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, 2000 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) 856-9271
                                                             -------------------

           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 1999 were $1,500.

     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 June 29, 2000
------------------------------                      ----------------------------
Common Stock, $0.001 par value                            3,994,027 shares

Documents incorporated by reference:  None.
Transitional Small Business Disclosure Format: YES ___  NO    X

<PAGE>

                                     PART I

ITEM 1. 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 holds
no mining claim interests.  The Registrant intends to examine  opportunities for
the joint venture to acquire other mineral properties or interests  therein,  as
warranted.

(a)(2) The Registrant has not been involved in any bankruptcy, receivership or
similar proceedings in the last three 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 not had the
resources to explore 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") a 91.7% shareholder of the Company,  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.

(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 on cash assets.

                                       2

<PAGE>

(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 date of filing.

(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

None

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.
        ----------------------------------------------------

     A meeting of the shareholders was held at the U.S. Energy Corp.  offices at
877 N. 8th W.,  Riverton,  WY on Tuesday,  January 25, 2000  commencing at 11:00
a.m.

     Proposal  No. 1:  Election  of  Directors.  It was  unanimous  that John L.
Larsen,  Harold F. Herron and George F. Smith be elected as members of the Board
of Directors.

     Proposal  No. 2:  Reverse  stock  split,  approve the reverse  split of the
common stock on a 1 for 20 basis by amending the Articles of Incorporation. For:
16,024,677 (801,234 post split) Against: 506,300 (25,315 post split)

     Proposal No. 3: Increase authorized stock, approve amending the Articles of
Incorporation  to  increase  the  number of shares  of  common  stock  which the
Corporation  is authorized to issue,  from the current number (20 million) up to
100 million.  For:  16,269,377  (8,113,469 post split) Against:  269,100 (13,455
post split)

                                        4

<PAGE>

     Proposal No. 4: Eliminate personal liability of Directors, approve amending
the  Articles of  Incorporation  to  eliminate  the  personal  liability  of the
Directors to the Company and its shareholders under certain circumstances.  For:
15,950,202 (797,510 post split) Against: 558,175 (27,909 post split)

     Proposal No. 5: Reduce voting  requirements,  approve amending the Articles
of  Incorporation  to eliminate the two-thirds  approval voting  requirement for
sale, lease or exchange of assets, and make such and similar  transactions,  and
amendments to the Articles of Incorporation, subject only to the requirements of
Colorado law. For: 14,593,431 (729,672 post split) Against: 567,415 (28,371 post
split)

                                     PART II

ITEM 5. MARKET PRICE OF AND DIVIDENDS FOR THE REGISTRANT'S COMMON
        ---------------------------------------------------------
        STOCK AND RELATED SECURITY HOLDER 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 6, 1999.

(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
During the year ended May 31, 2000 the Company's  working capital increased from
a working  capital  deficit  of $43,400 to  working  capital  of  $28,000.  This
increase came as a result of the Company  retiring all of its debt to its parent
U.S. Energy Corp. ("USE") by issuing shares of its common stock to USE.

Commitments  for the  Company's  cash  resources  include  its  ongoing  general
administrative  expenses and a management fee of $500 per month to a partnership
between USE and its affiliate Crested Corp., USECC Joint Venture. ("USECC")

The  Company  does  not  anticipate  that it  will  generate  revenue  from
operations  during the next fiscal year.  Sources of working capital are cash on
hand and cash invested in interest  bearing  accounts and proceeds from the sale
of  investments if necessary.  It is anticipated  that the Company will not have
any capital  expenditures  during fiscal 2001. The Company 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. No assurance can be given that such events will occur.

                                        5

<PAGE>

During a Special  Meeting of the  Shareholders  during the third quarter of
fiscal 2000,  the  shareholders  authorized a reverse  stock split on a 20 for 1
basis. This reverse stock split reduced the number of outstanding  shares of the
Company's  common stock to  450,000  shares.  Also  during  fiscal 2000,  the
Company issued  3,544,027  shares of common stock to retire  $100,400 of debt to
USE which retired all debt to USE or its  affiliates.  At the  conclusion of the
stock for debt  transactions  USE owns  91.7% of the  outstanding  shares of the
Company at May 31, 2000 as compared to 26.7% at May 31, 1999.

RESULTS OF OPERATIONS

Fiscal 2000 Compared with Fiscal 1999

The Company had no revenues from operations  during the years ended May 31, 2000
and May 31, 1999. The Company did, however, record $1,600 and $1,500 in interest
income earned on monies held in interest bearing accounts during the years ended
May 31, 2000 and May 31, 1999, respectively.

General and  administrative  costs  increased by $13,900 during fiscal 2000 from
fiscal  1999.  This  increase  in general  and  administrative  expenses  is due
primarily  to an increase in the cost of  professional  services  for the annual
Shareholders meeting and reverse stock split.

The  Company's   operations  consist  primarily  of  administrative   activities
associated  with the preparation of various reports and documents as required by
law.

Operations  resulted in losses of $29,000 and $15,200 during the years ended May
31, 2000 and May 31, 1999, respectively.


ITEM 7.  FINANCIAL STATEMENTS
         --------------------

Financial statements meeting the requirements of Regulation S-B follow.

                                       6

<PAGE>

                    Report of Independent Public Accountants


To the Shareholders of Ruby Mining Company:

We have  audited  the  accompanying  balance  sheet of RUBY  MINING  COMPANY  (a
Colorado  corporation)  as of May  31,  2000,  and  the  related  statements  of
operations, shareholders' equity and cash flows for each of the two years in the
period ended May 31, 2000. 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 auditing standards generally accepted
in the United States. 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, 2000,  and the results of its  operations and its cash flows for each of the
two years in the  period  ended May 31,  2000,  in  conformity  with  accounting
principles generally accepted in the United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note A to the
financial statements,  the Company has suffered 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,
June 29, 2000

                                       7

<PAGE>

                               RUBY MINING COMPANY

                                  BALANCE SHEET

                                  May 31, 2000

                                     ASSETS
<TABLE>
<S>                                                                    <C>
CURRENT ASSETS:
     Cash and cash equivalents (Note B)                                $ 38,400

INVESTMENTS (Notes B and C)                                              45,700

PROPERTY AND EQUIPMENT, at cost:
     Mining equipment                                                    39,600
     Less:  accumulated depreciation                                    (31,700)
                                                                          7,900
                                                                       $ 92,000

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Director fees payable (Note C)                                    $ 10,400

SHAREHOLDERS' EQUITY: (Note D)
     Common stock, $.001 par value;
       100,000,000 authorized shares;
       3,994,027 shares issued
       and outstanding                                                    4,000
     Additional paid-in capital                                         728,800
     Accumulated deficit                                               (618,000)
     Accumulated other comprehensive loss
       (Note C)                                                         (33,200)
                                                                         81,600
                                                                       $ 92,000
</TABLE>


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

                                       8

<PAGE>

                               RUBY MINING COMPANY

                            STATEMENTS OF OPERATIONS


                                                         Year Ended May 31,
                                                   -----------------------------
                                                       2000               1999
                                                       ----               ----
REVENUES:
     Interest                                      $     1,600         $  1,500


COSTS AND EXPENSES:
     General and administrative expenses                30,600           16,700
                                                     ---------          -------

NET LOSS                                            $  (29,000)        $(15,200)
                                                     =========          =======

NET LOSS PER SHARE, BASIC AND DILUTED               $     (.02)        $   (.03)
                                                     =========          =======

BASIC AND WEIGHTED AVERAGE SHARES
     OUTSTANDING                                     1,371,363          450,000
                                                     =========          =======


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

                                       9


<PAGE>

<TABLE>
                                                          RUBY MINING COMPANY

                                                  STATEMENT OF SHAREHOLDERS' EQUITY

<S>                                   <C>        <C>      <C>         <C>            <C>           <C>                  <C>

                                                          Additional                               Accumulated  Total
                                          Common Stock     Paid-in    Comprehensive  Accumulated         Other          Stockholders
                                        Shares   Amount    Capital        Income       Deficit     Comprehensive Loss       Equity
                                        ------   ------    -------        ------       -------     ------------------       ------


Balance, May 31, 1998                   450,000  $   500  $631,900      $    --      $(573,800)         $ 24,900           $ 83,500

Comprehensive Income:
     Net Loss                               --       --        --        (15,200)      (15,200)              --             (15,200)
     Other Comprehensive Loss:
       Unrealized holding
       loss on investments                  --       --        --        (33,200)          --            (33,200)          ( 33,200)
                                                                         -------

       Comprehensive Loss                   --       --        --        (48,400)          --                --                 --
                                      ---------   ------  ----------     =======      --------            --------          -------
Balance, May 31, 1999                   450,000      500   631,900                    (589,000)           (8,300)            35,100

Issuance of shares to retire debt
     to affiliate                      3,544,027   3,500    96,900           --            --                --             100,400
Comprehensive Income:
     Net Loss                               --       --        --        (29,000)      (29,000)              --             (29,000)
     Other Comprehensive Loss:
       Unrealized holding
       loss on investments                  --       --        --        (24,900)          --            (24,900)          (24,900)
                                                                         -------

       Comprehensive Loss                   --       --        --       $(53,900)          --               --                 --
                                      ---------   ------   -------       =======      --------           --------           -------
Balance, May 31, 2000                 3,994,027  $ 4,000  $728,800                   $(618,000)         $ (33,200)         $ 81,600
                                      =========   ======   =======                    ========           ========           =======


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

                                                                 10

<PAGE>

                               RUBY MINING COMPANY

                            STATEMENTS OF CASH FLOWS


                                                         Year Ended May 31,
                                                   -----------------------------
                                                      2000               1999
                                                      ----               ----
<TABLE>
<S>                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                       $(29,000)          $(15,200)

     Adjustments to reconcile net loss to
          net cash provided by
          operating activities:
          Increase in accounts payable                30,600             16,700
                                                     -------            -------

NET CASH PROVIDED BY
     OPERATING ACTIVITIES                              1,600              1,500
                                                     -------            -------

CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD                              36,800             35,300
                                                     -------            -------

CASH AND CASH EQUIVALENTS AT
     END OF PERIOD                                  $ 38,400           $ 36,800
                                                     =======            =======

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITY:

     Issuance of common stock
          to pay off indebtedness                   $100,300           $    --
                                                     =======            =======

     Change in market
          value of investments                      $(24,900)          $(33,200)
                                                     =======            =======
</TABLE>

     No interest  or income  taxes were paid in the years ended May 31, 2000 and
1999.

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

                                       11

<PAGE>

                               RUBY MINING COMPANY

                          NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2000


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.  Expenses are
projected  to exceed  interest  income  again in 2001.  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 Equipmen

     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.

                                       12
<PAGE>

                               RUBY MINING COMPANY

                          NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2000
                                   (continued)


New Accounting Standards

     Statement of Financial Accounting Standards ("SFAS") No. 131,  "Disclosures
about Segments of an Enterprise and Related Information,"  establishes standards
for  reporting   information  about  operating  segments.  It  also  establishes
standards for enterprise wide disclosures  related to geographic areas and major
customers. The Company operates in one segment.

Investments

     Based  on the  provisions  of  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 net unrealized holding gains and losses excluded from earnings and reported
as a separate component of shareholders' equity until realized.

Net Loss Per Share, Basic and Diluted

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

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.
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.

                                       13
<PAGE>

                               RUBY MINING COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2000
                                   (continued)

C. MARKETABLE EQUITY SECURITIES AND RELATED PARTY TRANSACTIONS

     U.S. Energy Corp. ("USE"), a 91.7% 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 2000 and 1999.

     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, 2000
                                             ------------------------
                                                                Fair
                                                               Market
                                              Cost             Value
                                             -------          -------
          U.S. Energy Corp.                  $51,200          $37,100
          Crested Corp.                       27,700            8,600
                                             -------          -------
                                             $78,900          $45,700
                                             =======          =======

     The  aggregate  fair  market  value  of the  marketable  equity  securities
decreased  $24,900  from  June  1,  1999  to May 31,  2000.  The  net  aggregate
unrealized holding loss on investments at May 31, 2000 was $33,200.

D. SHAREHOLDER'S EQUITY


     During a Special  Meeting of the  Shareholders  during the third quarter of
fiscal 2000,  the  shareholders  authorized a reverse  stock split on a 20 for 1
basis. This reverse stock split reduced the number of outstanding  shares of the
Company's  common stock to 1,000,000  shares.  Also during the fourth quarter of
fiscal 2000, the Company issued an additional  3,544,027  shares of common stock
to  retire  $100,400  of  debt  to USE  which  retired  all  debt  to USE or its
affiliates.  At the conclusion of the stock for debt transactions USE owns 91.7%
of the outstanding shares of the Company at May 31, 2000 as compared to 26.7% at
May 31, 1999.

                                       14

<PAGE>

                               RUBY MINING COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2000
                                   (continued)

E. INCOME TAXES

     There were no taxes currently  payable at May 31, 2000. The following table
reconciles  the Company's  effective  income taxes to statutory  federal  income
taxes:

                                                       May 31,
                                             -------------------------
                                               2000              1999
     Federal income tax benefit
         at statutory rates                  $(9,900)         $(5,200)
     Less valuation allowance                  9,900            5,200
                                             -------          -------

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

     As of May 31,  2000,  the  Company had net  operating  loss  ("NOL")  carry
forwards available of approximately $290,000,  which began to expire in 1998 and
will continue through 2015.

     The components of deferred taxes as of May 31, 2000 are as follows:

     Deferred tax assets:
         Tax effect of NOL carry forwards            $ 98,600
         Valuation allowance                          (98,600)
                                                     --------

         Net deferred tax asset                      $    --
                                                     ========

     The Company has  established  a valuation  allowance for the full amount of
the NOL carryforwards because, in its present non-operating state, the Company's
ability to generate  future taxable income is uncertain.  The deferred tax asset
and the related valuation allowance decreased  approximately $7,700 from May 31,
1999 due to the expiration of the 1984 NOL.

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

Not applicable.

                                       15
<PAGE>

                                    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        68        CEO, President, Treasurer and a Director
                                     since February 1971.

     Harold F. Herron      46        Assistant Secretary since August 1979,
                                     Director since July 1980 and  Secretary
                                     since May 1991.

     George F. Smith       64        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 six years.  Harold F. Herron had been  employed as President of The Brunton
Company  ("Brunton"),  a  former  subsidiary  of USE  and  now is  president  of
Environmental  Technologies,  a wholly owned  subsidiary of USE. George F. Smith
has been principally employed as operations manager for USE and Crested for more
than the past six 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.

                                       16
<PAGE>

(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:

(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,
1999 through May 31, 2000,  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, 2000, to the chief executive officer:

                                       17
<PAGE>

                        SUMMARY COMPENSATION TABLE(i)(ii)

                                                      Annual Compensation
Name and Principal Position                 Year          Salary          Bonus
---------------------------                 ----          ------          -----
John L. Larsen, CEO                         2000           -0-             -0-
                                            1999           -0-             -0-

(i) During  fiscal 2000,  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.

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,  the  directors  have not  requested
payment to this date.  It is  anticipated  they will  continue to forgo  payment
until the Company has sufficient revenues.

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.

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

                                       18

<PAGE>


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 OWNERS 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.            3,664,027          91.7%
$.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 July 12, 2000  ownership by the  Registrant's
officers  and  directors,  individually  and as a group,  of  securities  of the
Registrant and its parent, USE.

                                       19

<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        3,664,027(3)     91.7%
201 Hill Street             common stock, $.001
Riverton, WY  82501         par value

Harold F. Herron            Ruby Mining Company         3,664,027(3)    91.7%
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         3,664,027(3)    91.7%
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 3,664,027 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,  1999  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.

                                       20

<PAGE>


(c) Principle Shareholder Ownership.

USE is the  principle  shareholder  of the  Registrant  and  holds  91.7% of the
Registrant's common stock.

(d) Transactions with Promoters.

     Not applicable.

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.

                                       21
<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: July 28, 2000                          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: July 28, 2000                          By: /s/ John L. Larsen
                                                 -------------------------------
                                                 JOHN L. LARSEN, Director



Date: July 28, 2000                          By: /s/ George F. Smith
                                                 -------------------------------
                                                 GEORGE F. SMITH, Director



Date: July 28, 2000                          By: /s/ Harold F. Herron
                                                 -------------------------------
                                                 HAROLD F. HERRON, Director



Date: July 28, 2000                          By: /s/ Robert Scott Lorimer
                                                 -------------------------------
                                                 ROBERT SCOTT LORIMER, Principal
                                                 Financial Officer and
                                                 Chief Accounting Officer

                                       22