FORM 10-Q

                       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  February  28,  1999 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, address and 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 April 13, 1999 
--------------------------------------------------------------------------------
 Common stock, $.001 par value                      10,302,694 Shares

<PAGE>

                          CRESTED CORP. AND AFFILIATE

                                      INDEX

                                                                      Page No.
PART I.    FINANCIAL INFORMATION

ITEM 1.    Financial Statements.

           Condensed Consolidated Balance Sheets
              February 28, 1999 and May 31, 1998...........................3-4

           Condensed Consolidated Statements of Operations
              Three and Nine Months Ended February 28, 1999 and 1998.........5

           Condensed Consolidated Statements of Cash Flows
              Nine Months Ended February 28, 1999 and 1998...................6

           Notes to Condensed Consolidated Financial Statements..............7

ITEM 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations..................8-12

PART II.   OTHER INFORMATION

ITEM 1.    Legal Proceedings.............................................13-14

ITEM 4.    Submission of Matters to Security Holders for Vote...............14

ITEM 6.    Exhibits and Reports on Form 8-K.................................15

           Signatures.......................................................16


                                        2
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  Financial Statements.

                           CRESTED CORP. AND AFFILIATE

                      Condensed Consolidated Balance Sheets
                                    ASSETS
<TABLE>
<S>                                           <C>             <C>    

                                                   February 28,      May 31,
                                                        1999           1998
                                                   ------------    -------------
                                                    (Unaudited)
CURRENT ASSETS:
   Cash and cash equivalents                       $4,118,500      $1,012,700
   Accounts receivable
     Trade, net                                        41,300          89,500
     Affiliates                                     1,530,900         939,900
     SMP settlement receivable, net                     --          2,513,000
   Current portion of long-term note receivables
     Related parties                                  114,600         227,800
   Inventory and other                                 66,500          26,400
                                                   ------------    -------------
        TOTAL CURRENT ASSETS                        5,871,800       4,809,300

LONG-TERM NOTES RECEIVABLE
   Related parties                                    211,100         116,500
   Real estate sales, net of valuation
      allowance of $882,900                           182,500         182,500

INVESTMENTS IN AFFILIATES                           1,432,000       1,643,300

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

PROPERTIES AND EQUIPMENT                            5,852,200       5,876,700
Less accumulated depreciation,
   depletion and amortization                      (3,385,100)     (3,221,700)
                                                    2,467,100       2,655,000

OTHER ASSETS                                          155,300         153,800 
                                               $   10,970,800     $10,211,400 
</TABLE>

 


            See notes to Condensed Consolidated Financial Statements.

                                      3

<PAGE>

                          CRESTED CORP. AND AFFILIATE
                           CRESTED CORP. AND AFFILIATE

                      Condensed Consolidated Balance Sheets

                      LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<S>                                           <C>             <C>   


                                                   February 28,      May 31,
                                                       1999            1998
                                                   ------------   --------------
                                                    (Unaudited)

CURRENT LIABILITIES:
    Accounts payable and accrued expenses          $  171,800      $  698,800
    Deferred GMMV Purchase Option                   2,000,000       2,000,000
    Current portion of long-term debt
      Affiliate                                     7,162,600       6,547,100
      Others                                           53,400          36,400
                                                   -----------     -----------
TOTAL CURRENT LIABILITIES                           9,387,800       9,282,300

LONG-TERM DEBT                                         22,400          42,100

ACCRUED RECLAMATION LIABILITY                         725,900         725,900

COMMITMENTS AND CONTINGENCIES

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

SHAREHOLDERS' EQUITY:
    Preferred stock, $.001 par value;
      100,000 shares authorized;
      none issued or outstanding                         --             --
    Common stock, $.001 par value;
      20,000,000 shares authorized;
      10,237,694 shares issued and outstanding         10,200          10,200
    Additional paid-in capital                      6,375,400       6,375,400
    Accumulated deficit                            (5,594,800)     (6,268,400)
                                                  ------------    --------------
TOTAL SHAREHOLDERS' EQUITY                            790,800         117,200
                                                  ------------    --------------
                                                  $10,970,800     $10,211,400
                                                  ============    ==============

</TABLE>


           See notes to Condensed Consolidated Financial Statements.

                                      4

<PAGE>

                          CRESTED CORP. AND AFFILIATE

                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

                                      Three Months Ended     Nine Months Ended
                                           February 28,         February 28,    
                                       1999         1998       1999      1998
<TABLE>
<S>                             <C>         <C>        <C>        <C>    
 
REVENUES:
   Mineral revenue                 $  17,500   $  23,100  $   17,500  $ 429,300
   Commercial operations              52,600     137,200     439,900    529,400
   Oil sales                          14,800      24,200      41,700     62,500
   Royalties from mineral interests   16,500         -        58,800     78,300
   (Loss) on sale of assets           (4,600)        -        (4,600)       -
   Interest                           37,100      53,800     105,500    105,700
   SMP settlements, net            3,038,600         -     3,038,600        -
   Management fees and others        142,800     296,600     438,400    637,100
-                                  ----------  ---------- ----------- ----------
                                   3,315,300     534,900   4,135,800  1,842,300
 
COSTS AND EXPENSES:
 
   Mineral operations              $ 337,600   $ 178,200  $  889,600  $ 523,100
   Commercial operations             446,800      36,000     870,700    107,700
   Oil Production                      8,900       9,500      28,400     26,200
   Interest                           10,100       5,200      23,200     15,800
   General and administrative        515,100     838,400   1,436,000  1,621,900 
                                   ----------  ---------  ----------- ----------
                                   1,318,500   1,067,300   3,247,900  2,294,700 
                                   ----------  ---------  ----------- ----------
INCOME (LOSS) BEFORE
   EQUITY IN LOSS OF AFFILIATE
   AND PROVISION FOR INCOME
   TAXES                           1,996,800    (532,400)    887,900   (452,400)

EQUITY IN GAIN (LOSS) OF AFFILIATE    96,600     (66,000)   (214,300)  (157,400)
                                   ----------  ---------- ----------- ----------
INCOME (LOSS)  BEFORE
 PROVISION FOR INCOME TAXES        2,093,400    (598,400)    673,600   (609,800)

PROVISION FOR INCOME TAXES             -           -           -          -
                                  ----------  ----------  ---------- ----------
NET INCOME (LOSS)                 $2,093,400  $ (598,400) $  673,600 $ (609,800)
                                  ==========  ==========  ========== ==========
NET INCOME (LOSS)  PER SHARE,
   BASIC AND DILUTED              $     0.20  $    (0.06) $     0.07 $    (0.06)
                                  ==========  ==========  ========== ==========
BASIC WEIGHTED AVERAGE
   SHARES OUTSTANDING             10,237,694  10,302,694  10,237,694 10,302,694 
                                  ==========  ==========  ========== ==========
DILUTED WEIGHTED AVERAGE
   SHARES OUTSTANDING             10,302,694  10,302,694  10,302,694 10,302,694 
                                  ==========  ==========  ========== ==========
</TABLE>
 


            See notes to Condensed Consolidated Financial Statements.

                                        5

<PAGE>

                           CRESTED CORP. AND AFFILIATE
                 Condensed Consolidated Statements of Cash Flows

                                                          Nine Months Ended
                                                             February 28,  
                                                     ---------------------------
                                                        1999            1998
                                                     (Unaudited)     (Unaudited)
<TABLE>
<S>                                             <C>              <C>   

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net  income (loss)                                $  673,600       $ (609,800)
  Adjustments to reconcile net  income (loss)
      to net cash provided by (used in)
      operating activities:
      Depreciation, depletion and amortization         169,200          155,100
      Equity in loss of affiliates                     214,300          157,400
      Loss (Gain) on sale of assets                      4,600             (800)
      Deferred GMMV Purchase Option                       -           2,000,000
    Net changes in components
      of working capital                             1,403,100         (758,600)
                                                    ----------        ----------
NET CASH  PROVIDED BY OPERATING ACTIVITIES           2,464,800          943,300 
                                                    ----------        ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Changes in notes receivable                           18,600          275,800
  Investments in affiliates                             (3,000)        (316,000)
  Purchase of property and equipment                   (35,900)        (546,500)
  Proceeds from sale of assets                          50,000            2,000
  Increase in other assets                              (1,500)             -
  Development of mining claims                            -                (600)
                                                    ----------        ----------
NET CASH PROVIDED BY( USED IN) INVESTING ACTIVITIES     28,200         (585,300)
                                                    ----------        ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from third party debt                       100,500          313,300
  Payment on long term debt                           (103,200)        (239,600)
  Net activity on long term debt due to affiliate      615,500          347,100
                                                    ----------        ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES              612,800          420,800 
                                                    ----------        ----------
NET INCREASE IN
  CASH AND CASH EQUIVALENTS                          3,105,800          778,800
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     1,012,700           37,100 
                                                    ----------        ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $ 4,118,500       $  815,900 
                                                    ==========        ==========
SUPPLEMENTAL DISCLOSURES:
  Interest paid                                    $    23,200       $   15,800 
                                                    ==========        ==========
  Income tax paid                                  $     6,285       $    9,500 
                                                    ==========        ==========
</TABLE>





                                        6

<PAGE>

                                 CRESTED CORP.
              Notes to Condensed Consolidated Financial Statements
 
     1) The  Condensed  Consolidated  Balance  Sheet as of February 28, 1999 the
Condensed  Consolidated  Statements of Operations  for the three and nine months
ended and the condensed consolidated statement of Cash Flows for the nine months
ended  February  28, 1999 and 1998,  have been  prepared by the Company  without
audit. The Condensed  Consolidated Balance Sheet at May 31, 1998, 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 February  28, 1999 and May 31,  1998,  the
results of operations  for the three and nine months ended February 28, 1999 and
1998,  and the  consolidated  statements  of cash flows for the nine 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, 1998 Form 10-K. The
results of operations  for the periods ended  February 28, 1999 and 1998 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" or
"USECC") which is owned 50% by Company and 50% by Company's parent,  U.S. Energy
Corp.  ("USE").  All  material  inter-company  profits  and  balances  have been
eliminated.

     4) Deferred  GMMV  Purchase  Option at  February  28, 1999 and May 31, 1998
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  acquire  the  Green  Mountain   Mining  Venture   ("GMMV")
properties. (See GMMV discussion in Item 2).

     5) During the nine months  ended  February  28,  1998 the Company  received
$5,551,900 in cash as a result of the settlement of the monetary  portion of the
SMP Arbitration Order and Award. The Company  recognized  revenues of $3,038,600
during the quarter  ended  February  28,  1999,  the  balance of  revenues  were
recognized  at the year ended May 31,  1998.  The Company and USE  continued  to
pursue the enforcement of the equitable portions of the Order and Award.

     6) Debt at February  28, 1999 and May 31, 1998  consists  primarily  of the
balance  on a note  payable  to the  Company's  parent  USE  of  $7,162,600  and
6,547,100, respectively. The remaining long-term debt of $75,800 at February 28,
1999 and  78,500 at May 31,  1998 is for  various  equipment  purchases  and the
financing of annual insurance premiums through financial institutions.

     7) The reclamation liability of $725,900 represents the Company's 50% share
of the liability at the Sheep Mountain Mines in the Crooks Gap Mining  District.
This  reclamation  work may be  performed  over  several  years  and will not be
commenced  until such time as all the uranium  mineralization  contained  in the
properties is produced or the properties are  abandoned.  It is not  anticipated
that either of these events will occur for sometime into the future.

     8) In  February  1997,  SFAS No.  128  "Earnings  per Share" was issued and
specifies the computation, presentation and disclosure requirements for earnings
per share.  SFAS 128 is effective for periods ended after  December 15, 1997 and
requires  retroactive  restatement  of prior  period  earnings  per  share.  The
statement  replaces "primary earnings per share" with "basic earnings per share"
and  replaces  "fully  diluted  earnings per share" with  "diluted  earnings per
share." Adoption of SFAS 128 did not have an effect on the Company's  previously
reported net income (loss) per common share.


                                        7
<PAGE>

 

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

     The  following  is  Management's  Discussion  and  Analysis of  significant
factors  which have  affected the  Company's  liquidity,  capital  resources and
results of operations during the periods included in the accompanying  financial
statements.

Liquidity and Capital Resources

     During the nine months  ended  February  28,  1999,  the  Company  received
$5,551,900 in cash as a result of a partial  settlements  of the Sheep  Mountain
Partners ("SMP") arbitration.  Of this amount,  $3,038,600 was recognized by the
Company  as  revenue  during  the  nine  months  ended  February  28,  1999  and
$2,295,000,  net,  during the year ended May 31, 1998. The receipt of these cash
settlements  increased  the cash position of the Company at February 28, 1999 to
$4,118,500  or a net increase for the nine months in cash of  $3,105,800.  Other
increases in components of working capital were increases in Inventory and other
of $40,100 and Accounts Receivable  Affiliates of $591,000.  Inventory and other
increased by $40,100 as a result of prepaid insurance  incurred for fiscal 1999.
Accounts Receivable  Affiliates increased due to the Company and its parent U.S.
Energy Corp.  ("USE")  advancing  funds for the Green  Mountain  Mining  Venture
("GMMV")  operations that had not been reimbursed by the GMMV as of February 28,
1999.  The Company and USE  continue to work with  Kennecott  on  resolving  the
balance due.(Please see the GMMV discussion below)

     The major  component of decreased  working  capital  during the nine months
ended  February  28,  1999,  is an increase in the current  portion of long-term
debt.  Long term debt and the  current  portion of long term debt  increased  by
$612,800 during the nine months ended February 28, 1999. This increase is due to
amounts owed USE for shared expenses that USE paid on behalf of the Company. The
other increase in debt was as a result of financing the Company's portion of
pre-paid insurance premiums, which increased debt by $100,500.

Capital Resources

     General:  The primary  source of the  Company's  capital  resources for the
remaining three months of fiscal 1999 are the cash on hand at February 28, 1999;
the potential  receipt of cash from the equitable portion of the SMP Arbitration
Order and Award which  impressed a  constructive  trust on the  contracts  Nukem
entered into with three CIS republics; possible equity financing from affiliated
companies, and proceeds under the line of credit once it is renewed. The Company
will  continue to rely on USE to provide  funding for its  expenditures  for the
remaining  three months of fiscal 1999.  Additionally,  the Company and USE will
continue to offer for sale various  non-core assets such as equipment,  lots and
homes in Ticaboo, real estate holdings in Wyoming, Colorado and Utah and mineral
interests.  Interest, rentals of real estate holdings and equipment,  commercial
operations at Ticaboo,  aircraft  chartering and aviation fuel sales,  also will
provide cash.

     Line of Credit:  The Company and USE had a $1,000,000 line of credit with a
commercial  bank. The line of credit was secured by various real estate holdings
and  equipment  belonging  to the  Company  and  USE.  The  Company  and USE are
negotiating  with  the  commercial  bank  to  increase  the  line of  credit  to
$3,000,000. No assurance can be given that the line of credit will be increased.
The bank has  however  indicated  that the line of credit will be renewed for at
least its original amount.  It is anticipated that this renewal will occur prior
to year end at May 31,  1999.  The line of credit will be used to finance  short
term working capital needs.

     Financing:  Equity  financing for Sutter Gold Mining  Company  ("SGMC") and
Plateau Resources Ltd. ("Plateau") are dependent on the market price of gold and
uranium,  respectively  among other  conditions.  As of February 28,  1999,  the
prices for these metals remained depressed and it is not known when they will

                                        8

<PAGE>

    recover.  The Company  and USE  continue to be  optimistic  concerning  the
future markets for these metals but cannot  accurately  forecast what the prices
will be in the short or long term markets.  If the price for these metals do not
increase  in the short  term,  the  working  capital of Company  and USE will be
impacted  negatively  due to holding costs of the  properties and the ability of
raising equity funding could be impaired.

     Summary:  The Company  believes  that cash on hand at February  28, 1999 as
well as proceeds  from the renewed line of credit,  if needed,  the  anticipated
proceeds from the SMP  Arbitration  Order and Award and the Company's  continued
reliance on USE, will be adequate to fund working capital  requirements  through
fiscal 1999. However,  these capital resources will not be sufficient to provide
the funding for major capital expansions of the Company's mineral properties.

Capital Requirements

     General:  The primary requirements for the Company's working capital during
the  remainder of fiscal 1999 are expected to be the costs  associated  with the
development  activities of Plateau, care and maintenance costs of the former SMP
mineral properties  acquired from SMP in June of 1998,  payments of holding fees
for mining claims,  the Company's  portion of the costs associated with the GMMV
properties  should the Company elect to  participate in the plans and budget and
corporate general and administrative expenses.

     SGMC:  The Company owns a minority  interest in SGMC and is  therefore  not
directly responsible for the ongoing administrative and development costs of the
properties owned by SGMC. Through its affiliation with USE however,  the Company
assists in the efforts to secure  financing  to place the SGMC  properties  into
production.  SGMC is currently  negotiating with an equity banking firm to raise
the funds necessary to complete the mine and mill complex and place the property
into production.  In addition to developing the mineral property,  SGMC plans to
construct a visitors center on its property which will generate  additional cash
flows.  No assurance  can be given that SGMC will be  successful  in raising the
necessary funds to complete these projects through equity markets.

     SMP: As part of a settlement agreement reached during the fourth quarter of
1998, the SMP mines and associated  properties  were  transferred to the Company
and USE.  The  holding  and  reclamation  costs  associated  with  these  mining
properties are now the  responsibility of the Company and USE. The holding costs
have been  approximately  $65,000 per month for the last two fiscal  years.  The
Company and USE  continue  to search for  improved  techniques  that will reduce
these monthly  costs.  The future  reclamation  costs on the SMP  properties are
covered by a  reclamation  bond  which is secured by the pledge of certain  real
estate  assets  owned  by the  Company  and  USE.  The  dollar  amount  for  the
reclamation  bond is reviewed  annually by  regulatory  agencies.  The Company's
portion of the  reclamation  liability on the SMP  properties as of February 28,
1999 is $725,900 and is shown as  "Reclamation  liability " within the condensed
consolidated balance sheet.

     It is  not  anticipated  that  the  SMP  properties  will  be  placed  into
production  during Fiscal 1999. The Company and USE have determined that the SMP
mining properties should be maintained and prepared for production in the future
when the price of uranium concentrates increases into the $15 per pound range or
at such  time as the  Company  and USE are able to  obtain  long  term  delivery
contracts with favorable price terms and the Sweetwater Mill (which is owned and
operated by the GMMV) is placed into production.  There are no major reclamation
obligations  requirements during the balance of Fiscal 1999 that the Company and
USE are aware of on the SMP properties.

     In addition to receiving the SMP mining properties as partial settlement of
the SMP arbitration  issues, the Company and USE also received one of the market
related delivery  contracts which had previously  belonged to SMP. There was one
delivery  under this  contract  during the third  quarter  of Fiscal  1999.  The
delivery  requirement was sold to a third party and the Company and USE received
$35,000, one half to each,

                                        9
<PAGE>

     on the sale  during the  current  quarter.  As of February  28,  1999,  the
Company has no  additional  delivery or  financing  commitments  for the sale or
purchase of uranium during Fiscal 1999.

     The Company and USE continue to fund efforts to collect the equity  portion
of the SMP  Arbitration  Award.  Additional  court actions have been taken in an
effort to collect  amounts  that the  Company and USE believe are due them under
the Award. It is not known when these matters will be resolved and what the cost
of resolution will be. Please refer to Part II, Item I. Legal Proceedings.

     GMMV: During July 1998, the GMMV Management Committee unanimously agreed to
place the  Jackpot  Mine and  Sweetwater  Mill on active  standby  status.  This
decision was made as a result of uncertainties in the short term uranium market.
These same  uncertainties  resulted  in the  failure in the  attempt of USECC to
acquire Kennecott's  interest in the GMMV. The Company and USE had until October
31, 1998 to complete the financing efforts to purchase Kennecott's interest. The
financing was not successfully completed and the Acquisition Agreement which was
signed on June 23, 1997, expired on October 31, 1998.


     After October 31, 1998,  the mines and the mill continue to be  maintained.
Kennecott's  obligation  to fund the first $50  million in  expenditures  is now
satisfied.  The Management  Committee of the GMMV is currently  discussing  what
level  of  expenditures  should  be made to  maintain  the  properties.  A final
decision on these  expenditures  has not been reached but the  Company,  USE and
Kennecott  are  desirous  that  the  expenses  be  held to a  minimum.  Although
Kennecott's  $50 million  work  commitment  has been  satisfied,  the entire $16
million loan under the Acquisition Agreement was not advanced by Kennecott.  The
GMMV Management  Committee is still  discussing how and when the balance of $1.5
million under the loan can be spent.  The Company and USE have notified GMMV and
Kennecott that they will not be able to participate in the ongoing holding costs
of the mine and mill which could potentially cause a dilution of their interests
in the GMMV. The GMMV Management Committee has not resolved how to proceed.

     Expenditures through October 1998 were covered under the $16 million dollar
loan from Kennecott Energy pursuant to the Acquisition Agreement. From that time
forward,  the Company and USE have  continued to fund the operations at the GMMV
mineral  properties.  At  the  time  of the  filing  of  this  report,  all  but
approximately  $450,000 of the monies  advanced by the Company and USE have been
reimbursed by GMMV.  The Company and USE continue to discuss with  Kennecott the
resolution of the outstanding amounts.

     Plateau:  Plateau owns and maintains the Tony M uranium mine and Shootaring
Uranium mill in southeastern  Utah. The Company and USE are currently working to
obtain  the  final  approval  from the NRC to place  the  Shootaring  mill  into
production.  The Company and USE are seeking debt or equity financing to put the
mill and Tony M mine  into  production.  Until  such  time as the  financing  is
received and profitable contracts are obtained,  the Company and USE do not plan
to put the properties  owned by Plateau into production.  Historically,  the net
holding costs of the Plateau properties have been $70,000 per month.

     Plateau also operates the Ticaboo Townsite and commercial operations. Those
operations consist of a motel,  convenience store, restaurant - bar, mobile home
lot rentals, projected sale of home lots and boat storage facilities. Plateau is
currently  expanding  its boat  storage and real estate  sales  business.  It is
anticipated that following the initial  development  stage that these operations
will be grown out of profits off on going sales.

     Yellow  Stone Fuels  Corp.  ("YSFC"):  In  Management's  opinion,  YSFC had
sufficient  cash to  complete  its  projected  1999  exploration  program on its
in-situ  uranium  properties.  YSFC  owes  the  Company  and USE  $400,000  on a
convertible  promissory  note plus  interest  at 10% per annum  which was due on
March 31,  1999.  Additionally,  YSFC is indebted to the Company and USE for the
interest accrued on the note and

                                       10

<PAGE>

    additional  amounts  that the Company and USE have  advanced for YSFC for a
total indebtedness at February 28, 1999 of $654,700. YSFC has sufficient cash on
hand to retire this indebtedness. YSFC has indicated its desire to pay the total
indebtedness  in cash but it is not certain  that a cash payment will be made as
YSFC may elect,  at its option,  to pay the  promissory  note with shares of its
common stock.

     Term Debt and Other  Obligations:  Debt to non-related  parties at February
28, 1999 was $75,800 as compared to $78,500 at May 31, 1998 The increase in debt
to non-related  parties  consists primary of debt due on the financing of annual
insurance  premiums.  The balance of the debt to non-related  parties is for the
purchase of various pieces of heavy equipment and bears different interest rates
and has various maturity dates. All payments on the debt are current.

     As of February  28,  1999,  the  Company  was  indebted to USE in the total
amount of $7,162,600.  USE has not indicated that it will call the debt,  (which
is backed by a promissory note), when it is due. The Company will need to either
retire the note with  shares of its common  stock;  pay the debt with any monies
received  from the SMP  Arbitration  Award if  additional  cash is  received  or
negotiate with USE to extend the note and or negotiate an alternative  method of
repayment.

     Reclamation  Obligations:  It is not anticipated  that any of the Company's
working  capital will be used in Fiscal 1999 for the  reclamation  of any of its
mineral property  interests.  The reclamation costs are long term and are either
bonded  through  the  use of cash  bonds  or the  pledge  of  assets.  It is not
anticipated  that any of the  mining  properties  in which the  Company  owns an
interest of will enter the reclamation phase prior to May 31, 1999.

     Other:  The Company and USE  currently are not in production on any mineral
properties,   and   development   work  continues  on  several  of  their  major
investments.  The Company and USE are not using  hazardous  substances  or known
pollutants  to any great  degree in these  activities.  Consequently,  recurring
costs for managing hazardous substances, and capital expenditures for monitoring
hazardous  substances or pollutants have not been  significant.  The Company and
USE are also not aware of any claims for  personal  injury or  property  damages
that need to be accrued or funded.

     The tax years  through May 31,  1992 are closed  after audit by the IRS. On
October 5, 1998 the Company  and USE met with the  Appeals  Office of the IRS in
Denver,  Colorado to discuss  resolving  issues raised for Fiscal 1993 and 1994.
The Company and USE have resolved all outstanding issues for those years without
incurring any cash  commitments  for additional  taxes due. The IRS is currently
concluding its review of Fiscal 1995 and 1996 for both  companies,  but no final
reports have been issued  therefore no  representations  can be made as to their
ultimate outcome.

Results of Operations

     Nine months Ended  February 28, 1999 Compared to Nine months Ended February
28, 1998

     During the nine months ended February 28, 1999, revenues increased from the
same period of the previous year by $2,293,500 to total  revenues of $4,135,800.
The major increase resulted from the Company recognizing  $3,038,600 in revenues
as the payment of the monetary  portion of the SMP  Arbitration  Award after the
10th Circuit Court affirmed the Federal  Court's  Second Amended  Judgment which
was  appealed by Nukem and CRIC.  This  increase  was offset by a  reduction  in
revenues recognized from the delivery of uranium under SMP contracts. During the
nine months ended February 28, 1998, the Company recognized  $429,300 in revenue
from a SMP contract  delivery.  During the nine months ended  February 28, 1999,
the Company only recognized $17,500.


                                       11
<PAGE>

     Costs and expenses for the nine months ended February 28, 1999 increased by
$953,200  over the same period of the  previous  year.  The primary  increase in
costs  came  as a  result  of  increased  activity  on  mineral  properties  and
commercial  operations  along with an  increase  in general  and  administrative
overhead to supervise  the  increased  activity.  The  projects  which are being
developed,  are currently not in the production phase do not generate cash flow.
With the decline in the market  price of  uranium,  the  properties  will not be
placed into production in Fiscal 1999.  Until the price of uranium  concentrates
recovers and the capital is raised to place the properties into production,  the
operating and  administrative  costs of the properties should decline until they
consist of only standby costs.

     As a result  primarily of the increased  revenues from the SMP arbitration,
operations  for the nine months ended February 28, 1999 resulted in a net income
of  $673,600  or $0.07 per share as  compared to a loss of $609,800 or $0.06 per
share for the nine months ended February 28, 1998.

Year 2000 Issue

     Computer  programs  written  in the past  utilize  a two  digit  format  to
identify the applicable  year. Any date sensitive  software  beyond December 31,
1999 could fail, if not modified. The result could be among other possibilities,
disruptions  to  the   operations   and  the  inability  to  process   financial
transactions. The Company has evaluated the operating systems on all headquarter
and field office computers and consulted with all of the vendors of the computer
software  which is being used by the Company and  affiliates.  The vendors  have
confirmed to the Company  that all of the  Company's  software  and  information
systems are Year 2000 compliant.

                                       12

<PAGE>

                          PART II. OTHER INFORMATION

ITEM 1.     Legal Proceedings

Sheep Mountain Partners Arbitration/Litigation

     In 1991,  disputes arose between  USE/Crested,  d/b/a USECC and Nukem, Inc.
and its subsidiary  Cycle Resource  Investment  Corp.  ("CRIC"),  concerning the
formation and operation of the Sheep Mountain  Partners  partnership for uranium
mining and  marketing,  and activities of the parties  outside SMP.  Arbitration
proceedings  were initiated by CRIC in June 1991 and in July 1991, USECC filed a
lawsuit against Nukem,  CRIC and others in the U.S.  District Court of Colorado.
Later,  USECC filed  another suit for the standby costs at the SMP mines against
SMP in the  Colorado  State  Court.  The Federal  Court  stayed the  arbitration
proceedings and the State Court case was also stayed. In fiscal 1994, all of the
parties agreed to exclusive and binding  arbitration of the disputes  before the
American  Arbitration  Association,  ("AAA") for which the legal  claims made by
both sides included fraud and misrepresentation,  breach of contract,  breach of
duties owed to the SMP partnership, and other claims.

     Following  hearings  before a three  member  panel of the  AAA,  the  Panel
entered  an Order  and Award on April 18,  1996 and  supplemented  it on July 3,
1996,  which were ultimately  confirmed by the U.S.  District Court of Colorado.
Please see "Item 3. Legal Proceedings " in the Company's 1998 Form 10-K for more
details of this arbitration/litigation.  Nukem appealed the decision of the U.S.
District  Court to the 10th Circuit  Court of Appeals and on September 24, 1998,
oral arguments  were made to a three judge panel.  On October 22, 1998, the 10th
Circuit  Court of Appeals  affirmed the Second  Amended  Judgment  issued by the
Federal Court confirming the Arbitration  Order and Award and issued its Mandate
on  November  13,  1998.  Thereafter,  Nukem and CRIC filed a motion in the U.S.
District  Court  seeking  full  satisfaction  of the  judgment  against them and
offering to deposit the net amount due USECC of $5,971,596 in full  satisfaction
of the Second Amended Judgment. Plaintiffs USECC filed a response requesting the
Court to deny  Defendants  Motion and filed a motion to compel the company which
posted the  supersedeas  bond for Nukem to pay the judgment.  The District Court
denied the motion of Nukem and CRIC and Nukem paid USECC  $6,077,264 on February
9, 1999.  Since then,  USECC has filed  certified  copies of the Second  Amended
Judgment in Illinois and elsewhere to enforce the Judgment.  Proceedings  in aid
of execution are pending in a Federal and State Court in Illinois.

Ticaboo Townsite Litigation

     In fiscal 1998, a prior  contract  operator of the Ticaboo  restaurant  and
lounge,  and two employees  supervising the motel and convenience  store in Utah
(owned by Canyon  Homesteads,  Inc.) sued USE,  Crested and others in Utah State
Court.  After a five  day  trial,  a jury  denied  the  claims  of two of  three
plaintiffs but awarded the third plaintiff $156,000 in compensatory and punitive
damages plus $90,000 in attorneys fees against USE. USE filed motions  including
a motion for judgment  notwithstanding the verdict ("JNOV") which were denied by
the Court.  USE posted a  supersedeas  bond for $275,000  and is  appealing  the
judgment. The opening brief of USE is due on May 11, 1999.

BGBI Litigation

     USE and Crested are defendants and counter- or  cross-claimants  in certain
litigation in the District Court of the Fifth  Judicial  District of Nye County,
Nevada,  brought by Bond Gold Bullfrog Inc. ("BGBI") on July 30, 1991. BGBI (now
known as Barrick Bullfrog, Inc.) is an affiliate of Barrick Corp.,

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<PAGE>

     a large international gold producer  headquartered in Toronto,  Canada. The
litigation primarily concerns  extra-lateral rights associated with two patented
mining claims owned by Parador  Mining  Company Inc.  ("Parador")  and initially
leased to a  predecessor  of BGBI,  which  claims are in and  adjacent to BGBI's
Bullfrog  open pit and  underground  mine near Beatty,  Nevada.  USE and Crested
assert certain  interests in the claims under an April 1991 assignment and lease
with  Parador.  The  lease and  assignment  are  subject  to the lease to BGBI's
predecessor.  Please see "Item 3, Legal  Proceedings " of Registrant's 1998 Form
10-K for more  details of this  litigation.  The record on appeal has been filed
with the Nevada  Supreme Court and the Company,  USE and Parador have  requested
that the record be supplemental  because it was incomplete.  Thereafter,  briefs
will be filed by BGBI and the Company, USE and Parador.

Department of Energy Litigation

     On July 20, 1998,  eight uranium mining  companies  with  operations in the
United  States  (including  USE,  Crested,  YSFC) and the Uranium  Producers  of
America (a trade  organization)  filed a  complaint  against  the United  States
Department  of Energy  (the  "DOE")  in a  lawsuit  (file no. 98 CV 1775) in the
United States District Court, Cheyenne, Wyoming alleging inter alia that the DOE
unlawfully  transferred  uranium to USEC Inc.  which  became a  publicly  traded
corporation.  Please see "Item 3. Legal  Proceedings " of Registrant's 1998 Form
10-K for more details of this litigation.  The DOE has filed a motion to dismiss
the complaint claiming that the U.S. Congress withdrew its consent to be sued in
connection with the USEC Inc. privatization and that USEC Inc. must be joined as
an  indispensable  party.  The motion was heard on January 8, 1999 in  Cheyenne,
Wyoming and the District Court took the motion under advisement.

Contour Development Litigation

     On July 28, 1998, USE filed a lawsuit in the United States  District Court,
Denver,  Colorado against Contour Development  Company,  L.L.C. and entities and
persons  associated  with  Contour  Development   Company,   L.L.C.   (together,
"Contour")  seeking  compensatory  and  consequential  damages of more than $1.3
million from the  defendants  for  dealings in certain  real estate.  Please see
"Item 3. Legal  Proceedings " of Registrant's 1998 Form 10-K for more details on
this litigation.  The parties have reached an agreement to settle the litigation
and documents are being circulated for authority to resolve the disputes.

ITEM 4.  Submission of Matters to Security
     Holders for Vote On December 4,1998,  an annual meeting of shareholders was
held and the only issue was the election of five  directors.  The results of the
meeting  were  reported  in the  Company's  Form 10Q for  fiscal  quarter  ended
November 30, 1998.

ITEM 5. Other  Information  On December 28, 1998,  the Utah  Department  of
Water Quality began public advertisement of a notice for a public hearing on the
water discharge permit for the Shootaring  Canyon uranium mill. The state issued
the permit on March 17, 1999 and will be reviewed by the NRC to determine if the
permit is in compliance.



                                       14

<PAGE>

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

     (a) Exhibits. None.

     (b) Reports on Form 8-K.  The  Registrant  did not file any Reports on Form
8-K during the three months ended February 28, 1999.


                                       15
<PAGE>
                                  
                                   SIGNATURES

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

                                          CRESTED CORP.
                                          (Registrant)



Date: April 13, 1999          By:   /s/ John L. Larsen
                                    -----------------------------------------
                                    JOHN L. LARSEN,
                                    Chairman and Vice President



Date: April 13, 1999          By:   /s/ R. Scott Lorimer
                                    ------------------------------------------
                                    ROBERT SCOTT LORIMER,
                                    Principal Financial Officer
                                    and Chief Accounting Officer




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