscal 1992 the Company 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,  the Company loaned Mr. John L. Larsen $147,000 and further
agreed  to  consolidation  of  such  new  loan  with  outstanding
indebtedness  of  $99,008  owed the Company  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 the  USE
stock prices depressed from such persons selling their shares  to
meet personal obligations.  The loan maturities were extended  to
October   30,   1996.   At  May  31,  1995,  the  Larsen   family
indebtedness totaled $496,830 (of which $348,130 was  secured  by
120,600  shares  of  the Company's Common  Stock);  the  family's
indebtedness was $432,200 at May 31, 1994 (of which $322,800  was
secured  by  120,600 shares of the Company's Common Stock).   The
preceding  amounts  do not include the loan to  Mr.  Herron,  see
below.

In fiscal 1995, the Company 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 the Company'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 the USE  stock
prices  depressed  from Mr. Herron selling  his  shares  to  meet
personal obligations.
Security Ownership of Certain Beneficial Owners
                         and Management

      The  following lists (i) all record holders who, as of  May
24,  1996,  beneficially  owned more than  five  percent  of  the
outstanding  shares of Common Stock, as reported in filings  with
the  Commission  or as otherwise known to the Company,  and  (ii)
share  ownership of directors and executive officers.  Except  as
otherwise  noted,  each  holder exercises  the  sole  voting  and
dispositive  powers over the shares listed opposite the  holder's
name.  It should be noted that voting and dispositive powers over
certain  shares are shared by two or more of the listed  holders.
Such securities are reported opposite each holder having a shared
interest therein.
Amount and Nature of Beneficial Ownership
                            ------------------------------------------------------------------
                               Voting Rights       Dispositive Rights      Total     Percent
Name and address            -------------------    ------------------    Beneficail    of
of beneficial owner          Sole       Shared      Sole      Shared     Ownership   Class(1)
- --------------------         ----       ------      ----      ------     ---------   --------
John L. Larsen(2)*          592,432     688,871    548,136    926,542    1,495,079    22.4%
201 Hill Street
Riverton, WY 82501

Max T. Evans(3)*            119,577     676,259     93,589    913,931    1,020,270    15.6%
1410 Smith Road
Riverton, WY 82501
                                     
Harold F. Herron(4)*         99,176     180,093     94,251    417,765      512,016     7.9%
3425 Riverside Road
Riverton, WY 82501

Daniel P. Svilar(5)*        154,371     532,626    116,163    532,626      686,997    10.5%
357 Indiana Street
Hudson, WY 82515

Michael D. Zwickl(6)         61,069     510,359     61,069    510,359      571,428     8.8%
137 North Beech Street
Casper, WY 82601

Kathleen R. Martin(7)         -0-       510,359      -0-      510,359      510,359     7.9%
309 North Broadway
Riverton, WY 82501

Crested Corp.               510,359     510,359    510,359      -0-        510,359     7.9%
877 North 8th West
Riverton, WY 82501

U.S. Energy Corp. ESOP(8)   165,900       -0-      403,572      -0-        403,572     6.2%
877 North 8th West
Riverton, WY 82501

R. Scott Lorimer(9)*         57,181       -0-       29,702      -0-         57,181      **
11 Korell Court
Riverton, WY 82501

Don C. Anderson(10)*         26,155       -0-        8,155      -0-         26,155      **
875 Rio Virgin Drive, #247
St. George, UT 84770

Nick Bebout(11)*             10,550      11,111      9,550     11,111       21,661      **
4424 Skylane Diver
Riverton, WY 82501

David W. Brenman(12)*         7,750       -0-        6,750      -0-          7,750      **
1775 Sherman Street
Suite 1001
Denver, CO 80203
*   USE director and/or officer.
** Less than one percent.

(1) Percent of class is computed by dividing the number of shares
beneficially  owned including any options held by  the  reporting
person  or  group, by the number of shares outstanding  plus  the
shares underlying the options held by that person or group.

(2) Mr. Larsen exercises sole voting powers over 242,036 directly
owned shares, 106,000 shares held in joint tenancy with his wife,
20,400  shares  subject to forfeiture, 200,100 shares  underlying
options  and 23,896 shares held in the U.S. Energy Corp. Employee
Stock  Ownership  Plan  ("ESOP")  account  established  for   his
benefit.  The directly owned shares include 27,500 shares  gifted
to  his  wife,  that have remained in Mr. Larsen's name.   Shares
over  which shared voting rights are exercised consist of 522,971
shares  held  by corporations of which Mr. Larsen is a  director,
and  165,900  shares  held  by the  ESOP,  which  have  not  been
allocated  to  accounts  established for specific  beneficiaries.
The shares held by corporations of which Mr. Larsen is a director
consist of 510,359 shares held by Crested and 12,612 shares  held
by  Ruby.   Mr. Larsen shares voting and dispositive rights  over
such shares with the other directors of those corporations.   Mr.
Larsen  shares voting powers over the unallocated ESOP shares  in
his  capacity  as an ESOP Trustee with the other  ESOP  Trustees.
Shares  over which sole dispositive rights are exercised  consist
of  directly owned shares, joint tenancy shares and options, less
the  27,500  shares  gifted, but not transferred,  to  his  wife.
Shares  for  which shared dispositive powers are held consist  of
the  403,572 shares held by the ESOP, the shares held by  Crested
and  Ruby.  The shares shown as beneficially owned by Mr.  Larsen
do  not  include 42,350 shares owned directly by  his  wife,  who
exercises  the  sole  investment and  voting  powers  over  those
shares.

(3)  Shares  over  which Mr. Evans exercises sole  voting  powers
consist  of 36,389 directly owned shares which are held in  joint
tenancy  with  his  wife,  12,750 shares subject  to  forfeiture,
57,200  shares underlying options and 13,238 shares held  in  the
ESOP  account established for his benefit.  Shares for which  Mr.
Evans holds sole dispositive powers consist of his directly  held
shares and the shares underlying his options.  Shares over  which
Mr. Evans exercises shared voting rights consist of those held by
Crested  and  the  unallocated ESOP shares.  He exercises  shared
dispositive rights over the shares held by Crested and the  ESOP.
Mr.  Evans  shares  voting and dispositive power  over  Crested's
shares  with  the  remaining directors of that  company,  and  he
shares voting and dispositive powers over unallocated ESOP shares
with the other ESOP Trustees.

(4)  Mr. Herron exercises sole voting powers over 71,251 directly
owned shares, 12,000 shares held for his minor children under the
Wyoming  Uniform  Transfers to Minors Act (the  Minor's  shares),
11,000  shares underlying options and 4,925 shares  held  in  the
ESOP  account  established  for his  benefit.   Sole  dispositive
powers  are exercised over the directly held shares, the  Minor's
shares  and the shares underlying options.  Mr. Herron  exercises
shared  voting rights over 12,612 shares held by Ruby  and  1,581
shares  held  by  Northwest Gold, Inc. ("NWG")  and  the  165,900
unallocated ESOP shares.  Shared dispositive rights are exercised
over the shares held by the ESOP, and the shares held by Ruby and
NWG.   Mr. Herron exercises shared dispositive and voting  powers
over  the  shares  held by Ruby and NWG as a  director  of  those
companies  with  the  other directors  of  those  companies.   He
exercises  shared voting powers over unallocated ESOP  shares  in
his  capacity  as an ESOP Trustee with the other  ESOP  Trustees.
The  shares  shown  as beneficially owned by Mr.  Herron  do  not
include 3,030 shares owned directly by his wife who exercises the
sole voting and dispositive powers over those shares.

(5)  Mr. Svilar exercises sole voting powers over 28,884 directly
owned shares, 379 shares held in an individual retirement account
("IRA")  established for his benefit, 7,700 shares held in  joint
tenancy  with  his wife, 1,000 shares held as custodian  for  his
minor  child  under the Wyoming Uniform Transfers to  Minors  Act
(the Minor's shares), 18,360 shares subject to forfeiture, 66,000
shares  underlying options and 19,848 shares  held  in  the  ESOP
account  established for his benefit.  He holds sole  dispositive
power  over  his directly held shares, IRA shares, joint  tenancy
shares,  Minor's  shares and the shares underlying  his  options.
The  shares over which he exercises shared voting and dispositive
rights  consist  of  12,200 shares held  jointly  with  a  family
member,  and  the 510,359 shares held by Crested, over  which  he
exercises  shared  voting and dispositive  powers  as  a  Crested
director with the other Crested directors, and 22,267 shares held
by a nonaffiliated company of which Mr. Svilar is a partner.

(6)  Mr. Zwickl exercises sole voting and dispositive powers over
4,000  directly  held  shares,  4,444  shares  held  in  an   IRA
established  for his benefit and 53,625 shares held  by  two  (2)
limited partnerships.  He is the sole officer and director of the
corporate  general partner of those partnerships.  As a  director
of  Crested,  Mr. Zwickl exercises shared voting and  dispositive
powers  over  the 510,359 shares held by Crested with  the  other
Crested directors.

(7)  Consists  of shares held by Crested over which  Mrs.  Martin
exercises  shared voting and dispositive powers as a director  or
Crested  with the other Crested directors.  The shares  shown  as
beneficially owned by Mrs. Martin do not include 220 shares owned
directly  by  her  husband  who exercises  the  sole  voting  and
dispositive powers over those shares.

(8) The ESOP holds 403,572 shares, 165,900 of which have not been
allocated  to  accounts  of individual plan  beneficiaries.   The
Trustees exercise the voting rights over the unallocated  shares.
Plan participants exercise voting rights over allocated shares.

(9)  Mr.  Lorimer  exercises sole voting powers over  the  listed
shares  which  consist of 2 directly held shares,  12,240  shares
subject  to  forfeiture,  29,700 shares  underlying  options  and
15,239  shares  held  in  the ESOP account  established  for  his
benefit.  Mr. Lorimer exercises sole dispositive powers over  his
directly held shares and the shares underlying his options.

(10) Includes 5,100 directly held shares, 3,055 shares in an  IRA
established  for  his  benefit  and  18,000  shares  subject   to
forfeiture.   Mr.  Anderson exercises  sole  voting  rights  with
respect  to  the 26,155 shares, and sole dispositive rights  over
the directly held shares and shares held in his IRA.

(11)  Consists of 9,500 shares held directly, 50 shares  held  in
joint  tenancy with his wife, 1,000 shares subject to  forfeiture
and  11,111 shares held by a privately held company of which  Mr.
Bebout  is  an officer, director and principal shareholder.   Mr.
Bebout exercises shared investment and voting powers with respect
to  the  shares  held by the private company.  He exercises  sole
voting  and  investment powers over the directly held shares  and
joint tenancy shares.

(12)  Consists  of  6,750 shares held directly and  1,000  shares
subject to forfeiture.  Mr. Brenman exercises sole voting  powers
over the 7,750 listed shares and sole dispositive powers over the
6,750 directly held shares.

                   DESCRIPTION OF SECURITIES

The  Company's  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 Common Stock are entitled  to  receive
dividends when and as declared by the Board of Directors  out  of
funds legally available therefor.

Holders of 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 Company's 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  Company's Articles and the Wyoming  Management
Stability  Act, shares of Common Stock held by Crested  (510,359)
may  be  voted by Crested, shares of Common Stock held by Plateau
(125,556) may be voted by Plateau and shares of Common Stock held
by  SGMC  (100,000)  may be voted by SGMC  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 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 common stock  (including  the  Common
Shares offered for sale by this Prospectus) have been fully  paid
and are nonassessable.

Preferred  Stock. The Company's 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  Wyoming
Business  Corporation Act, 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.

Warrants.   The Warrants consist of (i) that certain  Warrant  to
Purchase 200,000 Common Shares of U.S. Energy Corp. dated January
9,  1996  (the  "Warrant") that Registrant  granted  to  Shamrock
Partners Ltd, 111 Veterans Square, Media, Pennsylvania ("Holder")
as  compensation  for  services  to  Registrant  as  a  financial
consultant and advisor, on a nonexclusive basis, under a one year
agreement  between Registrant and Holder also  dated  January  9,
1996;  (ii)  up to ten (10) other warrants which carry  the  same
(proportional)  rights ("Warrants") that may be substituted  upon
surrender  of  the  Warrant for division or  recombination.   The
Warrant or such substitute Warrants entitle the holders ("Holders
of  the Warrants") to purchase an aggregate of 200,000 shares  of
Registrant's common stock at any time or from time to time  until
12:00  o'clock Midnight, Mountain Time, on January 9,  1997  (the
"Expiration Date") at a price of $5.00 per share.  The Holder  or
Holders  of  the  Warrants are not entitled to any  rights  of  a
shareholder in the Company by virtue of holding the Warrants.

The Warrant carries certain rights to registration under the 1933
Act  as  more specifically described in the Warrant, but  if  the
Company  so  registers  the Warrants solely  to  accommodate  the
registration  of the Warrant Shares, as Registrant  has  done  by
filing the Registration Statement, of which this Prospectus is  a
part, with the Commission in accordance with the 1933 Act and the
regulations  pursuant  thereto, the  Holder  or  Holders  of  the
Warrants  may not sell or otherwise transfer the Warrants  for  a
period of 24 months after the effective date of such Registration
Statement,  which period prevents such sale or  transfer  of  the
Warrants  prior  to  their Expiration  Date.   The  Warrants  are
governed by and construed in accordance with the laws of Wyoming.

                      PLAN OF DISTRIBUTION

When issued by Registrant upon exercise of the Warrants, the
Warrant Shares will be offered from time to time by the Holders
of the Warrants or their agents at market prices from time to
time.  Selling commissions will be paid by the sellers of the
Warrant Shares.  Except for the Warrant exercise price of $5.00
per share to be paid upon exercise of the Warrants, no sales
proceeds will be paid to the Company or any subsidiary of the
Company from the sale of the Warrant Shares.  The remaining
52,901 Common Shares which are being registered for sale to the
public by the filing of the Registration Statement, of which this
Prospectus is a part, with the Commission in accordance with the
1933 Act and the regulations pursuant thereto, will be offered
from time to time by the Selling Shareholders or their agents at
market prices from time to time.  Selling commissions will be
paid by the Selling Shareholders.  No sales proceeds will be paid
to the Company or any subsidiary of the Company from the sale of
these Common Shares.  The Common Shares may be offered from time
to time by the Holders of the Warrants or the Selling
Shareholders (i) in transactions in the over-the-counter market,
automated inter-dealer system on which the Company's Common Stock
is then listed, in negotiated transactions or a combination of
such methods of sale, and (ii) at market prices prevailing at the
time of sale, at prices related to such prevailing market prices,
or at negotiated prices.  The Holders of the Warrants or the
Selling Shareholders may effect such transactions directly with
the broker-dealers.  Such broker-dealers may receive compensation
in the form of discounts, concessions or commissions from the
Holders of the Warrants and/or the purchasers of the Common
Shares for whom such broker-dealers may act as agents or to whom
they may sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary
commissions).  Sales of the Common Shares may be made pursuant to
this Prospectus or pursuant to Rule 144 adopted under the 1933
Act.

No  underwriting  arrangements exist  as  of  the  date  of  this
Prospectus.   Upon being advised of any underwriting arrangements
that  may be entered into by the Holders of the Warrants  or  the
Selling  Shareholders  after the date  of  this  Prospectus,  the
Company will prepare and file a post-effective amendment to  this
Registration Statement including a supplement to this  Prospectus
to disclose the name of such underwriters and such arrangements.

Expense of any sales pursuant to this Prospectus will be borne by
the  Holders of the Warrants or the Selling Shareholders,  except
that  the  Company is paying certain of the expenses,  which  are
estimated at $10,000, of registering the Common Shares under  the
1933  Act and under the laws of one state selected by the Holder,
consisting  of  all  costs  incurred  in  connection   with   the
preparation of the Registration Statement (except for any fees of
counsel  for  the Holders of the Warrants).  The Holders  of  the
Warrants or the Selling Shareholders will pay or assume brokerage
commissions, or underwriting discounts, incurred in the  sale  of
the  Common Shares, which commissions or discounts are not  being
paid or assumed by the Company.

                     HOLDERS OF THE WARRANTS

Only  one  Warrant is outstanding on the date of this  Prospectus
and  the  Holder of that Warrant is Shamrock Partners, Ltd.   The
Holder  has  requested  that  the Warrant  be  divided  into  six
Warrants  covering an aggregate of 200,000 Warrant  Shares.   The
names of the Holders of the Warrants after such division and  the
amount of Registrant's Common Stock owned by such Holders of  the
Warrants (including Warrant Shares to be issued upon exercise  of
such  Warrants)  prior to and after the offering  are  set  forth
below:

                                              No. of         Shares of
                           Shares of          Common          Common
                          Common Stock     Shares to be     Stock to be
                          Owned Prior       Offered by      Owned After
          Name            to Offering    this Prospectus     Offering
- -----------------------   ------------   ---------------    ------------
Rafi Khan                   154,000         145,000            9,000
Shamrock Partners, Ltd.      12,039          10,000            2,039
Shamrock Partners
  International, Inc.        20,000          20,000           20,000
The Leasing Group, Inc.       8,400           8,400            8,400
Diana L. Manes                4,300           4,300            4,300
Andrew Z. Furtak             12,300          12,300           12,300

None  of  the  Holders of the Warrants have  held  any  position,
office  or have had any material relationship with Registrant  or
any  of its affiliates within the past three years except for the
investment  banking consulting agreement that Registrant  entered
into with Shamrock Partners, Ltd., on a nonexclusive basis for  a
one  year  term, effective January 9, 1996, subject  to  renewal.
The   Warrant   was  granted  to  Shamrock  Partners,   Ltd.   As
compensation for its services under that agreement.

                      SELLING SHAREHOLDERS

The  following  is  a  listing of the Selling  Shareholders,  the
amount  of  Common  Shares to be offered for  each  such  Selling
Shareholder's account and the amount of USE's Common Stock  owned
by  each Selling Shareholder prior to the offering and to be held
by  such  Selling Shareholder after completion of  the  offering.
Except  as noted below, none of the Selling Shareholders (i)  has
had  any position, office or other material relationship with the
Registrant or any of its affiliates within the past three  years,
or  (ii) to the knowledge of the Company, will own one percent or
more  of  the Company's outstanding common stock after completion
of the offering.  It is anticipated each Selling Shareholder will
own none of the Common Shares hereby offered, after completion of
the offering.
No. of
                                 No. of            No. of        Shares of
                              Common Shares    Shares of USE     USE Common
                              to be Offered     Common Stock    Stock to be
                                by Selling      Owned Prior     Owned After
       Name                    Shareholder      to Offering*      Offering
       ----                   -------------    -------------    -----------
Keith G. Larsen(1)                21,774          111,603         89,829
Mark J. Larsen(2)                  1,577          115,196        113,619
George F. Smith(3)                 2,135           40,532         38,397
Michael E. Sweeney(4)              2,949           55,875         52,926
Richard P. Larsen(1)               1,774           55,627         53,853
Thomas M. Evans(2)                   941           23,651         22,710
Kenneth J. Webber(2)               1,478           31,571         30,093
M. Shane Larsen(2)                   994           30,879         29,885
Albert E. Dearth(5)                2,083           10,066          7,983
N. Hal Clyde(2)                    1,106            7,133          6,027
Glenn Dooley(6)                      113              113            -0-
Hershel R. Dike(2)                   906            4,421          3,515
Jeff T. Harding(2)                 1,066            4,472          3,406
Paul J. Hemschoot, Jr.(2)            974              974            -0-
Noel Holbert(2)                    1,062            6,753          5,691
Mitch M. LeClair(2)                1,047            4,607          3,560
Bruno J. Masson (2)                  261              261            -0-
Sharon Miller(2)                     723            4,033          3,310
Steven P. Morrill(2)                 884            1,438            554
Bryon G. Mowry(2)                    122              122            -0-
Pat G. Reeb(2)                       986            4,099          3,113
Steven D. Richmond(2)                986            2,383          1,397
Marilyn Sampson(2)                   401              672            271
Mark Smith(2)                      1,049            6,681          5,632
James E. Steinhoff(2)              1,018            6,622          5,604
John Turner(2)                        87               87            -0-
Randall R. Van Vleet(2)            1,741           19,724         17,983
Helen D. VonFeldt(2)                 501            3,228          2,727
Stanley S. Wegner(2)                 996            6,428          5,432
Daryl P. Winters(2)                1,167            1,952            785

*    Includes  shares  held  directly, shares  held  in  the  USE
     Employee   Stock   Ownership  Plan  (the   "ESOP")   account
     established for the benefit of employee shares held  jointly
     and  shares held directly by immediate family members in the
     same household.

(1)  USE  employee  and  director of  Northwest  Gold,  Inc.,  an
     affiliate of USE.

(2)  USE employee.

(3)  USE  employee  and  director  of  Ruby  Mining  Company,  an
     affiliate of USE.

(4)  USE  employee, director of Four Nines Gold, Inc.;  President
     and   director  of  Sutter  Gold  Mining  Company  and  Vice
     President  of  USECC  Gold Limited  Liability  Company,  all
     affiliates of the Company.

(5)  USE   employee;  President,  Chief  Operating  Officer   and
     director of Plateau Resources Limited, a 100% subsidiary  of
     USE.

(6)  USE employee; Vice President of Plateau Resources Limited, a
     100% subsidiary of USE.

                            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 and K to  the  USE
consolidated financial statements.

The  balance  sheet of the Green Mountain Mining  Venture  as  of
December  31,  1995  and  1994, and  the  related  statements  of
operations, changes in venture partners' capital and  cash  flows
for  the  years ended December 31, 1995, 1994 and  1993  and  the
period  from  inception  to December 31,  1995  included  in  the
registration statement of which this Prospectus is a  part,  have
been  audited  by Coopers & Lybrand LLP, independent accountants,
as  indicated  in  their  report with  respect  thereto  and  are
included  in  said  registration statement in reliance  upon  the
authority of such firm as experts in accounting and auditing.

                         LEGAL MATTERS

Stephen E. Rounds, Denver, Colorado, has acted as special counsel
to USE in connection with this offering.
Report of Independent Public Accountants

To the Board of Directors and Shareholders of
U.S. Energy Corp.:

We have audited the accompanying consolidated balance sheets of
U.S. Energy Corp. (the "Company") (a Wyoming corporation) and
affiliates as of May 31, 1995 and 1994, and the related
consolidated statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended May 31,
1995.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion
on these financial statements 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, 1995 and 1994, and the
results of their operations and their cash flows for each of the
three years in the period ended May 31, 1995, 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 and arbitration with their 50/50 partner
in Sheep Mountain Partners ("SMP"), Nukem, Inc. and its subsidiary
Cycle Resource Investment Corporation ("CRIC"). USECC, CRIC and
Nukem have filed claims and counterclaims against each other
alleging violations of the SMP Partnership Agreement among other
various allegations.  As a consequence of this litigation and
arbitration, USECC has been required to fund all of the
expenditures to maintain the SMP mineral properties on standby,
resulting in advances to SMP of $4,521,600.  USECC has expensed its
equity portion of these advances as of May 31, 1995.  Recovery of
the remaining  investment and advances of  $2,481,600 is dependent
upon the outcome of the litigation and arbitration, which is
uncertain at this time.  Most of the litigation claims were
consensually submitted to binding arbitration.  The evidentiary
stage of the arbitration proceedings are concluded and damage
claims have been submitted to the arbitration panel.  USECC is
seeking damages in excess of $200 million.  Nukem and CRIC are
seeking damages of approximately $48 million.  The resolution of
these matters is not anticipated until December 1995.  Counsel for
the Company has indicated that an evaluation of the likelihood of
an unfavorable outcome or any estimate of the amount or range of
potential loss is premature at this time given the state of the
proceedings.  Accordingly, the accompanying financial statements do
not reflect any adjustments that might result from this litigation
and arbitration.

     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,
August 28, 1995.
U.S. ENERGY CORP. AND AFFILIATES
                          CONSOLIDATED BALANCE SHEETS
                                     ASSETS
May 31,
                                            ------------------------------
                                                1995            1994
                                                ----            ----
CURRENT ASSETS:
Cash and cash equivalents                  $   551,300     $ 1,181,700 
 Accounts and notes receivable (Note C):
   Trade, net of allowance of $51,000
     and $32,600 for doubtful accounts        1,484,100       1,009,800 
   Related parties, net of
     allowance of $1,600 and
     $1,600 for doubtful accounts               231,600         166,500 
 Inventory (Note B)                           1,567,300       1,424,600 
 Current portion long-term 
   notes receivable (Note F)                     74,400            --   
 Other                                          149,300          84,000 
                                            ------------    ------------
   TOTAL CURRENT ASSETS                       4,058,000       3,866,600 

INVESTMENTS AND ADVANCES (Notes E and F):
 Affiliates                                   3,244,600       2,807,900 
 Restricted investments                       7,757,400       7,728,500 
                                            ------------    ------------
                                             11,002,000      10,536,400 

PROPERTIES AND EQUIPMENT
 (Notes B, C, D and F):
 Land and mobile home park                    2,771,900       2,803,100 
 Buildings and improvements                   6,010,800       5,918,800 
 Aircraft and other equipment                 6,104,000       6,047,600 
 Developed oil properties,
   full cost method                           1,769,800       1,769,800 
 Undeveloped gas properties                     422,000         207,900 
 Mineral properties and mine
  development costs                          10,121,700       9,505,000 
                                            ------------    ------------
                                             27,200,200      26,252,200 
 Less accumulated depreciation, 
 depletion and amortization                  (9,700,800)     (8,874,000)
                                            ------------    ------------
                                             17,499,400      17,378,200 
                                            ------------    ------------
(Continued)

          The accompanying notes to consolidated financial statements 
                 are an integral part of these balance sheets.
U.S. ENERGY CORP. AND AFFILIATES
                          CONSOLIDATED BALANCE SHEETS
                                     ASSETS
                                  (Continued)
May 31,
                                               -------------------------
                                                  1995            1994
                                                  ----            ----
OTHER ASSETS:
Accounts and notes receivable:
   Real estate sales and other (Note F)         945,700          28,700 
   Affiliates and related parties                25,000          25,000 
   Employees (Note C)                           505,100         366,000 
 Buildings and improvements held for sale         7,500         758,200 
 Long-term deferred compensation (Note J)         5,100          17,300 
 Deposits and other                             117,200         113,900 
                                            ------------    ------------
                                              1,605,600       1,309,100 
                                            ------------    ------------
                                            $34,165,000     $33,090,300 
                                            ------------    ------------
                                            ------------    ------------
CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' EQUITY
May 31,
                                           -----------------------------
                                                 1995           1994
                                                 ----           ----
CURRENT LIABILITIES:
Accounts payable and accrued expenses      $ 2,276,100     $   722,200 
 Lines of credit (Note G)                     1,527,000         161,000 
 Current portion of long-term 
   debt (Note G)                                232,900         408,500 
                                            ------------    ------------
   TOTAL CURRENT LIABILITIES                  4,036,000       1,291,700 

LONG-TERM DEBT (Note G)                         928,500       1,109,100 

RECLAMATION LIABILITY (Notes F and K)         3,951,800       3,951,800 

OTHER ACCRUED LIABILITIES (Note F)           10,818,700      11,284,600 

DEFERRED TAX LIABILITY (Note H)                 183,300         267,000
(Continued)

          The accompanying notes to consolidated financial statements 
                 are an integral part of these balance sheets.
U.S. ENERGY CORP. AND AFFILIATES
                          CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                                  (Continued)
May 31,
                                             ---------------------------
                                                 1995            1994
                                                 ----            ----
COMMITMENTS AND CONTINGENCIES (Note K)

MINORITY INTERESTS                              708,200       1,326,400 

FORFEITABLE COMMON STOCK,
 $.01 par value; issued 187,820 and
 169,300, shares, respectively, 
   forfeitable until earned 
   (Notes C and J)                            1,370,100       1,300,600 

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 5,262,794 and 4,693,090
   shares, respectively                          52,500          46,800 
 Additional paid-in capital                  18,629,000      16,784,800 
 Accumulated deficit                         (3,256,400)     (1,185,800)
 Treasury stock at cost,
   769,943 and 713,276 
   shares, respectively                      (2,242,400)     (2,072,400)
 Unallocated ESOP contribution               (1,014,300)     (1,014,300)
                                            ------------    ------------
                                             12,168,400      12,559,100 
                                            ------------    ------------
                                            $34,165,000     $33,090,300 
                                            ------------    ------------
                                            ------------    ------------
The accompanying notes to consolidated financial statements 
                 are an integral part of these balance sheets.
U.S. ENERGY CORP. AND AFFILIATES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended May 31,
                                  -----------------------------------------
                                       1995         1994          1993
                                       ----         ----          ----
REVENUES:
 Mineral sales (Note E)           $   --        $ 3,732,500   $ 2,690,800 
 Construction contract revenues     1,303,400     2,606,400     2,026,500 
 Commercial operations              1,253,200     1,165,100       894,400 
 Recreational product sales
 (Notes A and B)                    4,452,300       --            --      
 Oil sales                            194,500       183,700       286,300 
 Gain on sales of assets (Note F)   1,282,400        52,800       326,000 
 Gain on sale of investments          --            --            408,600 
 Gain from restructuring mineral
   properties agreements (Note F)      85,500       626,800     2,105,800 
 Interest                             479,900       328,700        78,200 
 Management fees and other
   (Note C)                            96,800        80,300       228,900 
                                  ------------  ------------  ------------
                                    9,148,000     8,776,300     9,045,500 
                                  ------------  ------------  ------------
COSTS AND EXPENSES:
 Cost of minerals sold                 --         3,895,400     2,617,600 
 Mineral operations                 1,654,300     1,129,000       659,900 
 Construction costs                 1,038,300     2,288,900     1,760,400 
 Commercial operations              2,070,100     1,989,400     1,573,000 
 Cost of recreational
   products sold                    2,407,000       --            --      
 Oil production                        78,100        89,800       122,400 
 General and administrative         3,606,100     2,696,800     1,955,300 
 Abandonment of mining claims         --            --            378,700 
 Gas operations                       206,600       157,800       --      
 Loss on sale of investments           90,000       --            --      
 Interest                             279,000       117,100        81,300 
                                  ------------  ------------  ------------
                                   11,429,500    12,364,200     9,148,600 
                                  ------------  ------------  ------------
LOSS  BEFORE MINORITY INTEREST
 IN LOSS, EQUITY IN LOSS OF
 AFFILIATES AND INCOME TAXES       (2,281,500)   (3,587,900)     (103,100)

MINORITY INTEREST IN LOSS OF
 CONSOLIDATED SUBSIDIARIES            653,200       874,800       325,900 

EQUITY IN LOSS OF AFFILIATES         (442,300)     (390,700)     (444,700)
                                  ------------  ------------  ------------
(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,
                                  -----------------------------------------
                                       1995          1994         1993
                                       ----          ----         ----
LOSS BEFORE INCOME TAXES          $(2,070,600)  $(3,103,800)  $  (221,900)

INCOME TAXES (Note H)                 --            --            --      
                                  ------------  ------------  ------------
LOSS BEFORE CUMULATIVE
 EFFECT OF ACCOUNTING CHANGE       (2,070,600)   (3,103,800)     (221,900)

CUMULATIVE EFFECT AT JUNE 1, 1993
 OF INCOME TAX ACCOUNTING CHANGE
 (Notes B and H)                       --          (267,000)     --       
                                  ------------  ------------  ------------
NET LOSS                          $(2,070,600)  $(3,370,800)  $  (221,900)
                                  ------------  ------------  ------------
                                  ------------  ------------  ------------
LOSS PER SHARE AMOUNTS:
 Loss before cumulative
   effect of accounting change    $      (.42)  $      (.70)  $      (.05)
 Cumulative effect at
   June 1, 1993 of income
   tax accounting change              --               (.06)         --   
                                  ------------  ------------  ------------
NET LOSS PER SHARE                $      (.42)  $      (.76)  $      (.05)
                                  ------------  ------------  ------------
                                  ------------  ------------  ------------
WEIGHTED AVERAGE SHARES
 OUTSTANDING                        4,977,050     4,431,469     4,248,848 
                                  ------------  ------------  ------------
                                  ------------  ------------  ------------
The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES

                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Accumulated
                                                Additional     Deficit)/                              Unallocated        Total
                             Common Stock        Paid-In       Retained          Treasury Stock           ESOP       Shareholders'
                            Shares     Amount    Capital        Earnings      Shares      Amount      Contribution       Equity   
                          ---------   -------   -----------   -----------    -------   ------------   ------------   -------------
Balance, May 31, 1992     4,163,201   $41,600   $14,749,600   $ 2,406,900    435,301   $(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    435,301    (1,200,900)    (1,014,300)     15,063,200

                                      The accompanying notes to consolidated financial statements
                                               are an integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES

                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                                             (Accumulated
                                                Additional     Deficit)/                              Unallocated        Total
                             Common Stock        Paid-In       Retained          Treasury Stock           ESOP       Shareholders'
                            Shares     Amount    Capital       Earnings      Shares       Amount      Contribution       Equity
                          ---------   -------   -----------   -----------    -------   ------------   ------------   -------------
Balance, May 31, 1993     4,257,288    42,500    15,050,900     2,185,000    435,301    (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 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)   713,276   $(2,072,400)   $(1,014,300)    $12,559,100
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------

                                      The accompanying notes to consolidated financial statements
                                               are an integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES

                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Accumulated
                                                Additional     Deficit)/                              Unallocated        Total
                             Common Stock        Paid-In       Retained          Treasury Stock           ESOP       Shareholders'
                            Shares     Amount    Capital       Earnings      Shares       Amount      Contribution       Equity   
                          ---------   -------   -----------   -----------    -------   ------------   ------------   -------------
Balance, May 31, 1994     4,693,090   $46,800   $16,784,800   $(1,185,800)   713,276   $(2,072,400)   $(1,014,300)    $12,559,100

Funding of ESOP              37,204       400       199,600        --          --          --              --             200,000
Issuance of common
 stock through private
 placement (Note J)         400,000     4,000     1,196,000        --         56,667      (170,000)        --           1,030,000
Issuance of common
 stock to third party
 for services rendered        5,000      --          23,100        --          --          --              --              23,100
Issuance of common stock 
 for exercised option       107,500     1,100       345,700        --          --          --              --             346,800
Issuance of common stock
 to buyout third party
 in property venture         20,000       200        79,800        --          --          --              --              80,000
Net loss                     --          --           --       (2,070,600)     --          --              --          (2,070,600)
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------
Balance May 31, 1995      5,262,794   $52,500   $18,629,000   $(3,256,400)   769,943   $(2,242,400)   $(1,014,300)    $12,168,000
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------
                          ---------   -------   -----------   -----------    -------   -----------    -----------     -----------
Shareholders' Equity at May 31, 1995 does not include 187,820 shares
currently issued but forfeitable if certain conditions are not met by the
recipients.  However, both the "Outstanding Shares at August 25, 1995" 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 717,026 shares of common stock held by a majority-owned
subsidiary, which, in consolidation, are treated as treasury shares.

          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended May 31,
                                       ------------------------------------------
                                           1995           1994           1993
                                           ----           ----           ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                              $(2,070,600)   $(3,370,800)   $  (221,900)
 Adjustments to reconcile net 
 loss to net cash used in
 operating activities:
   Minority interest in loss of
     consolidated subsidiaries            (653,200)      (874,800)      (325,900)
   Depreciation, depletion 
     and amortization                      766,200        720,200        908,400 
   Abandoned mining claims                    --            --           378,700 
   Gain from restructuring
     mineral properties
     agreements                               --         (500,000)    (2,000,000)
   Equity in loss from affiliates          442,300        390,700        444,700 
   Gain on sale of assets               (1,282,400)       (52,800)      (326,000)
   (Gain) loss on sale of
     marketable equity securities           90,000          --          (408,600)
   Common stock issued to fund ESOP        200,000        185,300        183,400 
   Non-cash compensation                    69,500         75,900         55,600 
   Common stock exchanged 
     for services                           23,100         34,300         --     
   Other                                  (318,200)      (149,900)      (246,400)
   Net changes in:
     Accounts receivable                  (539,400)       468,700       (406,800)
     Inventory                            (142,700)        (9,100)       407,300 
     Other assets                          (68,600)        (4,000)        62,200 
     Accounts payable and
      accrued expenses                   1,553,900       (573,700)       557,900 
     Other liabilities                    (465,900)      (415,400)        --     
     Deferred tax liability                (83,700)       267,000         --     
                                       -----------    -----------    ----------- 
NET CASH USED IN
 OPERATING ACTIVITIES                   (2,479,700)    (3,808,400)      (937,400)
                                       -----------    -----------    -----------
(Continued)

           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (continued)
Year Ended May 31,
                                        -----------------------------------------
                                           1995           1994           1993
                                           ----           ----           ----
CASH FLOWS FROM INVESTING ACTIVITIES:
 Cash acquired in purchase 
   of subsidiaries                           --         7,193,500         --     
 Development of mining properties         (455,100)      (796,300)      (740,500)
 Development of gas properties            (218,200)      (207,900)        --     
 Proceeds from sale of
   property and equipment                  854,300        149,700        848,800 
 Proceeds from sale of investments         199,300          --           611,200 
 Purchases of property
   and equipment                          (178,900)      (855,800)      (656,700)
 Changes in notes receivable                91,800         73,700       (173,400)
 Investments in affiliates                (830,500)      (760,500)    (1,108,600)
                                       -----------    -----------    ----------- 
NET CASH (USED IN) PROVIDED BY 
 INVESTING ACTIVITIES                     (537,300)     4,796,400     (1,219,200)
                                       -----------    -----------    ----------- 
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance
   of common stock                       1,376,800          --           137,500 
 Proceeds from long-term debt              626,400        368,400        914,600 
 Net proceeds from lines of credit       1,366,000          --            --     
 Repayments of long-term debt             (982,600)      (654,300)      (202,700)
                                       -----------    -----------    ----------- 
NET CASH PROVIDED BY (USED IN)
 FINANCING ACTIVITIES                    2,386,600       (285,900)       849,400 
                                       -----------    -----------    ----------- 
NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                  $  (630,400)   $   702,100    $(1,307,200)

CASH AND CASH EQUIVALENTS,
 Beginning of year                       1,181,700        479,600      1,786,800 
                                       -----------    -----------    ----------- 
CASH AND CASH EQUIVALENTS,
 End of year                           $   551,300    $ 1,181,700    $   479,600 
                                       -----------    -----------    ----------- 
                                       -----------    -----------    -----------
(Continued)

           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (continued)
Year Ended May 31,
                                       ------------------------------------------
                                           1995           1994           1993
                                           ----           ----           ----
SUPPLEMENTAL DISCLOSURES:
 Interest paid                         $   242,100    $   114,200    $    79,100 
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Income taxes paid                     $   --         $   --         $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 

Non-cash investing and financing activities:

 Notes received for sale of assets     $ 1,550,000    $   --         $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Issuance of common stock
   to acquire affiliate                $    80,000    $ 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    $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Change in valuation of
   reclamation liability               $   --         $  (243,800)   $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Conversion of SRRI 
   receivable to investment
   upon SRRI loan default              $   --         $ 1,857,800    $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    -----------
The accompanying notes to consolidated financial statements
                    are an integral part of these statements.
U.S. ENERGY CORP. AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (continued)
Year Ended May 31,
                                       ------------------------------------------
                                           1995           1994           1993
                                           ----           ----           ----
Undeveloped mining properties
   contributed to the Green
   Mountain Mining Venture             $   --         $   243,800    $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    ----------- 
 Acquisition of USE common
   stock in exchange for
   shareholder notes receivable        $   --         $   445,300    $   --      
                                       -----------    -----------    ----------- 
                                       -----------    -----------    -----------
Significant assets acquired and liabilities assumed
in 1994 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, 1995, 1994 AND 1993

A.   BUSINESS ORGANIZATION AND DESCRIPTION:

     U.S. Energy Corp. (the "Company" or "USE") was incorporated in
the State of Wyoming on January 26, 1966.  The Company engages in
the acquisition, exploration, holding, 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"), (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 1995, 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, "SGMC").

     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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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%), SGMC
(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, SGMC and Crested for
both 1995 and 1994.  The accompanying consolidated statements of
operations include USE, Brunton, Plateau, Energx, FNG, USECC, SGMC
and Crested for fiscal 1995, and USE, Plateau, Energx, FNG, USECC,
SGMC and Crested for fiscal 1994.  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.  The accompanying
consolidated statement of operations for fiscal 1993 includes USE,
FNG, USECC, SGMC and Crested.

     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.

Cash Equivalents

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

Investments

     The Company adopted Statement of Financial Accounting
Standards No. 115 ("SFAS No. 115"), "Accounting for Certain
Investments in Debt and Equity Securities" in fiscal 1995.  Based
on the provisions of SFAS No. 115, the Company accounts for
investments as held-to-maturity.  Held-to-maturity securities are
measured at amortized cost and are carried at the lower of
aggregate cost or fair market value.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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,
                                     -----------------------
                                        1995         1994   
                                     ----------   ----------
    Outdoor Recreational Products:
      Raw materials                  $  385,100   $  508,900
      Work in process                   201,100      161,600
      Finished goods                    895,000      664,600
    Other                                86,100       89,500
                                     ----------   ----------
                                     $1,567,300   $1,424,600
                                     ----------   ----------
                                     ----------   ----------

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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     The Company capitalizes all costs incidental to the
acquisition, exploration, holding 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 cost 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.

     Statement of Financial Accounting Standards No. 121 ("SFAS No.
121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued in March 1995.  The
provisions of SFAS No. 121 require the Company to evaluate the
carrying value of its long-term assets when certain events occur
that may effect the realizability of its assets.  SFAS No. 121 is
required to be adopted in fiscal 1996.  The Company has not
determined the impact, if any, the adoption of SFAS No. 121 will
have on its financial position or results of operations.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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 and uranium are recognized upon delivery. 
Revenues are recognized from the rental of certain assets as they
are rented.  Revenue from commercial operations are recognized as
goods and services are delivered.  Oil sales revenue is recognized
as the oil is produced (see Notes D and F.)

     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 No. 109 ("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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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 Loss Per Share

     Net 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, because they were antidilutive.

Reclassifications

     Certain reclassifications have been made in the 1994 and 1993
financial statements to conform to the classifications used in
1995.

C.   RELATED-PARTY TRANSACTIONS:

     In November 1993, USE and Brunton executed an Agreement and
Plan of Share 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 was
therefore 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 is obligated to the Company for its
share of the costs for providing such employees.  Revenues from
services by the Company to affiliates other than Crested were
$88,300, $80,300 and  $113,000 in fiscal 1995, 1994 and 1993,
respectively.

     At May 31, 1995, the Company's President and immediate family
were indebted to the Company in the amount of $609,000, of which
$460,300 is represented by notes secured by 150,600 shares of the
Company's common stock.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     On August 19, 1994, the Company sold a house in Riverton,
Wyoming, to Harold F. Herron, Vice President of the Company for an
amount equal to a current independent appraisal.  At the same time
the Company loaned to Mr. Herron the sum of $112,170 secured by
30,000 shares of the Company's common stock for a period of five
years.  This amount is included in the $609,000 discussed above.

     As of May 31, 1995, 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, 1995.  This note is eliminated in consolidation.

     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, 1995.

     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, 1995
and 1994 (Note B).

     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 to the Company from Crested.  The
receipt of these shares increased the Company's ownership in
Crested to 52.9%.  Therefore, both the balance sheets and
statements of operation have been consolidated with the Company for
all years presented.

     On June 14, 1995, USECC signed a six year option to acquire a
7,200 square foot hangar at the Riverton Regional Airport, for
$110,000, from a private company affiliated with a director of USE
and Crested.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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 properties and ventures 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 restricted investments are in place to secure
various decommissioning costs, reclamation and holding costs. 
Investments are comprised of debt securities issued by the U. S.
Treasury that mature at varying times from three months to one year
from the original purchase date.  As of May 31, 1995, the cost of
debt securities was a reasonable approximation of fair market
value.

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

                       Consolidated   Carrying Value at May 31,
                         Ownership       1995          1994
                       -------------  ----------    ----------
Equity Method:
 GMMV                      50.0%      $  724,800    $  724,800 
 Ruby Mining Company       26.7%          38,200        40,700 
 SMP (Note F)              50.0%       2,481,600     2,042,400 
                                      ----------    ---------- 
                                      $3,244,600    $2,807,900 
                                      ----------    ---------- 
                                      ----------    ----------
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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

                                   Year Ended May 31,
                          ------------------------------------
                             1995         1994         1993
                           ---------    ---------   ----------
    SMP (Note F)          $(439,200)   $(514,800)   $(532,000)
    Brunton (Note B)
     (consolidated
     beginning in 1995)       --         140,500       85,600 
    Ruby Mining Company      (3,100)     (16,400)       1,700 
    GMMV                      --          --           --     
                          ---------    ---------    --------- 
                          $(442,300)   $(390,700)   $(444,700)
                          ---------    ---------    --------- 
                          ---------    ---------    --------- 

     There are 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 provided funding to SMP in the amount of $4,521,600 for
standby mine care and maintenance, the rental of certain mining
equipment and administrative costs as of May 31, 1995.  These
advances are included in the above investment account net of the
Company's equity share of SMP's expenses.  The Company considers
the $4,521,600 to be a receivable from SMP.  Whether or not the
$4,521,600 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 903,200 to 1,213,800 pounds of
uranium annually from 1996 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, 1995.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

Revenues from such uranium sales of $2,893,800 and $2,690,800 have
been included in the accompanying consolidated statements of
operations for the years ended May 31, 1994 and 1993, which would
normally have been sales of SMP.  All sales contracts were filled
by Nukem in 1995, and as a result, no revenues from uranium sales
were recognized during 1995.  The cash from uranium sales is
accumulating in SMP's bank accounts which as of May 31, 1995
amounted to $7,505,000.

     GMMV expenses certain general and administrative, maintenance
and holding costs.  However, the Company has not recognized equity
losses in GMMV 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 $727,000 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 and Ruby Mining Company ("Ruby)
for 1995 and GMMV, SMP, Brunton and Ruby for 1994 and 1993. 
Condensed combined balance sheets do not include Brunton for 1994
as Brunton's balance sheet was consolidated with USE as of May 31,
1994.  

           CONDENSED COMBINED BALANCE SHEETS -  EQUITY INVESTEES
May 31,
                                  ----------------------------
                                      1995            1994
                                  ------------    ------------
Current assets                    $  8,408,500    $    720,700
Non-current assets                  49,211,100      48,795,700
                                  ------------    ------------
                                  $ 57,619,600    $ 49,516,400
                                  ------------    ------------
                                  ------------    ------------
Current liabilities               $  7,312,700    $  6,529,000
Other long-term debt                30,782,900      23,621,600
Excess in assets                    19,524,000      19,365,800
                                  ------------    ------------
                                  $ 57,619,600    $ 49,516,400
                                  ------------    ------------
                                  ------------    ------------
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

      CONDENSED COMBINED STATEMENTS OF OPERATIONS - EQUITY INVESTEES
Year Ended May 31,
                   ------------------------------------------
                       1995           1994           1993
                    -----------    -----------    -----------
Revenues           $   368,300    $ 4,570,500    $ 3,604,800 
Less costs and
  expenses          (1,402,400)    (7,336,800)    (8,500,500)
                   -----------    -----------    ----------- 
Net loss           $(1,034,100)   $(2,766,300)   $(4,895,700)
                   -----------    -----------    ----------- 
                   -----------    -----------    ----------- 

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.  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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     GMMV has incurred $14,316,300 in the development and
operations of the above uranium mineral properties through May 31,
1995.  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 $727,000 at May 31, 1995, 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 last
quarterly amortization of $250,000 for a non-interest bearing loan
from AMAX in lieu of advance royalties, was recognized in the first
quarter of fiscal 1994.

     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.  If AMAX sells the
properties, the Company and Crested will receive 15% of the first
$25 million received by AMAX.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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 $85,500, $126,800 and $105,800 of revenue from
the advance royalty payments in fiscal 1995, 1994 and 1993,
respectively.

     In fiscal 1995, USECC and Cyprus Amax agreed on exercise of
the option by USE and Crested agreeing to forego six quarters of
advance royalties from Cyprus Amax (the option purchase price was
$200,000).  See "Minerals - 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 otherwise encumbered and was sold in fiscal
1995.

     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 paid $345,000
cash and $625,300 in three year nonrecourse promissory notes, of
which $137,900 was paid during fiscal 1995.  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 remaining note bears interest at 7.5% per annum.

     The second option covers 472.5 acres of ranch land northwest
of the City of Gunnison, Colorado (purchase price $822,460). 
Pangolin paid $10,000 for the option; on option exercise and
closing, Pangolin paid $46,090 in cash and $776,370 by two
nonrecourse promissory notes (each with principal and unpaid
interest due on the third anniversary of closing except for $35,000
on the first anniversary).  At closing, 22.19 acres were deeded to
Pangolin; different parcels of the remaining acreage secure the
notes, and will be released for principal payments in the course of
development.  The sale was accounted for as an installment sale and
thus the gain on sale was deferred to be recorded as the notes are
paid.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

Sutter Gold Mining Company

     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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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.  During fiscal 1995, 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,
"SGMC").

     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. 

     SGMC is in the development stage at May 31, 1995, 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 $10,374,400
at May 31, 1995.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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 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 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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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 $6,018,700 at yearend.  Together with the $4,800,000
indemnification reserve, these estimated obligations are recorded
as Other Accrued Liabilities of $10,818,700 in the accompanying
consolidated financial statements.

     On August 25, 1994, Plateau signed a letter of intent with an
unrelated third party to sell part interest in Canyon Homesteads,
Inc. ("CHI"), 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 was to be $6,000,000.  The party
had made a non refundable earnest payment of $100,000 to Plateau to
be credited to the purchase price, with the remainder to be paid in
cash from the purchaser and out of operations, at specified times. 
In fiscal 1995 the purchaser defaulted, and as a result, the
$100,000 was recognized as income in fiscal 1995.

     CHI entered into a joint venture with Arrowstar Investments,
Inc. ("AII") to develop on a 50/50 basis, certain properties at the
Ticaboo Townsite.  AII is owned by certain shareholders of the
Company.  As of May 31, 1995, the Company has recorded $112,400
related to AII's initial funding commitment to the joint venture
which is included in accounts receivable trade on the accompanying
Balance Sheet.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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%) and the Assiniboine and Sioux Tribes (10%).

     During fiscal 1995, Energx sold a 50% interest in the leases
on the Fort Peck Indian Reservation for the sum of $200,000 plus
$100,000 to be used only for the acquisition and consolidation of
additional leases, and for committing to drill 8 exploratory wells. 
This resulted in a gain of $197,000 being recorded on this
undeveloped property sale.  Energx is in the lease acquisition
stage on this property.   No exploratory wells have been drilled to
date.

G.   DEBT:

     During fiscal 1995, USE and Crested obtained a $1,000,000 line
of credit from a bank.  The line of credit accrued interest at the
banks prime rate plus .5% (8.5% initially) and matured on July 23,
1995.  The weighted average interest rate for 1995 for the line of
credit was 9.82%.  $960,000 is outstanding as of May 31, 1995. 
Subsequently this line was repaid with funds received in the July
8, 1995 private placement.  The Company has renegotiated this
$1,000,000 line of credit and extended the maturity date to July
23, 1996.  The line of credit is secured by certain real property
and a share of the net proceeds of production from certain oil and
gas wells.  No amounts are currently outstanding on this line of
credit.

     The Company's debt also includes the $500,000 revolving line
of credit of Brunton with a commercial bank.  The line of credit
accrues interest at 1% above prime and expires in August, 1995.  As
of May 31, 1995, $387,000 was outstanding on the line of credit. 
Brunton also has a $200,000 line of credit that matures in August
1995.  No amounts are outstanding as of May 31, 1995.  Both of the
Brunton lines of credit were renegotiated for $500,000 and $250,000
respectively to mature August 2, 1996 with interest at 1% over bank
index rate.  The weighted average for these lines for 1995 was
9.35%.  FNG holds a $200,000 line of credit with a commercial bank. 
This line of credit accrues interest at 2.25% over the bank's prime
rate and expires on February 28, 1996, $180,000 was outstanding as
of May 31, 1995.  The weighted average rate for 1995 for this line
of credit was 10.29%
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     Brunton has two installment notes bearing interest at 8.25%
secured generally by all the assets of Brunton.  FNG also has
various installment notes bearing interest from 7.5% to 11.75%
which are secured by FNG equipment with maturity dates through
1997.  

     The components of debt as of May 31, 1995 and 1994 are as
follows:
May 31,
                                                          --------------------------
                                                             1995             1994
                                                          ----------      ----------
Installment note - secured by equipment, 
         interest at 8%, matures February 1996            $   84,600      $  220,200 
Installment notes - secured by real estate,
         interest at 7.9% - 8%, matures 1998-2004            270,500         287,600 
Brunton installment notes                                    722,700         770,000 
FNG installment notes                                         57,200         157,800 
Notes payable - other                                         26,400          82,000 
                                                          ----------      ---------- 
                                                           1,161,400       1,517,600 
         Less current portion                               (232,900)       (408,500)
                                                          ----------      ---------- 
                                                          $  928,500      $1,109,100 
                                                          ----------      ---------- 
                                                          ----------      ----------
Principal requirements on debt for the five years after May
31, 1995 are as follows: 1996 - $232,900; 1997 - $121,100; 1998 -
$107,100; 1999 - $200,500; 2000 - $344,100 and thereafter $155,700.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

H.   INCOME TAXES:

     The Company adopted SFAS 109 during fiscal 1994.

     The components of deferred taxes as of May 31, 1995 and 1994
are as follows:
May 31,
                                       -------------------------
                                         1995           1994
                                       ----------    ----------
Deferred tax assets:
 Deferred compensation                 $   50,400    $   26,300 
 Deferred gain on sale of assets          143,900        85,000 
 Net operating loss carryforwards       6,535,200     4,601,100 
 Capital loss carryforwards               182,100       452,000 
 Tax Credits                              325,000       325,000 
 Other                                     33,000        36,000 
                                       ----------    ---------- 
Total deferred tax assets               7,269,600     5,525,400 
                                       ----------    ---------- 
Deferred tax liabilities:
 Accelerated depreciation for tax      (1,073,400)   (1,112,900)
 Development and exploration costs     (2,095,700)   (2,039,900)
                                       ----------    ---------- 
Total deferred tax liabilities         (3,169,100)   (3,152,800)
                                       ----------    ---------- 
                                        4,100,500     2,372,600 

Valuation allowance                    (4,283,800)   (2,639,600)
                                       ----------    ---------- 
Net deferred tax liability             $ (183,300)   $ (267,000)
                                       ----------    ---------- 
                                       ----------    ----------
The Company has established a valuation allowance of
$4,224,900 against deferred tax assets due to the losses incurred
by the Company in fiscal 1995, 1994 and 1993.  The Company's
ability to generate future taxable income to utilize the NOL and
capital loss carryforwards is uncertain.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     For the year ended May 31, 1993, the tax effect of deferred
taxes resulting from timing differences in the recognition of
revenues and expenses for tax and financial statement purposes were
as follows.
                                              May 31,
                                               1993
                                             ---------
    Gain on sale of property and equipment  $ (81,800)
    Operating loss carryforwards for
      income tax reporting purposes          (311,200)
    Deferred compensation expense             (55,600)
    Exploration and development costs         437,700 
    Depreciation                               54,000 
    Other                                     (43,100)
                                            --------- 
      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,
                               -------------------------------------
                                  1995           1994          1993
                               ----------    -----------     -------
Expected federal income tax    $ (704,000)   $(1,055,300)   $  --   
Utilization of capital
 loss carryforward               (269,900)       --            --   
Net operating losses not
 previously benefitted           (670,300)       --            --   
Valuation allowance             1,644,200      1,055,300       --   
                               ----------    -----------    -------- 
 Income tax provision          $  --         $   --         $  --   
                               ----------    -----------    -------- 
                               ----------    -----------    --------
There were no taxes payable as of May 31, 1995, 1994 or 1993.
U.S. ENERGY CORP. AND AFFILIATES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 1995, 1994 AND 1993
                                  (continued)

     At May 31, 1995, the Company and its subsidiaries had available,
for federal income tax purposes, net operating loss carryforwards of
approximately $19,221,000 which will expire from 1996 to 2010 and
investment tax credit carryforwards of $325,000 which, if not used, will
expire from 1996 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', which includes USECC, 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 the sale of minerals and
the acquisition, exploration, holding development and sale of mineral
bearing properties although the Company has no producing mines. Other
reportable industry segments included commercial operations, primarily
manufacturing and distribution of outdoor recreation products, real
estate activities and operation of an airport fixed base operation and
construction operations.  The following is information related to these
industry segments:
U.S. ENERGY CORP. AND AFFILIATES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 1995, 1994 AND 1993
                                  (continued)
Year Ended May 31, 1995
                         ------------------------------------------------------
                                        Commercial  Construction
                          Minerals      Operations   Operations   Consolidated
                         -----------    ----------  ------------  ------------
Revenues                 $    85,500    $5,705,500   $1,303,400   $ 7,094,400 
                         -----------    ----------   ----------
                         -----------    ----------   ----------
Interest and
 other revenues                                                     2,053,600 
                                                                  ----------- 
   Total Revenues                                                 $ 9,148,000 
                                                                  ----------- 
                                                                  ----------- 
Operating (loss) profit  $(1,568,800)   $1,228,400   $  265,100   $   (75,300)
                         -----------    ----------   ----------
                         -----------    ----------   ----------
Interest and
 other revenues                                                     2,053,600 
General corporate 
 and other expenses                                                (3,606,600)
Equity in loss
 of affiliates                                                       (442,300)
                                                                  ----------- 
Loss before income taxes                                          $(2,070,600)
                                                                  ----------- 
                                                                  ----------- 
Identifiable assets
 at May 31, 1995         $18,518,300    $9,074,300   $  292,700   $27,885,300 
                         -----------    ----------   ----------
                         -----------    ----------   ----------
Investments
 in affiliates                                                      3,244,600 
Corporate assets                                                    3,035,100 
                                                                  ----------- 
 Total assets
   at May 31, 1995                                                $34,492,700 
                                                                  ----------- 
                                                                  ----------- 
Capital expenditures     $   455,100    $  186,400   $   28,100
                         -----------    ----------   ----------
                         -----------    ----------   ----------
Depreciation, depletion
 and amortization        $    --        $  637,600   $  116,500
                         -----------    ----------   ----------
                         -----------    ----------   ----------                         U.S. ENERGY CORP. AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MAY 31, 1995, 1994 AND 1993
                                   (continued)
Year Ended May 31, 1994               
                        -------------------------------------------------------
                                      Commercial   Construction
                         Minerals     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)
Loss before income taxes
 and cumulative effect                                            $(3,103,800)
                                                                  ----------- 
                                                                  ----------- 
Identifiable assets
 at May 31, 1994        $17,745,200   $8,898,400    $  371,200    $27,014,800 
                        -----------   ----------    ---------- 
                        -----------   ----------    ---------- 
Investments
 in affiliates                                                      2,807,900 
Corporate assets                                                    3,267,600 
                                                                  ----------- 
 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 
                        -----------   ----------    ---------- 
                        -----------   ----------    ----------
U.S. ENERGY CORP. AND AFFILIATES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MAY 31, 1995, 1994 AND 1993
                                   (continued)
Year Ended May 31, 1993
                        -------------------------------------------------------
                                      Commercial   Construction
                          Minerals    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 extraordinary 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
                        ------------  ----------    -----------
                        ------------  ----------    -----------
U.S. ENERGY CORP. AND AFFILIATES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MAY 31, 1995, 1994 AND 1993
                                   (continued)

     During fiscal 1994 and 1993, approximately 14% and 44% of
mineral revenues were from amortization of principal on the AMAX
notes and annual advance royalties of molybdenum from AMAX.  During
fiscal 1994 and 1993, 86% and 56%, respectively, of mineral
revenues were from sales of uranium.  There were no uranium sales
during fiscal 1995.

     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. 
Commercial operations for 1995 include the operations of Brunton.

J.   SHAREHOLDERS' EQUITY:

     In March 1995, the Company completed a private placement of
400,000 shares of stock at $3.00 per share.  The majority of the
proceeds were from employees of the Company.  This offering carried
terms by which the Company, at its option, would either redeem the
common shares sold from each investor, at a cash redemption price
of $3.50 per share or issue one additional common share for each
three shares originally purchased.  Management of the Company
intends to issue the additional common shares (133,333 shares). 
The Company is obligated to register all shares issued in
connection with this private placement by January 1996.

     In June and July, 1995 the Company sold common stock at $4.00
per share (812,432 shares, net proceeds to the Company of
$2,827,300).  In connection with this private placement, warrants
to purchase 81,243 USE common shares at $4.80 per share are to be
issued to the selling agent.  These warrants are exercisable
through July 25, 2000.

     The Board of Directors adopted the U.S. Energy Corp. 1989
Stock Option Plan (the "Option Plan") for the benefit of USE's key
employees.  The Option Plan, later amended reserves 550,000 shares
of the Company's $.01 par value common stock for issuance under the
Option Plan.  During fiscal 1992, the Company issued options to
certain of its executive officers, Board members and others. 
371,200 non-qualified options were issued at purchase prices
ranging from $2.00 per share to $2.90 per share.  The options will
expire on April 14, 2002 and April 30, 2002.  During fiscal 1995,
options were exercised for the purchase of 7,500 shares.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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 1995, 1994 and 1993, the
Board of Directors of USE contributed 37,204, 46,332 and 49,087,
shares to the ESOP at prices of $5.38, $4.00 and $3.75 per share,
respectively.  The Company is responsible for one-half of these
contributions amounting to $100,000, $92,500 and $91,700 in fiscal
1995, 1994 and 1993, 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 1996.

     The Board of Directors of both the Company and Crested issue
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, 1995, 1994 and 1993, the Company had
compensation expense of $200,000, $116,700 and $271,700,
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              40,300      USE        $  9.75        $392,925
June 1990             66,300      USE          11.00         729,300
November 1990
  (stock dividend)    10,660      USE           N.A.           N.A. 
June 1990             25,000      Crested       1.06          26,562
December 1990          7,500      Crested        .50           3,750
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
January 1995          18,520      USE           3.75          69,450
January 1995           6,500      Crested        .19           1,219
U.S. ENERGY CORP. AND AFFILIATES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 1995, 1994 AND 1993
                                  (continued)

     No shares were earned out in fiscal 1993 or 1995; however,
5,000 shares of USE stock were earned out and released to a third
party in fiscal 1994.  During fiscal 1993, the Company's Board of
Directors amended the stock bonus plan.  As a result, the earn out
dates of certain individuals were extended until retirement, which
is the earn out date of the amended stock bonus plan.  The amended
plan grants a stock-bonus of 20% of the previous plan per year for
five years.  Also included in forfeitable common stock are 15,000
shares to directors which are vesting at 20% a year beginning in
November 1992, of which 9,000 are earned out but not released as of
May 31, 1995.

     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 this affiliate options for
150,000 common shares at $3.50 per share.  None of these options
have been exercised as of May 31, 1995.

     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

Sheep Mountain Partners (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 to the Green
Mountain Mining Venture (GMMV) the 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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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
seek 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.  Certain of 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, agreed with the Company and
Crested that the majority of the claims post the formation of SMP
on December 21, 1988, 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 hearing commenced
on June 27, 1994 before a three member AAA arbitration panel. 
After 73 hearing days and some 15,000 pages of testimony, the
parties rested their cases on May 31, 1995.  Per order of the
Panel, the parties filed their proposed Findings of Fact and
Conclusions of Law, Award and a brief of the law on August 7, 1995.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

Each side shall submit responsive proposed findings of fact and
conclusions of law, responsive proposed award and reply briefs by
September 21, 1995.  The Panel will make its Order and Award within
90 days thereafter, unless the period of time is extended.  

     Nukem and CRIC are seeking $47,172,535 against USE and USECC
and the right to purchase USECC's interest in SMP for $2,350,000. 
USE and Crested are seeking the dissolution of the SMP Partnership,
the return of the Sheep Mountain Mining properties and damages
against Nukem and CRIC in excess of $200,000,000 with requests that
they be trebled under RICO and COCCA.  USECC has denied all the
allegations made by CRIC and denied any liability.  The Company and
counsel believe that an evaluation of the likelihood of an
unfavorable outcome and any estimate of the amount or range of
potential loss is premature at this time given to the state of the
proceedings.  The resolution of these matters by the arbitration
panel is expected by December 1995 or early calendar 1996.  The
Company also expects to vigorously pursue all pre-SMP Partnership
claims which have been reserved by the parties before the Federal
Court once the arbitration proceedings are completed.

     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
Luxembourg 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.  After
various negotiating sessions the parties reached agreement in June
1995 to settle the case by entering into an amendment to the
original agreement to increase the price per pound of U3O8 delivered
to IPC and provide for 3 deliveries totalling 486,443 lbs. U3O8 in
1995, 1996 and 1997.  The first delivery of 226,443 lbs. U3O8 was
made on June 30, 1995.  This amendment to the IPC contract will be
subject to the decision of the Arbitration Panel.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     Declaratory Judgment Action on Extralateral Rights.  On July
30, 1991, Bond Gold Bullfrog, Inc. ("BGBI") filed Civil Action No.
11877 in the District Court of the Fifth Judicial District, Nye
County, Nevada naming USE, Crested, Parador Mining Company, Inc.
("Parador") and H.B. Layne Contractor, Inc. (Layne) as defendants. 
The complaint primarily concerns extralateral rights associated
with two patented mining claims (the "Claims") owned by Parador
which were initially leased to a predecessor of BGBI and
subsequently, the residuals of that lease were assigned and leased
by Parador to USE and Crested.  Parador, USE and Crested answered
the complaint, filed a counterclaim against the Plaintiff and a
cross claim against Layne.  Pursuant to the Nevada Rules of Civil
Procedure, the parties through their attorneys have met and
prepared a report outlining various matters required by the Nevada
Rules regarding discovery and depositions.  Parador has notified
BGBI that it has terminated the lease to a predecessor of BGBI of
its two patented claims (being part of the Bullfrog Open Pit Mine). 
On or about June 30, 1993, Layne filed a motion for summary
judgment against Parador, USE and Crested claiming there is no
issue of material fact and Layne is entitled to judgment as a
matter of law.  Parador, USE and Crested are preparing a response
to this motion.  Pursuant to the Assignment and Lease of Mining
Claims entered into as of April 1, 1991 between USE, Crested and
Parador, USE and Crested are to receive 50% of damages or
production royalties due Parador from production of precious metals
out of the mined lode or veins dipping down from where the lode
apexes on Parador's mining claims.  USE agreed to advance $200,000
to cover attorney and other costs and fees which may be first
recovered out of production royalties or damages.  Any expenditures
over $200,000 shall be borne solely by USE and Crested.  If Bond
Gold should produce precious metals from within the boundaries of
Parador's Claims which are not related to extralateral rights,
Parador shall receive 100% of the royalties.  If USE and Crested
mine precious metals from the Claims, Parador shall receive a
royalty of 40% NSR.  Depositions have been taken in the case and
Layne has filed the above Motion for Summary Judgment.  The parties
agreed to stay the motion until discovery is completed.  The Court
set the trial on the issue of extralateral rights for July 17,
1995, but recently notified the parties that because of a conflict,
the case will not be heard until December 11, 1995.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     As of May 31, 1995, the Company has recorded estimated
reclamation obligations, including standby costs, of $14,770,500,
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 $23,960,000 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 SGMC 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, 1995 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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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).
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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
$16,322,900 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.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

     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.

SGMC

     The Company and Crested currently own 100% of SGMC, 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, 1995. 
Any reclamation liability for SGMC properties which currently exist
is insignificant.
U.S. ENERGY CORP. AND AFFILIATES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MAY 31, 1995, 1994 AND 1993
                                (continued)

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 $10,818,700 as of May 31, 1995, 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.
PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements.

                        U.S. ENERGY CORP. AND AFFILIATES

                     Condensed Consolidated Balance Sheets

                                     ASSETS
February 29,              May 31,
                                          1996                    1995
                                       ------------            -----------
                                       (Unaudited)             (Unaudited)
CURRENT ASSETS:
  Cash                                 $  1,279,100            $   360,600 
  Accounts receivable
    Trade                                   425,300                709,700 
    Related parties                         312,000                231,600
  Inventory                                  86,200                 86,100
  Current portion long-term 
    notes receivables                        38,300                 74,400 
  Other                                      87,800                 86,100 
  Net Current Assets of
    Discontinued Operations                  --                  1,841,600 
                                       ------------           ------------ 
    TOTAL CURRENT ASSETS                  2,228,700              3,390,100 
                                                        
INVESTMENTS AND ADVANCES
  Affiliates                              4,159,500              3,244,600 
  Restricted                              8,056,900              7,757,400 
                                       ------------           ------------ 
                                         12,216,400             11,002,000 

PROPERTIES AND EQUIPMENT                 28,101,900             27,079,200 
  Less accumulated depreciation, 
    depletion and amortization          (10,176,900)            (9,659,400)
                                       ------------           ------------ 
                                         17,925,000             17,419,800 
OTHER ASSETS:
  Accounts and notes receivable:
    Real estate and other                 1,905,600                912,700 
    Affiliates and related parties           25,000                 25,000 
    Employees                               525,500                505,100 
  Buildings and improvements 
    held for sale                             7,500                  7,500 
  Deferred compensation, long-term            --                     5,100 
  Deposits and other                        117,200                117,200 
                                       ------------           ------------
                                          2,580,800              1,572,600 
                                       ------------           ------------ 
                                       $ 34,950,900           $ 33,384,500 
                                       ------------           ------------ 
                                       ------------           ------------
See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

                     Condensed Consolidated Balance Sheets

                      LIABILITIES AND SHAREHOLDERS' EQUITY
February 29,           May 31,
                                           1996                 1995
                                        -----------           -----------
CURRENT LIABILITIES:                    (Unaudited)           (Unaudited)
  Accounts payable and 
    accrued expenses                    $   622,100           $ 2,067,000 
  Income taxes payable                       50,000                --     
  Line of credit                             --                 1,140,000 
  Current portion of long-term debt         418,900               161,200 
                                        -----------           ----------- 
    TOTAL CURRENT LIABILITIES             1,091,000             3,368,200 

LONG-TERM DEBT (See Note 4)                 651,300               277,500 

RECLAMATION LIABILITY (See Note 5)        3,951,800             3,951,800 

OTHER ACCRUED LIABILITIES (See Note 5)   10,546,300            10,818,700 

DEFERRED TAX LIABILITY                      267,000               183,300 

NET NONCURRENT LIABILITIES OF
  DISCONTINUED OPERATIONS                    --                   538,300 

COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST                           949,300               708,200 

Common stock, 187,817
  shares forfeitable                      1,486,500             1,370,100 

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, 6,379,066 and 5,262,794          62,300                52,500 
  Additional paid-in capital             21,619,300            18,629,000 
  Retained earnings (deficit)            (2,417,200)           (3,256,400)
  Treasury stock, 769,943 
    shares, at cost                      (2,242,400)           (2,242,400)
  Unallocated ESOP contribution          (1,014,300)           (1,014,300)
                                        -----------           ----------- 
                                         16,007,700            12,168,400 
                                        -----------           ----------- 
                                        $34,950,900           $33,384,500 
                                        -----------           ----------- 
                                        -----------           -----------
See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
Three Months Ended           Nine Months Ended
                                 February                    February
                          ------------------------  -------------------------
                           29, 1996     28, 1995     29, 1996      28, 1995
                          ----------   -----------  -----------   -----------
REVENUES:
Mineral sales
 and option               $  942,400   $   --       $ 3,116,700   $    --     
Oil sales                     55,200       47,400       137,300       138,200 
Commercial revenues          161,100      178,700       684,400       741,500 
Gain on restructuring
 mining properties
 agreements                   --           --            --            85,500 
Construction contract
 revenues                    552,500       29,100     3,369,600       919,600 
Gain on sale of assets        24,100      975,000        68,300     1,288,900 
Interest                     125,700       79,200       391,400       249,100 
Management and 
 other fees                   14,600       76,900       384,100       215,700 
                          ----------   ----------   -----------   ----------- 
                           1,875,600    1,386,300     8,151,800     3,638,500 
                          ----------   ----------   -----------   ----------- 
COSTS AND EXPENSES:
 Costs of mineral sales      942,400       --         2,766,700        --     
 Mineral operations          190,900      299,300       602,400     1,005,500 
 Construction costs          474,400       36,500     2,569,700       790,500 
 Abandoned gas leases         --           --           328,700        --     
 General and 
   administrative            959,200      618,600     1,965,800     1,469,100 
 Commercial operations       490,300      580,100     1,558,600     1,670,500 
 Oil production               36,700       24,100        68,100        52,700 
 Loss on sale 
   of investments             --           --            --            89,900 
 Interest                     72,600       46,100       174,300       111,500 
                          ----------   ----------   -----------   ----------- 
                           3,166,500    1,604,700     10,034,300    5,189,700 
                          ----------   ----------   -----------   -----------
(Continued)

            See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
                                   (Continued)
Three Months Ended           Nine Months Ended
                                 February                    February
                          ------------------------  --------------------------
                           29, 1996     28, 1995     29, 1996      28, 1995
                          ----------   -----------  -----------   ------------
Loss before 
 Equity In Loss
 of Affiliates,
 Provision for 
 Income Taxes             (1,290,900)    (218,400)   (1,882,500)   (1,551,200)

Minority Interest in 
 Loss of Consolidated
 Subsidiaries                332,200       76,200        398,700      418,400 

Equity in Loss of
 Affiliates-net             (115,700)    (128,100)     (281,600)     (304,900)

Provision for 
 Income Taxes                 --           --            --            --     
                          ----------   ----------   -----------   ----------- 
Loss from Continuing
 Operations               (1,074,400)    (270,300)   (1,765,400)   (1,437,700)
                          ----------   ----------   -----------   ----------- 
Discontinued Operations
 (Note 8)
Income from Discontinued
 Operations Net of
 Income Taxes of $0           (9,200)     (58,100)      308,900       121,900 

Gain on Disposal of
 Subsidiary Operations
 in Discontinued
 Segment Net of Income 
 Taxes of $50,000          2,295,700       --         2,295,700        --     
                          ----------   ----------   -----------   ----------- 
   
Income (Loss) from
 Discontinued Operations   2,286,500      (58,100)    2,604,600       121,900 
                          ----------   ----------   -----------   ----------- 

NET INCOME (LOSS)         $1,212,100   $ (328,400)  $   839,200   $(1,315,800)
                          ----------   ----------   -----------   ----------- 
                          ----------   ----------   -----------   -----------
(Continued)

            See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
                                   (Continued)
Three Months Ended           Nine Months Ended
                                 February                    February
                          ------------------------  --------------------------
                           29, 1996     28, 1995     29, 1996       28, 1995
                          ----------   -----------  -----------   ------------
NET INCOME (LOSS) PER SHARE
 Loss from Continuing
   Operations             $     (.17)  $     (.06)  $      (.28)  $      (.29)
 Income (Loss) from 
   Discontinued
   Operations                    .00         (.01)          .05           .02 
 Gain on Disposal
   of Subsidiary
   Operating in
   Discontinued
   Segment                       .36       --               .37        --     
                          ----------   ----------   -----------   ----------- 
NET INCOME (LOSS)
 PER SHARE                $      .19   $     (.07)  $       .14   $      (.27)
                          ----------   ----------   -----------   ----------- 
                          ----------   ----------   -----------   ----------- 
 
WEIGHTED AVERAGE
 NUMBER OF SHARES
 OUTSTANDING               6,364,089    5,012,216     6,142,925     4,877,776 
                          ----------   ----------   -----------   ----------- 
                          ----------   ----------   -----------   -----------
See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)
Nine Months Ended
                                                        February
                                              ---------------------------
                                                29, 1996       28, 1996
                                              -----------     -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income (Loss)                            $   839,200     $(1,315,800)
 Adjustments to reconcile
 net income to net cash used
 in operating activities:
   Minority interest in loss 
     of consolidated subsidiaries                (398,700)       (418,400)
   Depreciation, depletion
     and amortization                             623,900         577,300 
   Non-cash compensation                          297,400          69,500 
   Abandoned mineral leases                       328,700          --     
   Equity in loss of affiliates                   281,600         304,900 
   (Gain) on sale assets                          (68,300)     (1,288,900)
   (Gain) on sale of subsidiary                (2,345,700)          --    
   Net assets disposed of in connection
     with sale of subsidiary                   (1,939,000)         --     
   Loss (gain) on sale of investments              --              89,900 
   Cumulative effect of accounting changes         --             (83,800)
   Change in deferred income taxes                 83,700         (36,000)
 Net changes in components
  of working capital                              640,500         282,600 
                                              -----------     ----------- 
NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                         (1,656,700)      (1,818,700)

CASH FLOWS FROM INVESTING ACTIVITIES:
 Investments in affiliates                       (556,700)       (476,800)
 Investments in other                            (299,500)       (198,400)
 Purchase of property and equipment            (1,021,100)       (141,000)
 Proceeds from sale of assets                      77,700         969,100 
 Proceeds from sale of subsidiary               3,300,000          --     
 Development of mining properties                (349,200)       (341,400)
 Development of gas properties                    (23,400)       (147,700)
 Change in notes receivable                        55,800        (128,200)
 Proceeds from sale of investments                 --             199,300 
 Deposits and other                                --              (3,300)
                                              -----------     ----------- 
NET CASH USED IN INVESTING ACTIVITIES           1,183,600        (268,400)
                                              -----------     -----------
(Continued)

           See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)
Nine Months Ended
                                                       February
                                              ---------------------------
                                                29, 1996       28, 1996
                                              -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Private placement of common stock              2,842,200         868,100 
 Cancellation of stock for services               (23,100)          --     
 Company stock purchased by
   consolidated affiliate                          --            (120,000)
 Additions to long-term debt                    1,348,500       1,740,800 
 Payment on long-term debt                     (2,966,700)       (802,800)
                                              -----------     ----------- 
NET CASH PROVIDED BY FINANCING ACTIVITIES       1,200,900       1,686,100 
                                              -----------     ----------- 
NET INCREASE (DECREASE) IN CASH 
 AND CASH EQUIVALENTS                             727,800        (401,000)

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                              551,300       1,181,700 
                                              -----------     ----------- 
CASH AND CASH EQUIVALENTS AT
 END OF PERIOD                                $ 1,279,100     $   780,700 
                                              -----------     ----------- 
                                              -----------     ----------- 
SUPPLEMENTAL DISCLOSURES:
 Income tax paid                              $    --         $   118,900 
                                              -----------     ----------- 
                                              -----------     ----------- 
 Interest paid                                $   221,200     $   175,000 
                                              -----------     ----------- 
                                              -----------     ----------- 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
 Acquisition of unowned portion of
   affiliate with Company stock               $    --         $    80,000 
                                              -----------     ----------- 
                                              -----------     ----------- 

NOTES RECEIVABLE OBTAINED IN
 CONNECTION WITH SALE OF SUBSIDIARY           $ 1,000,000     $    --     
                                              -----------     ----------- 
                                              -----------     -----------
See notes to condensed consolidated financial statements.
U.S. ENERGY CORP. AND AFFILIATES

           Notes to Condensed Consolidated Financial Statements

     1)   The Condensed Consolidated Balance Sheets as of February
29, 1996 and May 31, 1995, the Condensed Consolidated Statements of
Operations for the three and nine months ended February 29, 1996
and February 28, 1995, and the Condensed Consolidated Statements of
Cash Flows for the nine months ended February 29, 1996 and February
28, 1995, have been prepared by the Registrant without audit.  In
the opinion of the Registrant, the accompanying financial
statements contain all adjustments (consisting of only normal
recurring accruals and reclassifications for amounts associated
with the discontinued operations of The Brunton Company ("Brunton")
which was sold by the Registrant as of January 1996) necessary to
present fairly the financial position of Registrant as of February
29, 1996 and May 31, 1995, the results of operations for the three
and nine months ended February 29, 1996 and February 28, 1995 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, 1995 Form 10-K.   The
results of operations for the periods ended February 29, 1996 and
February 28, 1995 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: Energx Ltd. (90%), Crested (51.9%), USECC Gold
Limited Liability Company (100%), Plateau Resources Limited (100%)
and Four Nines Gold, Inc. (50.9%).  The Consolidated Financial
Statements reflect the operations of Brunton as discontinued
because Brunton was sold as of January 31, 1996.  The 1995
Consolidated Financial Statements have been reclassified for
amounts associated with the discontinued operations of Brunton. 
Brunton manufactures and sells outdoor recreation products.  All
material intercompany profits and balances have been eliminated.

     4)   Debt as of February 29, 1996 consists of various
equipment and other property loans totaling $351,900 and debt
attributable to consolidated affiliates of $718,300 on Four Nines
Gold.  Certain inter-affiliate loans were eliminated through
consolidation.
U.S. ENERGY CORP. AND AFFILIATES

           Notes to Condensed Consolidated Financial Statements
                                (Continued)

     5)   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. 
In addition, Plateau has recorded additional obligations of
$10,546,301 for the estimated holding and maintenance costs needed
until the mill is placed in service or decommissioning begins.

     6)   During the nine months ended February 29, 1996, the
Registrant completed a private placement of 812,432 of restricted
common shares which resulted in net proceeds to the Company of 
$2,842,200.  The Registrant also cancelled 5,000 shares of its
common stock which had previously been issued for professional
services.  On January 5, 1996, the Registrant issued 32,901 shares
of common stock to certain of its employees for a Christmas bonus,
which represented $180,626 in compensation, one half of which was
paid by Crested. No officers or directors received such stock.  On
February 21, 1996 the Registrant issued 7,700 shares under the
Deferred Compensation Plan for a total compensation of $116,385.50
one half of which was paid by Crested.

     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.

     8)   The Registrant has reflected the operations of Brunton as
discontinued in each of the accompanying consolidated financial
statements presented because the Registrant sold its 100% interest
in Brunton to Silva A.B. of Sweden (Silva) during the third quarter
of 1996.  The purchase price paid by Silva was $4,300,000 and was
in the form of $3,300,000 of cash and a $1,000,000 Promissory Note. 
This note will be paid to the Registrant in three annual equal
installments of $333,333 beginning February 15, 1996 and will
accrue interest at 7%.  The sale of Brunton resulted in a gain of
approximately $2,295,700.

     Sales from Brunton's operations were $244,100 and $2,819,100
for the three and nine months ended February 29, 1996,
respectively, and $1,089,900 and $3,259,200 for the three and nine
months ended February 28, 1995, respectively.

     The effective income tax rate for discontinued operations
differs from the U.S. statutory tax rate primarily as a result of
the utilization of net operating loss carryforwards.
Report of Independent Accountants

To the Members of the Management Committee of
Green Mountain Mining Venture
Riverton, Wyoming

We have audited the accompanying balance sheet of Green Mountain
Mining Venture (A Joint Venture in the Development Stage) as of
December 31, 1994 and 1993, and the related statements of
operations, changes in Venture partners' capital, and cash flows
for the years ended December 31, 1994, 1993 and 1992, and the
period from inception (June 1, 1990) to December 31, 1994.  These
financial statements are the responsibility of the Venture's
management.  Our responsibility is to express an opinion on these
financial statements 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 Green
Mountain Mining Venture as of December 31, 1994 and 1993, and the
results of its operations and its cash flows for the years ended
December 31, 1994, 1993 and 1992, and the period from inception
(June 1, 1990) to December 31, 1994, in conformity with generally
accepted accounting principles.

Salt Lake City, Utah
April 10, 1995
GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                               BALANCE SHEET
                     as of December 31, 1994 and 1993
                               ------------

                                          1994           1993
                                       -----------    -----------
Assets:

 Property and equipment (Note 3):
   Mineral properties and mine
     development costs                 $21,887,857    $21,604,663
   Buildings                            24,815,009     24,815,009
                                       -----------    -----------

     Total assets                      $46,702,866    $46,419,672
                                       -----------    -----------

Liabilities and Partners' Capital:

 Due to USECC                          $    62,386    $   102,182

 Reclamation liabilities (Note 3)       23,619,000     23,619,000
                                       -----------    -----------

     Total liabilities                  23,682,386     23,722,182
                                       -----------    -----------
 Commitments (Note 3)

 Partners' capital:
   Kennecott Uranium Company            11,510,240     11,348,745
   USECC                                11,510,240     11,348,745
                                       -----------    -----------
                                        23,019,480     22,697,490
                                       -----------    -----------
     Total liabilities and 
      partners' capital                $46,702,866    $46,419,672
                                       -----------    -----------

The accompanying notes are an integral part of these financial
statements.
GREEN MOUNTAIN MINING VENTURE
                    (A Joint Venture in the Development Stage)

                             STATEMENT OF OPERATIONS
              for the years ended December 31, 1994, 1993 and 1992,
                   and the period from inception (June 1, 1990)
                               to December 31, 1994
                                   ------------

                                                                 Period from
                                                                inception to
                                                                December 31,
                       1994           1993           1992           1994
                    ___________    ___________    ___________    ____________

Costs and expenses:
  Maintenance and 
    holding costs   $ 1,877,528    $ 1,982,005    $ 2,061,349    $ 5,921,782
  Marketing costs        85,676         83,977         69,445        247,598
                    ___________    ___________    ___________    ____________

    Net loss        $ 1,963,194    $ 2,065,982    $ 2,130,794    $ 6,169,380
                    ___________    ___________    ___________    ____________

The accompanying notes are an integral part of these financial statements.
GREEN MOUNTAIN MINING VENTURE
                               (A Joint Venture in the Development Stage)

                            STATEMENT OF CHANGES IN VENTURE PARTNERS' CAPITAL
                          for the years ended December 31, 1994, 1993 and 1992,
                              and the period from inception (June 1, 1990)
                                          to December 31, 1994
                                               __________
Period from
                                                                                    inception to
                                                                                    December 31,
                                           1994           1993          1992            1994   
                                       ___________    ___________    ___________    ____________
Balance at beginning of period:
  Kennecott Uranium Company           $ 11,348,745   $ 11,049,433   $ 10,478,378   $     - 
  USECC                                 11,348,745     11,049,433     10,478,378         - 
    

Capital contributions (Note 1):
  Kennecott Uranium Company              1,143,097      1,332,303      1,636,452     14,594,930
  USECC                                  1,143,097      1,332,303      1,636,452     14,594,930 

Net loss:
  Kennecott Uranium Company               (981,602)    (1,032,991)    (1,065,397)    (3,084,690)
  USECC                                   (981,602)    (1,032,991)    (1,065,397)    (3,084,690)

Balance at end of period:
  Kennecott Uranium Company             11,510,240     11,348,745     11,049,433     11,510,240 
  USECC                                 11,510,240     11,348,745     11,049,433        11,510,240
The accompanying notes are an integral part of these financial statements.
GREEN MOUNTAIN MINING VENTURE
                                (A Joint Venture in the Development Stage)

                                          STATEMENT OF CASH FLOWS
                          for the years ended December 31, 1994, 1993 and 1992, 
                               and the period from inception (June 1, 1990) 
                                           to December 31, 1994
                                               ____________
Period from
                                                                                       inception to
                                                                                       December 31,
                                                1994           1993           1992         1994
                                             __________     __________     __________  ____________
Cash flows used in operating activities:
  Net loss                                 $(1,963,194)   $(2,065,982)   $(2,130,794)   $(6,169,380)
  Increase (decrease) in due to USECC          (34,782)        51,947         -              17,165 
                                           ___________    ___________    ___________    ___________ 

Net cash used in operating  activities      (1,997,986)    (2,014,035)    (2,130,794)    (6,152,215)
                                           ___________    ___________    ___________    ___________ 
Cash flows used in investing activities:
  Cost of buildings, mineral properties
    and mine development                      (283,194)      (666,975)      (698,298)    (7,355,866)
  Increase (decrease) in due to USECC           (5,014)        16,404       (443,812)        45,221 
                                           ___________    ___________    ___________    ___________ 

Net cash used in investing  activities        (288,198)      (650,571)    (1,142,110)    (7,310,645)
                                           ___________    ___________    ___________    ___________ 
Cash flows from financing activities:
  Capital contributions                      2,286,194      2,664,606      3,272,904     13,462,860 
                                           ___________    ___________    ___________    ___________ 

Net change in cash and cash equivalents    $    -         $    -         $    -         $    -      
                                           ___________    ___________    ___________    ___________ 
                                           ___________    ___________    ___________    ___________ 
Cash and cash equivalents:
  At beginning of period                   $    -         $    -         $    -         $    -      
  At end of period                              -              -              -              -      
                                           ___________    ___________    ___________    ___________ 
                                           ___________    ___________    ___________    ___________
The accompanying notes are an integral part of these financial statements.
GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                       NOTES TO FINANCIAL STATEMENTS
                                          

1.   Organization of the Joint Venture:

     Green Mountain Mining Venture ("GMMV" or the "Venture") is a
     joint venture with a 30 year life, formed by U.S. Energy Corp.
     ("USE"), Crested Corp. ("Crested") and Kennecott Uranium
     Company ("Kennecott"), the Venture partners, to develop mining
     claims and produce uranium from the Green Mountain properties
     located in south-central Wyoming.  Kennecott has a 50%
     interest in GMMV, and USE and Crested ("USECC") collectively
     have a 50% interest.  GMMV was formed June 1, 1990, with each
     partner contributing its portion of the Green Mountain
     properties.  Thereafter, the partners are required to
     contribute funds based upon their respective participating
     interests, subject to certain provisions as provided for in
     the joint venture agreement.

     Kennecott has agreed to contribute the first $50 million of
     operating and development expenses.  Through December 31,
     1994, Kennecott has contributed $13,462,808 to the Venture for
     operating and development expenses.  During this period, 50%
     of the capital contributions made by Kennecott are allocated
     to USECC.  The cash flows from the Venture will be allocated
     50% to Kennecott and 50% to USECC.  The allocation of the
     USECC portion of cash flows will be determined by the
     ownership interests of USE and Crested in the various GMMV
     properties.

     Effective October 29, 1992, Kennecott replaced USECC as
     manager of the Venture.  Kennecott contracts with USECC to
     perform work on behalf of the Venture.

     Through December 31, 1994, the activities of the Venture have
     consisted primarily of the development and maintenance of the
     Green Mountain properties.  Additional development is required
     prior to the commencement of commercial production.  Such
     commencement is not expected to occur until uranium prices
     increase significantly above current levels.  Therefore, the
     Venture is considered to be in the development stage as
     defined in Statement of Financial Accounting Standards No. 7.
GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                 NOTES TO FINANCIAL STATEMENTS, Continued

2.    Summary of Significant Accounting Policies:

      Mineral properties contributed to the Venture were recorded
      at the partners' historical cost at the date of contribution. 
      Costs incurred in the acquisition of mineral properties are 
      deferred  until  the  properties  are  put  into  operation,
      sold or abandoned.  Mine development costs incurred either
      to expand the capacity of operating mines, develop new ore
      bodies or develop mine areas substantially in advance of
      production are capitalized and will be charged to operations
      on the units-of-production method over the estimated reserves
      to be recovered.  Mine development costs incurred to maintain
      production will be included in operating costs and expenses. 
      Maintenance and holding costs are expensed as incurred.

      The cost of mining equipment, less estimated salvage value
      will be depreciated on the units-of-production method over
      the estimated reserves to be recovered or on the straight-
      line method over the estimated life of the equipment,
      whichever is shorter.  The cost of buildings will be
      depreciated on the straight-line method.  Costs of repairs
      and maintenance are expensed as incurred.  Expenditures that
      substantially extend the useful lives of assets are
      capitalized.  When assets are retired or otherwise disposed
      all applicable costs and accumulated depreciation are removed
      from the accounts and any resulting gain or loss is
      recognized currently.

      No provision has been made for federal, state and local
      income taxes, credits, or benefits since tax liabilities are
      the responsibility of the individual partners.

3.    Buildings, Mineral Properties and Mine Development Costs:

      USECC conducts operations at the mine site on behalf of the
      Venture.  All accounts payable are due to USECC for costs
      incurred by USECC in the normal course of business on behalf
      of GMMV.  Through December 31, 1994 Kennecott had reimbursed
      USECC for substantially all development costs incurred.
GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                 NOTES TO FINANCIAL STATEMENTS, Continued

3.    Buildings, Mineral Properties and Mine Development Costs,
      Continued:

      Building, mineral property and mine development costs
      incurred by each of the Venture partners are as follows: 

                                                        Period from
                                                         inception
             Year Ended     Year Ended    Year Ended      through
            December 31,   December 31,   December 31,   December 31,
                1994           1993          1992          1994
            ___________    ___________    ___________    ___________

USECC       $   145,712    $   296,869    $   319,110    $ 4,698,908
Kennecott       137,482        370,106        379,188      2,656,958
            ___________    ___________     __________    ___________

  Total     $   283,194    $   666,975     $  698,298    $ 7,355,866

     In December 1990, GMMV acquired additional mineral properties
     in exchange for the assumption of reclamation liabilities
     associated with those properties of $7.3 million.  In 1992,
     GMMV acquired an established uranium processing mill (the
     Sweetwater Mill) in exchange for the assumption of reclamation
     liabilities associated with this property of $16.3 million. 
     Such amounts represent the estimated costs at the acquisition
     date to reclaim these properties.  Kennecott, on behalf of
     GMMV, is self-bonded in the amount of $24.3 million, which is
     payable to the Wyoming Department of Environmental Quality and
     the U.S. Nuclear Regulatory Commission in the event GMMV does
     not properly reclaim the above properties or violates the
     Wyoming Environmental Quality Act.  If production does not
     commence before the year 1900, the seller is liable for the
     first $8 million of the reclamation costs at the Sweetwater
     Mill.

     The Venture properties contain approximately 16 square miles,
     of which 8,860 acres are unpatented lode mining claims and
     1,280 acres are state leases subject to a royalty of 5% of the
     gross value of uranium bearing ore mined  and  removed  from 
     said  lands.   The  state  leases will expire August 1996 and
     May 1901.  All fees required to hold the unpatented mining
     claims have been paid to the state of Wyoming for the period
     ended December 31, 1994.
GREEN MOUNTAIN MINING VENTURE
                (A Joint Venture in the Development Stage)

                 NOTES TO FINANCIAL STATEMENTS, Continued

3.   Buildings, Mineral Properties and Mine Development Costs,
     Continued:

     At December 31, 1994 and 1993, costs capitalized as property
     and equipment are composed of the following:

                                   1994             1993
                                ___________      ___________

      Acquisition costs         $39,347,000      $39,347,000
      Development costs           7,355,866        7,072,672
                                ___________      ___________

                                $46,702,866      $46,419,672
                                ___________      ___________

     Acquisition costs include the partners' initial contribution
     of $15,727,000 of mineral properties and buildings recorded at
     the contributing partners' historical cost and $23,619,000 of
     mineral properties and buildings acquired in exchange for the
     assumption of reclamation liabilities noted above.
PART II
             INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.  Other Expenses of Issuance and Distribution.

Legal                    $ 6,000*
Audit                      2,000*
SEC and
state fees                 2,000*
                         $10,000*

* Estimate

Item 14.  Indemnification of Directors and Officers.

The Wyoming Business Corporation Act ("WBCA"), W.S. 17-16-850  et
seq.,  provides for indemnification of the registrant's officers,
directors,  employees, and agents against liabilities which  they
may  incur  in such capacities.  A summarization of circumstances
in  which such indemnification may be available follows,  but  is
qualified  by reference to registrant's Articles of Incorporation
and the text of the statute.

In  general,  any officer, director, employee, or  agent  may  be
indemnified  against expenses, fines, settlements,  or  judgments
arising  in  connection  with a legal proceeding  to  which  such
person  is  a  party, as a result of such relationship,  if  that
person's actions were in good faith, were believed by him or  her
to  be  in  (or  at  least  not  opposed  to)  registrant's  best
interests, and in the case of any criminal proceeding, he or  she
had  no  reasonable  cause to believe  his  or  her  conduct  was
unlawful.   Unless such person is successful upon the  merits  in
such  an  action,  indemnification may be awarded  only  after  a
determination by decision of the board of directors (by directors
not  at  the  time  parties  to the proceeding)  or  by  majority
shareholder   vote  (excluding  shares  held  or  controlled   by
directors who are at the time parties to the proceeding),  or  by
opinion of special legal counsel.

The  circumstances under which indemnification would be  made  in
connection with an action brought on behalf of the registrant are
generally  the  same as stated above, except that indemnification
is permitted only for reasonable expenses.

In  addition,  registrant  has statutory  authority  to  purchase
insurance  to  protect  its officers, directors,  employees,  and
agents against any liabilities asserted against them, or incurred
in  connection  with their service in such capacities.   Further,
registrant may advance or reimburse funds to a director who is  a
party  to  a  proceeding,  for reasonable  expenses  incurred  in
connection with a proceeding.

Item 15.  Recent Sales of Unregistered Securities.

(a)(1)   In  August, 1993 Registrant sold a $300,000  convertible
promissory   note  to  The  Brunton  Company,  which   note   was
subsequently converted (on October 19, 1993) to 100,000 shares of
common stock of the Registrant at $3.00 per share.

    (2)  From November 28, 1995 to March 31, 1995 Registrant sold
400,000 restricted shares of its common stock, principally to its
officers and employees or members of their immediate families out
of a total 400,000 shares offered.

    (3)  From June 8, 1995 July 28, 1995, Registrant sold 812,432
restricted shares of its common stock to accredited investors  at
$4.00 per share, out of 1,750,000 shares offered.

   (4)  On September 15, 1994, Registrant delivered 20,000 shares
of  its  Common  Stock, that Registrant borrowed  from  Keith  G.
Larsen,  to Gladys L. May (13,334 shares), Kenneth E. May  (3,333
shares)  and  Vicki Juhl Guier (3,333) shares in exchange  for  a
total  of  9,000  common  shares  of  Ticaboo  Development,  Inc.
("TDI"), a Utah Corporation, pursuant to an Agreement and Plan of
Reorganization  dated September 2, 1994 (the  "Agreement")  among
Registrant,  TDI and TDI's three shareholders named  above.   The
20,000 shares of Registrant's Common Stock was acquired by  Keith
G.  Larsen (who is not an affiliate of Registrant) in open market
transactions  and was used by Registrant to acquire  all  of  the
outstanding shares of TDI pursuant to the terms of the Agreement.
In  December 21, 1994 Registrant issued to Keith G. Larsen 20,000
restricted shares of its Common Stock to replace the 20,000  free
trading  shares  borrowed  from him to complete  the  transaction
described above.

    (5)   In March 1996 Registrant issued the Warrant to Shamrock
Partners,  Ltd.  as  compensation for  services  as  a  financial
consultant and advisor under an agreement dated January 9, 1996.

    (6)  In January 1996 Registrant issued an aggregate of 32,901
shares  of its common stock to 30 employees as a Christmas  bonus
for services performed during the 1995 calendar year.

(b)(1), (2), (4), (5) and (6).  No underwriters were involved  in
transactions  (a)(1),  (2),  (4), (5)  and  (6).   RAF  Financial
Corporation was placement agent for the (a)(3) private  offering,
receiving  a  10  percent  sales  commission  and  a  3   percent
nonaccountable expense allowance on shares sold, and warrants  to
purchase 10 percent of total shares sold.

(c)(1)  See above.

   (2)  Shares were offered at $3.00.

   (3)  Shares were offered at $4.00.

   (4)  See (a)(4) above.

   (5)  See (a)(5) above.

   (6)  See (a)(6) above.

    (d)(1), (4), (5) and (6). The securities referenced in (a)(1),
(4), (5) and (6) were offered and sold in reliance on the section
4(2) exemption from section 5 registration.

    (d)(2)  and  (3).  The common stock issued and  sold  in  the
private placements were offered and have been sold in reliance on
the  section  4(2) exemption from registration, and Rule  506  of
Regulation D thereunder.  Total nonaccredited purchasers  in  the
two  private  placements were 34; the balance of  investors  were
accredited  persons.   Further,  Registrant  believes   the   two
placements  were different offerings, not subject to  integration
under Commission criteria.

Item 16.  Exhibits and Financial Statement Schedules.

(a)   The  following financial statements are filed as a part  of
this registration statement:

(1)   Consolidated Financial Statements (audited only for  fiscal
periods ending May 31)

   Registrant and Affiliates                             Page No.

   Report of Independent Public Accountants               101-102
   Consolidated Balance Sheets
     May 31, 1995 and 1994-                               103-105
     February 29, 1996                                    152-153

   Consolidated Statements of Operations
     for the Years Ended May 31, 1995 and 1994,           106-107
     Nine Months Ended February 29, 1996
     and February 28, 1995                                154-156

   Consolidated Statements of Shareholders'
     Equity for the Years Ended
     May 31, 1995, 1994 and 1993                          108-110

   Consolidated Statements of Cash Flows for
     the Years Ended May 31, 1995, 1994 and 1993          111-114
     Nine Months Ended February 29, 1996
     and February 28, 1995                                157-158

   Notes to Consolidated Financial Statements
     for the Years Ended May 31, 1995, 1994 and 1993      115-151
     Nine Months Ended February 29, 1996                  159-160

(2)  Financial Statement Schedules

   (i) Registrant and Affiliates - Not applicable

   (ii)  Financials and Schedules of Affiliates

        (a)  Green Mountain Mining Venture

             Report of Independent Public Accountants         161

             Balance Sheet - December 31, 1994 and 1993       162

             Statement of Operations for the Period
              from June 1, 1990 (Date of Inception)
              through December 31, 1994                       163

             Statement of Changes in Partners'
              Capital for the Period from
              June 1, 1990 (Date of Inception)
              through December 31, 1994                       164

             Statement of Cash Flows for
              the Period from June 1, 1990
             (Date of Inception) through December 31, 1994    165

             Notes to Financial Statements                166-169

        (b)  Sheep Mountain Partners

         USE's partner in SMP, Nukem/CRIC, has refused to provide
         certain  information concerning SMP to SMP's independent
         public  accountants.  The information requested concerns
         partnership  costs  for uranium  purchases.   USECC  and
         Nukem/CRIC disagree as to whether uranium costs  of  the
         partnership  means: (i) the price which Nukem/CRIC  pays
         for  purchases  of uranium for SMP; or  (ii)  the  price
         which CRIC charges SMP for uranium.
         
         As  a  result,  the independent public accountants  have
         informed  USE  that  they have been unable  to  complete
         their audit of SMP, and are unable to render a report on
         SMP's  financial statements.  USE and SMP's  independent
         public   accountants  are  seeking  to   resolve   these
         uncertainties so that SMP's financial statements may  be
         finalized  and  filed.  When and if  these  matters  are
         resolved, the following SMP financial statements will be
         filed under cover of an amendment.
Balance Sheets - May 31, 1995 and 1994

             Statements of Operations - Years Ended
             May 31, 1995, 1994 and 1993

             Statements of Changes in Partners' Capital
              Years Ended May 31, 1995, 1994 and 1993

             Statements of Cash Flows - Years Ended
              May 31, 1995, 1994 and 1993

             Notes to the Financial Statements

             Schedules to SMP's Financial Statements

*To be filed by amendment to registration statement.

    All other schedules have been omitted because the information
is  not applicable or because the information is included in  the
financial statements.

(b)  Exhibits.

Exhibit No.                                            Reference

3.1    USE Restated Articles of Incorporation             [4]

3.1(a) USE Articles of Amendment to
       Restated Articles of Incorporation                 [2]

3.2    USE Bylaws, as amended through April 22, 1992      [2]

4.1    Warrant to Purchase 200,000 Common Shares of USE   180

4.2    USE 1989 Incentive Stock Option Plan,
       as amended through 1/94                            187

4.3    USE Restricted Stock Bonus Plan,
       as amended through 2/94                            199

5.1    Opinion of Stephen E. Rounds, Esq.                   *

10.1   USECC Joint Venture Agreement - Amended            [5]

10.2   Management Agreement with USECC                    [3]

10.4   Contract for Sale of Stock of Brunton
       to Silva A.B.                                     [13]

10.5   Assignment and Lease - Parador                     [3]
10.6   Employment Agreement - Daniel P. Svilar            [4]

10.7   Airport Ground Lease - City of Riverton            [3]

10.8   Executive Officer Death Benefit Plan               [4]

10.9   Big Eagle Acquisition Agreement with PMC           [6]

10.11  Sweetwater Mill Acquisition Agreement              [3]

10.12  Ft. Peck Agreement - Drilling
       and Production Services                            [3]

10.13  USE/Seine River Letter Agreement - SGV             [8]

10.14  Agreement to Sell SGV Interest to Crested          [3]

10.18  Master Agreement - Mt. Emmons/AMAX                 [9]

10.20  Promissory Notes - ESOP/USE                       [10]

10.21  Self Bond Agreement - Crooks Gap Properties        [5]

10.22  Security Agreement - ESOP Loans                   [11]

10.27  Mineral Properties Agreement
       Congo Area - PMC                                   [4]

10.28  Memorandum of Joint Venture Agreement - GMMV       [4]

10.29  Memorandum of Partnership Agreement  - SMP         [5]

10.32  Employee Stock Ownership Plan                      [5]

10.33  1989 Stock Option Plan                             [5]

10.34  Form of Stock Option and Schedule - 1989 Plan      [4]

10.35  Severance Agreement (Form)                         [2]

10.36  1992 Stock Compensation Plan
       Non-Employee Directors                             [2]

10.37  Executive Compensation (John L. Larsen)            [2]

10.38  Executive Compensation
       (Non-qualified Options)                            [2]

10.39  ESOP and Option Plan Amendments (1992)             [2]

10.40  Plateau Acquisition -
       Stock Purchase Agreement and Related Exhibits      [7]
10.41  Option and Sales Agreements
       Gunnison Property Parcel A                         [1]

10.42  Option and Sales Agreements
       Gunnison Property Parcel B                         [1]

10.43  Option Agreement - USE and Arrowstar
       Aircraft Hanger                                    [1]

10.44  Amendment to Contract with Arrowstar or Hangar     200

10.45  Contract for Sale of Wind River Estates           [12]

10.46  Contract for sale of Jeffrey City Six-Plex        [12]

10.47  Development Agreement with First N-Last            206

10.48  Operating Agreement with First-N-Last              214

22.1   Subsidiaries of Registrant                         [2]

23.1   Consent of Arthur Andersen, LLP                    236

23.2   Consent of Coopers & Lybrand                         *

23.3   Consent of Stephen E. Rounds, Esq.                    *

*      To be filed by Amendment

[1]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1995.

[2]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1992.

[3]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1991.

[4]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1990.

[5]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's Annual Report on Form 10-K  for  the
       year ended May 31, 1989.

[6]    Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's  Form  10-Q  for  the  period  ended
       February 28, 1991.
[7]    Incorporated   by  reference  from  exhibit   A   to   the
       Registrant's  Form 8-K reporting an event  of  August  11,
       1993.

[8]    Incorporated  by  reference  from  exhibit  28.1  to   the
       Registrant's  Form 8-K reporting an event of  October  12,
       1990.

[9]    Incorporated  by reference from the like-numbered  exhibit
       to  a  Schedule  13D filed by AMAX on or about  August  3,
       1987.

[10]   Incorporated by reference from exhibit 2 to Amendment  No.
       6  of a Schedule 13D filed by John L. Larsen, reporting an
       event of May 28, 1991.

[11]   Incorporated  by reference from exhibit 3 to Amendment  No
       4. of a Schedule 13D filed by John L. Larsen, reporting an
       event of January 2, 1990.

[12]   Incorporated   by  reference  from  an  exhibit   to   the
       Registrant's Post-Effective Amendment No. 1 to  Form  S-3,
       SEC File No. 333-1967.

[13]   Incorporated  by reference from the like-numbered  exhibit
       to  the  Registrant's  Form 8-K,  reporting  an  event  of
       February 26, 1996.

Item 17.  Undertakings.

The registrant hereby undertakes:

(a)(1)   To file, during any period in which offers or sales  are
being  made,  a  post-effective amendment  to  this  registration
statement:

      (i)  To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;

      (ii)   To  reflect in the prospectus any  facts  or  events
arising  after the effective date of the registrations  statement
(or  the  most  recent post-effective amendment  thereof)  which,
individually or in the aggregate, represent a fundamental  change
in the information set forth in the registration statement;

      (iii)  To include any material information with respect  to
the   plan  of  distribution  not  previously  disclosed  in  the
registration statement or any material change to such information
in the registration statement.

(a)(2)  That, for the purpose of determining any liability  under
the  Securities  Act of 1933, each such post-effective  amendment
shall  be  deemed to be a new registration statement relating  to
the   securities  offered  therein,  and  the  offering  of  such
securities  at that time shall be deemed to be the  initial  bona
fide offering thereof.

(a)(3)   To remove from registration by means of a post-effective
amendment  any  of the securities being registered  which  remain
unsold at the termination of this offering.

(h)  Insofar as indemnification for liabilities arising under the
Securities  Act  of  1933,  as  amended,  may  be  permitted   to
directors,  officers, and controlling persons of the  registrant,
the  registrant  has  been advised that in  the  opinion  of  the
Securities  and  Exchange  Commission  such  indemnification   is
against public policy as expressed in the Act, and is, therefore,
unenforceable.   In  the event that a claim  for  indemnification
against  such  liabilities  (other  than  the  payment   by   the
registrant  of expenses incurred or paid by a director,  officer,
or controlling person of the registrant in the successful defense
of  any  action suit or proceeding) is asserted by such  officer,
director, or controlling person in connection with the securities
being  registered, the registrant will, unless in the opinion  of
its counsel the matter has been settled by controlling precedent,
submit  to  a  court of appropriate jurisdiction the question  of
whether  such indemnification by it is against public  policy  as
expressed  in  the  Act  and  will  be  governed  by  the   final
adjudication of such issue.
SIGNATURES

Pursuant  to the requirements of the Securities Act of 1933,  the
Registrant has duly caused this Registration Statement on Form S-
1  to  be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Riverton, Wyoming, on June 14, 1996.

                                   U.S. ENERGY CORP.
                                   (Registrant)

Date:  June 14, 1996           By:   s/ John L. Larsen
                                   ------------------------------
                                   JOHN L. LARSEN, President
                                   and Chief Executive Officer

In  accordance  with the requirements of the  Securities  Act  of
1933,  this  Registration Statement was signed by  the  following
persons in the capacities and on the dates stated.

Date:  June 14, 1996           By:   s/ John L. Larsen
                                   ------------------------------
                                   JOHN L. LARSEN, President
                                   and Director

Date:  June 12, 1996           By:   s/ Max T. Evans
                                   ------------------------------
                                   MAX T. EVANS, Director

Date:  June 14, 1996           By:   s/ Harold F. Herron
                                   ------------------------------
                                   HAROLD F. HERRON, Director

Date:  June 14, 1996           By:   s/ Nick Bebout
                                   ------------------------------
                                   NICK BEBOUT, Director

Date:  June ____, 1996         By:
                                   ------------------------------
                                   DON C. ANDERSON, Director

Date:  June ____, 1996         By:
                                   -------------------------------
                                   DAVID W. BRENMAN, Director

Date:  June 14, 1996           By:   s/ Robert Scott Lorimer
                                   ------------------------------
                                   ROBERT SCOTT LORIMER,
                                   Principal Financial Officer
                                   and Chief Accounting Officer