U.S. Energy Corp. and Crested Corp. Announce Joint Venture Partner for Exploration and Development of Sutter Gold's Gold Concession in Mexico
Tuesday April 3, 9:30 am ET


RIVERTON, Wyoming, April 3 /PRNewswire-FirstCall/ -- U.S. Energy Corp. (USE) (Nasdaq: USEG - News) and Crested Corp. (OTC Bulletin Board: CBAG - News), natural resource exploration and development Companies, announce that their subsidiary, Sutter Gold Mining Inc. (TSX Venture: SGM - News), has signed a Letter of Intent (LOI) with PREMIER GOLD MINES LIMITED (TSX: PG - News) to jointly explore Sutter's Santa Teresa mineral concession located in the historic and high grade El Alamo Mineral District of Baja California Norte, Mexico. The Sutter concession is located in the heart of the gold district which was the subject of the El Alamo Gold Rush of 1888. It is located some 100 kilometers southeast of Ensenada, Mexico and about 250 kilometers from San Diego, California, USA.
The proposed joint venture (JV) with Premier provides the funding for immediate exploration of the project. The Santa Teresa Concession (STC) compliments both Premier's and Sutter's business plans to explore high-grade gold properties as it:


    *  Is located within a proven (some 220,000 ounces of past production)
       gold district;
    *  District has historic mined grades of between 1.00 and 2.00 ounces
       per ton (opt);
    *  District was only mined within a 120 meters of the surface, but is
       believed to remain open at depth; and
    *  Has geologic characteristics similar to the prolific Mother Lode Gold
       District of California.

The STC is located adjacent to and on strike from the past-producing Princessa Mine (the district's largest gold producer) whose ore body was known to extend close to the STC boundary. The El Alamo District's production halted at its peak owing to adverse technological and political circumstances early in the 20th century, thus presenting a unique opportunity to the JV today. The mineralization in the district is characterized by common visible gold hosted within narrow and near vertical quartz veins associated with a "basin and range" tectonic history.

"The combination of Premier's experience in the Red Lake District of NW Ontario and Sutter's experience in the Mother Lode District of California makes this JV well-suited to exploring the high grade gold potential of the El Alamo District, Hal Herron, President and CEO of Sutter, stated. "We are very excited to partner with a company that also sees this potential."

"In my opinion, the El Alamo District holds great potential for the development of a high grade resource. I am pleased to be associated with an industry-respected exploration and development company like Premier. The experience of Messrs. Ewan Downie (CEO) and Steve McGibbon (COO) in conjunction with the Sutter geologic staff significantly enhances the ability of this JV to successfully develop this project. Mr. Downie was part of the exploration team that received the Prospector & Developers Association of Canada 2003 Bill Dennis Prospector of the Year Award as well as being named The Developer of the Year by the Northwestern Ontario Prospectors Association. Mr. McGibbon is a professional geologist that formerly served as Exploration Manager for Goldcorp Inc. at the Red Lake Mine when the "high grade zone" was discovered, which was the highest grade underground gold deposit discovered in Canada in the last 20 years."

Keith Larsen, CEO of USE said, "We are pleased that the professional staff at Premier Gold has elected to joint venture the El Alamo project with Sutter Gold. The synergies between the two groups will ensure a professional and detailed work plan for the expansion and exploration of the El Alamo project."


    Premier will earn an initial 50% interest in the project by:

    *  Making a payment of 100,000 shares of Premier common shares to SGMI;
    *  Completing US$1.5 million in exploration and property acquisitions
       within two years, including US$1 million within one year of signing the
       JV agreement: and
    *  Over a four-year period, reimbursing Sutter for the approximate
       US$225,000 it will pay to the original vendor of the property.

In addition, Sutter has granted Premier the potential to earn an additional 15% interest in the JV (for a total of 65%) by making a further cash payment of $500,000 to Sutter and conducting an additional US$4.0 million in exploration work. Sutter will be the initial operator, but Premier can take over as operator once it secures a greater than 50% interest.

The parties expect to negotiate detailed terms of, and execute, a joint venture agreement in the immediate future.