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| [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|-----|--------------------------------------------------------------------------------------|

| APPLIED MINERALS, INC.                                               |
|----------------------------------------------------------------------|
| (Exact name of registrant as specified in its charter)               |
| Delaware                                                             |   | 82-0096527 |
| (State or other jurisdiction of incorporation or organization)  |   | (I.R.S. Employer Identification No.)  |

| 110 Greene Street – Ste 1101, New York, NY |                                           | 10012      |
|--------------------------------------------------|------------------------------------------------|------------|
| (Address of principal executive offices)    |                                           | (Zip Code) |
|                                             | (800) 356-6463                                 |       |   |
|                                             | Issuer's telephone number, including area code |       |   |

|   | YES |   | NO | X |
|--------|-----|--------|----|---|

|   | YES |   | NO | X |
|--------|-----|--------|----|---|

|   | YES |   | NO | X |
|--------|-----|--------|----|---|

|   |   |   |   |   |
|--------|--------|--------|--------|--------|

| Large Accelerated Filer |   | Accelerated Filer |   | Non-accelerated Filer |   | Smaller Reporting Company | X |
|-------------------------|--------|-------------------|--------|-----------------------|--------|---------------------------|---|

|   | YES |   | NO | X |
|--------|-----|--------|----|---|

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|     | PART I                                                                                                                        | Page(s) |
|----------|-------------------------------------------------------------------------------------------------------------------------------|---------|
| Item 1.  | Business                                                                                                                      | 3       |
|     |                                                                                                                          |    |
| Item 1A. | Risk Factors                                                                                                                  | 8       |
|     |                                                                                                                          |    |
| Item 1B. | Unresolved Staff Comments                                                                                                     | 11      |
|     |                                                                                                                          |    |
| Item 2.  | Properties                                                                                                                    | 11      |
|     |                                                                                                                          |    |
| Item 3.  | Legal Proceedings                                                                                                             | 13      |
|     |                                                                                                                          |    |
|     | PART II                                                                                                                       |    |
| Item 4.  | Market Price for the Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities | 17      |
|     |                                                                                                                          |    |
| Item 5.  | Selected Financial Data                                                                                                       | 19      |
|     |                                                                                                                          |    |
| Item 6.  | Management’s Discussion and Analysis of Financial Condition and Results of Operation                                    | 19      |
|     |                                                                                                                          |    |
| Item 6A. | Quantitative and Qualitative Disclosures About Market Risk                                                                    | 26      |
|     |                                                                                                                          |    |
| Item 7.  | Financial Statements and Supplementary Data                                                                                   | 26      |
|     |                                                                                                                          |    |
| Item 8.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                          | 26      |
|     |                                                                                                                          |    |
| Item 8A. | Controls and Procedures                                                                                                       | 26      |
|     |                                                                                                                          |    |
| Item 8B. | Other Information                                                                                                             | 28      |
|     | PART III                                                                                                                      |    |
| Item 9.  | Directors and Executive Officers and Corporate Governance                                                                     | 29      |
|     |                                                                                                                          |    |
| Item 10. | Executive Compensation                                                                                                        | 29      |
|     |                                                                                                                          |    |
| Item 11. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                                | 29      |
|     |                                                                                                                          |    |
| Item 12. | Certain Relationships and Related Transactions, and Director Independence                                                     | 29      |
|     |                                                                                                                          |    |
| Item 13. | Principal Accounting Fees and Services                                                                                        | 29      |
|     |                                                                                                                          |    |
| Item 14. | Exhibits                                                                                                                      | 30      |
|     | PART IV                                                                                                                       |    |
| Item 15. | Exhibits, Financial Statement Schedules and Reports on Form 8-K                                                               | 32      |

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| ITEM 4. | MARKET PRICE FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
|---------|-------------------------------------------------------------------------------------------------------------------------------|

|           |   | Year 2009 |   |   | Year 2008 |   |
|----------------|--------|-----------|--------|--------|-----------|--------|
|           |   | High      |   |   | Low       |   |   | High |   |   | Low |   |
| First Quarter  |   | $         | 0.30   |   |      | $      | 0.17 |   |   | $ | 0.80 |   |   | $ | 0.53 |   |
| Second Quarter |   | $         | 0.69   |   |      | $      | 0.24 |   |   | $ | 0.53 |   |   | $ | 0.78 |   |
| Third Quarter  |   | $         | 0.90   |   |      | $      | 0.42 |   |   | $ | 0.73 |   |   | $ | 0.45 |   |
| Fourth Quarter |   | $         | 0.94   |   |      | $      | 0.55 |   |   | $ | 0.47 |   |   | $ | 0.135 |   |

----

| Equity Compensation Information                        |   |
|--------------------------------------------------------|--------|
| As of December 31, 2009                                |   |
|                                                   |   |   |   |   |   |   |   |   |   |
|                                                   |   | Number of securities to be issued upon exercise of outstanding options, warrants, and rights |   |   | Weighted-average exercise price of outstanding options, warrants and rights |   |   | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |   |
|                                                   |   | (a) |   |   | (b) |   |   | (c) |   |
| Equity compensation plans approved by security holders |   |   | - 0 - |   |   |   | - 0 - |   |   |   | (1 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity compensation plans                              |   |   |   |   |   |   |   |   |   |   |   |   |
| not approved by security holders                       |   |   | 7,433,277 |   |   | $ | 0.70 |   |   |   | (1 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                  |   |   | 7,433,277 |   |   | $ | 0.70 |   |   |   |   |   |

----

| ITEM 5. | SELECTED FINANCIAL DATA |
|---------|-------------------------|

| ITEM 6. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------|

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| ITEM 6A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|----------|------------------------------------------------------------|

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

----

----

----

| ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
|----------|------------------------------------------------------------------------------------------------|

| Information regarding security ownership of certain beneficial owners and management and related stockholder matters is incorporated herein by reference from our 2010 Proxy Statement. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Exhibit |                                                                                                                                                                           |   |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Number  | Description of Exhibit                                                                                                                                                         |   |
| 3.1     | Articles of Incorporation, as amended                                                                                                                                          | (1)    |
| 3.2     | Bylaws, as amended                                                                                                                                                             | (2)    |
| 4.1     | Form on 10% PIK Election Convertible Note and related Registration Rights Agreement issued December 30, 2008                                                                   | (3)    |
| 4.2     | Form on 10% PIK Election Convertible Note and related Registration Rights Agreement issued April 7 – 9, 2009                                                             | (4)    |
| 4.3     | Form on 10% PIK Election Convertible Note and related Registration Rights Agreement issued May 1, 2009                                                                         | (5)    |
| 4.4     | Form on 10% PIK Election Convertible Note and related Registration Rights Agreement issued July 28, 2009                                                                       | (6)    |
| 4.5     | Form on 10% PIK Election Convertible Note and related Registration Rights Agreement issued October 26, 2009                                                                    | (7)    |
| 10.1    | Lyon Employment Agreement                                                                                                                                                      | (8)    |
| 10.2    | Amendment to Lyon Employment Agreement                                                                                                                                         | (9)    |
| 10.3    | Compensation arrangements of directors                                                                                                                                         | (10)   |
| 10.4    | Amendment to compensation arrangements of directors                                                                                                                            | (11)   |
| 10.5    | Compensation arrangements of director Taft                                                                                                                                     | (12)   |
| 10.6    | Consulting Agreement with Morris Weiss                                                                                                                                         | (13)   |
| 10.7    | Additional Consulting Agreement with Morris Weiss                                                                                                                              | (14)   |
| 10.8    | Ronald Price separation agreement                                                                                                                                              | (15)   |
| 10.9    | Agreement with Material Advisors LLC                                                                                                                                           | (16)   |
| 10.10   | Agreement for Appointment of Agent for the Sale of Assets with AAMCOR LLC                                                                                                      | (17)   |
| 10.11   | Settlement Agreement (“Class Action Settlement Agreement”) with the lead plaintiffs in the class action In Re Atlas Mining Company Securities Litigation           | (18)   |
| 10.12   | Settlement Agreement with William Jacobson                                                                                                                                     | (19)   |
| 10.13   | Settlement Agreement with Robert Dumont                                                                                                                                        | (20)   |
| 10.14   | Terms of private placements of securities                                                                                                                                      | (21)   |
| 10.15   | Compensation Agreement with Forbearing Shareholders                                                                                                                            |   |
| 31.1    | Certification pursuant to Rule 13a-14 of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of the Principal Executive Officer |   |
| 31.2    | Certification pursuant to Rule 13a-14 of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of the Principal Financial Officer |   |
| 32.1    | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Principal Financial Officer                     |   |
| 32.2    | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Principal Financial Officer                     |   |

| 1)   | Incorporated by reference to exhibit 99.1 included in the Registrant's Current Report on Form 8-K, filed on November 3, 20009 |
|----------------|-------------------------------------------------------------------------------------------------------------------------------|

| 2)   | Incorporated by reference to exhibit 99.2 included in the Registrant's Current Report on Form 8-K filed November 3, 2009. |
|----------------|---------------------------------------------------------------------------------------------------------------------------|

----

| 3)   | Incorporated by reference to exhibits 99.2 and 99.3 included in the Registrant's Current Report on Form 8-K filed January 7, 2009. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------|

| 4)   | Incorporated by reference to exhibits 99.1 and 99.2 included in the Registrant's Current Report on Form 8-K filed April 10, 2009 |
|----------------|----------------------------------------------------------------------------------------------------------------------------------|

| 5)   | Incorporated by reference to exhibits 99.1 and 99.2 included in the Registrant's Current Report on Form 8-K filed May 4, 2009. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------|

| 6)   | Incorporated by reference to exhibits 99.1 and 99.2 included in the Registrant's Current Report on Form 8-K filed July 28, 2009. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------|

| 7)   | Incorporated by reference to exhibits 99.1 and 99.2 included in the Registrant's Current Report on Form 8-K filed October 26, 2009. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------|

| 8)   | Incorporated by reference to exhibit 99.1 included in the Registrant's Current Report on Form 8-K filed on July 3, 2008 |
|----------------|-------------------------------------------------------------------------------------------------------------------------|

| 9)   | Incorporated by reference to Item 8.01included in the Registrant's Current Report on Form 8-K filed on October 2, 2008 |
|----------------|------------------------------------------------------------------------------------------------------------------------|

| 10)   | Incorporated by reference to Item 5.02 (ii) and (iii) included in the Registrant's Current Report on Form 8-K filed on January 17, 2008 |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| 11)   | Incorporated by reference to Item 8.01 included in the Registrant's Current Report on Form 8-K filed on October 2, 2008 |
|-----------------|-------------------------------------------------------------------------------------------------------------------------|

| 12)   | Incorporated by reference to Item 5.02 included in the Registrant's Current Report on Form 8-K filed on October 22, 2008 |
|-----------------|--------------------------------------------------------------------------------------------------------------------------|

| 13)   | Incorporated by reference to exhibit 99.4 included in the Registrant's Current Report on Form 8-K filed on May 4, 2009 |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

| 14)   | Incorporated by reference to Item 5.02 included in the Registrant's Current Report on Form 8-K filed on May 4, 2009. |
|-----------------|----------------------------------------------------------------------------------------------------------------------|

| 15)   | Incorporated by reference to exhibit 10.11 in the Registrant’s Form 10-K filed on July 28, 2009 |
|-----------------|-------------------------------------------------------------------------------------------------------|

| 16)   | Incorporated by reference to exhibit 99.1 included in the Registrant's Current Report on Form 8-K filed on January 7, 2009 |
|-----------------|----------------------------------------------------------------------------------------------------------------------------|

| 17)   | Incorporated by reference to exhibit 10.13 in the Registrant’s Form 10-K filed on July 28, 2009 |
|-----------------|-------------------------------------------------------------------------------------------------------|

| 18)   | Incorporated by reference to exhibit 10.14 in the Registrant’s Form 10-K filed on July 28, 2009 |
|-----------------|-------------------------------------------------------------------------------------------------------|

| 19)   | Incorporated by reference to exhibit 10.15 in the Registrant’s Form 10-K filed on July 28, 2009 |
|-----------------|-------------------------------------------------------------------------------------------------------|

| 20)   | Incorporated by reference to exhibit 10.16 in the Registrant’s Form 10-K filed on July 28, 2009 |
|-----------------|-------------------------------------------------------------------------------------------------------|

| 21)   | Incorporated by reference to Items 3.02, 8.01, 8.01,2.03, 2.03, 2.03 and 2.03 included in the Registrant's Current Reports on Form 8-K filed on January 16, 2009, May 29, 2008, September 29, 2008, January 7, 2009, April 10, 2009, May 4, 2009 and October 26, 2009. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                       | Page              |
|------------------------------------------------------------------------------------------------------------|-------------------|
| Report of Independent Registered Public Accounting Firm                                                    | F-1               |
|                                                                                                       |              |
| Financial Statements:                                                                                      |              |
|                                                                                                       |              |
|  Consolidated Balance Sheets as of December 31, 2009 and 2008                                         | F-2 – F-3   |
|                                                                                                       |              |
| Consolidated Statements of Operations and Comprehensive Loss for Years Ended December 31, 2009 and 2008    | F-4 – F-6   |
|                                                                                                       |              |
|  Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2009 and 2008 | F-7               |
|                                                                                                       |              |
|  Consolidated Statements of Cash Flows for Years Ended December 31, 2009 and 2008                     | F-8 – F-9   |
|                                                                                                       |              |
|  Notes to Consolidated Financial Statements                                                           | F-10 – F-43 |

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| PMB Helin Donovan, LLP          |
|---------------------------------|
|                            |   |
| /s/PMB Helin Donovan, LLP  |
| Spokane, Washington             |   |
| March 26, 2010                  |   |

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| APPLIED MINERALS, INC. AND SUBSIDIARY                                                   |   |
|-----------------------------------------------------------------------------------------|--------|
| (Formerly Atlas Mining Company and Subsidiary)                                          |   |
| (An Exploration Stage Company)                                                          |   |
| Consolidated Balance Sheets                                                             |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   | December 31, |   |   | December 31, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |
|                                                                                    |   |   |   |   |   |   |
| Current Assets                                                                          |   |   |   |   |   |   |
| Cash and cash equivalents                                                               |   | $ | 1,584,866 |   |   | $ | 903,001 |   |
| Accounts receivable                                                                     |   |   | - 0 - |   |   |   | 44 |   |
| Investments – available for sale                                                  |   |   | 5,565 |   |   |   | 5,426 |   |
| Deposits and prepaids                                                                   |   |   | 145,542 |   |   |   | 282,306 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Total Current Assets                                                                    |   |   | 1,735,973 |   |   |   | 1,190,776 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Property and Equipment                                                                  |   |   |   |   |   |   |   |   |
| Land and tunnels                                                                        |   |   | 523,729 |   |   |   | 523,729 |   |
| Land improvements                                                                       |   |   | 94,029 |   |   |   | 91,835 |   |
| Buildings                                                                               |   |   | 445,197 |   |   |   | 445,197 |   |
| Mining equipment                                                                        |   |   | 432,670 |   |   |   | 389,492 |   |
| Milling equipment                                                                       |   |   | 98,047 |   |   |   | 99,855 |   |
| Laboratory equipment                                                                    |   |   | 67,728 |   |   |   | 75,968 |   |
| Office furniture and equipment                                                          |   |   | 37,522 |   |   |   | 37,962 |   |
| Vehicles                                                                                |   |   | 75,163 |   |   |   | 65,763 |   |
| Less:  Accumulated depreciation                                               |   |   | (382,753 | ) |   |   | (287,040 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |
| Total Property and Equipment                                                            |   |   | 1,391,332 |   |   |   | 1,442,761 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Other Assets                                                                            |   |   |   |   |   |   |   |   |
| Assets from discontinued operations                                                     |   |   |   |   |   |   |   |   |
| being held for sale                                                                     |   |   | 878,003 |   |   |   | 1,872,577 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Total Other Assets                                                                      |   |   | 878,003 |   |   |   | 1,872,577 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                                                                            |   | $ | 4,005,308 |   |   | $ | 4,506,114 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these consolidated financial statements. |   |

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| APPLIED MINERALS, INC. AND SUBSIDIARY                                                   |   |
|-----------------------------------------------------------------------------------------|--------|
| (Formerly Atlas Mining Company and Subsidiary)                                          |   |
| (An Exploration Stage Mining Company)                                                   |   |
| Consolidated Balance Sheets                                                             |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   | December 31, |   |   | December 31, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |
|                                                                                    |   |   |   |   |   |   |
| Current Liabilities                                                                     |   |   |   |   |   |   |
| Accounts payable and accrued liabilities                                                |   | $ | 1,047,541 |   |   | $ | 741,885 |   |
| Stock awards payable                                                                    |   |   | 203,000 |   |   |   | 52,500 |   |
| Current portion of notes payable                                                        |   |   | 72,762 |   |   |   | 115,836 |   |
| Current portion of leases payable                                                       |   |   | 15,690 |   |   |   | 41,004 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Total Current Liabilities                                                               |   |   | 1,338,993 |   |   |   | 951,225 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Long-Term Liabilities                                                                   |   |   |   |   |   |   |   |   |
| Long-term portion of leases payable                                                     |   |   | 22,832 |   |   |   | 118,765 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Total Long-Term Liabilities                                                             |   |   | 22,832 |   |   |   | 118,765 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Other Liabilities                                                                       |   |   |   |   |   |   |   |   |
| Convertible debt (PIK Notes), net of discount                                           |   |   | 2,234,473 |   |   |   | 1,000,000 |   |
| Liabilities from discontinued operations                                                |   |   | 98,406 |   |   |   | 239,128 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Total Other Liabilities                                                                 |   |   | 2,332,879 |   |   |   | 1,239,128 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES                                                                       |   |   | 3,694,704 |   |   |   | 2,309,118 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Commitments and Contingencies                                                           |   |   | - 0 - |   |   |   | - 0 - |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Stockholders’ Equity                                                              |   |   |   |   |   |   |   |   |
| Preferred stock, $0.001 par value, 10,000,000                                           |   |   |   |   |   |   |   |   |
| shares authorized, noncumulative, nonvoting,                                            |   |   |   |   |   |   |   |   |
| nonconvertible, none issued or outstanding                                              |   |   | - 0 - |   |   |   | - 0 - |   |
| Common stock, $0.001 par value, 120,000,000                                             |   |   |   |   |   |   |   |   |
| shares authorized, 69,781,351 and                                                       |   |   |   |   |   |   |   |   |
| 59,215,628 shares issued and outstanding                                                |   |   |   |   |   |   |   |   |
| at December 31, 2009 and 2008, respectively                                             |   |   | 69,781 |   |   |   | 59,216 |   |
| Additional paid-in capital                                                              |   |   | 26,965,507 |   |   |   | 22,096,327 |   |
| Accumulated deficit prior to the exploration stage                                      |   |   | (20,009,496 | ) |   |   | (20,009,496 | ) |
| Accumulated deficit during the exploration stage                                        |   |   | (6,766,200 | ) |   |   | - 0 - |   |
| Accumulated other comprehensive loss                                                    |   |   | (1,327 | ) |   |   | (1,466 | ) |
| Total Applied Minerals, Inc.                                                            |   |   |   |   |   |   |   |   |
| stockholders’ equity                                                              |   |   | 258,265 |   |   |   | 2,144,581 |   |
| Non-controlling interest                                                                |   |   | 52,339 |   |   |   | 52,415 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Total Stockholders’ Equity                                                        |   |   | 310,604 |   |   |   | 2,196,996 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND                                                                   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                              |   | $ | 4,005,308 |   |   | $ | 4,506,114 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these consolidated financial statements. |   |

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|  APPLIED MINERALS, INC. AND SUBSIDIARY                                             |   |
|-----------------------------------------------------------------------------------------|--------|
| (Formerly Atlas Mining Company and Subsidiary)                                          |   |
| (An Exploration Stage Company)                                                          |   |
| Consolidated Statements of Operations and Comprehensive Loss                            |   |
|                                                                                    |   |   |   |   |   |   |   | For the Period |   |
|                                                                                    |   |   |   |   |   |   |   | January 1, 2009 |   |
|                                                                                    |   |   |   |   |   |   |   | (Beginning of |   |
|                                                                                    |   |   |   |   |   |   |   | Exploration Stage) |   |
|                                                                                    |   | For the year ended |   |   | through |   |
|                                                                                    |   | December 31, |   |   | December 31, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |   | 2009 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| REVENUES                                                                                |   | $ | - 0 - |   |   | $ | - 0 - |   |   | $ | - 0 - |   |
| COST OF SALES                                                                           |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |
| Gross Profit                                                                            |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING (INCOME) EXPENSES:                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration costs                                                                       |   |   | 1,299,753 |   |   |   | 1,356,659 |   |   |   | 1,299,753 |   |
| General & administrative                                                            |   |   | 4,683,914 |   |   |   | 3,118,588 |   |   |   | 4,683,914 |   |
| (Gain) loss from disposition of land and equipment                                      |   |   | (410 | ) |   |   | 232,392 |   |   |   | (410 | ) |
| Loss on impairment of equipment                                                         |   |   | 42,042 |   |   |   | - 0 - |   |   |   | 42,042 |   |
| Total Operating Expenses                                                                |   |   | 6,025,299 |   |   |   | 4,707,639 |   |   |   | 6,025,299 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Operating Loss                                                                      |   |   | (6,025,299 | ) |   |   | (4,707,639 | ) |   |   | (6,025,299 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE):                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                                         |   |   | 448 |   |   |   | 25,977 |   |   |   | 448 |   |
| Interest expense                                                                        |   |   | (310,554 | ) |   |   | (85 | ) |   |   | (310,554 | ) |
| Sale of clay samples                                                                    |   |   | 6,000 |   |   |   | - 0 - |   |   |   | 6,000 |   |
| Refund of insurance premium                                                             |   |   | 13,786 |   |   |   | - 0 - |   |   |   | 13,786 |   |
| Gain (loss) on revaluation of stock awards                                              |   |   | (150,500 | ) |   |   | 227,500 |   |   |   | (150,500 | ) |
| Special investigation fees and expenses                                                 |   |   | - 0 - |   |   |   | (1,479,279 | ) |   |   | - 0 - |   |
| Net proceeds from legal settlement                                                      |   |   | 118,913 |   |   |   | - 0 - |   |   |   | 118,913 |   |
| Amortization of convertible debt discount                                               |   |   | (365,147 | ) |   |   | - 0 - |   |   |   | (365,147 | ) |
| Other income (expense)                                                                  |   |   | 10,855 |   |   |   | (1,056 | ) |   |   | 10,855 |   |
| Bad debt                                                                                |   |   | - 0 - |   |   |   | (281,163 | ) |   |   | - 0 - |   |
| Total Other Income (Expenses)                                                           |   |   | (676,199 | ) |   |   | (1,508,106 | ) |   |   | (676,199 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from exploration stage, before income taxes                                        |   |   | (6,701,498 | ) |   |   | (6,215,745 | ) |   |   | (6,701,498 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision (benefit) for income taxes                                                    |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss from Exploration Stage                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Before Discontinued Operations                                                          |   |   | (6,701,498 | ) |   |   | (6,215,745 | ) |   |   | (6,701,498 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) from discontinued operations                                          |   |   | (64,674 | ) |   |   | 795,350 |   |   |   | (64,674 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss from exploration stage after discontinued operations                           |   |   | (6,766,172 | ) |   |   | (5,420,395 | ) |   |   | (6,766,172 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss attributable to the noncontrolling interest                                    |   |   | (28 | ) |   |   | - 0 - |   |   |   | (28 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss Attributable to Applied Minerals, Inc.                                         |   | $ | (6,766,200 | ) |   | $ | (5,420,395 | ) |   | $ | (6,766,200 | ) |
|                                                                                    |   |
| The accompanying notes are an integral part of these consolidated financial statements. |   |

----

| APPLIED MINERALS, INC. AND SUBSIDIARY                                                   |   |
|-----------------------------------------------------------------------------------------|--------|
| (Formerly Atlas Mining Company and Subsidiary)                                          |   |
| (An Exploration Stage Company)                                                          |   |
| Consolidated Statements of Operations and Comprehensive Loss (Continued)                |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   | For the year ended |   |
|                                                                                    |   | December 31, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |
|                                                                                    |   |   |   |   |   |   |
| Earnings Per Share Information (Basic and Diluted):                                     |   |   |   |   |   |   |
| Net loss per share before discontinued operations                                       |   |   |   |   |   |   |
| attributable to Applied Minerals, Inc. common                                           |   |   |   |   |   |   |
| shareholders                                                                            |   | $ | (0.11 | ) |   | $ | (0.11 | ) |
| Discontinued operations attributable to Applied                                         |   |   |   |   |   |   |   |   |
| Minerals, Inc. common shareholders                                                      |   |   | - 0 - |   |   |   | 0.01 |   |
| Net Loss Per Share Attributable to Applied Minerals, Inc.                               |   |   |   |   |   |   |   |   |
| common shareholders                                                                     |   | $ | (0.11 | ) |   | $ | (0.10 | ) |
| Weighted Average Shares Outstanding, basic and diluted                                  |   |   | 60,665,785 |   |   |   | 56,340,783 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these consolidated financial statements. |   |

----

| APPLIED MINERALS, INC. AND SUBSIDIARY                                                   |   |                           |
|-----------------------------------------------------------------------------------------|--------|--------------------------------|
| (Formerly Atlas Mining Company and Subsidiary)                                          |   |                           |
| (An Exploration Stage Company)                                                          |   |                           |
| Consolidated Statements of Operations and Comprehensive Loss                            |   |                           |
|                                                                                    |   |                           |   |   |   |   |   |   |
|                                                                                    |   |                           |   |   | For the Period |
|                                                                                    |   |                           |   |   | January 1, 2009 |
|                                                                                    |   |                           |   |   | (Beginning of |
|                                                                                    |   |                           |   |   | Exploration Stage) |
|                                                                                    |   | For the year endedDecember 31, |   |   | ThroughDecember 31, |
|                                                                                    |   | 2009                           |   |   | 2008 |   |   | 2009 |
|                                                                                    |   |                           |   |   |   |   |   |   |
| Net Loss                                                                                |   | $                              | (6,766,200 | ) |   | $ | (5,420,395 | ) |   | $ | (6,766,200 | ) |
|                                                                                    |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive Gain:                                                                     |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Change in Market Value of Investments                                                   |   |                           | 139 |   |   |   | 540 |   |   |   | 139 |   |
|                                                                                    |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net Comprehensive Loss                                                                  |   | $                              | (6,766,061 | ) |   | $ | (5,419,855 | ) |   | $ | (6,766,061 | ) |
|                                                                                    |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these consolidated financial statements. |

----

| APPLIED MINERALS, INC. AND SUBSIDIARY                                                   |   |
|-----------------------------------------------------------------------------------------|--------|
| (Formerly Atlas Mining Company and Subsidiary)                                          |   |
| (An Exploration Stage Company)                                                          |   |
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY                                   |   |
| For the years ended December 31, 2009 and 2008                                     |   |
|                                                                                    |   | Common Stock |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                    |   | Shares |   |   | Amount |   |   | Additional Paid In Capital |   |   | Accumulated Deficit Prior to Exploration Stage |   |   | Accumulated Deficit During Exploration Stage |   |   | Other Comprehensive Income (Loss) |   |   | Non-Controlling Interest |   |   | Total Stockholders’ Equity |   |
| Beginning Balance,                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 1, 2008                                                                         |   |   | 54,173,594 |   |   | $ | 54,174 |   |   | $ |   19,053,937 |   |   | $ | (14,589,101 | ) |   | $ |   - 0 - |   |   | $ | (2,006 | ) |   | $ |   52,415 |   |   | $ | 4,569,419 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                    |   |   | 4,833,333 |   |   |   | 4,833 |   |   |   | 2,495,167 |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 2,500,000 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for directors fees                                                        |   |   |  208,701 |   |   |   |  209 |   |   |   |  119,791 |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  120,000 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employee stock-based                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                                                                            |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 427,432 |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 427,432 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net change in unrealized gain                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| on available for sale                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                                                                              |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 540 |   |   |   | - 0 - |   |   |   | 540 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | (5,420,395 | ) |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | (5,420,395 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                                                              |   |   | 59,215,628 |   |   |   | 59,216 |   |   |   | 22,096,327 |   |   |   | (20,009,496 | ) |   |   | - 0 - |   |   |   | (1,466 | ) |   |   |  52,415 |   |   |   | 2,196,996 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for directors fees                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                    |   |   |  78,497 |   |   |   |  78 |   |   |   |  17,172 |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  17,250 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock for conversion of debt including accrued interest              |   |   |  10,487,226 |   |   |   |  10,487 |   |   |   |  4,085,434 |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  - 0 - |   |   |   |  4,095,921 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of convertible debt                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| discount                                                                                |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 365,341 |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 365,341 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of stock options and warrants issued to consultants and directors            |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 401,234 |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 401,234 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net change in unrealized gain                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| on available for sale                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                                                                              |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | 139 |   |   |   | - 0 - |   |   |   | 139 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in non-controlling interest                                                      |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | (77 | ) |   |   | (77 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |   |   | (6,766,200 | ) |   |   | - 0 - |   |   |   | - 0 - |   |   |   | (6,766,200 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                              |   |   | 69,781,351 |   |   | $ | 69,781 |   |   | $ |   26,965,508 |   |   | $ | (20,009,496 | ) |   | $ | (6,766,200 | ) |   | $ | (1,327 | ) |   | $ |   52,339 |   |   | $ | 310,604 |   |
|                                                                                    |
| The accompanying notes are an integral part of these consolidated financial statements. |

----

| APPLIED MINERALS, INC. AND SUBSIDIARY                                                   |   |
|-----------------------------------------------------------------------------------------|--------|
| (Formerly Atlas Mining Company and Subsidiary)                                          |   |
| (An Exploration Stage Company)                                                          |   |
| Consolidated Statements of Cash Flows                                                   |   |
|                                                                                    |   |   |   |   | For the Period |   |
|                                                                                    |   |   |   |   | January 1, 2009 |   |
|                                                                                    |   |   |   |   | (Beginning of |   |
|                                                                                    |   |   |   |   | Exploration |   |
|                                                                                    |   |   |   |   | Stage) |   |
|                                                                                    |   | For the year ended |   |   | through |   |
|                                                                                    |   | December 31, |   |   | December 31, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |   | 2009 |   |
| Cash flows from operating activities:                                                   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                |   | $ | (6,766,200 | ) |   | $ | (5,420,395 | ) |   | $ | (6,766,200 | ) |
| Adjustments to reconcile net loss to                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| net cash used in operations:                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                            |   |   | 123,733 |   |   |   | 435,622 |   |   |   | 123,733 |   |
| Amortization of discount – PIK Notes                                              |   |   | 365,341 |   |   |   | - 0 - |   |   |   | 365,341 |   |
| Issuance of PIK Notes in payment of interest                                            |   |   | 282,587 |   |   |   | - 0 - |   |   |   | 282,587 |   |
| Stock issued for director services                                                      |   |   | 17,250 |   |   |   | 120,000 |   |   |   | 17,250 |   |
| Fair value of warrants and options issued to consultants and directors                  |   |   | 401,234 |   |   |   | 427,432 |   |   |   | 401, 234 |   |
| (Gain) loss on revaluation of stock awards                                              |   |   | 150,500 |   |   |   | (227,500 | ) |   |   | 150,500 |   |
| (Gain) loss on disposition of equipment                                                 |   |   | (410 | ) |   |   | 232,392 |   |   |   | (410 | ) |
| Loss on impairment of assets                                                            |   |   | 42,042 |   |   |   | - 0 - |   |   |   | 42,042 |   |
| Change in operating assets and liabilities:                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| (Increase) Decrease in:                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                     |   |   | 44 |   |   |   | (44 | ) |   |   | 44 |   |
| Accounts receivable – related party                                               |   |   | - 0 - |   |   |   | 1,618 |   |   |   | - 0 - |   |
| Deposits and prepaids                                                                   |   |   | 136,764 |   |   |   | 49,319 |   |   |   | 136,764 |   |
| Increase (Decrease) in:                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable and accrued expenses                                                   |   |   | 305,656 |   |   |   | 146,333 |   |   |   | 305,656 |   |
| Net cash used by discontinued operations                                                |   |   | 486,680 |   |   |   | 538,387 |   |   |   | 486,680 |   |
| Net cash used in operating activities                                                   |   |   | (4,454,779 | ) |   |   | (3,696,836 | ) |   |   | (4,454,779 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchases of land improvements                                                          |   |   | (2,194 | ) |   |   | - 0 - |   |   |   | (2,194 | ) |
| Purchases of equipment and vehicles                                                     |   |   | (122,580 | ) |   |   | - 0 - |   |   |   | (122,580 | ) |
| Net cash provided by discontinued operations                                            |   |   | 432,170 |   |   |   | 98,423 |   |   |   | 432,170 |   |
| Net cash provided by used in investing activities                                       |   |   | 307,396 |   |   |   | 98,423 |   |   |   | 307,396 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Payments on notes payable                                                               |   |   | (167,203 | ) |   |   | (131,040 | ) |   |   | (167,203 | ) |
| Payments on leases payable                                                              |   |   | (121,247 | ) |   |   | (35,555 | ) |   |   | (121,247 | ) |
| Proceeds from notes payable                                                             |   |   | 124,129 |   |   |   | 161,989 |   |   |   | 124,129 |   |
| Proceeds from PIK notes payable                                                         |   |   | 5,050,000 |   |   |   | 1,000,000 |   |   |   | 5,050,000 |   |
| Proceeds from issuance of common stock                                                  |   |   | - 0 - |   |   |   | 2,500,000 |   |   |   | - 0 - |   |
| Net cash used by discontinued operations                                                |   |   | (56,431 | ) |   |   | (204,604 | ) |   |   | (56,431 | ) |
| Net cash provided by financing activities                                               |   |   | 4,829,248 |   |   |   | 3,290,793 |   |   |   | 4,829,248 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash                                                         |   |   | 681,865 |   |   |   | (307,620 | ) |   |   | 681,865 |   |
| Cash and cash equivalents at beginning of period                                        |   |   | 903,001 |   |   |   | 1,210,621 |   |   |   | 903,001 |   |
| Cash and cash equivalents at end of period                                              |   | $ | 1,584,866 |   |   | $ | 903,001 |   |   | $ | 1,584,866 |   |
| The accompanying notes are an integral part of these consolidated financial statements. |   |

----

| APPLIED MINERALS, INC. AND SUBSIDIARY                                                   |   |
|-----------------------------------------------------------------------------------------|--------|
| (Formerly Atlas Mining Company and Subsidiary)                                          |   |
| (An Exploration Stage Company)                                                          |   |
| Consolidated Statements of Cash Flows                                                   |   |
| (continued)                                                                             |   |
|                                                                                    |   |   |   |   | For the Period |   |
|                                                                                    |   |   |   |   | January 1, 2009 |   |
|                                                                                    |   |   |   |   | (Beginning of |   |
|                                                                                    |   |   |   |   | Exploration |   |
|                                                                                    |   |   |   |   | Stage) |   |
|                                                                                    |   | For the year ended |   |   | through |   |
|                                                                                    |   | December 31, |   |   | December 31, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |   | 2009 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Cash Paid For:                                                                          |   |   |   |   |   |   |   |   |   |
| Interest                                                                                |   | $ | 17,587 |   |   | $ | 63,743 |   |   | $ | 17,587 |   |
| Income Taxes                                                                            |   | $ | - 0 - |   |   | $ | - 0 - |   |   | $ | - 0 - |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental Disclosure of Non-Cash Investing and Financing Activities:                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion of debt and accrued interest to common stock                                 |   | $ | 4,095,921 |   |   | $ | - 0 - |   |   | $ | 4,095,921 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these consolidated financial statements. |   |

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|                                    | Estimated         |
|-----------------------------------------|-------------------|
|                                    | Useful Life       |
| Building                                | 30 years          |
| Mining equipment                        | 2 – 7 years |
| Office and shop furniture and equipment | 3 – 7 years |
| Vehicles                                | 5 years           |

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|                                      |   | December 31, |           |
|-------------------------------------------|--------|--------------|----------------|
|                                      |   | 2009         |           |   | 2008 |   |
| Accounts receivable                       |   | $            | - 0 -          |   |   | $ | 336,237 |   |
| Mining supplies                           |   |         | - 0 -          |   |   |   | 40,544 |   |
| Property and equipment                    |   |         | 878,003        |   |   |   | 1,495,796 |   |
| Total assets from discontinued operations |   | $            |   878,003 |   |   | $ |   1,872,577 |   |

|                                           |   | December 31, |         |
|------------------------------------------------|--------|--------------|--------------|
|                                           |   | 2009         |         |   | 2008 |   |
| Accounts payable and accrued liabilities       |   | $            |   7,650 |   |   | $ |   105,468 |   |
| Leases payable                                 |   |         | 90,756       |   |   |   | 133,660 |   |
| Total liabilities from discontinued operations |   | $            | 98,406       |   |   | $ | 239,128 |   |

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|                                           |   | Year ended December 31, |     |
|------------------------------------------------|--------|-------------------------|----------|
|                                           |   | 2009                    |     |   | 2008 |   |
| Revenues from discontinued operations          |   | $                       | - 0 -    |   |   | $ | 3,833,460 |   |
| Cost of goods sold                             |   |                    | - 0 -    |   |   |   | (2,520,693 | ) |
| General and administrative expenses            |   |                    | (36,354  | ) |   |   | (140,243 | ) |
| Collection of previously recorded bad debt     |   |                    | 202,365  |   |   |   | - 0 - |   |
| Loss on disposal of assets                     |   |                    | (148,138 | ) |   |   | (232,392 | ) |
| Loss on impairment of assets                   |   |                    | (82,547  | ) |   |   | (144,782 | ) |
| Income (loss) from discontinued operations     |   |                    | (64,674  | ) |   |   | 795,350 |   |
| Income tax liability                           |   |                    | - 0 -    |   |   |   | - 0 - |   |
| Net income (loss) from discontinued operations |   | $                       | (64,674  | ) |   | $ |   795,350 |   |

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| 2010                                           |   | $      | 61,800  |   |
|------------------------------------------------|--------|--------|---------|--------|
| 2011                                           |   |   | 61,800  |   |
| 2012                                           |   |   | 11,591  |   |
| Total Minimum Lease Payments                   |   |   | 135,191 |   |
| Less:  Amount Representing Interest  |   |   | (21,329 | )      |
| Present Value of Net Minimum Lease Payments    |   |   | 113,862 |   |
| Amount attributable to discontinued operations |   |   | (75,340 | )      |
| Current Net Minimum Lease Payments             |   |   | (15,690 | )      |
| Long-Term Net Minimum Lease Payments           |   | $      | 22,832  |   |

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|                                      |   | December 31, |    |
|-------------------------------------------|--------|--------------|---------|
| Classes of Property                       |   | 2009         |    |   | 2008 |   |
| Milling Equipment                         |   | $            | 95,362  |   |   | $ | 286,088 |   |
| Less:  Accumulated Depreciation |   |         | (37,879 | ) |   |   | (78,333 | ) |
| Total assets under capital lease          |   | $            | 57,483  |   |   | $ | 207,755 |   |

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|                                  |   | Net Loss    |       |   | Shares        |   |             | Per-Share |   |
|---------------------------------------|--------|-------------|------------|--------|---------------|--------|------------------|-----------|--------|
|                                  |   | (Numerator) |       |   | (Denominator) |   |             | Amount    |   |
|                                  |   |        |       |   |          |   |             |      |   |
| For the year ended December 31, 2009: |   |        |       |   |          |   |             |      |   |
| Basic EPS                             |   |        |       |   |          |   |             |      |   |
| Net loss to common shareholders       |   | $           | (6,766,200 | )      |          |   |  60,665,785 |      |   | $ | (0.11 | ) |
|                                  |   |        |       |   |          |   |             |      |   |   |   |   |
| For the year ended December 31, 2008: |   |        |       |   |          |   |             |      |   |   |   |   |
| Basic EPS                             |   |        |       |   |          |   |             |      |   |   |   |   |
| Net loss to common shareholders       |   | $           | (5,420,395 | )      |          |   | 56,340,783       |      |   | $ | (0.10 | ) |

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|                               |   | 2009   |    |   | 2008           |   |
|------------------------------------|--------|--------|---------|--------|----------------|--------|
|                               |   |   |    |   | Weighted       |   |   |   |   |   | Weighted |   |
|                               |   |   |    |   | Average        |   |   |   |   |   | Average |   |
|                               |   | Shares |    |   | Exercise Price |   |   | Shares |   |   | Exercise Price |   |
|                               |   |   |    |   |           |   |   |   |   |   |   |   |
| Outstanding at beginning of period |   |   | - 0 -   |   |           | $      | - 0 - |   |   |   | - 0 - |   |   | $ | - 0 - |   |
| Issued                             |   |   | 260,000 |   |           | $      | 0.75 |   |   |   | - 0 - |   |   |   | - 0 - |   |
| Exercised                          |   |   | - 0 -   |   |           |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |
| Forfeited                          |   |   | - 0 -   |   |           |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |
| Expired                            |   |   | - 0 -   |   |           |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |
| Outstanding at end of period       |   |   | 260,000 |   |           | $      | 0.75 |   |   |   | - 0 - |   |   | $ | - 0 - |   |
| Exercisable at end of period       |   |   | 235,000 |   |           | $      | 0.79 |   |   |   | - 0 - |   |   | $ | - 0 - |   |

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|     |   |   | Warrants Outstanding |   |             | Warrants Exercisable |           |
|----------|--------|--------|----------------------|--------|------------------|----------------------|----------------|
|     |   |   |                 |   | Weighted Average |                 | Weighted       |   |   |   |   |   | Weighted |   |
| Exercise |   |   | Number               |   | Remaining        |                 | Average        |   |   | Number |   |   | Average |   |
| Price    |   |   | Outstanding          |   | Contractual Life |                 | Exercise Price |   |   | Exercisable |   |   | Exercise Price |   |
| $        | 0.35   |   |                 |   | 100,000          |                 | 4.25 years     |   | $ | 0.35 |   |   |   | 75,000 |   |   | $ | 0.35 |   |
| $        | 1.00   |   |                 |   | 160,000          |                 | 4.75 years     |   | $ | 1.00 |   |   |   | 160,000 |   |   | $ | 1.00 |   |
|     |   |   |                 |   | 260,000          |                 |           |   |   |   |   |   |   | 235,000 |   |   |   |   |   |

|   |                    | 2009              | 2008            |
|--------|-------------------------|-------------------|-----------------|
|   | Dividend Yield          | 0%                | 0%              |
|   | Expected Life           | 1 – 5 years | 5 years         |
|   | Expected Volatility     | 100%              | 39.65% - 86.91% |
|   | Risk-Free Interest Rate | 1.68%             | 3.44%           |

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|   |                    | 2009              | 2008            |
|--------|-------------------------|-------------------|-----------------|
|   | Dividend Yield          | 0%                | 0%              |
|   | Expected Life           | 1 – 5 years | 5 years         |
|   | Expected Volatility     | 100%              | 39.65% - 86.91% |
|   | Risk-Free Interest Rate | 1.68%             | 3.44%           |

|                               |   | December 31, 2009 |      |   | December 31, 2008 |   |
|------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|
|                               |   |              |      |   | Weighted          |   |   |   |   |   | Weighted |   |
|                               |   |              |      |   | Average           |   |   |   |   |   | Average |   |
|                               |   | Shares            |      |   | Exercise Price    |   |   | Shares |   |   | Exercise Price |   |
|                               |   |              |      |   |              |   |   |   |   |   |   |   |
| Outstanding at beginning of period |   |              | 625,000   |   |              | $      | 0.70 |   |   |   | 2,688,577 |   |   | $ | 0.70 |   |
| Granted                            |   |              | 6,908,277 |   |              |   | 0.70 |   |   |   | 625,000 |   |   |   | 2.61 |   |
| Exercised                          |   |              | - 0 -     |   |              |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |
| Forfeited                          |   |              | - 0 -     |   |              |   | - 0 - |   |   |   | (2,688,577 | ) |   |   | 0.66 |   |
| Expired                            |   |              | - 0 -     |   |              |   | - 0 - |   |   |   | - 0 - |   |   |   | - 0 - |   |
| Outstanding at end of period       |   |              | 7,533,277 |   |              | $      | 0.70 |   |   |   | 625,000 |   |   | $ | 0.70 |   |
| Exercisable at end of period       |   |              | 2,975,675 |   |              | $      | 0.70 |   |   |   | 258,334 |   |   | $ | 0.70 |   |

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|           |         |   | Options Outstanding |   |         | Options Exercisable |            |
|----------------|--------------|--------|---------------------|--------|--------------|---------------------|-----------------|
|           |         |   |                |   | Weighted     |                |            |   |   |   |   |   |   |   |
|           |         |   |                |   | Average      |                | Weighted        |   |   |   |   |   | Weighted |   |
|           |         |   |                |   | Remaining    |                | Average         |   |   |   |   |   | Average |   |
| Range of       |         |   | Number              |   | Contractual  |                | Exercise        |   |   | Number |   |   | Exercise |   |
| Exercise Price |         |   | Outstanding         |   | Life         |                | Price           |   |   | Exercisable |   |   | Price |   |
| $              | 0.65 - $0.71 |   |                |   |  75,000 |                |  3.5 years |   | $ |  0.69 |   |   |   |  75,000 |   |   | $ |  0.69 |   |
| $              | 0.70         |   |                |   | 7,358,277    |                | 3.5 years       |   | $ | 0.70 |   |   |   | 2,875,676 |   |   | $ | 0.70 |   |
| $              | 0.90         |   |                |   | 100,000      |                | 4.75 years      |   | $ | 0.90 |   |   |   | 24,999 |   |   | $ | 0.90 |   |
|           |         |   |                |   | 7,533,277    |                |            |   |   |   |   |   |   | 2,975,675 |   |   |   |   |   |

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| ·   | Level 1 – Valuations based on quoted prices in active markets for identical assets.  Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly.  Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

|                                    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
|-----------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
|                                    |   |    |   |   |    |   |   |    |   |   |   |   |
| Investment security, available for sale |   | $       | 5,565  |   |    | $      | - 0 -  |    |   | $      | - 0 -  |   |   | $ | 5,565 |   |
|                                    |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Total                                   |   | $       | 5,565  |   |    | $      | - 0 -  |    |   | $      | - 0 -  |   |   | $ | 5,565 |   |

|                                    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
|-----------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
|                                    |   |    |   |   |    |   |   |    |   |   |   |   |
| Investment security, available for sale |   | $       | 5,426  |   |    | $      | - 0 -  |    |   | $      | - 0 -  |   |   | $ | 5,426 |   |
|                                    |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Total                                   |   | $       | 5,426  |   |    | $      | - 0 -  |    |   | $      | - 0 -  |   |   | $ | 5,426 |   |

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|                                |   |   |   |
|-------------------------------------|--------|--------|--------|
|                                |   | 2009   |   |   | 2008 |   |
| Unrealized Losses                   |   |   |   |   |   |   |
| Gross accumulated unrealized losses |   | $      | (1,327 | ) |   | $ | (1,466 | ) |
| Adjustment from deferred tax assets |   |   | - 0 -  |   |   |   | - 0 - |   |
| Net accumulated unrealized losses   |   | $      | (1,327 | ) |   | $ | (1,466 | ) |

|                          |   | 2009    |       |   | 2008   |    |
|-------------------------------|--------|---------|------------|--------|--------|---------|
| Expected federal tax benefit  |   | $       | (2,368,170 | )      |   | $       | (1,746,359 | ) |
| State and local taxes         |   |    | (852,541   | )      |   |    | (965,487 | ) |
| Non-deductible expenses       |   |    | 1,014,879  |   |   |    | 199,932 |   |
| Change in valuation allowance |   |    | 3,220,711  |   |   |    | 2,661,949 |   |
| Income tax expense            |   |  $ | - 0 -      |   |   |  $ | - 0 - |   |

|                             |   | 2009   |       |   | 2008   |   |
|----------------------------------|--------|--------|------------|--------|--------|--------|
| Net operating loss carryforwards |   | $      | (9,204,020 | )      |   | $      | (5,983,309 | ) |
| Total gross deferred tax assets  |   |   | 9,204,020  |   |   |   | 5,983,309 |   |
| Valuation allowance              |   |   | (9,204,020 | )      |   |   | (5,983,309 | ) |
| Net deferred tax assets          |   | $      | - 0 -      |   |   | $      | - 0 - |   |

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|                                      | 2009    |   | 2008     |
|-------------------------------------------|---------|--------|----------|
| Statutory regular federal income tax rate | 35%     |   | 35%      |
| Statutory regular state income tax rate   | 12.6%   |   | 19.35%   |
| Change in valuation allowance             | (47.6%) |   | (53.35%) |
| Total                                     | 0%      |   | 0%       |

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| 1.   | The Company making available to NaturalNano a portion of its supply of unprocessed clay at the Dragon Mine, and; |
|----------------|------------------------------------------------------------------------------------------------------------------|

| 2.   | A commitment by NaturalNano to process the clay at its expense, including an agreement by NaturalNano to provide, at its expenses, technical, financial and operating support to provide a particle separation and sizing process at the Dragon Mine site. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |   | APPLIED MINERALS, INC.          |   |
|--------|--------|---------------------------------|--------|
|   |   |                            |   |
|   | By:    | /s/ ANDRE ZEITOUN               |   |
|   |   | Andre Zeitoun                   |   |
|   |   | Chief Executive Officer         |   |
|   |   |                            |   |
|   | By:    | /s/ CHRISTOPHER T. CARNEY       |   |
|   |   | Christopher T. Carney           |   |
|   |   | Interim Chief Financial Officer |   |

| Signature       | Title    | Date           |
|-----------------|----------|----------------|
|            |     |           |
| JOHN F. LEVY    | Director | March 29, 2010 |
| John F. Levy    |     |           |
|            |     |           |
| DAVID TAFT      | Director | March 29, 2010 |
| David Taft      |     |           |
|            |     |           |
| MORRIS D. WEISS | Director | March 29, 2010 |
| Morris D. Weiss |     |           |
|            |     |           |
| ANDRE ZEITOUN   | Director | March 29, 2010 |
| Andre Zeitoun   |     |           |
|            |     |           |
| EVAN STONE      | Director | March 29, 2010 |
| Evan Stone      |     |           |

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