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U.S. ENERGY/CRESTED -- KENNECOTT JOINT VENTURE ACQUIRES URANIUM MILL FROM UNOCAL

 U.S. ENERGY/CRESTED -- KENNECOTT JOINT VENTURE
 ACQUIRES URANIUM MILL FROM UNOCAL
 RIVERTON, Wyo., June 24 /PRNewswire/ -- U.S. Energy Corp. (NASDAQ/NMS: USEG) and Crested Corp. (NASDAQ: CBAG) announced that the Green Mountain Mining Venture (GMMV) has concluded an agreement with Union Oil Co. of California (UNOCAL) for the GMMV to acquire the state-of-the-art Sweetwater uranium mill of Minerals Exploration Co. (MEC) and related properties. The mill is located in the Red Desert of south-central Wyoming approximately 23 miles south of the GMMV's uranium deposits at Green Mountain. MEC is a wholly owned subsidiary of UNOCAL. The GMMV is a joint venture between U.S. Energy, its subsidiary Crested and Kennecott Uranium Co. of Salt Lake City (a subsidiary of Kennecott Corp., a wholly owned, indirect subsidiary of The RTZ Corp. PLC of London).
 MEC operated the Sweetwater Mill beginning in 1980, and it processed as much as 4,200 tons of uranium ore per day extracted from open pit mines near the facility. Following the collapse of uranium prices, MEC's operations at the mill were suspended in 1983. The plant has been maintained on standby since that time. It is one of the most modern uranium mills in the United States. The mill, tailings cell and related facilities were constructed at a cost exceeding $45 million.
 The GMMV's consideration for the Sweetwater Mill Property will primarily consist of the assumption of environmental liabilities, reclamation bonding obligations estimated at $16,314,000. UNOCAL and GMMV will allocate mill holding costs from Jan. 1, 1991 to closing, having as estimated total cost of about $1 million per year. UNOCAL has agreed to fund expenditures related to certain environmental liabilities that might occur prior to Jan. 1, 2001, with such funding (if any) to be recovered by UNOCAL from 20 percent of the cash flows generated by future commercial production of uranium concentrates.
 John L. Larsen, chief executive officer of U.S. Energy stated that, "Acquisition of the Sweetwater Mill will eliminate the GMMV's need to construct an expensive facility to process ore that will be extracted from the Green Mountain deposits, once uranium prices recover and mining operations are underway. To obtain permits and construct a similar facility would take in excess of six years in this regulatory environment, and the cost of construction would exceed $80 million. There were once 41 uranium mills built and operated in the U.S. and now according to industry sources, there may be only two domestic mills operating in the near future, one of which will be the Sweetwater Mill. We are extremely pleased to gain access to such a modern facility. It will play a critical role in the achievement of the GMMV's goal to become a low-cost producer of uranium concentrates. Two positive steps have recently been taken to revitalize the domestic uranium industry. These include the passage of different versions of a national energy law by both houses of Congress and a preliminary decision by the U.S. Department of Commerce to halt dumping of uranium on the domestic market by states of the former Soviet Union," he concluded.
 U.S. Energy and Crested are minerals exploration and development companies with interests in major uranium resources in south-central Wyoming. The companies also share a 90 percent interest in a gold prospect in California, hold royalty and other interests in a world- class molybdenum deposit in Colorado, and maintain interests in other base and precious metals properties.
 -0- 6/24/92
 /CONTACT: John L. Larsen or Daniel P. Svilar of U.S. Energy, 307-856-9271; or Art Bentley of UNOCAL, 213-977-6814/
 (USEG CBAG) CO: U.S. Energy Corp.; Crested Corp.; Kennecott Uranium Co.; Union
 Oil Co. of California; Minerals Exploration Co. ST: Wyoming IN: MNG SU: JVN


BB -- DV001 -- 3153 06/24/92 08:55 EDT
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Date:Jun 24, 1992
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