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U.S. Energy Corp. And Uranium Power Corp. Announce New Joint Venture Project

Posted on: Friday, 28 October 2005, 12:00 CDT

RIVERTON, Wyo., Oct. 28 /PRNewswire-FirstCall/ -- U.S. Energy Corp. and Uranium Power Corp. (TSX-V: UPC) are pleased to announce the addition of a new project to their existing joint venture portfolio. The new project, Burro Canyon, is located in San Miguel County, CO, in the Slick Rock Mining District, at the southern end of the highly productive Uravan Belt. As with the previously announced Sheep Mountain and Breccia Pipes projects, the Burro Canyon project will be a 50:50 joint venture, with UPC funding the first $500,000 of acquisition and exploration expenditures.

The project consists of 143 unpatented lode mining claims on BLM land, for a total of approximately 2900 acres.

The structural setting of the area is a syncline that strikes southeast to northwest and plunges to the southeast. Outcroppings of Morrison Formation sandstones and mudstones, Dakota Formation sandstones and Mancos Shale sediments wrap around the northwest nose of the syncline.

Immediately adjacent to the property on the northeast is the Sunday Mine complex, currently owned by International Uranium Corp. This area has produced about 1.5 million pounds of uranium and about 10.0 million pounds of vanadium. Published reports suggest that an additional resource of 4.0 million pounds U3O8 may be located at the Sunday Mine Group. Immediately adjacent, and to the southwest, the Burro mine has produced over 1.0 million pounds U3O8 and 8.0 million pounds V2O5. Neither of these mines is in production presently.

In detail the targets are deposits located in the fluvial sediments towards the center of the syncline occurring between the known producers. These targets are confined to the Salt Wash Member of the Morrison Formation.

The joint venture partners are planning an aggressive exploration program. This will consist of data compilation, geological review, and field mapping, followed by a drilling program.

Mark Larsen, President of USEG, commented, "U.S. Energy and UPC are positioning themselves to become the next U.S. uranium producers with their aggressive uranium exploration programs. We expect positive results which will enhance the restart of U.S. Energy's uranium mill located in southern Utah. Uranium prices remain strong and are expected to continue to rise into the future and our efforts are focused on production as early as 2007."

ABOUT U.S. ENERGY CORP. AND CRESTED CORP.

U.S. Energy Corp. and its majority-owned subsidiary, Crested Corp., are engaged in a joint venture to conduct various business operations as USECC. Through their subsidiaries, Sutter Gold Mining Inc., Plateau Resources Limited., U.S. Moly Corp, U.S. Uranium Ltd. and USECC, they own various interests or properties prospective for gold, uranium, vanadium and molybdenum.

This news release includes statements which may constitute "forward-looking" statements, usually containing the words "believe,""estimate,""project,""expect," or similar expressions. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, future trends in mineral prices, the availability of capital, competitive factors, and other risks.

The profitable mining and processing of uranium and vanadium will depend on many factors: Obtaining properties in proximity to the Shootaring mill to keep transportation costs economic; delineation through extensive drilling and sampling of sufficient volumes of mineralized material, with sufficient grades, to make mining and processing economic over time; continued sustained high prices for uranium oxide and vanadium; obtaining the capital required to upgrade the Shootaring mill and add a vanadium circuit; and obtaining and continued compliance with operating permits.

The profitable mining and processing of gold will depend on many factors, including receipt of final permits and keeping in compliance with permit conditions; delineation through extensive drilling and sampling of sufficient volumes of mineralized material, with sufficient grades, to make mining and processing economic over time; continued sustained high prices for gold; and obtaining the capital required to initiate and sustain mining operations and build and operate a gold processing mill.

We have not yet obtained feasibility studies on any of our mineral properties. These studies would establish the economic viability, or not, of the different properties based on extensive drilling and sampling, the design and costs to build and operate gold and uranium/vanadium mills, the cost of capital, and other factors. Feasibility studies can take many months to complete. We have not established any reserves (economic deposits of mineralized materials) on any of our uranium/vanadium or gold properties, and future studies may indicate that some or all of the properties will not be economic to put into production. The molybdenum property is currently owned by Phelps Dodge Corporation who plan to return the properties to USECC in 2005. The properties have had extensive work conducted by prior owners to establish the deposits of molybdenum, mine planning and other ancillary activities. This data will have to be updated to determine the viability of starting mining operations. Obtaining mining and other permits to begin mining the molybdenum property may be very difficult, and, like any mining operation, capital requirements for a molybdenum mining operation will be substantial.

By making these forward-looking statements, the Companies undertake no obligation to update these statements for revision or changes after the date of this release.

U.S. Energy Corp.

CONTACT: Keith G. Larsen, CEO, or Mark Larsen, President, both of U.S.Energy Corp., +1-307-856-9271

Source: PRNewswire-FirstCall

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