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<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.20549

                                  FORM 10 - KSB
(Mark  One)
(X)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
    For  the  fiscal  year  ended  December  31,  1998
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
    ACT  OF  1934
    For  the  transition  period  from

Commission  File  Number        000-29786

                             MINES MANAGEMENT, INC.
                             ----------------------
             (Exact Name of Registrant as specified in its charter)

               Idaho                                         91-0538859
-----------------------------------               ------------------------------
(State  or  other  jurisdiction  of                   (I.R.S.  Employer
incorporation  or  organization)                      Identification  No.)

905  W.  Riverside  Avenue,  Suite  311
Spokane,  Washington                                               99201
----------------------------------------               -------------------------
(Address  of  principal  Executive  Office)                    (Zip  Code)

Registrant's  telephone  number,  including  area  code:          (509) 838-6050

Securities  Registered pursuant to Section 12 (g) of the Act:

                          COMMON STOCK, PAR  VALUE  $0.01
                               (Title  of  Class)

     Check  whether  the  issuer  (1)  filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 ninety (90)
days.  Yes    (X)           No  ( ) 

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation S-B is not contained in this form, and no disclosure will be
contained,  to  the  best  of  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)

     State  issuer's  revenues  for  its  most recent fiscal year.       $29,070

     State the aggregate market value of the voting and non-voting common equity
held  by  non-affiliates  computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a  specified  date within the past 60 days.  Based upon the average bid price at
January  31,  1999  the aggregate market value was $1,753,858.

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as of December 31, 1998:  4,676,956 shares of Common Stock

                    DOCUMENTS INCORPORATED BY REFERENCE: None
Transitional  Small  Business  Disclosure  Format  (check  one): Yes  ( )  No(X)
Total Document pages: 33
<PAGE>

                                     PART I
                                     ------


ITEM  1.     DESCRIPTION  OF  BUSINESS

General
-------

Mines  Management,  Inc.  (together  with  its   subsidiaries,  "MMI"   or   the
"Company"),  is  engaged in the business of acquiring, exploring, and developing
mineral  properties,  primarily  those containing silver and associated base and
precious  metals.  The  Company  was incorporated under the laws of the State of
Idaho  on  February 20, 1947.  The Company has a wholly owned subsidiary, Newhi,
Inc.  Newhi,  Inc. was incorporated under the laws of the State of Washington on
November  3,  1987.  The  Company's  executive  offices  are  located  at  905 W
Riverside,  Suite  311,  Spokane,  WA  99201.

WITH  THE  EXCEPTION OF HISTORICAL MATTERS, THE MATTERS DISCUSSED IN THIS REPORT
ARE  FORWARD-LOOKING  STATEMENTS  WITHIN  THE  MEANING OF THE PRIVATE SECURITIES
LITIGATION  REFORM  ACT  OF  1995 AND INVOLVE RISKS AND UNCERTAINTIES THAT COULD
CAUSE  ACTUAL  RESULTS  TO  DIFFER  MATERIALLY  FROM  PROJECTIONS  OR  ESTIMATES
CONTAINED  HEREIN.  SUCH FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING
PLANNED  LEVELS  OF  EXPLORATION AND OTHER EXPENDITURES, ANTICIPATED MINE LIVES,
TIMING  OF  PRODUCTION  AND SCHEDULES FOR DEVELOPMENT.  FACTORS THAT COULD CAUSE
ACTUAL  RESULTS  TO  DIFFER  MATERIALLY  INCLUDE,  AMONG  OTHERS  ,METALS  PRICE
VOLATILITY.  MOST  OF  THESE FACTORS ARE BEYOND THE COMPANY'S ABILITY TO PREDICT
OR  CONTROL.  THE COMPANY DISCLAIMS ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING
STATEMENT  MADE  HEREIN.  READERS  ARE  CAUTIONED  NOT  TO PUT UNDUE RELIANCE ON
FORWARD-LOOKING  STATEMENTS.  (  SEE  INVESTMENT  CONSIDERATIONS).

All  of  the  Company's properties are currently in the exploration stage except
for the Montanore property, which is in the stage of determining feasibility for
development.  No  property  is  currently  in  production.

The  Company  conducts exploration and development on projects containing silver
and  associated  base and precious metal values.  The company primarily seeks to
obtain royalty and other carried ownership interests in these properties through
the  subsequent  transfer  of  operating  interests  to  other mining companies.
Although  the  Company  may  engage  in  mining  operations at some future time,
substantially  all of the Company's revenue is and can be expected to be derived
from  royalty  interests  for  the  foreseeable  future.

The  Company's  principal  mineral property interest is held by its wholly owned
subsidiary,  Newhi,  Inc.,  and  consists of a net profits royalty interest in a
portion of the claims making up the Montanore project.  The Montanore project is
located  in northwestern Montana, USA, and is operated by Noranda Minerals.  The
project  has an approved Environmental Impact Statement, has received all of its
primary  permits,  and  has  been  the  subject  of a variety of pre-feasibility
technical  analyses.  Noranda  Minerals  has reported a geologic resource of 142
million  tons  containing  0.76%  copper  and 2.1 ounces of silver per ton.  The
Company  is  also  conducting  exploration on its Chanarcillo silver property in
Chile and its Iroquois and Advance zinc-lead properties in Washington, USA.  The
Company  is  also  evaluating  opportunities  in  Mexico  and the United States.


The  Company  also  has  a small royalty income from a working interest royalty,
acquired  more  than  40  years  ago, for several producing oil wells located in
Kansas,  USA.

Document page: 2
<PAGE>
Competition
-----------

There  is  aggressive  competition  within the minerals industry to discover and
acquire  properties  considered  to  have  commercial  potential.   The  Company
competes  for  the  opportunity to participate in promising exploration projects
with  other entities, many of which have greater resources than the Company.  In
addition,  the  Company  competes  with others in efforts to obtain financing to
explore  and  develop  mineral  properties.

Employees
---------

During the year ending December 31, 1998, the Company had one full-time employee
and  one  part-time  employee  located  in  Spokane,  Washington.  The Company's
employees  are  not  subject  to a union labor contract or collective bargaining
agreement.  The  Company  executive  officers  provide  management  service on a
non-salaried  basis.  On  occasion, such officers perform consulting services to
the  Company  at  their  usual  and  customary  rates.

Regulation
----------

The  Company's  activities  in the United States are subject to various federal,
state,  and  local  laws  and  regulations  governing  prospecting, development,
production,  labor  standards,  occupational  health and mine safety, control of
toxic  substances,  and  other  matters  involving  environmental protection and
taxation.  It is possible that future changes in these laws or regulations could
have a significant impact on the Company's business, causing those activities to
be  economically  reevaluated  at  that  time.

INVESTMENT  CONSIDERATIONS
--------------------------

THE  FOLLOWING  INVESTMENT  CONSIDERATIONS,  TOGETHER WITH OTHER INFORMATION SET
FORTH  IN THIS FORM 10-KSB, SHOULD BE CAREFULLY CONSIDERED BY CURRENT AND FUTURE
INVESTORS  IN  THE  COMPANY'S  SECURITIES.

Risks  of  Passive  Ownership
-----------------------------

At  present,  the  Company's  principal  asset  is its interest in the Montanore
property.  The  Company's  success is dependent on the extent to which Montanore
proves  to  be  successful  and  on  the  extent to which the Company is able to
acquire  or  create  other  royalty  or  property  interests.

The  holder of a royalty interest typically has no executive authority regarding
development  or  operation of a mineral property.  Therefore, unless the Company
is  able  to secure and enforce certain extraordinary rights, it can be expected
that the Company will not be in control of basic decisions regarding development
and  operation  of  the  properties  in  which the Company may have an interest.

Thus,  the  Company's  strategy  of having others operate properties in which it
retains  a  royalty or other passive interest puts the Company generally at risk
to  the  decisions  of  others  regarding all basic operating matters, including
permitting,  feasibility  analysis,  mine  design and operation, and processing,
plant and equipment matters, among others.  While the Company attempts to obtain
contractual  rights  that will permit the Company to protect its position, there
can  be  no  assurance that such rights will be sufficient or that the Company's
efforts  will  be  successful  in  achieving  timely  or  favorable  results.

Document page: 3
<PAGE>
Risks  Inherent  in  the  Mining  Industry
------------------------------------------

Mineral exploration and development is highly speculative and capital intensive.
Most  exploration  efforts are not successful, in that they do not result in the
discovery  of  mineralization of sufficient quantity or quality to be profitably
mined.  The  operations of the Company are also indirectly subject to all of the
hazards  and  risks  normally  incident  to  developing  and   operating  mining
properties.  These  risks  include  insufficient  ore  reserves, fluctuations in
production  costs  that  may  make  mining  of  reserves uneconomic; significant
environmental  and  other  regulatory  restrictions;  labor disputes; geological
problems;  failure  of  pit walls or dams; force majeure events; and the risk of
injury  to  persons,  property  or  the  environment.

Uncertainty  of  Reserves  and  Mineralization  Estimates
---------------------------------------------------------

There  are  numerous  uncertainties  inherent  in estimating proven and probably
reserves  and  mineralization,  including many factors beyond the control of the
Company.  The  estimation of reserves and mineralization is a subjective process
and the accuracy of any such estimates is a function of the quality of available
data  and of engineering and geological interpretation and judgment.  Results of
drilling,  metallurgical testing and production and the evaluation of mine plans
subsequent  to  the date of any estimate may justify revision of such estimates.
No  assurances  can be given that the volume and grade of reserves recovered and
rates of production will not be less than anticipated.  Assumptions about prices
are  subject  to greater uncertainty and metals prices have fluctuated widely in
the  past.  Declines  in  the  market  price of base or precious metals also may
render  reserves  or  mineralization  containing  relatively lower grades of ore
uneconomic to exploit.  Changes in operating and capital costs and other factors
including, but not limited to, short-term operating factors such as the need for
sequential  development of ore bodies and the processing of new or different ore
grades,  may  materially  and  adversely  affect  reserves.

Proposed  Federal  Legislation
------------------------------

The  U.S.  Congress  is  currently  considering a proposed major revision of the
General  Mining  Law,  which  governs  the creation of mining claims and related
activities on federal public lands in the United States.  Each of the Senate and
the House of Representatives has passed a separate bill for mining law revision,
and  it  is  possible that a new law could be enacted.  The Company expects that
when  the  new  law  is  effective,  it will impose a royalty upon production of
minerals  from  federal  lands  and will contain new requirements for mined land
reclamation,  and  similar  environmental  control and reclamation measures.  It
remains  unclear  to  what  extent  any such new legislation may affect existing
mining  claims  or  operations.  The  effect of any such revision of the General
Mining Law on the Company's operations in the United States cannot be determined
conclusively  until  such  revision  is enacted; however, such legislation could
materially  increase  costs  on  properties  located  on federal lands, and such
revision  could also impair the Company's ability to develop, in the future, any
mineral  prospects  that  are  located  on  unpatented  mining  claims.









Document page: 4
<PAGE>

Fluctuations  in  the  Market  Price  of  Minerals
--------------------------------------------------

The  profitability  of mining operations is directly related to the market price
of the metals being mined.  The market price of base and precious metals such as
copper  and  silver  fluctuate widely and is affected by numerous factors beyond
the  control  of  any  mining  company.  These factors include expectations with
respect  to  the  rate  of inflation, the exchange rates of the dollar and other
currencies,  interest  rates,  global or regional political, economic or banking
crises, and a number of other factors.  If the market price of  silver or copper
should  drop  dramatically,  the  value  of  the  Company's royalty interest and
exploration  properties  could also drop dramatically, and the Company might not
be  able  to  recover  its  investment  in  those  interests or properties.  The
selection  of  a  property  for exploration or development, the determination to
construct  a  mine  and  place  it  into production, and the dedication of funds
necessary  to  achieve such purposes are decisions that must be made long before
the first revenues from production will be received.  Price fluctuations between
the  time  that  such  decisions  are  made  and  the commence of production can
drastically  affect  the  economics  of  a  mine.

The  volatility  in  metals  prices is illustrated by the following table, which
sets  forth,  for  the periods indicated, the yearly high and low prices in U.S.
dollars  per  ounce for silver  and the high and low yearly  average  prices for
copper  in  U.S.  dollars  per  pound.

<TABLE>
<CAPTION>
     Year             Silver  Price  Per  Ounce       Copper  Price  Per Pound
     ----             -------------------------       ------------------------
                         High            Low             High          Low
                      -----------   -----------       -----------  -----------
<S>                   <C>           <C>               <C>          <C>
     1996             $     5.79    $     4.67        $     1.17   $     0.91 
     1997             $     6.39    $     4.18        $     1.14   $     0.87
     1998             $     7.09    $     4.80        $     0.85   $     0.65

</TABLE>


Environmental  Risks
--------------------

Mining  is  subject to potential risks and liabilities associated with pollution
of  the  environment and the disposal of waste products occurring as a result of
mineral  exploration  and  production.   Insurance  against  environmental  risk
(including potential liability for pollution or other hazards as a result of the
disposal  of  waste  products  occurring from exploration and production) is not
generally  available  to  the  Company  (or  to  other companies in the minerals
industry) at a reasonable price.  To the extent that the Company becomes subject
to  environmental  liabilities,  the  satisfaction of any such liabilities would
reduce  funds  otherwise  available  to  the  Company  and could have a material
adverse  effect  on  the  Company.  Laws  and regulations intended to ensure the
protection  of  the  environment  are  constantly  changing,  and  are generally
becoming  more  restrictive.






Document page: 5
<PAGE>

Title  to  Properties
---------------------

The validity of unpatented mining claims, which constitute a significant portion
of the Company's property holdings in the United States, is often uncertain, and
such validity is always subject to contest.  Unpatented mining claims are unique
property  interests  and  are generally considered subject to greater title risk
than  patented  mining  claims, or real property interests that are owned in fee
simple.  The  Company  has  not  yet  filed  a patent application for any of its
properties  that  are  located on federal public lands in the United States and,
under proposed legislation to change the General Mining Law, patents may be hard
to  obtain.  Although the Company has attempted to acquire satisfactory title to
its undeveloped properties, the Company does not generally obtain title opinions
until  financing  is  sought to develop a property, with the attendant risk that
title  to  some properties, particularly title to undeveloped properties, may be
defective.

Foreign  Operations
-------------------

The  Company's  foreign  activities  are subject to the risk normally associated
with  conducting  business in foreign countries, including exchange controls and
currency  fluctuations,   limitations  on  repatriation   of  earnings,  foreign
taxation,  laws  or  policies  of  particular  countries,  labor  practices  and
disputes, and uncertain political and economic environments, as well as risks of
war  and  civil  disturbances,  or  other  risk  that could cause exploration or
development  difficulties or stoppages, restrict the movement of funds or result
in  the  deprivation  or  loss  of  contract rights or the taking of property by
nationalization  or expropriation without fair compensation.  Foreign operations
could  also  be  adversely  impacted  by  laws and policies of the United States
affecting  foreign  trade,  investment  and taxation.  The Company currently has
exploration  projects  located  in  Chile.

ITEM  2.     DESCRIPTION  OF  PROPERTIES

The  significant  properties  in which the Company has an interest are described
below.  Reference  is  made  to  footnotes  in the financial statements for more
information on the properties.  The Company has relied on public disclosure made
by  its  lessee  Noranda  Minerals,  relative to its assessment of the Montanore
deposit.

Montanore  Property
-------------------

The  Montanore  property consists of 16 mining claims covering approximately 300
acres  and  a  4 acre patented mill site located in Sanders County, northwestern
Montana.  The  mining  claims  are  owned  outright  by the Company and are held
subject to a $100 per claim annual payment to the Federal government.  Eleven of
the  claims  are  leased to Noranda Minerals Corp, who is responsible for annual
claim upkeep.  The claims can be reached from Noxon, the nearest town, by taking
State  Highway 200 about 2 miles to the east and thence north about 5 miles on a
secondary  graveled  road  to  the  junction  of the west and east forks of Rock
Creek.  From  this  point  it  is  about  a 4 mile hike up a Jeep trail behind a
locked  U.S.  Forest  Service gate to the claims.  More than half the claims are
located  within  the  Cabinet  Wilderness  Area.





Document page: 6
<PAGE>

Eleven  of  the  Company's claims cover a portion of the Montanore silver/copper
deposit.  The  deposit  occurs within rocks of the Belt Super Group, Precambrian
metasediments  that  crop  out over much of western Montana, northern Idaho, and
parts  of adjacent British Columbia.  The Montanore is one of 3 similar deposits
to  have  been  found  within Revett Formation quartzite of the Belt Supergroup.
These  include  the  Troy deposit which was mined between 1981 and 1992, and the
Rock  Creek  deposit  currently  under  environmental  assessment.

Mineralization  within  the  Revett  Formation  is disseminated, and confined to
specific  quartzite  strata.  The  deposits  are  characterized by great lateral
extent,  relatively  uniform  grades, and thicknesses that range up to 100 feet.
Often  the deposits are bounded by a paleo growth fault, considered to have been
active  during  rock  sedimentation   and  mineral  deposition.   Mineralization
consists  in  varying  parts  of  bornite, primary chalcocite, and chalcopyrite.


The  Montanore  deposit  has been defined as being at least 12,000 feet long and
varies  between 500 and 5000 feet in width.  The long axis of the deposit trends
in  a  northwesterly  direction  parallel  with a regional fault that bounds the
mineralization  of  the southwest.  The deposit dips approximately 12 degrees to
the  northwest,  parallel  with its long axis.  Mineralization occurs within two
mineralized  beds  over  much  of the deposit's length, but seems to coalesce up
dip.  Overall  the upper zone averages 29.9 feet in thickness and the lower zone
34.8  feet.  Unmineralized  strata  between  beds varies between 20 and 200 feet
thick.  On  the  basis  of 27 surface drill holes Noranda has reported a deposit
containing  and  estimated  142  million tons and averaging 0.78% copper and 2.1
ounces  of  silver  to  the  ton.

The  Company's  claims are located along the fault which bounds the southwestern
margin  of the deposit, and were staked to cover minor silver occurrences within
the  fault  or  in sympathetic parallel fractures.  The claims represent mineral
rights  to  a strip of land several hundred feet wide and about 11,500 feet long
that  cover  the projected position of the deposit adjoining the fault.  A total
of  7 widely spaced surface drill holes have intersected the deposit beneath the
Company's  claims  or  in  close  proximity  to  them.

In  1988,  Newhi,  Inc., a Washington corporation and wholly-owned subsidiary of
Mines Management, Inc. acquired the assets of Heidelberg Silver Mining Co., Inc.
through  a  corporate  merger.  The  assets  acquired  by  the Company consisted
primarily  of  34  unpatented mining claims and a 4 acre patented mill site.  In
1993  the Company determined that 18 of the mining claims were immaterial to the
maintenance  of  its  interest  in  the  Montanore project and these claims were
dropped.  Of  the remaining 16 claims owned by the Company, 11 claims are leased
to  Noranda  Minerals  Corp.  who is responsible for their yearly upkeep.  Under
terms of the lease agreement, the Company is paid annual advance minimum royalty
payments of $25,000.  In addition, the Company will be paid a production royalty
of 5% of the net profits until capital investment recovery and 20% thereafter on
all  material  taken  from  the  claims.  A significant portion of the Company's
claims  are  situated  within  the Cabinet Wilderness Area and may be subject to
dissolution  for  lack of adequate discovery.  However, Noranda's mineral rights
are  also  based  upon other claims with approved discoveries, and the agreement
between  Noranda  and  the Company is specifically not affected by the status of
the  Company's  claims.







Document page: 7
<PAGE>

In  1983,  U.S.  Borax and Chemical Corporation discovered a major silver/copper
deposit, later to be named the Montanore deposit, which extended in part beneath
what  is  now the Company's property.  In 1984 a lease agreement, relative to 11
claims,  was  entered  into  between  U.S.  Borax and the Company's predecessor,
Heidelberg.  Subsequently  U.S.  Borax  conducted  more than 70,000 feet of core
drilling  from  the  surface  which  outlined  the  bedded  silver/copper
mineralization.

In  1988,  U.S. Borax and partners sold their interest in the project to a Joint
Venture  made  up  of  Noranda  Minerals Corp. and Montana Reserves Co.  Noranda
became  the project operator, and the project name was changed to Montanore.  In
1993  the  Joint  Venture  was  dissolved  with  Noranda retaining rights to the
project.

In  late  1989, Noranda began a major tunneling program from a point east of the
Cabinet  Wilderness  Area.  The  purpose  of  the program was to more accurately
define  and develop a portion of the deposit containing approximately 30 million
tons.  The  proposed work was to include a 3-mile long decline and approximately
2,000  feet  of  lateral  development  in  the vicinity of the deposit.  Several
lateral  headings  were planned to intersect the portion of the deposit owned by
the  Company.  Close  spaced  drilling  was planned from these workings and bulk
metallurgical  samples  were  to  be taken during this phase.  In December, 1991
tunneling was stopped at approximately 14,000 feet, or about 2,000 feet short of
the  deposit,  pending  the  completion  of  the  project's Environmental Impact
Statement  (EIS).  Also during the year Noranda completed the process to acquire
patents  to  several  of its key claims.  However, the Secretary of Interior has
continued  to  refuse to approve any US patent applications made under the terms
of  the  Mining  Law  of  1872.

During  1993  the  project Environmental Impact Statement (EIS) was approved and
all  of  the  important  permits  for the mine were granted.  As part of the EIS
process, this approval was subject to appeal, and several appeals were made.  In
1994,  after  due  consideration,  the  US  Forest  Service  denied all appeals.

In  1991  an  environmental  group  had  brought suit against Noranda and the US
Forest  Service  concerning the validation of certain mining claims covering the
Montanore deposit.  In 1993 the US Secretary of Agriculture found that Noranda's
key mining claims were valid, and in 1997 the Federal District Court hearing the
case  also  ruled  that  Noranda's  claims  were  valid.  The court decision was
appealed  and  in  March,  1999  the U.S. Court of Appeals for the Ninth Circuit
upheld  the  U.S.  District  Court  decision.

Chanarcillo  Property
----------------------

The  Chanarcillo  property consists of 14  exploration concessions that cover an
area  of  about 38 sq. km. (9,500 acres) within the Chanarcillo mining district.
The  district  is  located in northern Chile's Third Region about 55 km south of
the mining center of Copiapo and about 350 km north of Santiago. The property is
reached  by  secondary roads from the Pan American Highway which passes about 10
km  to  the west.  The Chanarcillo district is situated in the western foothills
of  the Andes Mountains, with elevations that range between 900 and 1200 m above
sea  level.   The  Company's  concessions  contain  a number of small overlapped
concessions  representing preexisting mineral  rights which partially cover some
of  the  old mines of the district.  A total of about 34 sq. km (8,500 acres) of
the  Company's  concessions  are  unobstructed,  with  clear exploration rights.




Document page: 8
<PAGE>

The  Company  has an option to purchase the concessions from their owner, Minera
Calcia  Ltda.  of  Santiago,  Chile,  on the basis of the amount expended on the
project.  The  Company  has a work commitment of $50,000 in year 1, and $100,000
in  year 2 of the agreement.  After the Company has expended a total of $200,000
on the project it has the right to acquire title to the concessions, subject to:

-  A 2% Net Smelter Return Royalty one-half of which may be purchased during the
first  4  years  of  commercial  production.

-  An annual fee of  $25,000  to  be  paid  prior to  the  start  of  commercial
production.

- An annual payment equal to 5% of the preproduction exploration expenses of the
project  that are incurred in Chile, the total of which is capped at $2 million.

The  Chanarcillo district, was Chile's foremost silver producing area during the
19th  century, when  it  reportedly  produced an estimated 100 million ounces of
silver between 1832  and  1885. Only  minor  work occurred after that time until
the  1980's  when the area became the  focus of exploration for large, low-grade
copper  deposits  similar to the La Candelaria deposit located about 22 miles to
the  north.  At  various  times  to the present,  several major mining companies
have  drilled  specific  copper  targets  in  the  district,  but  no  work  has
involved  exploration  for  silver.

The Chanarcillo district lies within northern Chile's coastal belt of Cretaceous
age  sediments  and  intercalated volcanics. These rocks are intruded throughout
the length of the belt by Cretaceous age plutons which range in composition from
quartz  monzonite  to diorite.  The sediments consist primarily of siltstone and
carbonates  which  may  contain in varying degree silt or chert.  Interbedded in
the  sediments  are a series of thick to thin tuffs, pyroclastics, aggolmerates,
and  volcanic  units.  The  intruded  rocks  are  thermally  metamorphosed for a
substantial distance from the intrusive contacts creating extensive skarn zones.

In  the  Chanarcillo district the host rocks are relatively flat lying, but are
gently  folded into a northeast-trending double plunging anticline or dome.  The
district  is cut by two prominent sets of high-angle structures, which generally
show  small displacements.  One set trends to the north-northeast, parallel with
the fold axis, while the other trends to the northwest.  The north-northeast set
contains  most of the known silver veins, while faults of the northwest trending
set commonly contain andesite dikes and only locally some silver mineralization.

Silver  values  exploited  in the 19th century occur mostly in veins but also in
mantos  and  brecciated zones.  Exposures in mine workings extended to depths of
as  much as 400 m.  The character of the veins was strongly affected by the type
of  host  rock  they cut.  There was a definite correlation between increases in
vein  width and grade and carbonate wall rocks.  Ore shoots within the veins are
reported  to have ranged from 200 to 400 m in length, had vertical dimensions of
30 to 50 m, and varied from 1 to 10 m in width.  Hypogene vein minerals included
silver  sulfides  and  sulfosalts associated with minor amounts of copper, lead,
and  zinc  minerals.  Vein  mineralization  was  greatly  affected  by supergene
processes  to  depths  of as much as 200 m.  Mineralization within the supergene
zone was altered to native silver, and silver halides and bromides.  In addition
to  the  concentration of old silver mines on the property, internal exploration
summaries  by  Western  Mining  Exploration, S.A., and North, Ltd., report drill
intercepts  of  zinc  and  copper  mineralization  in several drill holes on the
property.  According  to  these  exploration  summaries,  a bedded, semi-massive
sulfide  occurrence  about  1  m  thick  and  running 7% zinc is reported to cut
underground  workings  in  the old silver mines.  A number of drill holes in and
around  the  Company's  concessions are reported to have cut zinc values ranging
from  13%  over  1  m  to  1%  over  120  m.
Document page: 9
<PAGE>
All  exploitation  of  silver  mineralization at Chanarcillo ceased by the early
1900's,  and  no systematic mapping and other exploration is known to have taken
place since that time.  Despite the lack of modern day exploration it is thought
that  near  surface, very high grade silver vein deposits have probably all been
discovered.  However,  several  types  of  targets  have  not been investigated.
These include: deeper hypogene mineralization, vein extensions, and bulk tonnage
targets.  The  Company  intends  to  investigate  all three target models in its
planned  exploration,  with emphasis placed upon the examination of bulk tonnage
targets.

Initially,  a  two  phase  exploration  is planned for the Chanarcillo property.
This  work will be designed to gain a better understanding of the geology and to
identify  specific  targets  in  the  silver  area  of  the  property.  Phase  1
exploration  will  consist  of  preparing  detailed maps of the stratigraphy and
structure  of  the silver vein area.  The mapping will be followed by a detailed
sampling  program  as well as geophysical surveys in areas of interest.  Phase 2
exploration  will  be

focused  on drill testing at least two targets that have already been identified
by  the  Company's  preliminary  sampling.

Advance  and  Iroquois  Properties
----------------------------------

The  Company  owns  the  Advance  and  Iroquois  zinc-lead properties located in
northeastern  Washington  state,  approximately  6  miles  south of the Canadian
border.  The  properties  are  situated  5  miles apart along a belt of Cambrian
carbonate  sediments  that  have  acted  as host rocks for several former mines.
Both  properties  are easily accessible on secondary graveled roads by two wheel
drive  vehicles.  A large zinc smelter and refinery is located at Trail, British
Columbia,  Canada,  approximately  17  miles  distant  over  excellent  roads.

The  Company  was  originally formed in 1947 to explore the Advance and Iroquois
properties.  Since  that time, Mines Management has leased its holdings to major
companies  including:  Rare  Metals,  Inc.  (El  Paso  Natural Gas) 1959-65, The
Bunker  Hill  Company  1962-65,  Cominco  American,  Inc.  1966-67  and 1974-75,
Brinco,  Ltd.  (RTZ  Group) 1977-78, and Equinox Resources Ltd.  1989-91.  Total
expenditures  on the properties to date are estimated to be at least $1,500,000.

The  Advance  and  Iroquois  properties are located along the Deep Lake Trend, a
northeast  striking  belt of Cambrian carbonate rocks collectively designated as
the  Metaline Limestone.  Rocks of the Deep Lake Trend have been strongly folded
and  faulted  by  numerous high-angle as well as thrust faults.  As a result the
Metaline  Limestone  has  a  complex  outcrop  pattern,  with steeply overturned
bedding.

Zones  of brecciation are found throughout the Metaline Limestone and are often,
but  not  always,  the  location of zinc and lead sulfide mineralization.  These
features  are  predominantly  stratabound  and have gradational, often irregular
borders.  Individual  breccia  bodies  are  crudely lensoid in cross section and
have third dimensions that attain considerable length.  The zones often occur in
an  en  echelon,  and  sometimes  interconnected pattern.  A variety of evidence
suggests  that  the  breccia bodies are solution collapse features controlled by
favorable  stratigraphy  or  lithologic  facies.







Document page: 10
<PAGE>

Mineralization  consists  of irregular bands, lenses, and fine disseminations of
sphalerite  and   galena   accompanied  by  varying   amounts  of  pyrite.   The
mineralization  is  considered  to have been localized by permeable zones within
and  peripheral  to  breccia  bodies  created by solution collapse.  The sulfide
minerals  are found in white dolomite that makes up the breccia matrix and fills
other  voids,  and  also  as selective replacements of the host carbonate rocks.
Individual deposits have irregular gradational borders and are crudely lensoidal
to  oval  in  outline.  Their  elongated  third dimension parallels the regional
strike  of  the  host  rocks,  and  often plunge at low angles.  Cross sectional
widths  up  to 80 feet and heights of as much as 150 feet have been noted in the
more  prominent  zones.  Lengths  of  mineralization  vary  up to 650 feet.  The
deposits  have  a  tendency  to  occur  together in an en echelon pattern over a
stratigraphic  interval  of as much as 300 feet.  Such groupings of deposits may
be  more  or  less  interconnected and have composite lengths of as much as 5000
feet.  Metal  values generally decease outward thus necessitating a border to be
established by economic consideration.  Although individual sample values within
a  deposit may be as high as 20% zinc, average values for a deposit will usually
range  up  to  7%  zinc  and 1% lead depending upon the "assay border" selected.


The  Advance  property consists of 720 acres of patented mineral rights, located
approximately  5  miles  east of the town of Northport.  The property is reached
from  Northport,  the  nearest  town,  by taking the paved Deep Lake south for 4
miles  to  the  graveled  Black  Canyon  road and thence north for 3 miles.  The
Metaline  Formation  is  the  principal  rock  unit  to  crop out on the Advance
property.  Exploration  consisting  of  soil  sampling, drilling, trenching, and
tunneling  has  shown  that  several  zones  of  low-grade,  disseminated   zinc
mineralization  occur on the property.  The Advance property is considered to be
of  an  exploratory  nature,  and is held by the Company on a maintenance basis.

The  Iroquois  property  consists  of  62  acres of patented mineral and surface
rights,  and  18  unpatented  mining  claims  containing  about  360 acres.  The
property  is  reached from Northport, the nearest town, by taking the paved Deep
Lake  road south and east for 19 miles to the graveled road marked Iroquois Mine
Road,  and  thence  northeast for three miles.  The unpatented mining claims are
held subject to a $100 per claim annual payment to the Federal government.  More
than  25,000  feet  of  drilling  and approximately 2,600 feet of tunneling have
shown  low-grade  mineralization  to  occur in multiple zones, extending for the
entire  5,000  foot  length  of  the property.  Most of the exploration has been
concentrated  in  one  area  where  a mineralized zone of disseminated zinc with
associated  lead  values has been outlined over approximately 900 feet in length
and  within  300  feet  of  the surface.  The property is considered to be of an
exploratory  nature  and  is  held  by  the  company  on  a  maintenance  basis.

Oil  Interests
--------------

The  Company receives income from a 12.5% working interest in 4 oil wells on the
Clark  lease  in Sumner County, Kansas.  Although the lease has now produced for
more  than 30 years, independent consultants calculated the Company's 1981 share
of the remaining reserves available through primary and secondary recovery to be
at  least 20,000 barrels.  Production since 1981 has totaled approximately 8,266
barrels  to  the  Company's  account.

ITEM  3.     LEGAL  PROCEEDINGS

None



Document page: 11
<PAGE>

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

During  the fourth quarter of the fiscal year covered by this report, the Annual
Meeting  of  the shareholders of the Company was held on November 10, 1998.  The
purpose  of  the  meeting was the election of directors, the approval of amended
and  restated  Articles  of  Incorporation, and the approval of stock option and
incentive  stock  option  plans.

The  following  table sets forth information regarding the election of the board
of  directors:
<TABLE>
<CAPTION>

Directors          Votes For     Votes Against     Abstentions     Broker Non-vote
------------       -----------  -----------------  --------------  ---------------
<S>                <C>          <C>                <C>             <C>

Willaim R. Green.  2,965,806               0          2,146             42,556


Jack W. Gustavel.  2,965,806               0          2,146             42,556


J. Phillip Piffer  2,965,806               0          2,146             42,556

Roy G. Franklin    2,965,806               0          2,146             42,556

</TABLE>


At the Annual Shareholders Meeting, shareholders were asked to and vote upon the
adoption  of  Amended  and Restated Articles of Incorporation which would, among
other things, increase the number of common shares authorized to 100,000,000, to
authorize  the  creation  of  up  to  10,000,000  preferred shares, to eliminate
directors'  personal  liability,  and  provide for indemnification for officers,
directors,  and   certain  other  persons.   The  following   table  sets  forth
information  regarding  the  shareholders'  vote  for  the  Amended and Restated
Articles  of  Incorporation:
<TABLE>
        Votes For     Votes Against     Abstentions     Broker Non-Votes
        ---------     -------------     -----------     ----------------
        <S>           <C>               <C>             <C>
        2,136,851         32,820           61,404           774,654
</TABLE>

At  the  Annual  Shareholders  Meeting,  shareholders  were asked to approve and
confirm  the Board of Directors' adoption of the Company's Stock Option Plan and
Incentive  Stock  Option  Plan effective May 18, 1998.  The following table sets
forth information regarding the shareholders vote on the Company's Stock Options
Plans:

<TABLE>
        Votes For     Votes Against     Abstentions     Broker Non-Votes
        ---------     -------------     -----------     ----------------
        <S>           <C>               <C>             <C>
        2,053,587          125,292         52,196           774,654
</TABLE>



Document page: 12
<PAGE>

                                     PART II
                                     -------

ITEM  5.     MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

The  Common Stock of the Company is traded in the over the counter market on the
NASD Bulletin Board under the symbol "MNMM".  The following table shows the high
and low closing sales prices for the Common Stock for each quarter since January
1,  1997.  The  quotations  reflect inter-dealer prices, without retail mark-up,
mark-down  or  commission  and  may  not  represent  actual  transactions.
<TABLE>

<CAPTION>

Fiscal  Year                              High  Closing          Low  Closing
------------                              -------------          ------------
<S>                                       <C>                    <C>
1997:
First Quarter.                                .19                    .09
Second Quarter                                .25                    .13
Third Quarter.                                .20                    .16
Fourth Quarter                                .22                    .16

1998:
First Quarter.                                .44                    .25
Second Quarter                                .50                    .31
Third Quarter.                                .56                    .25
Fourth Quarter                                .43                    .25

1999:
First Quarter.                                .406                   .281
</TABLE>


Holders.
--------

As of December 31, 1998 there were 1,127 shareholders of record of the Company's
common  stock.

Dividends.
----------

The  Company has never paid any dividends and does not anticipate the payment of
dividends  in  the  foreseeable  future.

Recent  Sales  Of  Unregistered  Securities.
--------------------------------------------

In  January  and  February 1999 the Registrant sold a total of 245,000 shares of
its  common  stock  at a price of $.25 per share for an aggregate of $ 61,250. A
commission  of  $6,000 was paid to selected dealers who were also granted 24,000
warrants.  Each  warrant  is exercisable for a period of one year to acquire one
share of common stock at a price of $0.30 per share. The shares were offered and
sold  pursuant  to  an  exemption  from registration under the Securities Act of
1933,  as  amended  pursuant  to  Rule  504  of  Regulation  D.




Document page: 13
<PAGE>

ITEM  6      MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION
             ----------------------------------------------------------------

Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
Operations  For  the  Year  Ended December 31, 1998,  Compared to the Year Ended
December 31, 1997.

For  the  year ended December 31, 1998 the Company had a net loss of $161,966 or
$0.035  per share, as compared to a net loss of $54,953, or $0.001 per share for
the  year  ended December 31, 1997.  The increased net loss for Fiscal Year 1998
is  attributable  to  a  higher  level of property acquisition, exploration, and
financing  costs.

During  Fiscal  Year  1998  the  Company had revenues from oil sales of $4070 as
compared  to  revenues  of $6242 for the year ended December 31, 1997.  Although
operating  costs  were  nearly identical, in Fiscal Year 1998 312.5 barrels were
produced  and  sold  at  an  average price of $13.02   per barrel, compared with
315.5  barrels  sold at an average price of $19.78 per barrel for the year ended
December  31,  1997.

The  Company's  plan  of  operation  for  the next twelve months will consist of
exploration  work  on  its Chanarcillo silver property in northern Chile.  Under
the terms of its option agreement the Company is required to expend a minimum of
$50,000 on the property prior to June, 1999.  This exploration work will consist
of  detailed  mapping of the stratigraphy and structure of the silver vein area,
review of drill data from drilling in other parts of the property and a detailed
sampling program and geophysical surveys.  The Company does not intend to hire a
significant  number of employees to carry out its exploration activities.  It is
anticipated  that  all  exploration  work  on  the  property will be carried out
through  the  services  of  consultants.  The  Company  currently has sufficient
resources  to  meet  its  work  obligations on the property and satisfy its cash
requirements  for  the  next  twelve  months.

Although  the Company intends to aggressively seek to acquire silver exploration
properties  of  merit,  at  the  present time the Company has no specific plans,
arrangements  agreements  or  undertakings  to  acquire  any  additional  silver
exploration  properties.

Year  2000  Issues
------------------

Throughout  the information technology industry, the use of two-digit fields was
common  practice  in  the  design  of  hardware,  systems  software  proprietary
applications  and  system  interfaces.  The  Year 20000 problem is pervasive and
complex.  The  issue  is  whether  computer systems will properly recognize date
sensitive  information  when  the  year  changes  to  2000.  Systems that do not
properly  recognize  such  information  could generate erroneous data or cause a
system  to  fail.
The  Company  recognizes the need to ensure its operations will not be adversely
impacted  by Year 2000 software failures and has assessed Year 2000 risks.  This
assessment  has  included  the  identification  of necessary changes to computer
hardware  and software applications that will attempt to ensure availability and
integrity  of  the  Company's  information  systems  and  the reliability of its
financial  and  operational  systems.






Document page: 14
<PAGE>

The  Company  has reviewed its financial, information and operational systems in
order  to  identify  those  products, services or systems that are not Year 2000
compliant.  As  a  result  of  this review, the Company has determined that only
nominal  modification  or  replacement  of  certain  information  systems may be
required  to  ensure  that  the  Company  will  by  Year  2000 compliant.  These
modifications  and  replacements  are  being,  and  will continue to be, made in
conjunction  with  the  Company's  overall systems upgrading.  The total cost of
these  Year  2000 compliance activities is not anticipated to be material to the
Company's  financial  position  or  its  results  of  operations.

Based  on  available  information,  the  Company  does  not believe any material
exposure  to  significant  business interruption exists as a result of Year 2000
compliance  issues.  These  costs  and  the timing in which the Company plans to
complete  its  Year 2000 modifications are based on management's best estimates.
However,  there  can  be  no assurance that the Company will timely identify and
remediate all significant Year 2000 problems, that remedial efforts will involve
significant  time  and  expense,  or that such problems will not have a material
adverse  effect  on  the  Company's business, results of operations or financial
position.

The  Company  also  faces risk to the extent that its vendors, service providers
and  others  with  whom  the Company transacts business may not comply with Year
2000  requirements.  The  Company  will  initiate  formal   communications  with
significant  vendors  and service providers to determine the extent to which the
Company  is  vulnerable  to  these third parties' failure to remediate their own
Year  2000  issues.  In  the  even  any  such  third  parties  are not year 2000
compliant,  the  Company's  results  of operations could be materially adversely
affected.

ITEM  7.     FINANCIAL  STATEMENTS

Financial Statements of the Company for the fiscal years ended December 31, 1998
and  1997,  which  have been audited by Williams and Webster, P.S., are included
here.

MINES MANAGEMENT, INC.
Spokane, Washington

FINANCIAL STATEMENTS 
For the years ended
December 31, 1998 and 1997

TABLE OF CONTENTS

NDEPENDENT AUDITOR'S REPORT                                                    1


FINANCIAL STATEMENTS

     Consolidated Balance Sheets                                               2
     Consolidated Statements of Operations and Comprehensive Income            4
     Consolidated Statement of Changes in Stockholders' Equity                 5
     Consolidated Statements of Cash Flows                                     6

NOTES TO FINANCIAL STATEMENTS                                                  7





Document page: 15
<PAGE>









                          INDEPENDENT AUDITOR'S REPORT


Board  of  Directors
Mines  Management,  Inc.
Spokane,  Washington

We  have  audited  the consolidated balance sheets of Mines Management, Inc. (an
Idaho  corporation)  as  of  December  31,  1998  and  1997,  and   the  related
consolidated  statements  of  operations and comprehensive income, stockholders'
equity, and cash flows for the years then ended.  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  audit.

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 consolidated financial statements referred to above present
fairly,  in  all  material respects, the financial position of Mines Management,
Inc. as of December 31, 1998 and 1997 and the results of its operations and cash
flows for the years then ended, in conformity with generally accepted accounting
principles.




Williams  &  Webster,  P.S.
Certified  Public  Accountants
Spokane,  Washington
March  5,  1999
















Document page: 16
<PAGE>
MINES MANAGEMENT, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997

<TABLE>
                                                 1998              1997
                                           _______________   _______________
<C>                                        <S>               <S>
ASSETS

Current Assets 
   Cash                                    $       45,734    $       48,796
   Accounts receivable                                500               558
   Prepaid expenses                                19,217             2,300
                                           _______________   _______________

       Total Current Assets                        65,451            51,654
                                           _______________   _______________

Mineral Properties                                 360,180          360,180


Property and Equipment
   Mine buildings                                   11,031            11,031
   Equipment                                        44,098            43,777
   Office equipment                                 10,196             7,686
                                           _______________   _______________

       Total Property and Equipment                 65,325            62,494

Less accumulated depreciation                      (60,236)          (58,829)
                                           _______________   _______________

       Net Property and Equipment                    5,089             3,665
                                           _______________   _______________

Investments
  Available for sale securities
   Bitterroot Resources, Ltd.                        1,765            10,800
                                           _______________   _______________

       Total Investments                             1,765            10,800

       TOTAL ASSETS                        $       432,485    $      426,299
                                           ===============   ===============

</TABLE>












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

                                        2
Document page: 17
<PAGE>
MINES MANAGEMENT, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997

<TABLE>
                                                 1998              1997
                                           _______________   _______________
<C>                                        <S>               <S>
LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES

Current Liabilities
   Accounts payable                        $        4,919    $        2,205 
   Payroll payable                                  1,300               -   
   State income taxes payable                         121               109
   Payroll taxes payable                              175               699
                                           _______________   _______________

        Total Current Liabilities                   6,515             3,013
                                           _______________   _______________

Commitments and Contingencies                         -                  -  
                                           _______________   _______________

Stockholders' Equity

   Common stock, $.01 par value: 
      100,000,000 shares authorized,
      4,676,956 and 3,873,706 shares 
      issued and outstanding 
      respectively                                 46,770            38,737 

Preferred stock, no par value:
      10,000,000 shares authorized,
      no shares issued and outstanding                -                 -   
Additional paid-in capital                      1,296,315         1,139,698 
Retained earnings (deficit)                      (918,880)         (765,949)
Net unrealized gains on marketable 
   securities                                       1,765            10,800
                                           _______________   _______________

      Total Stockholders' Equity                  425,970           423,286
                                           _______________   _______________

      TOTAL LIABILITIES AND 
            STOCKHOLDERS' EQUITY           $      432,485    $      423,299
                                           ===============   ===============

</TABLE>








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

                                        3
Document page: 18
<PAGE>
MINES MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF 
OPERATIONS AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
                                                 1998              1997
                                           _______________   _______________
<C>                                        <S>               <S>
REVENUES
   Royalties                               $       25,000    $       25,000 
   Oil and gas                                      4,070             6,242 
                                           _______________   _______________
       Total Revenues                              29,070            31,242 
                                           _______________   _______________
EXPENSES
Operating Expenses 
   Depreciation                                     1,407               625 
   Legal and accounting                            17,017             3,500 
   Miscellaneous                                   15,104             3,904 
   Oil and gas operating expense                    2,686             2,653 
   Professional fees                               28,459               - 
   Rent and office expense                         14,817             7,680 
   Salaries - officer and staff                    15,600            15,600 
   Taxes and licenses                               1,533             1,710 
   Telephone                                        3,824             1,570 
   Travel expense                                   4,463               -
   Exploration expense                             58,423               -
   Commissions                                      3,650               -
   Fees - filing, licenses                          2,576               -
   Assays                                             714               -
   Directors' fees                                 15,000               -
                                           _______________   _______________
       Total Operating Expenses                   185,273            37,242 
Operating income (loss)                          (156,203)           (6,000)
                                           _______________   _______________
Other income
   Interest                                         3,272             1,956 
                                           _______________   _______________
       Total Other Income                           3,272             1,956
                                           _______________   _______________
Net Income (Loss) Before Taxes                   (152,931)           (4,044)
   Provision for Income Taxes                         -                 109
                                           _______________   _______________
Net Income (Loss)                                (152,931)           (4,153)
Other Comprehensive Income (Loss), net
   of tax
   Unrealized Loss on Securities
     available for sale                            (9,035)           (50,800) 
                                           _______________   _______________

Comprehensive Income (Loss)                $     (161,966)   $       (54,953)
                                           ===============   ===============
Net Income (Loss) Per Share                        (0.035)           (0.001) 
                                           ===============   ===============
Weighted Average Common Shares Outstanding      4,402,385         3,859,086
                                           ===============   ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                        4
Document page: 19
<PAGE>


MINES MANAGEMENT, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
*begin 8 pt type*
<TABLE>

                                                                                       Net
                                                                                       Unrealized
                                                            Additional    Retained     Gains on
                       Common Stock      Preferred Stock     Paid-in      Earnings     Marketable
                     Shares     Amount   Shares   Amount     Capital     (Deficit)     Securities    Total
                   _________  _________  _______  _________  ___________  ___________  __________  _________
<S>                <C>        <C>        <C>      <C>        <C>          <C>          <C>         <C>
Balance, December
  31, 1996         3,844,465  $  38,445      -          -    $1,139,990   $ (761,796)  $  61,600   $ 478,239
Common stock 
  issued upon
  conversion of
  shares of
  Heidelberg
  Silver Mining
  Company, Inc
  Stock               29,241        292       -          -        (292)           -           -          -  
Adjustment to 
  net unrealized
  gain on
  marketable
  securities              -         -         -         -        -              -        (50,800)   (50,800)
Net Income (Loss)         -         -         -         -        -           (4,153)        -        (4,153) 
                   _________  _________  _______  _________  ___________  ___________  __________  _________

Balance, December
  31, 1997         3,873,706  $ 38,737       -         -     $ 1,139,698  $ (765,949)  $  10,800   $ 423,286
Common stock
  Issued for
  Services at
  Deemed value
  Of $.20 to $.28
  Per share          163,250     1,633       -          -         35,017         -          -        36,650
Stock sold
  During the
  Period for $.20
  Per share          640,000     6,400       -          -        121,600         -          -       128,000
Adjustment to 
  net unrealized
  gain on
  marketable
  securities              -         -        -          -            -           -        (9,035)    (9,035)
Net Income (Loss)         -         -        -          -            -      (152,931)        -     (152,931)
                   _________  _________  _______  _________  ___________  ___________  __________  _________

Balance,
December 31, 1998  4,676,956  $ 46,770       -          -    $1,296,315   $  (918,880) $    1,765  $ 425,970
                   =========  =========  =======  =========  ===========  ===========  ==========  =========
</TABLE>
*end 8 pt type*










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

                                           5

Document page: 20
<PAGE>
MINES MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 21, 1998 AND 1997

<TABLE>
                                                 1998              1997
                                           _______________   _______________
<S>                                        <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net (loss)                              $     (152,931)   $      (4,153) 
   Adjustments to reconcile net 
      (loss) to net cash (used)
      by operating activities:
        Depreciation                                1,407              625 
        Common stock issued for services              -                - 
   Changes in assets and liabilities:
        Accounts receivable                            58               94
        Prepaid expenses                          (16,917)             -
        Taxes payable                                (512)               96 
        Accounts payable                            4,014               (93) 
                                           _______________   _______________
        Net cash provided (used) by 
          operating activities                   (164,881)           (3,431)
                                           _______________   _______________

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisition of fixed assets                     (2,831)             (179)
                                           _______________   _______________
        Net cash provided by investing  
          Activities                               (2,831)             (179)
                                           _______________   _______________

CASH FLOWS FROM FINANCING ACTIVITIES
   Issuance of common stock for cash              128,000               -  
                                           _______________   _______________
         Net cash provided by financing
          Activities                              128,000               -  
                                           _______________   _______________
         Net (decrease) in cash                   (39,712)           (3,610)
Cash and cash equivalents at 
  beginning of year                                48,796            52,406 
                                           _______________   _______________

Cash and cash equivalents at end of year   $        9,084    $       48,796 
                                           ===============   ===============

Non-Cash operating activities
   Common stock issued for services        $       36,650    $          -
                                           ===============   ===============

Supplemental Disclosures:

   Interest paid                           $          -      $          -   
                                           ===============   ===============

   Income taxes paid                       $          -      $          113 
                                           ===============   ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                        6
Document page: 21
<PAGE>
MINES  MANAGEMENT,  INC.
NOTES  TO  FINANCIAL  STATEMENTS
DECEMBER  31,  1998

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Business  Activity
------------------
Mines  Management,  Inc.  (hereinafter  the  "Company") is a publicly held Idaho
corporation  incorporated in 1947.  The Company acquires, explores, develops and
operates mineral and oil properties principally in North America.  Currently the
Company  is  beginning  exploration  activities  in  South  America.

Principles  of  Consolidation
-----------------------------
The accompanying consolidated financial statements include the accounts of Mines
Management,  Inc.  and  its  wholly  owned subsidiary, Newhi, Inc.  Intercompany
items  and  transactions  have  been  eliminated.

Newhi,  Inc. was formed by the Company for the purpose of merger with Heidelberg
Silver  Mining  Company,  Inc.  In  the  merger,  completed  on  April 15, 1988,
Heidelberg  Silver  Mining  Company, Inc. was merged into Newhi, Inc.  To effect
the  merger, the Company issued 367,844 shares of its previously unissued common
stock.  Also in connection with this merger, the Company issued 11,117 shares of
common  stock  and  paid  $4,446  as a finders' fee.  As of December 31, 1998, a
portion of the shares to be distributed to the Heidelberg Silver Mining Company,
Inc.  shareholders  have yet to be issued.  Even though a number of shareholders
have  elected not to return their shares upon the merger, the Company is holding
approximately  60,000  shares  to  be  delivered  at  their  request.

Concentration  of  Risk
-----------------------
The  Company receives a majority of its income from a single royalty source.  It
is  the  belief  of  management  that this source of income will continue in the
foreseeable  future due to the large investment of capital by the lessor in this
project,  however  royalties  are  unearned  by  the  Company  until  received.

The  Company  maintains  its  cash  accounts primarily in one commercial bank in
Washington and in a securities firm also located in Washington.  The accounts at
the  commercial bank are guaranteed by the Federal Deposit Insurance Corporation
(FDIC)  up to $100,000.  At December 31, 1998, the Company's cash balance in the
commercial  bank  did  not  exceed  the  insured  amount.  The  accounts  at the
securities  firm  consists  of an insured government money market account and an
uninsured  securities  money  market  account.

Mineral  Properties  and  Deferred  Mining  Exploration  and  Development  Costs
--------------------------------------------------------------------------------
Costs  of acquiring, exploring and developing mineral properties are capitalized
by  project  area.  Costs to maintain the mineral rights and leases are expensed
as  incurred.  When  a  property  reaches  the  production  stage,  the  related
capitalized costs will be amortized, using the units of production method on the
basis  of  periodic  estimates  of  ore or oil reserves.  Mineral properties are
periodically  assessed  for  impairment  of  value and any losses are charged to
operations  at  the  time  of  impairment.

Should a property be abandoned, its capitalized costs are charged to operations.




                                           7
Document page: 22
<PAGE>
MINES  MANAGEMENT,  INC.
NOTES  TO  FINANCIAL  STATEMENTS
DECEMBER  31,  1998

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES (continued)

Related  Accounting  Standards
------------------------------

In  March  1995,  the  Financial  Accounting  Standards Board issued a statement
titled  "Accounting  for  Impairment  of  Long-Lived  Assets."  This standard is
effective  for  years beginning after December 15, 1995.  In complying with this
standard,  the  Company  reviews its long-lived assets quarterly to determine if
any  events  or changes in circumstances have transpired which indicate that the
carrying  value  of  its  assets  may  not be recoverable.  The Company does not
believe  that  any  adjustment  is needed to the carrying value of its assets at
December  31,  1998.

Property  and  Equipment
------------------------
Property  and  equipment  are stated at cost.  Buildings were depreciated on the
straight-line  basis and were fully depreciated at December 31, 1998.  Machinery
and  furniture  are  generally  being depreciated using accelerated methods over
lives  ranging  from  five  to  ten  years.

Income  (Loss)  Per  Common  Share
----------------------------------
Income  or  loss per common share is computed by dividing the net income or loss
by  the weighted average number of shares outstanding during the year (4,402,385
at  December  31,  1998  and  3,859,086  at  December  31,  1997).

Net  Operating  Loss
--------------------
At December 31, 1998, the Company's net operating loss carryforward increased to
approximately  $980,000.  These  net operating loss carry-forwards may be offset
against future taxable income through 2013.  A portion of the net operating loss
carryforward  expires  each  year.  No  tax  benefit  has  been  reported in the
financial  statements,  as the Company believes there is a 50% or greater chance
the  net  operating  loss  carryforwards  will  expire unused.  Accordingly, the
potential  tax  benefits of the net operating loss carryforwards are offset by a
valuation  allowance  of  the  same  amount.

Cash  Equivalents
-----------------
For  purposes  of  the statement of cash flows, the Company considers all highly
liquid  debt instruments purchased with a maturity of three months or less to be
cash  equivalents.

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 and disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amounts  of  revenues  and  expenses during the reporting period.
Actual  results  may  differ  from  estimates.




                                           8
Document page: 23
<PAGE>
MINES  MANAGEMENT,  INC.
NOTES  TO  FINANCIAL  STATEMENTS
DECEMBER  31,  1998

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES (Continued)

Comprehensive  Income
---------------------
For  the  year  ended  December  31,  1998  the  Company  adopted  the reporting
requirements  of  the  Statement  of  Financial  Accounting  Standards  No.  130
requiring  the disclosure of comprehensive income.  The Company has reclassified
the  information  presented  on  unrealized  gains  and  losses  from securities
available  for  sale  as  other  comprehensive  income  or  losses, as required.

NOTE  2  -  STOCKHOLDERS'  EQUITY

COMMON  STOCK
-------------

Transactions  During  the  Year
-------------------------------

During  the  year  ended  December 31, 1998, the Company issued 75,000 shares of
common  stock  to  directors for services rendered.  These shares were valued at
$0.20  per  share,  which  was  the  fair  market value on the date of issuance.

During  the  year  ended  December 31, 1998, the Company issued 88,250 shares of
common stock to outside parties for services rendered.  These shares were valued
at prices ranging from $0.20 to $0.28 per share, which was the fair market value
on  the  date  of  issuance.

During  the  year  ended  December  31, 1998, the Company sold 640,000 shares of
common  stock  for  $128,000  in  cash.

Subsequent  Events
------------------

In  January of 1999, the Company sold 245,000 shares of common stock for $61,250
in  cash.

PREFFERED  STOCK
----------------

During the year ended December 31, 1998 the Company authorized 10,000,000 shares
of  no  par  value  preferred stock.  As of the year ended December 31, 1998 the
Company  had  not  issued  any  of  the  authorized  preferred  stock.

NOTE  3  -  MINERAL  PROPERTIES

Mineral  properties  are  comprised  of acquisition, exploration and development
costs  related to the Advance and Iroquois properties in the Northport region of
northeastern  Washington  State  and  the  Montanore  property  in  northwestern
Montana,  as  shown  below:







                                           9
Document page: 24
<PAGE>

MINES  MANAGEMENT,  INC.
NOTES  TO  FINANCIAL  STATEMENTS
DECEMBER  31,  1998

NOTE  3  -  MINERAL PROPERTIES (Continued>

<TABLE>
                                   December 31, 1998        December 31, 1997
<S>                                <C>                      <C>
     Advance                       $       2,139            $        2,139
     Montanore                           134,207                   134,207
     Iroquois                            223,834                   223,834
                                  -----------------         ------------------
                                   $     360,180            $      360,180
                                  =================         ==================
</TABLE>

The Advance property consists of 720 acres of patented mineral rights.  Although
the  Company  does  not own the overlying surface rights to its patented mineral
rights  it  does  have  rights  of  access  to  explore  and  mine.

The  Montanore  property  (formerly  the Noxon property) located in northwestern
Montana  includes 16 mining claims covering 320 acres and a 5-acre patented mill
site.

The  Iroquois  property  consists  of  64  acres of patented mineral and surface
rights,  and  18  unpatented  mining  claims  containing  360  acres.

On  June  29,  1998, the Company signed an agreement, effective June 1, 1998, to
explore  and develop certain lands located in the country of Chile along with an
option  to  purchase  the  property.

The  agreement  called  for  an  initial deposit of $25,000 as a holding fee and
annual  holding fees in the amount of $25,000 until such time as the property is
placed  in  commercial  production.  The  initial  $25,000  holding fee has been
placed in prepaid expenses to be written off ratably over the one-year period to
which  it pertains.  The agreement also calls for certain qualified expenditures
as  work  requirements.

NOTE  4  -  MARKETABLE  SECURITIES

At  December  31,  1998  and  December  31,  1997, the Company owned 45,000 free
trading  shares  of  Bitterroot  Resources,   Ltd.  (BTT),  a  public   Canadian
corporation  traded  on  the  Vancouver  Stock  Exchange.   The  investment  was
accounted  for  on the equity method prior to 1996, and previous losses reported
by  BTT  have  caused  this asset to be carried at a value of zero.  In 1996 the
Company  adopted  FAS  115 and determined the aforementioned shares were held as
"available  for  sale."  This  investment is being recorded at fair market value
with  a  corresponding  adjustment  to  stockholders'  equity.  The  45,000 free
trading  shares  at  December 31, 1998 and December 31, 1997 have an approximate
market  value  of  $1,765  and  $10,800  U.S.  funds,  respectively.








                                          10
Document page: 25
<PAGE>

MINES  MANAGEMENT,  INC.
NOTES  TO  FINANCIAL  STATEMENTS
DECEMBER  31,  1998

NOTE  5  -  STOCK  OPTIONS

During the year ended December 31, 1998 the shareholders of the Company approved
two  stock-based  compensation  plans: a fixed employee stock-based compensation
plan  and a performance-based plan.  Under the fixed plan, the Company may grant
options  to  purchase  up  to  460,000 shares of common stock.  The option price
shall not be less than the fair market value on the date of grant of the shares.
Stock  options  shall be exercisable within ten years from the date of the grant
of  the  option.  Options  under  the  fixed  plan  vest  immediately.

At  December  31,  1998  the  following  fixed  plan  options  had been granted:
<TABLE>
Optionee          Number of shares granted      Option price      Option period
----------------  ----------------------------  ----------------  -------------
<S>               <C>                           <C>               <C>
Directors:
Jack Gustavel            75,000                  $0.40 per share   5 years
Phillip Piffer           75,000                  $0.40 per share   5 years
Roy Franklin             75,000                  $0.40 per share   5 years
Officer:
Greg Lipsker             75,000                  $0.40 per share   5 years
                  ---------------------------
Total                   300,000
                  ===========================

</TABLE>

Under  the  incentive  plan,  the  Company  may  grant options to purchase up to
460,000  shares  of  common  stock.  The option price shall not be less than the
fair  market  value  on the date of grant of the shares.  Stock options shall be
exercisable  within ten years from the date of the grant of the option.  Options
under  the  incentive  plan  vest  immediately.

At  December  31,  1998  the  following  incentive  based  plan options had been
granted:

<TABLE>
Optionee          Number of shares granted      Option price      Option period
----------------  ----------------------------  ----------------  -------------
<S>               <C>                           <C>               <C>
William Green           100,000                 $0.40 per share     5 years
Chris Broili            100,000                 $0.40 per share     5 years
Don Griffiths           100,000                 $0.40 per share     5 years
                  ---------------------------
Total                   300,000
                  ===========================

</TABLE>







                                          11
Document page: 26
<PAGE>

                                    PART III
                                   ----------

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

There  have  been  no  disagreements  between  the  Company  and its accountants
regarding  any  matter  or  accounting  principles  or  practices  or  financial
statement  disclosures.

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROLL PERSONS;
COMPLIANCE  WITH  SECTION  16(a)  OF  THE  EXCHANGE  ACT

Directors  and  Officers
------------------------
<TABLE>
<CAPTION>
Name                      Age  Office  with  the Company      Appointed to Office
----                      ---  -------------------------      --------------------
<S>                       <C>  <C>                           <C>
William R. Green. . . .    60  Chairman of the Board                  1965
President
Chief Executive Officer

Chris Broili. . . . . .    50  Vice President - Exploration           1998

Don Griffiths . . . . .    49  Vice President -
Corporate Development .  1998

Gregory B. Lipsker. . .    48  Vice President - Legal                 1991

Roy G. Franklin . . . .    62  Director                               1988

Jack W. Gustavel. . . .    58  Director                               1974

J. Phillip Piffer . . .    52  Director                               1991

Robert L. Russell . . .    65  Director                               1999
</TABLE>

The  directors  are  elected for a one-year term and until their successors have
been elected and qualified.  Executive Officers are appointed to serve until the
meeting  of  the  Board  of  Directors  following  the  next  annual  meeting of
shareholders  and until their successors have been elected and qualified.  There
are  no  arrangements  or understandings between any of the directors, executive
officers,  and other persons pursuant to which any of the foregoing persons were
named  as  Directors  or  executive  officers.  There  is no family relationship
between  any  Director,  Executive Officer, or person nominated or chosen by the
Registrant  to  become  a  Director  or  Executive  Officer.

William  R.  Green  is  a  mining engineer and geologist, and was a professor of
mining  engineering  at  the University of Idaho from 1965 to 1983.  He has been
actively  involved in the mining business since 1962 and is a former officer and
director  of  Yamana Resources and currently an officer and director of Canadian
public  companies:  Maya  Gold  Limited  and  Petromin  Resources  Ltd.,  and US
companies  Cimarron-Grandview  Group,  Inc.  and Metaline Mining and Leasing Co.
Dr.  Green  dedicates  approximately  80%  of  his time to the management of the
Company.  The  balance  of Dr. Green's time is devoted to consulting for various
mining  exploration  companies.

Document page: 27
<PAGE>
Chris  Broili  holds  an  MSc degree in exploration geology and has more than 25
years experience in mineral exploration worldwide.  From 1984 to 1994 Mr. Broili
was  employed  by  Atlas  Precious Metals, Inc., most recently as an Exploration
Manager  and  was involved in the discovery of the Grassy Mountain gold deposit.
From  1994  to  1997  Mr. Broili was employed by Yamana Resources, Inc. as chief
geologist  and  later as Vice-President of Exploration.  Since January 1998, Mr.
Broili  has  been  employed  as an independent consulting geologist.  Mr. Broili
dedicates  approximately  30%  of  his time to the management of the Company and
provides independent consulting services to several mining exploration companies
for  the  balance  of  his  time.

Don  Griffiths  holds  an  MSc degree in Materials Science and has over 25 years
experience  in  project  development,   engineering,  construction   and  mining
operations.  From 1992 to 1994 Mr. Griffiths was employed by International Musto
Explorations  Limited  as a project manager at the Bajo de al Alumbrera property
in  Argentina.  From  1995  to 1997, Mr. Griffiths was employed by International
Curator  Resources  Limited  as  project manger on the El Boleo property in Baja
California  Sur,  Mexico.  Since  1998  Mr.  Griffiths  has  been an independent
contractor.  Mr.  Griffiths  dedicates  approximately  2%  of  his  time  to the
management  of  the  Company.   Mr.  Griffiths   is  currently  employed  as  an
independent consultant by various mining and exploration companies.

Gregory  Lipsker is a practicing attorney with 17 years experience in mining and
corporate law.  He was formerly the president and director of Antioch Resources,
a  mineral  exploration  company.  He  is  currently  an officer and director of
Cimarron-Grandview  Group, Inc. and Metaline Mining and Leasing Co.  Mr. Lipsker
currently  dedicates  approximately  5%  of  his  time  to the management of the
Company.  The  balance  of  Mr.  Lipsker's  time is devoted to his law practice.

Robert  L.  Russell,  a Professional Engineer has been a director of the Company
since  March,  1999.  Since  September,  1998  Mr.  Russell  has provided mining
management  consulting  services  through  his  consulting company, R.L. Russell
Associates.  From  1995-1998  Mr.  Russell  was  employed by Zambia Consolidated
Copper  Mines, most recently as General Manager of the Nchanga Division. In that
position  Mr.  Russell  was responsible for all functions of two operating mines
and several metallurgical facilities. Under Mr. Russell the Nchanga Division had
8700  employees  and produced 150,000 tons of copper and 3500 tons (about 12% of
the  world's  supply)  of  cobalt  per  year.  From 1989 to 1995 Mr. Russell was
employed as  the Vice  President of Freeport  McMoRan  Copper and  Gold and  the
Executive Vice-President of PT Freeport Indonesia.

Roy  G.  Franklin  is  a certified public accountant with 29 years experience in
small  company  administration  and  finance.  He  was  formerly  a  director of
Heidelberg  Silver  Mining  Company and is a principal in the accounting firm of
Oswalt,  Teel,  and  Franklin,  P.S.

Jack  W.  Gustavel has more than 30 years experience in the banking industry and
is  a  former  member  of the Board, and Director of, the Portland branch of the
Federal  Reserve Bank of San Francisco.  He is currently a Director and Chairman
and  CEO  of  Idaho  Independent  Bank.

J.  Phillip  Piffer  holds an MBA degree from the University of Calgary, and has
worked  as  a  management  consultant  and  corporate executive primarily in the
Canadian  oil  business.   He was formerly the President and Director of Brigdon
Resources  Inc.,  a  Calgary-based  oil  and  gas  production  company  that  is
listed on the Toronto  Stock  Exchange.





Document page: 28
<PAGE>
None  of  the  Directors  is  also  a  director  of  any company with a class of
securities  registered  pursuant to Section 12 of the Exchange Act or subject to
Section  15(d)  of  the  Act,  or of any company registered under the Investment
Company  Act  of  1940 except William R. Green, Jack W. Gustavel, and Gregory B.
Lipsker  as  noted  above.

No  Director, or person nominated to become a Director or Executive Officer, has
been  involved  in  any  legal action involving the Company during the past five
years.

Promoters  and  Control  Person:  Not  Applicable

Compliance  with  Section  16(a)  of  the  Exchange  Act
--------------------------------------------------------

Based  solely upon a review of forms 3 and 4 and amendments thereto furnished to
the Registrant pursuant to Section 240.16a-3 during the most recent fiscal year,
and  Form  5  and amendments thereto furnished to the Registrant with respect to
the  most  recent  fiscal year, no person who at any time during the fiscal year
was  a  director,  officer,  or beneficial owner or more than ten percent of any
class  of  equity securities of the Registrant registered pursuant to Section 12
of  the  Exchange Act, or any other person subject to Section 16 of the Exchange
Act  with respect to the Registrant because of the requirements of Section 30 of
the  Investment  Company Act or Section 17 of the Public Utility Holding Company
Act  (A  reporting person) failed to file on a timely basis, as disclosed in the
above  Forms,  reports  required by Section 16(a) of the Exchange Act during the
most  recent  fiscal  year  or  prior  fiscal  years.

ITEM  10.        EXECUTIVE  COMPENSATION

A  summary  of cash and other compensation for the Company's President and Chief
Executive  Officer  for  the  three  most  recent  years  is  as  follows:
<TABLE>
<CAPTION>
                              SUMMARY  COMPENSATION  TABLE
Long-Term  Compensation
Annual  Compensation                          Awards            Payouts
____________________________________________  _________________  ______________________
(a)          (b)   (c)      (d)      (e)      (f)        (g)          (h)     (i)
Name                                 Other    Restricted Securities
and                                  Annual   Stock      Underlying   LTIP     All  Other
Principal    Year  Salary   Bonus    Comp.    Awards(1)  Options/     Payouts  Comp.
Position           ($)      ($)      ($)      ($)        SARs(#)      ($)      ($)
___________  ____  _______  _______  _______  __________  __________  ________  _________

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

William
R. Green     1996  $15,600    $0       $0       $1,500         -0-      $0        $90
Vice
President
and          1997  $15,600    $0       $0       $3,000         -0-      $0        $150
Director     1998  $15,600    $0       $0           $0         -0-      $0        $0
</TABLE>







Document page: 29
<PAGE>
Option/SAR Grants in the Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants                          % of Total     
                                           Options/SARs   
                   Number of Securities    Granted to     Exercise or
                   Underlying Option/SARs  Employees in   Base Prices   Expiration
Name               Granted (#)             Fiscal Year    ($/Share)     Date
-----------------  ----------------------  -------------  ------------  -----------
<S>                <C>                     <C>            <C>           <C>
William R. Green         100,000             16.6%           $ .40        May 03
</TABLE>

Director Compensation For Last Fiscal Year
<TABLE>
<CAPTION>
                       Cash Compensation                    Security Grants
                       -----------------------------------  -----------------------------
                                                                         Number of
                       Annual                  Consulting                Securities
                       Retainer     Meeting    Fees/Other   Number of    Underlying
                       Fees ($)     Fees       Fees ($)     Shares (#)   Options/SARs (#)
Name (a)               (b)          (c)        (d)          (e)          (f)
---------------------  -----------  ---------  -----------  -----------  ----------------
<S>                    <C>          <C>        <C>          <C>          <C>
Roy G. Franklin            -0-         -0-         -0-          -0-          75,000
Jack A. Gustavel           -0-         -0-         -0-          -0-          75,000
J. Phillip Piffer          -0-         -0-         -0-          -0-          75,000

The Company  has no employment  contracts with executive  officers or directors.
While there is no formal compensation arrangement with  directors,  historically
(through 1997)  Directors have  received an  annual restricted  stock award.  In
1998, stock options were granted in lieu of restricted stock awards.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

The following table sets  forth information as  of March 30, 1999  regarding any
person known to the Company to be the beneficial owner of more than five percent
of any class of the Company's voting securities.

</TABLE>
<TABLE>
<CAPTION
                                           Amount and nature
Title of Class  Name of Beneficial owner   of Beneficial Ownership   Percent of Class (1)
--------------  -------------------------  ------------------------  --------------------
<S>             <C>                        <C>                       <C>
Common          William R. Green                  612,500(2)                12.6%
</TABLE>

(1) Fully Diluted (assumes exercise of all 700,000 outstanding options)
(2) Does not include options to acquire 100,000 shares of Common Stock

Security Ownership of Management

The  following  table  sets  forth  certain  information  as of  March  30, 1999
Regarding the number and percentage of  shares of Common Stock of the Company or
any of its parents or  subsidiaries beneficially owned  (as such term is defined
in  Rule 13d-3 under  the  Exchange Act) by  each director,  each of  the  named
executive officers and directors and officers as a group.

Document page: 30
<PAGE>

<TABLE>
<CAPTION
                                           Amount and nature
Title of Class  Name of Beneficial owner   of Beneficial Ownership   Percent of Class (1)
--------------  -------------------------  ------------------------  --------------------
<S>             <C>                        <C>                       <C>

Common          William R. Green                   612,500(2)               12.6%

Common          Christopher Broili                 165,000(2)                4.7

Common          Jack W. Gustavel                    89,500(3)                2.9

Common          Roy G. Franklin                     76,229(3)                2.7

Common          Robert R. Russell                      -0-(2)                1.7

Common          J. Phillip Piffer                   57,500(3)                2.3

Common          Total of all officers and 
                directors (8 individuals)        1,043,229(4)               30.7

</TABLE>


(1)     Fully Diluted (assumes exercise of all 700,000 outstanding options)
(2)     Does  not  include  options  to  acquire  100,000  shares
(3)     Does  not  include  options  to  acquire  75,000  shares
(4)     Does  not  include  options  to  acquire  700,000  shares

Changes  in  Control
---------------------

There are no arrangements known to the Registrant the operation of which may at
a subsequent  time  result  in  the  change  of  control  of  the  Registrant.

ITEM  12.    CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

There  have  been  no  transactions  or  series  of  transactions,  or  proposed
transactions  during  the  last  two years to which the Registrant is a party in
which  any  director,  nominee  for election as a director, executive officer or
beneficial  owner  of  five percent or more of the Registrant's common stock, or
any  member  of the immediate family of the foregoing had or is to have a direct
or  indirect  material  interest  exceeding  $60,000.

ITEM  13.     EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,  AND  REPORTS  ON
FORM  8-K.

(a)  the  following  documents  are  filed  as  part  of  the  report:

     1.  Financial  Statements

         Accountants'  Report

         Consolidated  Balance  Sheets
         December  31,  1998  and  1997

         Consolidated  Statements  of  Operations  and  Comprehensive  Income
         for  the  years  ended  December  31,  1998,  and  1997

Document page: 31
<PAGE>
         Consolidated  Statement  of  Changes  in  Stockholders'  Equity
         for  the  years  ending  December  31,  1998,  and  1997

          Consolidated  Statements  of  Cash  Flows
          for  the  years  ending  December  31,  1998,  and  1997

          Notes  to  Financial  Statements

2.  Exhibits  required  by  Item  601

     (2)     Plan  of  Acquisition,  reorganization,  arrangement,
             liquidation  or  succession.(1)
     (3)(i)  Articles  of  Incorporation  (2)
     (3)(ii) Bylaws.  (2)
     (4)     Instruments  defining  the  rights  of  security  holders,
             including  indentures.  (1)
     (9)     Voting  trust  agreements.  (1)
    (10)     Material  contracts.  (2)
    (11)     Statement  re:  computation  of  per  share  earnings.  (1)
    (12)     Statements  re:  computation  of  ratios.  (1)
    (13)     Annual  report  to  security  holders,  Form  10Q
             or  quarterly  report  to  security  holders.(1)
    (16)     Letter  re:  change  in  certifying  accountant.  (1)
    (18)     Letter  re:  change  in  accounting  principles  .(1)
    (19)     Subsidiaries  of  the  Registrant.  (2)
    (22)     Publisher  report  regarding  matters  submitted
             to  vote  of  security  holders.  (1)
    (23)     Consents  of  Experts  and  counsel.
    (24)     Power  of  Attorney.
    (99)     Additional  Exhibits.  (1)

     (1)  These  items  have  either  been  omitted  or  are  not  applicable
     (2)  Incorporated  by  reference  to  previous  filing

(b)     Reports  on Form 8-K.  No reports on Form 8-K have been filed during the
last  quarter  of  the  period  covered  by  this  report.

























Document page: 32
<PAGE>

                                   SIGNATURES

In  accordance  with  Section  13  or  15(d) of the Exchange Act, the Registrant
caused  this report to be signed on its behalf by the undersigned thereunto duly
authorized.

MINES  MANAGEMENT,  INC.

                                     /s/  William R. Green
                                     ___________________________
Date:  March  30,  1999.             By:  William  R.  Green
                                     President  (Principal  Executive  Officer)

                                     /s/ Roy G. Franklin
                                     ___________________________
Date:  March  30,  1999              By:  Roy  G.  Franklin
                                     Treasurer  (Principal  Financial  Officer)

In  accordance  with  the Exchange Act, this report has been signed below by the
following  persons  on behalf of the registrant and in the capacities and on the
dates  indicated.

                                      /s/ William R. Green
                                      ___________________________
Date:     March  30,  1999.           William  R.  Green,  Director

                                     /s/ Roy G. Franklin
                                      ___________________________
Date:     March  30,  1999            Roy  G.  Franklin,  Director

                                     /s/ Jack W. Gustavel
                                      ___________________________
Date:     March  30,  1999            Jack  W.  Gustavel,  Director

                                     /s/ Phillip Piffer
                                      ___________________________
Date:     March  30,  1999            J.  Phillip  Piffer,  Director

                                     /s/ Robert L. Russell
                                      ___________________________
Date:     March  30,  1999            Robert  L.  Russell,  Director