FORM 10-KSB

                            U.S. SECURITIES AND EXCHANGE COMMISSION
                                    WASHINGTON, D.C.  20549
                         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                            OF THE SECURITIES EXCHANGE ACT OF 1934

[X]  Annual report pursuant to section 13 or 15(d) of the Securities Exchange
     Act of 1934 
     [Fee Required] for the fiscal year ended MAY 31, 1997 or
[ ]  Transition  report  pursuant to section 13 or 15(d) of the  Securities
     Exchange Act of 1934 
     [No Fee Required] for the transition period from to
Commission file number   0-7501

                               RUBY MINING COMPANY
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        COLORADO                                         83-0214117
--------------------------------------------     -------------------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)

        877 North 8th West
        RIVERTON, WY                                        82501
--------------------------------------------     -------------------------------
(Address of principal executive offices)                 (Zip Code)

Registrant's Telephone Number, including area code:  (307) 856-9278
                                                   -----------------------------
           Securities registered pursuant to Section 12(b) of the Act:
                                      NONE

           Securities registered pursuant to Section 12(g) of the Act:
                         COMMON STOCK, $0.001 PAR VALUE
                         ------------------------------
                                (Title of Class)

        Indicate by check mark whether the  Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES X NO ___

        Indicate by check mark if disclosure of delinquent  filers,  pursuant to
Item 405 of Regulation S-K is not contained herein and will not be contained, to
the best of the  Registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ X ]

        Registrant's revenues in fiscal year 1997 were $1,100.

        There is no established trading market for the Registrant's voting stock
and as a result  the  aggregate  market  value of shares of that  stock  held by
non-affiliates of the Registrant can not be accurately estimated. The Registrant
has securities of only one class of stock (common) outstanding.

               CLASS                             OUTSTANDING AT AUGUST 15, 1997
--------------------------------------------     -------------------------------
        Common Stock, $0.001 par                      9,000,000 shares

DOCUMENTS INCORPORATED BY REFERENCE:  None.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: YES ___  NO    X


<PAGE>



                                     PART I

ITEM I.         DESCRIPTION OF BUSINESS

(a)(1)  Business Development.

Ruby Mining Company  ("Registrant" or "Company") was incorporated under the laws
of the State of Colorado on February 16, 1971.  The  Registrant has been engaged
in the general minerals  business,  which includes the acquisition,  exploration
and development  and/or sale or lease of mineral properties and the purchase and
lease of mineral  exploration and mining  equipment.  The Registrant's  minerals
activity has been conducted both directly,  and indirectly through various joint
ventures with both affiliated and non-affiliated  entities.  The Registrant held
interests in various mining properties located near Crested Butte,  Colorado,  a
portion of which were owned  directly  and a portion of which were  subject to a
Joint Venture  Agreement  entered into in 1977.  Until fiscal 1994, this venture
held 168  unpatented  mining claims in the Colorado  Mineral Belt.  These claims
were abandoned in fiscal 1994. The Registrant  intends to examine  opportunities
for the joint venture to acquire other mineral  properties or interests therein,
as warranted. The Registrant owns various mining equipment.

(a)(2) The Registrant has not been involved in any  bankruptcy,  receivership or
similar proceedings in the last three last fiscal years.

(a)(3) In the last three  fiscal  years,  the  Registrant  did not engage in any
material  reclassification,  merger  or  consolidation,  nor did it  acquire  or
dispose of any material  amount of assets  otherwise than in the ordinary course
of business.

(b)     Business of Issuer.

(b)(1)  During the three most  recent  fiscal  years,  the  Registrant  has been
devoting its resources  primarily to examine  various  mineral  properties.  The
Registrant  operates  in  one  business  segment;  the  location,   acquisition,
exploration, sale or lease and/or development of natural resource properties.

(b)(2)  The  Registrant's  business  activities  in the past have  included  its
participation  in the USECC Joint  Venture (a joint  venture with its  principle
shareholder,  U.S. Energy Corp.  ("USE"),  and USE's  subsidiary,  Crested Corp.
("Crested")),  and other  affiliates  of USE and Crested.  The  Registrant is no
longer a party to any USECC Joint Venture  activities,  or other activities with
USE or Crested  affiliates,  although such Venture provides  certain  management
services.  See  Item  6  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations."

(b)(3)  There  has not been a public  announcement  of,  nor has the  Registrant
otherwise  publicized a new product or industry  segment which would require the
investment  of a  material  amount of the assets of the  Registrant,  or that is
otherwise material.

(b)(4)  The  evaluation  and  acquisition  of base and  precious  metals  mining
properties and oil and gas properties is a highly  competitive  business.  There
are numerous companies involved in this business,  many of which are larger than
the Registrant.

(b)(5)  The  Registrant's  business  is not  dependent  upon the  supply  of raw
materials.


                                        2

<PAGE>



(b)(6)  The  Registrant's  business  is not  dependent  upon any single or a few
customers;  during  the most  recently  completed  fiscal  year  the  Registrant
received all of its revenues from interest earned on cash assets.

(b)(7)  The  Registrant  holds no  patents,  trademarks,  licenses,  franchises,
concessions,  royalty  agreements or labor  contracts and does not consider such
property rights to be important to its operations.

(b)(8) Mining operations are subject to statutory and agency  requirements which
address  various  issues,  including (i)  environmental  permitting  and ongoing
compliance  costs,  supervised by the EPA and state agencies (e.g., the Colorado
department  of  Environmental  Quality),  for water and air  quality,  hazardous
waste, etc.; (ii) mine safety and OSHA generally;  (iii) wildlife (Department of
Interior  for  migratory  fowl if  attractive  standing  water  is  involved  in
operations);  and (iv) nuclear and radioactive materials (generally, the Nuclear
Regulatory Commission, which preempts state regulation in such matters).

The Registrant presently has no operations requiring government approval, and no
applications for any approval are pending or planned at Report date.

(b)(9) Because any mining  operations of the  Registrant  would be subject to at
least some of the  requirements  discussed in (b)(8) above,  the commencement of
such  operations  would be delayed  pending agency  approval (or a determination
that approval is not required  because of size,  etc.) or the project might even
be abandoned due to prohibitive costs (water treatment facilities for mine water
discharge might be too expensive for the projected cash flow from the property).

Generally,  the effect of current or probable  governmental  regulations  on the
Registrant  cannot be determined  until a specific  project is undertaken by the
Registrant.

(b)(10) The Registrant  has made no direct  expenditures  for  company-sponsored
research  and   development   activities,   nor  has  it  been   connected  with
customer-sponsored research and development projects.

(b)(11) Federal, state and local provisions regulating the discharge of material
into  the  environment,   or  otherwise   relating  to  the  protection  of  the
environment,  such  as  the  Clean  Air  Act,  Clean  Water  Act,  the  Resource
Conservation  and Recovery  Act, and the  Comprehensive  Environmental  Response
Liability Act ("Superfund") affect minerals operations. For mining operations in
Colorado,  applicable environmental regulation includes a permitting process for
mining  operations,  an  abandoned  mine  reclamation  program and a  permitting
program for industrial  development and siting.  Corresponding statutes exist in
most other  jurisdictions  and would be expected to affect any mining  operation
undertaken by the  Registrant.  Compliance  with these laws and any  regulations
adopted  thereunder  can make the  development  of mining  claims  prohibitively
expensive,  thereby  frustrating the sale or lease of properties,  or curtailing
profits or royalties  which might have been received  therefrom.  The Registrant
believes it is in compliance in all material  respects with all rules,  laws and
regulations  promulgated  by the  various  federal,  state  and  local  agencies
applicable  to  its  current  activities,  but it  cannot  anticipate  what  new
regulations  of this type might be proposed and adopted,  or what the  resulting
effect on its capital expenditures, earnings and competitive position may be.

(b)(12) The Registrant has no full-time employees.



                                        3

<PAGE>



ITEM 2.    DESCRIPTION OF PROPERTY

2(a)    Description of Property

MINERAL PROPERTIES

Until  fiscal 1994,  the  Registrant  owned 153  unpatented  lode mining  claims
located in the Ruby Mining District about five miles west of the town of Crested
Butte, Gunnison County, Colorado. These claims were abandoned in fiscal 1994.

JOINT VENTURE PROPERTIES

The Registrant  also owns a 25% interest in a joint  venture,  which held (until
fiscal 1994) 168 unpatented lode mining claims in the Colorado Mineral Belt. The
remaining  joint  venturers are USE,  Crested,  and certain  mining  exploration
limited partnerships,  and NUPEC Resources,  Inc. These claims were abandoned in
fiscal 1994, and the joint venture is inactive.

OTHER PROPERTIES

USE and  Crested  provide  management  services to the  Registrant  for $500 per
month. Management services include managerial, legal, accounting, geological and
secretarial  services.  The  Registrant  has the use of the common  area of some
3,500  square  feet of the Glen L.  Larsen  Building,  owned by the USECC  Joint
Venture,  located at 877 North 8th West in Riverton,  WY. Those  facilities  are
adequate for the Registrant's executive offices.

2(b)    Investment Policies.  Not Applicable.

2(c)    Description of Real Estate and Operating Data.  Not Applicable.

ITEM 3.    LEGAL PROCEEDINGS.

The Registrant is not engaged in any legal proceedings.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to the Registrant's  security holders during the final
quarter of the most recently completed fiscal year.

                                        4

<PAGE>



                                     PART II

ITEM 5.    MARKET PRICE OF AND DIVIDENDS FOR THE REGISTRANT'S COMMON
           EQUITY AND RELATED STOCKHOLDER MATTERS.

(a)(1)  Market Information.

There is no established  trading market for the Registrant's common stock, which
trades infrequently,  if at all, in the over-the-counter  market. The Registrant
has been unable to establish that there was trading in the stock during the past
two years or determine whether any price quotations or sale prices may have been
provided during that period.

(b)     The  Registrant  had  approximately  2,500 record holders of its common 
stock at August 15, 1997.

(c)     The Registrant has paid no dividends  with  respect to its common stock.
There  are no contractual  restrictions  on  the  Registrant's present or future
ability to pay dividends.

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

        The following is  management's  discussion  and analysis of  significant
factors which have affected the Registrant's  liquidity,  capital  resources and
results of operations during the periods specified.

LIQUIDITY AND CAPITAL RESOURCES

Working  capital  decreased by $10,600 to a working  capital  deficit of $15,300
during fiscal 1997. The decrease in working  capital was a result of the Company
using cash to pay general  and  administrative  expenses  of $1,700.  These cash
expenditures were primarily  associated with audits and associated  reporting to
regulatory agencies.  The other component of the decrease in working capital was
an increase of $8,900 in accounts  payable to affiliates.  This increase was the
result  of a  $6,000  management  fee due  USECC  Joint  Venture  ("USECC")  for
managerial,  legal,  accounting,  secretarial,  geologic and reporting services.
USECC is a joint venture between U.S. Energy Corp. ("USE"), a 27% shareholder of
the Company, and Crested Corp., a USE subsidiary.

Commitments  for the Company's  cash resources  include its ongoing  general and
administrative expenses, and a management fee of $500 per month to USECC.

Sources  of  working  capital  are cash on hand and cash  invested  in  interest
bearing  accounts.  It is  anticipated  that  the  Registrant  will not have any
capital  expenditures  during fiscal 1997;  however,  the Registrant  would need
additional capital to acquire and develop new properties, and continue operating
long-term.  Sources of capital could come from either  liquidation of investment
assets,  equipment  or  negotiation  with USECC for a  reduction  to the payable
amounts. No assurance can be given that such events will occur.


                                        5

<PAGE>



RESULTS OF OPERATIONS


FISCAL 1997 COMPARED WITH FISCAL 1996

Revenues  from  interest  earned  on cash  held  in  interest  bearing  accounts
decreased by $100 to $1,100 for fiscal 1997.  Expenses  decreased by $200 during
fiscal 1997 due to reduced audit and filing fees.

The  Registrant  recorded a net loss of $10,700 for fiscal 1997 as compared to a
net loss of $10,800 for fiscal 1996. There was no significant change in revenues
and expenses during 1997.

FISCAL 1996 COMPARED WITH FISCAL 1995

Revenues  from  interest  earned  on cash  held  in  interest  bearing  accounts
increased  slightly by $200 to $1,200 for fiscal 1996.  Expenses  increased by a
nominal amount of $100 during fiscal 1996 due to slightly higher  administration
costs associated with stock transfer fees, audit and filing fees.

The  Registrant  recorded a net loss of $10,800 for fiscal 1996 as compared to a
net loss of $10,900 for fiscal 1995. There was no significant change in revenues
and expenses during 1996.

ITEM 7.  FINANCIAL STATEMENTS

Financial statements for the Registrant follow.

                                        6

<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Ruby Mining Company:

We have  audited  the  accompanying  balance  sheet of Ruby  Mining  Company  (a
Colorado  corporation)  as of May  31,  1997,  and  the  related  statements  of
operations, shareholders' equity and cash flows for each of the two years in the
period ended May 31, 1997. These financial  statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Ruby Mining Company as of May
31, 1997,  and the results of its  operations and its cash flows for each of the
two years in the  period  ended  May 31,  1997,  in  conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been prepared  assuming that Ruby
Mining Company will continue as a going  concern.  As discussed in Note A to the
financial  statements,  the Company has  experienced  recurring  losses,  has no
current operations and has a significant accumulated deficit, matters that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these  matters are also  described  in Note A. The  financial
statements do not include any  adjustments  relating to the  recoverability  and
classification  of asset carrying  amounts or the amount and  classification  of
liabilities  that might  result  should the  Company be unable to  continue as a
going concern.




ARTHUR ANDERSEN LLP

Denver, Colorado,
August 15, 1997.


                                        7

<PAGE>



                                      RUBY MINING COMPANY

                                  BALANCE SHEET

                                  MAY 31, 1997


                                     ASSETS


CURRENT ASSETS:
     Cash and cash equivalents                        $   34,000
     Other assets                                            300
                                                      ----------
                                                          34,300

INVESTMENTS (Notes B and C)                              130,500

PROPERTY AND EQUIPMENT, at cost:
     Mining equipment                                     39,600
     Less accumulated depreciation                       (31,700)
                                                      ----------
                                                           7,900
                                                      ----------
                                                      $  172,700
                                                      ==========


                             LIABILITIES AND SHAREHOLDERS' EQUITY


CURRENT LIABILITIES:
     Director fees payable (Note C)                   $    10,400
     Accounts payable - affiliates                         39,200
                                                      -----------
                                                           49,600

SHAREHOLDERS' EQUITY:
     Common stock, $.001 par value;
        authorized, 20,000,000 shares; issued
        and outstanding, 9,000,000 shares                   9,000
     Additional paid-in capital                           623,400
     Accumulated deficit                                 (560,900)
     Unrealized holding gain on investments
        (Note C)                                           51,600
                                                      -----------
                                                          123,100
                                                      -----------
                                                      $   172,700
                                                      ===========

  The  accompanying  notes to financial  statements are an integral part of this
balance sheet.


                                        8

<PAGE>



                               RUBY MINING COMPANY

                            STATEMENTS OF OPERATIONS



                                                     YEAR ENDED MAY 31,
                                                     ------------------
                                                   1997              1996
                                                   ----              ----
REVENUES:
     Interest                                    $   1,100        $    1,200
                                                 ---------        ----------


COSTS AND EXPENSES:
     General and administrative (Note A)              11,800          12,000
                                                 -----------      ----------

NET LOSS                                         $ (10,700)       $  (10,800)
                                                 =========        ==========

NET LOSS PER SHARE                               $    *           $     *
                                                 =========        ==========

WEIGHTED AVERAGE SHARES
     OUTSTANDING                                 9,000,000         9,000,000
                                                 =========        ==========

        *  Less than $.01 per share.


   The accompanying notes to financial  statements are an integral part of these
statements.


                                        9

<PAGE>

<TABLE>
<CAPTION>


                               RUBY MINING COMPANY

                        STATEMENT OF SHAREHOLDERS' EQUITY

                                                                                               Unrealized
                                                                                                 Holding
                                                             Additional                         Gain (Loss)          Total
                                   Common Stock               Paid-in         Accumulated           On           Shareholders'
                              Shares           Amount         Capital           Deficit         Investments        Equity
                              ------           ------         -------           -------         -----------        ------

<S>                          <C>              <C>            <C>              <C>               <C>               <C>       
Balance, May 31, 1995        9,000,000        $  9,000       $  623,400       $  (539,400)      $    7,400        $  100,400

Net unrealized holding
  gain on investments           --                --             --                --              255,200           255,200
Net loss                        --                --             --               (10,800)           --              (10,800)
                             ---------        --------       ----------       -----------       ----------        ----------

Balance, May 31, 1996        9,000,000           9,000          623,400          (550,200)         262,600           344,800

Net unrealized holding
  loss on investments           --                --             --                --             (211,000)         (211,000)
Net loss                        --                --             --               (10,700)           --              (10,700)
                             ---------        --------       ----------       -----------       ----------        ----------

Balance, May 31, 1997        9,000,000        $  9,000       $  623,400       $  (560,900)      $   51,600        $  123,100
                             =========        ========       ==========       ===========       ==========        ==========


      The  accompanying  notes to financial  statements  are an integral part of these statements.
</TABLE>
                                       10


<PAGE>



                               RUBY MINING COMPANY

                             STATEMENT OF CASH FLOWS


                                                      YEAR ENDED MAY 31,
                                                      ------------------
                                                    1997             1996
                                                    ----             ----

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                     $  (10,700)      $ (10,800)

    Adjustments to reconcile net loss
        to net cash provided by (used in)
        operating activities:
        Increase in accounts payable                   9,000         11,700
                                                 -----------      ---------

NET CASH PROVIDED BY (USED IN)
    OPERATING ACTIVITIES                            (1,700)             900
                                                 ---------        ---------

NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS                            (1,700)             900

CASH AND CASH EQUIVALENTS AT
    BEGINNING OF PERIOD                              35,700          34,800
                                                 ----------       ---------

CASH AND CASH EQUIVALENTS AT
    END OF PERIOD                                $   34,000       $  35,700
                                                 ==========       =========

SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITY:

    Changes in market
        value of investments                     $(211,000)       $ 255,200
                                                 =========        =========

    No  interest  or income  taxes were paid in the years ended May 31, 1997 and
1996.


   The accompanying notes to financial  statements are an integral part of these
statements.


                                       11

<PAGE>



                               RUBY MINING COMPANY

                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 1997


A.      BUSINESS ORGANIZATION AND GOING CONCERN

        Ruby Mining  Company (the  "Company") was  incorporated  in the State of
Colorado on February 16, 1971,  to engage in the  acquisition,  exploration  and
development  and/or sale or lease of mineral  properties  and the  purchase  and
lease of mineral exploration and mining equipment.

        The Company  currently  has no operating  activities,  but  continues to
incur losses from  general and  administrative  expenses  and has a  significant
accumulated deficit.  These expenses are projected to exceed investment interest
revenues  again in 1998.  Management  continues to analyze the  viability of the
Company and its  future.  There is  substantial  doubt as to whether the Company
will continue as a going concern.  However,  the Company has no commitments  for
capital expenditures in the next year and management believes its available cash
is  sufficient  to fund next  year's  obligations,  primarily  for  general  and
administrative expenses.

B.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

        The  preparation  of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts of assets and  liabilities at the
date of the  financial  statements  and the  reported  amounts of  revenues  and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

PROPERTY AND EQUIPMENT

        The  Company   capitalizes   all  costs  related  to  the   acquisition,
exploration and development of mineral properties. Capitalized costs are charged
to operations  when the  properties  are determined to have declined in value or
have  been  abandoned.  The  Company  currently  has no  operations  or  mineral
properties.

        Depreciation of mining equipment is provided by the straight-line method
over the  estimated  useful lives of the related  assets.  All mining  equipment
owned by the  Company is fully  depreciated  with a remaining  salvage  value of
$4,900. Other remaining assets have a book value of $3,000.

INVESTMENTS

        Based on the provisions of Statement of Financial  Accounting  Standards
("SFAS")  No. 115, the Company  accounts for  marketable  equity  securities  as
available-for-sale  securities.  Available-for-sale  securities  are measured at
fair value at each  reporting  date,  with  unrealized  holding gains and losses
excluded from  earnings and reported as a net amount as a separate  component of
shareholders' equity until realized.

NET LOSS PER SHARE

        Net loss per share is  computed  using the  weighted  average  number of
common shares outstanding during the period.


                                       12

<PAGE>


                               RUBY MINING COMPANY

                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 1997
                                   (CONTINUED)

CASH AND CASH EQUIVALENTS

        Amounts held by depository  institutions in demand deposit  accounts are
considered  cash and cash  equivalents.  For purposes of the  statements of cash
flows, cash equivalents include all cash investments with original maturities of
three months or less.

INCOME TAXES

        The Company  accounts for income taxes in accordance  with SFAS No. 109,
"Accounting For Income Taxes".  This statement requires  recognition of deferred
income  tax  assets  and   liabilities   for  the  expected  future  income  tax
consequences,  based on enacted tax laws, of temporary  differences  between the
financial reporting and tax bases of assets, liabilities and carryforwards.

        SFAS No. 109 requires recognition of deferred tax assets and liabilities
for the expected future effects of all deductible  temporary  differences,  loss
carryforwards  and tax  credit  carryforwards.  Deferred  tax  assets  are  then
reduced,  if deemed  necessary,  by a valuation  allowance  for any tax benefits
which, based on current circumstances, are not expected to be realized.

C.      INVESTMENTS AND RELATED PARTY TRANSACTIONS

        U.S.  Energy  Corp.  (USE),  a 26.7%  shareholder,  and its  subsidiary,
Crested Corp.,  provide certain  management and  administrative  services to the
Company under a management agreement. Charges for these services were $6,000 per
annum for 1997 and 1996.

        The  Company  has  accrued  fees of  $10,400  to be paid to the Board of
Directors for services performed prior to 1990.

        The Company's  investments  consist of marketable  equity  securities of
affiliated, but not controlled companies as follows:

                                               MAY 31, 1997
                                               ------------
                                                               Fair
                                                               Market
                                          Cost                 Value
                                          ----                 -----
        U.S. Energy Corp.              $  51,200             $ 112,000
        Crested Corp.                     27,700                18,500
                                       ---------             ---------
                                       $  78,900             $ 130,500
                                       =========             =========

        The  aggregate  fair market value of the  marketable  equity  securities
decreased  $211,000  from  June  1,  1996  to May 31,  1997.  The net  aggregate
unrealized holding gain on investments at May 31, 1997 was $51,600.


                                       13

<PAGE>


                               RUBY MINING COMPANY

                          NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 1997
                                   (CONTINUED)

D.      INCOME TAXES

        There were no taxes currently payable at May 31, 1997.

        The following table  reconciles the Company's  effective income taxes to
statutory federal income taxes:

                                                       MAY 31,
                                            --------------------------
                                               1997             1996
                                            --------         ---------
        Federal income tax benefit
           at statutory rates               $ (3,600)        $ (3,700)
        Less valuation allowance               3,600            3,700
                                            --------         --------

        Effective tax                       $  --            $  --
                                            ========         ========

        As of  May  31,  1997,  the  Company  had  net  operating  loss  ("NOL")
carryforwards available of approximately $464,300 which expire beginning in 1998
through 2012.

        The components of deferred taxes as of May 31, 1997 are as follows:

        Deferred tax assets:
               Tax effect of NOL carryforwards        $   157,800
               Valuation allowance                       (157,800)
                                                      -----------
        Net deferred tax asset                        $     --
                                                      ===========

        The Company has established a valuation allowance for the full amount of
the NOL carryforwards  because, in its present nonoperating state, the Company's
ability to generate  future taxable income is uncertain.  The deferred tax asset
and the related valuation allowance decreased approximately $61,900 from May 31,
1996 due to the expiration of the 1981 NOL.

                                       14

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ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE.

Not applicable.

                                    PART III

ITEM 9.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

(a)(1)(2)(3) Identification of Directors and Executive Officers.

Members of the Registrant's  Board of Directors are elected to hold office until
the next annual meeting of shareholders  and until their  successors are elected
or appointed  and  qualified.  Officers are  appointed by the Board of Directors
until a successor  is elected and  qualified  or until  resignation,  removal or
death.
The Registrant's executive officers and directors are listed below:

                NAME         AGE       POSITION AND TENURE
                ----         ---       -------------------

        John L. Larsen       65        CEO, President, Treasurer and a Director
                                       since February 1971.

        Harold F. Herron     44        Assistant Secretary since August 1979,
                                       Director   since  July  1980  and
                                       Secretary since May 1991.

        George F. Smith      62        Vice President and Director since May
                                       1986.

No arrangement  exists between any of the above officers and directors  pursuant
to which any one of those person was elected to such office or position.

(a)(4)  BUSINESS  EXPERIENCE.  John L. Larsen has been  principally  employed as
chief executive officer of the Registrant's principal shareholder, USE, for more
than five years.  Harold F. Herron has been employed as President of The Brunton
Company  ("Brunton"),  a former  subsidiary  of USE  which  manufactures  and/or
markets  pocket  transits,  precision  and  recreational  compasses,  knives and
binoculars,  for more than five  years.  George  F.  Smith has been  principally
employed as  operations  manager for USE and Crested for more than the past five
years.

(a)(5) DIRECTORSHIPS.  John L. Larsen is also a director of USE and Crested. Mr.
Herron is also a director of USE and Northwest Gold, Inc. Messrs. Larsen, Herron
and Smith hold no other  directorships  of any other  companies  with a class of
securities  registered  pursuant to Section 12 of the  Exchange  Act or that are
subject to the  requirements  of Section  15(d) of such Act,  or of any  company
registered as an investment company under the Investment Company Act of 1940.

(b)     Identification of Certain Significant Employees.

        Not applicable.

(c)     Family Relationships.

        Harold F. Herron is John L. Larsen's son-in-law.

(d)     Involvement in Certain Legal Proceedings.

        During the past five years,  no director,  person  nominated to become a
director, or executive officer of Registrant:

                                       15

<PAGE>




(1) has filed or had filed against him, a petition under the federal  bankruptcy
law or any state insolvency law, nor has any court appointed a receiver,  fiscal
agent or similar  officer by or against any  business of which such person was a
general partner,  or any corporation or business  association of which he was an
executive officer within two years before the time of such filing;

(2) was convicted in a criminal  proceeding or is the named subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses);

(3)  was the  subject  of any  order,  judgment,  or  decree,  not  subsequently
reversed,  suspended  or  vacated,  of  any  court  of  competent  jurisdiction,
permanently  or  temporarily  enjoining,  barring  or  suspending  him from,  or
otherwise  limiting  his  involvement  in, any type of business,  securities  or
banking activities, or

(4) was found by a court of competent  jurisdiction  in a civil action or by the
Securities and Exchange  Commission or the Commodity Futures Trading  Commission
to have  violated any federal or state  securities or  commodities  law, and the
judgment  in such  civil  action  or  finding  by the  Commission  has not  been
subsequently reversed, suspended or vacated.

Based upon a review of Forms 3 and 4  furnished  to the  Registrant  pursuant to
Rule 16a-3(e) since June 1, 1996 and written representations referred to in Item
405(b)(2)(i) of Regulation  S-K, no directors,  officers,  beneficial  owners of
more than ten percent of the  Registrant's  common  stock,  or any other  person
subject  to Section 16 of the  Exchange  Act failed for the period  from June 1,
1996 through May 31, 1997,  to file on a timely basis,  the reports  required by
Section 16(a) of the Exchange Act.

ITEM 10.   EXECUTIVE COMPENSATION

No executive officer of the Registrant received aggregate cash compensation from
the Registrant in excess of $100,000 during the  Registrant's  last fiscal year.
The  following  table  contains   information  with  respect  to  the  aggregate
compensation  accrued by the  Registrant for the last two fiscal years ended May
31, 1997, to the chief executive officer:

                               SUMMARY COMPENSATION TABLE(i)(ii)

                                         Annual Compensation
Name And Principal Position       Year         Salary          Bonus
---------------------------       ----         ------          -----
John L. Larsen, CEO               1997           -0-            -0-
                                  1996           -0-            -0-

(i) During fiscal 1997, no cash compensation was paid to the executive officers.

(ii) The USECC Joint Venture provides management and administrative  services to
the  Registrant for a monthly fee of $500. It is estimated that employees of USE
who provide  services for the  Registrant  spend less than five percent of their
time on the affairs of the Registrant.

No cash bonuses were paid by the  Registrant to the group of persons  identified
in paragraph (a) of Item 9, during the year.

Minimum director fees of $1,500 are owed to the group of individuals  identified
in paragraph  (a) of Item 9, for services  during each fiscal year  ($10,400 for
periods  prior to June 1,  1989).  However,  for the past  several  years  these
amounts  have  not been  paid  and have  been  waived  by the  directors.  It is
anticipated that the directors will again waive these fees for fiscal 1998.

The  Registrant  does not  have any  annuity,  pension,  retirement,  incentive,
deferred  compensation  plans, stock option or stock appreciation  rights plans,
employment  contracts or arrangements  whereby any of its executive  officers or
directors have been paid or may receive compensation from the Registrant.


                                       16

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Alternative  Pension Plan  Disclosure:  The Registrant has no defined benefit or
actuarial pension plans.

(c)     Option/SAR Grants.

        The Registrant has no stock option or stock appreciation rights plans.

(d)     Aggregated Option/SAR Exercise and Fiscal Year-End Option/SAR Value.

        Not Applicable.

(e)     Long Term Incentive Plan ("LTIP") Awards.

        Not Applicable.

(f)     Compensation of Directors.

(1) Standard Arrangements: The Registrant is obligated to pay each member of the
Board directors' fees of $500 per year and $100 per meeting  attended,  together
with reasonable travel and lodging expenses. As discussed above, these fees have
been waived by the directors.

(2) Other arrangements:  There were no other arrangements  pursuant to which any
director of the Registrant was compensated for services as a director during the
fiscal year.

(g)  Employment  Contracts and  Termination  of Employment and Change in Control
Arrangements.

The Registrant has no compensatory plan or arrangement,  nor are any payments to
be received from the  Registrant,  with respect to any  individual  named in the
Table at Item  11(b) for the latest or the next  preceding  fiscal  year,  which
compensation  results or will result  from the  resignation,  retirement  or any
other termination of such individual's  employment with the Registrant or from a
change in the individual's  responsibilities  following a change in control,  in
which the amount  involved,  including  all periodic  payments or  installments,
exceeds $100,000.

ITEM 11        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL WNERS AND
               MANAGEMENT.

(a)     Security Ownership of Certain Beneficial Owners.

The  following  table  shows  the  holder  known  by  the  Registrant  to be the
beneficial owner of more than five percent of the  Registrant's  common stock as
of report date.

                                                 AMOUNT AND
                                                 NATURE OF
                     NAME AND ADDRESS            BENEFICIAL        PERCENT
TITLE OF CLASS       OF BENEFICIAL OWNER         OWNERSHIP        OF CLASS
--------------       -------------------         ---------        --------
Common stock,        U.S. Energy Corp.           2,400,000          26.7%
$.001 par value      Glen L. Larsen Building
                     877 North 8th West
                     Riverton, WY 82501

The listed holder  exercises sole voting and  investment  powers over the shares
set forth opposite its name.

(b)     Security Ownership of Management.

The following table shows,  as of August 15, 1997 ownership by the  Registrant's
officers  and  directors,  individually  and as a group,  of  securities  of the
Registrant and its parent, USE.

                                       17

<PAGE>





                                                   AMOUNT AND
                                                    NATURE OF
NAME AND ADDRESS                                   BENEFICIAL       PERCENT
OF BENEFICIAL OWNER     TITLE OF CLASS              OWNERSHIP      OF CLASS(2)
-------------------     --------------              ---------      -----------
John L. Larsen          Ruby Mining Company      2,400,000(3)         26.7%
201 Hill Street         common stock, $.001
Riverton, WY  82501     par value

Harold F. Herron        Ruby Mining Company      2,400,400(3)         26.7%
3425 Riverside Drive    common stock, $.001
Riverton,  WY  82501    par value

George F. Smith         Ruby Mining Company           -0-              0.0%
1602 East Pershing      common stock, $.001
Riverton, WY  82501     par value

All officers and        Ruby Mining Company      2,400,400(3)         26.7%
directors as a group    common stock, $.001
(three persons)         par value

(1)  Except as  otherwise  noted the listed  executive  officer  exercises  sole
dispositive and voting powers over the shares set forth opposite his name.

(2) Percent of class is computed by dividing  the number of shares  beneficially
owned plus any options held by the reporting  person or group,  by the number of
shares  outstanding plus the shares  underlining  options held by that person or
group.

(3) John L.  Larsen and Harold F. Herron are two of seven  directors  of USE and
accordingly  share the dispositive and voting power over the 2,400,000 shares of
the Registrant's stock held by USE, with the remaining directors of USE.

(c) The  Registrant  is not aware of any pledge of its  securities  or any other
arrangement  which may at a subsequent date result in a change in control of the
Registrant.

ITEM 12.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

(A)(B)  TRANSACTIONS WITH MANAGEMENT AND OTHERS.

Since  June 1,  1991  there  were no  transactions  and  there  are no  proposed
transactions  in which the  amount  involved  exceeds  $60,000  and in which any
executive  officer,  nominee or director of the Registrant,  any security holder
who is known by the Registrant to hold of record or beneficially  more than five
percent of any class of the Registrant's  voting securities or any member of the
immediate  family of any of the foregoing  person,  had or will have a direct or
indirect material interest.

(C)     PRINCIPLE SHAREHOLDER OWNERSHIP.

USE is the  principle  shareholder  of the  Registrant  and  holds  26.7% of the
Registrant's common stock.

(D)     TRANSACTIONS WITH PROMOTERS.

        Not applicable.


                                       18

<PAGE>



ITEM 13.       EXHIBITS AND REPORTS ON FORM 8-K.

(a)     Exhibits Required to be Filed:

        3.1    Articles of Incorporation................................... [1]

        3.2    Amendment to Articles of Incorporation...................... [1]

        3.3    By-Laws..................................................... [1]

       10.1    Joint Venture Agreement -
               USE, Crested, NUPEC and Registrant.......................... [2]

        [1]    Incorporated  by reference from the like numbered  exhibit to the
               Registrant's  Annual  Report on Form 10-K for the year  ended May
               31, 1991.

        [2]    Incorporated  by reference  from the exhibit to the  Registrant's
               November 30, 1990, Quarterly Report on Form 10-Q.

(b)     Reports filed on Form 8-K.

               During the fourth quarter of the last fiscal year, the Registrant
               did not file any reports on Form 8-K.


                                       19

<PAGE>


                                   SIGNATURES


        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized.

                                            RUBY MINING COMPANY
                                            (Registrant)



Date:  August 22, 1997              By:        /s/ JOHN L. LARSEN
                                            -----------------------------------
                                            JOHN L. LARSEN,
                                            Chief Executive Officer


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



Date:  August 22, 1997              By:        /s/ JOHN L. LARSEN
                                            ------------------------------------
                                            JOHN L. LARSEN, Director



Date:  August 22, 1997              By:        /s/ GEORGE F. SMITH
                                            ------------------------------------
                                            GEORGE F. SMITH, Director



Date:  August 22, 1997              By:        /s/ HAROLD F. HERRON
                                            ------------------------------------
                                            HAROLD F. HERRON, Director



Date:  August 22, 1997              By:        /s/ ROBERT SCOTT LORIMER
                                            ------------------------------------
                                            ROBERT SCOTT LORIMER, 
                                            Principal Financial Officer
                                            and Chief Accounting Officer


                                       20

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