EXHIBIT 10.54

                                   EXHIBIT "I"
                                FOURTH AMENDMENT
                                       OF
                            MINING VENTURE AGREEMENT
                                      AMONG
                           KENNECOTT URANIUM COMPANY,
                               U.S. ENERGY CORP.,
                                       AND
                            THE USE/CC JOINT VENTURE



<PAGE>


                                                                   EXHIBIT 10.54

                                FOURTH AMENDMENT
                                       OF
                            MINING VENTURE AGREEMENT

        THIS AMENDMENT OF MINING VENTURE  AGREEMENT (the "Amendment") made as of
June  23,  1997 is among  Kennecott  Uranium  Company,  a  Delaware  corporation
("Kennecott"),  U.S. Energy Corp., a Wyoming  corporation  ("USE"),  and a joint
venture between USE and Crested Corp., a Colorado  corporation  ("Crested") (the
joint venture between USE and Crested is referred to herein as "USE/CC" and USE,
Crested and USE/CC are collectively referred to herein as the "USE Parties").

                                    RECITALS

        A. Kennecott and the USE Parties entered into a Mining Venture Agreement
made as of June 1, 1990 with respect to a mining  venture  being  undertaken  by
them (the "Venture")  involving  certain  properties and related property rights
and personal property in Fremont County, Wyoming described in the Mining Venture
Agreement (the "Properties").

        B. The  Mining  Venture  Agreement  has been  amended  from time to time
including (without  limitation) by letters dated September 10, 1990 and March 1,
1991,  an Agreement  and Amendment  dated  September 20, 1991,  and an Agreement
Regarding  Sweetwater  Mill and  Amendment  to Mining  Venture  Agreement  dated
September 20, 1991 and  Amendment  dated  February 26, 1992 (the Mining  Venture
Agreement,  as amended,  is referred to in this Amendment as the "Mining Venture
Agreement").

        C. Contemporaneously with the execution of this Amendment, Kennecott and
the USE Parties are entering into an  Acquisition  Agreement with respect to the
sale of certain assets of Kennecott (the "Acquisition Agreement"). In connection
with the transactions  contemplated by the Acquisition Agreement,  Kennecott and
the USE Parties  desire to amend the Mining  Venture  Agreement  to provide for,
among other things,  (i) the granting of a Mineral  Lease  Agreement to USE with
respect to the Properties  (to the extent the  Properties  remain subject to the
Mining  Venture  Agreement)  and certain  other  properties  (collectively,  the
"Mining Properties",  which are more particularly  described in Exhibit A to the
Mineral  Lease  Agreement);  (ii)  approval of a contract  pertaining to certain
improvements and modifications to be undertaken at the Venture's Sweetwater Mill
(the "Mill  Contract");  (iii) the  accelerated  contribution  of some or all of
Kennecott's  cash  contributions  to the  Venture;  and (iv) the  granting  of a
security  interest  in the  Mining  Properties  and  other  properties  owned or
controlled by the Venture.



                                        1

<PAGE>


                                                                   EXHIBIT 10.54

                                    AGREEMENT

        For good and valuable  consideration  and the covenants  and  agreements
contained  in  this  Amendment,   the  receipt  and  sufficiency  of  which  are
acknowledged  by  Kennecott  and each of the USE Parties,  the parties  agree as
follows:

        1. AUTHORIZATION OF THE MINERAL LEASE AGREEMENT AND THE MILL CONTRACT.

        Notwithstanding  any  provision of the Mining  Venture  Agreement to the
contrary, Kennecott and the USE Parties authorize:

               a. The Venture to enter into the  Mineral  Lease  Agreement  with
USE/CC on behalf of the  Venture  and to lease the Mining  Properties  to USE/CC
pursuant to the terms of the Mineral Lease Agreement; and

               b.  Kennecott,  as Manager of the Venture's  Sweetwater  Mill, to
enter into the Mill Contract with USE.

        2. ACCEPTANCE OF THE MINERAL LEASE AGREEMENT AND THE MILL CONTRACT.

        USE/CC  agrees to  execute  the  Mineral  Lease  Agreement  and the Mill
Contract  and to be bound by the terms of the Mineral  Lease  Agreement  and the
Mill Contract.  USE/CC further agrees that,  during the respective  terms of the
Mineral Lease Agreement and the Mill Contract,  all activities  undertaken by it
with respect to the Mining Properties and the Sweetwater Mill will be undertaken
solely  pursuant to USE/CC's role as lessee and  contractor,  respectively,  and
that  USE/CC will  undertake  no  activities  on the Mining  Properties  or with
respect to the  Sweetwater  Mill in its role as a Manager of the Venture or as a
co-venturer  in  the  Venture.  Information  obtained  in  connection  with  the
performance  of the Mineral  Lease  Agreement or the Mill  Contract  shall,  for
purposes of Article XVI of the Mining Venture Agreement,  be treated as obtained
in connection with the performance of the Mining Venture Agreement.

        3. ACCELERATION OF KENNECOTT'S ADDITIONAL CASH CONTRIBUTIONS.

               a. In lieu of Kennecott's  obligations to provide additional cash
contributions  to the  Venture as provided  in  Subsection  5.2(a) of the Mining
Venture  Agreement.  Kennecott has paid to the USE Parties the sum of $4,000,000
upon the  execution  of the  Acquisition  Agreement  (the  "Signing  Bonus") and
Kennecott will make available to the Venture a contribution of up to $16,000,000
for the purposes of funding the  operations  of USE/CC on the Mining  Properties
and at the  Sweetwater  Mill pursuant to the terms and conditions of the Mineral
Lease Agreement and the Mill Contract,  respectively (the  "Development  Costs",
which are further defined in the Acquisition Agreement),  and for the payment of
Transition  Costs  (which are  further  defined in the  Acquisition  Agreement).
Development Costs will also include any monies

                                        2

<PAGE>


                                                                   EXHIBIT 10.54

spent by the GMMV on the Mining  Properties and the Sweetwater  Mill between May
1, 1997 and the date of this  Amendment and such  expenditures  shall be counted
toward the $16,000,000  obligation described above. Except for funds advanced to
cover costs incurred  between May 1, 1997 and the date of this Amendment,  which
will be advanced as provided in the Mining  Venture  Agreement,  Kennecott  will
advance such funds to the Venture in accordance  with the provisions of Sections
4  and  5  below.  Kennecott's  obligation  to  make  contributions  under  this
Subsection 3(a) shall expire on the termination of the Acquisition Agreement, or
at any  time  it is  established  that  the  sale  of the  assets  of  Kennecott
contemplated thereunder will not be consummated.

               b.  Each  dollar  of  Development   Costs  and  Transition  Costs
contributed to the Venture  pursuant to Subsection 3(a) above and each dollar of
the Signing  Bonus shall count as the  contribution  of two dollars  against the
remaining amount of Kennecott's obligation to contribute the first $50.0 million
in Dollars of the Day to Programs and Budgets as provided in  Subsection  5.2(a)
of the Mining Venture Agreement.

               c. In the event that the Acquisition Agreement is terminated, the
transaction  contemplated by the Acquisition Agreement is consummated,  or it is
established  that  the  sale of the  assets  of  Kennecott  contemplated  in the
Acquisition Agreement will not be consummated:

                      i.  Kennecott  will  have no  further  obligation  to make
contributions  under Subsection 3(a) hereof,  even if it has not contributed the
full $16  million  referenced  in said  Section.  Any balance  remaining  in the
Working Capital  Account  described in Subsection 4(a) below will be returned to
Kennecott  within  15  days  of the  date  that  the  Acquisition  Agreement  is
terminated,  the  transaction  contemplated  by  the  Acquisition  Agreement  is
consummated,  or it is  established  that the sale of the  assets  of  Kennecott
thereunder will not be consummated;

                      ii.  Kennecott's  obligation to contribute the first $50.0
million in Dollars of the Day to Programs and Budgets as provided in  Subsection
5.2(a) of the Mining Venture Agreement, shall be reduced:

                              (x) by all  contributions  made to the  Venture by
               Kennecott  prior to the date hereof,  which the parties  agree is
               $20,355,142,

                              (y) by the sum of $8,000,000 in  consideration  of
               the Signing Bonus; and

                              (z) by the two dollar per dollar  credit  provided
               with respect to any amounts  contributed to the Venture  pursuant
               to Subsection 3(a) above.

Any remaining  funding to reach Kennecott $50 million initial  contribution will
be pursuant to Section 5.2(a) of the GMMV Mining Venture Agreement dated June 1,
1990 on a one to one basis by Kennecott.  Once Section 5.2(a) of the GMMV Mining
Venture Agreement is satisfied,

                                        3

<PAGE>


                                                                   EXHIBIT 10.54

all  remaining  contributions  will be subject to Section 5.3 of the GMMV Mining
Venture Agreement.

                      iii. If the  transaction  contemplated  by the Acquisition
Agreement  is  consummated,  Kennecott's  obligations  to make  disproportionate
contributions under Subsections 5.2(b)(1) and 5.2(b)(2) shall then be satisfied.
Otherwise,  if the  transaction is not  consummated,  Subsections  5.2(b)(1) and
5.2(b)(2) shall remain in effect; and

                      iv.  Upon   completion   of   Kennecott's   obligation  to
contribute the remaining amount of the first $50.0 million in Dollars of the Day
to Programs  and Budgets as provided in  Subsection  5(a) of the Mining  Venture
Agreement, as such amount has been reduced by all contributions  previously made
by Kennecott,  which the parties agree is $20,355,142,  by the $8,000,000 credit
in  consideration  of the Signing Bonus, and by the two dollar per dollar credit
provided  with  respect to any amounts  contributed  to the Venture  pursuant to
Subsection 3(a) above,  the second  sentence of Subsection  5.2(a) of the Mining
Venture  Agreement  will be amended to reflect that each  Participant's  Initial
Contribution  is equal to $15.0  million plus  one-half of the actual  amount of
Kennecott's additional contributions, without taking into account the two dollar
per dollar credit described above.

        4. MECHANICS OF THE KENNECOTT CONTRIBUTION.

        Kennecott  agrees  to  fund  the  additional  $16,000,000   contribution
(including  all  Transition  Costs  incurred or  projected to be incurred by the
Kennecott  or the  Venture  pursuant  to Section 5 below and all costs  incurred
between May 1, 1997 and the date of this  Agreement  as  provided in  Subsection
3(a) above) to the Venture for Development Costs as follows:

               a.  Kennecott will  initially  advance  $1,000,000 to the Venture
which the Venture will, in turn,  advance to USE/CC pursuant to the terms of the
Mineral  Lease  Agreement  and the Mill  Contract to allow USE/CC to establish a
working  capital  account (the  "Working  Capital  Account") to fund  activities
authorized by those agreements.  From time to time, but at least once per month,
USE/CC  shall  provide to the Venture and the Venture  will provide to Kennecott
invoices  ("Invoices") for all expenditures  actually made by USE/CC pursuant to
the Mineral  Lease  Agreement and the Mill  Contract  that are  reimbursable  to
USE/CC by the  Venture  pursuant  to the terms of those  agreements,  along with
evidence  of the  amounts  deposited  by  USE/CC to  satisfy  the  sinking  fund
requirements  set  out  in  Subsection  9(c)  of  the  Mineral  Lease  Agreement
("Evidence of Deposit"),  together with the supporting documentation required by
the  Mineral  Lease   Agreement   and  the  Mill   Contract   (the   "Supporting
Documentation");

               b. Within 20 days of  presentation to and receipt by Kennecott of
the Invoices,  Supporting Documentation and Evidences of Deposit, Kennecott will
(i)  provide  to  the  Venture  funds  adequate  to  reimburse  USE/CC  for  its
reimbursable  expenditures  and to restore  the Working  Capital  Account to its
initial balance, with authorization to the Venture to forward such

                                        4

<PAGE>


                                                                   EXHIBIT 10.54

funds to USE so that USE is  reimbursed  and can  restore  the  Working  Capital
Account;  or (ii)  Kennecott will advise the Venture of any amounts with respect
to  such  Invoices,  Supporting  Documentation  or  Evidences  of  Deposit  that
Kennecott  believes in good faith are not supported by adequate  explanation  or
were not  spent in  compliance  with the  Mineral  Lease  Agreement  or the Mill
Contract,  together with an explanation,  in reasonable detail, of the basis for
Kennecott's objection to such Invoices, Supporting Documentation or Evidences of
Deposit,  in which case  Kennecott will provide funds to the extent that it does
not contest the Invoices,  Supporting  Documentation or Evidences of Deposit. At
such time as the balance of Kennecott's  obligation to fund $16,000,000 has been
reduced to less than  $1,000,000,  its obligation to restore the Working Capital
Account  balance shall be reduced to be no more than the amount of the remaining
obligation.

               c. Kennecott shall have the right to conduct audits,  at its sole
expense,  of all expenditures for which USE/CC seeks  reimbursement  pursuant to
this Section. Such audits may be conducted at six-month intervals,  with a final
audit being conducted  within six months after the date of the final request for
reimbursement by USE/CC. If Kennecott  determines that a discrepancy exists with
respect to any  expenditure,  USE/CC shall  restore to the Working  Capital such
amounts as  Kennecott  believes  in good  faith are not  supported  by  adequate
explanation or were not spent in compliance  with the Mineral Lease Agreement or
the Mill Contract,  within 20 days of Kennecott's written demand therefor.  Such
amounts may  subsequently  be  expended  by USE/CC  pursuant to the terms of the
Mineral  Lease  Agreement  and the Mill  Contract or, if not expended by USE/CC,
returned  to  Kennecott  as  provided  Subsection  3(c)(i)  above  whether  such
restoration and return occurs before or after the termination of the Acquisition
Agreement or the consummation of the transactions contemplated by the agreement.

               d. If  Kennecott  has  withheld  funding  from the  Venture  with
respect to an Invoice  presented under  Subsection 4(b) above, or USE/CC has not
made a refund  demanded  under  Subsection  4(c) above,  the parties  shall meet
within 15 days and seek to resolve  the basis for the  dispute.  If the  dispute
cannot be resolved to the parties'  mutual  satisfaction  within 30 days of such
presentation  or demand,  such dispute may, at the written request of any of the
parties,  delivered  to each of the other  parties  not later than 40 days after
such presentation or demand, be submitted to and resolved by binding arbitration
conducted in  accordance  with the  procedures  set forth in Exhibit "A" to this
Amendment,  which is incorporated  herein by reference.  The parties acknowledge
and agree that such right to arbitration is the exclusive remedy of the parties,
or any of them,  for the failure of Kennecott to satisfy its  obligations  under
Subsections  3(a),  4(a) and 4(b) or the failure of USE/CC to make refunds under
Subsection  4(c), that none of the parties shall seek any other remedy,  whether
statutory, equitable or at common law, with respect thereto, and this Amendment,
including  without  limitation  Subsection  3(c),  shall  continue  to be  fully
effective  for  all  purposes   regardless  of  such  dispute  or  its  ultimate
resolution.

                      e. At Closing (but subject to Closing occurring) Kennecott
shall contribute the excess, if any, of the amount required to be contributed to
the Venture by Kennecott under

                                        5

<PAGE>


                                                                   EXHIBIT 10.54

Section  3(a)  hereof  over the sum of (i)  amounts  previously  contributed  by
Kennecott  under  this  Section 4 and (ii)  amounts  funded by  Kennecott  under
Section 5 hereof.  The USE Parties covenant that such  contribution will be used
exclusively  for the  purpose of funding  the  operations  of the Venture on the
Mining Properties and Sweetwater Mill.

        5. AGREEMENT WITH RESPECT TO THE TRANSITION COSTS.

        In connection with the  implementation  of this  Amendment,  the Mineral
Lease Agreement,  the Mill Contract, the Acquisition Agreement and certain other
documents related to the transactions contemplated by such agreements, Kennecott
and/or the Venture may incur  Transition  Costs,  as defined in the  Acquisition
Agreement.  Kennecott  agrees to fund such costs to the extent they are incurred
by the  Venture or to incur  such costs  directly  to the  extent  Kennecott  is
required to participate in activities,  the cost of which are Transition  Costs,
and provide an account of such costs to USE/CC. All such costs which the parties
agree are Transition Costs, will count toward Kennecott's  obligation to provide
up to $16,000,000 to the Venture as provided in Subsection 3(a) above.

        6.  AUTHORIZATION  FOR  GRANTING  A  SECURITY  INTEREST  IN  THE  MINING
PROPERTIES.

        Immediately  prior to the delivery of this Amendment,  Kennecott  Energy
Company  ("KEC"),  an affiliate of Kennecott,  loaned the sum of  $16,000,000 to
Kennecott as evidenced  by a promissory  note (the "KEC Note").  Notwithstanding
any provision of the Mining  Venture  Agreement to the contrary,  including,  in
particular,  the  restrictions of Subsections  15.2(a) and 15.2(f) of the Mining
Venture Agreement, Kennecott and the USE Parties authorize Kennecott to grant to
KEC a lien,  mortgage and  security  interest in and to all of  Kennecott's  50%
interest in and to the Mining Properties and the other properties (including the
Sweetwater Mill) owned by the Venture, but only to the extent of Kennecott's 50%
interest therein, by executing and delivering to KEC a Deed of Trust,  Mortgage,
Security Agreement,  Financing  Statement and Assignment of Proceeds,  Rents and
Leases in the form attached to the Acquisition  Agreement as Exhibit B (the "KEC
Mortgage"). The KEC Mortgage shall be a first and prior lien to any lien created
in favor of the  Manager of the Venture or of the  parties to the  Venture,  but
only to the extent of  Kennecott's  50%  interest in the Mining  Properties  and
other properties owned by the Venture,  and the Mining Venture Agreement and the
interests of the other  participants in the Venture and such properties shall be
subordinate to the KEC Mortgage.


                                        6

<PAGE>


                                                                   EXHIBIT 10.54

        7. COVENANTS WITH RESPECT TO THE SECURITY INTEREST.

        Kennecott covenants to and with the USE Parties that, if the sale of the
assets  of  Kennecott   contemplated  in  the   Acquisition   Agreement  is  not
consummated,  Kennecott will comply with all of the terms and conditions of, and
make all payments required by, the KEC Note and will take all actions and do all
things necessary to prevent  foreclosure of the KEC Mortgage.  Kennecott further
agrees to protect,  indemnify, hold harmless and defend the USE Parties from all
losses, claims,  demands, costs of defense (including reasonable attorneys' fees
and court costs) that the USE Parties,  or any of them, may incur as a result of
Kennecott's  failure to comply  with the  covenants  given to the USE Parties in
this Section 7.

        8. Financing Additional Contributions.

        Section 5.3 of the Venture Agreement is amended to read as follows:

               "(a)  At  such  time  as the  USE  Parties  become  obligated  to
               contribute  to Programs  and Budgets if,  despite the exercise of
               its best  efforts,  the USE  Parties  are  unable to  obtain  the
               financing  necessary  to  contribute  to an approved  Program and
               Budget adopted with respect to (i) the development of the initial
               mine on the Properties; (ii) the return of the Sweetwater Mill to
               operational  status  pursuant to the  requirements of the Nuclear
               Regulatory Commission;  or (iii) a major expansion of Operations,
               Kennecott  agrees to exercise  reasonable  commercial  efforts to
               assist the USE Parties in obtaining  the  financing  necessary to
               make such contribution. Kennecott's reasonable commercial efforts
               shall  include  consideration  of  joint  project  financing.  If
               Kennecott   assists  the  USE  Parties  in  obtaining   financing
               necessary to make such contribution or if joint project financing
               is arranged  pursuant to  Kennecott's  efforts under this Section
               5.3,  the  USE  Parties  agree,  as a  condition  of  Kennecott's
               performance under this Section,  to compensate  Kennecott for all
               costs of obtaining such financing or joint  financing,  including
               but not limited to interest and other costs of funds, that exceed
               the cost that would have been  incurred  by  Kennecott  if it had
               funded its share of the Program and Budget separately.

               (b) For  purposes  of this  Section  5.3,  a Program  and  Budget
               involving a major  expansion of Operations  shall be defined as a
               Program and Budget for the  expansion  of the initial mine on the
               Properties,  expansion of the Sweetwater Mill after its return to
               operational  status,  or development of an additional mine on the
               Properties, in each case the cost of which exceeds $25,000,000.

               (c) The  Participants  agree that Kennecott's  obligations  under
               this  Section  5.3 shall be  solely  for the  benefit  of the USE
               Parties and such  obligations  are not  assignable  or  otherwise
               transferable.

                                        7

<PAGE>


                                                                   EXHIBIT 10.54


        9. Further Assurances.

        Each party to this  Amendment  agrees to execute such further  documents
and perform such further acts as are  necessary to implement  fully the terms of
this Amendment.

        10. Confirmation of the Mining Venture Agreement.

        This  Amendment  is  subject to the terms and  provisions  of the Mining
Venture  Agreement,  including  the  confidentiality  provisions of Article XVI.
Except as amended by this Amendment, the Mining Venture Agreement, as previously
amended,  shall  continue  in full force and effect  and  Kennecott  and the USE
parties  ratify,  confirm  and adopt the Mining  Venture  Agreement  as amended.
Kennecott and the USE Parties further confirm and agree as follows:

               a.  Neither  the  Mining  Venture  Agreement  nor this  Amendment
creates any fiduciary duty, express or implied, among the Participants.

               b.  Neither  the  Mining  Venture  Agreement  nor this  Amendment
imposes  any  time  limit,   express  or  implied,   on  Kennecott   for  making
contributions  under  Section  5.2(a)  hereof or otherwise to take any action to
develop or put into production any asset of the Venture.  However,  this Section
10(b)  does not  limit or  excuse  Kennecott's  obligations  under  Section 3 or
Section 4 of this Amendment.

               c.  Neither  the  Mining  Venture  Agreement  nor this  Amendment
imposes any obligations, express or implied, on any Participant to undertake any
activity with respect to marketing  prior to the time that a decision is made to
develop or put into  production  any asset of the Venture.  No such decision has
ever been made by the  Management  Committee  of the  Venture and as of the date
hereof no such decision is contemplated prior to July 31, 1998.

               d.  Neither  the Mining  Venture  Agreement  nor this  Amendment,
expressly or by implication, prevents any Participant, any Affiliate (as defined
in the  Acquisition  Agreement)  of any  Participant,  or any other  person from
engaging in any other  business or activity  whether or not similar to,  related
to, or in direct or indirect  competition  with any  business or activity of the
Venture, regardless of the effect any such activity may have on the Venture.



                                        8

<PAGE>


                                                                   EXHIBIT 10.54

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

                                        KENNECOTT URANIUM COMPANY


                                        By     /S/ L. R. CARDEY-YATES
                                            -----------------------------------
                                        Its    DIRECTOR/ASSISTANT SECRETARY
                                             ---------------------------------- 

                                        U.S. ENERGY CORP.

                                        By     /S/ JOHN L. LARSEN
                                            -----------------------------------
                                        Its     PRESIDENT
                                             ---------------------------------- 

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

                                        By:  U.S. ENERGY CORP.


                                           By     /S/ JOHN L. LARSEN
                                               -------------------------------- 
                                           Its     PRESIDENT
                                               --------------------------------


                                        9

<PAGE>


                                                                   EXHIBIT 10.54




                                                   By:  CRESTED CORP.


                                                      By     /S/ MAX T. EVANS
                                                          ---------------------
                                                      Its     PRESIDENT
                                                          ---------------------


                                    GUARANTY

        FOR  VALUABLE  CONSIDERATION,  Kennecott  Energy  and  Coal  Company,  a
Delaware corporation (the "Guarantor"),  guarantees the obligations of Kennecott
under Section 7 of the foregoing Fourth Amendment to Mining Venture Agreement.

                                            KENNECOTT ENERGY AND COAL COMPANY



                                     By:    /S/ G. H. BOYCE
                                         --------------------------------------
                                               G.H. Boyce,
                                         President and Chief Executive Officer
                                         

                                            By:    /S/ K. P. DONE
                                                -------------------------------
                                                      K. P. Done
                                                      Assistant Treasurer


                                       10

<PAGE>


                                                                   EXHIBIT 10.54

                                   EXHIBIT "A"

                                       TO

                  FOURTH AMENDMENT TO MINING VENTURE AGREEMENT

                             ARBITRATION PROCEDURES





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


                                       11

<PAGE>