UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form10-KSB

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|[X] | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2007

OR

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

For the Transition Period FromTo

Commission File Number: 001-01761

CHIEF CONSOLIDATED MINING COMPANY
(Name of small business issuer in its charter)

ARIZONA


87-0122295(State or Other Jurisdiction of
Incorporation or Organization)


(I.R.S. Employer Identification No.)


15988 SILVER PASS ROAD, P.O. BOX 51, EUREKA, UTAH 84628
(Address of Principal Executive Offices) (Zip Code)

(435) 433-6606
(Issuer’s telephone number, including area code)

Securities registered under section 12(b) of the Exchange Act:Common Stock, $0.50 Par Value

Securities registered under section 12(g) of the Exchange Act:N/A

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

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesNoX

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendments to this Form 10-KSB.[ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).[ ]

State issuer’s revenues for its most recent fiscal year: $0

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days: $                          .

State the number of shares outstanding of each of the issuer’s classes of common equity, as of December 31, 2007:

Common Stock $0.50 par value: 10,635,507

Convertible Common Stock $0.50 par value: 4,060,000

Transitional Small Business Disclosure Format:

YESNOX

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PART I

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|Item 1. | Description of Business.

Chief Consolidated Mining Company was organized as a corporation under the laws of Arizona in 1909. Our mining and executive office is located in Eureka, Juab County, Utah. Our principal subsidiaries, or corporations which we control, are Tintic Utah Metals, LLC, a Colorado limited liability company and Chief Gold Mines, Inc., a Delaware corporation. In our own name, through these subsidiary companies and other subsidiaries, we own interests in mining properties, including the Burgin Mine and the Trixie Mine. Neither mine is currently in production but are subject to development efforts as further described below. We own a 75% membership interest in Tintic Utah. Chief Gold Mines is our wholly-owned subsidiary.

We own or control approximately 16,000 acres of patented mining land in our own name and through our subsidiaries. Of these 16,000 acres, approximately 6,000 acres are subject to being sold, as discussed below, pursuant to a Consent Decree approved by the United States District Court for the District of Utah in January 2005 on behalf of the Environmental Protection Agency. These 6,000 acres are generally similar to the 6,000 acres that we considered selling to developers in 2000-2002 for residential and commercial purposes. The 6,000 acres, however, are still classified as mining land even though the land has not been mined to date.

In 2005, we commissioned a study on the further development and exploitation of our mining claims in the Tintic and East Tintic Mining Districts. The engineers who completed the study concluded that significant opportunities may exist and recommended a program of development to increase the value and enhance the prospects of viably operating four projects:

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| | • | Advancing the Burgin extension deposit through to a feasibility study;

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| | • | Further development of the concept to sell potable water from a desalination plant fed by pumped water from the Burgin Mine;

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| | • | Investigation of the economic possibilities of producing and selling halloysite (and other) clays from the Zuma and other areas; and

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| | • | Continued investigation and development of other exploration targets in the claim block and adjacent areas.

Background

Tintic Utah.

Tintic Utah was organized in 1996 under the Colorado Limited Liability Company Act as a joint venture for the development of properties that we contributed to Tintic Utah. At that time, we entered into an operating agreement with KZ Utah, Inc., a subsidiary of Korea Zinc Co. Ltd. and Akiko Gold Resources Ltd. to form Tintic Utah. The operating agreement governs the management and operations of the properties owned by Tintic Utah and the rights and obligations of the members of Tintic Utah to each other. Pursuant to the terms of the operating agreement, we transferred the mining rights to approximately 8,500 acres of our patented mining property in the East Tintic Mining District of Utah, including the Burgin Mine, to Tintic Utah in exchange for a 50% membership interest. Korea Zinc contributed $3,000,000 to Tintic Utah for a 25% membership interest. The funds from Korea Zinc were used by Tintic Utah for rehabilitation work, reserve confirmation and to produce information in connection with a potential feasibility study on the Burgin Mine. As a result of its failure to contribute the required capital to Tintic Utah, however, Akiko forfeited any rights of ownership in the joint venture and we succeeded to their 25% membership interest, increasing our ownership percentage of Tintic Utah to 75%.

Burgin Mine.

The Burgin Mine, which is located in the East Tintic Mining District of Utah, is owned by Tintic Utah. It is not currently in production. We cannot proceed with production at the mine unless we

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can dewater the mine and raise capital for use in connection with restarting mining operations. We have applied for permission, as described further below, to appropriate water from the Burgin Mine and this application is currently pending before the Utah State Engineer. If the Utah State Engineer approves our application, we may then begin negotiations with various potential partners with the intention of finding a method to finance the construction of a water treatment facility. The water treatment facility would be used as the means for disposing 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 in negotiations regarding the terms of an agreement with the main objectors. The Utah State Engineer will issue a decision on the application and we would have the right to appeal any adverse decision to a court. We are unable to predict whether an agreement with the objectors will be signed or when the Utah State Engineer will render his decision. Even if the Utah State Engineer approves our application and we reach an agreement with the objectors, we may not have funds to proceed, and even if we do have funds, we may not use such funds to proceed at the Burgin Mine. If we are not successful in obtaining water rights, we believe there may be alternative methods to successfully dewater the mine.

Application for Appropriation of Burgin Mine Water.

In 2000, a public hearing was held before the Utah State Engineer on our application for the appropriation of the saline waters located below the 1050 foot level of the Burgin Mine. At the hearing, several objectors to the application argued that the application should be denied on the grounds that the removal of the water from the Burgin Mine would interfere with their water rights in the Utah Lake. We presented expert testimony at the hearing to demonstrate that the Burgin geothermal system and the Utah Lake geothermal system are not connected and that removal of water from the Burgin Mine would have no effect upon Utah Lake. We have been negotiating with the objectors, but cannot predict when and how the Utah State Engineer will decide the application or whether we will reach an agreement with the objectors. Even if our application is approved, we may not be able to proceed with production at the Burgin Mine.

If the water appropriation is not approved and we choose to go forward with production at the Burgin Mine, we believe there may be alternative methods to dewater the Burgin Mine. The Utah Division of Water Quality is holding an application previously filed by us for the underground injection of Burgin Mine water in abeyance until the water appropriation application is decided by the Utah State Engineer. Alternately, we may also be able to file for a temporary diversion to dewater the Burgin Mine.

If we decide to proceed with our mining business and we are able to resolve the dewatering process, we would then start a final feasibility study. The feasibility study would define the mining methods to be employed, including among other things, pre-engineering design for pumping, defining the structural steel and cement requirements, determining the locations where deep wells will be drilled and the overall evaluation of the Burgin Mine’s main ore body.

Korea Zinc Option.

We previously held options to purchase Korea Zinc’s membership interest in Tintic Utah, and that option expired. Pursuant to the last option amendment to the operating agreement, we held an additional option to purchase Korea Zinc’s 25% membership interest for $3,000,000. That option expired on December 31, 2002. Since that option expired, the management of Tintic Utah is controlled by us and Korea Zinc through a management committee. Each member has a voting representative on the committee.

Voting is in proportion to each member’s respective membership percentage interest. As such, we will be able to determine the decisions of the management committee because we hold a majority of the percentage interests. A majority vote is required to approve a program and budget that describes the exploration, development, mining and other operational activities of Tintic Utah. The approval of a production program and budget that describes the development, rehabilitation and construction to bring the Burgin Mine into production would require the affirmative vote of us and Korea Zinc. We have recently been advised by Korea Zinc that they do not intend to contribute cash towards any potential restart of Tintic.

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Chief Gold Mines.

Chief Gold Mines was formed to enter into a transaction with South Standard Mining Company and to hold certain of our mining property in the East Tintic District of Utah. As a result of the merger in 1996 of South Standard Mining Company into our wholly-owned subsidiary, Chief Gold Mines, Chief Gold Mines owns 2,200 acres of patented mining properties located in the East Tintic District of Utah, including the Trixie Mine.

Trixie Mine.

The Trixie Mine is located on property owned by our wholly-owned subsidiary, Chief Gold Mines, and is 1.5 miles from Tintic Utah’s concentrating mill. Our subsidiary, Tintic Utah last processed gold and silver ores produced from the Trixie Mine at Tintic Utah’s concentrating mill during early 2002. Due to safety conditions at the Trixie Mine, we are not operating the mine and do not presently plan to resume mining operations at the Trixie Mine, although we may be interested in various other options including, joint ventures or leasing or selling the Trixie.

EPA Settlement

During 2001, the EPA placed Eureka Mills Superfund Site on the National Priorities List, as authorized under the Comprehensive Environmental Response, Compensation and Liability Act of 1980. According to the EPA, samples indicate that, approximately 150 acres of soil in the Town of Eureka were contaminated with lead and, to a lesser extent, arsenic.

In 2002, the EPA finalized its actions to be taken in response to the release of waste materials at and around the site. The EPA is seeking reimbursement from Chief for its portion of the liability based on the ownership and the conduct of mining operations on portions of the site.

In February 2005, Chief agreed to a judgment with the EPA in the amount of $60 million. The judgment will remain in effect until we have complied with all the requirements of the Consent Decree. The following outlines our obligations under the Consent Decree:

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| | • | We agreed to use our 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 will be paid to the United States. Until all claims are exhausted, we must provide an annual report for five years listing insurance claims, the action taken to recover the amounts, and any recovery obtained.

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| | • | We agreed to use our best efforts to sell property, other than property upon which the repository, open cells, response action structures, water source, and borrow source are located. Upon the transfer of any property, we will 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 the property is not sold by the fifth anniversary of this decree, we agreed to auction the property to the highest bidder, engaging a professional auctioneer, but we cannot hold a mortgage or other security interest from any purchaser.

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| | • | We agreed for a five year period from the date of the Consent Decree to reimburse the United States 15% of our net income in excess of $2 million during any calendar year. We also agreed to pay the U.S. 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. We are required to present audited financial statements to the EPA.

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| | • | We agreed to allow the EPA sole use of borrowed material (top soil, fill and base material) that is free from contaminants, and to give uninterrupted and continuous access to the borrowed source 24 hours a day, 365 days a year.

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| | • | We agreed to allow the EPA an irrevocable right to access, construct, operate, and close the repository and the property. We also granted 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.

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| | • | We agreed 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. We also agreed to provide storage space and water as needed.

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In the event that we complete all of our obligations under the Consent Decree, the EPA will file a Release of Notice of Federal Lien in the Office of the Juab County Recorder and we will be completely relieved of the $60 million liability, resulting in a gain in such future period. As of the current date, we continue to have obligations under the consent decree and are in compliance with those terms. The judgment amount of $60 million represents the future value of clean up costs when the terms of the Consent Decree are satisfied on February 9, 2010.

Employees

As a result of the suspension of our mining operations, we were forced to lay-off all of our employees in 2002. We currently have no employees.

Recent Developments

Special Meeting of Stockholders

On December 17, 2007, Chief filed a definitive proxy statement, announcing a Special Meeting of Stockholders, with the Securities and Exchange Commission (the ‘‘SEC’’). The Special Meeting of Stockholders was held on February 1, 2008. All proposals were approved by affirmative majority vote of shares of Preferred Stock, Common Stock and Convertible Common Stock, voting as a single class. The proposals were:

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| | • | The election of Richard R. Schreiber, Steven G. Park, and Peter D. Schreiber as Directors of Chief;

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| | • | Amendment of Chief’s Articles of Incorporation:

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| | • | To increase the amount of authorized Common Stock to 100,000,000 shares,

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| | • | To reset the par value of the Common Stock and Convertible Common Stock from $0.50 par value per share to $0.01 par value per share,

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| | • | To set the size of the Board of Directors at a range of one to seven members,

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| | • | To authorize the election of directors at a time prescribed by the Board of Directors, and

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| | • | To remove the requirement that only stockholders may act as directors;

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| | • | The approval and ratification of the prior sale of convertible debentures to the Dimeling, Schreiber and Park Reorganization Fund II, LP; and

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| | • | The approval and ratification of a non-qualified stock option to one of Chief’s long-time mining consultants.

Genco Resources Ltd. Stock Purchase Agreement

On March 7, 2008, Dimeling, Schreiber & Park Reorganization Fund II, L.P. Chief’s controlling stockholder, entered into an agreement for the purchase of all of its shares of Common Stock with Genco Resources Ltd., a British Columbia corporation (‘‘Genco’’). Pursuant to that agreement, Dimeling, Schreiber & Park Reorganization Fund II, LP, agreed to sell and Genco agreed to purchase 6,477,241 shares of Chief’s Convertible Common Stock and 13,034,769 shares of its Common Stock from Dimeling, Schreiber & Park Reorganization Fund II, LP, representing all of the shares of Convertible Common Stock and Common Stock owned by Dimeling, Schreiber & Park Reorganization Fund II, LP. Upon the closing of the stock purchase agreement on or about March 12, 2008, a change in control of Chief occurred. The shares acquired by Genco represent 64.7% of Chief’s issued and outstanding capital stock. Genco agreed to pay $4,878,002.50 for the shares. Genco used its working capital to purchase the shares.

The parties have the following understandings upon the execution of the stock purchase agreement: After the Closing Date, Richard R. Schreiber and Steven G. Park will remain as directors of Chief as long as Genco requests and they desire to continue as directors. As of March 12, 2008, Peter D. Schreiber resigned as a director, and Genco appointed Robert C. Gardner to fill that seat.

Chief is not a party to the Purchase Agreement.

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|Item 2. | Description of Property.

We are the direct owner of, or have a membership or stock ownership interest in, approximately 16,000 acres of patented mining property in the Tintic and East Tintic Mining Districts, located in Juab and Utah Counties of Utah. Title to the 16,000 acres of patented mining ground is vested in us, as the owner of the land. We are an exploration stage company. There is no assurance that a commercially viable mineral deposit exists on any of our properties. Further exploration will be required before a final evaluation may be made as to economic and legal feasibility of a development program.

Description of Land Holdings of our Subsidiaries

Rights Held By Tintic Utah.

The rights to approximately 8,500 acres of patented ground located in the East Tintic Mining District of Utah are held by Tintic Utah. Pursuant to the terms of Tintic Utah’s operating agreement, we transferred the mining rights of approximately 11,000 acres of our patented ground and 200 acres of our unpatented mining claims to Tintic Utah.

Under the terms of Tintic Utah’s operating agreement, ownership of approximately 2,500 acres that were not involved in Tintic Utah’s exploration and development programs reverted back to us, leaving Tintic Utah with 8,500 acres of patented mining property.

The Burgin Mine is included in the property that is held by Tintic Utah. The Burgin Mine had previously been leased by us as part of a Unit Lease, together with properties of other landowners, to Kennecott Corporation. After the Burgin Mine was removed from the Unit Lease in 1978, we leased the Burgin Mine to the Sunshine Mining Company in 1980. When Sunshine became the lessee, it gained the use of the mining shafts and other capital improvements previously made by Kennecott on the properties, including underground access by means of the Apex Number 2 Shaft.

The Apex Shaft, together with the connecting drifts and drill stations, had been rehabilitated by Sunshine at a cost of approximately $6 million. As a result of a successful lawsuit brought by us and South Standard against Sunshine relating to Sunshine’s leases with us and South Standard, the Burgin Mine was returned to us in 1992.

Tintic Utah also holds the rights to the concentrating mill (sometimes referred to as the concentrator). The concentrating mill was built by Kennecott when it was mining from the Burgin Mine under its lease. The concentrator, approximately 24,000 square feet in size, was built to process up to 1,200 tons of lead and zinc ore per day. Tintic Utah rehabilitated the concentrator over a several year period to include a precious metals (gold/silver) flow sheet. The total cost of the renovation was approximately $1,900,000. The concentrating mill processed gold and silver ores from the Trixie Mine during January, February and March 2002. The concentrates produced by the concentrating mill were brokered through H&H Metals, New York, New York, to Penoles Torreon Smelter, Penoles, Mexico.

Property Owned By Chief Gold Mines.

Approximately 2,200 acres of patented mining properties located in the East Tintic Mining District of Utah are owned by Chief Gold Mines. Chief Gold Mines acquired the property as the result of a merger of South Standard Mining Company into Chief Gold Mines in 1996.

The Trixie Mine is located on this property that was acquired by Chief Gold Mines in 1996 upon its merger with South Standard. South Standard was one of the landowners who joined in a Unit Lease to lease various properties to Kennecott. The Trixie Mine property was included in the land contributed by South Standard to the Unit Lease. Kennecott mined from the Trixie Mine, producing gold and silver that were by-products from a flux material that Kennecott used in connection with refining its copper ore from Kennecott’s Bingham Canyon mining operation in Utah. In 1983, Kennecott sold its interest in the Unit Lease to Sunshine, who operated the Trixie Mine for approximately nine years, producing similar ores for use as flux material. The Trixie Mine was received back by South Standard in 1992. South Standard continued shipping dump materials as flux from the Trixie dump for several years after 1992, but it did not mine the Trixie Mine.

We began mining ore from the Trixie Mine in 2001, and began processing ore at the concentrating mill in January 2002. In March 2002, we encountered unstable mining conditions in the Trixie Mine and

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suspended mining and processing operations. As a result of the suspended mining and processing operations, we are not generating any revenues and we do not have sufficient funding to make the significant safety improvements required in the Trixie Mine or to continue exploration efforts related to the Trixie Mine.

Central Standard Consolidated Mines.

We currently own approximately 23% of the outstanding capital stock of Central Standard Consolidated Mines. Central Standard’s mining property consists of approximately 320 acres located in the north-central portion of the East Tintic Mining District. This property is surrounded by property owned by Tintic Utah. The approximately 320 acres owned by Central Standard is located about 2 miles from the Burgin Mine and the geologic characteristics of the Central Standard property are similar to those of the Trixie Mine.

In addition, in May 2006, some of the holdings of Tintic Utah Metals, LLC, Central Standard, and Eagle and Blue Bell Mining Co., our subsidiaries, were sold at tax sale. We have been reviewing our options to recover these properties. We redeemed the Tintic and Eagle and Blue Bell properties. The Central Standard properties were not redeemed but were included as part of a broader land-swap package worked out between Chief and an adjoining property owner.

Other Land Rights in Utah and Juab Counties

In addition to the land owned by our subsidiaries, and companies in which we have an interest, enumerated above, we own approximately 6,000 additional acres of mining land in the Tintic Mining District in Utah.

Exploration of Our Mining Properties

In 2005, we commissioned a group of consultants consisting of mining and geological engineers, as well as metallurgical and hydro-chemical engineers, to conduct a technical survey on our mining properties. This report is posted on our website at www.chiefmines.com and a summary of its contents is described below. The summary below does not contain all information contained in the 2005 report. The section below also describes the current status of development regarding our mining property.

Brief History of the Mining District

Ore was initially discovered in the Tintic District, where we own our property, at the end of the 19thcentury. Within a few years most of the major outcropping ore-bodies were being mined and there were 15 – 20 exploitation and exploration shafts. By the end of the 1871, three mining camps had been established – Eureka, Silver City and Diamond City. All future discoveries of major deposits in the East Tintic would be blind ore-bodies, based on surface alteration and found by underground geologic interpretation. In the early 1900s, miners became interested in the Tintic Standard area. The Tintic Standard Mine went on to become one of the major lead-silver mines in the world.

District production slowly increased through discovery of new mines and peaked between 1921 and 1930, when according to data from the U.S. Bureau of Mines (Morris and Mogensen (1978)) production for the decade from the combination of the Tintic and East Tintic Mining Districts reached 4,250,000 tons. From that peak, production decreased to a low of 662,000 tons between 1961 and 1970. Production from the Burgin Mine led to a second peak of 1,200,000 tons between 1971 and 1976. Total recovered metal from the district between 1869 and 1976 is as follows:

Tons


18MMGold


2.7MM ouncesSilver


270MM ouncesCopper


250MM lbs.Lead


2.2 billion lbs.Zinc


250MM lbs.


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Property Description and Location

Our property in the Tintic Mining District comprises approximately 16,000 acres of patented mining claims. This property is located in Juab and Utah Counties in the State of Utah (see figure No. 2 below). In order to retain title to the patented mining property, we must pay all applicable land taxes each year. Of these mining claims, approximately 8,500 acres of patented mining rights are held by Tintic Utah Metals LLC. The center of the property is approximately 39o – 57 ́ N latitude and 112o – 20 ́ W longitude. The area is dominated by the East Tintic Mountains, a north trending fault block range near the eastern margin of the Great Basin.




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The consultants have not yet determined the full extent and location of our mining claims. In the technical study, the consultants concentrated their efforts on the East Tintic District, the location of the Burgin Mine. The approximate claim boundary in that area is shown on Figure No. 3 below:




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Accessibility, Climate, Local Resources, Infrastructure and Physiography

The property that was examined during the 2005 technical study is approximately 60 miles southwest of Salt Lake City, Utah and is accessible by paved county roads. The property may be reached by traveling south on Interstate 15 from Provo to Santaquin, a distance of 15 miles, then west on Highway 6 (which bisects the area) for a distance of approximately 20 miles. A spur from the Denver Rio Grande Western Railway line also services the Burgin Mine, which is the location of the primary asset development target (see Figure No. 2 above).

The topography is dominated by north trending ridges with associated valleys with elevations ranging from 5,000 feet to 10,000 feet. Precipitation amounts to approximately 15 inches per year, equally proportioned between snow and rain. The average mid-winter temperature in January is 38oF with a recorded low of negative 18oF. During the mid-summer (August), the average temperature is 74oF and the maximum recorded high is 112oF. Vegetation in the claim area is typical of semi-arid mountainous terrain. Sage juniper, hedgehog cactus and prickly pear dominate on the hotter and drier south facing slopes. Aspen, Douglas fir and spruce trees cover the higher and north facing slopes.

The town of Eureka, altitude 6460 ft., population 760, lies adjacent to the claim boundaries. This town has serviced previous mining activities. There are also a few small towns located eastward on Highway 6 towards Santaquin, a town that is located at the junction of Highway 6 and Interstate 15 and has a population of approximately 5000.

Rock Formations on the Property

The East Tintic Range is a north trending fault block range near the eastern border of the Great Basin-range province. Its shape and orientation is controlled by northerly trending Basin-range normal faults, formed late in the geological history of the range.

The mountains are underlain by Precambrian and Paleozoic strata that underwent complex folding and faulting during the Sevier orogeny of the Cretaceous age. In Oligocene and Miocene times the deformed strata were intruded by stocks and buried by volcanic rocks.

Precambrian Formations.The Precambrian rocks exposed in the region are predominantly quartzite, argillite and brown dolomite. These rock formations total approximately 1650 ft in thickness.

Paleozoic Formations.The Paleozoic rocks unconformably overlie the Precambrian and are estimated to be approximately 12,000 feet in thickness. Morris and Mogensen, geologists who have surveyed the East Tintic area and published numerous studies, have commented that, in general, the Paleozoic rocks in the area consist of approximately 60% carbonate rocks, 30% quartzite and 10% shale. The base of the Paleozoic rock formations consists of 3,000 feet of Tintic Quartzite. Above the Tintic Quartzite, in what is known as the Ophir Formation, lies limey shales and limestones. Above the Ophir Formation, sandstones and shale are distinctly subordinate to carbonate rocks.

Most of the mineral production from the Paleozoic strata has come from five units as follows:

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| | • | The 370 ft thick Ophir Formation ($200 million).

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| | • | 450 ft thick Bluebell Dolomite ($135 million).

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| | • | 510 ft thick Ajax Dolomite ($60 million).

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| | • | 900 ft thick Deseret Formation ($47 million).

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| | • | Approximately 2,700 ft thick Tintic Quartzite ($35 million).

Developments during Oligocene and Miocene Times.Following the Paleozoic era, the strong mature relief was buried by ash, which has become known as the Packard Quartz Latite. The Packard Quartz Latite is overlain by a sequence of latite flows, tuffs and agglomerates which make up the Tintic Mountain Volcanic Group. These rocks formed a large composite volcanic cone that was intruded by many stocks, plugs and sills of latite and monzonite porphyry of the Sunrise Peak Stock. The youngest Oligocene eruptive rocks in the district belong to the Laguna Springs Volcanic Group. The volume of Laguna Springs tuffs and flows is small compared to earlier volcanic events. The termination of their eruption was marked

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by the intrusion of the Silver City stock, a monzonite porphyry. Associated with the Silver City stock are numerous monzonite porphyry plugs and dikes. During and after intrusion of the Silver City stock large volumes of hydrothermal fluids coursed through the faults and breccia zones of the region and produced extensive regions of hydrothermal alteration. These solutions changed in chemical character over time and ultimately caused dolomitization, propylitization, argillization, silicification, calcitization and sericitization of country rocks. During later stages of fluid evolution they deposited the ores for which the district is famous.

Developments During the Sevier Orogeny.During the Sevier orogeny, three or more superimposed thrust faults and many associated high angle faults were produced in the sedimentary pile. Paleozoic rocks were displaced as much as 100 miles eastward over younger Paleozoic and Mesozoic strata. During later stages of movement the strata and thrusts were crumpled into asymmetric anticlines and synclines with amplitudes of 3 – 4.5 miles. During the folding, small thrust faults developed on the limbs and crests of the structures. A series of late faults cut the intrusives, volcanics and sediments and can be traced northeasterly across the district. Locally, the fault planes are occupied by pebble dikes. These late faults show little displacement, typically on the order of a few tens of feet and in most instances dip steeply to the west. These faults, according to Morris and Mogensen, were the primary conduits for ore-depositing solutions and where they localize ore shoots the wall rocks exhibit concentric zones of hydrothermal alteration.

Mineralization and Deposits in the Tintic District

Description of Mined Ore-Bodies.The mined ore-bodies on our property occur as replacement deposits, replacement veins and fissure veins, as well as stockworks and disseminated deposits. Replacement deposits have been the source of more than 90% of the ore produced in the Main Tintic and East Tintic Districts. The replacement deposits range from small masses of less than a ton to masses containing more than 2,000,000 tons. They are irregular in form and commonly connected one to another by narrow stringers or veins of ore. Some deposits show a clear localization by structure, whilst others are seemingly unrelated to structure.

Replacement Deposits.Replacement deposits in the Tintic District occur in five linear zones known as ore-runs. Each ore-run is generally rod-shaped and less than 100 feet wide. Much, if not most of the volume of the ore-run, consists of un-replaced wall rock. These geometries are very difficult to quantify with exploration. Most of the mines in the Main Tintic District carried very small tonnages of proven reserves and relied on continuous underground exploration. Much of this work was completed by lessors. The ore-bodies in the East Tintic District, including the Burgin Mine, show a greater amount of structural control. The major replacement deposits are irregular masses localized by the intersections of northeast trending fissure zones and small thrust faults with porous, permeable and reactive units.

Replacement Veins.Replacement veins were mined most commonly in the pyrometasomatic rocks near the margin of the Silver City Stock, where ore replaced the fault gouge and breccia and locally replaced reactive beds.

Fissure Veins.Fissure veins occur in a myriad of short faults typically cutting massive siliceous rock units including quartzite, quartz monzonite, monzonite porphyry, latite, silicified tuff and agglomerate.

Types of Ores in the Tintic District.The ores in the district consist largely of galena and sphalerite with variable amounts of acanthite, argentite, tetrahedrite-tennantite, enargite-famatinite, proustite, hessite, calaverite, native gold and silver and a wide variety of uncommon copper, lead, silver and bismuth sulfosalt minerals. The above mentioned minerals occur in a gangue that is commonly siliceous, ranging in texture from coarsely crystalline quartz near the Silver City stock to fine grained jasperoid even flinty jasperoid in the far north and distal parts of the district. The gangue also includes abundant barite, calcite, dolomite and rhodochrosite. Deep oxidation above the water table reaches depths of 900-2,200 feet in the sediments and has produced a variety of sulfate, carbonate, silicates, arsenates, antimonates, manganates and other mineral varieties.

Mineral Zoning.Mineral zoning in the district is pronounced. Deposits in the south were most valuable for copper and gold. Lead and silver were more prevalent in the north and zinc was the most prevalent mineral in the northern-most deposits. At the Ball Park deposit to the north of the Burgin Mine,

10

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silver grades are most commonly less than an ounce and zinc is typically more abundant than lead. In the East Tintic District, metal zonation similar to that seen from south to north across the district can be seen from the deeper parts of some deposits to the shallower regions. The North Lily Mine produced gold and copper ores at depth and moderate grade lead and silver ores from the central and northern parts of the mine. Morris and Mogensen (1978) report the Tintic Standard Mine produced gold-copper ore at depth, silver-lead ore from the central part of the mine and zincian manganese ore from the upper northeastern levels of the mine. The Burgin Mine ores contain lead, zinc, only moderate quantities of silver and insignificant amounts of copper and gold. Rhodochrosite is abundant in Burgin ores in contrast to its relative rarity in other East Tintic ore-bodies.

Mineral Processing

The Burgin Mine and Concentrator were operated by Bear Creek Mining Co., a subsidiary of Kennecott Copper Corporation, from 1963 to July 1978. They produced separate lead and zinc concentrates using differential flotation from both sulphide and oxide ores. Ore was processed at rates which varied from 400 t.p.d. to 900 t.p.d. depending upon grindability of the mineralization and availability of the mine and plant. A conventional crushing circuit preceded two ball mills in parallel which fed a lead flotation circuit followed by a zinc flotation circuit, concentrate thickening, filtering, concentrate load-out, and tailing disposal. The second ball mill was added in June 1975 in order to raise milling capacity from 400/500 t.p.d. to 700/900 t.p.d. In the final years of operation, predominantly sulphide ores were processed.

Power, Electrical and Water Supply

Power is available at our mining properties through the Utah State Grid. Various sub-stations and transformers on the property are live and fed by the local utility. There is sufficient power to operate the facilities installed by Kennecott Mining Company in the 1970s, i.e. a 800 t.p.d. concentrator, three mining locations with associated shafts and workings and an office complex and labor ‘‘dry’’. In addition, we own perennial water rights that are sufficient for all the installed facilities.

Modernization and Plan of Improvement

The consultants who conducted the technical study for us in 2005, after spending time on the property and an extensive evaluation of the volumes of historic data, have concluded that significant opportunities exist for further development and exploitation of the claims.

Consultant Recommendations for Phase One

The consultants have recommended, at an estimated cost range of $3,000,000 to $3,500,000, phase one of a plan to increase the value and enhance the prospects of viably operating the following four projects. This most recent estimate is based on the understanding gained during the 2006 program. The Phase One recommendations include:

| |   |                                                                                
| | - | -------------------------------------------------------------------------------
| | • | Advancing the Burgin extension deposit through to a bankable Feasibility Study.

| |   |                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------
| | • | Further development of the concept to sell potable water from a desalination plant fed by pumped water from the Burgin Mine.

| |   |                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------
| | • | Investigation of the economic possibilities of producing and selling halloysite (and other) clays from the Zuma and other areas.

| |   |                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------
| | • | Continued investigation and development of other exploration targets in the claim block and adjacent areas.

Drilling Program.As part of this Burgin Mine Program, the consultants recommended that an underground drill program be conducted from the Burgin 1050 level, accessed via the Apex No. 2 shaft. Surface drilling has been discounted due to the inability to ensure that the drill penetrates the desired ore zone and exactly twins existing holes. The shaft and 1050 level will need inspection and rehabilitation as necessary. Ventilation, communications and safety facilities will also require attention (see figure No. 5 below). The objectives of this work, at an estimated cost of $2,500,000, will be to provide a NI 43-101 compliant resource and subsequent reserve, to obtain samples for metallurgical testing and to ascertain initial hydrological characteristics relative to ore deposit dewatering.

11

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This drill program will provide technical data to complete essential prerequisites to a Feasibility Study. The necessary technical data includes:

| |    |                                                                                                                               
| | -- | ------------------------------------------------------------------------------------------------------------------------------
| | 1. | Twin old holes to provide drill campaign comparisons and statistical analysis and to facilitate a N1 43-101 Resource estimate.

| |    |                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Metallurgical samples to define concentrate characteristics and the different metallurgy between the indicated Lead and Zinc dominant zones.

| |    |                                                                     
| | -- | --------------------------------------------------------------------
| | 3. | Geotechnical and hydrological data for mine planning and dewatering.

| |    |                              
| | -- | -----------------------------
| | 4. | Logging of ore-body structure

| |    |                                    
| | -- | -----------------------------------
| | 5. | Packer testing of rock permeability

| |    |                                  
| | -- | ---------------------------------
| | 6. | Installation of maintaining wells

The collection of this data will also enable us to develop a program which will lead to the plan needed to ensure that the ore-body is effectively dewatered.

12

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13

---



Scoping Study.Following the drilling, the consultants anticipate potential further project financing will be available through public methods. This will require the completion of a N1 43-101 Resource and Subsequent Scoping Study.

As part of a Scoping Study, capital costs should be developed for rehabilitation, repair and re-commissioning of the Concentrator and ancillary facilities. The Concentrator itself is dry and relatively clean and the remaining installed equipment appears to be in good condition, though incomplete in some areas. In contrast, any equipment which is located outside will require major work. The property has suffered from theft, particularly in electrical cabling, piping, tools, and small equipment, such as compressors and welding machines. During the recent Trixie gold ore milling it was not possible to process more than 240 tons per day, due to limitations in the classification circuit. The gravity circuit consisting of a Knelson concentrator that recovered free gold, has been sold; its replacement cost would be approximately $120,000 and the failure to provide a gravity circuit for similar ores would reduce gold recovery by approximately one-third. Additional equipment has been sold to pay creditors. A detailed inventory and assessment of deficiencies, however, has not yet been undertaken. Every part of the plant will have to be cleaned and made safe (i.e., necessary platforms, stairs, cranes, lighting, and heating, etc.) prior to any new work. It is assumed that existing process equipment will not have to be replaced, except as noted.

In summary:

| |   |                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | All conveyors, crushers, ball mills, pumps, concentrators, screens, feeders, storage silo, and dust collector, etc. should be inspected for structural integrity, where applicable, and mechanical operability, followed by repair and replacement of missing components; all motors should be inspected and tested;

| |   |                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | The building which housed the metallurgical/assay laboratories will have to be inspected, repaired, and re-equipped for on-site test-work and assaying, including environmental protection and monitoring;

| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| | • | The inventory of tools, small equipment, and vehicles for mechanics and electricians will have to be replaced;

| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| | • | The offices will have to be cleaned out and made habitable with plumbing, toilets, heat, and light.

An order-of-magnitude estimate of cost for rehabilitation, repair, and re-commissioning of the Concentrator and ancillary facilities to produce a bulk flotation concentrate at the rate of 800 tons per day is, in Year 2005 constant dollars, $3,500,000 to $5,000,000.

Current Status of Phase One.During 2006, the program suggested in the 2005 technical study has been partially completed; the time–schedule, however, has been delayed because of factors and exigencies encountered as the work progressed. In particular, the following information updates the status of the four objectives listed above and notes the reasons for delays:

| |   |                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Efforts to gain access to the 1050 Burgin level via the Apex #2 shaft, to facilitate underground drilling of the extension deposit’ were thwarted by the discovery of a cave-in that had blocked the Apex shaft at the 500 ft. level. A program to rehabilitate the area is being planned. Its successful execution will allow the drilling program to be completed.

| |   |                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Positive discussions continue to be held with potential partners and stakeholders in the desalination concept. Independent hydro/geological studies have been completed which endorse the concept of isolation and separation of the water source. New, potable water is becoming increasingly in demand in the area surrounding the Burgin Mine.

| |   |                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | The clay deposits of the Zuma area have been investigated to try to correlate existing contours and surface with previous drilling. A new drill program still needs to be designed and undertaken.

| |   |                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | A detailed geological reconnaissance and data review has been made of the entire district. Several areas of interest have been defined as meaningful targets. These areas will be subjected to more detailed evaluation in the coming field season.

14

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Reclamation Plan

Tailing, waste and rock dumps and all related mine reclamation requirements are covered by approved and bonded permits issued by the State of Utah. By far the largest ore deposits in the district are replacements in carbonate rocks and hence there is virtually no acid generation potential. The Reclamation Plan calls for the removal of mine infrastructure and the grading and re-vegetation of the surface to its original status. An update to the existing mine reclamation plan has been submitted to the State of Utah, which has not yet responded as to its adequacy.

Current and Future Costs of Mining Projects

The total costs incurred to date for exploration on our mining properties is not reasonably quantifiable because exploration has occurred since at least 1909. Many millions of dollars have been spent over nearly one hundred years. The closest estimate is that approximately $150 million to $300 million in capital costs have been expended and a larger amount in operating costs. Since 2005, the objectives under phase one of the plan described above have been funded to date from the proceeds of the sale of a convertible debenture to Dimeling, Schreiber & Park Reorganization Fund II, LP. The amount to be incurred in the future is also not currently ascertainable, but the consultants who have conducted the technical study for us anticipate that immediate future costs could be between $5 million and $10 million.

Further development and exploration is necessary, in conjunction with a feasibility study, before a final evaluation may be made as to economic and legal feasibility of a development program.

|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.

See ‘‘Item 1. Description of Business — EPA Settlement.’’

Utah Labor Commission Administrative Proceeding

We were named, along with two other corporate entities, as a respondent in an administrative proceeding before the Utah Labor Commission in August 2006. In the proceeding, the seventy-six year old petitioner alleges that he was our employee from 1950 to 1954 and has contracted lung cancer as a result of his employment. The plaintiff sought medical expenses and permanent total disability compensation. The plaintiff is now deceased. His widow has now claimed dependent’s benefits and burial benefits. We have filed an answer in the proceeding denying all material allegations and are investigating the claim, and will vigorously dispute his claims. The litigation is currently in the discovery stage. A hearing was scheduled for September 2007. That hearing was continued at the request of the petitioner, based on a defense raised by us. No new hearing date has been set.

Royce Hackworth and Hackworth Drilling, Inc.

On August 30, 2002, Royce Hackworth and Hackworth Drilling, Inc. filed a complaint against us and Adren Underwood in the Fourth Judicial District Court in and for Juab County, Utah (Civil No. 02060124). The complaint sought monetary relief of $37,697.14 for drilling services that were rendered to us by Hackworth Drilling. Judgment in the amount of $37,697.14 has been entered against us. We have recently been advised by Hackworth that they will permit us to pay this lien through the sales of our land pursuant to the EPA Consent Decree.

Leonard Weitz

On April 23, 2007, Leonard Weitz filed a complaint against us in the Fourth Judicial District in and for Utah County, Utah (Case No. 07010174). An amended complaint was filed on June 23, 2007. The complaint is seeking money damages in the amount of $726,000.00 for alleged breach of contract arising out of Mr. Weitz’s employment agreement with the Company. We believe we have meritorious defenses to the claims asserted in the action and intend to vigorously defend the matter.

|        |                                                     
|------- | ----------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders.

None.

15

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PART II

|        |                                                                                                                
|------- | ---------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

Our shares of common stock are traded in the over the counter market known as the Pink Sheets under the symbol ‘‘CFCM.PK.’’ High and low sales prices of our common stock for each quarterly period during the past two years are as follows:

High


Low2007 Market PriceFourth Quarter



$
0.50




$
0.10Third Quarter



$
0.45




$
0.25Second Quarter



$
0.50




$
0.30First Quarter



$
0.50




$
0.302006 Market PriceFourth Quarter



$
0.50




$
0.35Third Quarter



$
0.50




$
0.39Second Quarter



$
0.60




$
0.35First Quarter



$
0.54




$
0.30


The approximate number of holders of record of our Common Stock as of December 31, 2007 was 2,000. No cash dividends have been declared or paid over the previous five years nor are expected to be paid for the foreseeable future.

|        |                                                           
|------- | ----------------------------------------------------------
|Item 6. | Management’s Discussion and Analysis or Plan of Operation.

The following discussion is intended to assist in understanding our financial condition and plan of operations. You should read the following discussion along with our financial statements and related notes included in this Form 10-KSB.

Overview

We were organized in 1909 and own several interests in mining properties in Utah, including the Burgin Mine and the Trixie Mine. Our principal subsidiaries are Tintic Utah Metals, LLC, a Colorado limited liability company and Chief Gold Mines, Inc., a Delaware corporation. Our land holdings consist of approximately 16,000 acres of mining property. Approximately 6,000 acres of this land is subject to being sold pursuant to a Consent Decree with the Environmental Protection Agency.

The Burgin Mine is not in operation. In late 2001, we began mining ore from the Trixie Mine, and began processing ore in our Tintic Mill in January 2002. In March 2002, we encountered unstable mining conditions in the Trixie Mine and suspended mining and processing operations. As a result of the suspended mining and processing operations, we are not generating any revenues and we do not have sufficient funding to make the significant safety improvements required in the Trixie Mine or to continue exploration efforts related to the Burgin Mine. As a result, we have had no significant operating activity since early 2002.

Plan of Operation

The mining aspect of our activities will concentrate on seeking one or more joint venture partners or other arrangements to fund the startup of mining operations. To the extent we enter into such an arrangement, we could contribute mining properties and/or the Burgin concentrating mill to any joint venture arrangement in return for a percentage interest in the venture, with our partner(s) to provide the main portion of cash funding requirements.

We have an immediate cash need. No assurance can be given that we will be able to raise the necessary funds, or if the funds are raised, that we will be able to restart our mining operations.

Our financial statements have been prepared assuming that we will continue as a going concern. We have suffered net losses of $1,181,116 and $120,616 for the years ended December 31, 2007 and 2006,

16

---



respectively. Additionally, as of December 31, 2007, we had an accumulated deficit of $98,181,384. These matters raise substantial doubt about our ability to continue as a going concern.

As of December 31, 2007, we had $950,000 of land and mining claims and $150,000 of mining related buildings, machinery and equipment. The realization of our investment in land and mining claims and mining related buildings and equipment is dependent upon various factors, including: our success in exploration efforts to discover additional mineral resources and in proving the technical feasibility and commercial viability of the identified mineral resources, and our ability to obtain necessary funding to continue exploration of the mining properties and to finance operations.

In December 2005, Dimeling, Schreiber & Park Reorganization Fund II, LP agreed to purchase $2.5 million in convertible debentures contingent upon creditors holding more than 50% of our outstanding indebtedness agreeing to settle such outstanding amounts. The funds are held in escrow by our legal counsel and are dispersed by the escrow agent to pay creditors as they individually agree with us and to pay legal, accounting and other consulting fees. As of the date of this report, the minimum level of creditor acceptances has been reached. The funds remain in escrow, however, as a practical method of paying creditors and other expenses, as we do not have any employees to disburse the funds. The debentures automatically converted into common stock at $0.25 per share immediately upon shareholder approval of certain amendments to our Articles of Incorporation, including a decrease in the par value. At a Special Meeting of Stockholders held on February 1, 2008, Chief’s stockholders approved the proposed amendments to the Articles of Incorporation. As of that date, $425,205.48 in interest had accrued on the debentures. Subsequently, 11,700,822 shares of Common Stock were issued to Dimeling, Schreiber & Park Reorganization Fund II, LP resulting from the conversion of the debentures and the accrued interest thereon.

|        |                      
|------- | ---------------------
|Item 7. | Financial Statements.

See Financial Statements beginning on page F-1.

|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|Item 8. | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

|         |                         
|-------- | ------------------------
|Item 8A. | Controls and Procedures.

Management’s Report On Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of Company management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2007. In making its assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was not effective as of December 31, 2007, as the result of a material weakness.

This material weakness consisted primarily of insufficient personnel in the accounting and financial reporting function due to the size of our Company and the lack of operations. The Company does not have any full-time paid officers or employees, which prevented its ability to employ sufficient resources to effectively review and analyze elements of the financial statement closing process and prepare and file on a timely basis financial statements in accordance with U.S. GAAP.

Remediation of Material Weakness

As noted above, the size of the Company and its lack of any operations prevents it from being able to employ sufficient resources to enable the Company to have adequate segregation of duties within its

17

---



internal control system. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures, and will continue to work to address and remedy the material weakness as the position of the Company and its operations permits.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the year ended December 31, 2007, that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting, other than the remediation measures described above.

|         |                   
|-------- | ------------------
|Item 8B. | Other Information.

None.

18

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PART III

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

Directors and Executive Officers

The name and age of each of our directors and executive officers and the positions and offices held by him are:

Name of Directors and
Executive Officers


Age


Offices with Chief


Term During Which
Served in OfficeRichard R. Schreiber


52


Director and Interim President


Director since 2001 and Interim President since 2002Steven G. Park


53


Director, Secretary and Treasurer


Director since October 2001Peter D. Schreiber


46


Director


Director from December 2007 until March 2008Robert C. Gardner


67


Director


Director since March 2008


The following is a brief account of the business experience during the past five years of each director and executive officer named above.

Steven G. Park


A principal of Dimeling, Schreiber & Park, a private investment partnership that makes private equity investments in a broad range of middle market companies.Richard R. Schreiber


A principal of Dimeling, Schreiber & Park, a private investment partnership that makes private equity investments in a broad range of middle market companies.Peter D. Schreiber


A principal of Dimeling, Schreiber & Park, a private investment partnership that makes private equity investments in a broad range of middle market companies.Robert C. Gardner


Mr. Gardner is Chairman of the Board of Genco Resources Ltd., a publicly traded (Toronto Stock Exchange) company engaged in silver production in Mexico. He is currently Chairman of the Board of Andover Ventures Inc. (publicly traded (TSX Venture Exchange) mineral exploration company; Dec 2006 – present), Stealth Energy Inc. (publicly traded (CNQ) petroleum and natural gas company; Aug 2007 – present); and Principal of Gardner & Associates (Law Firm; Jan 1988 – present). He was previously Chairman of the Board of Bolero Resources Corp. (publicly traded (TSX Venture Exchange) mineral exploration company; February 2006 – March 2008).Mr. Gardner is currently a Director of the following publicly traded companies: Andover Ventures Inc. (December 2006 – present), Atlas Technology Group, Inc. (August 2005 – present), Getty Copper Inc. (June 2003 – November 2004), Kootenay Gold Inc. (June 2003 – present), Stealth Energy Inc. (August 2007 – present) and Triple Dragon Resources Inc. (April 2007 – May 2007). He was previously a director of Bolero Resources Corp. (February 2006 – March 2008).


Former Director Peter D. Schreiber is the brother of Director and President Richard R. Schreiber.

Our Board of Directors does not currently possess standing nominating, audit or compensation committees. All functions generally performed by these committees are carried out by the full Board of Directors. There have not been any material changes to the procedures by which our security holders may recommend nominees to our Board of Directors.

Independent Consultants

We do not currently have any employees. We do, however, utilize independent consultants for matters regarding mining explorations and surveys. Our independent consultants cover the full spectrum

19

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of mine exploration, development and operations. All are extremely capable and have considerable mining experience. The following details the experience of these consultants:

B. Mountford, P. Eng., is a mining engineer with over 35 years of experience and expertise in all aspects of mining. He has been a principal in several projects that were developed from drill indicated targets through to operating mines. Relevant in the U.S.A. are the Montana Tunnels Mine in Montana, Pinson and Pebble in Nevada and Gilt Edge in South Dakota. Most recently he was President of Northern Dynasty Mines, the developer of the Pebble project in Alaska.

D. Barratt, P. Eng., is a senior consultant engineer specializing in metallurgy. He has over 35 years of experience and has provided services to many major and intermediate mining companies throughout the world.

R.H. Sillitoe, Ph.D., is a world renowned consulting economic geologist, the winner of numerous awards for merit and achievement. He travels extensively for most major mining companies and several government agencies. His services are widely sought and his opinions have considerable weight.

B. Ainsworth, P. Eng., is an ex Vice-President of Exploration for Placer-Dome. Currently, he provides geological expertise and experience to a select group of clients. Of particular relevance in his work for us is his experience in the mining and marketing of clays, including halloysite.

D. Jenkins, P. Geo., is also an ex Placer Dome Senior Geologist. He has been directly involved in many grass root projects that were developed into mines. Mr. Jenkins provides us with specific expertise in vein and replacement ore deposition, both of which categorize the Tintic mineralization.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors and persons who own more than ten percent of a registered class of the equity securities of the Company (‘‘Reporting Persons’’) to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission. In addition, Reporting Persons are required to furnish us with copies of all Forms 3, 4, and 5 that they file. To the best of the Company’s knowledge, no Reporting Person failed to file a Form 3, 4 or 5 on a timely basis during the fiscal year ended December 31, 2007.

Code of Ethics

The Board of Directors has not adopted a corporate code of conduct and ethics because we have not had operations or employees since 2002. The Board of Directors will adopt a code of conduct and ethics and will disclose this code of conduct and ethics in the reports filed or submitted to the SEC and post a copy on our website as soon as practicable following the initiation of our operations.

|         |                        
|-------- | -----------------------
|Item 10. | Executive Compensation.

Executive Officer Compensation

Our executive officers, Richard R. Schreiber, our President, and Steven G. Park, our Secretary and Treasurer, did not receive any compensation during the fiscal years ended December 31, 2007 and 2006.

20

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Outstanding Equity Awards at Fiscal-Year End Table

The following table sets forth information regarding unexercised options, unvested shares of Common Stock and any awards under an equity incentive plan as of December 31, 2007 for Richard R. Schreiber, our President, and Steven G. Park, our Secretary and Treasurer:

Option Awards


Stock AwardsName


Number of
Securities
Underlying
Unexercised
Options (#):
Exercisable


Number of
Securities
Underlying
Unexercised
Options (#):
Unexercisable


Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)


Option
Exercise
Price ($)


Option
Expiration
Date


Number of
Shares or
Units of
Stock
that
have not
Vested (#)


Market
Value of
Share or
Units
that
have not
Vested ($)


Equity
Incentive Plan
Awards:
Number of
Unearned
Shares,
Units or
other
Rights
that
have not
Vested (#)


Equity
Incentive
Plan Awards:
Number
Market or
Payout
Value of
Unearned
Shares,
Units, or
other
Rights
that
have not
Vested ($)Richard R. Schreiber




60,000





-0-





-0-



$2.90


06/11/2011




-0-





-0-





-0-





-0-Steven G. Park




60,000





-0-





-0-



$3.00


10/16/2011




-0-





-0-





-0-





-0-


Compensation of Directors

Our directors did not receive any compensation during fiscal year 2007.

Equity Compensation Plans

The Company does not currently have any equity compensation plans in effect. All outstanding options at December 31, 2007 are nonqualified stock options.

|         |                                                                                                
|-------- | -----------------------------------------------------------------------------------------------
|Item 11. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table shows as of December 31, 2007, stock ownership of all persons known to management, to be beneficial owners of more than 5% of our Common Stock and our directors and executive officers.

Name of Beneficial Owners


Amount and Nature of
Beneficial Ownership


Percentage of
Class(1)Five Percent Shareholders:Dimeling, Schreiber & Park, as General Partner of Dimeling, Schreiber & Park Reorganization Fund II, LP
1629 Locust Street Philadelphia, PA 19103(2)




5,904,522
(3)




35.7
%Directors and Named Executive Officers:Steven G. Park(2)




5,964,522
(3)(4)




35.9
%Richard R. Schreiber(2)




5,964,522
(3)(5)




35.9
%Owned by all directors and
officers as a group (3 persons)




6,024,522
(3)(4)(5)




36.2
%


|
|
|
|

(1)    Based upon 4,060,000 shares of Convertible Common Stock, 10,635,507 shares of Common Stock outstanding as of December 31, 2007. Holders of Convertible Common Stock and Common Stock share voting rights.

(2)    Richard R. Schreiber and Steven G. Park are principals of Dimeling, Schreiber & Park, which serves as the general partner of Dimeling, Schreiber & Park Reorganization Fund II, LP, and they share voting and investment power over the shares reported in the table.

21

---



(3)    The number of shares beneficially owned includes 1,844,522 shares of Convertible Common Stock issuable as cumulative dividends in arrears, but does not include up to 10,000,000 shares of Common Stock issuable upon the conversion of outstanding debentures purchased by Dimeling, Schreiber & Park Reorganization Fund II, LP. The debentures automatically convert if and when the shareholders approve certain changes in the Articles of Incorporation, including a change in par value.

(4)    Includes nonqualified stock options previously approved by the shareholders to purchase 60,000 shares held by Stephen G. Park.

(5)    Includes nonqualified stock options previously approved by the shareholders to purchase 60,000 shares held by Richard R. Schreiber.

|         |                                                
|-------- | -----------------------------------------------
|Item 12. | Certain Relationships and Related Transactions.

Except as set forth below, since January 1, 2004, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or are a party in which:

| |   |                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------
| | • | the amounts involved exceeded or will exceed $120,000 or 1% of the average of our total assets at year-end for the last three fiscal years; and

| |   |                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | a director, executive officer, holder of more than 5% of our Common Stock or Convertible Common Stock or any member of their immediate family had or will have a direct or indirect material interest.

In December 2005, we issued and sold convertible debentures in the amount of $2.5 million to Dimeling, Schreiber and Park Reorganization Fund II, LP. The debentures accrue interest at an annual rate of 8%, payable at the time of conversion in additional shares of common stock. The fixed conversion price is $0.25 per share. The debentures automatically converted into shares of common stock at the rate of 4,000 shares for each $1,000 principal amount upon the approval by the shareholders of certain amendments to the Articles of Incorporation, including a change in par value and increase in authorized capital. At a Special Meeting of Stockholders held on February 1, 2008, Chief’s stockholders approved the proposed amendments to the Articles of Incorporation. As of that date, $425,205.48 in interest had accrued on the debentures. Subsequently, 11,700,822 shares of Common Stock were issued to Dimeling, Schreiber & Park Reorganization Fund II, LP resulting from the conversion of the debentures and the accrued interest thereon.

Dimeling Schreiber and Park Reorganization Fund II, LP placed $2.5 million in escrow during December 2005. The funds remain in escrow until such time that we received creditor acceptances (repayment on a negotiated basis, or compromise offer) representing 50% of the outstanding aggregate unsecured amounts owed. As of the date of this report, the minimum level of creditor acceptances has been reached. The funds remain in escrow, however, as a practical method of paying creditors and other expenses, as we do not currently have any employees to disburse the funds.

Director Independence

The Company is not listed as an issuer on any national securities exchange or inter-dealer quotation system that requires that the majority of the board of directors be independent. For the purposes of compliance with applicable securities rules, the following describes the independence standards required by a national securities exchange, the Nasdaq Stock Market, Inc., and assesses whether our directors and director nominees, Richard R. Schreiber, Steven G. Park, and Peter D. Schreiber, would be considered to be independent directors under Nasdaq’s independence standards were they so required.

The majority of the directors on the board of directors of a newly public company listed on Nasdaq must be independent. An independent director is ‘‘a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the [company]’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.’’ Under Nasdaq Rule 4200, an independent director may not (1) have been employed by the company or its subsidiaries or parent company during the preceding three years; (2) have received, or had a family member that received, compensation in excess of $60,000 from the company

22

---



during any twelve month period during the preceding three years (other than for board or committee services, benefits under a retirement plan or payments to a family member who is a non-executive employee of the company); (3) have had a family member that was an executive officer of the company during the preceding three years; (4) have received from or given to the company during the current and three preceding years, either directly or through family members or entities under his control, any property or services totaling the greater of $200,000 or 5% of the recipient’s gross revenues for that year, unless the payments arose from investments in the company’s securities or a non-discretionary charitable contribution matching program; (5) be employed or have been employed during the last three years, or have a family member who is employed or was employed, as an executive officer of another company where any of the issuer’s executive officers sat on the compensation committee; or (6) be or have a family member who is a partner at the company’s outside auditor or was a partner or employee of the company’s outside auditor who worked on the company’s audit at any time during the preceding three years. Share ownership in the company by itself will not disqualify a director from being independent.

Neither Mr. Richard Schreiber, Mr. Park, nor Mr. Peter Schreiber is independent under Nasdaq standards. Both Mr. Richard Schreiber and Mr. Park are acting executive officers of the Company. Mr. Peter Schreiber is the brother of Mr. Richard Schreiber. In addition, Nasdaq requires that all members of the audit, nominating and compensation committees of the board of directors be independent. The Company does not have an audit, nominating or compensation committee at this time. The functions generally performed by these committees are carried out by Mr. Schreiber and Mr. Park.

|         |          
|-------- | ---------
|Item 13. | Exhibits.

|            |  |            
|----------- |  | -----------
|EXHIBIT NO. |  | DESCRIPTION
|            |  |            

|    |  |                                                                                                                                                                            
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 |  | 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)].
|    |  |                                                                                                                                                                            

|    |  |                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------
|3.2 |  | 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)].
|     |  |                                                                                                                                                                                                                                                          

23

---



|     |  |                                                                                                                                                                                                                                                         
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 Chief’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)].
|      |  |                                                                                                                                                                                               

24

---



|      |  |                                                                                                                                                                                 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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)].
|      |  |                                                                                                                                                                                 

|     |  |                                                                                                                        
|---- |  | -----------------------------------------------------------------------------------------------------------------------
|21.1 |  | Subsidiary List [Incorporated by reference to Chief’sForm 10-KSB/Afiled 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).
|   |  |                                                                                                                                         

|         |                                        
|-------- | ---------------------------------------
|Item 14. | Principal Accountant Fees and Services.

Information Regarding Accounting Matters

Audit Fees

The aggregate fees billed for the years ended December 31, 2007 and December 31, 2006 for the professional services rendered by Hansen, Barnett & Maxwell, P.C. the Company’s principal accountant, for the audit of the Company’s annual financial statements and review of financial statements or services that are normally provided by the Company’s principal accountant in connection with statutory and regulatory filings or engagements for such fiscal years equaled $74,380 and $27,018, respectively.

Audit-Related Fees

There were no fees billed for the years ended December 31, 2007 and December 31, 2006, for assurance and related services by Hansen, Barnett & Maxwell, P.C. that are reasonably related to audit or review of the Company’s financial statements not reported under ‘‘Audit Fees’’ above.

Tax Fees

The aggregate fees billed for the years ended December 31, 2007 and December 31, 2006 for professional services rendered by Hansen, Barnett & Maxwell, P.C. for tax compliance, tax advice, and tax planning equaled $9,035 and $82, respectively, and consisted of assistance in the preparation of tax returns, and general tax research and planning.

All Other Fees

No other fees were billed by Hansen, Barnett & Maxwell, P.C. to the Company during 2007 or 2006.

Pre-Approval Policies and Procedures

The Company does not currently have a standing audit committee. The Company’s full board of directors conducts all tasks related to the selection and approval of the independent public accountant. All services related to the Company’s independent public accountant, described above, were pre-approved by Mr. Richard Schreiber, Mr. Park and Mr. Peter Schreiber.

25

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES

TABLE OF CONTENTS

PageReport of Independent Registered Public Accounting Firm




F-1Consolidated Balance Sheets as of December 31, 2007 and 2006




F-2Consolidated Statements of Operations for the Years Ended December 31, 2007 and 2006




F-3Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2006 and 2007




F-4Consolidated Statements of Cash Flows for the Years Ended December 31, 2007 and 2006




F-5Notes to Consolidated Financial Statements




F-6


---



Hansen, Barnett & Maxwell, p.c.
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
5 Triad Center, Suite 750
Salt Lake City, UT 84180-1128
Phone: (801) 532-2200
Fax: (801) 532-7944
www.hbmcpas.com


Registered with the Public Company
Accounting Oversight Board


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and the Stockholders
Chief Consolidated Mining Company

We have audited the accompanying consolidated balance sheets of Chief Consolidated Mining Company and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for each of the three years in the period ended December 31, 2007. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Chief Consolidated Mining Company and subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has a working capital deficiency and a capital deficiency, has incurred significant losses from operations, and has significant reclamation and EPA settlement obligations and environmental contingencies that raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

HANSEN, BARNETT & MAXWELL, P.C.

Salt Lake City, Utah
April 28, 2008

F-1

---



CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

December 31,
2007


December 31,
2006Current assetsCash



$
129,003




$
939,578Other current assets




15,471





35,720Total current assets




144,474





975,298Land and mining claims




950,000





950,000Buildings, machinery and equipment, net




150,000





200,000Reclamation funds on deposit




488,300





488,300Total assets



$
1,732,774




$
2,613,598LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent liabilitiesAccounts payable



$
654,277




$
588,338Related party payable




391,351





380,305Interest payable




408,219





200,000Accrued liabilities




110,286





110,286Accrued convertible common stock dividends




862,109





694,421Total current liabilities




2,426,242





1,973,350Long-term liabilitiesConvertible debentures




2,500,000





2,500,000Reclamation obligation




518,036





502,948EPA settlement obligation




60,000,000





60,000,000Total long-term liabilities




63,018,036





63,002,948Minority 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; 4,060,000 shares outstanding




40,600





40,600Common stock, $0.01 par value; 100,000,000 shares authorized; 10,635,507 shares outstanding




106,355





106,355Additional paid-in capital




34,292,748





30,971,001Stock purchase rights




—





3,321,747Accumulated deficit




(98,181,384
)




(96,832,580
)Total stockholders’ deficit




(63,736,231
)




(62,387,427
)Total liabilities and stockholders’ deficit



$
1,732,774




$
2,613,598


See the accompanying notes to the consolidated financial statements.

F-2

---



CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31,2007


2006RevenueMining revenue



$
—




$
—Land sales and other




—





2,214Total revenue




—





2,214Operating expensesGeneral and administrative




934,314





471,540Mining properties operating and exploration costs




9,511





—Depreciation and depletion




50,000





50,000Accretion of reclamation obligation




15,088





14,648Total expenses




1,008,913





536,188Other income (expense)Interest income



$
25,932




$
72,989Interest expense




(208,219
)




(235,996
)Gain on forgiveness of debt




24,777





576,364Property reacquisition costs




(14,693
)




—Total other income (expense)




(172,203
)




413,357Net loss




(1,181,116
)




(120,616
)Eight percent convertible common stock dividends




(167,688
)




(179,323
)Loss attributable to common stockholders



$
(1,348,804
)



$
(299,939
)Basic and diluted loss per common share



$
(0.13
)



$
(0.03
)Basic and Diluted Weighted-Average Common Shares Outstanding




10,635,507





10,635,507


See the accompanying notes to the consolidated financial statements.

F-3

---



CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2006 TO 2007

Preferred Stock


Convertible
Common Stock


Common Stock


Additional
Paid-in
Capital


Stock
Purchase
Rights


Accumulated
Deficit


Total
Stockholders’
Equity
(Deficit)Shares


Amount


Shares


Amount


Shares


AmountBalance – December 31, 2005




10,899




$
5,450





4,060,000




$
40,600





10,635,507




$
106,355




$
30,971,001




$
3,321,747




$
(96,532,641
)



$
(62,087,488
)Net loss




—





—





—





—





—





—





—





—





(120,616
)




(120,616
)Eight percent convertible common stock dividends




—





—





—





—





—





—





—





—





(179,323
)




(179,323
)Balance – December 31, 2006




10,899





5,450





4,060,000





40,600





10,635,507





106,355





30,971,001





3,321,747





(96,832,580
)




(62,387,427
)Net loss




—





—





—





—





—





—





—





—





(1,181,116
)




(1,181,116
)Expiration of stock purchase rights




—





—





—





—





—





—





3,321,747





(3,321,747
)




—





—Eight percent convertible common stock dividends




—





—





—





—





—





—





—





—





(167,688
)




(167,688
)Balance – December 31, 2007




10,899




$
5,450





4,060,000




$
40,600





10,635,507




$
106,355




$
34,292,748




$
—




$
(98,181,384
)



$
(63,736,231
)


See the accompanying notes to the consolidated financial statements.

F-4

---



CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31,2007


2006Cash Flows from Operating Activities:Net loss



$
(1,181,116
)



$
(120,616
)Adjustments to reconcile net loss to net cash used in operating activities:Accretion of reclamation obligation




15,088





14,648Gain on forgiveness of debt




(24,777
)




(576,364
)Depreciation and depletion




50,000





50,000Changes in operating assets and liabilities:Other current assets




20,249





(28,400
)Reclamation funds on deposit




—





(2,214
)Related party payable




11,046





26,213Accounts payable




90,716





(523,700
)Interest payable




208,219





133,832Accrued liabilities




—





(88,074
)Director indemnification




—





(127,736
)Net Cash Used in Operating Activities




(810,575
)




(1,242,411
)Cash Flows from Financing Activities:Net proceeds from issuance of convertible debentures




—





2,500,000Principal payments on notes payable




—





(318,021
)Net Cash Provided By Financing Activities




—





2,181,979Net Change in Cash




(810,575
)




939,568Cash at Beginning of Year




939,578





10Cash at End of Year



$
129,003




$
939,578Supplemental Schedule of Noncash Investing and Financing ActivitiesConvertible common stock dividends accrued




167,688





179,323Cash paid for interest




—





145,350


See the accompanying notes to the consolidated financial statements.

F-5

---



CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — NATURE OF OPERATIONS AND INVESTMENTS

Chief Consolidated Mining Company (‘‘Chief’’) was incorporated in the state of Arizona in 1909. Chief currently is the owner of or has vested interests in approximately 16,000 acres of patented mining property in the Tintic Mining Districts in Utah County and Juab County, Utah. Chief and its subsidiaries (collectively, the ‘‘Company’’) operate as a mineral resource company seeking to engage in the exploration and development of their mining claims and properties.

Tintic Utah Metals Joint Venture– The Company owns a 75% interest in Tintic Utah Metals LLC (‘‘Tintic’’). The Company’s Burgin Mine and the Tintic Mill are located on property owned by Tintic.

Central Standard Consolidated Mines– The Company owns approximately 23% percent of the outstanding capital stock of Central Standard Consolidated Mines (‘‘Central Standard’’). Central Standard’s mining property consisted of 320 acres located in the north-central portion of the East Tintic Mining District and is surrounded by property owned by Tintic. In May 2006, some of the holdings of Tintic, Central Standard, and Eagle and Blue Bell Mining Co., Chief’s subsidiaries, were sold at tax sale. The Company has been reviewing its options to recover these properties. During April 2007, the Company redeemed the Tintic and the Eagle and Blue Bell properties for $38,000. The Central Standard properties were not redeemed but were included as part of a broader land-swap package worked out between Chief and an adjoining property owner during the first quarter of 2008.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates– The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The estimated amount of the reclamation and EPA settlement obligations are particularly subject to change in the near term.

Principles of Consolidation– The accompanying consolidated financial statements include the accounts of the Company and all majority owned subsidiaries. The Company’s 23% investment in Central Standard was accounted for using the equity method and is carried at zero. Intercompany accounts and transactions have been eliminated in consolidation.

Land and Mining Claims– Land and mining claims are recorded at the lower of cost, less accumulated depletion, or fair value. Costs of developing mining properties (after completion of exploration) are capitalized. Exploration costs are expensed as incurred until the establishment of a commercially minable deposit or reserve which can be economically and legally produced. When a mining property reaches the production stage, the related capitalized costs are amortized using the units of production method on the basis of proven and probable ore reserves. The Company’s mining properties are periodically assessed for impairment of value and any losses are charged to operations at the time of impairment.

Buildings, Machinery and Equipment– Buildings, machinery and equipment are recorded at the lower of cost or fair value. Major additions and improvements are capitalized while minor replacements, maintenance and repairs that do not increase the useful lives of the assets are expensed as incurred. Depreciation of buildings, machinery and equipment has been computed using the straight-line method over estimated useful lives of 11 years.

Impairment of Long-Lived Assets– The Company accounts for long-lived assets pursuant to Statement of Financial Accounting Standards (SFAS) No. 144,Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company evaluates its land and mineral properties, buildings, machinery and equipment and other long-lived assets for impairment at

F-6

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

least annually and when indications of possible impairment exist and assesses their recoverability based upon anticipated future cash flows from the asset’s or group of assets’ use or sale. If changes in circumstances lead Company management to believe that any of its long-lived assets may be impaired, the carrying value of long-lived assets are reduced by the estimated excess of the carrying value over the fair value of the assets. Fair value is determined by the discounted future cash flows from the asset or group of assets. No impairment was recognized during the years ended December 31, 2007 or 2006.

Reclamation Costs– The Company provides for reclamation costs and penalties for the retirement obligations associated with tangible long-lived assets. Reclamation liabilities are accrued based on estimates of known environmental exposure in conjunction with feasibility studies and are accreted over the estimated life of the assets.

Income Taxes– The Company follows the provisions of SFAS No. 109,Accounting for Income Taxes, which requires that income tax accounts be computed using the liability method. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities and operating loss and tax credit carryforwards given the provisions of currently enacted tax laws.

Fair Value of Financial Instruments– The carrying amount of the convertible debentures, the reclamation obligation and the EPA settlement obligation approximates fair value. The estimated fair values have been determined using market information regarding interest and discount rates.

Basic and Diluted Loss Per Common Share– Basic loss per common share excludes dilution and is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the year. Diluted loss per common share reflects the potential dilution that could occur if stock options were exercised, or convertible debentures or convertible common stock was converted into common stock. The computation of diluted loss per common share does not assume exercise or conversion of securities that would have an antidilutive effect on net loss per common share.

At December 31, 2007 and 2006, there were outstanding options to purchase 185,000 shares of common stock for each year, which were excluded from the computation of diluted loss per common share. In addition, for the years ended December 31, 2007 and 2006, there were 4,060,000 shares of convertible common stock outstanding and $2,500,000 of convertible debentures and $408,219 and $200,000 of accrued interest which are convertible at $0.25 per share that were excluded from the computation of diluted loss per common share calculation. These potential common shares were excluded because they were antidilutive and would have decreased diluted loss per common share.

In June 2006, the FASB issued FIN No. 48,Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No 109(FIN 48). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition classification, interest and penalties, accounting in interim periods, disclosure, and transition. The interpretation was effective for the year ended December 31, 2007. The adoption of this interpretation did not have any effect on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements(SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 will be applied prospectively and is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. SFAS 157 is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities – including an Amendment of FASB Statement No.115, which allows an entity to choose to measure certain financial instruments and liabilities at fair value. Subsequent measurements for the financial instruments and liabilities an entity elects to value at fair value will be recognized in

F-7

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

earnings. SFAS No. 159 also establishes additional disclosure requirements. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 will have a material effect on its consolidated financial statements.

In December 2007, the Financial Accounting Standards Board issued SFAS No. 141 (revised 2007),Business Combinations(SFAS 141R). This accounting principle requires the fundamental requirements of acquisition accounting (purchase accounting) be applied to all business combinations in which control is obtained regardless of consideration and for an acquirer to be identified for each business combination. Additionally, this accounting principle requires acquisition-related costs and restructuring costs at the date of acquisition to be expensed rather than allocated to the assets acquired and the liabilities assumed; minority interests, including goodwill, to be recorded at fair value at the acquisition date; recognition of the fair value of assets and liabilities arising from contractual contingencies and contingent consideration (payments conditioned on the outcome of future events) at the acquisition date; recognition of bargain purchase (acquisition-date fair value exceeds consideration plus any noncontrolling interest) as a gain; and recognition of changes in deferred taxes. This accounting principle will be adopted by the Company for acquisitions after December 31, 2008. Adoption is not expected to have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2007, FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statements(SFAS 160). This accounting principle eliminates noncomparable accounting for minority interests. Specifically, minority interests are presented as a component of shareholders’ equity; consolidated net income includes amounts attributable to both the parent and minority interest and is disclosed on the face of the income statement; changes in the ownership interest are accounted for as equity transactions if ownership remains controlling; elimination of purchase accounting for acquisitions of noncontrolling interests and acquisitions of additional interests; and recognition of deconsolidated controlling interest based on fair value consistent with SFAS No. 141R. This accounting principle will be adopted in January 2009. The accounting requirements will be adopted prospectively, however presentation and disclosure will be adopted retrospectively for all periods presented. Earlier adoption is prohibited. Adoption is expected to reclassify the $24,727 of minority interest in consolidated subsidiaries to stockholders’ deficit.

Business Conditions– The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

As of December 31, 2007, the Company had $950,000 of land and mining claims and $150,000 of mining related buildings, machinery and equipment, which in aggregate, represent approximately 64% of total assets. The Company’s buildings, machinery and equipment consist principally of the Tintic Mill located at the Trixie mine. The realization of the Company’s investment in land and mining claims and mining related buildings, machinery and equipment is dependent upon various factors, including the outcome of: (i) the Company’s success in exploration efforts to discover additional mineral resources and in proving the technical feasibility and commercial viability of the identified mineral resources, (ii) the Company’s ability to obtain necessary funding to continue exploration of the mining properties and to finance operations while the Company pursues real estate development alternatives for portions of the Company’s land, (iii) the Company’s success in finding a joint venture partner to provide capital funding for the Company’s continued exploration of its mining properties, (iv) the Company’s ability to profitably lease the Tintic Mill or its mining claims to outside entities, and (v) the Company’s success in selling or developing certain of its land surface rights to fund its continued mining and exploration activities.

In 2002, the Company encountered unstable mining conditions and suspended mining and processing operations. As a result of the suspended mining and processing operations, the Company is

F-8

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

not generating mining revenues and does not have sufficient funding to make the significant safety improvements required in the Trixie Mine or to continue exploration efforts related to the Burgin Mine.

During 2002, the Environmental Protection Agency (EPA) completed a study and finalized its actions to be taken in response to the release of waste materials at and around the Eureka Mills Superfund Site located in Juab County, Utah. The EPA is seeking reimbursement from the Company in the amount of $60 million for its portion of the liability based on the ownership and the conduct of mining operations on portions of the site. During 2005, the Company received a consent decree from the EPA and agreed to comply with its conditions, as discussed more fully in Note 11.

These matters raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or liabilities that might be necessary should the Company not be able to continue as a going concern.

The Board of Directors is currently pursuing efforts to obtain additional sources of financing to allow the Company to proceed with its operations. The Company is also investigating selling portions of its land surface rights in order to comply with the EPA Consent Decree.

NOTE 3 — CAPITALIZATION

Convertible Common Stock– Dividends on the convertible common stock accrue at a rate of 8 percent per annum and are payable in-kind with shares of convertible common stock. The terms of the convertible common stock require that the Company shall not declare dividends on the common stock as long as the convertible common stock is outstanding. Dimeling, Schreiber & Park (‘‘DS&P’’) shall have a preemptive right to purchase new issuances of securities of the Company before any other investors, not to include certain issuances including securities issued in any public offering or a merger.

Dividends accrue on the convertible common stock at the rate of 8% per annum and are payable in-kind with convertible common shares, and amounted to 472,362 shares and 437,372 shares of convertible common stock that are issuable for the years ended December 31, 2007 and 2006, respectively. The in-kind dividends were valued based on the average market price of the common stock during the period and resulted in recognizing $167,688 and $179,323 of convertible common stock dividends during the years ended December 31, 2007 and 2006, respectively. The aggregate amount of dividends accrued at December 31, 2007 and 2006 was $862,109, or $0.21 per share, and $694,421, or $0.17 per share respectively. No further dividends will be paid if DS&P’s ownership of all classes of common stock increases to 68%. As of December 31, 2007 DS&P’s actual ownership totaled 27.61% and ownership including dividends in arrears totaled 37.46%.

Preferred Stock– The Board of Directors of the Company authorized the issuance of common stock in exchange for preferred stock on a share-for-share basis if elected by the preferred stockholders. Preferred shares obtained by the Company in the exchange are retired. During 2007 and 2006, no preferred shares were exchanged for common shares.

The shares of preferred stock and common stock of the Company have equal right to receive dividends, when and if declared by the Board of Directors, but are junior to the convertible common stock, to vote, and in all other respects except that upon liquidation of the Company the preferred shares are entitled to a preferential payment of $0.50 per share.

Stock Purchase Rights– Outstanding stock purchase rights have expired and their carrying value $3,321,747 was reclassified to additional paid-in capital during the year ended December 31, 2007.

NOTE 4 — STOCK OPTIONS

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004) (SFAS 123R), using the modified prospective method. SFAS 123R requires

F-9

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. SFAS 123R also requires the stock option compensation expense to be recognized over the period during which an employee is required to provide service in exchange for the award (the vesting period). Prior to adopting SFAS 123R, the Company accounted for stock-based compensation plans under Accounting Principles Board Opinion (‘‘APB’’) No. 25, ‘‘Accounting for Stock Issued to Employees’’ (‘‘APB 25’’). Under APB 25, generally no compensation expense is recorded when the terms of the award are fixed and the exercise price of the employee stock option equals or exceeds the fair value of the underlying stock on the date of grant. The Company had adopted the disclosure-only provision of SFAS No. 123, ‘‘Accounting for Stock-Based Compensation’’ (‘‘SFAS 123’’). No employee or director options were granted or vested during the years ended December 31, 2007 and 2006, and no compensation was recognized.

Incentive Stock Options– At December 31, 2007, no stock options remain outstanding under the incentive stock option plan.

Nonqualified Stock Options– From time to time, the shareholders have approved the issuance of nonqualified stock options to officers and directors. The Board of Directors also issued nonqualified stock options to key employees, to non-employees for services rendered and to a creditor as part of a settlement of a claim in prior years. The nonqualified stock options have various vesting options and must be exercised within ten years or less from the date of grant unless sooner terminated by their terms.

No options were granted for the years ended December 31, 2007 and 2006. A summary of the status of the nonqualified stock options at December 31, 2007 and 2006 and related changes during the years then ended is as follows:

Options


Average
Exercise
Price


Average
Remaining
Life (Years)


Range of
Exercise
PricesBalance, December 31, 2005




230,000




$
2.68





4.01



$2.19 – $3.00Expired




(60,000
)




2.44Balance, December 31, 2006




170,000





2.77





5.43



2.19 – 3.00Expired




0





0





0



0Balance, December 31, 2007




170,000




$
2.77





3.43



$2.19 – $3.00


F-10

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 — INCOME TAXES

The Company believes it is unlikely that the deferred tax assets will be realized and the deferred tax assets have been fully allowed against. The net deferred tax asset consisted of the following at December 31:

2007


2006EPA settlement obligation



$
22,380,000




$
22,380,000Reclamation obligation




193,227





182,136Mine exploration costs




1,638,000





2,047,500Land and mining claims




610,074





610,074Buildings and equipment




58,712





234,850Impairment loss on equity investment




48,994





48,994Stock-based compensation




57,682





57,682Operating loss carryforwards




9,517,891





8,570,301Total deferred tax assets




34,504,580





34,131,537Valuation allowance




(34,504,580
)




(34,131,537
)Net deferred tax asset



$
—




$
—


A reconciliation of the expected U.S. federal income tax computed at the statutory rate to the provision for income taxes is as follows for the years ended December 31:

2007


2006Tax at federal statutory rate – 34%



$
(401,579
)



$
(30,306
)State benefit, net of federal tax




(38,977
)




(2,941
)Expiration of operating loss carryforwards




67,513





—Change in valuation allowance




373,043





33,247Net tax expense



$
—




$
—


Since operations ceased in 2002, the Company has failed to file its federal income tax returns. The net operating losses expire as follows:

Year of Expiration


Amount2008



$
773,0002009




930,0002010




1,284,0002011




1,038,0002012




648,0002018




992,0002019




1,085,0002020




2,161,0002021




3,457,0002022




2,765,0002023




1,745,0002024




1,854,0002025




2,267,0002026




1,796,0002027




2,721,000$
25,516,000


F-11

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Internal Revenue Code contains provisions that reduce or limit the availability and utilization of net operating loss carryforwards if certain changes in ownership have taken place or will take place. Changes in the ownership of the Company may have resulted in limitations on all pre-existing net operating loss carryforwards of the Company. As a result, management estimates that all of the Company’s net operating loss carryforwards may be limited to utilization of an annual amount not to exceed the value of the Company on the date the Company exceeded the specified levels of allowable changes in ownership multiplied by the Federal long-term tax-exempt rate at that date. If the annual limited amount is unutilized in any particular year, it remains available on a cumulative basis through the expiration date of the applicable net operating loss carryforwards.

NOTE 6 — RELATED PARTY TRANSACTIONS

The Company has amounts payable to Dimeling, Schreiber & Park Reorganization Fund II, LP in the amount of $343,766 and $321,143 at December 31, 2007 and 2006, respectively and owed Dimeling, Schreiber & Park Reorganization Fund II, LP $2,500,000 at December 31, 2007 and 2006 under the terms of convertible debentures payable. A representative of Dimeling, Schreiber & Park Reorganization Fund II, LP is management of the Company. In addition, the Company has accrued payroll liabilities in the amount of $47,584 and $59,162 to former employees at December 31, 2007 and 2006.

NOTE 7 — ASSET RETIREMENT OBLIGATIONS

Reclamation of Mines– Prior to 1993, the Company and or companies that were subsequently acquired by the Company leased certain of its mining properties to other companies for operation, exploration and development. Under the terms of the leases, these other companies were obligated to comply with all federal, state and local environmental laws and regulations affecting the mining industry. Tintic has assumed a reclamation obligation from the previous operator of the Burgin Mine. In addition, the Company also holds a small mining permit and reclamation obligation in connection with its Chief Gold properties.

The Company has cash held in escrow in the form of reclamation bonds with the State of Utah to settle the obligations when all mining efforts have been abandoned. All interest income on the bonds is currently being garnished by the Internal Revenue Service to cover certain taxes, penalties, and interest included in accrued liabilities on the Company’s balance sheet. The Company has issued a bond to the State of Utah totaling $488,300 at December 31, 2007.

A reconciliation of the asset retirement obligations associated with reclamation is as follows:

Balance, December 31, 2005



$
488,300Accretion expense




14,648Balance, December 31, 2006




502,948Accretion expense




15,088Balance, December 31, 2007



$
518,036


NOTE 8 — CONVERTIBLE DEBENTURES

During December 2005, the Company issued convertible debentures in the amount of $2.5 million to Dimeling, Schreiber & Park Reorganization Fund II, LP. The debentures accrue interest at an annual rate of 8%, payable at the time of conversion in additional shares of common stock. The conversion price is $0.25 per share. The debentures automatically convert into shares of common stock at the rate of 4,000 shares for each $1,000 principal amount upon the approval of the shareholders of certain amendments to the Articles of Incorporation. Under APB 14, none of the proceeds were attributable to the conversion feature.

F-12

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dimeling Schreiber & Park Reorganization Fund II, LP placed $2.5 million in escrow during December 2005. The funds remained in escrow until such time the Company had receipt of creditor acceptances (repayment on a negotiated basis, or compromise offer) representing 50% of the outstanding aggregate unsecured amounts owed. The Company satisfied this requirement in July 2006, the restricted cash held in escrow was recognized as cash.

NOTE 9 — LAND, MINING CLAIMS, AND PROPERTY AND EQUIPMENT

Land and mining claims and buildings, machinery and equipment consisted of the following as of December 31, 2007 and 2006:

2007


2006Land and mining claims



$
950,000




$
950,000Mill



$
250,000




$
250,000Machinery and equipment




335,778





335,778Total buildings, machinery and equipment




585,778





585,778Less: Accumulated depreciation




(435,778
)




385,778Net buildings, machinery and equipment



$
150,000




$
200,000


Land and mining claims include (1) land owned by our wholly-owned subsidiaries American Star Mining Co.; Chief Consolidate Mining Company; Chief Gold Mines; Eagle and Blue Bell Mining Co.; East Crown Point Mining Co.; Eureka Mines Co.; and Tintic Utah Metals; (2) land owned by Central Standard Consolidated Mining Co.; (3) the Tintic Ranch Millsite; and (4) Section 14, T14S, R3W SLBM.

Depreciation expense was $50,000 and $50,000 for the years ended December 31, 2007 and 2006. During 2002, the mill was impaired to its salvage value and has not been in operation since operations discontinued during 2002.

In 2002, approximately 19,000 acres of land that we either owned or had vested interests in was valued at $50 per acre. Giving effect to subsequent dispositions of land pursuant to tax sales, relinquishment of mining claims and other transfers of property, the Company currently owns or has vested interests in approximately 16,000 acres of land.

NOTE 10 — OTHER COMMITMENTS AND CONTINGENCIES

On May 24, 2002, a suit was filed against the Company by a limited liability company (‘‘the LLC’’) for $1,787,400 in damages, as well as punitive damages, that derive from claims by the LLC that the Company had committed to purchase certain water rights that the LLC owned or was in process of obtaining with the intent to sell to the Company. The Company settled the liability for $25,000 during the year ended December 31, 2004. As of December 31, 2005, the liability had not been paid and is included in accrued liabilities in the accompanying balance sheet. Subsequently, in December 2006, the claim was renegotiated and completely settled and paid for $15,000.

On April 23, 2007, Leonard Weitz filed a complaint against the Company in the Fourth Judicial District in and for Utah County, Utah (Case No. 07010174). An amended complaint was filed on June 23, 2007. The complaint is seeking money damages in the amount of $726,000 for alleged breach of contract arising out of Mr. Weitz’s employment agreement with the Company. The Company believes it has meritorious defenses to the claims asserted in the action and intends to vigorously defend the matter.

Environmental Protection Agency Settlement– During 2001, the U.S. Environmental Protection Agency (‘‘EPA’’) proposed to place what the agency has titled the ‘‘Eureka Mills Superfund Site’’

F-13

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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, samples indicate that the soil in the Town of Eureka, Utah is contaminated with lead and, to a lesser extent, arsenic. The Site consists of approximately 150 acres in the town of Eureka, Utah.

On October 18, 2002 the EPA finalized its actions to be taken in response to the release of waste materials at and around the Site. The EPA is seeking reimbursement from the Company for its portion of the liability based on the ownership and the conduct of mining operations on portions of the Site. On February 9, 2005, the Company agreed to a judgment with the EPA in the amount of $60 million. The judgment will remain in effect until the Company has complied with all the requirements of the related consent decree. The following details the Company’s obligations under the judgment:

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

| |    |                                                                                                                                                                                                                                                                                                                           
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

In the event the Company completes all of its obligations under the consent decree, the EPA will file a Release of Notice of Federal Lien in the office of the Juab County Recorder and the Company will be completely relieved of the $60 million liability, resulting in a gain in such future period. To date, the Company has fully complied with all terms of the agreement.

F-14

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CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The judgment amount of $60 million represents the future value of clean up costs when the terms of the consent decree are satisfied on February 9, 2010. The Company elected to adopt SFAS 5 and SOP 96-1 during the year ended December 31, 2002 with respect to the EPA settlement obligation. The Company recognized the face value (undiscounted) of the liability and there will be no accretion expense in the future.

Note 11 — SUBSEQUENT EVENTS

At a special meeting of stockholders on February 1, 2008, the Company’s Articles of Incorporation were amended (a) to increase the amount of authorized Common Stock to 100,000,000 shares and (b) to reset the par value of the Common Stock and Convertible Common Stock from $0.50 par value per share to $0.01 par value per share. The accompanying financial statements have been restated retroactively for all periods presented to reflect the changes.

F-15

---



SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHIEF CONSOLIDATED MINING COMPANYBy:


/s/ Richard R. SchreiberRichard R. Schreiber, President (Principal Executive Officer and Principal Accounting and
Financial Officer)


Date: May 5, 2008

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signatures


Date/s/ Richard R. Schreiber


May 5, 2008Richard R. Schreiber, Director, President (Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer)/s/ Steven G. Park, Director


May 5, 2008Steven G. Park, Director


---