FORM 10-Q/A

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549


[X]     Quarterly  report  pursuant  to  section  13 or 15(d) of the  Securities
        Exchange Act of 1934 For the fiscal quarter ended November 30, 1997 or
                                  -----------------
[       ] Transition  report  pursuant to section 13 or 15(d) of the  Securities
        Exchange Act of 1934 For the transition period from _____ to _____

Commission file number:  0-8773
                         ------

                                  CRESTED CORP.
       -------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

        Colorado                                          84-0608126
----------------------------------------            ----------------------
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                      Identification No.)

877 North 8th West, Riverton, WY                           82501
----------------------------------------            ----------------------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone Number, including area code: (307) 856-9272
                                                    ---------------
                                             NONE
-------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)

        Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                   YES    X              NO

        Indicate  the  number  of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

            Class                   Outstanding at January 14, 1998
-----------------------------      -------------------------------
Common stock, $.001 par value             10,302,694 Shares


                                        1

<PAGE>



                                  CRESTED CORP.

                                      INDEX

                                                                        Page No.
PART I.      FINANCIAL INFORMATION

ITEM 1.      Financial Statements.

                Condensed Consolidated Balance Sheets
                November 30, 1997 and May 31, 1997.......................3-4

                Condensed Consolidated Statements of
                Operations Three and Six Months
                Ended November 30, 1997 and 1996.........................5-6

                Condensed Consolidated Statements of Cash Flows
                Six Months Ended November 30, 1997 and 1996..............7-8

                Notes to Condensed Consolidated
                Financial Statements.......................................9

ITEM 2.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations.............10-13

PART II.     OTHER INFORMATION

ITEM 1.      Legal Proceedings.........................................14-15

ITEM 6.      Exhibits and Reports on Form 8-K.............................16

             Signatures...................................................17




                                        2

<PAGE>



                          PART I. FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS.

                           CRESTED CORP. AND AFFILIATE

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                              November 30,             May 31,
                                                  1997                  1997
                                               ----------            ----------
                                               (Unaudited)

CURRENT ASSETS:
     Cash                                   $  1,493,700       $         37,100
     Accounts receivable
        Trade                                    135,200                 63,900
        Affiliates                               456,500                596,200
     Current portion of
        long-term receivable
        Related parties                          317,900                304,000
        Other                                     79,000                  ---
     Inventory and other                          88,600                 48,300
                                                ----------            ----------
           TOTAL CURRENT ASSETS                2,570,900              1,049,500

LONG-TERM NOTES RECEIVABLE                       403,600                474,600

INVESTMENTS IN AFFILIATES                      1,889,400              1,796,800

INVESTMENT IN CONTINGENT
 STOCK PURCHASE W                                651,000                651,000

PROPERTIES AN                                  5,607,200              5,181,300
     Less accumulated depreciation,
     depletion                                (3,103,800)            (3,017,700)
                                               ----------            ----------
                                               2,503,400              2,163,600

OTHER ASSETS                                      150,200               150,200
                                               ----------            ----------
                                          $     8,168,500       $     6,285,700
                                               ==========            ==========









                                        3

<PAGE>



                           CRESTED CORP. AND AFFILIATE

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

                                               November 30,           May 31,
                                                  1997                 1997
                                               -----------          -----------
                                               (Unaudited)

CURRENT LIABILITIES:
     Accounts payabl
        and accrued expenses             $       168,700       $      556,600
     Deferred income (Note 4)                  2,000,000              ------
     Current portion of long-term
     debt (Note 5)
   Affiliates                                  6,256,200            6,023,400
     Others                                       66,700               12,400
                                               ---------             ---------
TOTAL CURRENT LIABILITIES                      8,491,600            6,592,400
 
LONG-TERM DEBT (Note 5)                           10,800               15,800

ACCRUED RECLAMATION COSTS (See Note 6)           725,900              725,900


COMMITMENTS AND CONTINGENCIES

FORFEITABLE COMMON STOCK,$.001 par value
     65,000 shares issued,
   forfeitable until earned                       43,900               43,900

SHAREHOLDERS'DEFICIT:
     Preferred stock, $.001 par value;
        authorized, 100,000 shares;
        none issued or outstanding                 --                    --
     Common stock, $.001 par value;
        authorized 20,000,000 shares;
        issued 10,23                              10,200                10,200
     Additional paid-in capital                6,375,400             6,375,400
     Accumulated deficit                      (7,489,300)           (7,477,900)
                                              ----------             ----------
TOTAL SHAREHOLDERS' DEFICIT                   (1,103,700)           (1,092,300)
                                              ----------             ----------

                                              $8,168,500            $6,285,700
                                               ==========           ==========







                                        4

<PAGE>



                           CRESTED CORP. AND AFFILIATE

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                        Three Months Ended            Six Months Ended
                            November 30,                 November 30,
                       ------------------------     ------------------------
                        1997           1996         1997            1996
                       ---------       -------      --------     -----------
                       (Unaudited)   (Unaudited)    (Unaudited)   (Unaudited)
REVENUES:
  Mineral sales        $    ----     $    ----      $  492,300    $    ----
  Oil and gas sales        14,000        11,600         38,300        31,100
  Mineral property
   transactions            26,400        27,500         55,200        48,400
  Interest                 23,600         8,500         51,900        14,900
  Rental                  171,500         61,300       392,200       129,100
 Gain on sale of assets       800         -----            800         -----
  Other                   184,300        92,900        339,700       163,600
                         ---------     ----------     ----------    ----------
                          420,600       201,800      1,307,400       387,100
COSTS AND EXPENSES:
  Cost of sales            44,100        22,700         71,700        49,200
  Mineral operations      174,200        77,100        361,600       158,500
  Interest                  6,200         6,200         10,600        13,700
  General and
     administrative       356,700       258,200        686,800       437,200
  Depreciation and
     amortization          52,600        49,000         96,700        93,100
                          ---------    ----------    ---------     ---------
                          633,800       413,200      1,227,400       751,700
                          ---------    ----------    ---------     ---------
LOSS BEFORE EQUITY
  LOSS AND TAX PROVISION (213,200)     (211,400)        80,000      (364,600)

EQUITY IN LOSS OF
  AFFILIATES              (44,100)      (68,100)       (91,400)     (126,900)
                          --------     ----------     -------      ----------

Continued












                                        5

<PAGE>



                           CRESTED CORP. AND AFFILIATE

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                       Three Months Ended            Six Months Ended
                          November 30,                  November 30,
                        --------------------        -------------------
                         1997           1996          1997            1996
                        ---------    -----------      ----------    ---------
                       (Unaudited)   (Unaudited)     (Unaudited)    (Unaudited)
LOSS BEFORE PROVISION
  FOR INCOME TAXES     (257,300)     (279,500)          (11,400)       (491,500)

PROVISION FOR
  INCOME TAXES          --              --               --               --
                       ---------      ------           ----------     ----------
NET LOSS             $ (257,300)    $(279,500)      $   (11,400)     $ (491,500)
                       =========    ==========        ==========     ==========
NET LOSS PER SHA           (.02)    $    (.03)      $    *         $       (.05)
                       =========    ==========        ==========     ==========
WEIGHTED AVERAGE
  NUMBER OF SHARES
  OUTSTANDING        10,302,694    10,156,094        10,302,694      10,156,094
                      ==========    ==========        =========      ==========





























                                        6

<PAGE>



                           CRESTED CORP. AND AFFILIATE

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                               Six Months Ended
                                                 November 30,
                                                ----------------
                                           1997                 1996
                                         (Unaudited)          (Unaudited)
                                         ----------            ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                             $   (11,400)       $     (491,500)
   Adjustments to reconcile net
      loss to net cash used
      in operating activities:
         Depreciation, depletion
            and amortization                 96,700                93,100
         Equity in loss on investments
       And affiliates                        91,400               126,900
         (Gain) on sale of assets              (800)                ----
         Deferred Income                  2,000,000             2,103,800
      Net changes in components
         of working capital                (359,800)             (323,300)
                                           ----------            ----------
   NET CASH PROVIDED BY
   OPERATING ACTIVITIES                   1,816,100             1,509,000
                                           ----------            ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Increase in notes receivable             (35,000)               -----
   Proceeds from collection
      of notes receivable                    13,100               (45,800)
  Investments in affiliates                (184,000)             (249,900)
   Purchase of property and equipment      (437,700)              (17,700)
   Proceeds from sale of assets               2,000
                                           ----------            ----------
NET CASH (USED IN)INVESTING ACTIVITIES     (641,600)             (313,400)
                                            ----------           ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase in debt                         313,300               112,600
   Payment on long-term debt                (31,200)           (1,342,700)
                                            ----------            ----------
NET CASH PROVIDED BY (USED IN)
   FINANCING ACTIVITIES                     282,100            (1,230,100)
                                            ----------            ----------
NET INCREASE (DECREASE) IN
   CASH AND CASH EQUIVALENTS              1,456,600               (34,500)




(Continued)



                                        7

<PAGE>



                           CRESTED CORP. AND AFFILIATE

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                             Six Months Ended
                                               November 30,
                                         -------------------------
                                        1997                  1996
                                     ----------            ----------
                                   (Unaudited)    (Unaudited)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD                        37,100                52,600
                                       ----------            ----------
CASH AND CASH EQUIVALENTS AT
    END OF PERIOD                     $ 1,493,700            $   18,100
                                       ==========            ==========


SUPPLEMENTAL DISCLOSURES:
    Income tax paid                $        --           $        --
                                       ==========            ==========
    Interest paid                  $       10,600        $       13,700
                                       ==========            ==========






























                                        8

<PAGE>



                                         CRESTED CORP.

                     Notes to Condensed Consolidated Financial Statements

  1) The  Condensed  Consolidated  Balance  Sheet as of November 30,  1997,  the
Condensed  Consolidated  Statements  of  Operations  for  the six  months  ended
November 30, 1997 and 1996,  and the Condensed  Consolidated  Statements of Cash
Flows for the six months ended November 30, 1997 and 1996, have been prepared by
the Company without audit. The Condensed  Consolidated  Balance Sheet of May 31,
1997,  has been taken from the  audited  financial  statements  included  in the
Company's  Annual  Report on Form 10-K  filed  for the year then  ended.  In the
opinion of the  Company,  the  accompanying  financial  statements  contain  all
adjustments  (consisting of only normal recurring  accruals) necessary to fairly
present the  financial  position of the Company and its affiliate as of November
30, 1997 and May 31, 1997,  the results of  operations  for the six months ended
November 30, 1997 and 1996, and the cash flows for the six months then ended.

  2) Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted. It is suggested that these financial  statements
be read in conjunction with the Company's May 31, 1997 Form 10-K. The results of
operations for the periods ended November 30, 1997 and 1996 are not  necessarily
indicative of the operating results for the full year.

  3)    The condensed consolidated financial statements of the Company
include its proportionate share of the accounts of USECB Joint
Venture (USECB) which is owned 50% by Company and 50% by Company's
parent, U.S. Energy Corp. (USE).  All material intercompany profits
and balances have been eliminated.

  4) Deferred  income  consists of the Company's half of the $4,000,000  Signing
Bonus received when the Company and its parent,  USE entered into an Acquisition
Agreement with Kennecott Uranium Company to develop  properties.  The amount was
forfeitable  until  certain  actions  are taken by the Company and USE (See GMMV
discussion in Item 2).

  5) Debt consists  primarily of a note payable to the  Company's  parent USE of
$6,256,200.  The remaining  debt is for various  equipment  and insurance  loans
through financial institutions.

  6) Accrued  reclamation  obligation of $725,900 is the Company's  share of the
reclamation  liability at the Sheep  Mountain/Green  Mountain Mining  Districts.
This reclamation work may be performed over several years.


  7)  Certain  reclassifications  have been made in the May 31,  1997  financial
statements to conform to the classifications used in November 30, 1997.

                                        9

<PAGE>





ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS.
               -------------------------------------------------------

LIQUIDITY AND CAPITAL RESOURCES

On June 23, 1997, the Company and its parent, U.S. Energy corp. ("USE"), entered
into an  Acquisition  Agreement  with Kennecott  Uranium  Company  ("Kennecott")
whereby  the  Company  and USE  received  a  signing  bonus  from  Kennecott  of
$4,000,000  and a loan to  develop  the Green  Mountain  Mining  Venture  (GMMV)
properties of $16,000,000.  The $4,000,000, one half of which is attributable to
the Company,  is shown as deferred income on the November 30, 1997 balance sheet
as it was  forfeitable  until  certain  conditions  were met.  During  the third
quarter of fiscal 1998, the forfeitable terms were satisfied.

The Company also  received cash from the sale of uranium under the SMP contracts
of $429,300;  its advance royalty payment from Cyprus AMAX of $55,200;  $392,200
from the rental of  equipment  and real estate  properties;  and $239,300 in the
form of  management  fees.  The receipt of these funds  increased  the Company's
liquidity position significantly.

The Company utilized $641,600 in its investing  activities during the six months
ended  November 30, 1997.  This was primarily as a result of the Company and USE
purchasing  $437,700  worth of  equipment,  and the funding of standby  costs of
Sheep Mountain Partners ("SMP") and Plateau Resources Limited  ("Plateau").  Due
to the disputes existing between the SMP partners,  the Company and USE have not
been reimbursed for the care,  maintenance and standby costs expended on the SMP
mineral properties in Wyoming since the spring of 1991.

The  Company  netted  $282,100  from its  financing  activities  as a result  of
increased long term debt primarily to USE because of USE paying certain expenses
on the Company's  behalf.  Cash  provided by  operations of $1,816,100  plus the
$282,100  provided by  financing  activities,  less  $641,600  used in investing
activities  resulted  in  a  net  increase  in  cash  and  cash  equivalents  of
$1,456,600.  This  increase  places the company in the strong  cash  position of
$1,493,700  at November  30, 1997 as compared to $18,100 at the same date of the
prior year and $37,100 as of May 31, 1997.

The  primary  requirements  for the  Company's  working  capital  continue to be
funding of the on-going  administrative  expenses; the mine and mill holding and
start-up  costs  of  Plateau;  the  holding  costs  of the SMP  mines,  on going
litigation  expenses  associated  with  the SMP  dispute;  and  certain  uranium
delivery  costs to SMP  contracts.  Nukem is  currently  making  most of the SMP
deliveries.  No  assurances  can be given  that  this  method of  delivery  will
continue. The capital requirements to fill the Company's and USE's portion of

                                       10

<PAGE>



the remaining commitments in fiscal 1998 will depend on the spot market price of
uranium and may also be dependent  on the outcome of the  Arbitration/Litigation
Award  involving  Nukem and CRIC,  which they have  appealed to the 10th Circuit
Court of Appeals.

The primary  source of the  Company's  capital  resources  for the  remainder of
fiscal  1998 will be cash on hand;  financing  available  through  the GMMV (see
discussion below); eventual settlement of the Nukem/CRIC Arbitration/Litigation;
uranium deliveries  pursuant to the SMP contracts;  the borrowing from financial
institutions (primarily the line of credit); and the sale of equity or interests
in  investment  properties.  Fees from oil  production;  rentals of various real
estate  holdings and equipment,  and the sale of aviation fuel will also provide
cash.

The Company,  USE and Sutter Gold Mining Company ("SGMC") are currently  seeking
additional  financing for the  construction of the gold processing mill and mine
development of SGMC.  See discussion of SGMC below.  An additional $8 million in
financing is being  sought,  however,  there is no  assurance  the funds will be
raised.

The expenditures for the SMP care and maintenance  costs may require  additional
funding,  depending on the outcome of the SMP  Arbitration/Litigation.  See Part
II, Item 1 "Legal Proceedings" below.

GMMV
----

On June 23,  1997,  the Company  and USE signed an  Acquisition  Agreement  with
Kennecott  Uranium Company  ("Kennecott")  for the right to acquire  Kennecott's
interest in the GMMV for $15,000,000 and other  consideration.  This information
was  previously  reported  in the  Company's  Form 10-Q  (Item 2) for the fiscal
quarter  ended  August 31,  1997.  Kennecott  paid USE and USECC  $4,000,000  on
signing,  and  committed  to provide  the GMMV a loan of up to  $16,000,000  for
payment  of costs  incurred  by USECC in  developing  the  proposed  underground
Jackpot  uranium mine and permitting  the Sweetwater  Mill. As a result of these
agreements,  it is  believed  that no internal  funding  will be required by the
Company and USE for the GMMV at either the Sweetwater Mill or the Jackpot mine.

Pursuant to the  Acquisition  Agreement and the Mineral Lease and Mill Contract,
USECC is  developing  the proposed  Jackpot  Mine and working with  Kennecott in
preparing the Sweetwater mill for renewed operations.  Such work is being funded
from the  $16,000,000  loan being  provided to the GMMV by Kennecott.  Under the
Fourth  Amendment of the GMMV Agreement,  Kennecott will be entitled to a credit
against  Kennecott's  original  $50,000,000  commitment to fund the GMMV, in the
amount of two  dollars  of credit  for each one  dollar of such funds out of the
$16,000,000  provided by Kennecott to the GMMV,  plus the $4,000,000 paid to USE
and USECC on signing of the Acquisition Agreement.


                                       11

<PAGE>



Closing of the  Acquisition  Agreement  is  subject to USE and USECC  satisfying
several conditions,  on or before the extended closing date of October 30, 1998.
If the  Acquisition  Agreement were not closed by December 1, 1997, then USE and
USEC  (or an  entity  formed  by them to  acquire  the  GMMV  interest  owned by
Kennecott)  were to provide to Kennecott a  commitment  letter from a recognized
national  investment banking firm to complete an underwritten public offering of
the securities of USE (or an entity formed or introduced to acquire  Kennecott's
GMMV  interest  (the  "Acquiring  Entity"),  in amount  sufficient  to close the
Acquisition Agreement transactions.  Such amount is estimated by the company and
USE to be approximately $40,000,000. The Acquisition Agreement was not closed by
December 1, 1997 but USE and USECC provided Kennecott a commitment letter from a
recognized  national  investment banking firm to meet the timely requirements of
the Acquisition Agreement.  Thus, the $4,000,000 signing bonus paid by Kennecott
became nonrefundable.

SUTTER GOLD MINING COMPANY
--------------------------

A  preliminary  prospectus  to  qualify  a  previous  special  warrant  offering
prospectus  of Sutter Gold  Mining,  has been filed with the Ontario  Securities
Commission  and the Toronto  Stock  Exchange.  An  additional $8 million must be
raised to fund the development costs to place the SGMC properties in production.
It is not  anticipated  that any of the Company's funds will be required to fund
these operations.

SHEEP MOUNTAIN PARTNERS
------------------------

Nukem and CRIC filed their opening brief in their appeal before the 10th Circuit
Court of Appeals on December  12,  1997.  The Company and USE filed their answer
brief on January 12, 1998. Nukem and CRIC now have fourteen days to file a reply
brief after which time the 10th Circuit  Court may set oral  arguments  and then
decide the case. No assurance can be given as to the ultimate  outcome,  however
management  of the  Company and USE are  optimistic  the ruling will be in their
favor.

Until  such  time as these  issued  are  resolved,  the  Company  and USE may be
required to fund the standby costs of the Sheep Mountain mines.  The Company and
USE have filed a lien on the SMP  properties as a protection  for the payment of
past and  future  standby  costs for  which  they  have not been  reimbursed  by
Nukem/CRIC  and filed suit in Wyoming to foreclose the lien.  The case is in the
discovery stage.







                                       12

<PAGE>



RESULTS OF OPERATIONS

SIX MONTHS ENDED NOVEMBER 30, 1997 COMPARED TO SIX MONTHS ENDED
NOVEMBER 30, 1996

Revenues for the six month period ended  November 30, 1997 increased by $920,300
over the same period of the prior year. The increase in revenues primarily is as
a result  of a  delivery  of  uranium  concentrates  pursuant  to one of the SMP
delivery  contracts  wherein a net  profit of  $429,300  was  recognized  by the
Company and an increase  of  $263,100 in revenues  generated  from the rental of
equipment  and certain real estate.  There were no Uranium  sales during the six
month period ended  November 30, 1996.  The increase in rental  revenues is as a
result of  increased  equipment  rentals  to the GMMV  under  the June 23,  1997
Agreement discussed above. Finally,  other revenues increased by $176,100 during
the six months ended November 30, 1997, over the six month period ended November
30, 1996.  This increase was primarily as a result of management fees increasing
by $107,600 because of increased  activities  provided to the various subsidiary
companies and partnerships by the Company.

Costs and expenses  increased by $475,700 over the same six month period for the
prior  year.  This  is  as a  result  of  Mineral  Operations  and  General  and
Administrative expenses increasing by $203,100 and $249,600 respectively.  These
increases  were due primarily to requiring  additional  staff to administer  the
development of the GMMV and Plateau mining properties.

Operations  for the six months ended  November  30, 1997,  resulted in a loss of
$11,400 less than $0.01 per share as compared to a loss of $491,500 or $0.05 per
share for the same period last year.  The increase in earnings is primarily as a
result  of  increased  revenues  from  the sale of  uranium  and the  rental  of
equipment.



                                       13

<PAGE>



                           PART II. OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS.
               -------------------

        (a) Sheep Mountain Partners Arbitration/Litigation.
         -----------------------------------------------
The information  called for in this Item 1 has been  previously  reported in the
Company's  Form 10-K (Item 3) for the fiscal year ended May 31, 1997 and Item 1,
Part II of the Company's  Form 10-Q for the quarter ended August 31, 1997.  This
report discloses the status of the consensual arbitration/litigation in the U.S.
District  Court of Colorado  and 10th  Circuit  Court of Appeals  involving  the
Company  and USE d/b/a USECC and Nukem,  Inc.  and its  wholly-owned  subsidiary
Cycle  Resource  Investment  Corp.  (CRIC)  over  disputes  involving  the Sheep
Mountain Partners (SMP) partnership concerning the marketing and sale of uranium
and mining  operations in Wyoming.  As was reported  earlier,  a Second  Amended
Judgment  was entered on June 30,  1997,  by Judge Lewis T.  Babcock of the U.S.
District  Court of Colorado  wherein the Court again  confirmed the  Arbitration
Award ordering Nukem to pay USECC a net of approximately  $8,600,000 as monetary
damages and imposing a  constructive  trust in favor of SMP on Nukem's rights to
purchase  CIS  uranium,  the uranium  acquired  pursuant to those rights and the
profits  therefrom  (the  "CIS  contracts").   Nukem/CRIC  filed  a  motion  for
clarification  and/or limited remand of the Second Amended  Judgment.  On August
13, 1997, the U.S.  District Court denied the motion.  Nukem and CRIC then filed
an amended notice of appeal of the District  Court's Judgment and Second Amended
Judgment  with the  10th  Circuit  Court of  Appeals.  USECC  filed a motion  to
increase the supersedeas  bond Nukem posted for $8,613,600 to cover the value of
the CIS  contracts,  but the 10th Circuit Court of Appeals on December 12, 1997.
USECC filed its  Appellees'  brief on January 12,  1998.  Nukem/CRIC  may file a
reply brief on or before  January 26, 1998. The Court may hear oral arguments on
the appeal and a decision  from the Court is  expected  in late  spring or early
summer 1998.

        (b) BGBI Litigation.
         ----------------
The information  called for in this Item 1 has been  previously  reported in the
Company's Form 10-K (Item 3) for the fiscal year ended May 31, 1997. This report
discloses the status of the lawsuit filed by Bond Gold Bullfrog Inc.  ("BGBI" or
"Bond Gold") in Nye County, NV against Company,  USE and Parador Mining Company,
Inc.  regarding  Parador's  mining  lease to Bond  Gold of two  patented  mining
claims.  The District Court had bifurcated the trial of the issues and heard the
issue of whether  Parador's mining claims had extralateral  rights,  in December
1995.  On December 18, 1997, at a hearing  before the District  Court on motions
for summary  judgment by all  parties,  the Court  granted  various  motions for
summary judgment of the parties.  However,  the Court denied plaintiff's motions
for summary  judgment on the breach of Parador's lease and the issue of specific
performance by plaintiff and denied

                                       14

<PAGE>



defendants'  motion for  summary  judgment  on  plaintiff's  claim for breach of
contract. Thus, the issues of breach of contract by both BGBI and the defendants
Company,  USE and Parador and these  defendants' claim against BGBI for specific
performance, will be tried before the Court commencing on January 26, 1998.










































                                       15

<PAGE>



ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K.
               --------------------------------

        (a)    Exhibits.  None.

        (b) Reports on Form 8-K. The Company filed no Reports on Form 8-K during
the quarter ended November 30, 1997.


                                       16

<PAGE>


                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company  has  duly  caused  this  report  to be  signed  on  its  behalf  by the
undersigned, thereunto duly authorized.


                                  CRESTED CORP.
                                    (Company)



Date:  January 14, 1998                     By:    s/ Max T. Evans
                                                   -----------------------------
                                                   MAX T. EVANS,
                                                   President



Date:  January 14, 1998                     By:      s/ R. Scott Lorimer
                                                   ------------------------
                                                   ROBERT SCOTT LORIMER,
                                                   Principal Financial Officer
                                                   and Chief Accounting Officer



                                       17

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