EXHIBIT 10.53
                                   EXHIBIT "H"





                             MINERAL LEASE AGREEMENT

                                     BETWEEN


                       THE GREEN MOUNTAIN MINING VENTURE,

                                   AS LESSOR,

                                       AND

                                 S. ENERGY CORP.
                                       AND
                                  CRESTED CORP.
                                      D/B/A
                                     USE/CC

                                    AS LESSEE




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                                                                   EXHIBIT 10.53


                             MINERAL LEASE AGREEMENT


        THIS MINERAL LEASE AGREEMENT (the "Agreement") is entered into this 23rd
day of June,  1997 (the  "Effective  Date"),  by and between the GREEN  MOUNTAIN
MINING VENTURE (the "GMMV"), a Mining Venture between Kennecott Uranium Company,
a  Delaware  corporation  ("KUC"),  U.S.  Energy  Corp.,  a Wyoming  corporation
("USE"),  and a  joint  venture  between  USE  and  Crested  Corp.,  a  Colorado
corporation  ("Crested")  (the joint venture between USE and Crested is referred
to as  "USE/CC"  and  USE,  Crested  and  USE/CC  are  referred  to as the  "USE
Parties"), as lessor, and USE/CC, in its separate capacity, as lessee.

                                    RECITALS

        A. The GMMV owns or controls  certain  patented  and  unpatented  mining
claims and other property in Fremont County,  Wyoming (the "Mining Properties").
The  Mining  Properties  are more  particularly  described  in Exhibit A to this
Agreement.

        B. USE/CC  desires to lease the Mining  Properties  from the GMMV and to
conduct certain  operations as more particularly  described in Exhibit D to this
Agreement  (the "Work") on the Mining  Properties  pursuant to the terms of this
Agreement.  USE/CC has the skill and  expertise  necessary to develop a strategy
for,  and to  supervise  and to perform  the  design,  engineering,  permitting,
procurement, construction and other work necessary to complete the Work.

                                    AGREEMENT

        For good and  valuable  consideration,  the receipt and  sufficiency  of
which are  acknowledged  by each of the  parties,  the GMMV and USE/CC  agree as
follows:

        1.     GRANT OF LEASE.

        The GMMV leases the Mining  Properties  to USE/CC and USE/CC  leases and
takes the Mining  Properties from the GMMV for the purposes and on the terms and
conditions set forth in this Agreement.

        2.     TERM.

        The  term  of  this  Agreement  commences  on  the  Effective  Date  and
terminates on the date of termination of the  Acquisition  Agreement,  dated the
same  date  as  this  Agreement,   between  KUC  and  the  USE/CC  Parties  (the
"Acquisition   Agreement"),   unless  sooner  terminated  as  provided  in  this
Agreement,  provided  that in no case  shall the term of this  Agreement  extend
beyond October 30, 1998.



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                                                                   EXHIBIT 10.53


        3.     USE OF THE MINING PROPERTIES.

        USE/CC is  granted  the  following  rights  with  respect  to the Mining
Properties insofar as such rights are necessary to perform the Work:

        (a) The right of access, ingress and egress to the Mining Properties and
the right to enter  upon and  occupy  the  Mining  Properties  for all  purposes
reasonably incident to evaluating the environmental  condition and potential for
mineral  development  of the Mining  Properties,  including the right to explore
for, to develop, to mine (by underground mining,  surface mining,  strip mining,
or any other surface or subsurface method),  extract,  mill,  stockpile,  store,
process,   remove  and  market  all  merchantable   ores,  metals  and  minerals
(collectively, "Mineral Products") found in the Mining Properties, provided that
USE/CC  shall  have the  right  to  respond  to  requests  for  bids on  uranium
concentrates  as agent for the GMMV and for  Plateau  Resources  Ltd.,  provided
USE/CC  delivers a copy of each such response to the GMMV in the manner provided
in Section 14 hereof for notices.  USE/CC shall not enter into any contracts for
sale of  Mineral  Products  on behalf  of the GMMV  prior to  closing  under the
Acquisition Agreement. The Parties agree that no final acceptance or approval of
any  contract  committing  the GMMV  will be made  prior to  closing  under  the
Acquisition Agreement. The USE Parties covenant and agree that the provisions of
the  preceding  two  sentences  shall be  disclosed  in  writing  in each bid or
proposed contract contemplated hereunder.

        (b) The right to mine and remove Mineral  Products  existing on or under
the Mining Properties through or by means of portals,  shafts, openings, or pits
that presently  exist on the Mining  Properties or that may be sunk or made upon
the Mining  Properties or upon adjoining and nearby  property,  and the right to
stockpile any Mineral Products  produced from the Mining Properties upon grounds
situated upon any such properties;

        (c) The right to commingle  Mineral  Products  produced  from the Mining
Properties  with ores and minerals  produced  from other  properties;  provided,
however,  that USE/CC shall  calculate from  representative  samples the average
grade of the ores and minerals to be commingled and shall weigh (or calculate by
volume)  the ores  and  minerals  from  each  property  before  commingling.  If
yellowcake or any other  concentrates  are produced from the commingled ores and
minerals,  USE/CC shall also calculate from  representative  samples the average
recovery  percentage  for all such  concentrates  produced  during the  calendar
quarter and shall allocate a percentage of concentrate  production to the Mining
Properties according to such calculations.  In obtaining  representative samples
and calculating the average grade of the ore and average  recovery  percentages,
USE/CC shall use procedures  generally  accepted in the mining and metallurgical
industry;

        (d)  The  right  to  temporarily  or  permanently  deposit  waste  rock,
overburden,  surface  stripping,  and all other  materials mined from the Mining
Properties on or off the Mining Properties;

        (e) The right to beneficiate,  concentrate,  process,  and/or  otherwise
treat Mineral  Products  produced from the Mining  Properties by any physical or
chemical method;



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                                                                   EXHIBIT 10.53


        (f) The right to use the GMMV's water rights on, about,  under, or which
are  appurtenant  to the Mining  Properties  in connection  with the  activities
described in items (a) through (f) above; and

        (g)  The   right   to  use   all   rights,   improvements,   privileges,
hereditaments,  and  appurtenances  belonging or in any way  appertaining to the
Mining Properties in connection with the above described  activities;  provided,
however, that nothing in this Agreement shall be deemed to create any express or
implied  right in USE/CC to use the GMMV's  Sweetwater  Mill with respect to the
activities of USE/CC undertaken pursuant to this Agreement.

        4.     PERMITS AND BONDS.

        (a) During the term of this  Agreement,  the GMMV will use  commercially
reasonable  efforts to  maintain,  or to cause KUC to  maintain,  the  operating
permits  and bonds set out in Exhibit B to this  Agreement;  provided,  however,
that the GMMV does not make any  representation  or warranty with respect to its
ability to maintain or to cause to be maintained  such permits or bonds, or with
respect to the ability of USE/CC to conduct any operations on or with respect to
the  Mining  Properties  pursuant  to such  permits  and bonds nor does the GMMV
represent  or warrant that such permits and bonds are the only permits and bonds
required to conduct  operations  on the Mining  Properties.  For all permits and
bonds  that  remain  in the name of the  GMMV or KUC,  the  GMMV  will  make all
payments  and provide  all notices  required  with  respect to such  permits and
bonds.  USE/CC  shall  develop and shall  recommend  to the GMMV a strategy  for
negotiation of all amendments,  renewals or other  modifications to such permits
or bonds as may be necessary to allow USE/CC to complete the Work. The GMMV will
implement such strategy in  cooperation  with USE/CC unless such strategy is, in
the GMMV's reasonable judgment,  inconsistent with applicable law, regulation or
administrative policy or the terms of this Agreement,  such strategy jeopardizes
the  continued  existence of such permits or bonds or such strategy will subject
the GMMV to penalties under such law, regulation,  policy,  permits or bonds. To
the extent permitted by applicable law, regulation and administrative policy and
so long as such direction is consistent with the preceding sentence, USE/CC will
prepare all  correspondence,  drawings and other documents  related to, and will
direct the course of all  negotiations  with such agencies and  businesses  with
respect to the terms, conditions, renewals, amendments,  extensions, replacement
or transfer of such permits and bonds;  provided that the GMMV will initiate all
contacts with the agencies or businesses  involved and will  participate  in all
meetings and telephone conferences or other conversations with such agencies and
businesses   and  will   approve  in  advance   the  form  and  content  of  all
correspondence  and other  documents  prepared by USE/CC in connection with such
negotiations prior to submission to such agencies and businesses.

        (b) USE/CC shall also  promptly  develop a strategy with respect to, and
advise the GMMV as to, any  additional  permit or bond or increase in the amount
of an existing bond that is or will be required with respect to the Work. Within
15 days of  receiving  notice  from  USE/CC as to any such  need,  the GMMV will
determine if it desires to obtain such permit, bond or increase in the amount of
a bond in its own name,  in which case the permit or bond will be treated in the
same  manner as the permits and bonds set out in Exhibit B, or if it desires for
USE/CC to secure the permit or bond in USE/CC's  own name,  in which case USE/CC
shall be


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                                                                   EXHIBIT 10.53


solely responsible for the costs,  terms and conditions of such permit,  bond or
increase  in the amount of a bond  provided  that such  permit or bond cannot be
binding on the GMMV or extend beyond the date of termination of this  Agreement.
If requested by USE/CC, the GMMV will participate in, and cooperate with respect
to, negotiation of such permits and bonds.

        (c) All costs and  expenses  incurred  by the GMMV in  carrying  out the
activities in this Section 4 shall be included in Transition Costs as defined in
the Acquisition Agreement.

        5.     PAYMENTS.

        (a) In  consideration  for the lease by the GMMV to USE/CC of the Mining
Properties and for the GMMV's agreement to maintain certain permits and bonds as
provided in Section 4 above,  USE/CC  agrees to pay to the GMMV a monthly fee of
$3,363.  The fee will be due and payable on the first business day of each month
during the term of this Agreement commencing with the first payment which is due
on July 1, 1997.

        (b) USE/CC,  as full  compensation for performance of the Work, shall be
paid for all  Reimbursable  Costs,  and such other  costs as may be  approved in
writing by the GMMV, as are incurred by USE/CC in performance of the Work to the
extent and only to the extent that (i) such costs are  expressly  authorized  in
Exhibit E to this  Agreement and otherwise are incurred in compliance  with this
Agreement;  and (ii) the total of such costs, when taken together with the total
costs spent by USE/CC  pursuant to that  certain  Contract  Services  Agreement,
dated as of the same date as this  Agreement,  between KUC and  USE/CC,  amounts
expended by the GMMV after May 1, 1997 pursuant to  Subsection  3(a) of the GMMV
Amendment  (as  defined  below)  and  all  Transition  Costs  is not  more  than
$16,000,000.

        (c) USE/CC shall use all reasonable  efforts to obtain any cash,  trade,
quantity,  freight or other discount or allowance available and refunds of sales
taxes and/or taxes and all such cash, quantity discounts or allowances,  refunds
and rebates shall be for the GMMV's  benefit and credited  against  Reimbursable
Costs or paid  directly to the GMMV.  USE/CC will  exercise  its best efforts to
minimize  excess  materials  purchases.  Excess  materials or scrap generated by
USE/CC as a result of its work under this  Agreement will remain the property of
the GMMV.  USE/CC will stockpile or dispose of such materials as directed by the
GMMV.

        (d) KUC has  initially  advanced  $1,000,000 to the GMMV pursuant to the
provisions of  Subsection  4(a) of the  Amendment of Mining  Venture  Agreement,
dated as of the same date as this  Agreement,  among KUC and the USE/CC  Parties
(the "GMMV  Amendment")  in order to  establish a working  capital  account (the
"Working  Capital  Account")  which  USE/CC  may  draw  upon to fund  activities
associated with the Work and which will qualify as Reimbursable Costs.

        (e) From time to time, but at least once per month,  USE/CC shall submit
an itemized invoice (the "Invoice") to the GMMV for all  Reimbursable  Costs for
Work performed accompanied by such supporting documentation as the GMMV may from
time to time reasonably request,  together with evidence,  including lien waiver
forms   satisfactory   to  the  GMMV,   of  the   payment  and  release  of  all
subcontractor's, mechanics', materialmen's and other liens (collectively,


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                                                                   EXHIBIT 10.53


the "Supporting  Documentation").  Supporting Documentation for the Reimbursable
Costs for which USE/CC seeks reimbursement shall include,  but not be limited to
the following:

                      (i) Labor costs shall be  supported  by payroll  abstracts
               which will identify each employee of USE/CC or its subcontractors
               engaged in performing the Work, the  employee's  title,  the date
               and  hours  worked,  the pay rate and a  description  of the work
               performed;

                      (ii) Costs for materials,  supplies,  equipment, tools and
               other tangible  property shall be supported by invoices and bills
               of  sale  showing  ownership  of all  such  materials,  supplies,
               equipment, tools and other tangible property in Owner's name;

                      (iii)  Billings  by  USE/CC  for GMMV  approved  services,
               expenses  and other  costs for outside  commitments,  of vendors,
               suppliers and  subcontractors  shall be supported by copy of such
               third   parties'   original   invoice  and   related   supporting
               documentation   and  will  be   attached   to  a  GMMV   approved
               authorization;

                      (iv) Billings for travel and subsistence expenses shall be
               supported by travel  expense  reports  supported  by, among other
               things,  copies of  airline  tickets  and  copies of auto  rental
               invoices,  copies of hotel/motel bills and appropriate  receipts.
               All expense reports will show the business purpose of the travel;
               and

                      (v)  Billings  for all other items for which  USE/CC seeks
               reimbursement  shall  be  supported  by  documentation  in a form
               reasonably satisfactory to the GMMV.

        (f)  Within 20 days of  presentation  to and  receipt by the GMMV of the
Invoice and the  Supporting  Documentation,  the GMMV will (i) provide to USE/CC
funds adequate to reimburse  USE/CC for the  Reimbursable  Costs incurred and to
restore the Working  Capital  Account to its initial  balance;  or (ii) the GMMV
will advise  USE/CC of any amounts with  respect to such  Invoice or  Supporting
Documentation that the GMMV believes in good faith are not supported by adequate
explanation  or were not spent in compliance  with the terms of this  Agreement,
together with an explanation,  in reasonable detail, of the basis for the GMMV's
objection to such Invoice or  Supporting  Documentation,  in which case the GMMV
will  provide  funds to the  extent  that it does not  contest  the  Invoice  or
Supporting  Documentation.  Each  dollar  paid  by the  GMMV  pursuant  to  this
Agreement  shall go toward  satisfaction  of KUC's  obligation  to provide up to
$16,000,000 to the Green Mountain Mining Venture as provided in Section 3 of the
GMMV  Amendment.  At such  time  as the  balance  of  KUC's  obligation  to fund
$16,000,000 to the Green Mountain Mining Venture as provided in Section 3 of the
GMMV  Amendment  has been reduced to less than  $1,000,000,  its  obligation  to
restore the Working  Capital Account balance shall be reduced to be no more than
the amount of the remaining obligation.

        (g) Payment by the GMMV of USE/CC's  Invoices shall be without prejudice
to the GMMV's right to audit the invoices in accordance  with provisions of this
Agreement,  and to  challenge  the  correctness  of  the  invoice  at  any  time
thereafter. Payments otherwise due USE/CC


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                                                                   EXHIBIT 10.53


may be withheld in an amount  sufficient to satisfy any claim which the GMMV may
have against USE/CC and any amounts necessary to correct  nonconforming,  faulty
or defective Work.

        6.     ACCESS TO INFORMATION.

        During  the term of this  Agreement,  the GMMV will make  available  for
inspection and use by USE/CC all exploration data, assays, logs, maps, including
any mine plan maps, geological,  geochemical and geophysical surveys and reports
and records or data relating to production or  development  that the GMMV has in
its possession  relating to the Mining  Properties.  Upon written request of the
GMMV made after expiration or termination of this Agreement, USE/CC shall return
all information  obtained from the GMMV pursuant to this Agreement together with
copies of all data,  assays,  logs,  maps,  core and other surveys,  studies and
other  information  generated by or on behalf of USE/CC  during the term of this
Agreement pertaining to the Mining Properties.

        7.     TITLE TO THE MINING PROPERTIES.

        (a) The GMMV makes no  representation  or warranty with respect to title
to the Mining Properties or the other rights and information  provided to USE/CC
pursuant  to  this  Agreement,  the  condition  or  adequacy  of any  buildings,
equipment or improvements on or associated  with the Mining  Properties,  or the
completeness or accuracy of any  information  provided to USE/CC with respect to
the Mining  Properties.  USE/CC  represents  and warrants  that it has made such
inquiries and investigations as it, in its sole discretion, deems advisable with
respect to the Mining  Properties  and the other  rights,  and the buildings and
equipment and improvements and other information  provided to USE/CC pursuant to
this  Agreement  and the  condition of such  properties  and rights,  and USE/CC
warrants to the GMMV that it accepts such  properties and rights AS IS/WHERE IS,
WITH NO REPRESENTATIONS OR WARRANTIES WHATSOEVER.

        (b) In the event the title to all or any part of the  Mining  Properties
is determined to be defective or in the event that a third party  challenges the
title to all or any part of the  Mining  Properties,  the  GMMV  shall  have the
right,  but not the  obligation,  to defend title to the Mining  Properties  and
USE/CC shall  cooperate  fully in such defense.  The GMMV shall not be liable to
USE/CC if the GMMV is unsuccessful  in,  withdraws  from, or discontinues  title
litigation or other curative work. If the GMMV elects not to defend title to all
or any part of the Mining  Properties,  USE/CC shall have the right to undertake
defense of the GMMV's title at USE/CC's  sole cost and expense and the GMMV will
cooperate  fully in such defense.  Any improvement or perfection of title to the
Mining  Properties shall inure to the benefit of the GMMV and USE/CC in the same
manner and to the same extent as if such improvement or perfection has been made
prior to the execution of this Agreement.

        (c)  Should  the  GMMV  or  USE/CC  institute  any  action  for  adverse
possession,  suit to quiet title,  or other  action aimed at obtaining  title to
property,  or should the GMMV or USE/CC  purchase any undivided  interest in the
Mining  Properties from any third party during the term of this  Agreement,  the
property rights so acquired shall inure to the benefit of the GMMV and


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                                                                   EXHIBIT 10.53


USE/CC in the same manner and to the same extent as if such property  rights had
been obtained prior to the execution of this Agreement.

        8.     CLAIM MAINTENANCE.

        (a) While this Agreement is in effect,  USE/CC agrees to make the mining
claim rental or maintenance fee payments  required by federal and state law with
respect to all of the unpatented mining claims included in the Mining Properties
and to file and record such notices or  affidavits  as are necessary to maintain
said  claims.  All  such  costs  shall be  included  in the  Reimbursable  Costs
reimbursable  to  USE/CC  pursuant  to  this  Agreement.  If this  Agreement  is
terminated or expires between July 31 and September 1 of any year,  USE/CC shall
make the payments and perform the filings and recordings required for that year.
If the time for payment of rental or  maintenance  fees or performance of annual
assessment work, or other annual  maintenance  requirements,  changes to date or
dates different than August 31 or September 1 of each year, then USE/CC shall be
responsible  for the  satisfaction of any such obligation that must be completed
within 30 days after  termination of this Agreement.  USE/CC shall be reimbursed
for such payments notwithstanding the prior termination of this Agreement.

        (b)  If  federal   assessment  work  requirements  are  reinstated,   or
independent state assessment work  requirements are imposed,  at any time during
the term of this  Agreement,  USE/CC shall perform or cause to be performed such
assessment  work as required by law in order to maintain the  unpatented  mining
claims.  With  respect  to such  work,  USE/CC  shall  during  the  term of this
Agreement record or file with the appropriate county, state and federal agencies
copies of assessment affidavits or notices as may then be required by law within
the time prescribed for such recording or filing. USE/CC shall have the right to
perform the  assessment  work  required  hereunder  pursuant to a common plan of
exploration, and continued actual occupancy of each claim shall not be required.
USE/CC  shall  provide  evidence to the GMMV that USE/CC has  completed  or will
complete the assessment  work, if required,  for that assessment year by the end
of the assessment year.

        (c) During the term of this Agreement,  if requested by USE/CC, the GMMV
may (i) amend or relocate any unpatented mining claim included within the Mining
Properties,   (ii)  locate  any  fractions  resulting  from  such  amendment  or
relocation,  and (iii) apply for mining  patents or mining leases or other forms
of mineral tenure for any such unpatented claims.

        9.     ADDITIONAL OBLIGATIONS OF USE/CC.

        In  addition  to the  other  obligations  of  USE/CC  set  out  in  this
Agreement:

        (a) USE/CC shall perform all of its operations on the Mining  Properties
in a good and minerlike  manner and in compliance  with all applicable  federal,
state,  and  local  laws and  regulations  including  environmental  protection,
reclamation,  and bonding. In particular,  USE/CC represents and guarantees that
all Work will conform  with that degree of skill and judgment  which is normally
exercised  by  recognized  professional   consulting  (including   environmental
consulting),   engineering,   procurement  and  construction   management  firms
performing  services  of a similar  nature  taking into  account  the  oversight
responsibilities of affected administrative


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                                                                   EXHIBIT 10.53


agencies  with  respect  to the  Work  and  shall  be free of  faulty  planning,
consulting, engineering design, procurement, construction management and quality
assurance,  field  engineering  and other  services  of USE/CC and that the Work
shall  be  performed  and  shall  conform  to  generally  accepted   consulting,
engineering and  construction  management  standards and practices.  USE/CC will
maintain all existing facilities on the Mining Properties in a condition that is
at least as good as their  present  conditions,  normal wear and tear  excepted.
USE/CC shall,  if requested by the GMMV, at the conclusion of the activities and
operations undertaken pursuant to this Agreement,  conduct such reclamation with
respect to the activities conducted by USE/CC as required by applicable federal,
state and local law;

        (b) USE/CC shall keep the Mining Properties free and clear of all liens,
assessments and other  encumbrances  created by, through or under USE/CC or that
result  from  USE/CC's  control,  occupancy  of, or  operations  on,  the Mining
Properties during the term of this Agreement;  provided that USE/CC shall not be
required to remove any such lien so long as it is contesting the validity or the
amount  thereof,  or if payment of the amount secured by the lien is not yet due
as in the case of mechanics', suppliers' or similar liens;

        (c) USE/CC  shall  protect the GMMV  against any damages  arising out of
USE/CC's  operations  on the  Mining  Properties  and shall  indemnify  the GMMV
against any and all liability  resulting from USE/CC's  operations on the Mining
Properties.  USE/CC  shall  establish a sinking fund for all  reclamation  costs
anticipated  to be associated  with its  activities  and  operations  under this
Agreement.  USE/CC  will  fund  such  sinking  fund at the end of each  calendar
quarter with an amount of money  reasonably  sufficient to cover all reclamation
activities  that will result from the operations  carried out in the quarter and
all such funds shall constitute  Reimbursable Costs reimbursable pursuant to the
terms of this Agreement.  USE/CC shall carry liability insurance  protecting the
GMMV against damages arising out of USE/CC's operations on the Mining Properties
in the amounts specified in Exhibit C to this Agreement;

        (d) USE/CC  covenants and agrees to pay promptly before  delinquency all
rental, leasehold, property and other payments relating to the Mining Properties
and all utility and other payments,  taxes and assessments  that may be assessed
during  the term of this  Agreement  upon the  Mining  Properties  and  USE/CC's
activities upon the Mining Properties regardless of whether such payments, taxes
and  assessments  arise out of USE/CC's  activities on the Mining  Properties or
arise out of the GMMV's  ownership  or control of the  properties.  USE/CC shall
have the right to contest, in the courts or otherwise, the validity or amount of
any  such  payments,  taxes  or  assessments,  or to take  such  other  steps or
proceedings  as it may  deem  necessary  to  secure a  cancellation,  reduction,
re-adjustment,  or equalization thereof, before it shall be required to pay such
payments, taxes or assessments.  Notwithstanding the foregoing, USE/CC shall not
permit any part of the Mining  Properties to be conveyed or for title to be lost
as the  result  of  nonpayment  of such  payments,  taxes  and  assessments.  If
requested by the GMMV, USE/CC shall provide the GMMV with copies of all receipts
evidencing payment of such payments, taxes and assessments. If the GMMV receives
utility,  tax bills or claims that are the  responsibility of USE/CC pursuant to
this  Agreement,  the GMMV will promptly  forward such bills or claims to USE/CC
for appropriate action;



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                                                                   EXHIBIT 10.53


        (e) USE/CC will provide to the GMMV a program,  in reasonable detail, of
the operations and activities that USE/CC expects to undertake in progressing to
accomplish  the  Work in the  ensuing  calendar  quarter.  The  program  will be
submitted  to the GMMV at least 15 days  prior to the  commencement  of any such
operations or activities. Within 30 days after the end of each calendar quarter,
USE/CC will submit to the GMMV a report,  in reasonable  detail,  that describes
the  operations  and  activities  that were actually  undertaken in the calendar
quarter and any activities described in the program that were not undertaken and
accomplished;

        (f) USE/CC will not undertake any  operations or activities  that depart
from the Work or the operations  and  activities set out in the program  without
submitting  to the GMMV a  proposed  amendment  to the  program to the GMMV that
describes such amended  operations and activities  and, if such amendment  would
require  a  modification  of the Work as  described  in  Exhibit  D, a  proposed
amendment to the Work. Within 20 days of any such proposal, the GMMV will notify
USE/CC  of  its  acceptance  or  rejection  or  the  proposed  amendment,  which
acceptance will not be unreasonably  withheld so long as the proposed  amendment
does not materially  depart from the overall scope of the Work and is consistent
with the other  terms and  provisions  of this  Agreement.  With  respect to any
proposal for  modification of the program  prepared by USE/CC or any proposal to
modify the Work that  departs  from the overall  scope of Work as  described  in
Exhibit  D, the GMMV may  accept or reject  such  proposal  at the  GMMV's  sole
discretion; and

        (g) Upon  reasonable  advance  notice of not less than 24 hours,  USE/CC
shall  allow the GMMV and its  agents and  representatives  access to the Mining
Properties for the purposes of viewing or inspecting  USE/CC's  operations.  The
GMMV shall  conduct  such  inspections  in a manner  that does not  unreasonably
interfere with USE/CC's  operations.  All  representatives  of the GMMV shall be
required to comply with all applicable safety and operational rules of USE/CC.

        10.    INDEMNIFICATION.

        USE/CC agrees to indemnify,  defend, release and hold harmless the GMMV,
KUC and KUC's parents, subsidiaries,  affiliates, successors and assigns and the
respective officers, directors,  employees, agents, contractors and professional
advisors of each of them from and  against  the  entirety of any and all Adverse
Consequences, whether arising during or after the term of this Agreement, any of
them shall suffer:

        (a) As the  result  of any  breach  of any  obligation,  representation,
covenant or warranty of USE/CC as set forth in this Agreement; and

        (b) As the result of (i) the  release,  threatened  release,  discharge,
storage, treatment,  disposal or presence of Hazardous Materials at, upon, about
or beneath the Mining  Properties as a result of USE/CC's  operations;  (ii) the
release,  threatened  release,  or discharge of Hazardous Materials emanating or
migrating,  or  threatening  to emanate or migrate to, from or across the Mining
Properties  arising  out of  USE/CC's  operations;  (iii) any  violation  of any
Environmental  Laws  pertaining  to the  Mining  Properties  and the  activities
thereon; or (iv) the treatment, storage,


                                        9

<PAGE>
                                                                   EXHIBIT 10.53


disposal,  arrangement for disposal, or transportation of Hazardous Materials by
USE/CC at or to a facility other than one on the Mining Properties;

        (c)    For the purposes of this Agreement:

               (i)  "Adverse  Consequences"  means any and all  actions,  suits,
        proceedings,  hearings,  investigations,  charges,  complaints,  claims,
        demands,  injunctions,  judgments,  orders,  decrees,  rulings,  damages
        (including   natural  resource   damages),   dues,   penalties,   fines,
        encumbrances,  liens,  costs and expenses of defense of a claim (whether
        or not such claim is ultimately  defeated),  good faith  settlements  of
        claims,  judgments and disputes,  costs  (including  without  limitation
        costs  of  investigative,   reporting,   clean-up,   response,  removal,
        remedial, corrective action and closure activities relating to Hazardous
        Materials),  liabilities  (including  strict  liability),   obligations,
        taxes,  liens,  losses,  expenses and fees,  including  consultants' and
        attorneys' fees and court costs and expenses;

               (ii)   "Environmental   Laws"  means  all  applicable   statutes,
        treaties,  regulations,  rules,  ordinances,  codes, licenses,  permits,
        orders,  approvals,  authorizations  and similar  items of all  federal,
        state,  and  local   governmental   branches,   agencies,   departments,
        commissions,  boards, bureaus or instrumentalities,  whether domestic or
        foreign,   having   jurisdiction,   and  all  applicable   judicial  and
        administrative  and  regulatory  decrees,  judgments  and orders and all
        covenants  running with the land that relate to the protection of health
        or the environment,  including  without  limitation those that relate to
        the existence, handling, manufacture, treatment, storage, disposal, use,
        generation,  release,  discharge,  refining or  recycling  of  Hazardous
        Materials or reclaiming real property.  Without  limiting the foregoing,
        Environmental  Laws include the Hazardous  Materials  Transportation Act
        (49 U.S.C. " 1801 ET SEQ.),  the Resource  Conservation and Recovery Act
        of 1976, (42 U.S.C. " 6901 ET SEQ.), the Clean Air Act (42 U.S.C. " 7401
        ET SEQ.),  the Federal Water  Pollution  Control Act (33 U.S.C. ' 1251),
        the  Safe  Drinking  Water  Act  (42  U.S.C.   "  300f  ET  SEQ.),   the
        Comprehensive Environmental Response,  Compensation and Liability Act of
        1980 (42 U.S.C. " 9601 ET SEQ.),  the Toxic  Substances  Control Act (15
        U.S.C. " 2601 ET SEQ.),  the Emergency  Planning and Community  Right to
        Know Act (42 U.S.C. "11001, ET SEQ.), the Occupational Safety and Health
        Act (26 U.S.C. " 651 ET SEQ.), the Pollution  Prevention Act of 1990 (42
        U.S.C " 13101 ET SEQ.), the Atomic Energy Act of 1954, 68 Stat. 919, the
        Energy  Reorganization  Act of 1974,  the Mine  Safety and Health Act of
        1977, the Uranium Mill Tailings  Radiation  Control Act (42 U.S.C " 7901
        ET SEQ.), and all similar or additional federal, state, local or foreign
        statutes,  all as amended, and all regulations  promulgated  thereunder;
        and

               (iii) "Hazardous Materials" means any substance: (A) the presence
        of which requires reporting, investigation, removal or remediation under
        any  Environmental  Laws;  (B) that is defined as a  "hazardous  waste,"
        "hazardous   substance"  or  "pollutant"  or  "contaminant"   under  any
        Environmental Laws; (C) that is toxic, explosive,  corrosive, flammable,
        ignitable, infectious, radioactive, reactive, carcinogenic, mutagenic or
        otherwise  hazardous and is regulated under any Environmental  Laws; (D)
        the  presence  of which on a  property  causes or  threatens  to cause a
        nuisance upon the property or to


                                       10

<PAGE>
                                                                   EXHIBIT 10.53


        adjacent properties or poses or threatens to pose a hazard to the health
        or  safety  of  persons  on or about  the  property;  (E) that  contains
        gasoline,  diesel  fuel or  other  petroleum  hydrocarbons;  or (F) that
        contains PCBs, asbestos or urea formaldehyde foam insulation.

        11.    TERMINATION OR EXPIRATION.

        (a)    This Agreement will terminate as provided in Section 2 above.

        (b) In the event the GMMV  determines  that USE/CC has not complied with
any  material  obligation  hereunder,  the GMMV shall  notify  USE/CC in writing
setting out specifically in what respect it is claimed that USE/CC has failed to
comply with this  Agreement.  If the alleged  failure is not cured to the GMMV's
reasonable  satisfaction  within ten (10) days after written notice is given, or
if USE/CC has not within that time either  commenced to cure the alleged  breach
to the  GMMV's  reasonable  satisfaction  and  does  not  thereafter  diligently
complete such cure,  or fails  successfully  to challenge the  legitimacy of the
allegation, the GMMV may terminate this Agreement by delivering to USE/CC notice
of such  termination  or the GMMV may seek  such  other  remedies,  at law or in
equity, to which it is entitled.

        (c) USE/CC shall have the right to terminate  this Agreement at any time
with  respect  to all but not less than all of the Mining  Properties  by giving
written  notice to the GMMV.  Upon  such  termination,  all  right,  title,  and
interest of USE/CC  under this  Agreement  shall  terminate  and USE/CC shall be
relieved of all further  obligations set forth in this Agreement which arise out
of  USE/CC's  activities  prior to the date of such  termination  except for the
obligations  in Sections 8 and 9, the  indemnifications  provided for in Section
10,  any  other   obligation   expressly  set  forth  in  this  Agreement  as  a
post-expiration or post-termination  obligation, and any reclamation required by
applicable law arising from USE/CC's operations.


        (d) Upon  termination  or  expiration  of this  Agreement,  USE/CC  will
relinquish possession of the Mining Properties to the GMMV free and clear of all
obligations,  liens and encumbrances.  USE/CC will also relinquish possession of
all buildings,  structures,  facilities,  improvements,  machinery and equipment
that  were on the  Mining  Properties  as of the  Effective  Date  or that  were
acquired by, erected,  placed,  or became  situated on the Mining  Properties or
were acquired in connection  with USE/CC's  activities on the Mining  Properties
and  were  paid for by  funds  provided  to  USE/CC  by the GMMV  (collectively,
"Fixtures and Personalty").  In connection with the relinquishment of the Mining
Properties and the Fixtures and  Personalty,  USE/CC will provide a release,  in
recordable  form,  executed  by USE/CC  for the  benefit of the GMMV in order to
clear title to the Mining  Properties and  appropriate  assignments and bills of
sale  with  respect  to  the  Fixtures  and  Personalty.  In any  such  release,
assignments and bills of sale, USE/CC will represent that the Mining Properties,
Fixtures  and  Personalty  are  free  and  clear  of all  obligations,  liens or
encumbrances  created by,  through or under  USE/CC.  USE/CC will also  transfer
control of the sinking  fund  established  pursuant to Section 9(c) above to the
GMMV.

        (e) Upon  termination  or  expiration  of this  Agreement,  USE/CC  will
commence  and  will  diligently   pursue  to  completion,   reclamation  of  all
disturbance caused by the USE/CC Parties


                                       11

<PAGE>
                                                                   EXHIBIT 10.53


in  connection  with its  activities  under this  Agreement in  accordance  with
applicable  laws,  orders and  regulations,  provided that USE/CC shall leave in
place and not  reclaim  any  foundations  or other  improvements  of a permanent
nature,  supports,  track, and pipe placed in shafts, drifts, or openings in the
Mining Properties, roads, development work, portals, declines or other workings,
and water wells and  piezometers  constructed  on the Mining  Properties  unless
otherwise requested by the GMMV. Such reclamation activities will be funded from
the sinking fund created  pursuant to Section 9(c) and USE/CC may draw upon such
fund from time-to-time by providing evidence reasonably satisfactory to the GMMV
of the expenditures  made by USE/CC in conducting such  reclamation  activities.
USE/CC shall be solely  responsible  for completing the  reclamation  activities
required by this  Agreement and the amount of funds in the sinking fund shall in
no way limit USE/CC's  obligation to complete the  reclamation  required by this
Agreement.  USE/CC  shall,  within a period of three  months  from and after the
termination or expiration of this Agreement,  remove from the Mining  Properties
all personal  property that is owned solely by USE/CC.  If USE/CC desires not to
remove any item of its personal property from the Mining Properties and the GMMV
agrees in  writing to allow such  property  to remain on the Mining  Properties,
such  property  shall  become  the  property  of the  GMMV  unless  GMMV  agrees
otherwise.

        12.    FORCE MAJEURE.

        Except as provided in Subsections  12(b) or 12(c) below,  the failure to
perform or to comply with any of the covenants or  conditions  contained in this
Agreement, either expressed or implied, on the part of either party shall not be
a ground for  cancellation or termination or forfeiture of this  Agreement,  and
shall  not  create  a  liability  for the  party  for  failure  to  perform  its
obligations  during any period in which  performance  is prevented,  in whole or
part, by causes herein termed "force majeure".

        (a) For purposes of this  Agreement,  the term "force  majeure" shall be
limited to substantial  and  unforeseeable  events beyond the control of a party
that  cannot be avoided  through  the  diligent  actions  of a party,  including
extreme   weather   conditions;    earthquakes   or   cave-ins;    unforeseeable
unavailability  of  labor,  transportation,   materials,  machinery,  equipment,
supplies,  utilities,  or services  even on premium  terms;  serious  accidents;
unavoidable breakdown of major equipment, machinery, or facilities;  injunctions
issued  by  any  court;   inability  to  obtain  licenses,   permits,  or  other
authorizations in spite of diligent efforts to do so;  curtailment or suspension
of activities to remedy or avoid an actual,  serious  violation of environmental
laws;  acts of war or conditions  arising out of or  attributable  to war; riot;
civil  strife;  fire;  explosion;  or any similar  cause  beyond the  reasonable
control of the party declaring force majeure.

        (b) If either party desires to invoke the provisions of this Section 12,
the invoking party shall give notice to the other party of the  commencement  of
the  circumstances  giving rise to such force majeure.  The time for discharging
the party's  obligations  with  respect to the  prevented  performance  shall be
extended for the period of force majeure, provided that the party invoking force
majeure  pursues  diligent  efforts to eliminate the event that gave rise to the
condition of force  majeure.  The  existence of any event of force majeure shall
not relieve a party of the  obligation to make any payments  required of a party
with respect to  maintenance  of the Mining  Properties or the permits and bonds
associated with the properties in accordance with the


                                       12

<PAGE>
                                                                   EXHIBIT 10.53


terms of this  Agreement,  making  payments due under  Section 5, the  payments,
filings and recordings due under Sections 8 and 9, and the indemnities  required
by  Section  10,  nor shall an event of force  majeure  extend  the term of this
Agreement.

        (c)  Notwithstanding  the  foregoing,  neither  party may  invoke  force
majeure with respect to any event that would otherwise  constitute force majeure
if the duration of such event is less than 15 days.

        13.    MINING LAW REVISION.

        If any time during the term of this  Agreement,  the Mining Law of 1872,
30 U.S.C.  " 22 et seq., is amended,  modified,  or repealed and superseded by a
new law providing for the initiation  and  maintenance of mining rights upon the
public  lands,  this  Agreement  shall be deemed to have been  amended  so as to
include in this  Agreement  any new  rights  that are  afforded  the GMMV in the
Mining Properties that arise from the application of such modified or new law to
the Mining Properties. If any actions are required to be taken by the new law to
maintain rights to the ground encompassed by the Mining Properties hereunder, or
to convert the  unpatented  mining claims within the Mining  Properties to a new
form of right,  USE/CC is hereby  authorized to take such actions as it may deem
reasonably  necessary to maintain the rights of the parties hereto in and to the
lands  encompassed  within the Mining Properties at the sole cost and expense of
USE/CC.  The GMMV  covenants and agrees to execute such  documents and take such
actions as USE/CC may reasonably  require to effectuate  the  maintenance of the
parties'  rights  and  interest  in and to the lands  encompassed  by the Mining
Properties.

        14.    NOTICES.

        Any required notice,  payment,  or other  communication  contemplated by
this  Agreement  shall be in writing and shall be  effective  with  respect to a
party (i) when  personally  delivered  or  delivered  by courier at the  party's
address as set out below; (ii) when delivered by electronic communication at the
party's  telecopier  number  described below or at such other telecopy number as
the party may designate in writing  provided that such electronic  communication
is followed by a delivery by mail or by personal service to the party's address;
or (iii) when  delivered by mail  deposited in the United  States mail,  postage
prepaid  and  registered  or  certified,  with  return  receipt  requested,  and
addressed to the party at the party's address:

               IF TO THE GMMV:                        COPY TO:

               Kennecott Uranium Company              Kennecott Corporation
               Attn:  President                       Attn:  Legal Department
               Caller Box 3009                        8315 West 3595 South
               505 South Gillette Avenue              P. O. Box 6001
               Gillette, WY 82717-3009                Magna, UT  84044-6001
               FAX (307) 687-6011                     FAX (801) 252-3559



                                       13

<PAGE>
                                                                   EXHIBIT 10.53


               IF TO USE/CC:                          COPY TO:

               U.S. Energy Corp.                      U.S. Energy Corp.
               Attn: John L. Larsen                   Attn: D.P. Svilar
               877 North 8th West                     877 North 8th West
               Riverton, Wyoming  82501               Riverton, WY 82501
        FAX: (307) 857-3050                           FAX: (307) 857-3050

Either the GMMV or USE/CC may change its address for future notices by providing
written notice to that effect to the other party.

        15.    INTENTIONALLY OMITTED.

        16.    ASSIGNMENTS AND TRANSFERS OF INTEREST.

        During  the term of this  Agreement,  neither  USE/CC nor the GMMV shall
transfer,  or enter into any  agreement to transfer,  any interest in the Mining
Properties or in this Agreement without the prior written consent of the other.

        17.    IMPLIED COVENANTS.

        There  are no  implied  covenants  in  this  Agreement  except  for  the
covenants of good faith and fair dealing. Nothing in this Agreement shall impose
any  obligation  or covenant  upon  USE/CC,  express or implied,  to conduct any
exploration, development, or mining operations upon the Mining Properties except
as provided in Exhibit D, it being the intent of the parties  that USE/CC  shall
otherwise have the sole discretion to determine the economic feasibility,  time,
method, manner, and rate of conducting any such operations,  except as otherwise
required by this Agreement.

        18.    MISCELLANEOUS.

        (a) As to any  provision  in this  Agreement,  the parties do not intend
that  there  shall be any  violation  of the Rule  Against  Perpetuities  or any
related Rule. If any violation should inadvertently occur, it is the wish of the
parties that the  appropriate  court reform such  provision so as to approximate
most closely the intent of the parties within the limits  permissible under such
Rule.

        (b) This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Wyoming without giving effect to any choice or
conflict of law  provision or rule (whether of the State of Wyoming or any other
jurisdiction)  that would cause the application of the laws of any  jurisdiction
other than the State of Wyoming.

        (c) Each of the  parties  hereto  agrees  that it shall  not seek a jury
trial in any  proceeding  based upon or arising out of or  otherwise  related to
this Agreement or any of the other documents and instruments contemplated hereby
and EACH OF THE PARTIES  HERETO HEREBY WAIVES ANY AND ALL RIGHT TO ANY SUCH JURY
TRIAL.


                                       14

<PAGE>
                                                                   EXHIBIT 10.53



        (d) The provisions of this  Agreement  shall inure to the benefit of and
be  binding   upon  the  parties   and  their   respective   heirs,   executors,
administrators,   personal  representatives,   beneficiaries,   successors,  and
assigns.

        (e) This  Agreement  shall not be  recorded.  Upon the request of either
party,  the parties shall execute a Memorandum of this Agreement in a recordable
form  sufficient  under the laws of the State of Wyoming to give notice to third
parties of the rights  granted  hereunder.  Either party shall have the right to
record such Memorandum at any time.

        (f) This Agreement may be executed in any number of  counterparts,  each
of which shall be deemed to be an  original,  and all of which shall  constitute
one and the same instrument.


        (g) This  Agreement  and its  Exhibits,  all of which  are  incorporated
herein by reference,  constitute the sole  understanding and entire agreement of
the parties  with  respect to the subject  matter  herein.  No  modification  or
alteration of this Agreement  shall be effective  unless in writing and executed
by the parties.

        (h) The headings appearing in this Agreement are inserted for convenient
reference  purposes only, and are not definitive as to the provisions  contained
within said Sections in the interpretation and construction of this Agreement.

        (i) In the  event  any of the  terms  or  provisions  of this  Agreement
conflict  with  or  are  inconsistent  with  the  terms  or  provisions  of  the
Acquisition  Agreement,  the terms and conditions of the  Acquisition  Agreement
shall prevail.




                                       15

<PAGE>
                                                                   EXHIBIT 10.53


        Executed to be effective as of the date first above set forth.

                                  KENNECOTT URANIUM COMPANY


                                  By    /s/ L. R. Cardey-Yates
                                      ----------------------------------------
                                      Its  Director/Assistant Secretary
                                         -------------------------------------

                                  U.S. ENERGY CORP.


                                  By    /s/ John L. Larsen
                                      ----------------------------------------
                                         Its    President
                                            ----------------------------------

                                  U.S. ENERGY CORP. and
                                  CRESTED CORP. dba the
                                  USE/CC JOINT VENTURE


                                  By:   U.S. ENERGY CORP.


                                  By    /s/ John L. Larsen
                                      ----------------------------------------
                                         Its    President
                                            ----------------------------------


                                  By: CRESTED CORP.


                                  By    /s/ Max T. Evans.
                                      ----------------------------------------
                                         Its    President
                                            ----------------------------------




                                       16

<PAGE>
                                                                   EXHIBIT 10.53


                                    EXHIBIT A


Mining Properties.


This Exhibit is not filed with this Form 10-K for the year ended May 31, 1997.



                                       17

<PAGE>
                                                                   EXHIBIT 10.53


                                    EXHIBIT B
                           TO MINERAL LEASE AGREEMENT

                           OPERATING PERMITS AND BONDS

I.      JACKPOT MINE

ACTIVE PERMITS & APPROVALS OR PERMITS REQUIRED

TYPE                                       IN NAME OF    STATUS (1/28/97)
----                                       ----------    ----------------
DEQ
---
  Permit to Mine                              GMMV       No. 660
  License to Mine                             GMMV       No 660-L1
* Air Quality Permit                                     Engineering
  WQD - NPDES Permit                          USE        WY0033952 - Renewal 
                                                                     12/31/97
* WQD - Construct Sewage System                          Engineering
  WQD - Construct Sediment Basin                         Approved - Completed
* WQD - Construct Treatment Ponds & Plant                Engineering
  Drill Site 28-86-1                          KUC        194DN-DEQ Inspection
* Enhancement Drilling Program                GMMV       297DN - To Be Completed
  PZ & JP Monitor Holes (various)             USE        Complete
* Storm Water Permit - Pollution Prevention Plan         Engineering
* Permit Amendment for Widening Access Road

STATE ENGINEERS OFFICE
----------------------
  Appropriate Water From Well                 USE        UW 75407
  Appropriate Water From Underground Mine     USE/BLM    UW 75520
* Construct Water Treatment Ponds                        Engineering
* Construct Permanent Diversion Ditch                    Engineering
  Sediment Reservoir (Jackpot No. 1)          GMMV       No. 10090R
  PZ & JP Monitor Wells                       USE        Completed No. Issued

BLM
---
  Power Line Easement                         PP&L       Complete
  Access Road - 179LE                         USE        W71827
* To Widen Road to 40' (Jackpot to Big Eagle)            Engineering
  Haul Road to Mill                                      Engineering Required
* Plan of Operations (approved in conjunction            Approved
  with Jackpot Mine Permit)
* Anaconda Road                               KUC        194DN
* ROW Amendment Big Eagle Haul Road           GMMV       Engineering





                                       18

<PAGE>
                                                                   EXHIBIT 10.53


U.S. ARMY CORP OF ENGINEERS
---------------------------
*  Nationwide Permits 14 and 26 (33 CFR Part             Approved - NPDES
   330, Appendices A(B) 14 and 26) and Section           Renewal 4/6/95
   404
   -   Road Crossing
   -   Headwaters and Isolated Waters Discharge


II.     BIG EAGLE MINE

ACTIVE PERMITS
                                                                      Status
                                                                        or
TYPE                         Permit No.  Transfer Date   In Name Of  Expiration
----                         ----------  -------------   ----------  ----------

DEQ
---
*   Mine Permit              Pt 451        12-31-90         KUC      IMS

     IMS (Interim Mine Stabilization & Amendment to permit required) 11-2-97

    NPDES                    WY-0025950    12-31-90         GMMV     6-30-98
    Air Quality                            12-31-90                  Engineering
*   Industrial Landfill                    **                        Engineering
    Wash Evap. Pond          77-427R       **                        with 451
    Septic Tank/Drain Field  77-300R       **                        with 451
    Storm Water Permit       WYR000283     Aug. 31, 1997    KUC


    STATE ENGINEERS OFFICE
    ----------------------

    Rock Well No. 1          UW 34440      1-11-91          GMMV     Complete
    Rock Well No. 2          UW 35444      1-11-91          GMMV     Complete
    GM Diversion Ditch       P25671D       1-14-91          GMMV     Complete
    GM Mine Reservoir        P7863R        1-14-91          GMMV     12-31-97
    Rock Reservoir           P7861R        1-14-91          GMMV     12-31-97
    Zenith #1 (shop water)   UW 41033      1-11-91          GMMV     Complete
    Jensen Reservoir         P7862R        1-14-91          GMMV     Complete
    Domino No. 1             UW 42150      1-11-91          GMMV     Complete

    Stream Gauging Sta-Esmt  1917          12-31-90         GMMV     6-29-77 
                                                                      (granted)




                                       19

<PAGE>
                                                                   EXHIBIT 10.53


     STATE LAND OFFICE
     -----------------


     LEASES                 Lease No.     Lessor      Transfer Date
     ------                 ---------     ------      -------------
     State Mineral Lease
       Sec. 36, T28N,R92W   26528       State of WY    4-3-91       USE 50%, KUC
                                                                    50% dba GMMV
                                                                    Exp 5/1/01

     FEE SURFACE LANDS      SECTION                Ownership
     -----------------      -------                ---------
     T27N, R92W             Sec. 2, S1/2             GMMV
                            Sec. 11, N1/2            GMMV



KUC  =      Kennecott Uranium Company
GMMV =      Green Mountain Mining Venture

*    Needed for Jackpot Decline Development
**   Not Transferred


                                       20

<PAGE>
                                                                   EXHIBIT 10.53


                                    EXHIBIT C

                                    INSURANCE


        (a) During the term of the Agreement  and all times during  performance,
and until  completion of the Work,  USE/CC shall maintain in force the insurance
described  in this  Exhibit C, for the benefit of the parties to the  Agreement,
all of their  personnel  and the  personnel of all  subcontractors  on site with
companies  satisfactory to the GMMV.  USE/CC shall be responsible for compliance
by all its  contractors  with these  insurance  requirements  and shall  furnish
certificates  as provided  herein  evidencing  the  required  insurance  for the
contractors.

        (b)  Certificates  of such  insurance  shall be made out to the GMMV and
shall be  furnished to the GMMV  promptly and must reflect both the  endorsement
provisions   requiring  30  days  prior  written   notice  to  be  given  before
cancellation or material change,  and the additional  interest where applicable.
Each certificate shall specify the date when such benefits and insurance expire.
USE/CC agrees that such benefits and  insurance,  as specified  above,  shall be
provided  and  maintained  until the entire  work under the  Agreement  has been
completed and accepted by the GMMV. An original copy of each  certificate  shall
be mailed or delivered to:

               Kennecott Uranium Company
               Caller Box 3009
               505 South Gillette Avenue
               Gillette, Wyoming 82717-3009
               FAX (307) 687-6011

The GMMV's approval or failure to disapprove insurance certificates furnished by
USE/CC or  subcontractors  shall not release USE/CC or its contractors from full
responsibility for liability, damage, and accidents as set forth herein.

        (c) It shall be a condition of approval that the required insurance must
be arranged with insurance  companies  authorized to do business in the State of
Wyoming.

        (d) If at any time the  USE/CC-required  insurance  policies  should  be
canceled,  terminated or modified so that the insurance is not in full force and
effect as required  herein,  the GMMV may terminate the Agreement for default or
obtain  insurance  coverage  equal to that  required  herein and  recover  costs
therefor from USE/CC.

        (e) USE/CC and contractors  shall bear all risk of loss of or damage to,
and shall, as they deem necessary,  carry fire, theft, physical damage, or other
insurance on their own and their employees' tools, equipment, reusable materials
(such as metal forms and metal  scaffolding),  trailers,  any  property of their
employees.

        (f) The  liability of USE/CC  assumed  under the  Agreement  shall in no
manner be limited by the amount of insurance  furnished by GMMV or by the amount
of  insurance  which  Contractor  has or is  required  to  provide  by the terms
thereof.


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                                                                   EXHIBIT 10.53



        (g) In addition to USE/CC's  liability for property  damage as set forth
in the  Agreement,  USE/CC  shall  also be  responsible  for any  damage  to its
vehicles  and  the  vehicles  of  its  contractors,  employees,  and  agents  or
representatives  of USE/CC or contractors  while the vehicles are parked or used
on the GMMV's property.

        (h) USE/CC shall be  responsible  for and shall bear any and all risk of
loss or of damage to work in progress.

        (i) All  policies  of  insurance  carried  by  USE/CC  pursuant  to this
        Agreement shall:

        (i) provide  that they may not be canceled  or the  protection  afforded
        thereby  substantially  changed  without 30 days prior written notice to
        GMMV.  Upon  request,  USE/CC  shall  permit  GMMV to examine any of the
        insurance policies specified herein.

        (ii)  be  endorsed  to  include   Kennecott   Uranium  Company  and  all
        subsidiary, associated, and affiliated companies, as additional insured.

        (iii) contain  endorsements stating that USE/CC'S coverage is primary to
        any coverage GMMV may elect to carry for its own account, or for USE/CC.

        (iv) contain  endorsements  waiving the insurer's  right to  subrogation
        against GMMV, its subsidiaries,  agents, and affiliated  companies,  and
        their employees, officers, and directors.

        (i)  Any and all deductibles  specified  in the above  described  USE/CC
        insurance  policies  shall be assumed by, for the account of, and at the
        sole risk of USE/CC.

        (j)    The insurance required hereunder is as follows:

        WORKER'S  COMPENSATION AND OCCUPATIONAL  DISEASE insurance in compliance
        with all state and federal  regulations  in the  jurisdiction  where the
        work and services are to be performed with the statutory limit required.
        USE/CC shall require each  consultant  and  contractor to carry Worker's
        Compensation and Employer's Liability insurance.

        COMMERCIAL GENERAL LIABILITY insurance covering all operations of USE/CC
        in the performance of work,  including  contractual  liability insurance
        covering the liability  assumed in this Contract.  Said insurance policy
        or policies  shall  provide  $2,000,000  combined  single limits for all
        injuries or death to persons and damages to property per occurrence.

        COMPREHENSIVE  AUTOMOBILE  LIABILITY  insurance including all owned, non
        owned, and hired vehicles, with the following limits:

                   Bodily Injury         $1,000,000 each person
                                         $1,000,000 each occurrence

                   Property Damage       $1,000,000 each occurrence



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                                                                   EXHIBIT 10.53


        (k) USE/CC shall not commence  work at the site until a  certificate  in
evidence of insurance coverage has been approved by GMMV.

        (l) USE/CC shall be responsible for compliance by all  contractors  with
these insurance  requirements and shall furnish  certificates as provided herein
evidencing the required insurance for the contractors.

        (m) The  liability of USE/CC  assumed  under the  Agreement  shall in no
manner be  limited by the amount of  insurance  furnished  by the GMMV or by the
amount of  insurance  which  USE/CC has or is  required  to provide by the terms
thereof.




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                                                                   EXHIBIT 10.53


                                    EXHIBIT D

                                    THE WORK


The Work is  described  in the pages  that  follow  this  cover  sheet and shall
include the Objectives and Activities described in Exhibit E to the Agreement.



The balance of this  Exhibit is not filed with this Form 10-K for the year ended
May 31, 1997.



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                                                                   EXHIBIT 10.53


                                    EXHIBIT E


Reimbursable Costs.


Description and Detail of  Reimbursable  Costs are not filed with this Form 10-K
for the year ended May 31, 1997. Following are Objectives and Activities.




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                                                                   EXHIBIT 10.53

                          GREEN MOUNTAIN MINING VENTURE
                                     JACKPOT
                            OBJECTIVES AND ACTIVITIES
                               DECLINE DEVELOPMENT

OBJECTIVES:
Complete site preparation.
Develop dual declines into ore zones.

ACTIVITIES:
Site  preparation - Completion of site  preparation  during May and June,  which
will allow for the development of dual declines to commence in July.

Excavation for Conveyor - Complete  preparation of declines for conveyor  system
and install conveyor.

Declines  development - Commence  development of dual declines at an advancement
of 5 feet per cutting hour utilizing a drum miner.  Development schedule will be
two shifts per day seven day per week.  As manpower  increases  programs will be
developed.

Mine water ponds - Upon receiving approval,  from the state agencies,  construct
two lined treatment ponds and water treatment facility and monitoring station.

Install  electric station - This includes labor and supplies to maintain permits
and conditions set forth in the permits and transfer all permits to new owner.


The balance of this  Exhibit is not filed with this Form 10-K for the year ended
May 31, 1997.



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