EXHIBIT 10.50
                                   EXHIBIT "A"
                                 PROMISSORY NOTE
$16,000,000                                                       June 23, 1997

        For value received,  Kennecott Uranium Company,  a Delaware  corporation
(the  "Borrower"),  promises  to pay to  Kennecott  Energy  Company,  a Delaware
corporation  (the "Lender"),  or its order,  at the place  designated in writing
from time to time by the Lender, without setoff or deduction,  the principal sum
of Sixteen Million Dollars (U.S. $16,000,000.00), together with interest accrued
on all amounts outstanding hereunder.

        Interest  shall  be  compounded  annually  as of the  last  day of  each
calendar year on all amounts outstanding hereunder on that date.

        Absent an Event of Default,  interest  shall begin to accrue  twenty-two
(22) months after the date hereof. Such interest shall accrue at the rate of ten
and one-half percent (10.5%) per annum.

        Principal  and  interest  are  payable  by  Borrower  to the  Lender  in
quarterly  installments  in an amount equal to twenty  percent (20%) of the Cash
Flow from the GMMV Properties for such quarter (the "Payment").  Notwithstanding
the preceding sentence, in no event shall the Payment exceed fifty percent (50%)
of the EBITDA from the GMMV  Properties  for the end of the quarter  immediately
preceding the Payment due date.  Concurrently with each Payment,  Borrower shall
deliver  to  Lender  a  certificate  of  its  Chief  Financial  Officer  ("CFO")
certifying  the  accuracy  of the  calculation  of the  Payment  based  upon the
financial  statements  of Borrower  (which  shall also be certified by the CFO).
Borrower shall provide to Lender complete  copies of such financial  statements.
Borrower  shall keep adequate  records and books of account in  accordance  with
GAAP  to  support  such   financial   statements   and  permit  any   authorized
representative  of Lender to  inspect,  copy and audit the same upon  reasonable
prior notice,  at least once in every calendar year. All payments due under this
Note shall be applied first  against  outstanding  costs,  expenses and fees due
under  this Note,  then to accrued  but unpaid  interest  and then  against  the
outstanding principal amount due under this Note.

        Payments  for each  calendar  quarter  shall be due on each  January 20,
April 20, July 20 and October 20 immediately following such quarter, if there is
both Cash Flow and EBITPA from the GMMV Properties with respect to such quarter.
Notwithstanding  Cash Flow,  EBITPA or any other  provision  hereof,  the entire
balance of this Note shall be due and payable on June 23,  2010.  If any Payment
to be made by Borrower  shall  become due on a day which is not a Business  Day,
such  payment  shall  be made  on the  next  succeeding  Business  Day and  such
extension of time shall be included in computing the interest in such payment.

        Borrower  shall pay all amounts  due under this Note in lawful  money of
the United States of America.

        Borrower  may,  at its own  election,  prepay any unpaid  principal  and
interest without penalty provided such prepayment  equals or exceeds one million
dollars  ($1,000,000) and notice of such prepayment  election is given to Lender
at least ten (10) days prior to such payment.



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                                                                   EXHIBIT 10.50


        If any Payment is not paid when due,  including any  acceleration of the
obligations  under  this  Note due to a default  by  Borrower,  the  outstanding
principal balance of this Note shall bear interest, from such due date until the
date of such payment,  at a rate per annum equal to the lesser of (a) twelve and
one-half  percent  (12.5%),  or (b) the maximum  interest  rate  permitted to be
charged by the laws of the State of Wyoming (the "Default Rate").

        Upon an  Event  of  Default,  the  Borrower  has the  right  to cure any
monetary  default within ten (10) days after the due-date  thereof  without such
event otherwise  constituting a default and for any  non-monetary  default,  the
Borrower has the  opportunity to cure such default within thirty (30) days after
written notice to Borrower of such Event of Default.  A breach or default by the
Borrower of any term or condition  of this Note or the Deed of Trust,  Mortgage,
Security Agreement,  Financing  Statement and Assignment of Proceeds,  Rents and
Leases,  entered  into by the  Borrower  and Lender on even date  herewith  (the
"Mortgage")  securing this Note,  shall constitute a default under this Note and
the Mortgage. Each Event of Default herein and the remedies provided to Borrower
for curing of such defaults shall apply to each of the Note and the Mortgage. To
the extent  that an Event of Default and the  remedies  provided in the Note and
the  Mortgage  are  inconsistent,  the terms and  conditions  of this Note shall
apply. The following constitute an Event of Default:

        (i) The  failure to pay in full,  when due,  any  payment of interest or
principal  required  hereunder  or the  failure  to  provide  any  documentation
required by this Note.

        (i) the occurrence of any Event of Default which is defined in the 
Mortgage.

        Borrower agrees that upon the occurrence of any Event of Default and the
failure of the Borrower to cure the default as above provided, Lender shall have
the right,  in addition to all other  rights and  remedies  available  to Lender
under the  Mortgage,  or by law, to do any or all of the  following  and in such
order as Lender, at its sole discretion, deems advisable:

        (ii) Lender may  accelerate  the payment of the Note and  thereupon  the
principal sum then remaining unpaid on the Note and all accrued interest thereon
shall become immediately due and payable.

        (iii)  Lender  may seek the court  appointment  of a  receiver,  without
regard to the solvency of Borrower,  to prevent waste, and to protect all rights
accruing to Lender by virtue of the Note and  Mortgage.  All costs and  expenses
incurred in connection  with the  appointment  of such  receiver,  and all costs
incurred  by  Lender  or the  receiver  in  connection  with the  protection  or
preservation  of the  Collateral  shall  be  charged  against  Borrower,  may be
enforced as a lien  against such  Collateral  and shall be deemed an increase to
and a part of the Note.

        Lender  shall have the right to enforce any one or more of the  remedies
provided  hereunder or by law or in equity either  successively or concurrently,
and any such  action by Lender  shall not be deemed an  election  of remedies or
otherwise  prevent Lender from pursuing any further remedy it may have hereunder
or at law or in equity. The rights and remedies of Lender are cumulative.


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                                                                   EXHIBIT 10.50


        All sums expended and expenses incurred by Lender in the exercise of the
rights  conferred in this Note and the  Mortgage  shall be deemed to be advanced
and loaned to Borrower  hereunder,  and payment  thereof shall be secured by the
Mortgage,  provided, however, that Lender may demand immediate repayment of such
sums and that such sums shall bear interest at the Default Rate.

        Borrower shall pay to Lender upon demand all reasonable costs,  expenses
and fees (including  reasonable  attorney's fees), whether suit be instituted or
not,  both before and after  judgment,  and for any judicial  proceeding  at the
trial court and appellate levels (and if suit is instituted,  such fees as shall
be fixed by a judge sitting  without a jury) incurred by Lender in protecting or
enforcing  its rights  hereunder,  and under the  Mortgage,  and all expenses of
taking  possession,  holding  and  disposing  of the  Collateral,  including  as
incurred in any bankruptcy, insolvency, or arbitration proceeding.

        Borrower  hereby  waives  diligence,  demand,  presentment  for payment,
notice of  nonpayment,  protest,  notice of dishonor and notice of protest,  and
hereby  waives any defense by reason of  extension  of time for payment or other
indulgence granted by Lender.

        No delay or  failure  of  Lender  in  exercising  any  right,  remedy or
privilege  under this Note shall  affect such right,  remedy or  privilege,  nor
shall  any  single  or  partial   exercise   thereof  or  any   abandonment   or
discontinuance  of steps to enforce such a right,  remedy or privilege  preclude
any  further  exercise  thereof or the  exercise of any other  right,  remedy or
privilege.   The  rights,  remedies  and  privileges  of  Lender  hereunder  are
cumulative and not exclusive of any rights,  remedies or privileges which Lender
would  otherwise  have. Any waiver,  permit,  consent or approval of any kind or
character on the part of Lender of any breach or default  under this Note, or of
any  provision  or  condition  of this  Note,  must be in  writing  and shall be
effective only to the extent  specifically set forth in such writing.  No notice
to or demand on Borrower  shall entitle  Borrower to any other or further notice
or demand in other similar circumstances. A waiver on any one occasion shall not
be construed  as a waiver or bar to any right,  remedy or privilege on any other
occasion.

        All notices,  consents or communications  required under this Note shall
be in writing  and shall be deemed to have been  properly  given if sent by hand
delivery, overnight courier or certified mail, postage prepaid, addressed to the
parties at the addresses set forth in the Mortgage.

        No  amendment  or  modification  of any  provision of this Note shall be
valid unless the same shall be in writing and signed by the Lender and Borrower.

        This Note is to be construed  and enforced in all respects in accordance
with the laws of the State of Wyoming,  without  giving  effect to any choice or
conflict  of law  provision  or rule either of the State of Wyoming or any other
jurisdiction  which  would  cause the  application  of any law other than of the
State of Wyoming.


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                                                                   EXHIBIT 10.50


        Whenever used herein the words  "Borrower"  and "Lender" shall be deemed
to include, to the extent applicable, the successors and assigns of Borrower and
of Lender.  This obligation  shall bind Borrower and, to the extent  applicable,
its  successors and assigns,  and the benefits  hereof shall inure to Lender and
its successors and assigns.

        Capitalized  terms which are not defined  herein shall have the meanings
subscribed to them by Annex I attached hereto.

        Time  is of  the  essence  of  this  Note  and of  all  the  obligations
hereunder.

        Executed this 23rd day of June, 1997.

                                KENNECOTT URANIUM COMPANY

                                By:   /s/  L. R. Cardey-Yates
                                   --------------------------------------------
                                Its:     Director/Assitant Corporate Secretary
                                    -------------------------------------------


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                                                                   EXHIBIT 10.50

                                     ANNEX I
                                   Definitions

        "ACQUISITION  AGREEMENT" means the acquisition  agreement by and among 
Borrower,  U.S. Energy Corp. and the joint venture between U.S. Energy Corp. and
Crested Corp., dated the 23rd day of June, 1997.

        "BUSINESS  DAY"  means any day other  than a  Saturday,  a Sunday,  or a
holiday on which  national  banking  associations  in the state of  Wyoming  are
closed.

        "CASH FLOW" means cash flow  calculated in accordance  with GAAP for the
applicable period.

        "CLOSING" means  the  closing of the  transactions contemplated  by the
Acquisition Agreement.

        "COLLATERAL" means Mortgaged Property as defined in the Mortgage.

        "EBITDA" means earnings before  interest,  Income Tax,  depreciation and
amortization calculated in accordance with GAAP for the applicable period.

        "GAAP" means United States generally accepted  accounting  principles as
in effect from time to time.

        "GMMV  PROPERTIES" means the mill and mining properties which, as of the
date hereof, are subject to the GMMV Agreements.

        "GMMV AGREEMENTS" means the  following  agreements among Borrower,  U.S.
Energy Corp. and the joint venture  between U.S. Energy Corp. and Crested Corp.:
(i) Mining Venture  Agreement  dated June 1, 1990;  (ii) Letters dated September
10, 1990 and March 1, 1991;  (iii)  Amendment and Agreement  dated September 20,
1991; (iv) Agreement  Regarding  Sweetwater Mill and Amendment to Mining Venture
Agreement  dated  September 20, 1991; (v) the Third  Amendment to Mining Venture
Agreement  dated  February  26,  1992;  and (vi) the Fourth  Amendment of Mining
Venture Agreement dated as of June 23, 1997.

        "INCOME TAX" means any federal,  state,  local,  or foreign  income tax,
including any interest, penalty, or addition thereto, whether disputed or not.


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