UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period From  To
 Commission File Number: 001-01761
 CHIEF CONSOLIDATED MINING COMPANY
  ARIZONA
    
    87-0122295(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)
 
 
 o þ
 o o
  Large accelerated filer o
    
    Accelerated filero
    
    Non-accelerated filer   o(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
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PART I  FINANCIAL INFORMATION
 Item 1. Financial Statements.
 CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (UNAUDITED)
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCash
    
    $
    14,223
    
    
    $
    129,003Other current assets
    
    
    81,933
    
    
    
    15,471Total current assets
    
    
    96,156
    
    
    
    144,474Land and mining claims
    
    
    950,000
    
    
    
    950,000Buildings, machinery and equipment, net
    
    
    112,500
    
    
    
    150,000Reclamation funds on deposit
    
    
    488,300
    
    
    
    488,300Total assets
    
    $
    1,646,956
    
    
    
    1,732,774LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilitiesAccounts payable
    
    $
    663,333
    
    
    $
    654,277Related party payable
    
    
    505,627
    
    
    
    391,351Accrued interest payable
    
    
    
    
    
    
    408,219Accrued liabilities
    
    
    326,532
    
    
    
    110,286Korea Zinc purchase option obligation
    
    
    1,000,000
    
    
    
    Accrued convertible common stock dividends
    
    
    75,065
    
    
    
    862,109Total current liabilities
    
    
    2,570,557
    
    
    
    2,426,242Long-term liabilitiesConvertible debentures
    
    
    
    
    
    
    2,500,000Reclamation obligation
    
    
    529,691
    
    
    
    518,036EPA settlement obligation
    
    
    60,000,000
    
    
    
    60,000,000Total long-term liabilities
    
    
    60,529,691
    
    
    
    63,018,036Minority interest in consolidated subsidiaries
    
    
    24,727
    
    
    
    24,727Shareholders deficitPreferred stock, $0.50 par value; 1,500,000 shares authorized;
10,899 shares outstanding; liquidation preference of $5,450
    
    
    5,450
    
    
    
    5,450Convertible common stock, $0.01 par value; 30,000,000 shares
authorized; 6,477,242 and 4,060,000 shares outstanding,
respectively
    
    
    64,772
    
    
    
    40,600Common stock, $0.01 par value; 100,000,000 shares authorized;
23,734,011 and 10,635,507 shares outstanding, respectively
    
    
    237,340
    
    
    
    106,355Additional paid-in capital
    
    
    38,313,573
    
    
    
    34,292,748Accumulated deficit
    
    
    (100,099,154
    )
    
    
    (98,181,384
    )Total stockholders deficit
    
    
    (61,478,019
    )
    
    
    (63,736,231
    )Total liabilities and stockholders deficit
    
    $
    1,646,956
    
    
    $
    1,732,774
  F-1




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##### 



CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 For the Three Months Ended Sept 30,
    
    
    For the Nine Months Ended Sept 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Operating expensesGeneral and administrative
    
    
    250,909
    
    
    
    221,489
    
    
    
    697,583
    
    
    
    565,861Mining properties operating and
exploration costs
    
    
    23,804
    
    
    
    
    
    
    
    39,154
    
    
    
    Depreciation and depletion
    
    
    12,500
    
    
    
    12,500
    
    
    
    37,500
    
    
    
    37,500Accretion of reclamation obligation
    
    
    3,885
    
    
    
    3,772
    
    
    
    11,655
    
    
    
    11,316Total operating expenses
    
    
    291,098
    
    
    
    237,761
    
    
    
    785,892
    
    
    
    614,677Other income (expense)Impairment expense
    
    $
    (1,000,000
    )
    
    $
    
    
    
    $
    (1,000,000
    )
    
    $
    Interest Income
    
    
    66
    
    
    
    7,673
    
    
    
    211
    
    
    
    22,534Interest expense
    
    
    
    
    
    
    (50,411
    )
    
    
    (16,986
    )
    
    
    (149,589
    )Other income (expense)
    
    
    
    
    
    
    
    
    
    
    105
    
    
    
    (15,615
    )Total Other income (expense)
    
    
    (999,934
    )
    
    
    (42,738
    )
    
    
    (1,016,670
    )
    
    
    (142,670
    )Net loss
    
    
    (1,291,032
    )
    
    
    (280,499
    )
    
    
    (1,802,562
    )
    
    
    (757,347
    )Convertible common stock dividends
    
    
    (26,029
    )
    
    
    (35,427
    )
    
    
    (115,208
    )
    
    
    (128,719
    )Loss attributable to common stockholders
    
    $
    (1,317,061
    )
    
    $
    (315,926
    )
    
    $
    (1,917,770
    )
    
    $
    (886,066
    )Basic and diluted loss per common share
    
    $
    (0.06
    )
    
    $
    (0.03
    )
    
    $
    (0.09
    )
    
    $
    (0.08
    )Basic and diluted weighted-average
common shares outstanding
    
    
    23,734,011
    
    
    
    10,635,507
    
    
    
    22,082,597
    
    
    
    10,635,507
  F-2




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##### 



CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 For the Nine Months EndedSeptember 30,2008
    
    
    2007Cash Flows from Operating ActivitiesNet loss
    
    $
    (1,802,562
    )
    
    $
    (757,347
    )Adjustments to reconcile net loss to net cash used in
operating activitiesAccretion of reclamation obligation
    
    
    11,655
    
    
    
    11,316Depreciation and depletion
    
    
    37,500
    
    
    
    37,500Impairment expense
    
    
    1,000,000
    
    
    
    Changes in operating assets and liabilities:Other current assets
    
    
    (66,462
    )
    
    
    (128,107
    )Accounts payable
    
    
    24,094
    
    
    
    11,735Related party payable
    
    
    447,763
    
    
    
    11,046Accrued interest payable
    
    
    16,986
    
    
    
    149,589Accrued liabilities
    
    
    216,246
    
    
    
    Net Cash Used in Operating Activities
    
    
    (114,780
    )
    
    
    (664,268
    )Cash Flows from Financing Activities
    
    
    
    
    
    
    Net Cash Provided by Financing Activities
    
    
    
    
    
    
    Net Change in Cash
    
    
    (114,780
    )
    
    
    (664,268
    )Cash at Beginning of Period
    
    
    129,003
    
    
    
    939,578Cash at End of Period
    
    $
    14,223
    
    
    $
    275,310Supplemental Schedule of Noncash Investing and Financing ActivitiesCommon stock issued for services provided
    
    $
    348,487
    
    
    $
    Common stock issued on conversion of debenture
    
    
    2,500,000
    
    
    
    Common stock issued on conversion of debenture interest
    
    
    425,206
    
    
    
    Common stock issued in settlement of accrued
convertible dividends
    
    
    902,252
    
    
    
    Convertible common stock dividends accrued
    
    
    115,208
    
    
    
    128,719
  F-3




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 1  NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Accounting Basis 
 Use of Estimates
 Principles of Consolidation
 Business Conditions
 F-4




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 1  NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
      Land and Mining Claims
 F-5




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 Buildings, Machinery and Equipment
 Impairment of Long-Lived Assets Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of
 Reclamation Costs Obligation
 Income Taxes Accounting for Income
Taxes
 Fair Value of Financial Instruments
 EPA settlement obligation Environmental Remediation Liabilities Accounting for Contingencies
 Basic and Diluted Loss Per Common Share
 F-6




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
   Stock-Based Employee Compensation Share-Based Payment
 Recent accounting pronouncements  New Accounting Policies Fair Value Measurement
 The Fair Value Option for Financial Assets and
Financial Liabilities, including an amendment of FASB Statement No. 115
 F-7




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 Accounting for
Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
 Recent accounting pronouncements  Business Combinations
 Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133
 Determination of the Useful
Life of Intangible Assets Goodwill and Other Intangible Assets Business Combinations
 F-8




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants
 NOTE 2  INVESTMENTS IN SUBSIDIARIES
 Tintic Utah Metals Joint Venture
     Central Standard Consolidated Mines .
 F-9




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 3  CAPITALIZATION
  Convertible Common Stock
    Common stock
     F-10




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 4  RELATED PARTY TRANSACTIONS
   NOTE 5  CONVERTIBLE DEBENTURES
  NOTE 6  ASSET RETIREMENT OBLIGATIONS
 Reclamation of Mines
   EPA Liability
    
    
    Other
    
    
    TotalBalance, December 31, 2007
    
    $
    60,000,000
    
    
    $
    518,036
    
    
    $
    60,518,036Accretion expense
    
    
    
    
    
    
    11,655
    
    
    
    11,655Balance, September 30, 2008
    
    $
    60,000,000
    
    
    $
    529,691
    
    
    $
    60,529,691
 F-11




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 7  OTHER COMMITMENTS AND CONTINGENCIES
  Environmental Protection Agency Settlement
  1.
    
    The Company agrees to use its best efforts to satisfy the judgment by
seeking indemnification or recovery from insurance policies. After
deducting recovery costs, 70% of all proceeds from insurance policies
shall be paid to the United States. Until all claims are exhausted,
the Company must provide a report to the United States each year for
five years listing insurance claims, the action the Company is taking
to recover the amounts, and any recovery obtained.2.
    
    The Company agrees to use its best efforts to sell property comprising
approximately 6,000 acres, most of which is located north of Highway 6
in both Utah County and Juab County, Utah. Upon the transfer of any
such property, the Company shall pay the EPA 100% of net sales
proceeds up to $350,000, and then 50% thereafter. If the transfer is
less than the tax assessed value of the property or exceeds a total of
more than 1,000 acres, the EPA may require an independent appraisal
and may object to the transfer based on the sale price. If any portion
of such property is not sold by the fifth anniversary of this decree,
the Company agrees to auction the property to the highest bidder,
engaging a professional auctioneer. The Company cannot hold a mortgage
or other security interest from any purchaser.3.
    
    The Company agrees, for a five year period from the date of the
consent decree, to reimburse the United States 15% of its net income
in excess of $2 million during any calendar year. The Company also
agrees to pay the US 15% of the net proceeds of the sale of Chief
Consolidated Mining Company or the sale of substantially all of its
assets in excess of $2 million. The Company will be required to
present audited financial statements to the EPA.4.
    
    The Company agrees to allow the EPA sole use of borrowed material (top
soil, fill and base material) that is free from contaminants. The
Company agrees to give uninterrupted and continuous access to the
borrowed source 24 hours a day, 365 days a year. The Company shall
allow the EPA to use and improve the borrowed source as is necessary
to fulfill its purposes.
 F-12




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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 7  OTHER COMMITMENTS AND CONTINGENCIES (CONTINUED)
 5.
    
    The Company agrees to allow the EPA an irrevocable right to access,
construct, operate, and close the repository and the property. The
Company further grants the EPA the right to access, construct, and
operate the two open cells on the property for the permanent disposal
of waste material excavated from the site.6.
    
    The Company agrees to allow the EPA to enter onto the property to
construct and maintain such response action structures as are
necessary to implement the response actions. The land will have an
easement for the EPA to inspect, maintain, and operate the structure.7.
    
    The Company agrees to provide storage space and water as needed.8.
    
    The Company agrees to allow additional access as needed for various purposes as needed.
   NOTE 8  SUBSEQUENT EVENTS
    F-13




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Overview
  Trixie and Burgin Mines
   2




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Plan of Operation
     Changes in Control
  3




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Korea Zinc
  
    
    US$500,000 the later of three days following execution date of the agreement or after
regulatory approval;
    
    a further US$500,000 on or before the six month anniversary of the initial payment; and
  
    
    a further US$2,000,000 on or before the second anniversary of the initial payment.
   
    
    US$150,000 on or before November 23, 2008 (paid);
    
    a further US$350,000 on or before May 25, 2009;
    
    a further US$500,000 on or before November 23, 2009; and
    
    a further US$2,000,000 on or before November 23, 2010.
   Anglo American
 4




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Item 4T. Controls and Procedures.
 Managements Report On Internal Control Over Financial Reporting
    Remediation of Material Weakness
  Limitations on the Effectiveness of Internal Controls
  5




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##### 



Changes in Internal Control Over Financial Reporting
  6




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PART II  OTHER INFORMATION
 Item 1. Legal Proceedings.
 EPA Settlement
    
 
 
 
 
 7




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##### 




  Utah Labor Commission Administrative Proceeding .
 Royce Hackworth and Hackworth Drilling, Inc.
 Leonard Weitz
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  Item 3. Defaults Upon Senior Securities.
  8




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Item 4. Submission of Matters to a Vote of Security Holders.
  Item 5. Other Information.
  Item 6. Exhibits.
 EXHIBIT NO.
    
    DESCRIPTION3.1
    
    Articles of Incorporation, as amended [Incorporated by
reference to Exhibit A to Chiefs Schedule 14A Proxy Statement
filed on December 17, 1999 (SEC File No. 001-01761)].3.1A
    
    Amendment to Articles of Incorporation, as amended [Incorporated by
reference to Appendix A to Chiefs Schedule 14A Proxy Statement
filed on December 17, 2007].3.2
    
    Amended and Restated By-laws [Incorporated by reference to
Chiefs Form 10-KSB/A filed on September 5, 2007 (SEC File No.
001-01761)].10.1
    
    The Operating Agreement of Tintic Utah LLC dated as of July
17, 1996 by and among Chief, Akiko Resources (Utah) Inc. and
KZ Utah, Inc. [Incorporated by reference to Exhibit 10B,
marked as Exhibit A, to Chiefs Form 10-KSB filed on April
2, 1997 (SEC File No. 001-01761].10.2
    
    The First Amendment to Operating Agreement dated as of March
11, 1997 by and among Chief, Akiko Resources (Utah) Inc. and
KZ Utah, Inc. [Incorporated by reference to Exhibit 10B,
marked as Exhibit A, to Chiefs Form 10-KSB filed on April
2, 1997, (SEC File No. 001-01761].10.3
    
    Second Amendment to Operating Agreement dated as of November
10, 1997 by and between Chief and KZ Utah, Inc [Incorporated
by reference to Exhibit 10D, filed as Exhibit A, to Chiefs
Form 10-K report filed on March 30, 1998 (SEC File No.
001-01761)].10.4
    
    Third Amendment to Operating Agreement dated as of October 1,
1998 by and between Chief and KZ Utah, Inc [Incorporated by
reference to Exhibit 10D, filed as Exhibit A, to Chiefs Form
10-KSB report filed on April 15, 1999 (SEC File No.
001-01761)].10.5
    
    Fourth Amendment to Operating Agreement dated as of September
9, 1999 by and between Chief and KZ Utah, Inc [Incorporated by
reference to Exhibit 10E, filed as Exhibit A, to Chiefs Form
10-KSB report filed on March 30, 2000 (SEC File No.
001-01761)].10.6
    
    Fifth Amendment to the Operating Agreement dated as of January
1, 2001 [Incorporated by reference to Form 10-QSB filed on
August 14, 2001].10.7
    
    The Articles of Organization of Tintic Utah LLC is
incorporated by reference to an exhibit to Form 10-KSB filed
on April 2, 1997.10.8
    
    Stock Purchase Agreement dated as of November 19, 1999 between
Chief and Dimeling, Schreiber & Park [Incorporated by reference to
 9




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EXHIBIT NO.
    
    DESCRIPTIONChiefs Form 8-K report filed on November 30,
1999 (SEC File No. 001-01761)].10.9
    
    Registration Rights Agreement dated as of November 19, 1999
between Chief and Dimeling, Schreiber & Park [Incorporated by
reference to Chiefs Form 8-K report filed on November 30,
1999 (SEC File No. 001-01761)].10.10
    
    Form of Warrant issued to Dimeling, Schreiber & Park by Chief
dated as of November 19, 1999 [Incorporated by reference to
Chiefs Form 8-K report filed on November 30, 1999 (SEC File
No. 001-01761)].10.11
    
    EPA Consent Decree [Incorporated by reference to Chiefs Form
10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].10.12
    
    Debenture Purchase Agreement [Incorporated by reference to
Chiefs Form 10-KSB/A filed on September 5, 2007 (SEC File No.
001-01761)].10.13
    
    Escrow Agreement [Incorporated by reference to Chiefs Form
10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].10.14
    
    Chief Consolidated Mining Company Prospect and Retrospect,
dated as of November 2005 [Incorporated by reference to
Chiefs Form 10-KSB/A filed on September 5, 2007 (SEC File No.
001-01761)].10.15
    
    Genco Resources Ltd. Stock Purchase Agreement, dated as of
March 7, 2008 [Incorporated by reference to Chiefs Schedule
13D/A filed on March 13, 2008 (SEC File No. 005-36578)].10.16
    
    Form of 2008 Warrant
[Incorporated by reference to Chiefs Form 10-Q filed
on August 7, 2009].21.1
    
    Subsidiary List [Incorporated by reference to Chiefs Form
10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].31.1
    
    Certification by Chief Executive Officer pursuant to Rule
13a-14(a)/15d-14(a) (filed herewith).31.2
    
    Certification by Chief Financial Officer pursuant to Rule
13a-14(a)/15d-14(a) (filed herewith).32
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed herewith).
 10




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##### 



SIGNATURES
  CHIEF CONSOLIDATED MINING COMPANYDated:  July 30, 2009
    By:

/s/
Gordon BlanksteinGordon Blankstein, Chairman and
Chief ExecutiveOfficer (Principal Executive Officer)Dated:  July 30, 2009
    By:
    /s/     Jeff BatesJeff Bates (Chief Financial Officer) 11