SECURITIES AND EXCHANGE COMMISSION
                                                                
                    Washington, D.C. 20549
                                                                
                        Form 10-KSB

   [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934
      For the fiscal year ended December 31, 1995, or 

   [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934
       For the Transition Period from       to       
                                                                
                Commission File Number 0-9739

                  Horn Silver Mines, Inc. 
      (Name of small business issuer in its charter)

     UTAH                                           87-0299832
(State or other jurisdiction of                (I.R.S. Employer 
incorporation or organization)              Identification Number)

4444 South 700 East, Suite 204                     84107
Salt Lake City, Utah                            (Zip Code)               
(Address of principal executive offices)

         Registrant's telephone number, including area code:
                         (801) 281-5656

   Securities to be registered under Section 12(g) of the Act:              

                                          Name of each exchange 
Title of each Class                       on which registered 
-------------------                       ---------------------
    None                                          None                       
  
   Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, $.001 Par Value               
                         (Title of Class)

   Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X]  No [ ]

  Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-B is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

  Registrant's revenues for its most recent fiscal year were
$14,092.
                                                                  
  The aggregate market value of the voting stock held by
non-affiliates of the Registrant as of April 30, 1997 was
approximately $506,000 calculated using a per share price of
$.125.

  As of March 31, 1997, Registrant had outstanding 6,088,966
shares of Common Stock.
                                                                
                    DOCUMENTS INCORPORATED BY REFERENCE

  Portions of the Preliminary Proxy Statement, as filed on
February 7, 1997, and exhibits thereto are incorporated by
reference.

   Transitional Small Business Disclosure Format (check one): 
   Yes [ ]  No [X] 

                                                                
<PAGE>                                                                
                                                                
                       HORN SILVER MINES, INC.
                         INDEX-FORM 10-KSB

                                                                
                               PART I

                                                       Page

Item 1.  Description of Business . . . . . . . . . . .   1

Item 2.  Description of Properties . . . . . . . . . . . 8

Item 3.  Legal Proceedings . . . . . . . . . . . .  . . 11

Item 4.  Submission of Matters to a Vote 
         of Security Holders . . . . . . . . . . . . . .11

                               PART II

Item 5.  Market for the Common Equity and 
         Related Stockholder Matters. . . . . . . . . . 12

Item 6.  Management's Discussion and Analysis 
         or Plan of Operations. . . . . . . . . . . . . 12

Item 7.  Financial Statements and 
         Supplementary Data . . . . . . . . . . . . . . 13

Item 8.  Changes in and Disagreements with 
         Accountants on Accounting and 
         Financial Disclosure. . . .  . . . . . . . . . 14


                                                                
                            PART III


Item 9.  Directors, Executive Officers, 
         Promoters and Control Persons; Compliance 
         with Section 16(a) of the Exchange Act . . . . 14

Item 10. Executive Compensation . . . . . . . . . . . . 15

Item 11. Security Ownership of Certain Beneficial
         Owners and Management . .  . . . . . . . . . . 16

Item 12. Certain Relationships and Related
         Transactions . . . . . . . .  . . . . . . . . .17

                                                                
                          PART IV

Item 13. Exhibits and Reports on Form 8-K . . . . . . .17

Signatures 

Index to Financial Statements and Schedules

<PAGE>
                                                                
                              PART I

ITEM 1.  Description of Business

Organization and General Development

       Horn Silver Mines, Inc.  (hereinafter referred to as the
"Company") engages principally in mining and in the acquisition,
exploration, and development of interests in mineral properties
located primarily in Utah and Nevada.  In addition, the Company
has a royalty interest in developed oil and gas properties
located in Oklahoma.  The Company was incorporated under the laws
of the State of Utah in 1971.  The executive offices of the
Company are located at 4444 South 700 East, Suite 204, Salt Lake
City, Utah 84107.

       From the time of its incorporation in 1971 until mid 1974,
the Company was essentially inactive.  During that period of
time, negotiations were carried out to acquire mining properties,
but none of the transactions was concluded.  In July, 1974, the
Company negotiated the acquisition of two mining contracts to
mine and operate the old Horn Silver Mine properties consisting
of 244 patented mining claims located near Frisky, Utah, in the
San Francisco Mining District in Beaver County, Utah (the "Horn
Silver Mine properties") from Cameron Mining Company ("Cameron"),
an affiliated corporation.  Cameron agreed to transfer its
contract rights to operate these properties consisting of
approximately 4,100 acres and the results of its exploration
efforts to the Company in exchange for the issuance of 75,000
shares of the Company's Common Stock.  

       The Horn Silver Mine properties were formerly owned 60% by
Tintic Mineral Resources, Inc. ("Tintic"), a Utah corporation,
and 40% by Wangenheim and Wanger, a California limited
partnership.  The Company obtained an option to purchase the
Wangenheim's 40% interest in the properties for $200,000 and used
the proceeds from a public offering of the Company's Common Stock
in August, 1980, to exercise the option.  The Company acquired
the remaining 60% interest in the properties from Tintic as a
result of a merger with Tintic which was completed in June, 1983.

       The Company purchased milling equipment and a right to
lease a patented millsite adjoining the Horn Silver Mine
properties from Tintic in 1974.  The Company also acquired the
right to use a mineshaft in an adjoining mine owed by Tintic to
the 800 foot level where a crosscut provides access to the old
Horn Silver Mine.  In exchange for these rights, the Company
issued 200,000 shares to Tintic.

       On August 12, 1980, the Company completed a Regulation A
offering of its Common Stock.  The Company sold the entire
offering of 2,500,000 shares at a price of $0.02 per share.  From
this offering, the net cash proceeds to the Company, after
deducting underwriting commissions and other expenses of the
offering, was $815,800.  The Company used $200,000 of the net
proceeds to exercise the option to purchase a 40% interest in 244
mining claims from Wangenheim & Wanger.

       On June 30, 1983, the stockholders of the Company approved
a proposed merger between the Company and Tintic.  As a result of
the approval of the merger, Tintic was merged into the Company. 
The Company became the surviving corporation and, under the terms
of the Merger Agreement, the holders of Tintic Common Stock
became entitled to five shares of the Company Common Stock for
each of their shares of Tintic Common Stock.  The principal asset
of Tintic was a 60% interest in the Horn Silver Mine properties.

       On December 5, 1988, the Company entered into a Mining
Lease and Operating Agreement with Arapahoe Mining Corporation
("Arapahoe"), a Canadian mining company, which provides for the
exploration and, if warranted, the development and mining on the
patented mining claims which comprise the Horn Silver Mine
properties.  On February 1, 1991, the Company entered into an
Amended Mining Lease and Operating Agreement with Arapahoe, the
terms of which are identical in most respects to the initial
agreement.  The Company terminated the Amended Mining Lease and
Operating Agreement as of September 1, 1992, due to Arapahoe's
failure to make the required lease payments to the Company
thereunder.  During the period from December 5, 1988 to September
1, 1992, Arapahoe expended over $1,200,000 for exploration and
development work on the Horn Silver Mine properties.  See "Item
1. Business - Mining Lease and Operating Agreement with Arapahoe
Mining Corporation,"  "Exploration and Development Activities in
1989," "Exploration and Development Activities in 1990," and
"Exploration and Development Activities in 1991."

       In 1989, the Company acquired a one-half interest in the
Imperial Mine and adjacent patented mining claims that adjoin the
Horn Silver Mine properties and located approximately 200 new
mining claims covering approximately 4,000 acres which are
contiguous to the Horn Silver Mine properties.  The Imperial Mine
consists of seven patented mining claims covering 105 acres.  In
1990, the Company located an additional 25 new mining claims
covering approximately 500 acres which are also contiguous to the
Horn Silver Mine properties.  See "Item 1. Business - Exploration
and Development Activities in 1989" and "Exploration and
Development Activities in 1990."

       With the addition of the mining claims that were located in
1989 and 1990, there were approximately 8,600 acres comprising
the Horn Silver Mine properties and adjoining properties. 
However, as of August 1993, the Company abandoned approximately
230 of its unpatented mining claims, thereby reducing the total
acres of patented and unpatented mining claims comprising the
Horn Silver Mine properties to approximately 6,000 acres.  There
are no proven or probable reserves on any of the Company's
properties.

       On April 28, 1994, the Company entered into a mining lease
with Dotson Exploration Company ("Dotson Exploration"), a Utah
mining company, which conveyed to Dotson Exploration the right to
conduct exploration and, if warranted, development and mining
activities on 13 patented lode mining claims covering 219 acres
located in Beaver Lake Mining District.  In the event any ores
are mined from the mining properties, Dotson Exploration agrees
to pay to the Company a 5% royalty on all ores mined from the
properties.  Dotson Exploration also agrees to pay the Company
$10,000 in advance royalties upon execution of the lease, with
annual payments thereafter of $7,500 per year.  The lease was
subsequently transferred by Dotson Exploration to Centurion Mines
Corporation ("Centurion").  Centurion conducted an extensive
drilling program on the mining properties in 1994, 1995 and 1996. 
See "Item I.  Business - Exploration and Development Activities
in 1994," "Exploration and Development Activities in 1995," and
"Exploration and Development Activities in 1996."

       On October 8, 1996, the Company entered into an option
agreement (the "Option Agreement") with PAB Oil & Mining, Inc.
("PAB"), a Utah-based mining company.  Under the terms of an
Option Agreement, which was approved at the Company's recent
Annual Meeting of Shareholders held on March 28, 1997, PAB was
granted the right to purchase shares of the Company's Common
Stock for $850,000, such that after the issuance of the shares
PAB would hold 75% of the Company's outstanding Common Stock. 
The proceeds from the sale of the Company's stock to PAB will be
used to finance a major exploration and development program on
the Company's mining properties.  

       The planned exploration and development program includes
reopening and repairing the main access shaft of the Horn Silver
Mine located on the Company's mining properties and reopening the
main 650-foot haulage level of the mine.  Specific exploration
and development activities planned for fiscal 1997 include the
installation of a double drum hoist, rehabilitation of the
existing headframe, installation of piping for water and
compressed air in the main access shaft and the main 650-foot
haulage level, replacement of the underground track, replacement
of timber in the main 650-foot haulage level, and any additional
work required to place the access shaft and 650-foot haulage
level in an operable condition.  See "Item 1. Business - Option
Agreement with PAB Oil & Mining, Inc."

       At the Company's Annual Meeting of Shareholders held on
March 28, 1997, the shareholders approved a 1-for-20 reverse
stock split of the Company's Common Stock and amendments to the
Company's Articles of Incorporation to reduce the authorized
shares of Common Stock from 200,000,000 shares to 30,000,000
shares, and to exchange the par value of Common Stock from no par
value to $.001 par value.  All references in this Form 10-KSB to
number of shares of Common Stock, except as otherwise indicated,
have been adjusted to reflect the 1-for-20 stock split. 
References in the Form 10-KSB also reflect the approval of the
amendments to the Company's Articles of Incorporation at the
Annual Meeting.

       In addition to the Horn Silver Mine and adjoining
properties and the carried working interest in undeveloped
properties located in Nevada, the Company owns a royalty interest
in developed oil and gas properties in Oklahoma.  See "Item 2.
Properties - Osage Oil Field, Osage County, Oklahoma."

Ore Occurrences and Possible Metallurgical Treatment Methods

       The principal property of the Company is a wholly-owned
interest in the Horn Silver Mine properties located in Beaver
County, Utah, which includes the Company and Cactus Mines, as
well as several smaller mines that were productive in the past. 
These mines have produced significant amounts of silver, lead,
copper, zinc and gold.  These minerals, which have been mined in
the past from the properties, exist in both the oxidized and
sulfide state.  Treatment of a given mineral is dependent upon
its physical and chemical character.  

       Silver ores, together with lead, zinc and copper ores, have
been produced in the past from several localities on the Horn
Silver Mine properties.  The sulfide lead-silver ores, such as
those previously mined in the hypogene portion of the properties,
are ordinarily ground in a mill, after which the lead and zinc
are separated by selective flotation with the silver often
accompanying the lead.  The oxidized lead-silver ores are sent
directly to smelters.  Bonification of oxidized lead-silver ores
generally result in low recovery and known hydrometallurgical
methods are complex and expensive.

       Crude non-sulfide zinc ores are not directly saleable,
except to lead smelters having a fuming plant where crude ore is
charged with hot slag.  Various hydrometallurgical procedures
have been suggested by the U.S. Bureau of Mines; however, such
processes are thus far only employed in smelters located in
Europe and Japan.  

       In the past, gold ores occurring in lead-silver ores have
been shipped to lead smelters for processing, whereas siliceous
gold-silver ores have been shipped to copper smelters for
processing.  Where the siliceous gold-silver ores are free of
cyanicides, they are treated by cyanidation in which most of the
silver contents in the ores are also recovered.

       Copper ores have been mined at the Cactus locality in
Copper Gulch.  The only copper mineral known to exist in the past
in commercial quantities and grade is chalcopyrite or copper iron
sulfide, which is recoverable by grinding and flotation.  The
flotation concentrates are then sold to a copper smelter.  There
is presently considerable demand for copper concentrates and the
prevailing price of copper, primarily due to foreign imports,
renders many domestic operations non-economic.

Option Agreement with PAB Oil & Mining, Inc.

       On October 8, 1996, the Company entered into an Option
Agreement with PAB Oil & Mining, Inc. ("PAB").  Upon execution of
the Option Agreement, PAB paid $25,000 to the Company to be used
for general and administrative expenses, including expenses
related to a shareholders meeting to approve the Option
Agreement.  Under the terms of the Option Agreement, PAB is
granted the right to purchase shares of the Company's Common
Stock, in consideration for the payment of an additional
$175,000, so that after the issuance of the shares, PAB will own
25% of the Company's outstanding Common Stock.  PAB is required
to exercise this initial option within 18 months from the date of
the Option Agreement, or on or before April 7, 1998.

       In the event that PAB exercises the initial option by
paying an additional $175,000 to the Company, the Company is
required to use the funds, to the extent of not more than
$100,000, to rehabilitate the main access shaft of the Horn
Silver Mine located on the Company's mining properties in
Milford, Utah, and the main 600 foot haulage level, including the
installation of an approved double-drum hoist, rehabilitation of
the existing headframe, installation of piping for water and
compressed air in the shaft and the main 650 foot haulage level,
replacement of the underground track where needed, replacing any
timbering in the main 650 foot haulage level where required, and
whatever additional work is required to place the shaft and the
main 650 foot haulage level in an operable condition.  The
required work to rehabilitate the main access shaft of the Horn
Silver Mine must be performed by reputable independent mining
contractors selected by the Company's Board of Directors on the
basis of experience, ability and cost.

       The Option Agreement also grants to PAB a second option to
purchase additional shares of the Company's Common Stock from the
Company, in consideration for the payment to the Company of an
additional $650,000, so that after the issuance to PAB of the
initial shares and these additional shares of Common Stock, PAB
will hold 75% of the Company's issued and outstanding Common
Stock.  This additional option must be exercised within 66 months
from the date of the Option Agreement, or on or before April 7,
2002.

       The Option Agreement further provides that PAB may make
partial payments toward the second option and PAB shall be
issued, on a quarterly basis, shares of the Company's Common
Stock commensurate with the degree to which PAB has provided the
entirety of the option payment.  All shares of the Company's
Common stock issued to PAB under the two options are restricted
and issued for investment purposes only, with each certificate
issued bearing an appropriate legend to that effect.  

       As PAB makes payments to the Company under the second
option, the Company is required to use the funds to further
explore and develop the Horn Silver Mine properties.  Finally,
the terms of the Option Agreement allow PAB to appoint at least
two of the six members of the Company's Board of Directors, one
of whom shall also be named as an officer of the Company.  This
right shall continue throughout the option periods unless PAB
elects to terminate the Option Agreement.

       The proceeds from the sale of Common Stock to PAB will be
used to finance a major exploration development program on the
Company's mining properties.  The planned exploration and
development program will include reopening and repairing the main
access shaft of the Horn Silver Mine located on the Company's
mining properties in Milford, Utah and reopening the main
650-foot haulage level of the mine.  

       Specific exploration and development activities planned for
fiscal 1997 include the installation of a double drum hoist,
rehabilitation of the existing headframe, installation of piping
for water and compressed air in the main access shaft and the
main 650-foot haulage level, replacement of the underground
track, replacement of timber in the main 650-foot haulage level,
and any additional work required to place the access shaft and
650-foot haulage level in an operable condition.

Exploration and Development Activities in 1989

       During 1989, Arapahoe Mining Corporation ("Arapahoe")
expended over $700,000 for exploration and development activities
on the south end of the Horn Silver Mine properties.  This work
included the preparation of new topographic and aerial maps, the
construction of several miles of new roads, drill site
preparations, the excavation of test trenches, drilling,
geophysical exploration and sampling.  New mining properties
covering approximately 4,000 acres were located by the Company
contiguous to the Horn Silver Mine properties.  These mining
properties consisted at the time of approximately 200 unpatented
mining claims and two Utah State mineral leases.  These new
properties have been included with the mining claims which are
subject to the Amended Mining Lease and Operating Agreement with
Arapahoe.

       The drilling that was performed by Arapahoe in 1989
occurred on a series of five geophysical anomalies.  The holes
totalled over 1,500 feet in cumulative length.  More than 1,000
surface and underground samples were taken and analyzed.  The
most promising drilling results were obtained from the holes
drilled in the Washington-Double Barrel Tunnel vicinity where
mineralization of up to 365 feet in thickness was found
containing several intercepts of commercial lead zinc silver ore
up to 20 feet thick.  This discovery was made in the Frisco
Silver area about one mile west of the Horn Silver Mine.  The two
holes drilled by Arapahoe in the limestone footwall of the Horn
Silver Mine failed to intersect any significant mineralization. 
It is management's opinion that the holes were bottomed at an
insufficient depth to encounter the bedded ore expected.  These
holes have been left open for possible re-entry and deepening at
a later time.

       One additional major development in 1989 was the
acquisition by the Company for cash of a one-half interest in the
Imperial Mine and adjacent patented mining claims.  This group of
claims is enclosed by the Horn Silver Mine properties and
contains large reserves of sulfide copper ore, as well as
important tunnel sites which provide an opportunity to initiate
bulk mining operations into the adjoining Horn Silver Mine
properties.  The new road that was constructed by Arapahoe links
the Horn Silver Mine with the Imperial Mine and adjacent claims
affording access and drill sites on properties previously
accessible only by horseback.

Exploration and Development Activities in 1990

       During 1990, Arapahoe expended over $350,000 for
exploration and development activities on the Horn Silver Mine
properties.  The work included continued preparation of
topographic and aerial maps, drill site preparations, excavation
of test trenches, drilling, geophysical exploration and sampling,
and the construction of a new road.  The new road is from the
Frisco town site over the Frisco summit south of Frisco Peak to
the access road near the Cactus Mine.  The new road crosses an
area where there is a significant magnetic low.  While
constructing the new road, Arapahoe discovered an extensive
mineralized area of altered quartz monzonite with many of the
surface expressions which are typical of sulfide porphyry. 
Several drill holes are planned in 1991 for the purpose of
exploring this mineralized area.

       New mining properties covering approximately 500 acres were
located in 1990 by the Company contiguous to the Horn Silver Mine
properties.  These new mining properties consist of 25 unpatented
mining claims.  These new properties have been included with the
mining claims which are subject to the Amended Mining Lease and
Operating Agreement.  As a result of the new mining properties,
the Company's claim-acreage has increased to approximately 8,600
acres.

       The drilling that was performed by Arapahoe during 1990
consisted of a series of shallow inclined holes in the breccia
zone at the south end of the Horn Silver Mine properties.  Five
of the holes drilled intersected commercial grade mineralization,
three of which penetrated a gold bearing breccia pipe.  The next
phase of the drilling program planned by Arapahoe in 1991 will
consist of additional drilling at the south end of the Horn
Silver Mine properties and of drilling in the Cactus Mine area
and in the mineralized area which was discovered when the new
road was constructed.

       Other exploration activities during 1990 included drilling
and surface mapping of the Washington claim, which contains a
large amount of wollastonite (fibrous calcium silicate).  The
claim was delineated and found to contain in excess of one
million tons of wollastonite.  Wollastonite is in considerable
demand as a substitute for asbestos.

Exploration and Development Activities in 1991

       During 1991, Arapahoe expended over $150,000 for
exploration and development activities on the Horn Silver Mine
properties.  The work included preparation of geological maps,
drill site preparations, excavation of test trenches, extensive
geochemical sampling, and construction of a new road.  In
addition, Page P. Blakemore, Sr., who was then President of the
Company, personally spent an additional $10,000 for the
preparation of four drill sites and for the drilling of three
rotary holes in the altered intrusive area east of the Cactus ore
body (at the northwest corner of the Horn Silver Mine
properties).  This work was performed at Mr. Blakemore's expense
without reimbursement by the Company.  All three of the holes
that were drilled exhibited large amounts of pyrite and were
anomalous in copper, zinc, gold, silver and other heavy metals,
but contained no commercial grade mineralization.

       In constructing the new road from Frisco Pass south to
Indian Grave Peak, numerous structures were cut that eventually
will be explored.  These new structures contain copper and gold
mineralization in quartz veins, veins of specularite, bodies of
jasperoid in limestone and considerable amounts of contact
metamorphic rocks developed between blocks of limestone and the
late intrusive quartz monzonite.  None of these exposures had
previously been mapped because of the vegetation and scree.  The
new road will give access to several previously discovered but
unexplored mineralized breccia pipes that are planned as drilling
targets during 1992.

Exploration and Development Activities in 1992

       During 1992, Great Basin Exploration & Mining Co., Inc.
("Great Basin") drilled two deep diamond core holes on properties
located on the east side of the San Francisco Range on the Horn
Silver Mine properties.  These holes were drilled in order to
establish the presence of a different and separate intrusive on
the properties.  The core analysis revealed that the properties
which were drilled are anomalous in copper, lead, zinc, silver
and gold, but the analysis did not reach ore grade in any of the
metals.  The Company's management regards the results of the
drilling as very favorable but not conclusive.  In addition to
drilling, Great Basin completed geochemical sampling and
geological mapping on the properties during this period. 

       Exploration work was also completed in 1992 by Crown
Resources Corp. on properties located on the west side of the San
Francisco Range known as the Loeber Gulch area.  As a result of
these exploration activities by Crown Resources, an important
gold and silver anomaly was discovered in the Washington shaft
area.  During the same period, Great Basin also drilled and
abandoned the Shauntee Hills claims, located southwest of the San
Francisco Range on the Horn Silver Mine properties, and Gold
Fields Consolidated drilled and abandoned the Hidden Treasure
claims, located south of the Shauntee Hills claims.

Exploration and Development Activities in 1993

       During 1993, the Company conducted exploration work on its
mining properties in the Beaver Lake Mining District and the San
Francisco Mining District.  The exploration activities conducted
in the Beaver Lake Mining District included construction of
approximately three miles of access roads, preparation of four
drill sites, stripping of various copper bearing outcrops, and
drilling of a hole about 500 feet in depth.  The hole was drilled
in order to establish the presence of copper on the properties. 
The core analysis revealed copper mineralization from the surface
to about 500 feet in depth.  The exploration activities conducted
in the San Francisco Mining District included the rehabilitation
of the two main trans-montane roads that cross the San Francisco
Mountain Range, which had been damaged by the winter weather.

       Also in 1993, Dotson Exploration Company ("Dotson
Exploration"), which has performed exploration and development
work on the Horn Silver Mine properties in the past for Arapahoe,
performed exploration work on the mining properties in the Beaver
Lake Mining District.  Included among the exploration activities
by Dotson Exploration during this period were the construction of
about three miles of access roads to an otherwise inaccessible
group of mining claims and the drilling of three holes three
miles northwest of the OK Copper Mine.  All three of the holes
that were drilled exhibited copper mineralization.  

       In addition to exploration activities in the Beaver Lake
Mining District, the Company conducted excavation work during
1993 at the north end of the open pit area on the Horn Silver
Mine properties, which is located near the King David Mine shaft. 
The excavation work revealed a flat fault that displaced the
mineral zone to the north and east suggesting the possible
existence of near surface mineralization, which has been
previously undiscovered.

       In addition to the above exploration activities, the
Company also examined more than 50 gold prospects in the states
of Arizona, Nevada and California in 1993.  The Company desires
to acquire additional mining properties at favorable terms which
can, in turn, be leased or sold to major mining companies, with
the Company receiving advanced payments and retaining a royalty
interest.  Negotiations are currently in process to obtain leases
under such terms and conditions on two mining properties the
Company had examined in Mohave County, Arizona.  Metallurgical
testing was conducted during 1993 on ores from the Horn Silver
Mine properties and on the ore samples gathered from the various
properties examined in Arizona, Nevada and California.

Exploration and Development Activities in 1994

       During 1994, exploration work continued on the Company's
mining properties in the Beaver Lake Mining District.  The
Company entered into a mining lease with Dotson Exploration
covering certain patented lode mining claims owned by the Company
within this mining district.  Under this lease, Dotson
Exploration was granted the right to perform exploration and
development work on the mining properties covered by the lease. 
The lease was subsequently assigned by Dotson Exploration to
Centurion Mines Corporation ("Centurion").  After conducting an
extensive drilling program on the mining properties covered by
the lease, as well as on properties surrounding the Company's
other mining properties in the Beaver Lake Mining District,
Centurion announced a major discovery of ore in the form of a
copper porphyry deposit.  The discovery is reported to be a large
ore body open in several directions.  Centurion also announced
plans to conduct a leaching operation to extract the ore using a
solvent extraction-electrowinning method to produce high grade
copper from the mine.

       The Company conducted very limited exploratory and
development activities during 1994 on the Horn Silver Mine
properties.  This decrease in activity was due to the limited
funds available to the Company.  The Company has also discovered
what may be a near surface faulted segment of original, high
grade lead silver ore at the north end of the caved surface area
of the Horn Silver Mine properties.  However, no additional work
was accomplished on these properties during 1994 due to limited
resources.

       In addition to the above activities, the Company continued
examining various properties for gold prospects in the states of
Arizona, Nevada, and California in 1994.  The Company also
negotiated with different companies interested in the zinc
deposits on the Horn Silver Mine properties, the wollastonite
deposits in Loeber Gulch, the marble quarry owned by the Company,
and the copper porphyry possibilities southeast and northwest of
the Cactus Mine.  The Company actively sought joint venture
opportunities with other companies interested in developing the
mining properties owned by the Company.

Exploration and Development Activities in 1995.  

       During 1995, Centurion continued its drilling program on
the Company's mining properties in the Beaver Lake Mining
District, including the OK Copper Mine as well as on other
properties surrounding the Company's Beaver Lake mining
properties.  The Company's mining properties on which Centurion
conducted its drilling activities are covered by the lease
originally entered into with Dotson Exploration that was later
assigned to Centurion.  As a result of the drilling program,
Centurion has announced the discovery of a major porphyry ore
body on its properties in the Beaver Lake Mining District
containing more than 50 million pounds of copper.  Also during
1995, Centurion continued with its plans to construct a treatment
plant on its Beaver Lake mining properties to extract copper from
the ore using a solvent extraction-electrowinning method to
produce high grade copper.  Centurion has filed applications with
federal and state agencies to obtain the requisite permits to
construct a treatment plant.

       The Company was unable to conduct any exploratory or
development activities on its other properties during 1995 on
account of the limited funds the Company has available for any
further exploration or development activities.  The Company
continued to examine various properties for gold prospects in the
states of Arizona, Nevada and California in 1995.  The Company
also continued to actively seek joint venture opportunities with
other companies interested in developing the mining properties
owned by the Company.

Exploration and Development Activities in 1996.

       During 1996, the Company was unable to conduct any
significant exploration or development activities on its mining
properties due to the lack of sufficient funds.  However,
Centurion continued its exploration activities on the Company's
mining properties during the year, where it had previously
announced the discovery of a major porphyry ore body.  Centurion
has filed applications with federal and state agencies to obtain
the requisite permits to begin open pit mining operations and to
construct a treatment plant on its Beaver Lake mining property to
extract copper from the ore using a solvent
extraction-electrowinning method to produce high grade copper. 
About 80% of the ore Centurion has developed to date on its
Beaver Lake properties is located within the Company's mining
properties in the Beaver Lake Mining District.

       Also during 1996, the Company entered into an option
agreement (the "Option Agreement") with PAB Oil & Mining, Inc.,
which was approved by the Company's shareholders at the Annual
Meeting of Shareholders held on March 28, 1997.  The Option
Agreement grants PAB an option to purchase shares of the
Company's Common Stock.  The proceeds from the sale of the
Company's stock will be used to finance a major exploration and
development program on the Company's mining properties.  See
"Item 1. Business - Option Agreement with PAB Oil & Mining."

Competition

       There is considerable competition for mining prospects on
federal lands due to recent major discoveries of gold deposits,
particularly in Nevada.  Costs of mining, milling,
transportation, labor and other costs have risen dramatically. 
These costs would be a factor in determining whether the
discovery of minerals, if any, would be commercial or not, and
could render a discovery unprofitable, even if made.

       Commencing in 1972, various federal, state and local
environmental laws and regulations began to have a significant
impact on the mining industry in Utah, where the Horn Silver Mine
properties are located, and elsewhere in the Western States.  At
the present time, there is only one smelter in the Western
States, which is operating at full capacity.  Several smelters,
which had been buyers of custom mineralization from independent
mines located in Utah, are now closed.  Thus, there presently
exists no nearby market for the types of ore which the Company is
seeking to develop.

       In addition to the uncertainty surrounding the eventual
development of commercial mineralization on the Company's
properties, the success of any mining operation which might be
conducted is dependent upon the price of minerals on the domestic
and world markets, which is subject to fluctuation, in part as a
result of actions by central banks and government policies.

Government Regulation

       Any exploration, rehabilitation, and development programs
of the Company, as well as any commercial production which might
be warranted, will be subject to extensive federal, state and
local laws and regulations controlling not only the exploration
for viable minerals in the ground, the condition of the shafts
and the nature of milling and leaching operations, but also the
possible environmental effects of water and particle contaminant
discharges resulting from the Company's activities.  No
environmental impact studies have been performed by the Company,
and there is no assurance that environmental or safety standards
more stringent than those presently in effect will not be imposed
in the future.  At present, in the opinion of the Company, the
current and immediately proposed activities of the Company are
such that no compliance problems are anticipated.

Employees

       As of March 31, 1997, the Company had one part-time
employee, a secretary, who performs clerical work for the
Company.  All other work, legal and accounting, is performed on
a fee basis.  The Company's activities in connection with the
acquisition, exploration and development of mining and other
mineral properties and the negotiation with potential joint
venture partners are now conducted principally by John P.
Bogdanich, the newly elected President, Chief Executive Officer
and Treasurer of the Company, who also serves as President of PAB
Oil & Mining, Inc.  See "Item 10.  Directors and Executive
Officers of the Registrant."  Murray C. Godbe, III, Vice
President and a director of the Company, will assist Mr.
Bogdanich from time to time with the planned exploration and
development program on the Company's mining properties.  The
Company presently has no plans to expand its staff.

ITEM 2.  Description of Properties

General

       The Company currently owns 244 patented mining claims and
approximately 20 unpatented mining claims covering approximately
6,000 acres located in Beaver County, Utah.  The claims comprise
most of the San Francisco Mining District.  The two principal
mines on the properties, which were productive in the past, are
the  Horn Silver and Cactus Mines.  The Horn Silver Mine, which
represents a very small part of the overall acreage, shipped
silver, gold, copper and lead from one breccia pipe and was one
of the largest producers of silver in the United States until
about 1930.  The Cactus Mine, with a production history dating
from 1910, shipped significant amounts of copper, gold and silver
until about 1913.  The Company also owns a one-half interest in
the Imperial Mine, a once productive mine, and adjacent patented
mining claims located in the San Francisco Mining District.  In
addition to the foregoing mining properties, the Company has a
carried working interest in undeveloped mining properties located
in Nevada and a royalty interest in developed oil and gas
properties located in Oklahoma.  There are no proven reserves on
any of the Company's properties.

Horn Silver Mine Properties, Milford County, Utah

       The Horn Silver Mine properties consist of patented and
unpatented mining claims, which are currently wholly owned by the
Company.  The properties are located in the San Francisco Mining
District in Beaver County, Utah, approximately 15 miles west of
the town of Milford.  The San Francisco Mining District was
formed in the 1880's.  It consists of a mountain range about 15
miles long and three to five miles wide trending in a north-south
direction located some 230 miles south of Salt Lake City, Utah,
and about 15 miles west of Milford, Utah.  The Company's primary
property interests are located in this district and were
originally mined for their silver, gold, lead, zinc and copper
content.  Production lasted from the 1880's until about the early
1920's when economic circumstances stopped production.  Less
significant production occurred after that time on an
intermittent basis and during World War II when metals were
produced under government subsidies.  No significant production
has occurred since 1947.

The Horn Silver Mine

       The San Francisco Mining District was organized in 1871,
but attracted little attention until the discovery of the Horn
Silver Mine by James Ryan and Samuel Hawkes in 1875.  Ryan and
Hawkes subsequently sold the mine to Campbell, Cullen, Ryan and
Byram.  They extracted 25,000 tons of high grade lead silver ore
and had developed the mine to a depth of about 280 feet.  They
then sold the mine to Horn Silver Mining Company, which was
incorporated under Utah law in 1879.  Two smelters were
constructed near Frisco, a townsite near the mine.  The mine
operated continuously until 1885, with the mineralization
material being smelted at the two plants.

       In 1885, a cave-in from the 700 foot level to the surface
caused considerable damage, requiring that a new shaft be sunk to
a depth of 1,600 feet, unfortunately again in the volcanic rocks
east of the ore zone.  The mine was operated through the new
shaft until 1919 when the mine was closed for economic reasons. 

       In 1929, the mine was leased to Albert E. Kipps who began
a program of rehabilitation of the underground workings to
develop the lower levels.  This program led to discovery of
substantial tonnages of ore.  In 1944, Mr. Kipps assigned his
lease to Metal Producers, Inc.  The 1,600 foot production shaft
had to be abandoned due to subsidence of the hanging wall of the
vein structure.  A connection was then driven from the existing
King David mine shaft located in the stable limestone footwall
about 900 feet in distance to connect with the 650 foot level of
the mine.

Mine Development

       The mine is presently served by the 816 foot King David or
Knight timbered shaft sunk in the limestone footwall some 1,200
feet from the old mineral deposit and an interior shaft sunk to
the 1,100 foot level from the 700 foot level.  All other shafts
fitted for hoisting ore or waste were sunk in the highly altered
volcanic hanging wall and have caved in many years ago.  A manway
serving as an escape route is open in the south end of the
mineralized zone.

       The mine has been explored along the fault line to the
1,600 foot level, but only very limited lateral work has been
attempted below the 1,100 foot level or into the limestone
footwall for any significant distance.  Minable ore bottomed in
the main fault zone and only insignificant amounts of mineralized
material have been discovered below the 1,000 foot level.

The Cactus Mine

       The Cactus Mine is located on the Company's patented claims
near the northern boundary of the properties.  It was discovered
in 1870.  During the 1880's, a French company constructed a
charcoal fired smelter near the outcrop which produced an unknown
amount of blister copper.  The ore was mainly primary sulfides
with refractory achieved at the relatively low temperatures,
leading to abandonment of the operation.

       In 1900, the mine was acquired by Samuel Newhouse, who
built an 1,000  ton per day concentrator, and mined and treated
nearly one million tons of ore mined underground from the
timbered square-set stopes.  The mine was developed to the 900
foot level.  Ore was mined from an elongate breccia pipe enclosed
in the main granodiorite stock.  The breccia filling consisted of
quartz, tourmaline, siderite, specularite and chalcopyrite, the
latter constituting the only commercial mineral as an ore of
copper containing minor amounts of gold and silver.

       The Cactus Mine has not been operated since 1913.  Due to
the caved condition of the timbered stopes, it is impossible to
estimate the tonnage and grade of any mineralized material left
in the stopes in prior operations, or to examine any blocks of
mineralized material left unmined, if any.  No proven reserves of
commercial mineralized rock are known to exist in the Cactus
Mine.

Geology

       The San Francisco Mountains form a small north-south
mountain range in West Central Utah.  The range is typical of
Great Basin mountain ranges with Paleozoic carbonates and
quartzite intruded by a granitic stock.  The limestone is host
for numerous mineral deposits of various types.  Faults with
considerable displacement particularly on the range's east side
bring volcanic flow rocks in contact with both intrusive and
sedimentary rocks of the range proper.  In addition, the area is
in part overlain by several ages of other flow rocks.  In the
process of mountain building through the folding and faulting,
the various layers or strata have been disrupted.  There are
several fault systems apparent in the San Francisco Mountains. 
Moreover, vulcanism in the area has resulted in extensive flows
of molten rocks and ash.

       The principal mineral deposits in the range are lead,
silver, zinc, copper and gold deposits occurring as fault
fissure, breccia filing, stratabound limestone replacements
deposits, pipe-like deposits emplaced at the intersection of
fissures and favorable beds, gold mineralized breccia pipes in
limestone, tungsten deposits in sharn, copper deposits in quartz,
and tourmaline filled breccia pipes in intrusive rocks.

       Mineralization in the San Francisco Mountains has been
largely contemporaneous with the cooling of molten rocks which
have intruded into various strata.  The minerals are localized in
close relationship with areas where faulting and fracturing have
allowed mineralized solutions access to favorable host rocks. 
All known mineralization of the area is associated with fissures
and favorable bed intersections in the sedimentary rocks or in
breccia pipes.  Fissure intersections particularly influence
localization of minerals whether in sediments, flow rocks or
intrusive rocks.

       The Horn Silver Mine is located on the Horn Silver Fault. 
The fault is on the east side of the range and brings flow rocks
in contact with the limestone.  Limestone replacement formations
of this type have frequently been found to be favorable areas for
exploration for lead and silver.  The fault is traced from Squaw
Springs Pass northerly for nearly two miles where it is concealed
just north of the Horn Silver Mine.  It is apparent that in
addition to the Horn Silver Fault at least two thrust faults
exist in the area which are as yet unmapped in detail and aerial
photographs reveal the existence of a second north-south fault of
considerable magnitude.

Osage Oil Field, Osage County, Oklahoma

       On February 6, 1981, the Company acquired a working
interest in two developed oil and gas leases in Osage County,
Oklahoma.  On September 1, 1986, the Company entered into an
agreement with Golden Oil Company to exchange its working
interest in the leases for a 1-1/2% overriding royalty interest
in all oil and gas production from the leases.  The two leases
are named the Long-B lease and the Reed lease.  The Long-B lease
covers approximately 160 gross acres (20 net acres) and contains
four producing walls.  The Reed lease also covers approximately
160 gross acres (20 net acres) and contains five producing wells. 
The Company paid $20,000 and issued 500,000 shares of its Common
Stock for its working interests in the leases.  

       The leases are for a term of five years commencing in 1972. 
However, if production is established, the leases continue so
long as oil or gas or other minerals are produced in commercial
quantities.  The leases are subject to a landowner's royalty
interest of 16-2/3%, increasing to 21% in the event producing
wells average 100 or more barrels per well per day.  The Company
is not aware of any current plans for drilling of any additional
oil and gas wells on the properties.

       The Company has not undertaken an evaluation of the oil and
gas properties in order to determine the estimated net proved
reserves of oil or gas and the future net revenue attributable
thereto.  In management's opinion, the revenues received from the
Company's interest in the oil and gas properties and the
estimated total value of its interest are not substantial enough
to warrant the expenditure necessary to provide a disclosure of
proved oil and gas reserves.  From January 1, 1996 to December
31, 1996, the Company received $325 in production payments from
its royalty interest in the leases.  The Company received $699 in
production payments in fiscal 1995 from the leases.

Title to Mining Properties

       The Company's most important property interest at the
present time consists of its ownership of the Horn Silver Mine
properties.  The patented claims involved were originally
obtained by deed from the federal government.  The Company's
ownership rights in the properties is dependent upon the validity
of title to the claims which is vested in other entities and upon
the validity of the Company's contracts with the entities holding
such title.  The Company has not received any warranties of
title, title opinions nor policies of title insurance.  The
Company now owns the patented claims through its purchase of the
Wangenheim's 40% interest in the claims in 1980 and its
acquisition of Tintic's 60% interest in the claims as a result of
a merger with Tintic in 1983.

       The validity of all unpatented mining claims is dependent
upon the inherent uncertainties and conditions that may prevent
a fee title in the usual sense from existing or vesting. 
Unpatented claims when properly located, staked and posted
according to regulation give the claimant possessory right only. 
Possessory title to an unpatented claim, when validly initiated,
endures unless lost through abandonment or through a forfeiture
which results from an adverse location made while the prior
location is in default with respect to the performance of annual
assessment work.  Because many of these factors involve findings
of fact, title validity cannot be determined solely from an
examination of the record.

       The continuing validity of the Company's unpatented claims
is subject to many contingencies, including the availability of
land for location at the time location is made, the making of
valid mineral discoveries within the boundary of each claim, the
compliance with all regulations, both state and federal, for
locating claims, and the making of annual payments of $100 per
claim.  Failing satisfaction of these requirements, the claims
are subject to cancellation by the United States upon a finding
of no valid discovery and, perhaps, upon failure to perform
annual assessment work.  Failure to perform annual work subjects
the claimant to the risk of forfeiture of rights through valid
subsequent locations by others or through cancellation by the
government agency involved.

ITEM 3.  Legal Proceedings

       The Company is not aware of any threatened or pending
litigation.

ITEM 4.  Submission of Matters to a Vote of Security Holders

       At the Company's Annual Meeting of Shareholders held on
March 28, 1997, the shareholders of the Company elected directors
and transacted certain other business coming before the meeting. 
Such matters included the approval of the following proposals:
(i) the option agreement with PAB Oil & Mining, Inc. in which PAB
was granted an option to purchase shares of the Company's Common
Stock for the sum of $200,000, so that after the issuance of such
shares PAB will then own 25% of the outstanding shares of the
Company's Common Stock, and a second option to purchase
additional shares of the Company's Common Stock for the sum of
$650,000, so that after the issuance of such shares PAB will then
own 75% of the outstanding shares of the Company's Common Stock;
(ii) a 1-for-20 reverse stock split of the Company's Common
Stock; (iii) an amendment to the Company's Articles of
Incorporation to reduce the authorized shares of Common Stock
from 200,000,000 shares to 30,000,000 shares, and to change the
par value of the Common Stock from no par value to $.001 par
value; and (iv) the appointment of Tanner & Co., as the Company's
auditors for the fiscal year ending December 31, 1996.

                                                                
     PART II

ITEM 5.  Market for Common Equity and Related Stockholder Matters

       The Company's Common Stock is currently traded in the
over-the-counter market under the trading symbol "HRNS."  Prior
to April 30, 1997, the Company's trading symbol was "HORN."  The
following are the high and low closing bid prices of the Common
Stock on the OTC Bulletin Board as reported by the Nasdaq Trading
& Market Services of The Nasdaq Stock Market, Inc. for the
periods indicated.

<TABLE>
<CAPTION>

    Period                               Bid Price           
  Calendar Year                      High          Low  
  -------------                      -----------------
<S>                                  <C>           <C>
  1995
    First Quarter                    .03           .01
    Second Quarter                   .01           .01
    Third Quarter                    .02           .01
    Fourth Quarter                   .01           .01

  1996
    First Quarter                    .01           .01
    Second Quarter                   .01           .01
    Third Quarter                    .005          .01
    Fourth Quarter                   .005          .005

</TABLE>

       The bid prices represent quotations between dealers without
retail markups, markdowns or commissions and do not necessarily
represent actual transactions.  The bid prices reflect the
trading of the Common Stock prior to the approval of the 1-for-20
reverse stock split at the Annual Meeting of Shareholders held on
March 28, 1997.

       At March 31, 1997, there were 4,377 record holders of the
Company's Common Stock.

       The Company has never paid any cash dividends on its Common
Stock and does not anticipate paying any cash dividends on its
Common Stock in the foreseeable future.  The Company currently
intends to retain future earnings, if any, to fund the
development and growth of the Company's proposed business and
operations.

ITEM 6.  Management's Discussion and Analysis or Plan of
Operations

Liquidity and Capital Resources

       Cash increased by $5,894 during the 1996 fiscal year.  The
principal reason for the increase in cash during 1996 was from
the $25,000 payment the Company received from PAB Oil & Mining,
Inc. ("PAB") upon the execution of the Option Agreement the
Company entered into with PAB.  The Company is currently unable
to finance its operations from its operating revenues and cash
flow.  In addition, the Company currently has no credit facility
with a lending institution.  There remains only $24,531 in cash
as of December 31, 1996 from the proceeds of the Company's 1980
Regulation A stock offering.  

       The Company does not anticipate spending any of its
remaining cash reserves during the 1997 fiscal year for
exploration or development activities.  However, in the event PAB
exercises the initial option under the Option Agreement by paying
an additional $175,000 to the Company, the Company is required to
use the funds for exploration and development activities on its
mining properties.  See "Item 1.  Business - Option Agreement
with PAB Oil & Mining, Inc."  The Company plans to continue to
actively seek joint ventures for exploration and development
activities during 1997.

Results of Operations

       Year Ended December 31, 1996 Compared to Year Ended
December 31, 1995

       Revenues decreased by $3,057, or 17.8%, to $14,092 for the
year ended December 31, 1996, from $17,149 for the year ended
December 31, 1995.  Mineral royalties decreased by $2,800, or
17.6%, to $13,100 in fiscal 1996, from $15,900 in fiscal 1995. 
This reduction was primarily due to the termination of the mining
lease with Frisco Rock, Inc. in 1996.  The $13,100 in mineral
royalties in 1996 included $9,900 in advance royalty payments
from the mining lease assigned to Centurion and $3,200 in royalty
payments from the mining lease with Frisco Rock, Inc.  

       Interest income from investment of funds increased by $11,
or 2.0%, to $561 in fiscal 1996, from $550 in fiscal 1995 due to
an increase in the amount of funds invested over the preceding
year.  The Company received $431 in other income in fiscal 1996
primarily representing royalty payments from its interest in two
oil and gas leases in Osage County, Oklahoma.  The payments
represented a decrease of $268, or 38.3% in the royalty payments
the Company received in fiscal 1996 over fiscal 1995 due to a
reduction in production from the oil wells on the leases.
 
       Expenses increased by $3,609, or 7.0%, to $55,276 in fiscal
1996, from $51,667 in fiscal 1995.  Contributing to this increase
in expenses was a $2,395 increase in general and administrative
expenses to $53,705 in fiscal 1996, from $51,310 in fiscal 1995. 
The increase in general and administrative expenses reflected an
increase in legal and accounting expenses in fiscal 1996 due to
the transaction with PAB, including preparation of proxy
materials filed with the Securities and Exchange Commission to
obtain shareholder approval of the transaction at the Annual
Meeting of Shareholders.  Carrying costs for mineral leases
increased by $1,216 in fiscal 1996 over fiscal 1995 due to the
additional costs of maintaining the Company's unpatented mining
claims under new federal mining regulations.

       Year Ended December 31, 1995 Compared to Year Ended
December 31, 1994

       Revenues decreased by $1,735, or 9.2%, to $17,149 for the
year ended December 31, 1995, from $18,884 for the year ended
December 31, 1994.  Mineral royalties decreased by $1,300, or
7.6%, to $15,900 in fiscal 1995, from $17,200 in fiscal 1994. 
The decrease was primarily due to a reduction in the royalty
payments the Company received under the mining lease that was
entered into with Dotson Exploration on April 28, 1994, and
subsequently assigned to Centurion Mines Corporation.  The
$15,900 in mineral royalties in 1995 included $11,100 in advance
royalty payments from the mining lease assigned to Centurion and
$4,800 in royalty payments from the mining lease with Frisco
Rock, Inc.

       Interest income from investment of funds decreased by $373,
or 40.4%, to $550 in fiscal 1995, from $923 in fiscal 1994 due to
a decrease in the amount of funds invested at lower interest
rates than in the preceding year.  The Company received $699 in
other income in fiscal 1995 representing royalty payments from
its interest in two oil and gas leases in Osage County, Oklahoma. 
These payments represented a decrease of $62, or 8.1%, in the
royalty payments the Company received in fiscal 1995 over fiscal
1994 due to a reduction in production from the oil wells on the
leases.  

       Expenses decreased by $6,828, or 17.1%, to $51,667 in
fiscal 1995, from $58,495 in fiscal 1994.  Contributing to this
reduction in expenses was a $1,724 decrease in general and
administrative expenses to $51,310 in fiscal 1995, from $53,034
in fiscal 1994.  The reduction in general and administrative
expenses reflected the reduced level of the Company's mining
activities in fiscal 1995.

ITEM 7.  Financial Statements and Supplementary Data

       The financial statements of the Company and supplementary
data are included beginning immediately following the signature
page to this report.  See Item 14 for a list of the financial
statements and financial statement schedules included.

ITEM 8.  Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

       None.

                                                                
    PART III

ITEM 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the              
Exchange Act

       The Company's Board of Directors currently consists of five
persons.  The following table sets forth certain information with
respect to the directors and executive officers of the Company:


<TABLE>
<CAPTION>
                              Director or     Position with
 Name                 Age    Officer Since    the Company
 ----                 ---    -------------    -------------
<S>                   <C>    <C>              <C>
John P. Bogdanich      43    September 1995   Chairman of the Board
                                               President, Chief
                                               Executive Officer and
                                               Treasurer
Murray C. Godbe, III   71    July 1984        Vice President and
                                               Director
Melvin E. Leslie       68    April 1997       Secretary and Director
Page P. Blakemore, Sr. 78    July 1971        Director
Randall A. Mackey      51    July 1981        Director
Jeff D. Gentry         38    April 1997       Director

</TABLE>

       The following biographical information is furnished with
respect to each of the directors and executive officers.

       John P. Bogdanich has served as Chairman of the Board,
President, Chief Executive Officer and Treasurer of the Company
since April 1997 and a director of the Company since September
1995.  He has been President since 1981 of PAB Oil & Mining,
Inc., which engages in the mining and oil and gas business.  See
"Item 12.  Certain Relationships and Related Transactions."

       Murray C. Godbe has served as the Vice President and a
director of the Company since July 1984.  He has been the
President since 1974 of M.C. Godbe Consultants, Inc. which has
performed geological consulting work for a number of mining
companies.  From 1969 to 1974, he was the President of East Utah
Mining Company, a Utah mining and oil and gas company.  Mr. Godbe
received a B.Sc. degree in geology from the University of Utah in
1948, where he also did graduate work in geology in 1949.

       Melvin E. Leslie has served as Secretary and a director of
the Company since April 1997.  He is an attorney who has
practiced law in Utah since 1955.  From 1968 to 1982, Mr. Leslie
was Legislative General Counsel to the Utah State Legislature. 
Mr. Leslie received a B.S. degree from Northwestern University in
1951 and a Juris Doctor degree from Northwestern University in
1995.  He is also a director of PAB Oil & Mining, Inc., which
engages in the mining and oil and gas business.  See "Item 12. 
Certain Relationships and Related Transactions."

       Page P. Blakemore, Sr. has served as a director of the
Company since July 1971.  From 1984 to April 1997, he served as
Chairman of the Board, President, Chief Executive Officer and
Treasurer of the Company, and from 1971 to 1984, he served as its
Vice President.  Mr. Blakemore has also been the President since
1970 of Basin and Range Exploration Company, which engages in
mineral exploration work in the western United States.  He has
been the President since 1988 of Basin and Range International
Exploration Ltd., which engages the exploration and development
of gold and silver.  He is also the President of Constitution
Petroleum, Inc. and has served in that capacity since 1970. 
Constitution Petroleum is engaged in oil and gas exploration in
Ohio and Pennsylvania.  Mr. Blakemore has also been the President
of Cameron Mining Company since 1956, which engages in the mining
and drilling contracting business.  He has also been Vice
President and a director since January 1991 of Con-Coyle Oil
Field Tool Company, which manufactures oil field tools.  Finally,
Mr. Blakemore is a director of Alta United Mines Company and PAB
Oil & Mining, Inc.

       Randall A. Mackey has served as director of the Company
since July 1981.  He has been a shareholder in the Salt Lake City
law firm of Mackey Price & Williams since May 1989.  From 1979 to
1989, he practiced law with the Salt Lake City law firm of Fabian
& Clendenin, where he was a shareholder and director of the firm
from 1982 to 1989.  From 1977 to 1979, Mr. Mackey was associated
with the Washington, D.C. law firm of Hogan & Hartson.  Mr.
Mackey received a B.S. degree in economics from the University of
Utah in 1968, a M.B.A. degree from Harvard University in 1970, a
Juris Doctor degree from Columbia University in 1975, and a
B.C.L. degree from Oxford University in 1977.  Mr. Mackey is also
a director of Paradigm Medical Industries, Inc., which develops
and manufactures ophthalmic surgical systems.

       Jeff D. Gentry has been a director of the Company since
April 1997.  He has been President of Emerald Oil & Mining
Company since 1987, which acquires and manages oil, gas and
mineral interests.  From 1985 to 1987, Mr. Gentry was a director
of G.T.B., Inc., an investment banking firm specializing in
financing oil and gas companies.  Mr. Gentry received B.S.
degrees in geological engineering and geology from the University
of Utah.

       All directors of the Company hold office until the next
annual meeting of the shareholders and until their successors
have been duly elected and has qualified.  All of the officers
serve at the pleasure of the Board of Directors.

       The Board of Directors of the Company held four meetings in
1996.  No director attended fewer than 75% of all meetings of the
Board of Directors in 1996.

ITEM 10.  Executive Compensation

Executive Officer Compensation

       The following table sets forth, for each of the last three
fiscal years, the compensation received by John P. Bogdanich, the
Company's President, Chief Executive Officer and Treasurer, Page
P. Blakemore, the Company's former President, Chief Executive
Officer and Treasurer, and all other executive officers
(collectively, the "Named Executive Officers") at December 31,
1996 whose salary and bonus for all services in all capacities
exceed $100,000 for the fiscal year ended December 31, 1996.

<TABLE>
<CAPTION>
                                                                
                     Summary Compensation Table
                                                                
                              Annual Compensation              
                     ------------------------------------------
   Name and                                     Other Annual
Principal Position   Year  Salary($)  Bonus($)  Compensation($)
------------------   ----  ---------  --------  ---------------
<S>                  <C>   <C>        <C>       <C>
John P. Bogdanich    1996    $ 0        $ 0          0 
Chairman of the      1995      0          0          0
Board, President,    1994      0          0          0
Chief Executive
Officer, Treasurer

Page P. Blakemore    1996      0          0          0
Sr., former          1995      0          0          0
Chairman of the      1994      0          0          0
Board, President,
Chief Executive
Officer, Treasurer

(continued)

</TABLE>

<TABLE>
<CAPTION>

                            Long-Term Compensation
                     --------------------------------------------
                            Awards                 Payouts
                     ----------------------  --------------------
                     Restricted  Securities  Long-term  All Other
   Name and           Stock      Underlying  Incentive  Compensa-
Principal Position   Awards($)    SARs(#)    Payout()$)  tion($) 
------------------   ---------   ----------  ---------- -------- 
<S>                  <C>         <C>         <C>        <C>
John P. Bogdanich      0<F1>        0            0       $ 0
Chairman of the        0<F1>        0            0         0
Board, President,      0            0            0         0
Chief Executive
Officer, Treasurer

Page P. Blakemore      0<F2>        0            0         0
Sr., former            0<F2>        0            0         0
Chairman of the        0<F2>        0            0         0
Board, President,
Chief Executive
Officer, Treasurer


________________
<FN>
<F1>    Does not include 25,000 shares of the Company's Common
Stock issued to Mr. Bogdanich each year he served as a director
of the Company during fiscal 1995 and 1996.  Mr. Bogdanich was
elected President, Chief Executive Officer and Treasurer of the
Company on April 4, 1997.
<F2>    Does not include 100,000 shares of the Company's Common
Stock issued to Mr. Blakemore each year he served as President,
Chief Executive Officer and Treasurer of the Company during
fiscal 1994, 1995 and 1996.  Mr. Blakemore resigned as President,
Chief Executive Officer and Treasurer of the Company on April 4,
1997.
</TABLE>

       The following table sets forth information concerning the
exercise of options to acquire shares of the Company's Common
Stock by the Named Executive Officers during the fiscal year
ended December 31, 1996, as well as the aggregate number and
value of unexercised options held by the Named Executive Officers
on December 31, 1996.

<TABLE>
<CAPTION>
         Aggregated Option/SAR Exercises in Last Fiscal Year
            and Fiscal Year-End Option/SAR Values

                          Shares Acquired             Value
     Name                 on Exercise(#)           Realized ($)
     ----                 ---------------          ------------
<S>                       <C>                      <C>
John P. Bogdanich                -0-                   -0-
Page P. Blakemore, Sr.           -0-                   -0-

(Continued)

</TABLE>
<TABLE>
<CAPTION>
                Number of Securities      Value of Unexercised
               Underlying Unexercised     In-the-Money Options
                    Options/SARs         /SARs at December 31,
               at December 31, 1996(#)   at December 31, 1996($)
              ------------------------- -------------------------
 Name         Exercisable Unexercisable Exercisable Unexercisable
 ----         ----------- ------------- ----------- -------------
<S>           <C>         <C>           <C>         <C>
John P. 
Bogdanich         -0-          -0-          -0-            -0-

Page P. 
Blakemore, Sr.    -0-          -0-          -0-            -0-

Director Compensation  

       Directors of the Company (but not including Page P.
Blakemore, Sr., the former President, Chief Executive Officer and
Treasurer of the Company) were paid a director's fee of 25,000
shares of the Company's Common Stock each year they served as a
director of the Company during fiscal 1994, 1995 and 1996.

ITEM 11.  Security Ownership of Certain Beneficial Owners and
Management

       The following table sets forth, as of March 31, 1997, the
beneficial ownership of the Company's Common Stock by each person
known by the Company to be the beneficial owner of more than five
percent  of the Company's Common Stock, by each director, and by
all directors and executive officers as a group.


</TABLE>
<TABLE>
<CAPTION>
                                                    Percent of
Name and Address<F1>         Number of Shares       Ownership
----------------             ----------------      ----------
<S>                          <C>                   <C> 
John P. Bogdanich                50,000                *
Page P. Blakemore, Sr.<F2>    1,600,574              26.3%
Murray C. Godbe, III            206,775               3.4%
Melvin E. Leslie                   *
Randall A. Mackey               186,500               3.1%
Jeff D. Gentry                     --                  *
All directors and             2,043,849              33.6%
executive officers 
as a group (6 persons)

---------------                          
*      Less than 1% of outstanding shares

<FN>
<F1>   The address for Mr. Bogdanich is 2667 East Capricorn Way,
Salt Lake City, Utah 84124.  The address for Mr. Blakemore, Sr.
is 4735 Naniloa Drive, Salt Lake City, Utah 84117.  The address
for Mr. Godbe is 1530 West Stansfield Drive, Kanab, Utah 84741. 
The address for Mr. Leslie is 1947 East Orchard Drive, Salt Lake
City, Utah 84106.  The address for Mr. Mackey is 1474 Harvard
Avenue, Salt Lake City, Utah 84105.  The address for Mr. Gentry
is P.O.Box 920078, Snowbird, Utah 84092.

<F2>    Includes 77,000 shares owned by Basin and Range
Exploration, a Utah corporation, of which Mr. Blakemore is the
President; and 150,000 shares owned by Cameron Mining Company, a
Utah corporation, of which Mr. Blakemore is also the President. 
Mr. Blakemore has sole voting and investment power with respect
to the shares owned by Basin and Range Exploration Company and
Cameron Mining Company.

</TABLE>

ITEM 12.  Certain Relationships and Related Transactions

       In October 1996, the Company entered into an option
agreement (the "Option Agreement") with PAB, which was approved
at the Company's Annual Shareholders Meeting held on March 28,
1997.  Under the terms of the Option Agreement, PAB is granted
options to purchase shares of the Company's Common Stock for
$850,000, such that after the issuance of the shares PAB will
hold 75% of the Company's outstanding Common Stock.  Mr.
Bogdanich, President, Chief Executive Officer and Treasurer of
the Company, also serves as President and a director of PAB.  Mr.
Blakemore, a director of the Company, also serves as a director
of PAB.  See "Item 1. Business - Option Agreement with PAB Oil &
Mining, Inc."

       Randall A. Mackey, a director of the Company, is a
shareholder of the law firm of Mackey Price & Williams, which has
rendered legal services to the Company.  Legal fees and expenses
paid to the firm for the years ended December 31, 1995 and 1996,
totaled $4,190 and $2,235, respectively.

                                                                
                             PART IV

ITEM 13.  Exhibits and Reports on Form 8-K.

       (a)     Financial Statements Filed
       
               Report of Independent Accountants

               Balance Sheet - December 31, 1996

               Statement of Operations - Years Ended December 31,
               1995, and 1996

               Statement of Stockholders Equity - January 1, 1995 to
               December 31, 1996

               Notes to Financial Statements

       (b)     Exhibits

               3.     A.*    Articles of Incorporation (Exhibit 3A to
                             Registration Statement on Form S-14,
                             No 2-78284, filed March 29, 1983)

                      B.*    Bylaws (Exhibit 3A to Registration
                             Statement on Form S-14, No 2-78284,
                             filed March 29, 1983)

                      C.*    Specimen Stock Certificate (Exhibit 3A to
                             Registration Statement on Form S-14,
                             No 2-78284, filed March 29, 1983)

               10.    A.*    Mining Lease with Dotson Exploration
                             Company (Exhibit 10B to Annual
                             Report on Form 10-K, No. 0-9739,
                             November 24, 1995)

                      B.*    Option Agreement with PAB Oil & Mining,
                             Inc. (Exhibit to Preliminary Proxy
                             Statement, No. 1-8757, February 7,
                             1997)

                      *      Exhibits so marked have heretofore been
                             filed with the Securities and
                             Exchange Commission as part of the filing
                             indicated and are incorporated herein by
                             this reference.

       (c)     Reports on Form 8-K

                      The Company has not filed any report on Form
                      8-K during the quarter for which this
                      report is filed.

<PAGE>

           INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
                                                                
                                                                
                                                             Page
                                                             ----
Independent Auditor's Report . . . . . . . .  . . . .        F-1

Balance Sheet, December 31, 1996 . . . . . . . . . . .       F-2

Statement of Operations for the two years 
ended December 31, 1996 . . . . . . .  . . . . . . . .       F-3

Statement of Stockholders' Equity, for the two
years ended December 31, 1996 . . . . . .  . . . . . .       F-4

Statement of Cash Flows for the two years ended
December 31, 1996 . . . . . . . . . . . . . . . . . .        F-5

Notes to Financial Statements. . . . . . .  . . . .          F-6

<PAGE>                                                                
                           SIGNATURES

       Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized in Salt Lake City, Utah, on this 22nd
                                                          ------ 
day of May, 1997.


                             HORN SILVER MINES, INC.

                             By: John P. Bogdanich
                                 Chairman of the Board,
                                 President, Chief Executive
                                 Officer, and Treasurer


       Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons in the capacities and on the dates indicated:

SIGNATURE                   TITLE                      DATE


John P. Bogdanich     Chairman of the Board,       May 22, 1997
                      President, Chief Executive
                      Officer and Treasurer 
                      (Principal Executive,
                      Financial and Accounting
                      Officer)

Murray C. Godbe, III  President and Director       May 22, 1997
                                                                         
Melvin E. Leslie      Secretary and Director       May 22, 1997

Page P. Blakemore     Director                     May 22, 1997

Randall A. Mackey     Director                     May 22, 1997

Jeff D. Gentry        Director                     May 22, 1997

<PAGE>

                   HORN SILVER MINES, INC. 
               Index to Financial Statements

                                                          Page
                                                          ----

Independent auditors' report                               F-1

Financial statements:

       Balance sheet, December 31, 1996                    F-2

       Statement of operations for the years ended
       December 31, 1996 and 1995                          F-3

       Statement of stockholders' deficit for the
       years ended December 31, 1996 and                   F-4

       Statement of cash flows for the years ended
       December 31, 1996 and 1995                          F-5

       Notes to financial statements                       F-6 

<PAGE>
                                       
                         INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
of Horn Silver Mines, Inc.


       We have audited the balance sheet of Horn Silver Mines,
Inc., as of December 31, 1996, and the related statements of
operations, stockholders' deficit and cash flows for the years
ended December 31, 1996 and 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 Horn Silver Mines, Inc., as of December 31, 1996, and the
results of operations and cash flows for the years ended December
31, 1996 and 1995, in conformity with generally accepted
accounting principles.

       The accompanying consolidated financial statements have
been prepared assuming that the Company will continue as a going
concern.  As discussed in note 2 to the consolidated financial
statements, there is substantial doubt about the ability of the
Company to continue as a going concern.  Management's plans in
regard to that matter are also described in note 2.  The
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



                                     Tanner & Co.

Salt Lake City, Utah 
March 21, 1997
                                      F-1
<PAGE>

                            HORN SILVER MINES, INC.

<TABLE>
<CAPTION>
                                 Balance Sheet
                                                                
                               December 31, 1996

       Assets
       ------
<S>                                                           <C> 

Current assets - cash                                         $24,531
                                                             --------
Property and equipment:
   Leasehold improvements                                       5,634
   Structures and equipment                                     8,441
                                                              -------
                                                               14,075

Less accumulated depreciation 
  and amortization                                            (13,794)
                                                              -------
       Net property and equipment                                 281

Other assets                                                    1,211
                                                             --------
       Total assets                                           $26,023
                                                             ========

       Liabilities and Stockholders' Deficit
       -------------------------------------
<S>                                                           <C>
Current liabilities:
  Accounts payable                                            $21,650
  Accrued liabilities due 
    to related parties                                         28,605
  Accrued expenses                                                284
                                                             --------
       Total current liabilities                               50,539
                                                             --------
Commitments                                                       -  

Stockholders' deficit:
  Common stock, par value $.001. 
    30,000,000 shares authorized; 
    6,088,966 shares issued and 
    outstanding                                                 6,089
  Additional paid-in capital                                1,669,009
  Accumulated deficit                                      (1,699,614)
                                                          -----------
Total stockholders' deficit                                   (24,516)
                                                          -----------
Total liabilities and 
  stockholders' deficit                                    $   26,023
                                                          ===========

See accompanying notes to financial statements.

                                      F-2
<PAGE>

               Statement of Operations
                                                                
                                            Years Ended December 31,
                                            ------------------------
                                            1996                1995
                                            ------------------------

Revenue:
  Mineral royalties                         $ 13,100         $ 15,900
  Interest                                       561              550
  Other income                                   431              699
                                            --------        ---------
Total revenue                                 14,092           17,149
                                            --------        ---------
Expenses:
  General, administrative 
    and exploration                           53,705           51,310
  Carrying costs for 
    mineral leases                             1,216               -  
   Depreciation                                  355              357
                                           ---------        ---------
       Total expenses                         55,276           51,667
                                           ---------        ---------
       Net loss                             $(41,184)        $(34,518)
                                            ---------       ---------
Loss per common share                       $   (.01)        $   (.01) 
                                            ---------        ---------
Weighted average number 
  of shares outstanding                     5,976,466       5,778,701
                                            ==========     ==========


See accompanying notes to financial statements.

                                      F-3
<PAGE>
                                                                
               Statement of Stockholders' Deficit


</TABLE>
<TABLE>
<CAPTION>
                                                                
             Years Ended December 31, 1996 and 1995


                  Common Stock    Additional
                --------------     Paid-In     Retained
                 Shares  Amount    Capital     Deficit     Total
            ---------------------------------------------------
<S>            <C>        <C>     <C>         <C>          <C>        
Balance,       5,693,435  $5,693  $1,599,284  $(1,623,912) $(18,935)
January 1,
1995

Common stock 
issued for 
officers' 
compensation 
and directors'
fee valued at 
approximately 
$.13 per 
share           170,000     170     22,355          -        22,525

Common stock
issued as
contingent 
consideration 
for assets 
valued at 
approximately 
$.13 per 
share (see 
note 7)             531       1          70        -             71

Net loss           -          -                   (34,518)  (34,518)
             ------------------------------------------------------
Balance, 
December 31, 
1995             5,863,966   5,864  1,621,709  (1,658,430)  (30,857)

Common stock 
issued for 
officers' 
compensation 
and directors' 
fee valued at 
approximately 
$.10 per share     225,000     225     22,300       -       22,525

Contributed 
capital in 
exchange for 
the option 
to purchase 
company stock         -            -   25,000       -       25,000

Net loss              -            -             (41,184)   (41,184)
               ----------------------------------------------------
Balance, 
December 31, 
1996             6,088,966  $6,089 $1,669,009 $(1,699,614) $(24,516)
              =====================================================

</TABLE>

See accompanying notes to financial statements.

                                      F-4
<PAGE>

                     Statement of Cash Flows

<TABLE>
<CAPTION>
                                                                
                                         Years Ended December 31,
                                         --------------------------  
                                         1996                  1995
                                         --------------------------
<S>                                      <C>                <C>
Cash flows from 
  operating activities:

  Net loss                               $(41,184)          $(34,518)

  Adjustments to reconcile
    net loss to net cash 
    used in operating 
    activities:
      Depreciation                            355                357
      Stock issued for 
        services                           22,525             22,595
       (Increase) decrease in:
         Other assets                         360                 -
       Increase (decrease) in:
         Accounts payable                    (772)             6,329
       Accrued liabilities                   (390)               544
                                          -------            -------
         Net cash provided by 
               (used in)
         Operating activities             (19,106)            (4,693)
                                         --------            -------
Cash flows from 
  investing activities                        -                  -  
                                         --------           --------
Cash flows from 
  financing activities
    Proceeds from issuance 
      of stock options                     25,000                -  
                                         --------          ---------

       Net increase 
         (decrease) in cash                 5,894             (4,693)

Cash, beginning of year                    18,637              23,330
                                         --------            --------
Cash, end of year                         $24,531             $18,637
                                         ========            ========

</TABLE>

See accompanying notes to financial statements.

                                      F-5
<PAGE>
                        Notes to Financial Statements
                                                                
                         December 31, 1996 and 1995

1.     Summary of Significant Accounting Policies

Organization
The Company was incorporated in 1971 under the laws of the State
of Utah.  The Company is a "junior" natural resource Company
whose activities are primarily acquisition, exploration and
development of natural resources.

Cash and Cash Equivalents
For financial statement purposes, the Company considers all
instruments with a maturity of less than three months to be cash
equivalents.

Property, Equipment and Mining Costs 
Expenditures for exploration of mineral properties are charged
against income as incurred.  Property acquisition costs and mine
development costs incurred to expand capacity of operating mines,
develop new ore bodies or develop new areas substantially in
advance of current production are capitalized and charged to
operations on the units-of-production method.  Capitalized costs
of abandoned projects or impaired properties are charged to
operations in the year of abandonment.

Corporate property and equipment are stated at cost. 
Acquisitions having a useful life in excess of one year are
capitalized.  Maintenance and repairs are expensed in the year
incurred.  Capitalized assets are depreciated by the
straight-line method over estimated useful lives of the related
assets, ranging from three to ten years.

Income Taxes
Deferred income taxes are provided in amounts sufficient to give
effect to temporary differences between financial and tax
reporting, principally related to accounting for mining
properties.

Stock Split
Subsequent to year-end, the Company's shareholders approved a
reverse stock split of 1 share for each 20 shares held.  The
financial statements have been restated to reflect the reverse
stock split as if it had taken place at January 1, 1995 (see note
8 - subsequent events).

Loss Per Common Share
Losses per common share are calculated based on the weighted
average number of shares of common stock outstanding during the
period.  Common stock equivalents which would be antidilutive are
not included in the calculation.

                                      F-6
<PAGE>
                   Notes to Financial Statements
                               Continued

1.     Summary of Significant Accounting Policies

Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods.  Actual results could differ from those estimates.


2.     Going Concern

The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern.  As of December 31, 1996, the Company had a deficit in
working capital of $26,008, and an accumulated deficit of
$1,699,614 and incurred a loss of $41,184 for the year ended
December 31, 1996.  These conditions raise substantial doubt
about the ability of the Company to continue as a going concern. 
The consolidated financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.

The Company's ability to continue as a going concern is subject
to the attainment of profitable operations or obtaining necessary
funding from outside sources.  Management anticipates that equity
funding, resulting from the agreement described in note 4 -
related party transactions, will provide positive cash flow. 
However, there can be no assurance such funding will be received.

3.     Commitments

The Company has entered into various cancelable mining leases and
royalty agreements as a lessee and lessor.  Future minimum lease
and royalty payments received and paid under the Company's
current agreements are minimal.  In addition to the lease
payments required above, certain leases also require minimum
payments of approximately $100 per claim.  Certain leases also
have provisions allowing the Company to purchase all rights to
the properties thereby reducing future commitments for royalty
payments.  The leases are cancelable at the Company's option at
any time which would terminate any further lease payments or work
commitments.  The lease agreements also provide that the lease
will remain in effect as long as exploration or development is
being conducted with reasonable diligence or production continues
in commercial quantities.

                                      F-7
<PAGE>
                    Notes to Financial Statements
                         Continued

3.     Commitments (Continued)

The Company leases its office facilities under an operating lease
which requires payments of approximately $3,000 per year through
January 1997.

4.     Related Party Transactions

At December 31, 1996 and 1995, the Company recorded a liability
for officers compensation and directors' fees and expense
reimbursements to officers of approximately $29,000.

In October 1996, the Company entered into an Option Agreement
with PAB Oil & Mining, Inc. ("PAB") which grants to PAB the right
to purchase up to 75% of the outstanding shares of the Company's
common stock for the sum of $850,000.  The President, Chief
Executive Officer, and Treasurer of the Company, served as a
director of PAB from September 1993 to September 1996.  A
director of the Company, currently serves as President and Chief
Executive Officer of PAB.

A director of the Company, is President and a shareholder of a
law firm which has rendered legal services to the Company.  Legal
fees and related costs paid to the firm for the year ended
December 31, 1996 totaled $2,235.  There were no legal fees paid
to the firm during fiscal 1995, although, the firm rendered legal
services for the Company during that period.

5.     Income Taxes

The difference between income taxes at statutory rates for 1996
and 1995 and the amount presented in the financial statements is
the increase in the tax valuation allowance, which offsets the
income tax benefit of the operating loss.

Deferred tax assets consist of the following:

       Operating loss carryforwards            $ 568,000
       Valuation allowance                      (568,000)
                                               ---------
                                               $   -  
                                               =========
                                      F-8
<PAGE>

                    Notes to Financial Statement
                            Continued

5.     Income Taxes (Continued)

The Company has net operating loss carryforwards of approximately
$1,672,000, which begin to expire in the year 2000.  The amount
of net operating loss carryforward that can be used in any one
year will be limited by significant changes in the ownership of
the Company and by the applicable tax laws which are in effect at
the time such carryforward can utilized.

6.     Supplemental Cash Flow Disclosure

Operations reflect actual amounts paid for interest and income
taxes as follows for the years ended December 31:

                                        1996              1995

Interest                           $         -    $        -
                                   ---------------------------
                                   $         -    $        -
                                   ===========================

7.     Common Stock Issued for Assets

During 1983, the Company acquired the assets of another mining
company by offering to exchange Company shares of common stock
for the common stock of this company.  At the time this
transaction was entered into, the other mining company could not
produce a complete listing of all shareholders.  Therefore, the
exact number of shares to be issued could not be determined. 
However, management believes that any shares not exchanged when
the transaction was originally entered into are not significant. 
During 1995, 10,625 shares were issued to newly identified
shareholders of this Company.

8.     Subsequent     Events

On March 28, 1997, the shareholders of the Company approved a
reverse stock split of 1 share for each 20 shares held.  The
reverse stock split had the effect of reducing shares issued and
outstanding from 121,779,316 and 117,279,316 shares to 6,088,966
and 5,863,966 at December 31, 1996 and 1995, respectively.  The
financial statements have been restated to reflect this change.

                                      F-9

<PAGE>
                    Notes to Financial Statements
                                   Continued


8.     Subsequent Events (Continued)

On March 28, 1997, the shareholders of the Company approved a
resolution to amend the Articles of Incorporation.  The amendment
reduced the authorized shares of common stock from 200,000,000
shares to 30,000,000 shares, and changed the par value of common
stock from no par value to $.001 par value.  The effect of the
amendment reduced the dollar value of common stock issued and
outstanding from $1,650,098 and $1,627,573 to $6,089 and $5,864,
respectively, at December 31, 1996 and 1995.  The amendment also
increased additional paid-in capital from $0 to $1,660,009 and
$1,621,709 at December 31, 1996 and 1995, respectively.  The
financial statements have been restated to reflect these changes.


                                     F-10