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UNITEDSTATESSECURITIES AND EXCHANGECOMMISSION

Washington, D.C.20549

FORM10-QSB

|        |                                                                                  |
|--------|----------------------------------------------------------------------------------|
|   | QUARTERLY REPORT UNDER SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

Forthe Quarterly Period ended September  30,2006

|        |                                                                                   |
|--------|-----------------------------------------------------------------------------------|
|   | TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 |

For theTransition Period From                      To                    

Commission FileNumber: 001-01761

CHIEF CONSOLIDATED MININGCOMPANY

(Exact name of small businessissuer as specified in itscharter)

|                                                             |  |  |                                   |
|-------------------------------------------------------------|--|--|-----------------------------------|
| ARIZONA                                                     |  |  | 87-0122295                        |
| (Stateor Other Jurisdiction ofIncorporation orOrganization) |  |  | (I.R.S.EmployerIdentificationNo.) |
|                                                             |

|                                                 |  |  |           |
|-------------------------------------------------|--|--|-----------|
| 15988SILVER PASS ROAD, P.O. BOX 51, EUREKA,UTAH |  |  | 84628     |
| (Addressof Principal Executive Offices)         |  |  | (ZipCode) |
|                                                 |

(435)433-6606(Issuer’s telephonenumber)

Check whether the issuer is not required tofile reports pursuant to Section 13 or 15(d) of the Exchange Act.

Check whether the issuer: (1) filed all reportsrequired to be filed by Section 13 or 15(d) of the Exchange Act duringthe past 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.             Yes     No 

Indicate by check mark whether the registrantis a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No 

State the number of sharesoutstanding of each of the issuer’s classes of common equity, asof January  24,  2007. Common Stock $0.50 par value:10,635,507    

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

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PARTI

|               |                       |
|---------------|-----------------------|
| Item 1.  | Financial Statements. |

SeeFinancial Statements beginning on page F-1.

|              |                                                                 |
|--------------|-----------------------------------------------------------------|
| Item2.  | Management’s Discussion and Analysis orPlan of Operation. |

The following discussion is intended toassist you in understanding our financial condition and plan ofoperations. You should read the following discussion along with ourfinancial statements and related notes included in this QuarterlyReport on Form 10-QSB.

Forward-Looking Statements

Thefollowing discussion contains forward-looking statements within themeaning of Section 27A of the Securities Act of 1933, as amended andSection 21E of the Securities Exchange Act of 1934, as amended, thatare subject to risks, uncertainties and assumptions. Our actualresults, performance and achievements may differ materially from thoseexpressed in, or implied by, these forward looking statements. Wordssuch as ‘‘believes,’’‘‘intends,’’‘‘expects,’’‘‘may,’’‘‘will,’’‘‘should,’’‘‘plan,’’‘‘projected,’’‘‘contemplates,’’‘‘anticipates’’ and variations of thesewords and similar expressions are intended to identify forward-lookingstatements. Our ability to predict results or the actual effect offuture plans or strategies is uncertain. Factors which could have amaterial adverse effect on our operations include, but are not limitedto, environmental matters, general economic conditions,legislative/regulatory changes, and changes in accounting principlesand interpretations. These risks and uncertainties should be consideredin evaluating forward-looking statements and you should not place unduereliance on these forward-looking statements, which apply only as ofthe date of this Quarterly Report on Form 10-QSB. Except as required bylaw, we undertake no obligation to release publicly the result of anyrevisions to these forward-looking statements that may be made toreflect events or circumstances after the date of this Quarterly Reporton Form 10-QSB or to reflect the occurrence of unanticipatedevents.

Overview

We were organized in 1909 and ownseveral interests in mining properties in Utah, including the BurginMine and the Trixie Mine. Our principal subsidiaries are Tintic UtahMetals, LLC, a Colorado limited liability company and Chief Gold Mines,Inc., a Delaware corporation. We also own or control approximately6,000 acres of land in an area known as the Main Tintic District inUtah. The majority of this land is generally considered to benon-mining land and is subject to being sold pursuant to a ConsentDecree discussed below in the section entitled ‘‘LegalProceedings – EPA Settlement.’’

The TrixieMine is located on property owned by our wholly owned subsidiary, ChiefGold Mines, and is 1.5 miles from Tintic Utah’s concentratingmill. Our subsidiary, Tintic Utah, last processed gold and silver oresproduced from the Trixie Mine at Tintic Utah’s concentratingmill in early 2002. Due to past safety conditions at the Trixie Mine,we are not currently operating the mine and do not presently plan toresume mining operations, although we may be interested in variousother options including, joint ventures or leasing or selling theTrixie.

The Burgin Mine, which is located in the East TinticMining District of Utah, is also not currently in production. We cannotproceed with production at the mine unless we can dewater the mine andraise capital for use in connection with restarting mining operations.We have applied for permission to appropriate water from the BurginMine and the application is currently pending before the Utah StateEngineer. If it approves our application, we may then beginnegotiations with various potential partners with the intention offinding a method to finance the construction of a water treatmentfacility. The water treatment facility would be used as the means fordisposing of the water pumped from the lower levels of the Burgin Mine,enabling us to proceed with development and production programs.Although there were objections to our application, we have been innegotiations regarding the terms of an agreement with the mainobjectors. The Utah State Engineer will issue a decision on

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the application and we would have the right toappeal any adverse decision to a court. We are unable to predictwhether an agreement with the objectors will be signed or when the UtahState Engineer will render his decision. Even if the Utah StateEngineer approves our application and we reach an agreement with theobjectors, we may not have the necessary funds to proceed, and even ifwe do have such funds, we may not use these funds to proceed at theBurgin Mine. If we are not successful in obtaining water rights, webelieve there may be alternative methods to successfully dewater themine.

As a result of the suspended mining and processingoperations, we are not generating any revenues and we do not havesufficient funding to make the significant safety improvements requiredin the Trixie Mine or to continue exploration efforts related to theBurgin Mine. As a result, we have had no significant operating activitysince early 2002.

Plan of Operation

In the mining aspectof our activities, we will concentrate on seeking one or more jointventure partners or other arrangements to fund the startup of miningoperations. To the extent we enter into such an arrangement, we couldcontribute mining properties and/or the Burgin concentrating mill toany joint venture arrangement in return for a percentage interest inthe venture, with our partner(s) to provide the main portion of cashfunding requirements.

We have an immediate cash need. Noassurance can be given that we will be able to raise the necessaryfunds, or if the funds are raised, that we will be able to restart ourmining operations.

Our financial statements have been preparedassuming that we will continue as a going concern. We recognized$404,508 in revenues for the nine months ended September30,  2006 which consists of $351,111 resulting from vendorsettlements and $53,397 in interest. We have suffered net losses of$1,843,673 for the nine months ended September  30,  2006.Additionally, as of September  30,  2006, we had anaccumulated deficit of $87,427,057. These matters raise substantialdoubt about our ability to continue as a going concern.

As ofSeptember  30,  2006, we had $950,000 of land and miningclaims and $250,000 of mining related buildings, machinery andequipment. The realization of our investment in land and mining claimsand mining related buildings and equipment is dependent upon variousfactors, including: our success in exploration efforts to discoveradditional mineral resources and in proving the technical feasibilityand commercial viability of the identified mineral resources, and ourability to obtain necessary funding to continue exploration of themining properties and to finance operations.

In December2005, Dimeling, Schreiber & Park, our shareholders, agreed topurchase $2.5  million in convertible debentures contingent uponcreditors holding more than 50% of our then outstandingindebtedness agreeing to settle such outstanding amounts. The funds areheld in escrow by our counsel and are dispersed by the escrow agent topay creditors as they individually agree with us and to pay legal,accounting and other consulting fees as incurred. The debenturesautomatically convert into common stock at $0.25 per share immediatelyupon shareholder approval of certain amendments to our Articles ofIncorporation, including a decrease in the par value and an increase inauthorized capital. The minimum level of acceptances with creditors hasbeen reached. In the event that the shareholders do not approve suchamendments, the debentures will become immediately due andpayable.

In addition, in May  2006, some of the holdings ofTintic Utah Metals, LLC, Central Standard Mines Co., and Eagle and BlueBell Mining Co. were sold at tax sale. We have been reviewingour options to recover these properties.

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|               |                         |
|---------------|-------------------------|
| Item 3.  | Controls andProcedures. |

We have had neither operations nor employees sinceearly 2002 and, as such, our Board of Directors did not establish apolicy regarding disclosure controls and procedures untilJanuary  22,  2007. We began to implement this disclosurecontrols and procedures policy on that date. This policy is designed toensure that information required to be disclosed by us in our QuarterlyReports on Form 10-QSB, our Annual Reports on Form 10-KSB and in otherreports required to be filed under the Securities Exchange Act of 1934,as amended (the ‘‘Exchange Act’’), isrecorded, processed, summarized and reported within the time periodsspecified in the rules and forms of the Securities and ExchangeCommission for such filings. Our Disclosure Committee assists our ChiefExecutive Officer and our Chief Financial Officer in ensuring that thefunctions required by our disclosure controls and procedures policy areperformed.

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PART II

|              |                    |
|--------------|--------------------|
| Item1.  | Legal Proceedings. |

EPASettlement

During 2001, the Environmental Protection Agency,also known as the EPA, placed Eureka Mills Superfund Site on theNational Priorities List, as authorized under the ComprehensiveEnvironmental Response, Compensation and Liability Act of 1980.According to the EPA, samples indicate that, approximately 150 acres ofsoil in the Town of Eureka, Utah, the location of our principalexecutive offices and operations, were contaminated with lead and, to alesser extent, arsenic.

In 2002, the EPA finalized its actions tobe taken in response to the release of waste materials at and aroundthe site. The EPA is seeking reimbursement from us for our portion ofthe liability based on the ownership and the conduct of miningoperations on portions of the site.

In February  2005, weagreed to a judgment against us by the EPA in the amount of $60million. The judgment will remain in effect until we have complied withall the requirements of a Consent Decree issued to us by the EPA. Ourmaterial obligations under the Consent Decree include:

|        |        |                                                             |
|--------|--------|-------------------------------------------------------------|
|   | • | seeking indemnification or recoveryfrom insurance policies; |

|        |        |                                                                                                                                                                         |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | usingour best efforts to sell sites, other than sites upon which therepository, open cells, response action structures, water source, andborrow source are located; and |

|        |        |                                                                                                                                                                                                                                                |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | reimbursing the EPA for a five yearperiod 15% of our net income in excess of $2  millionduring any calendar year and 15% of the net proceeds of the saleof our Company or the sale of substantially all of our assets in excessof $2  million. |

In the event that we complete all of ourobligations under the Consent Decree, the EPA will file a Release ofNotice of Federal Lien in the Office of the Juab County Recorder and wewill be relieved of the $60  million liability, resulting in again in such future period. As of the current date, we have fullycomplied with all terms of the agreement. The judgment amount of$60  million represents the future value of clean up costs whenthe terms of the Consent Decree are satisfied on February9,  2010.

Other Proceedings

In addition, we werenamed, along with two other corporate entities, as a respondent in anadministrative proceeding before the Utah Labor Commission inAugust  2006. In the proceeding, the seventy-six year oldpetitioner alleged that he was one of our employees from 1950 to 1954and has contracted lung cancer as a result of his employment. Theplaintiff sought medical expenses and permanent total disabilitycompensation. The plaintiff is now deceased. His widow claimsdependent’s benefits and burial benefits. We have denied allmaterial allegations, are investigating the claim and will vigorouslydispute the petitioner’s claims. Currently, this litigation isin the discovery stage. A hearing is scheduled for April 5,2007.

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|              |           |
|--------------|-----------|
| Item6.  | Exhibits. |

|            |    |     |             |  |  |                                                                                                                                                                                                                                                                                                                  |
|------------|----|-----|-------------|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| EXHIBITNO. |    |     | DESCRIPTION |
|            | 3  | .1  |             |  |  | Articles ofIncorporation [Incorporated by reference to Exhibit A toChief’s Schedule 14A Proxy Statement filed on December17,  1999 (SEC File No.001-01761)].                                                                                                                                               |
|            | 3  | .2  |             |  |  | By-laws[Incorporated by reference from Form S-4 Registration Statement(File  No.333-00160].                                                                                                                                                                                                                      |
|            | 3  | .3  |             |  |  | Amendment to theBy-laws dated March  16,  2001 [Incorporated byreference to Exhibit 2, marked as Exhibit A, to Chief’s Form10-KSB filed on April  4, 2001 (SEC File No.001-01761)].                                                                                                                        |
|            | 10 | .1  |             |  |  | The OperatingAgreement of Tintic Utah LLC dated as of July  17,  1996 byand among Chief, Akiko Resources (Utah) Inc. and KZ Utah, Inc.[Incorporated by reference to Exhibit 10B, marked as‘‘Exhibit A’’, to Chief’s Form10-KSB filed on April  2,  1997 (SEC File No.001-01761].   |
|            | 10 | .2  |             |  |  | The First Amendment toOperating Agreement dated as of March  11,  1997 by andamong Chief, Akiko Resources (Utah) Inc. and KZ Utah, Inc.[Incorporated by reference to Exhibit 10B, marked as‘‘Exhibit A’’, to Chief’s Form10-KSB filed on April  2,  1997, (SEC File No.001-01761]. |
|            | 10 | .3  |             |  |  | Second Amendment toOperating Agreement dated as of November  10,  1997 by andbetween Chief and KZ Utah, Inc [Incorporated by reference toExhibit 10D, filed as Exhibit A, to Chief’s Form 10-K reportfiled on March  30,  1998 (SEC File No.001-01761)].                                                   |
|            | 10 | .4  |             |  |  | Third Amendment toOperating Agreement dated as of October  1,  1998 by andbetween Chief and KZ Utah, Inc [Incorporated by reference toExhibit 10D, filed as Exhibit A, to Chief’s Form 10-KSB reportfiled on April  15,  1999 (SEC File No.001-01761)].                                                    |
|            | 10 | .5  |             |  |  | Fourth Amendment toOperating Agreement dated as of September  9,  1999 by andbetween Chief and KZ Utah, Inc [Incorporated by reference toExhibit 10E, filed as Exhibit A, to Chief’s Form 10-KSB reportfiled on March  30,  2000 (SEC File No.001-01761)].                                                 |
|            | 10 | .6  |             |  |  | Fifth Amendment tothe Operating Agreement dated as of January  1,  2001[Incorporated by reference to Form 10-QSB filed on August14, 2001].                                                                                                                                                                       |
|            | 10 | .7  |             |  |  | The Articles ofOrganization of Tintic Utah LLC is incorporated by reference to anexhibit to Form 10-KSB filed on April  2,1997.                                                                                                                                                                                  |
|            | 10 | .7  |             |  |  | Stock Purchase Agreement dated asof November  19,  1999 between Chief and Dimeling,Schreiber & Park [Incorporated by reference to Chief’sForm 8-K report filed on November  30,  1999 (SEC File No.001-01761)].                                                                                        |
|            | 10 | .8  |             |  |  | Registration RightsAgreement dated as of November  19,  1999 between Chief andDimeling, Schreiber & Park [Incorporated by reference toChief’s Form 8-K report filed on November  30,  1999(SEC File No. 001-01761)].                                                                                   |
|            | 10 | .9  |             |  |  | Form ofWarrant issued to Dimeling, Schreiber & Park by Chief dated as ofNovember  19,  1999 [Incorporated by reference toChief’s Form 8-K report filed on November  30,  1999(SEC File No. 001-01761)].                                                                                                |
|            | 10 | .10 |             |  |  | EPAConsent Decree [Incorporated by reference to Chief’s Form10-KSB report filed on December  12,  2006 (SEC File No.001-01761)].                                                                                                                                                                           |
|            |

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|            |    |     |             |  |  |                                                                                                                                                  |
|------------|----|-----|-------------|--|--|--------------------------------------------------------------------------------------------------------------------------------------------------|
| EXHIBITNO. |    |     | DESCRIPTION |
|            | 10 | .11 |             |  |  | Debenture PurchaseAgreement [Incorporated by reference to Chief’s Form 10-KSBreport filed on December  12,  2006 (SEC File No.001-01761)]. |
|            | 10 | .12 |             |  |  | Escrow Agreement[Incorporated by reference to Chief’s Form 10-KSB reportfiled on December  12,  2006 (SEC File No.001-01761)].             |
|            | 32 |     |             |  |  | Certification Pursuantto 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002 (filedherewith).            |
|            |

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CHIEFCONSOLIDATED MINING COMPANY AND SUBSIDIARIES

TABLE OFCONTENTS

|                                                                                                                  |  |  |      |  |     |  |
|------------------------------------------------------------------------------------------------------------------|--|--|------|--|-----|--|
|                                                                                                             |  |  | Page |
| CondensedConsolidated Balance Sheets – September  30,  2006and December  31,  2005(Unaudited)              |  |  |      |  | F-2 |  |
| CondensedConsolidated Statements of Operations for the nine months EndedSeptember  30,  2006 and 2005(Unaudited) |  |  |      |  | F-3 |  |
| CondensedConsolidated Statements of Cash Flows for the nine months EndedSeptember  30,  2006 and 2005(Unaudited) |  |  |      |  | F-4 |  |
| Notesto the Condensed Consolidated Financial Statements(Unaudited)                                               |  |  |      |  | F-5 |  |
|                                                                                                                  |

F-1

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CHIEFCONSOLIDATED MINING COMPANY AND SUBSIDIARIES    CONDENSEDCONSOLIDATED BALANCESHEETS(UNAUDITED)

|                                                              |  |  |                  |   |             |                 |  |  |  |   |             |   |
|--------------------------------------------------------------|--|--|------------------|---|-------------|-----------------|--|--|--|---|-------------|---|
|                                                         |  |  | September30,2006 |   |             | December31,2005 |
| ASSETS                                                       |  |  |                  |   |        |                 |  |  |  |   |        |   |
| Currentassets                                                |  |  |                  |   |        |                 |  |  |  |   |        |   |
| Cash                                                         |  |  |                  | $ | 10          |                 |  |  |  | $ | 10          |   |
| Prepaidexpenses                                              |  |  |                  |   | 101,685     |                 |  |  |  |   | —     |   |
| Othercurrentassets                                           |  |  |                  |   | 16,060      |                 |  |  |  |   | 7,320       |   |
| Restricted cashheld inescrow                                 |  |  |                  |   | 1,898,913   |                 |  |  |  |   | 2,500,000   |   |
| Totalcurrentassets                                           |  |  |                  |   | 2,016,669   |                 |  |  |  |   | 2,507,330   |   |
| Landand miningclaims                                         |  |  |                  |   | 950,000     |                 |  |  |  |   | 950,000     |   |
| Buildings,machinery and equipment,net                        |  |  |                  |   | 250,000     |                 |  |  |  |   | 250,000     |   |
| Reclamationfunds ondeposit                                   |  |  |                  |   | 488,300     |                 |  |  |  |   | 486,086     |   |
| Totalassets                                                  |  |  |                  | $ | 3,704,969   |                 |  |  |  | $ | 4,193,416   |   |
| LIABILITIESAND STOCKHOLDERS’DEFICIT                    |  |  |                  |   |        |                 |  |  |  |   |        |   |
| Currentliabilities                                           |  |  |                  |   |        |                 |  |  |  |   |        |   |
| Accountspayable                                              |  |  |                  | $ | 1,010,076   |                 |  |  |  | $ | 1,310,408   |   |
| Relatedpartypayable                                          |  |  |                  |   | 319,477     |                 |  |  |  |   | 364,477     |   |
| Interestpayable                                              |  |  |                  |   | 114,963     |                 |  |  |  |   | 109,354     |   |
| Directorindemnification                                      |  |  |                  |   | —     |                 |  |  |  |   | 240,000     |   |
| Accruedliabilities                                           |  |  |                  |   | 304,527     |                 |  |  |  |   | 304,527     |   |
| Accruedconvertible common stockdividends                     |  |  |                  |   | 650,683     |                 |  |  |  |   | 515,098     |   |
| Notespayable                                                 |  |  |                  |   | 349,835     |                 |  |  |  |   | 424,014     |   |
| Totalcurrentliabilities                                      |  |  |                  |   | 2,749,561   |                 |  |  |  |   | 3,267,878   |   |
| Long-termliabilities                                         |  |  |                  |   |        |                 |  |  |  |   |        |   |
| Convertibledebentures                                        |  |  |                  |   | 2,500,000   |                 |  |  |  |   | 2,500,000   |   |
| Reclamationobligation                                        |  |  |                  |   | 499,286     |                 |  |  |  |   | 488,300     |   |
| EPAsettlementobligation                                      |  |  |                  |   | 50,913,299  |                 |  |  |  |   | 49,080,612  |   |
| Totallong-termliabilities                                    |  |  |                  |   | 53,912,585  |                 |  |  |  |   | 52,068,912  |   |
| Minorityinterest in consolidatedsubsidiaries                 |  |  |                  |   | 24,727      |                 |  |  |  |   | 24,727      |   |
| Commitmentsand contingencies                                 |  |  |                  |   | —     |                 |  |  |  |   | —     |   |
| Shareholders’deficit                                   |  |  |                  |   |        |                 |  |  |  |   |        |   |
| Preferredstock, $0.50 par value; 1,500,000 sharesauthorized; |  |  |                  |   |        |                 |  |  |  |   |        |   |
| 10,899 sharesoutstanding; liquidation preference of$5,450    |  |  |                  |   | 5,450       |                 |  |  |  |   | 5,450       |   |
| Convertiblecommon stock, $0.50 par value; 30,000,000shares   |  |  |                  |   |        |                 |  |  |  |   |        |   |
| authorized;4,060,000 sharesoutstanding                       |  |  |                  |   | 2,030,000   |                 |  |  |  |   | 2,030,000   |   |
| Commonstock, $0.50 par value; 50,000,000 sharesauthorized;   |  |  |                  |   |        |                 |  |  |  |   |        |   |
| 10,635,507sharesoutstanding                                  |  |  |                  |   | 5,314,209   |                 |  |  |  |   | 5,314,209   |   |
| Additionalpaid-incapital                                     |  |  |                  |   | 23,773,747  |                 |  |  |  |   | 23,773,747  |   |
| Stockpurchaserights                                          |  |  |                  |   | 3,321,747   |                 |  |  |  |   | 3,321,747   |   |
| Accumulateddeficit                                           |  |  |                  |   | (87,427,057 | )               |  |  |  |   | (85,613,254 | ) |
| Totalstockholders’deficit                              |  |  |                  |   | (52,981,904 | )               |  |  |  |   | (51,168,101 | ) |
| Totalliabilities and stockholders’deficit              |  |  |                  | $ | 3,704,969   |                 |  |  |  | $ | 4,193,416   |   |
|                                                              |

Theaccompanying notes are an integral part of these condensed consolidatedfinancial statements.

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CHIEF CONSOLIDATED MINING COMPANY ANDSUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OFOPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006AND 2005(UNAUDITED)

|                                                            |  |  |                                        |   |            |                                      |  |  |      |   |            |      |  |  |  |   |            |   |  |  |  |   |            |   |
|------------------------------------------------------------|--|--|----------------------------------------|---|------------|--------------------------------------|--|--|------|---|------------|------|--|--|--|---|------------|---|--|--|--|---|------------|---|
|                                                       |  |  | Forthe Three MonthsEnded September 30, |   |            | For the NineMonthsEnded September30, |
|                                                       |  |  | 2006                                   |   |            | 2005                                 |  |  | 2006 |   |            | 2005 |
| Revenue                                                    |  |  |                                        |   |       |                                      |  |  |      |   |       |      |  |  |  |   |       |   |  |  |  |   |       |   |
| Landsales andother                                         |  |  |                                        | $ | 108,962    |                                      |  |  |      | $ | —    |      |  |  |  | $ | 404,508    |   |  |  |  | $ | —    |   |
| Totalrevenue                                               |  |  |                                        |   | 108,962    |                                      |  |  |      |   | —    |      |  |  |  |   | 404,508    |   |  |  |  |   | —    |   |
| Operatingexpenses                                          |  |  |                                        |   |       |                                      |  |  |      |   |       |      |  |  |  |   |       |   |  |  |  |   |       |   |
| Generalandadministrative                                   |  |  |                                        |   | 90,318     |                                      |  |  |      |   | 89,154     |      |  |  |  |   | 210,776    |   |  |  |  |   | 147,721    |   |
| Depreciationanddepletion                                   |  |  |                                        |   | —    |                                      |  |  |      |   | 42,197     |      |  |  |  |   | —    |   |  |  |  |   | 126,590    |   |
| Accretionof reclamation and EPA settlementobligations      |  |  |                                        |   | 622,038    |                                      |  |  |      |   | 585,927    |      |  |  |  |   | 1,843,673  |   |  |  |  |   | 1,757,780  |   |
| Totalexpenses                                              |  |  |                                        |   | 712,356    |                                      |  |  |      |   | 717,277    |      |  |  |  |   | 2,054,449  |   |  |  |  |   | 2,032,092  |   |
| Otherincome(expense)                                       |  |  |                                        |   |       |                                      |  |  |      |   |       |      |  |  |  |   |       |   |  |  |  |   |       |   |
| Interestexpense                                            |  |  |                                        |   | (8,636     | )                                    |  |  |      |   | (10,133    | )    |  |  |  |   | (28,277    | ) |  |  |  |   | (30,066    | ) |
| Netloss                                                    |  |  |                                        |   | (612,030   | )                                    |  |  |      |   | (727,410   | )    |  |  |  |   | (1,678,218 | ) |  |  |  |   | (2,062,158 | ) |
| Redeemableand convertible common stockdividends:           |  |  |                                        |   |       |                                      |  |  |      |   |       |      |  |  |  |   |       |   |  |  |  |   |       |   |
| Eightpercent stockdividend                                 |  |  |                                        |   | (45,924    | )                                    |  |  |      |   | (28,348    | )    |  |  |  |   | (135,585   | ) |  |  |  |   | (85,044    | ) |
| Lossattributable to commonstockholders                     |  |  |                                        | $ | (657,954   | )                                    |  |  |      | $ | (755,758   | )    |  |  |  | $ | (1,813,804 | ) |  |  |  | $ | (2,147,202 | ) |
| Basicand diluted loss per commonshare:                     |  |  |                                        | $ | (0.06      | )                                    |  |  |      | $ | (0.07      | )    |  |  |  | $ | (0.16      | ) |  |  |  | $ | (0.19      | ) |
| Basicand diluted weighted-average common sharesoutstanding |  |  |                                        |   | 10,635,507 |                                      |  |  |      |   | 10,635,507 |      |  |  |  |   | 10,635,507 |   |  |  |  |   | 10,635,507 |   |
|                                                            |

Theaccompanying notes are an integral part of these condensed consolidatedfinancial statements.

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Table of Contents

CHIEF CONSOLIDATED MINING COMPANY ANDSUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005(UNAUDITED)

|                                                                           |  |  |                                       |   |            |      |  |  |  |   |            |   |
|---------------------------------------------------------------------------|--|--|---------------------------------------|---|------------|------|--|--|--|---|------------|---|
|                                                                      |  |  | Forthe Nine MonthsEnded September 30, |
|                                                                      |  |  | 2006                                  |   |            | 2005 |
| CashFlows from OperatingActivities:                                       |  |  |                                       |   |       |      |  |  |  |   |       |   |
| Netloss                                                                   |  |  |                                       | $ | (1,813,804 | )    |  |  |  | $ | (2,147,202 | ) |
| Adjustmentsto reconcile net loss to net cash used in operatingactivities: |  |  |                                       |   |       |      |  |  |  |   |       |   |
| Accretion ofreclamation and EPA settlementobligations                     |  |  |                                       |   | 1,843,673  |      |  |  |  |   | 1,745,251  |   |
| Depreciationanddepletion                                                  |  |  |                                       |   | —    |      |  |  |  |   | 126,590    |   |
| Changesin operating assets andliabilities:                                |  |  |                                       |   |       |      |  |  |  |   |       |   |
| Otherassets                                                               |  |  |                                       |   | (8,740     | )    |  |  |  |   | —    |   |
| Reclamationfunds ondeposit                                                |  |  |                                       |   | (2,214     | )    |  |  |  |   | —    |   |
| Relatedpartypayable                                                       |  |  |                                       |   | (45,000    | )    |  |  |  |   | 159,383    |   |
| Accountspayable                                                           |  |  |                                       |   | (300,332   | )    |  |  |  |   | 43,403     |   |
| Interestpayable                                                           |  |  |                                       |   | 5,609      |      |  |  |  |   | 30,066     |   |
| Prepaidexpenses                                                           |  |  |                                       |   | (101,685   | )    |  |  |  |   | —    |   |
| Accruedconvertible common stockdividends                                  |  |  |                                       |   | 135,585    |      |  |  |  |   | 85,044     |   |
| Directorindemnification                                                   |  |  |                                       |   | (240,000   | )    |  |  |  |   | —    |   |
| NetCash Used in OperatingActivities                                       |  |  |                                       |   | (526,908   | )    |  |  |  |   | 42,536     |   |
| CashFlows from InvestingActivities:                                       |  |  |                                       |   |       |      |  |  |  |   |       |   |
| Proceedsfrom the sale ofequipment                                         |  |  |                                       |   | —    |      |  |  |  |   | —    |   |
| Purchasesof property andequipment                                         |  |  |                                       |   | —    |      |  |  |  |   | —    |   |
| NetCash Used in InvestingActivities                                       |  |  |                                       |   | —    |      |  |  |  |   | —    |   |
| CashFlows from FinancingActivities:                                       |  |  |                                       |   |       |      |  |  |  |   |       |   |
| Principalpayments on notespayable                                         |  |  |                                       |   | (74,179    | )    |  |  |  |   | —    |   |
| NetCash Provided By FinancingActivities                                   |  |  |                                       |   | (74,179    | )    |  |  |  |   | —    |   |
| NetChange in Cash                                                         |  |  |                                       |   | (601,087   | )    |  |  |  |   | 42,536     |   |
| Cash atBeginning ofPeriod                                                 |  |  |                                       |   | 2,500,010  |      |  |  |  |   | 1,554      |   |
| Cashat End ofPeriod                                                       |  |  |                                       | $ | 1,898,923  |      |  |  |  | $ | 44,090     |   |
| SupplementalCash FlowInformation                                          |  |  |                                       |   |       |      |  |  |  |   |       |   |
| Cashpaid forinterest                                                      |  |  |                                       | $ | 22,669     |      |  |  |  | $ | —    |   |
|                                                                           |

Theaccompanying notes are an integral part of these condensed consolidatedfinancial statements.

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Table of Contents

CHIEF CONSOLIDATEDMINING COMPANY AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

NOTE 1 —CONDENSED FINANCIAL STATEMENTS

Chief Consolidated Mining Company(‘‘Chief’’ or the‘‘Company’’) was incorporated in the stateof Arizona in 1909. Chief currently is the owner of or has vestedinterests in approximately 19,300 acres of patented mining property inthe Tintic Mining Districts in Utah County and Juab County, Utah. Chiefand its subsidiaries (collectively, the‘‘Company’’) operate as a mineral resourcecompany seeking to engage in the exploration and development of theirmining claims and properties.

The accompanying unauditedcondensed consolidated financial statements of the Company have beenprepared in accordance with accounting principles generally accepted inthe United States of America for interim financial information andpursuant to the rules and regulations of the Securities and ExchangeCommission. Accordingly, certain information and disclosures normallyincluded in financial statements prepared in accordance with accountingprinciples generally accepted in the United States of America have beencondensed or omitted pursuant to such rules and regulations. Thesefinancial statements should be read in conjunction with theCompany’s annual financial statements and the notes thereto forthe year ended December  31,  2005. In the opinion of theCompany’s management, the accompanying unaudited condensedconsolidated financial statements contain all adjustments (consistingof only normal recurring adjustments) necessary to fairly present theconsolidated financial position of Chief Consolidated Mining Companyand subsidiaries as of September  30,  2006, and theresults of their operations for the three and nine months endedSeptember  30,  2006 and 2005 and their cash flows for thenine months ended September  30,  2006 and 2005. Theresults of operations for the nine months ended September30,  2006, may not be indicative of the results that may beexpected for the year ending December  31,  2006 or for anyother period.

Business Condition – TheCompany’s financial statements are prepared using accountingprinciples generally accepted in the United States of Americaapplicable to a going concern that contemplates the realization ofassets and liquidation of liabilities in the normal course ofbusiness.

During 2002, the Company suspended mining andprocessing operations. As a result, the Company is not generating anymining revenue and has not had sufficient funding to make thesignificant safety improvements required in the Trixie Mine or tocontinue exploration efforts related to the Burgin Mine. As ofSeptember  30,  2006, the Company had $950,000 of land andmining claims and $250,000 of mining related buildings, machinery andequipment, which in aggregate, represent approximately 32% oftotal assets. The Company’s buildings, machinery and equipmentconsist principally of the Tintic Mill located at the Trixie mine. Therealization of the Company’s investment in land and mining claimsand mining related buildings, machinery and equipment is dependent uponvarious factors, including the outcome of: (i) the Company’ssuccess in exploration efforts to discover additional mineral resourcesand in proving the technical feasibility and commercial viability ofthe identified mineral resources, (ii) the Company’s ability toobtain necessary funding to continue exploration of the miningproperties and to finance operations while the Company pursues realestate development alternatives for portions of the Company’sland, (iii) the Company’s success in finding a joint venturepartner to provide capital funding for the Company’s continuedexploration of its mining properties, (iv) the Company’s abilityto profitably lease the Tintic Mill or its mining claims to outsideentities, and (v) the Company’s success in selling or developingcertain of its land surface rights to fund its continued mining andexploration activities.

During 2002, the Environmental ProtectionAgency (EPA) completed a feasibility study and finalized its actions tobe taken in response to the release of waste materials at and aroundthe Eureka Mills Superfund Site located in Juab County, Utah. The EPAis seeking reimbursement from the Company in the amount of $60million for its portion of the liability based on the ownership and theconduct of mining operations on portions of the site. During 2005, theCompany reached a settlement agreement with the EPA regarding thejudgment, as discussed more fully in Note 5.

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CHIEF CONSOLIDATEDMINING COMPANY AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern. Theconsolidated financial statements do not include any adjustmentsrelating to the recoverability or classification of assets orliabilities that might be necessary should the Company not be able tocontinue as a going concern.

The Board of Directors is currentlypursuing efforts to obtain additional sources of financing to allow theCompany to proceed with its operations. The Company is alsoinvestigating selling portions of its land surface rights in order tocomply with the EPA Consent Decree.

NOTE 2 — SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES

Use of Estimates– The preparation of financial statements in conformity withaccounting principles generally accepted in the United States requiresmanagement to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the financial statements and thereported amounts of revenues and expenses during the reporting period.Actual results could differ from these estimates. The estimated amountof the reclamation and EPA settlement obligations are particularlysubject to change in the near term.

Impairment of Long-LivedAssets – The Company accounts for long-lived assets pursuantto SFAS  No. 144, Accounting for the Impairment of Long-LivedAssets and for Long-Lived Assets to be Disposed Of. The Companyevaluates its land and mineral properties, buildings, machinery andequipment and other long-lived assets for impairment at least quarterlyand assesses their recoverability based upon anticipated future cashflows. If changes in circumstances lead Company management to believethat any of its long-lived assets may be impaired, the carrying valueof long-lived assets are reduced by the estimated excess of thecarrying value over the fair value of the assets.

Basic andDiluted Loss Per Common Share – Basic loss per common shareexcludes dilution and is computed by dividing net loss applicable tocommon stockholders by the weighted-average number of common sharesoutstanding during the period. Diluted loss per common share reflectsthe potential dilution that could occur if stock options were exercisedor convertible common stock was converted into common stock. Thecomputation of diluted loss per common share does not assume exerciseor conversion of securities that would have an antidilutive effect onnet loss per common share.

At September  30,  2006and 2005, there were outstanding options to purchase 245,000 and245,000 shares of common stock, respectively, which were excluded fromthe computation of diluted loss per common share. In addition, for theperiods ended September  30,  2006 and 2005, there were4,060,000  shares of convertible common stock outstanding thatwere excluded from the computations of diluted loss per common share.These potential common shares were excluded because they wereantidilutive and would have decreased diluted loss per commonshare.

Recent Accounting Pronouncements – InFebruary  2006, the FASB issuedSFAS No. 155, Accounting for Certain Hybrid FinancialInstruments – an amendment of FASB Statements No. 133 and140 (SFAS 155). SFAS 155 amendsSFAS No. 133, Accounting for Derivative Instrumentsand Hedging Activities and SFAS No. 140,Accounting for Transfers and Servicing of Financial Assets andExtinguishments of Liabilities, and related interpretations.SFAS 155 permits fair value remeasurement for any hybridfinancial instrument that contains an embedded derivative thatotherwise would require bifurcation and clarifies which interest-onlystrips and principal-only strips are not subject to recognition asliabilities. SFAS 155 eliminates the prohibition on a qualifyingspecial-purpose entity from holding a derivative financial instrumentthat pertains to a beneficial interest other than another derivativefinancial instrument. SFAS 155 is effective for the Company forall financial instruments acquired or issued beginning July1,  2007. The impact of adoption of this statement on theCompany’s consolidated financial statements, if any, has not yetbeen determined.

In March  2006, the FASB issued SFAS No.156, Accounting for Servicing of Financial Assets – anamendment of FASB Statement No. 140 (SFAS 140). SFAS 156 amendsSFAS 140 requires an entity to 

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CHIEF CONSOLIDATEDMINING COMPANY AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

recognize a servicing asset or servicingliability each time it undertakes an obligation to service a financialasset. It also requires all separately recognized servicing assets andservicing liabilities to be initially measured at fair value, ifpracticable. SFAS 156 permits an entity to use either the amortizationmethod or the fair value measurement method for each class ofseparately recognized servicing assets and servicing liabilities. SFAS156 is effective for the Company as of January  1,  2007.The impact of adoption of this statement on the Company’sconsolidated financial statements, if any, has not yet beendetermined.

In June  2006, the FASB issued FIN No. 48,Accounting for Uncertainty in Income Taxes-an interpretation of FASBStatement No 109 (FIN 48). FIN 48 prescribes a recognitionthreshold and measurement attribute for the financial statementrecognition and measurement of a tax position taken or expected to betaken in a tax return. FIN 48 also provides guidance on derecognitionclassification, interest and penalties, accounting in interim periods,disclosure, and transition. The interpretation is effective for thefiscal years beginning after December  15,  2006. Theimpact of adoption of this interpretation on the Company’sconsolidated financial statements, if any, has not yet beendetermined.

In September  2006, the Securities and ExchangeCommission issued Staff Accounting Bulletin No.108 (SAB 108). SAB 108considers the effects of prior year misstatements when quantifyingmisstatements in current year financial statements. It is effective forfiscal years ending after November  15,  2006. Accordingly,the Company will adopt SAB 108 during the fourth quarter of 2006. TheCompany does not believe the adoption of SAB 108 will have a materialimpact on its consolidated financial statements.

InSeptember  2006, the FASB issued SFAS No. 157, Fair ValueMeasurements (SFAS 157). SFAS  157 defines fair value,establishes a framework for measuring fair value, and expandsdisclosures about fair value measurements. SFAS 157 will beapplied prospectively and is effective for fiscal years beginning afterNovember  15,  2007, and interim periods within thosefiscal years. SFAS 157 is not expected to have a material impacton the Company’s consolidated financial statements.

InSeptember  2006, the FASB issued SFAS No. 158,Employers’ Accounting for Defined    Benefit Pension andOther Postretirement Benefit Plans, an amendment of FASB Statements No.87, 88, and 132(R) (SFAS 158). SFAS 158 requires companies torecognize the overfunded or underfunded status of a defined benefitpostretirement plan as an asset or liability in its statement offinancial position and to recognize changes in that funded statusthrough comprehensive income. This statement also requires themeasurement date for plan assets and liabilities to coincide with thesponsor’s year end. The standard provides two transitionalternatives related to the change in measurement date provisions. Therecognition of an asset and liability related to the funded statusprovision is effective for fiscal years ending after December15,  2006. Accordingly, the Company will adopt SFAS 158 duringthe fourth quarter of 2006. The change in measurement date provisionsis effective for fiscal years ending after December  15,2008. The Company is currently evaluating the impact of SFAS 158 on theconsolidated financial statements.

NOTE 3 —RELATED PARTY TRANSACTIONS

The Company has amounts payable toDimeling, Schreiber & Park in the amount of $264,481, atSeptember  30,  2006 and December  31,  2005and owes Dimeling, Schreiber & Park $2,500,000 at September30,  2006 and December  31,  2005 under the terms ofconvertible debentures payable. A  representative of Dimeling,Schreiber & Park is management of the Company. In addition, theCompany has accrued payroll liabilities in the amount of $54,996 and$99,996 to former employees as of September  30,  2006 andDecember  31,  2005.

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CHIEF CONSOLIDATEDMINING COMPANY AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

NOTE 4 — NOTES PAYABLE

Notespayable are summarized as follows at September  30,  2006and December  31,2005:

|                                                                                                   |  |  |      |   |         |      |  |  |  |   |         |  |
|---------------------------------------------------------------------------------------------------|--|--|------|---|---------|------|--|--|--|---|---------|--|
|                                                                                              |  |  | 2006 |   |         | 2005 |
| $300,000unsecured note payable to an individual, 8% interest, maturedFebruary  9, 2003, indefault |  |  |      | $ | 286,835 |      |  |  |  | $ | 286,835 |  |
| $63,000unsecured note payable to a company, 12% interest, maturedOctober  15, 2002, indefault     |  |  |      |   | 63,000  |      |  |  |  |   | 63,000  |  |
| $104,627 notepayable to a company, 8% interest secured by equipment, maturedDecember  1,2002      |  |  |      |   | 0       |      |  |  |  |   | 74,179  |  |
| Totalnotespayable                                                                                 |  |  |      | $ | 349,835 |      |  |  |  | $ | 424,014 |  |
|                                                                                                   |

NOTE5 — ASSET RETIREMENT OBLIGATIONS

Reclamation ofMines – Prior to 1993, the Company or companies that weresubsequently acquired by the Company leased certain of its miningproperties to other companies for operation, exploration anddevelopment. Under the terms of the leases, these other companies wereobligated to comply with all federal, state and local environmentallaws and regulations affecting the mining industry. Tintic assumed areclamation obligation from the previous operator of the Burgin Mine.In addition, the Company also holds a small mining permit andreclamation obligation in connection with its Chief Goldproperties.

At September  30,  2006, the Company has$488,300 of cash held in escrow in the form of reclamation bonds withthe State of Utah to assure that the Company will settle thereclamation obligations. All interest income on the bonds is currentlybeing garnished by the Internal Revenue Service to cover certain taxes,penalties, and interest included in accrued liabilities on theCompany’s balance sheet.

Environmental ProtectionAgency Settlement – During 2001, the U.S. EnvironmentalProtection Agency (‘‘EPA’’) proposed toplace what the agency has titled the ‘‘Eureka MillsSuperfund Site’’ (the‘‘Site’’) on the National Priorities List,as authorized under the Comprehensive Environmental Response,Compensation and Liability Act of 1980, as amended(‘‘CERCLA’’). According to the EPA, samplesindicate that the soil in the Town of Eureka, Utah is contaminated withlead and, to a lesser extent, arsenic. The Site consists ofapproximately 150 acres in the town of Eureka, Utah.

OnOctober  18,  2002 the EPA finalized its actions to betaken in response to the release of waste materials at and around theSite. The EPA is seeking reimbursement from the Company for its portionof the liability based on the ownership and the conduct of miningoperations on portions of the Site. On February  9,  2005,the Company confessed to a judgment with the EPA in the amount of$60  million. The judgment will remain in effect until theCompany has complied with all the requirements of the related consentdecree. The following details the Company’s obligations underthe judgment:

|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.  | The Company agrees to use its bestefforts to satisfy the judgment by seeking indemnification or recoveryfrom insurance policies. After deducting recovery costs, 70% ofall proceeds from insurance policies shall be paid to the UnitedStates. Until all claims are exhausted, the Company must provide areport to the United States each year for five years listing insuranceclaims, the action the Company is taking to recover the amounts, andany recovery obtained. |

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CHIEF CONSOLIDATEDMINING COMPANY AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.  | The Company agrees to useits best efforts to sell its property, other than the property uponwhich the repository, open cells, response action structures, watersource, and borrow source are located. Upon the transfer of anyproperty, the Company shall pay the EPA 100% of net salesproceeds up to $350,000, and then 50% thereafter. If thetransfer is less than the tax assessed value of the property or exceedsa total of more than 1,000 acres, the EPA may require an independentappraisal and may object to the transfer based on the sale price. Ifany portion of the property is not sold by the fifth anniversary ofthis decree, the Company agrees to auction the property to the highestbidder, engaging a professional auctioneer. The Company cannot hold amortgage or other security interest from anypurchaser. |

|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.  | The Company agrees, for a five yearperiod from the date of the consent decree, to reimburse the UnitedStates 15% of its net income in excess of $2  millionduring any calendar year. The Company also agrees to pay the US15% of the net proceeds of the sale of Chief Consolidated MiningCompany or the sale of substantially all of its assets in excess of$2  million. The Company will be required to present auditedfinancial statements to the EPA. |

|          |                                                                                                                                                                                                                                                                                                                                                                       |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.  | The Companyagrees to allow the EPA sole use of borrowed material (top soil, filland base material) that is free from contaminants. The Company agreesto give uninterrupted and continuous access to the borrowed source 24hours a day, 365 days a year. The Company shall allow the EPA to useand improve the borrowed source as is necessary to fulfill itspurposes. |

|          |                                                                                                                                                                                                                                                                                                                       |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 5.  | The Company agrees to allow the EPA anirrevocable right to access, construct, operate, and close therepository and the property. The Company further grants the EPA theright to access, construct, and operate the two open cells on theproperty for the permanent disposal of waste material excavated fromthe site. |

|          |                                                                                                                                                                                                                                                                      |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 6.  | The Company agrees to allow the EPA toenter onto the property to construct and maintain such response actionstructures as are necessary to implement the response actions. The landwill have an easement for the EPA to inspect, maintain, and operate thestructure. |

|          |                                                                 |
|----------|-----------------------------------------------------------------|
| 7.  | The Company agrees to provide storagespace and water as needed. |

|          |                                                                                       |
|----------|---------------------------------------------------------------------------------------|
| 8.  | The Company agrees toallow additional access as needed for various purposes asneeded. |

In the event the Company completes all of its obligationsunder the consent decree, the EPA will file a Release of Notice ofFederal Lien in the office of the Juab County Recorder and the Companywill be completely relieved of the $60  million liability,resulting in a gain in such future period. To date, the Company hasfully complied with all terms of the agreement. The judgment amount of$60  million represents the future value of clean up costs whenthe terms of the consent decree are satisfied on February9,  2010.

A reconciliation of the asset retirementobligations is asfollows:

|                            |  |  |              |   |            |       |  |  |       |   |         |  |  |  |  |   |            |  |
|----------------------------|--|--|--------------|---|------------|-------|--|--|-------|---|---------|--|--|--|--|---|------------|--|
|                       |  |  | EPALiability |   |            | Other |  |  | Total |
| Balance,December  31,2005  |  |  |              | $ | 49,080,612 |       |  |  |       | $ | 488,300 |  |  |  |  | $ | 49,568,912 |  |
| Accretionexpense           |  |  |              |   | 1,832,687  |       |  |  |       |   | 10,986  |  |  |  |  |   | 1,843,673  |  |
| Balance,September  30,2006 |  |  |              | $ | 50,913,299 |       |  |  |       | $ | 499,286 |  |  |  |  | $ | 51,412,585 |  |
|                            |

NOTE6 — OTHER COMMITMENTS AND CONTINGENCIES

On May24,  2002, a suit was filed against the Company by a limitedliability company (‘‘the LLC’’) for$1,787,400 in damages, as well as punitive damages, that derive fromclaims by the LLC that the Company had committed to purchase certainwater rights that the LLC owned or was in process of obtaining with theintent to sell to the Company. The Company settled the liability for$25,000 during the year ended December  31,  2004. Theliability has not been paid and is included in accrued liabilities inthe accompanying balance sheet.

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CHIEF CONSOLIDATEDMINING COMPANY AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

During 2002, a former employee filed asuit for $43,425 for severance pay, which was settled and paid duringthe 2nd quarter of 2006.

During 2003, two formerdirectors filed a suit seeking indemnification for approximately$240,000 in legal fees resulting from a lawsuit brought by a formerdirector. This suit was settled and paid in the 2nd quarterof 2006.

Other suits have been filed for an additional $106,488.The Company has accrued these amounts in full as of September30,  2006 and December  31,  2005.

The Companyhas other matters of litigation related to undisputed accounts payable.Outstanding settlement judgments have been reached totaling $194,039and $194,039 as of September  30,  2006 and December31,  2005 respectively.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, theRegistrant caused this report to be signed on its behalf by theundersigned, thereunto dulyauthorized.

|  | CHIEF CONSOLIDATED MININGCOMPANY |
|--|----------------------------------|

|  | By:   /s/ RichardR.Schreiber                                                 |
|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | RichardR. SchreiberInterim President (Principal Executive OfficerandPrincipal Financial Officer) |
|--|--------------------------------------------------------------------------------------------------|

Dated: January23,  2007

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