EXHIBIT 10.49
                                    ACQUISITION AGREEMENT

                                           BETWEEN

                                  KENNECOTT URANIUM COMPANY

                                          as Seller

                                             AND

                                      U. S. ENERGY CORP.

                                 and a Joint Venture between

                                      U.S. ENERGY CORP.

                                             AND

                                        CRESTED CORP.

                                          as Buyers
                                                                   EXHIBIT 10.49
                                        June 23, 1997




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                                                                   EXHIBIT 10.49
                                                                         PAGE

        1.     Definitions and Construction..................................1

               a.     Definitions in Annex...................................1
               b.     Use of ................................................1
               c.     Headings...............................................1
               d.     References.............................................1
               e.     Incorporation of Exhibits, Annexes, and Schedules......1
               f.     $......................................................1

        2.     Purchase and Sale of GMMV Interest............................2

               a.     Basic Transaction......................................2
               b.     Assumption of Liabilities..............................2
               c.     Cash Price.............................................2
               d.     Assumption and Payment of KEC Note.....................2
               e.     The Closing............................................2
               f.     Deliveries at the Closing..............................2
               g.     Allocation.............................................3

        3.     Representations and Warranties Concerning the Transaction.....3

               a.     Representations and Warranties of the Seller...........3
               b.     Representations and Warranties of the Buyers...........4

        4.     Representations and Warranties Concerning the GMMV............5

               a.     Acquired Assets........................................5
               b.     Financial Statements...................................5
               c.     Events Subsequent to Most Recent Fiscal Month End......6
               d.     Tax Matters............................................6
               e.     Litigation.............................................6
               f.     Environmental Law Violation............................6

        5.     Pre-Closing Covenants.........................................6

               a.     General................................................6
               b.     Notices and Consents...................................7
               c.     Full Access............................................7
               d.     Sweetwater Mill........................................7
               e.     Mineral Lease Agreement................................7
               f.     Amendment of GMMV Agreement............................7
               g.     Commitment to Underwriting.............................7
               h.     Signing Bonus..........................................8




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                                                                   EXHIBIT 10.49

                                      TABLE OF CONTENTS
                                         (CONTINUED)
                                                                         PAGE


        6.     Other Covenants..............................................8

               a.     General...............................................8
               b.     Litigation Support....................................8
               c.     Other Acquisition Agreements..........................8
               d.     Taxes.................................................8
               e.     Reclamation Sinking Fund.............................10
               f.     Employees............................................10

        7.     Conditions to Obligation to Close...........................10

               a.     Conditions to Obligation of the Buyers...............10
               b.     Conditions to Obligation of the Seller...............11

        8.     Remedies for Breaches of This Agreement.....................12

               a.     Survival of Representations and Warranties...........12
               b.     Indemnification Provisions for Benefit of the Buyers.12
               c.     Indemnification Provisions for Benefit of the Seller.13
               d.     Matters Involving Third Parties......................14
               e.     Determination of Adverse Consequences................15
               f.     Other Indemnification Provisions.....................15

        9.     Termination.................................................15

               a.     Termination of Agreement.............................15
               b.     Effect of Termination................................16

        10.    Use of Information......................................... 16

               a.     Confidentiality......................................16
               c.     Accuracy.............................................17
               d.     Use at Own Risk......................................17

        11.    Miscellaneous...............................................18

               a.     Press Releases and Public Announcements..............18
               b.     No Third-Party Beneficiaries.........................18
               c.     Entire Agreement.....................................18
               d.     Succession and Assignment............................18
               e.     Counterparts.........................................18


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                                                                   EXHIBIT 10.49

                                      TABLE OF CONTENTS
                                         (CONTINUED)
                                                                         PAGE


               f.     Disclaimer of Other Representations and Warranties....18
               g.     Notices...............................................19
               h.     Governing Law.........................................19
               i.     Waiver of Jury Trial..................................20
               j.     Amendments and Waivers................................20
               k.     Severability..........................................20
               l.     Expenses..............................................20
               m.     Joint and Several Obligations.........................20
               n.     Final Termination.....................................20
               o.     Specific Performance..................................20


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                                                                   EXHIBIT 10.49

                                      TABLE OF CONTENTS
                                         (CONTINUED)
                                                                         PAGE


Exhibit "A"             Copy of KEC Note
Exhibit "B"             Copy of KEC Mortgage
Exhibit "C"             Intentionally Omitted
Exhibits"D-1"
   through "D-4"      Forms of Transfer, Assignment and Assumption Documents
Exhibit "E"           Form of Assumption of KEC Note
Exhibit "F"           Financial Statements
Exhibit "G"           Form of Contract Service Agreement (with Work Plan and
                      Budget attached)
Exhibit "H"           Form of Mineral Lease Agreement (with Work Plan and Budget
                      attached)
Exhibit "I"           Form of Amendment to GMMV Agreement
Exhibit "J"           Form of Confidentiality and Release Agreement
Exhibit "K"           Form of Officer's and Secretary's Certificates to be
                      Delivered at Closing
Annex I               Exceptions to the Seller's Representations and
                      Warranties;  Bonds to be Replaced
Annex II              Exceptions to the Buyers' Representations and Warranties
                      Concerning the Transaction
Annex III             Definitions


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                                                                   EXHIBIT 10.49


                              ACQUISITION AGREEMENT

        This  Agreement is entered  into as of June 23, 1997,  by and among U.S.
Energy Corp., a Wyoming  corporation  ("USE"),  a joint venture  between USE and
Crested  Corp.,  a Colorado  corporation  ("CRESTED")  (the joint  venture being
referred to herein as "USE/CC" and USE and USE/CC being collectively referred to
herein as the "BUYERS"),  and Kennecott Uranium Company, a Delaware  corporation
(the "SELLER"). The Buyers and the Seller are referred to collectively herein as
the "PARTIES."

        The parties  entered into a Mining Venture  Agreement dated June 1, 1990
for the  formation  and  operation  of the Green  Mountain  Mining  Venture (the
"GMMV") which is currently  conducted under the "GMMV  Agreement" (as defined in
Annex III).

        The Seller  desires to sell its  interest in the GMMV and certain  other
assets,  as  hereinafter  set forth,  to the  Buyers,  and the Buyers  desire to
purchase such interests and assets.

        Now, therefore, in consideration of the premises and the mutual promises
herein  made,  and in  consideration  of the  representations,  warranties,  and
covenants herein contained, the Parties agree as follows.

            1. Definitions and Construction.

               a. DEFINITIONS IN ANNEX. Capitalized terms used herein shall have
the respective meanings assigned to them in Annex III attached hereto.

               b. USE OF "SS.". Except where the context otherwise implies,  the
use of "ss." without  further  reference means a reference to a section or other
subdivision of this Agreement.

               c. HEADINGS. The section headings contained in this Agreement are
inserted  for  convenience  only and shall not affect in any way the  meaning or
interpretation of this Agreement.

               d.  REFERENCES.  Any reference to any federal,  state,  local, or
foreign  statute  or law  shall  be  deemed  also  to  refer  to all  rules  and
regulations promulgated thereunder,  unless the context requires otherwise.  The
word "including" shall mean including without limitation.

               e.  INCORPORATION  OF  EXHIBITS,   ANNEXES,  AND  SCHEDULES.  The
Exhibits,  Annexes,  and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.

               f. "$".  The  symbol  "$"  refers to United  States  currency  in
dollars. 

            2. PURCHASE AND SALE OF GMMV INTEREST.

               a. BASIC TRANSACTION.  On and subject to the terms and conditions
of this  Agreement and in  consideration  of the payment by Seller of $4,000,000
(the "SIGNING BONUS")


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                                                                   EXHIBIT 10.49


to Buyers on execution and delivery of this  Agreement,  the receipt of which is
hereby  acknowledged,  the Buyers  agree to purchase  from the  Seller,  and the
Seller  agrees to sell and  transfer,  convey and deliver to the Buyers,  at the
Closing,  the GMMV Interest  together with all of the Acquired  Assets,  for the
consideration specified in this ss. 2.

               b.  ASSUMPTION  OF  LIABILITIES.  On and subject to the terms and
conditions of this Agreement,  the Buyers agree to jointly and severally  assume
and become  responsible for all of the Assumed  Liabilities at the Closing.  The
Buyers will not assume or have any responsibility,  however, with respect to any
obligation  or  liability of the Seller not included  within the  definition  of
Assumed Liabilities.

               c.  CASH  PRICE.  The  Buyers  agree to pay to the  Seller at the
Closing  $15,000,000  (the "CASH  PRICE") by  delivery  of cash  payable by wire
transfer or delivery of other immediately available funds.

               d.  ASSUMPTION  AND PAYMENT OF KEC NOTE.  Buyers  understand  and
agree that immediately prior to the delivery of this Agreement, Kennecott Energy
Company ("KEC"), an Affiliate of Seller, loaned the sum of $16,000,000 to Seller
as evidenced by a promissory  note of even date herewith (the "KEC NOTE") a copy
of which is attached as Exhibit "A" hereto. The KEC Note is secured by a Deed of
Trust,  Mortgage,  Security  Agreement,  Financing  Statement and  Assignment of
Proceeds, Rents and Leases of even date herewith (the "KEC MORTGAGE"), a copy of
which is attached as Exhibit  "B,"  encumbering,  among other  things,  the GMMV
Interest  and all of the Acquired  Assets.  The KEC Note  (including  all unpaid
principal,  interest  and other  amounts)  shall be  assumed by the  Buyers,  at
Closing, under the Assumption Agreement attached hereto as Exhibit "E".

               e. THE CLOSING.  The closing of the transactions  contemplated by
this Agreement (the "CLOSING") shall take place at the offices of Parsons, Behle
& Latimer  in Salt Lake City,  Utah  commencing  at 11:00 a.m.  local time on or
before the fifth (5th) business day following the  satisfaction or waiver of all
conditions  to the  obligations  of the Parties to consummate  the  transactions
contemplated   hereby  (other  than  conditions  with  respect  to  actions  the
respective  Parties  will take at  Closing  itself),  or such  other date as the
Buyers and Seller may mutually determine (the "CLOSING DATE"). The Parties agree
that Closing shall occur no later than the Extended Closing Date.

               f. DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller will
deliver to the Buyers  the  various  certificates,  instruments,  and  documents
referred to in ss. 7(a)  below,  (ii) the Buyers will  deliver to the Seller the
various certificates,  instruments, and documents referred to in ss. 7(b) below,
(iii) the Seller will execute,  acknowledge (if  appropriate) and deliver to the
Buyers the transfer,  assignment and assumption  documents in the forms attached
hereto as Exhibit "D-1" through "D-4"; (iv) the Buyers will execute, acknowledge
and  deliver to the Seller an  assumption  of the KEC Note in the form  attached
hereto as  Exhibit  "E";  and (v) the  Buyers  will  deliver  to the  Seller the
consideration  specified in ss. 2(c) above.  Any delivery  made, at any time, by
Seller  to USE  shall  constitute  delivery  to the  Buyers,  and after any such
delivery,  Seller shall have no further obligation,  duty or liability to USE/CC
in connection therewith.


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                                                                   EXHIBIT 10.49


               g. ALLOCATION. The Parties shall mutually agree to the allocation
of the  Cash  Price  (and all  other  capitalizable  costs  arising  under  this
Agreement) at the Closing Date among the GMMV  Interest and the Acquired  Assets
for all purposes (including financial accounting and tax purposes). In the event
the Parties cannot reach such  agreement,  the allocation of the Cash Price (and
all other capitalizable costs arising under this Agreement) to the GMMV Interest
and Acquired  Assets will be made in accordance with an appraisal of said assets
performed by one of the "big six" accounting firms not including the independent
auditors of  Kennecott  or the Buyers.  Such  accounting  firm shall be selected
based on the lowest bid for such  appraisal.  Costs of such  appraisal  shall be
equally borne by Buyers and Seller.

            3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.

               a.  REPRESENTATIONS  AND  WARRANTIES  OF THE  SELLER.  The Seller
represents and warrants to the Buyers that the statements  contained in this ss.
3(a) are  correct  and  complete  as of the date of this  Agreement  and will be
correct and  complete as of the Closing  Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss. 3(a)).

                   i.  ORGANIZATION OF SELLER.  The Seller is a corporation duly
     organized,  validly  existing,  and in good standing  under the laws of the
     State of Delaware.

                   ii.  AUTHORIZATION OF TRANSACTION.  The Seller has full power
     and authority (including full corporate power and authority) to execute and
     deliver  this  Agreement  and to perform its  obligations  hereunder.  This
     Agreement  constitutes  the valid and  legally  binding  obligation  of the
     Seller, enforceable in accordance with its terms and conditions.  Except as
     set forth in Annex I attached  hereto,  the Seller need not give any notice
     to, make any filing with, or obtain any authorization, consent, or approval
     of any  government  or  governmental  agency  in  order to  consummate  the
     transactions contemplated by this Agreement.

                   iii.  NONCONTRAVENTION.  Except  as  set  forth  in  Annex  I
     attached hereto,  neither the execution and the delivery of this Agreement,
     nor the consummation of the transactions  contemplated hereby, will violate
     any constitution,  statute, regulation, rule, injunction,  judgment, order,
     decree,   ruling,   charge,   or  other   restriction  of  any  government,
     governmental  agency,  or court to  which  the  Seller  is  subject  or any
     provision of its charter or bylaws.

                   iv.  BROKERS'  FEES.  The Seller has not retained any broker,
     finder, or agent or incurred any liability or obligation to pay any fees or
     commissions  to  any  broker,   finder  or  agent,   with  respect  to  the
     transactions  contemplated  by this  Agreement  for which the Buyers  could
     become liable or obligated.

                   v.  BANKRUPTCY  INSOLVENCY.  No  filing  of any  petition  or
     commencement  of any case or  proceeding  by or  against  Seller  under any
     federal or state law relating to insolvency, bankruptcy, or reorganization,
     has occurred or been threatened;  no adjudication  that Seller is insolvent
     or  bankruptcy  has been made;  no order for relief under the United States
     Bankruptcy Code with respect to Seller has been entered; and no

                                        3

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                                                                   EXHIBIT 10.49


        appointment  of or taking  of  possession  by a  custodian,  trustee  or
        receiver  for all or any  assets  of Seller  has  occurred.  Seller  has
        neither  executed  an  assignment  for the  benefit  of  creditors,  nor
        convened  a meeting  of its  creditors,  or any class  thereof,  for the
        purposes of effecting a moratorium  upon or extension or  composition of
        its debts;  nor has Seller  admitted in writing its inability to pay its
        debts generally and is generally paying its debts.

                   vi. GMMV  INTEREST.  Seller has not assigned,  transferred or
     encumbered the GMMV Interest  (except as set forth in the GMMV Agreement or
     this Agreement or the Exhibits hereto).

               b.  REPRESENTATIONS  AND  WARRANTIES  OF THE BUYERS.  Each of the
Buyers represent and warrant to the Seller that the statements contained in this
ss. 3(b) are correct and complete as of the date of this  Agreement  and will be
correct and  complete as of the Closing  Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss. 3(b));  and will be correct and complete as of the date of assignment and as
of the Closing Date with respect to the Acquiring Person (as though made on such
dates and as though the Acquiring  Person were  substituted  for Buyers and such
dates were substituted for the date of this Agreement throughout this ss. 3(b)).

                   i.  ORGANIZATION  OF THE BUYERS.  USE is a  corporation  duly
     organized,  validly  existing,  and in good standing  under the laws of the
     State of Wyoming. Crested is a corporation duly organized, validly existing
     and in good standing  under the laws of the State of Colorado.  USE/CC is a
     joint  venture  currently  existing  pursuant to an agreement  which is the
     valid and legally binding obligation of USE and Crested enforceable against
     each in accordance with its terms and conditions.

                   ii. AUTHORIZATION OF TRANSACTION. Each of the Buyers has full
     power and  authority  (including  full  corporate  power and  authority) to
     execute  and  deliver  this  Agreement  and  to  perform  its   obligations
     hereunder.  This  Agreement  constitutes  the  valid  and  legally  binding
     obligation  of each of the Buyers,  enforceable  against each in accordance
     with its  terms  and  conditions.  Except  as set out in Annex II  attached
     hereto,  neither  Buyer need give any notice to, make any filing  with,  or
     obtain  any  authorization,  consent,  or  approval  of any  government  or
     governmental agency in order to consummate the transactions contemplated by
     this Agreement.

                   iii. NONCONTRAVENTION. Except as set out in Annex II attached
     hereto,  neither the execution and the delivery of this Agreement,  nor the
     consummation  of the  transactions  contemplated  hereby,  will violate any
     constitution,  statute,  regulation,  rule,  injunction,  judgment,  order,
     decree,   ruling,   charge,   or  other   restriction  of  any  government,
     governmental  agency,  or court to which either of the Buyers is subject or
     any provision of either's articles, bylaws or constituting agreement.

                   iv.  BROKERS'  FEES.  Neither  Buyer has retained any broker,
     finder,  or agent or incurred any liability or  obligation  for any fees or
     commissions  to  any  broker,   finder  or  agent,   with  respect  to  the
     transactions  contemplated  by this Agreement for which Seller could become
     liable or obligated.

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                                                                   EXHIBIT 10.49



                   v. NET WORTH. USE and Crested have a Market Capitalization of
     at least  $25,000,000,  and a  positive  consolidated  tangible  net  worth
     determined  under GAAP.  No filing of any petition or  commencement  of any
     case or  proceeding  by or against  either Buyer under any federal or state
     law relating to insolvency,  bankruptcy, or reorganization, has occurred or
     been threatened; no adjudication that either Buyer is insolvent or bankrupt
     has been made; no order for relief under the United States  Bankruptcy Code
     with respect to either Buyer has been  entered;  and no  appointment  of or
     taking of  possession  by a  custodian,  trustee or receiver for all or any
     assets of either Buyer has occurred.  Neither  Buyer is insolvent;  neither
     Buyer has  executed an  assignment  for the benefit of  creditors;  neither
     Buyer has convened a meeting of its creditors,  or any class  thereof,  for
     the purposes of effecting a moratorium  upon or extension or composition of
     its debts;  neither  Buyer has admitted in writing its inability to pay its
     debts generally; and each Buyer is generally paying its respective debts.

            4.  REPRESENTATIONS  AND WARRANTIES  CONCERNING THE GMMV. The Seller
represents and warrants to the Buyers that the statements  contained in this ss.
4 are correct and complete as of the date of this  Agreement and will be correct
and  complete  as of the  Closing  Date (as  though  made then and as though the
Closing Date were substituted for the date of this Agreement throughout this ss.
4) except with  respect to matters  arising from the acts or omissions of any of
the Buyers.

               a. ACQUIRED ASSETS. The representations and warranties  contained
in Exhibits "D-1" through "D-4"  concerning the Acquired Assets are incorporated
herein,  subject to the  exceptions,  qualifications  and  limitations set forth
therein.

               b. FINANCIAL  STATEMENTS.  Attached hereto as Exhibit "F" are the
following GMMV financial statements  (collectively the "FINANCIAL  STATEMENTS"):
(i) audited consolidated balance sheets and statements of income (loss), changes
in  participants'  equity,  and cash flow as of and for the  fiscal  year  ended
December 31, 1996, and (ii) unaudited consolidated balance sheets and statements
of income (loss),  changes in participants'  equity, and cash flow as of and for
the four months ended April 30, 1997 (the "MOST RECENT  FISCAL MONTH END").  The
Financial  Statements  have been prepared in  accordance  with GAAP applied on a
consistent  basis  throughout the periods covered thereby and present fairly the
financial  condition of the GMMV as of such dates and the results of  operations
of the GMMV for such periods;  PROVIDED,  HOWEVER, that the Financial Statements
are  subject  to  normal  year-end  adjustments  and lack  footnotes  and  other
presentation items.

               c. EVENTS  SUBSEQUENT TO MOST RECENT FISCAL MONTH END.  Since the
Most Recent Fiscal Month End, there has not been any material  adverse change in
the financial condition of the GMMV.


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                                                                   EXHIBIT 10.49


               d.  TAX MATTERS.

                   i. For all periods  ending on or prior to the  Closing  Date,
     the GMMV has filed all Tax Returns that it was required to file,  according
     to applicable filing requirements  (including  extensions) and has paid all
     Taxes shown thereon as owing,  except where the failure to file Tax Returns
     or to pay Taxes would not have a material adverse effect on GMMV.

                   ii. Any Income Tax  allocation or sharing  agreement to which
     the  GMMV is a party  will be  terminated  for the  GMMV on or  before  the
     Closing Date.

               e.  LITIGATION.  The GMMV is not (i)  subject to any  outstanding
injunction or judgment, or (ii) a party to, or to Seller's knowledge threatened,
in writing,  to be made a party to, any action,  suit,  proceeding,  hearing, or
investigation  of, in, or before any court or  quasi-judicial  or administrative
agency of any federal,  state, local, or foreign jurisdiction,  except where the
injunction,  judgment, order, decree, ruling, action, suit, proceeding, hearing,
or  investigation  could not be reasonably  expected to have a material  adverse
effect on GMMV.

               f. ENVIRONMENTAL LAW VIOLATION.  With respect to those properties
which are both (i) located in Sweetwater County, Wyoming and (ii) subject to the
GMMV Agreement (but not with respect to any other properties), the Seller, after
having made diligent inquiry of its officers and employees (and any officers and
employees  of KEC and  Kennecott  Energy  Company)  has no  knowledge of (w) any
release threatened release, discharge,  treatment, storage, disposal or presence
of Hazardous  Materials at, upon, about or beneath any such properties,  (x) any
release,  threatened  release or discharge of Hazardous  Materials  emanating or
migrating or threatening to migrate to, from or across any such properties,  (y)
any violation of  Environmental  Laws  pertaining  to any property  owned and/or
operated by the GMMV, or (z) the treatment,  storage, disposal,  arrangement for
disposal  or  transportation  of  Hazardous  Materials   originating  from  such
properties  at or to a  facility  other than any such  properties,  in each case
prior to the date of this Agreement and except as set forth in Annex I.

            5. PRE-CLOSING COVENANTS.  The Parties agree as follows with respect
to the period between the execution of this Agreement and the Closing.

               a. GENERA. Each of the Parties will use its reasonable efforts to
take all actions and to do all things  necessary in order to consummate and make
effective  the   transactions   contemplated   by  this   Agreement   (including
satisfaction,  but not  waiver,  of the  Closing  conditions  set forth in ss. 7
below).

               b.  NOTICES  AND  CONSENTS.  Each of the  Parties  will  give any
notices to, make any filings with, and use its reasonable  efforts to obtain any
authorizations,  consents,  permits,  licenses and approvals of governments  and
governmental  agencies and third parties in connection with the matters referred
to in ss. 3(a)(ii), ss. 3(b)(ii), and ss. 7(b)(vi) hereof.

               c. FULL ACCESS. The Seller will permit, and the Seller will cause
the GMMV to permit the Buyers to have full access at all reasonable  times,  and
in a manner so as not to interfere  with the normal  business  operations of the
GMMV or the seller (i) to all premises,

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                                                                   EXHIBIT 10.49


properties,  books,  records (including tax records),  contracts,  and documents
which are owned by the GMMV and (ii) to technical  management of the GMMV or the
Seller for the purpose of providing such  information as Buyers  reasonably deem
appropriate in connection  with the  underwriting  contemplated by ss. 5(g). The
Buyers will treat and hold as such any Confidential  Information either receives
from the Seller or the GMMV in the course of the  reviews  contemplated  by this
ss. 5(c), will not use any of the Confidential  Information except in connection
with this  Agreement,  will not  disclose  any of the  Confidential  Information
except as permitted in this Agreement,  and, if this Agreement is terminated for
any reason  whatsoever,  will  return to the Seller and the GMMV or destroy  all
tangible embodiments and all copies of the Confidential Information which are in
the  possession  of either.  Upon  request,  Buyers  will  certify to Seller the
destruction of such information.

               d.  SWEETWATER  MIL.  Contemporaneously  herewith,  Buyers  shall
enter,  and the  Parties  shall  cause  the  GMMV,  acting  through  Seller,  as
permittee,  to enter into the Contract Services  Agreement (the "MILL CONTRACT")
in the form attached hereto as Exhibit "G."

               e. MINERAL LEASE AGREEMENT.  Contemporaneously  herewith,  Buyers
shall enter,  and the Parties shall cause the GMMV to enter into a Mineral Lease
Agreement (the "MINERAL  LEASE  AGREEMENT") in the form set forth in Exhibit "H"
attached hereto.

               f.  AMENDMENT  OF  GMMV  AGREEMENT.  Contemporaneously  herewith,
Buyers and Seller are entering into the Amendment of GMMV  Agreement  (the "GMMV
AMENDMENT") in the form attached hereto as Exhibit "I."

               g. COMMITMENT TO  UNDERWRITING.  Not later than December 1, 1997,
Buyers shall furnish evidence in form reasonably acceptable to Seller of a valid
and legally binding commitment (subject to conditions  customarily  contained in
such commitment letters, including a "market out" clause), by an established and
nationally  recognized  underwriter,  who regularly engages in similar financing
transactions,  to complete an  underwritten  offering of the  securities  of the
Buyer or the Acquiring Person not later than Scheduled  Closing Date which would
upon  completion  result in  sufficient  proceeds  to enable  the  Buyers or the
Acquiring Person to close the transactions herein contemplated.  In lieu of such
underwriting  commitment,  Buyers  may  furnish  evidence,  in  form  reasonably
acceptable to Seller, of a valid and legally binding  commitment letter (subject
to conditions  customarily  contained in such  commitment  letters) from a bank,
venture  capital firm or other  Person,  in each case  reasonably  acceptable to
Seller,  for a private  financing or joint  venture  involving  assets of Buyers
(which may but need not include the GMMV Interest and the Acquired  Assets after
Closing),  which would upon completion  result in sufficient  proceeds to enable
the  Buyers  or  the  Acquiring   Person  to  close  the   transactions   herein
contemplated. Each of the Buyers will use its best efforts to satisfy and comply
with the terms of such  commitment.  The Buyers  covenant that the  contemplated
offering  or other  financing  will be  completed,  if at all, no later than the
Extended Closing.

               h. Signing  Bonus.  The Signing Bonus is being paid by the Seller
to the  Buyers  in  consideration  of their  entering  into and  executing  this
Agreement,  the GMMV Amendment and the other instruments herein contemplated and
the covenants of Sellers  contained herein and therein.  The Signing Bonus shall
be nonrefundable  if (i) Closing occurs;  or (ii) Buyers  substantially  perform
each of such  covenants,  other than those set out in the last two  sentences of
Section 5(g) hereof.

                                        7

<PAGE>
                                                                   EXHIBIT 10.49



            6. OTHER COVENANTS. The Parties agree as follows:

               a.  GENERA.  In case at any time after the  Closing  any  further
action is  necessary to carry out the  purposes of this  Agreement,  each of the
Parties will take such further  action  (including the execution and delivery of
such  further  instruments  and  documents)  as any other Party  reasonably  may
request,  all at the sole cost and expense of the  requesting  Party (unless the
requesting Party is entitled to indemnification therefor under ss. 8 below).

               b. LITIGATION  SUPPORT. In the event and for so long as any Party
actively is  contesting  or  defending  against any  action,  suit,  proceeding,
hearing,  investigation,  charge, complaint, claim, or demand in connection with
(i)  any  transaction  contemplated  under  this  Agreement  or (ii)  any  fact,
situation,   circumstance,   status,   condition,   activity,   practice,  plan,
occurrence,  event,  incident,  action, failure to act, or transaction involving
the GMMV and/or Seller,  the other Party shall cooperate with it and its counsel
in the  defense or contest,  make  available  its  personnel,  and provide  such
testimony  and  access  to their  books and  records  as shall be  necessary  in
connection with the defense or contest,  all at the sole cost and expense of the
contesting or defending Party.

               c. OTHER ACQUISITION  AGREEMENTS.  From and after Closing, Buyers
shall  cause  GMMV to  timely  perform  all of its  obligations  under the Other
Acquisition Agreements and Buyers shall timely perform all of the obligations of
Seller and its Affiliates  under the Other  Acquisition  Agreements.  Subject to
Buyers'  performance  under the  preceding  sentence,  Seller agrees that Buyers
shall be  entitled to all of the rights of Seller and its  Affiliates  under the
Other Acquisition Agreements.

               d.  TAXES.

                   i. Seller shall  prepare and file all Tax Returns of the GMMV
     (including  any  amendments  thereto)  with  respect  to any  taxable  year
     (including  any short  taxable  year) ending on or before the Closing Date.
     Buyers  shall  prepare and file all Tax Returns with respect to any taxable
     year ending after the Closing  Date.  Following  Seller's  request,  Buyers
     shall  promptly  provide  Seller  with  all  data  and  information  in the
     possession  of Buyers or the GMMV  necessary to allow Seller to prepare all
     Tax Returns required to be filed by Seller hereunder.

                   ii. In order to appropriately  apportion any items of income,
     gain,  loss,  deduction  or  credit  of the GMMV  attributable  to the GMMV
     Interest  between Buyer and Seller within any taxable  period that includes
     the Closing Date, the Parties shall elect to perform an interim  closing of
     the books as of the Closing Date.

                   iii. After the Closing Date,  Seller will be entitled to file
     amended Tax Returns for the GMMV for periods  ending on or before  Closing,
     to control  the audit of any  original  or  amended  Tax  Returns  for such
     periods,  including but not limited to extending the applicable  statute of
     limitations,  and settling of litigated  claims,  and Buyers will cooperate
     and cause the GMMV to execute such powers of attorney  and other  documents
     as are  necessary to carry out this intent.  Any refunds to the partners of
     the GMMV for such period(s) covered by the amended tax returns shall be the
     property of those partners.

                                        8

<PAGE>
                                                                   EXHIBIT 10.49



                   iv.  Buyers and Seller shall furnish or cause to be furnished
     to each other, upon request,  as promptly as practicable,  such information
     (including  access  to  books  and  other  records)  and  assistance  as is
     reasonably  necessary  for the  filing of any Tax  Return of GMMV,  for the
     preparation for or conduct of any audit, and for the prosecution or defense
     of any claim, suit, or proceeding  relating to any proposed Tax adjustment.
     Buyers and Seller  shall  cooperate  with each other in the  conduct of any
     audit or other similar  proceedings and each shall execute and deliver such
     powers of attorney and other  documents  as are  necessary to carry out the
     intent of this paragraph.

                   v. Buyers shall promptly give written notice to Seller of any
     examination,  audit,  inquiry, or proposed or actual assessment of the GMMV
     by a federal,  state, or local taxing authority covering any taxable period
     ending before, or including,  the Closing Date. Seller shall have the right
     to control any resulting  proceedings and to determine  whether and when to
     settle  any  such  claim,  assessment,   or  dispute  to  the  extent  such
     proceedings or  determinations  affect the amount of Taxes for which Seller
     may be liable;  provided,  however,  that Buyers are not hereby relieved of
     their  responsibilities  to handle an audit  unless  expressly  assumed  by
     Seller.   Whenever  any  taxing  authority   informs  Seller  of  a  claim,
     assessment,  or other  dispute  concerning  any  amount  of Taxes for which
     Buyers  are or may be  liable,  Seller  shall  promptly  inform  Buyers  in
     writing,  and Buyers shall have the right to control any  resulting  claim,
     assessment,  or dispute to the extent  such  proceedings  or  determination
     affect  the  amount  of Taxes  for  which  Buyers  are  liable  under  this
     Agreement.  Each party  hereto  agrees to give the other party the right of
     reasonable  consultation  regarding  matters subject to this ss.  (6)(d)(v)
     which could affect the other.

                   vi.  Effective as of the Closing Date,  all  liabilities  and
     obligations  between members of Seller's  consolidated income tax reporting
     group  and  the  GMMV  under  any  tax  allocation   agreement  or  similar
     arrangement  in effect prior to the Closing Date shall be  extinguished  in
     full and any  liabilities  or rights  existing  under any such agreement or
     arrangement shall terminate and shall no longer be enforceable.

               e.  RECLAMATION  SINKING FUND.  Each of the Buyers  covenants and
agrees  that it will  cause the GMMV to  maintain  an  adequate  reserve to meet
reclamation costs, including, without limitation the following:

                   i. The  GMMV,  its  participants  and  their  successors  and
     assigns shall  promptly,  fully and in good faith  satisfy the  obligations
     currently set forth in Section 5.4 of the GMMV Agreement which  obligations
     shall continue unchanged,  regardless of the termination of the GMMV or any
     amendment of the GMMV Agreement;

                   ii.  The  aggregate  amount  contributed  to the  Reclamation
     Escrow  Account  after the date hereof shall not, at any time, be less than
     the product of $1.00  multiplied  by the  cumulative  weight  (expressed in
     tons)  of ore  removed  (from  the  date  hereof  to such  time),  from the
     properties which are now subject or which may  subsequently  become subject
     to the  GMMV  Agreement,  and  processed  at the  Sweetwater  Mill.  If the
     aggregate amount of the cash  reclamation  account and the reclamation bond
     exceed reclamation liability,  Buyers are allowed to reduce the reclamation
     account by such excess; and

                                        9

<PAGE>
                                                                   EXHIBIT 10.49



                   iii. Except as provided in (ii) above,  the escrow  agreement
     now in existence  governing  the  Reclamation  Escrow  Account shall not be
     modified,  amended, reduced or revoked at any time (whether before or after
     Closing)  without the prior written consent of the Seller,  which shall not
     be unreasonably withheld.

               f. EMPLOYEES.  Following Closing,  Buyers shall cause the GMMV to
employ each individual  named in the Side Letter (or their  replacements)  until
the first  anniversary of Closing.  The rate of  compensation  shall be not less
than that set out in the Side Letter. The benefits and other terms of employment
provided  shall be no less  favorable  than the  benefits  generally  offered to
employees  of  Buyers.  If,  prior to the  first  anniversary  of  Closing,  the
employment  of any such person is  terminated  by the GMMV for any reason  other
than good cause,  such  individual  shall be entitled to full  compensation  and
benefits through the First Anniversary of Closing.

            7. CONDITIONS TO OBLIGATION TO CLOSE.

               a. CONDITIONS TO OBLIGATION OF THE BUYERS. The obligations of the
Buyers to consummate the transactions to be performed by them in connection with
the Closing are subject to satisfaction of the following conditions:

                   i. the  representations  and warranties set forth in ss. 3(a)
     and ss. 4 above shall be true and correct in all  material  respects at and
     as of the Closing Date;

                   ii. the Seller shall have  performed and complied with all of
     their covenants hereunder in all material respects through the Closing;

                   iii.  there  shall not be any  injunction,  judgment,  order,
     decree,  ruling, or charge in effect preventing  consummation of any of the
     transactions contemplated by this Agreement;

                   iv.  the  Seller  shall  have   delivered  to  the  Buyers  a
     certificate  to the effect that each of the conditions  specified  above in
     ss.  7(a)(i)-(iii)  is  satisfied  in all respectS in the form of officer's
     certificate and secretary's certificate attached as Exhibit K;

                   v.  the  Parties  and  the  GMMV  shall  have   received  all
     authorizations,   consents,   permits  and  approvals  of  governments  and
     governmental  agencies  referred to in ss. 3(a)(ii) and ss. 3(b)(ii) above;
     and

                   vi. all actions to be taken by the Seller in connection  with
     consummation of the transactions  contemplated hereby and all certificates,
     instruments  and  other  documents  required  to  effect  the  transactions
     contemplated  hereby will be reasonably  satisfactory in form and substance
     to the Buyers.

The Buyers may waive any  condition  specified in this ss. 7(a) if it executes a
writing so stating at or prior to the Closing.


                                       10

<PAGE>
                                                                   EXHIBIT 10.49


               b. CONDITIONS TO OBLIGATION OF THE SELLER.  The obligation of the
Seller to consummate the  transactions  to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:

                   i. the  representations  and warranties set forth in ss. 3(b)
     above shall be true and correct in all  material  respects at and as of the
     Closing Date;

                   ii. the Buyers shall have  performed and complied with all of
     their  covenants  hereunder  and all of their  covenants  contained  in the
     Mineral  Lease  Agreement  and the Mill  Contract in all material  respects
     through the Closing;

                   iii.  there  shall not be any  injunction,  judgment,  order,
     decree,  ruling, or charge in effect preventing  consummation of any of the
     transactions contemplated by this Agreement;

                   iv.  the  Buyers  shall  have   delivered  to  the  Seller  a
     certificate  to the effect that each of the conditions  specified  above in
     ss.  7(b)(i)-(iii)  is  satisfied  in all respectS in the form of officer's
     certificate and secretary's certificate attached as Exhibit K;

                   v.  the  Parties  and  the  GMMV,  shall  have  received  all
     authorizations,   consents,   permits  and  approvals  of  governments  and
     governmental agencies referred to in ss. 3(a)(ii) and ss. 3(b)(ii) above;

                   vi. On or before  Closing,  Buyers  shall  have  replaced  or
     caused to be replaced all bonds, guaranties, indemnification agreements and
     suretyship  agreements  listed on Annex I and any other  obligations  under
     which Seller or any of its Affiliates may have any obligation  with respect
     to the GMMV or  operations  conducted on or with respect to the  properties
     subject to the GMMV  Agreement (the  "Performance  Bonds") and obtained the
     release of Seller and its Affiliates from all obligations thereunder;

                   vii. Buyers or Buyers' permitted assignee, as of the business
     day preceding Closing,  shall have the $15,000,000 in cash to pay Seller as
     required  in  ss.2(c)  above,   made  arrangements  to  assume  and  become
     responsible  for all of the  Assumed  Liabilities  as  required  in ss.2(b)
     above, and shall have a Market Capitalization of at least $200,000,000, and
     a positive consolidated tangible net worth determined under GAAP; and

                   viii.  all  actions to be taken by the  Buyers in  connection
     with  consummation  of  the  transactions   contemplated   hereby  and  all
     certificates,  instruments  and other  documents  required  to  effect  the
     transactions  contemplated  hereby will be reasonably  satisfactory in form
     and substance to the Seller.

The Seller may waive any  condition  specified in this ss. 7(b) if it executes a
writing so stating at or prior to the Closing.


                                       11

<PAGE>
                                                                   EXHIBIT 10.49


            8. REMEDIES FOR BREACHES OF THIS AGREEMENT.

               a.  SURVIVAL  OF  REPRESENTATIONS  AND  WARRANTIES.  None  of the
representations  and  warranties  of the Seller  contained  in ss. 4 above shall
survive the Closing.  All of the  representations  and warranties of the Parties
contained  in ss. 3 above shall  survive the Closing  (unless the damaged  Party
knew or had reason to know of any misrepresentation or breach of warranty at the
time of  Closing)  and  continue  in full  force and effect  forever  thereafter
(subject to any applicable statutes of limitations).

               b.  INDEMNIFICATION  PROVISIONS FOR BENEFIT OF THE BUYERS. In the
event the Seller breaches any of its covenants or representations and warranties
contained  herein or in any document  delivered at Closing,  and, if there is an
applicable survival period pursuant to ss. 8(a) above,  provided that the Buyers
make a written  claim for  indemnification  against  the Seller  pursuant to ss.
11(g) below within such survival period, then the Seller agrees to indemnify the
Buyers  from and against the  entirety  of any Adverse  Consequences  the Buyers
shall suffer  through and after the date of the claim for  indemnification  (but
EXCLUDING any Adverse  Consequences the Buyers shall suffer after the end of any
applicable survival period) caused by the breach.

               c. INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLER.

                      i. In the event any of the Buyers or the Acquiring  Person
        breach any representations,  warranties,  and covenants contained herein
        or in any documents delivered at Closing,  then the Buyers jointly agree
        to  indemnify  the Seller from and  against the  entirety of any Adverse
        Consequences  the Seller shall suffer  through and after the date of the
        claim for indemnification caused by the breach.

                      ii. The Buyers  jointly agree to indemnify the Seller from
        and against the entirety of any Adverse  Consequences,  whether  arising
        before or after  Closing,  the Seller  shall suffer as the result of (x)
        any act or omission of any of the Buyers,  or the Acquiring  Person,  or
        any Affiliate of any of them,  and the respective  officers,  directors,
        employees, agents, contractors, or professional advisors of any of them,
        during the term of, or acting  under  authority or color of authority of
        the Mineral Lease Agreement, or the Mill Contract, or (y) Seller being a
        party  to the GMMV  Agreement  or any  operations  of the GMMV or as the
        result  of Seller  or any of its  Affiliates  being a party to the Other
        Acquisition Agreements,  but Buyer's indemnification of Seller under the
        foregoing  clause (y) shall not be  effective  for Adverse  Consequences
        arising out of Seller's acts occurring before Closing.

                      iii.  Each  of the  Buyers  jointly  agree  to  indemnify,
        defend,  release and hold harmless the Seller and its Affiliates and the
        respective officers,  directors,  employees,  agents,  contractors,  and
        professional  advisors of each of them, from and against the entirety of
        any Adverse  Consequences,  whether arising before or after Closing, any
        of them  shall  suffer  as the  result  of (w) the  release,  threatened
        release,  discharge,   treatment,   storage,  disposal  or  presence  of
        Hazardous Materials at, upon, about or beneath any property currently or
        formerly owned and/or operated by the GMMV, (x) the release,  threatened
        release or discharge of Hazardous Materials emanating or

                                       12

<PAGE>
                                                                   EXHIBIT 10.49


        migrating,  or  threatening to emanate or migrate to, from or across any
        property  currently or formerly  owned and/or  operated by the GMMV, (y)
        any violation of Environmental Laws pertaining to any property currently
        or formerly  operated  and/or owned by the GMMV,  or (z) the  treatment,
        storage,  disposal,  arrangement  for  disposal,  or  transportation  of
        Hazardous  Materials  at  or  to a  facility  other  than  any  property
        currently  or  formerly  operated  and/or  owned by the GMMV,  provided,
        however,  that if the  Closing  does not occur for any  reason,  Buyers'
        indemnification  under this clause (iii) shall be limited to  conditions
        arising from or  attributable  to acts or omissions of Buyers during the
        term of, or acting under  authority or color of authority of the Mineral
        Lease Agreement or the Mill Contract.

                      iv. The Buyers jointly agree to indemnify, defend, release
        and hold harmless Seller and its Affiliates and the respective officers,
        directors,  employees,  agents, contractors and professional advisers of
        each of them, from and against the entirety of any Adverse Consequences,
        whether  arising before or after Closing,  any of them shall suffer as a
        result of an untrue  statement  of a  material  fact  contained  in, any
        written document  delivered to, or any oral  communication  made to, any
        Person in connection with any private or public offering of any security
        of any of the Buyers,  the Acquiring  Person or any Affiliates of any of
        them, or the omission or alleged  omission  therefrom of a material fact
        necessary  in  order  to make the  statements  therein,  in light of the
        circumstances under which they were made, not misleading.

                      v. If the indemnification  provided for in ss. 8(c)(iv) is
        legally unavailable or insufficient as a result of legal  unavailability
        to hold  harmless  an  indemnified  Person  in  respect  of any  Adverse
        Consequence  referred  to  therein,   then  each  of  the  Buyers  shall
        contribute to the amount paid or payable by such indemnified Person as a
        result of such Adverse  Consequence in such proportion as is appropriate
        to  reflect  the  relative  fault of the  Buyers on the one hand and the
        indemnified  Person on the other in  connection  with the  statements or
        omission or other action or  non-action  which  resulted in such Adverse
        Consequence as well as any other relevant equitable considerations.

               d. MATTERS INVOLVING THIRD PARTIES.

                      i.  If  any  third  party  shall  notify  any  Party  (the
        "INDEMNIFIED PARTY") with respect to any matter which may give rise to a
        claim for  indemnification  against any other  Party (the  "INDEMNIFYING
        PARTY") under this ss. 8 (a "THIRD PARTY CLAIM"),  then the  Indemnified
        Party shall promptly notify each Indemnifying  Party thereof in writing;
        PROVIDED, HOWEVER, that no delay on the part of the Indemnified Party in
        notifying any Indemnifying  Party shall relieve the  Indemnifying  Party
        from any obligation hereunder unless (and then solely to the extent) the
        Indemnifying Party thereby is prejudiced.

                      ii. Any  Indemnifying  Party will have the right to defend
        the Indemnified  Party against the Third Party Claim with counsel of its
        choice  reasonably  satisfactory to the Indemnified Party so long as (A)
        the Indemnifying  Party notifies the Indemnified Party in writing within
        10 business  days after the  Indemnified  Party has given  notice of the
        Third  Party  Claim  that the  Indemnifying  Party  will  indemnify  the
        Indemnified   Party  from  and  against  the  entirety  of  any  Adverse
        Consequences the

                                       13

<PAGE>
                                                                   EXHIBIT 10.49


        Indemnified  Party may suffer  resulting from,  arising out of, relating
        to, in the  nature  of, or caused  by the  Third  Party  Claim,  (B) the
        Indemnifying   Party  provides  the  Indemnified   Party  with  evidence
        reasonably  acceptable to the  Indemnified  Party that the  Indemnifying
        Party will have the  financial  resources  to defend  against  the Third
        Party Claim and fulfill its indemnification  obligations hereunder,  (C)
        the Third Party Claim  involves  only money damages and does not seek an
        injunction or other equitable  relief,  (D) settlement of, or an adverse
        judgment  with  respect  to, the Third  Party  Claim is not, in the good
        faith  judgment  of  the  Indemnified  Party,   likely  to  establish  a
        precedential  custom or practice  materially  adverse to the  continuing
        business  interests of the Indemnified  Party,  and (E) the Indemnifying
        Party  conducts  the  defense  of the Third  Party  Claim  actively  and
        diligently.

                      iii. So long as the  Indemnifying  Party is conducting the
        defense of the Third Party Claim in accordance  with ss. 8(d)(ii) above,
        (A) the  Indemnified  Party may retain  separate  co-counsel at its sole
        cost and  expense  and  participate  in the  defense of the Third  Party
        Claim,(B)  the  Indemnified  Party will not  consent to the entry of any
        judgment or enter into any  settlement  with  respect to the Third Party
        Claim without the prior written consent of the  Indemnifying  Party (not
        to be withheld  unreasonably),  and (C) the Indemnifying  Party will not
        consent to the entry of any judgment or enter into any  settlement  with
        respect to the Third Party Claim  without the prior  written  consent of
        the Indemnified Party (not to be withheld unreasonably).

                      iv.  In the event any of the  conditions  in ss.  8(d)(ii)
        above is or becomes unsatisfied,  however, (A) the Indemnified Party may
        defend  against,  and consent to the entry of any judgment or enter into
        any  settlement  with respect to, the Third Party Claim in any manner it
        reasonably  may deem  appropriate  (and the  Indemnified  Party need not
        consult  with,  or obtain any consent from,  any  Indemnifying  Party in
        connection  therewith),  (B) the Indemnifying Parties will reimburse the
        Indemnified  Party promptly and  periodically for the costs of defending
        against the Third Party Claim (including  reasonable attorneys' fees and
        expenses),  and (C) the Indemnifying Parties will remain responsible for
        any Adverse  Consequences  the  Indemnified  Party may suffer  resulting
        from,  arising out of,  relating  to, in the nature of, or caused by the
        Third Party Claim to the fullest extent provided in this ss. 8.

               e. DETERMINATION OF ADVERSE CONSEQUENCES.  The Parties shall make
appropriate  adjustments  for Tax benefits and insurance  coverage and take into
account the time cost of money (using 10.5% as the discount rate) in determining
Adverse  Consequences for purposes of this ss. 8. All  indemnification  payments
under this ss. 8 shall be deemed adjustments to the purchase price.

               f.  OTHER   INDEMNIFICATION   PROVISIONS.   The   indemnification
provisions  in this ss. 8 are in  addition  to,  and not in  derogation  of, any
statutory,  equitable,  or common  law  remedy  any Party may have for breach of
representation,  warranty,  or  covenant  provided,  however,  that  the  Buyers
acknowledge and agree that the foregoing indemnification  provisions in this ss.
8  shall  be  the  exclusive  remedy  of  the  Buyers  for  any  breach  of  the
representations and warranties in ss. 4 above.


                                       14

<PAGE>
                                                                   EXHIBIT 10.49


            9. TERMINATION.

               a. TERMINATION OF AGREEMENT. Certain of the Parties may terminate
this Agreement as provided below:

                      i.  the Buyers and the Seller may terminate this Agreement
        by mutual written consent at any time prior to the Closing;

                      ii. the  Buyers may  terminate  this  Agreement  by giving
        written notice to the Seller at any time prior to the Closing (A) in the
        event the Seller has breached any material representation,  warranty, or
        covenant contained in this Agreement in any material respect, the Buyers
        have  notified  the Seller of the breach,  and the breach has  continued
        without cure for a period of 5 business  days after the notice of breach
        unless  the  Seller  has  commenced  to cure the  alleged  breach to the
        Buyers' reasonable satisfaction and thereafter diligently completes this
        cure,  or (B) if the  Closing  shall not have  occurred on or before the
        Extended  Closing  Date,  by  reason  of the  failure  of any  condition
        precedent  under ss. 7(a) hereof (unless the failure  results  primarily
        from the Buyers themselves  breaching any representation,  warranty,  or
        covenant contained in this Agreement); and

                      iii.  the Seller may  terminate  this  Agreement by giving
        written notice to the Buyers at any time prior to the Closing (A) in the
        event  any of the  Buyers  or the  Acquiring  Person  has  breached  any
        material  representation,   warranty,  or  covenant  contained  in  this
        Agreement,  the  Mineral  Lease  Agreement  or the Mill  Contract in any
        material respect,  the Seller has notified the Buyers of the breach, and
        the breach has  continued  without cure for a period of 5 business  days
        after the notice of breach unless the Buyers have  commenced to cure the
        alleged breach to the Seller's  reasonable  satisfaction  and thereafter
        diligently  complete  such cure,  or (B) if the  Closing  shall not have
        occurred  on or  before  the  Extended  Closing  Date,  by reason of the
        failure of any  condition  precedent  under ss. 7(b) hereof  (unless the
        failure  results   primarily  from  the  Seller  itself   breaching  any
        representation, warranty, or covenant contained in this Agreement).

               b. EFFECT OF TERMINATION.  If any Party terminates this Agreement
pursuant to ss. 9(a) above, all rights and obligations of the Parties  hereunder
shall terminate  without any liability of any Party to any other Party hereunder
(except for any  liability  of any Party then in breach  under this  Agreement);
PROVIDED,   HOWEVER,  that  the  confidentiality  provisions  contained  herein,
including ss. 5(c) and the provisions of ss. 10 below shall survive termination.
The GMMV  Amendment  shall continue to apply.  The Mining  Venture  Agreement as
amended by the GMMV Amendment, the Mineral Lease Agreement and the Mill Contract
shall  continue  to apply  in  accordance  with  the  terms  set  forth  therein
applicable to the period following the termination of this Agreement.

            10. USE OF INFORMATION.

               a.  CONFIDENTIALITY.  Both before and after Closing,  each of the
Buyers shall maintain all of the  Confidential  Information  in confidence,  and
shall not  disclose it to, or use it for the benefit of, any Person  (except for
use by Buyers solely in connection with this

                                       15

<PAGE>
                                                                   EXHIBIT 10.49


Agreement) or permit any Person who receives Confidential Information as Buyers'
representative  hereunder  to  disclose  it to or use it for the  benefit of any
Person (except that for use by Buyers solely in connection  with this Agreement)
except  that,  subject to the GMMV  Agreement,  disclosure  is  permitted on the
following terms and conditions:

                      i.  Buyers  may  make  such  limited   disclosure  of  the
        Confidential  Information as it may determine  necessary to allow Buyers
        to finance the purchase  contemplated  herein or to implement  the terms
        hereof,  provided that each person  receiving such  disclosure has first
        executed an agreement  substantially in the form of the  Confidentiality
        and Release  Agreement  attached hereto as Exhibit "J" providing,  among
        other things for maintenance of the  confidentiality of such information
        and  releasing  claims  arising from  inaccuracies  or omissions in such
        information; and

                      ii.  Buyers  may  make  such  limited  disclosure  of  the
        Confidential  Information as is required by or prudent under  applicable
        law or  regulation in  connection  with a public  offering of securities
        whose proceeds are dedicated (to the extent  necessary) to financing the
        purchase  contemplated herein.  Buyers will furnish only that portion of
        the  Confidential  Information  which  Buyers are  advised by counsel is
        legally  required or with respect to which failure to disclose  would be
        imprudent.  In  addition,   Buyers  may  file  with  the  United  States
        Securities  and  Exchange   Commission,   and  any  Canadian  provincial
        securities  commission  that may require the same in  connection  with a
        public  offering  of  securities  of any of the Buyers or the  Acquiring
        Person,  this Agreement  (including any Exhibits,  Annexes and Schedules
        thereto)  if Buyers are  advised by counsel  that such filing is legally
        required,  or with respect to which  failure to file would be imprudent,
        to comply with Buyers' obligations under the Securities Act of 1933, the
        Securities  Exchange Act of 1934 or any such laws and  regulations  of a
        Canadian provincial  securities commission having jurisdiction over such
        public offering.

                      iii.   In  the   event   that   Buyers  or  any  of  their
        representatives  is requested  pursuant  to, or required by,  applicable
        law,   regulation  or  legal   process  to  disclose  any   Confidential
        Information,  other than pursuant to ss.  10(a)(ii),  Buyers will notify
        Seller  promptly  so that  Seller may seek a  protective  order or other
        appropriate  remedy or, in Seller's sole  discretion,  waive  compliance
        with the terms  hereof.  In the event that no such  protective  order or
        other  remedy is obtained,  or that Seller  waives  compliance  with the
        terms hereof,  Buyers will furnish only that portion of the Confidential
        Information  which Buyers are advised by counsel is legally required and
        will exercise all reasonable  efforts to obtain reliable  assurance that
        confidential treatment will be accorded the Confidential Information.

               b.  ACCURACY.  In the  event  any of the  Buyers  or one of their
permitted  assigns makes a public or private  offering to raise sufficient funds
to enable Buyers to close the contemplated transaction,  or if any of the Buyers
offers to sell any portion or all of the GMMV  Interest or sells,  transfers  or
assigns  any  portion  or  all  of  the  GMMV  Interest,  and  any  Confidential
Information or any information, whether or not confidential,  obtained hereunder
or under the GMMV Agreement is used in connection  therewith  (whether orally or
in  writing),  Buyers  covenant  and  agree not to make or permit to be made any
untrue or misleading  statement of a material fact or to omit to state or permit
any omission to state a material fact  necessary in order to make the statements
made, in the light of the circumstances under which they were

                                       16

<PAGE>
                                                                   EXHIBIT 10.49


made, not misleading. Each of the Buyers further covenant that it will, and will
cause each of its  Affiliates  to, comply,  in all material  respects,  with the
Securities Act and the Securities Exchange Act.

               c. USE AT OWN RISK.  The  Buyers  acknowledge  and agree that any
Confidential  Information  and any other  information  it receives in connection
herewith will be used entirely at Buyers' own risk.  The Seller does not make or
give,  and  specifically  disclaims,  any  representation  or warranty as to the
accuracy,  completeness,  usefulness or reliability of any such information, and
the Buyers hereby  irrevocably waive and release any claims they may have at any
time  against  Seller  which  arise as the result of or in  connection  with any
aspect of the use of such information,  including without limitation, any claims
based on inaccuracies,  omissions or inadequacies of such information,  provided
however,  such waiver and release is not applicable to Seller's  representations
contained in ss. 3(a) or 4.

            11. MISCELLANEOUS.

               a. PRESS RELEASES AND PUBLIC ANNOUNCEMENTS.  No Party shall issue
any press release or make any public announcement relating to the subject matter
of this  Agreement  without  the prior  written  approval  of the Buyers and the
Seller;  PROVIDED,  HOWEVER,  that any Party may make any public  disclosure  it
believes in good faith is required by  applicable  law or any listing or trading
agreement   concerning  its  publicly-traded   securities  (in  which  case  the
disclosing Party will use its reasonable  efforts to advise and consult with the
other Parties prior to making the disclosure).

               b. NO THIRD-PARTY BENEFICIARIES. Except for the provisions of ss.
8, this Agreement  shall not confer any rights or remedies upon any Person other
than the Parties  and their  respective  Affiliates,  successors  and  permitted
assigns.

               c. ENTIRE  AGREEMENT.  This  Agreement  (including  the documents
referred  to herein)  constitutes  the entire  agreement  among the  Parties and
supersedes any prior understandings,  agreements, or representations by or among
the Parties,  written or oral, to the extent they have related in any way to the
subject matter hereof.

               d.  SUCCESSION AND  ASSIGNMENT.  This Agreement  shall be binding
upon and inure to the benefit of the Parties  named herein and their  respective
successors and permitted  assigns.  No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the Buyers and the Seller;  provided,  however,  that the Buyers may
assign  their  right to  purchase  the GMMV  Interest  and the  Acquired  Assets
hereunder  at Closing (but not any of its other  rights  hereunder),  if (i) the
assignee  assumes  all of the  obligations  of  Buyers  hereunder  and under the
Mineral Lease  Agreement,  Mill Contract and  Assumption  Agreement  (but Buyers
shall  nonetheless  remain  responsible  for  the  performance  of  all  of  its
obligations  hereunder and  thereunder)  and (ii) at the time of such assignment
the assignee has a market capitalization of at least $200,000,000 and a positive
consolidated tangible net worth determined under GAAP.

               e.  COUNTERPARTS.  This  Agreement may be executed in one or more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together will constitute one and the same instrument.

                                       17

<PAGE>
                                                                   EXHIBIT 10.49



               f. DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES.  Except as
expressly  set forth in ss.ss.  3 and 4, the Seller makes no  representation  or
warranty, express or implied, at law or in equity, in respect of the GMMV or any
of  its  respective  assets,  liabilities  or  operations,   including,  without
limitation,  with  respect  to  merchantability  or fitness  for any  particular
purpose,  and any such other  representations or warranties are hereby expressly
disclaimed.  Buyers  acknowledge  that as a party to the GMMV  Agreement  it has
received such information and has such rights to additional information (whether
or not exercised)  concerning the assets,  liabilities  and operation of GMMV as
are  necessary  or desirable in order for Buyers to determine to enter into this
Agreement and consummate the  transactions  herein  contemplated.  Buyers hereby
acknowledge  and agree  that,  except to the  extent  specifically  set forth in
ss.ss.  3 and 4, the Buyers are  purchasing  hereunder  on an "as-is,  where-is"
basis and have not relied  upon any  written or oral  statement  of any  Person,
other than the  representations  set forth in ss.ss. 3 and 4. Each of the Buyers
has been given full  opportunity  to  conduct,  and has in fact  conducted,  all
inquiries, inspections, examinations and diligence which it desires or which are
necessary for it to enter into this Agreement.

               g. 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 in each
case,  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 SELLER:                           COPY TO:
-----------------                           --------
Kennecott Uranium Company                   Legal Department
Attn:  President                            Kennecott Services Company
Caller Box 3009                             8315 West 3595 South
505 South Gillette Avenue                   P.O. Box 6001
Gillette, WY  82717-3009                    Magna, UT  84044-6001
FAX (801) 687-6011                          FAX (801) 252-3559

IF TO THE BUYERS:                           COPY TO:
U.S. Energy Corp.                           Daniel P. Svilar
Attn: John L. Larsen                        U.S. Energy/Crested Corp.
877 North 8th West                          877 North 8th West
Riverton, Wyoming  82501                    Riverton, Wyoming 82501
FAX (307) 857-3050                          FAX (307) 857-3050

Either  the  Seller or Buyers may  change  its  address  for  future  notices by
providing written notice to that effect to the other party.  Notice to Buyers as
set forth above constitutes notice to both USE and USE/CC.


                                       18

<PAGE>
                                                                   EXHIBIT 10.49


               h.  GOVERNING  LAW.  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.

               i. WAIVER OF JURY TRIA. 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.

               j. AMENDMENTS AND WAIVERS.  No amendment of any provision of this
Agreement  shall be valid  unless the same shall be in writing and signed by the
Buyers and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant  hereunder,  whether intentional or not, shall
be deemed to extend to any prior or subsequent  default,  misrepresentation,  or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

               k. SEVERABILITY.  Any term or provision of this Agreement that is
invalid or unenforceable  in any situation in any jurisdiction  shall not affect
the validity or  enforceability  of the remaining terms and provisions hereof or
the validity or  enforceability  of the offending term or provision in any other
situation or in any other jurisdiction.

               l. EXPENSES.  Except as provided in the GMMV  Amendment,  each of
the Buyers,  Seller and the GMMV will bear its own costs and expenses (including
legal fees and  expenses)  incurred in  connection  with this  Agreement and the
transactions contemplated hereby.

               m. JOINT AND SEVERAL  OBLIGATIONS.  Each of the  representations,
warranties  and covenants of the Buyers in this  Agreement are joint and several
obligations  of the Buyers.  This means that each Buyer will be  responsible  as
provided in ss. 8 above for the entirety of any Adverse  Consequences the Seller
may suffer as a result of any breach  thereof,  though  Seller shall be entitled
only to a single  recovery.  The  foregoing  applies  regardless  of whether the
representation,  warranty  or  covenant  is made by "each of the  Buyers",  "the
Buyers" or otherwise.

               n. FINAL  TERMINATION.  This  Agreement  will, if not  previously
terminated, expire and terminate on December 31, 2016.

               o. SPECIFIC  PERFORMANCE.  Each of the Parties  acknowledges  and
agrees that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached.  Accordingly,  each of the Parties  agrees that
the other party shall be entitled to an  injunction  or  injunctions  to enforce
specifically  this Agreement and the terms and  provisions  hereof in any action
instituted  in any  court of the  United  States  or any  state  thereof  having
jurisdiction over the Parties and the matter, in addition to any other remedy to
which it may be entitled, at law or in equity.


                                       19

<PAGE>
                                                                   EXHIBIT 10.49


        IN WITNESS  WHEREOF,  the Parties hereto have executed this Agreement as
of the date first above written.
                                                         
KENNECOTT URANIUM COMPANY                     U.S. ENERGY CORP. and
                                              CRESTED CORP. dba
                                              USE/CC JOINT VENTURE

By:  /s/ L. R. Cardey-Yates                   By:    U.S. ENERGY CORPORATION
   ------------------------------------
Title:   Director/Assistant Secretary
      ---------------------------------
U.S. ENERGY CORP.                             By:     /s/ John L. Larsen
                                                 ------------------------------
                                                 Title:  President
By:     /s/ John L. Larsen
    -----------------------------------
Title: President                                By:    CRESTED CORP.
      ---------------------------------

                                                By:    /s/ Max T. Evans
                                                   ----------------------------
                                                   Title:  President
                                                   ----------------------------


                                       20

<PAGE>
                                                                   EXHIBIT 10.49


                                     ANNEX I

                 EXCEPTIONS TO THE SELLER'S REPRESENTATIONS AND
                      WARRANTIES CONCERNING THE TRANSACTION


Not filed with this Form 10-K for the year ended May 31, 1997.


<PAGE>
                                                                   EXHIBIT 10.49




                                    ANNEX II

                  EXCEPTIONS TO THE BUYERS' REPRESENTATIONS AND
                      WARRANTIES CONCERNING THE TRANSACTION


Not filed with this Form 10-K for the year ended May 31, 1997.




<PAGE>
                                                                   EXHIBIT 10.49




                                    ANNEX III

                                   DEFINITIONS

     "ACQUIRED  ASSETS"  means the assets  described as acquired in Exhibits D-1
through  D-4 other than the GMMV  Interest.  Acquired  Assets do not include the
excluded assets as set forth in such instruments.

     "ACQUIRING  PERSON"  means  the  Person  acquiring  all or part of the GMMV
Interest and Acquired Assets at Closing.

     "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),  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 and disputes, costs (including without limitation costs of
investigative,  reporting,  clean-up,  response,  removal, remedial,  corrective
action and closure  activities  relating to  Hazardous  Materials),  reclamation
costs,  liabilities  (including strict liability),  obligations,  Taxes, losses,
expenses and fees,  including  consultants'  and attorneys' fees and court costs
and expenses.

     "AFFILIATE"  has the  meaning  set forth in Rule  12b-2 of the  regulations
promulgated under the Securities Exchange Act.

     "AGREEMENT"  means the Acquisition  Agreement  between Buyers and Seller to
which this Annex III is attached.

     "ASSUMED   LIABILITIES"   means  the   liabilities   described  as  assumed
liabilities in Exhibits "D- 1" through "D-4." Assumed Liabilities do not include
the excluded liabilities as set forth in such instruments.

     "BUYERS" has the meaning set forth in the preface of the Agreement.

     "CASH PRICE" has the meaning set forth in ss. 2(c) of the Agreement.

     "CLOSING" has the meaning set forth in ss. 2(e) of the Agreement.

     "CLOSING DATE" has the meaning set forth in ss. 2(e) of the Agreement.

     "CODE" means the Internal Revenue Code of 1986, as amended.

     "CONFIDENTIAL INFORMATION" means the terms of this Agreement (including any
Exhibits,   Annexes  and  Schedules  thereto)  any  information  concerning  the
businesses and affairs of the



<PAGE>
                                                                   EXHIBIT 10.49




GMMV obtained under ss. 5(c), the documents described in the Side Letter and any
documents or communications  containing forecasts,  estimates or interpretations
of Seller or its Affiliates concerning the reserves or economics of the GMMV.

     "CRESTED" has the meaning set forth in the preface of the Agreement.

     "DEVELOPMENT  COSTS"  means  expenditures  made by the GMMV and approved by
Seller in accordance with the Mill Contract or the Mineral Lease Agreement.

     "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,
threatened release,  discharge,  refining or recycling of Hazardous Materials or
reclaiming of real property. Without limiting the foregoing,  Environmental Laws
include the Hazardous  Materials  Transportation  Act (49 U.S.C.  ss.ss. 1801 ET
SEQ.),  the Resource  Conservation  and Recovery Act of 1976, (42 U.S.C.  ss.ss.
6901 ET SEQ.),  the Clean Air Act (42 U.S.C.  ss.ss.  7401 ET SEQ.), the Federal
Water Pollution  Control Act (33 U.S.C.  ss. 1251),  the Safe Drinking Water Act
(42 U.S.C.  ss.ss.  300f ET SEQ.),  the  Comprehensive  Environmental  Response,
Compensation  and Liability  Act of 1980 (42 U.S.C.  ss.ss.  9601 ET SEQ.),  the
Toxic  Substances  Control Act (15 U.S.C.  ss.ss.  2601 ET SEQ.),  the Emergency
Planning and Community Right to Know Act (42 U.S.C. ss.ss. 11001, ET SEQ.,), the
Occupational Safety and Health Act (26 U.S.C. ss.ss. 651 ET SEQ.), the Pollution
Prevention Act of 1990 (42 U.S.C ss.ss. 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
ss.ss.  7901 ET SEQ.), and all similar or additional  federal,  state,  local or
foreign statutes, all as amended, and all regulations promulgated thereunder.

     "EXTENDED  CLOSING DATE" means the Scheduled  Closing Date unless  extended
for the following causes:

               (i) If, on the Scheduled  Closing Date an  underwriting on behalf
of the Buyers or their permitted assignee is actively in progress,  conducted by
an established and nationally  recognized  underwriter who regularly  engages in
similar financing transactions,  and such underwriter has made a best efforts or
firmer  commitment to raise  sufficient funds to enable such Person to close the
contemplated   transaction,   the  Closing  Date  may  be  extended   until  the
underwriting is completed.




<PAGE>
                                                                   EXHIBIT 10.49




               (ii) If an event of force  majeure,  as that term is  defined  in
Section 12 of the Mineral Lease  Agreement and Section 2.18 of the Mill Contract
occurs the Closing Date may be extended to a date determined in the manner,  but
subject to the terms and conditions therein provided.

               (iii) If  Buyers  shall  have  satisfied  or are in  position  to
satisfy all conditions set out in ss. 7(b) of the Agreement, except for that set
out in ss.  7(b)(vi),  by the  Scheduled  Closing  Date  and  have  demonstrated
reasonable  diligence in attempting  to satisfy the latter  condition and have a
reasonable  prospect of  satisfying  such  condition  on or prior to October 30,
1998,  then the  Closing  Date  shall be  extended  for such time as Seller  may
reasonably determine is needed to satisfy such condition.

In no event shall the Extended Closing Date be later than October 30, 1998.

     "FINANCIAL  STATEMENT"  has  the  meaning  set  forth  in ss.  4(b)  of the
Agreement.

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

     "GMMV" has the meaning set forth in the preface of the Agreement.

     "GMMV  AGREEMENT"  means the Mining  Venture  Agreement  dated June 1, 1990
among Seller, Buyers and USE/CC as amended by the following instruments:

               (a)  Letters  dated  September  10,  1990 and March 1, 1991 among
                    Seller, Buyers and USE/CC;

               (b)  Amendment  and  Agreement  dated  September  20,  1991 among
                    Seller, Buyers, and USE/CC;

               (c)  Agreement  Regarding  Sweetwater  Mill and  Amendment to the
                    Mining  Venture  Agreement  dated  September  20, 1991 among
                    Seller, Buyers and USE/CC;

               (d)  Third  Amendment  dated  February  26,  1992  to the  Mining
                    Venture Agreement; and

               (e)  The GMMV  Amendment  (when the term GMMV  Agreement  is used
                    with respect to times after the  effective  date of the GMMV
                    Amendment).

     "GMMV AMENDMENT" has the meaning set forth in ss. 5(f) of the Agreement.




<PAGE>
                                                                   EXHIBIT 10.49




     "GMMV INTEREST"  means all of the Seller's  right,  title and interest as a
Participant or Manager (as those terms are used in the GMMV Agreement) under the
GMMV Agreement.

     "GREEN MOUNTAIN  PROPERTIES"  means the property  interests  subject to the
Mineral Lease Agreement.

     "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  "contaminate"  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  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.

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

     "INCOME  TAX  RETURN"  means any  return,  declaration,  report,  claim for
refund, or information return or statement  relating to Income Taxes,  including
any schedule or attachment thereto.

     "INDEMNIFIED PARTY" has the meaning set forth in ss. 8(d) of the Agreement.

     "INDEMNIFYING  PARTY"  has  the  meaning  set  forth  in  ss.  8(d)  of the
Agreement.

     "KEC" has the meaning set forth in ss. 2(d) of the Agreement.

     "KEC MORTGAGE" has the meaning set forth in ss. 2(d) of the Agreement.

     "KEC NOTE" has the meaning set forth in ss. 2(d) of the Agreement.

     "KNOWLEDGE" means actual knowledge without independent investigation.

     "MARKET  CAPITALIZATION"  is the total issued and  outstanding  shares of a
company, fully diluted (including all warrants,  options, purchase plans, etc.),
and  multiplied  by the average of the closing  prices  over the  previous  five
business days.

     "MILL CONTRACT" has the meaning set forth in ss. 5(d) of the Agreement.

     "MINERAL  LEASE  AGREEMENT"  has the  meaning  set forth in ss. 5(e) of the
Agreement.



<PAGE>
                                                                   EXHIBIT 10.49





     "MOST RECENT FISCAL MONTH END" has the meaning set forth in ss. 4(b) of the
Agreement.

     "OTHER ACQUISITION AGREEMENTS" means:

               (1)  Sale and Purchase  Agreement between Kennecott  Corporation,
                    GMMV,   Union  Oil  Company  of   California   and  Minerals
                    Exploration Company effective June 25, 1991;

               (2)  Guaranty  by  Kennecott  Corporation  in favor of Union  Oil
                    Company of California and Minerals Exploration Company dated
                    June 23, 1992; and

               (3)  Guaranty by Union Oil Company of California in favor of KEC,
                    Buyers and USE/CC dated June 23, 1992.

     "ORDINARY  COURSE OF  BUSINESS"  means  the  ordinary  course  of  business
consistent with past custom and practice (including with respect to quantity and
frequency).

     "PARTY" has the meaning set forth in the preface of the Agreement.

     "PERFORMANCE  BONDS"  has the  meaning  set  forth in ss.  7(b)(vi)  of the
Agreement.

     "PERSON" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental  entity (or any department,  agency, or political  subdivision
thereof).

     "RECLAMATION  ESCROW ACCOUNT" means the escrow account maintained  pursuant
to Section 5.4 of the GMMV Agreement.

     "REPORTABLE EVENT" has the meaning set forth in ERISA ss. 4043.

     "SCHEDULED CLOSING DATE" means July 31, 1998.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SECURITIES  EXCHANGE  ACT" means the  Securities  Exchange Act of 1934, as
amended.

     "SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,  charge,
or other  security  interest,  other  than (a)  mechanic's,  materialmen's,  and
similar liens,  (b) liens for Taxes not yet due and payable,  (c) purchase money
liens and liens securing rental payments under capital lease  arrangements,  and
(d) other liens  arising in the Ordinary  Course of Business and not incurred in
connection with the borrowing of money.

     "SELLER" has the meaning set forth in the preface of the Agreement.



<PAGE>
                                                                   EXHIBIT 10.49





     "SIDE  LETTER"  means  the  letter  dated  June  ___,  1997,  from  Lynn R.
Cardey-Yates to Daniel P. Svilar.

     "SIGNING BONUS" has the meaning set forth in ss. 2(a) of the Agreement.

     "SUBSIDIARY" means any corporation with respect to which a specified Person
(or a Subsidiary  thereof)  owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors,  or any  partnership,  joint  venture or other entity with respect to
which such person owns a majority of the capital interests.

     "TAX OR TAXES" means any tax or taxes, similar charge, fee, impost, levy or
other assessment (including,  without limitation, Income Taxes, severance taxes,
excise taxes, sales taxes, franchise taxes, real estate taxes, transfer taxes or
fees,  transfer gain taxes,  use taxes,  ad valorem  taxes,  withholding  taxes,
payroll  taxes,  or  minimum  taxes),  together  with any  related  liabilities,
penalties,  fines,  additions to tax or interest imposed by the United States or
any state, county, local or foreign government or subdivision or agency thereof.

     "TAX  RETURN OR  RETURNS"  means all  reports,  estimates  and  information
statements  relating to, or required to be filed in connection  with,  any Taxes
pursuant to the statutes, rules and regulations of any foreign,  federal, state,
or local government taxing authority.

     "THIRD PARTY CLAIM" has the meaning set forth in ss. 8(d) of the Agreement.

     "TRANSITION  COSTS"  means the  reasonable  costs  incurred  by the GMMV or
incurred  by Seller  not  reimbursed  to Seller by the GMMV in  connection  with
obtaining consents and approvals,  transferring permits,  licenses and bonds and
taking other actions  reasonably related to the consummation of the transactions
contemplated  herein (whether or not such  transactions  are consummated) not to
exceed  $100,000,  provided  that  costs  incurred  by the Seller or the GMMV in
connection  with the offering of securities  contemplated  hereunder  (which the
Parties do not  expect to be  material)  shall not be  subject to such cap,  nor
shall any costs associated with such offering be counted in determining  whether
that cap has been exceeded.

     "USE" has the meaning set forth in the preface of the Agreement.

     "USE/CC" has the meaning set forth in the preface of the Agreement.