USE Form 8-K 9-7-05 USE & UPC
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (date of earliest event reported): September 7, 2005 (September 6,
2005)
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U.S.
ENERGY CORP.
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(Exact
Name of Company as Specified in its
Charter)
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Wyoming
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0-6814
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83-0205516
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(State
or other jurisdiction of
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(Commission
File No.)
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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Glen
L. Larsen Building
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877
North 8th
West
Riverton,
WY
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82501
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (307)
856-9271
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Not
Applicable
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Former
Name, Former Address or Former Fiscal Year,,
If
Changed From Last Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2):
o
Written
communications pursuant to Rule 425 under the Securities Act
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
Section
8 Other Event
Item
8.01. Other Event
U.S.
Energy Corp. (USEG) and Crested Corp. (Crested) d/b/a USECC and Uranium Power
Corp. (UPC) announce the acquisition of uranium properties in northern
Arizona.
Acquired
Properties
On
August
22, 2005, USECC and UPC signed an agreement to add another uranium project
(now
totaling 4) to their Joint Venture. The latest project involves properties
in
the Arizona Strip, in northern Arizona, as part of their on-going commitment
to
develop uranium properties under a pre-existing Joint Venture agreement. The
property, known as the Breccia Pipes Project, consists of 54 lode mining claims
(STAR and JAVA claims) on BLM land in Mohave and Coconino counties, Arizona.
The
exploration target on these properties is breccia pipe uranium
deposits.
These
properties were acquired by USECC pursuant to an agreement with Nu Star
Exploration, LLC. Under the terms of the agreement between USECC and UPC, UPC
will earn a 50% interest in the project by contributing the first $500,000
in
acquisition and exploration expenses for the project. Additionally, UPC agrees
to issue up to 500,000 common shares of UPC stock to USECC, subject to
regulations of the TSX Venture Exchange, within six (6) months of the date
drilling results outline an Inferred Mineral Resource on the Breccia Pipes
Project as follows: 1) 250,000 common shares for the first 500,000 lbs. of
contained U3O8
identified
and 2) an additional 250,000 common shares for the second 500,000 lbs. of
contained U3O8
identified.
The
Arizona Strip was the site of a major uranium staking rush in the early 1980’s.
Uranium-bearing breccia pipes were first located in the Hack Canyon area of
Mohave County and the mineralized material was typically of a higher grade
than
other uranium deposits located in surrounding areas of the Colorado Plateau.
Historic mining in the Arizona Strip had produced average uranium contents
of up
to 0.80% U3O8.
The
total production from individual mines in this district has ranged from about
1,000,000 lbs to 7,000,000 lbs U3O8.
The
STAR
claims are contiguous with the partially mined Arizona I mine. The area is
located within a short distance to the south of the Hack Canyon mining area.
Mapping on the STAR claims indicates the presence of 23 potential pipes, with
the potential for 4 additional targets on the JAVA claims.
The
Joint
Venture plans to explore these targets in the very near future. Airphoto mapping
and field reconnaissance have already been completed and permitting for a
stratigraphic drilling program has also been initiated with the BLM. A 30-40
hole program of shallow stratigraphic holes is planned to commence as soon
as
the permitting process is completed. A Phase 2 follow-up drilling program is
also planned to provide a deep test (maximum 2,000 feet in depth) of up to
four
pipes based on initial drilling results.
If
any of
the targets are developed to a mining stage, then the Shootaring Canyon Mill,
owned by USEG, would be the likely location for ore processing.
Sheep
Mountain Properties
Drilling
continues on the USECC-UPC Sheep Mountain project in Fremont County, Wyoming.
To
date, six holes have been completed and logged, for a total of 3,740
feet.
The
primary goal of this drilling program is to define the extension of previous
high grade intersections at stratigraphic horizons deeper than the currently
defined mineral horizons at the Sheep 1 and 2 mines. Hole SM16-1010 intersected
7.5 feet at an average grade of 0.13% U3O8.
This
intersection is at a depth of 527 feet, and is believed to be in the same roll
front system as the high grade intersections from earlier drilling. The
significance of the intersection is that it appears to demonstrate continuity
of
the roll front system. Hole SM16-1021 intersected a low grade zone at a depth
of
465 feet with a gamma signature that indicates proximity to, but at a location
ahead of, the nose of the roll front. Hole SM16-1023 intersected 3 feet of
8.03%
U3O8
at
92
feet. This encounter is thought to be an isolated pocket of mineralization
contained in a carbonaceous zone of limited extent which is not uncommon in
this
type of sandstone hosted deposit. Hole SM16-1009 intersected 6.5 feet of .11%
U3O8
at a
depth of 120 feet. Hole SM16-1023 intersected 15 feet of .09% U3O8
at a
depth of 19 feet and 5.5 feet of .06% U3O8
at a
depth of 56 feet. Hole SM16-1025 intersected 19 feet of .05% U3O8
at a
depth of 120 feet. These 3 holes may be indicative of potential for an open
pit
if further drilling identifies additional shallow mineralization. Results from
the drilling program will assist in the mapping of the overall extent of the
system, and in its full evaluation.
A
second
drill rig is expected to be added to the program within the next
week.
Other
USE Properties
On-going
acquisition and exploration activities by USECC have resulted in a current
property base in excess of 32,000 acres, in Wyoming, Utah, Colorado and Arizona.
All of these properties are actively being evaluated and currently comprise
11
separate projects. Future drilling is planned for all of these properties,
to
follow the Sheep Mountain and Breccia Pipe drilling programs in an orderly
manner. The overall objective of these programs is to provide an assured source
of mill feed for USEG’s Shoortaring Canyon Mill in Garfield County, Utah. USEG
is actively pursuing the amendments to the license for the mill, with a view
to
resuming production in a timely manner.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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U.S.
ENERGY CORP.
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Dated:
September 7, 2005
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By:
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/s/Mark
J. Larsen
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Mark
J. Larsen, President
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