UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


þ		ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2008


o		TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From To

Commission File Number: 001-01761

CHIEF CONSOLIDATED MINING COMPANY

(Name of small business issuer in its charter)


ARIZONA (State or Other Jurisdiction of Incorporation or Organization)		87-0122295 (I.R.S. Employer Identification No.)

15988 SILVER PASS ROAD, P.O. BOX 51, EUREKA, UTAH 84628
(Address of Principal Executive Offices) (Zip Code)

(435) 433-6606
(Issuer’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: Common Stock, par value $0.01 per share

Securities registered under Section 12(g) of the Exchange Act: N/A

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes þ No

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act o Yes þ No

Indicate by check mark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. o Yes No þ

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained to the best of registrant’s knowledge, in definitive proxy of information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Se the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o
(Do not check if a smaller reporting company)

Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes þ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $9,207,091.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of December 31, 2008:

Common Stock, par value $0.01 per share: 46,035,456

Convertible Common Stock, par value $0.01 per share: 6,477,242

DOCUMENTS INCORPORATED BY REFERENCE

Listed hereunder the following document if incorporated by reference and the part of the Form 10-K (e.g., part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424 (b) or (c) under the Securities Act of 1933. This listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). None.

PART I

Item 1. Business.

Chief Consolidated Mining Company was organized as an Arizona corporation in 1909. We own or control approximately 16,000 acres of patented mining land in the Tintic and East Tintic Mining Districts of Juab and Utah Counties in the State of Utah through our interest in Tintic Utah Metals, LLC, a Colorado limited liability company and our wholly-owned subsidiary Chief Gold Mines, Inc., a Delaware corporation. These mining lands include the Bergin Mine and Trixie Mine, neither of which is currently in production. Approximately 6,000 of these acres, however, are subject to being sold pursuant to a court approved Consent Decree entered into with the U.S. Environmental Protection Agency in 2005, as further described below.

Tintic Utah Metals, LLC

Tintic Utah Metals was organized in 1996 under the Colorado Limited Liability Company Act as a joint venture with KZ Utah, Inc., a subsidiary of Korea Zinc Co. Ltd., and Akiko Gold Resources Ltd for the development of the mining properties that we contributed to the joint venture (“Tintic Utah Metals Joint Venture”). Pursuant to the terms of the operating agreement, we transferred the mining rights to approximately 8,500 acres of our patented mining property in the East Tintic Mining District, including the Burgin Mine, to Tintic Utah in exchange for a 50% membership interest. Korea Zinc contributed $3,000,000 for a 25% membership interest. The funds from Korea Zinc were used for rehabilitation work, reserve confirmation and to produce information in connection with a potential feasibility study on the Burgin Mine. As a result of its failure to contribute the required capital to Tintic Utah, however, Akiko forfeited any rights of ownership in the joint venture and we succeeded to their 25% membership interest, increasing our ownership percentage of Tintic Utah to 75%.

The management of Tintic Utah is through a management committee with members appointed by us and KZ Utah. Voting is in proportion, however, to each member’s respective membership percentage interest. As such, we control the management committee and all business and budgetary decisions relating to Tintic Utah, including the exploration, development, mining and other operational activities of the joint venture. Korea Zinc has indicated that it does not intend to contribute any additional cash towards any potential restart of mining activities at the Burgin Mine.

Burgin Mine. As noted above, the Burgin Mine is not currently in production. We cannot commence mining operations at the mine unless we can dewater the mine and raise sufficient capital. We applied to Utah State Engineer ten years ago for permission to appropriate water from the Burgin Mine. That application is still pending. In 2000, a public hearing was held before the Utah State Engineer on our application for the appropriation of the saline waters located below the 1050 foot level of the Burgin Mine. At the hearing, several objectors to the application argued that the application should be denied on the grounds that the removal of the water from the Burgin Mine would interfere with their water rights in the Utah Lake. We presented expert testimony at the hearing to demonstrate that the Burgin geothermal system and the Utah Lake geothermal system are not connected and that removal of water from the Burgin Mine would have no effect upon Utah Lake. We have had discussion and negotiations with the objectors from time to time but have not reached a settlement.

If the Utah State Engineer approves our application, we can then begin negotiations with various potential partners with the intention of finding a method to finance the construction of a water treatment facility. The water treatment facility would be used as the means for disposing of the water pumped from the lower levels of the Burgin Mine enabling us to proceed with exploration, development and production programs. Once the Utah State Engineer issues a decision on the application we would have the right to appeal any adverse decision to a court. We are unable to predict whether an agreement with the objectors will be reached or when the Utah State Engineer will render its decision. Even if our application is approved and we reach an agreement with the objectors we may not be able to proceed with production at the Burgin Mine if we cannot raise sufficient capital.

If the water appropriation is not approved and we choose to recommence operations at the Burgin Mine, we believe there may be alternative methods to dewater the Burgin Mine. The Utah Division of Water Quality is holding an application previously filed by us for the underground injection of Burgin Mine water in abeyance until the water appropriation application is decided by the Utah State Engineer. Alternately, we may also be able to file for a temporary diversion to dewater the Burgin Mine.

If we decide to proceed with our mining business and we are able to resolve the dewatering process, we would then start a final feasibility study for the Bergin Mine. The feasibility study would define the mining methods to be employed, including among other things, pre-engineering design for pumping, defining the structural steel and cement requirements, determining the locations where deep wells will be drilled and the overall evaluation of the Burgin Mine’s main ore body.

In 2005, we commissioned a study on the further development and exploitation of our mining claims in the Tintic and East Tintic Mining Districts of Utah. The engineers who completed the study concluded that significant opportunities may exist and recommended a program of development to increase the value and enhance the prospects of viably operating four projects:

	•		Advancing the Burgin Mine extension deposit through to a feasibility study;

	•		Further development of the concept to sell potable water from a desalination plant fed by pumped water from the Burgin Mine;

	•		Investigation of the economic possibilities of producing and selling halloysite (and other) clays from the Zuma and other areas; and

	•		Continued investigation and development of other exploration targets in the claim block and adjacent areas.

Chief Gold Mines

Our wholly-owned subsidiary Chief Gold Mines was formed to enter into a transaction with South Standard Mining Company and to hold certain of our mining property in the East Tintic District of Utah. As a result of the merger in 1996 of South Standard Mining Company into Chief Gold Mines, Chief Gold Mines owns 2,200 acres of our patented mining properties, including the Trixie Mine.

Trixie Mine. The Trixie Mine is a fully permitted gold and silver mine located approximately 1.5 miles from Tintic Utah’s concentrating mill. The mill last processed gold and silver ores from the Trixie Mine in early 2002. From late 2001 until it closed in 2002, the Trixie Mine produced and the mill processed 7,808 tons of ore and produced approximately 4,460 ounces of gold. The concentrating mill has been idle since that time. Due to safety conditions at the Trixie Mine, we are not currently operating the mine, but are considering a plan to restart operations by first processing the dry stack tailings from 2001-02 located and stockpiled on the surface. In addition, we may be interested in various other options including, joint ventures or leasing or selling the mine.

EPA Settlement

During 2001, the EPA placed Eureka Mills Superfund Site on the National Priorities List, as authorized under the Comprehensive Environmental Response, Compensation and Liability Act of 1980. According to the EPA, samples indicate that approximately 150 acres of soil in the Town of Eureka were contaminated with lead and, to a lesser extent, arsenic. In 2002, the EPA finalized its actions to be taken in response to the release of waste materials at and around the site. The EPA is seeking reimbursement from us for Chief’s portion of the liability based on the ownership and the conduct of mining operations on portions of the site.

In February 2005, we consented to a judgment with the EPA in the amount of $60 million to settle our exposure to the clean-up costs (“Consent Decree”), which was approved by the court. The judgment will remain in effect until we have complied with all the requirements of the Consent Decree. The following outlines our material obligations under the Consent Decree:

	•		We agreed to use our best efforts to satisfy the judgment by seeking indemnification or recovery from insurance policies. After deducting recovery costs, 70% of all proceeds from insurance policies will be paid to the United States. Until all claims are exhausted, we must provide an annual report for five years listing insurance claims, the action taken to recover the amounts, and any recovery obtained.

	•		We agreed to use our best efforts to sell property, other than property upon which the repository, open cells, response action structures, water source, and borrow source are located. Upon the transfer of any property, we will pay the EPA 100% of net sales proceeds up to $350,000 and then 50% thereafter. If the transfer is less than the tax assessed value of the property or exceeds a total of more than 1,000 acres, the EPA may require an independent appraisal and may object to the transfer based on the sale price. If any portion of the property is not sold by the fifth anniversary of this decree, we agreed to auction the property to the highest bidder, engaging a professional auctioneer, but we cannot hold a mortgage or other security interest from any purchaser.

	•		We agreed for a five year period from the date of the Consent Decree to reimburse the United States 15% of our net income in excess of $2 million during any calendar year. We also agreed to pay the U.S. 15% of the net proceeds of the sale of Chief Consolidated Mining Company or the sale of substantially all of its assets in excess of $2 million. We are required to present audited financial statements to the EPA.

	•		We agreed to allow the EPA sole use of borrowed material (top soil, fill and base material) that is free from contaminants, and to give uninterrupted and continuous access to the borrowed source 24 hours a day, 365 days a year.

	•		We agreed to allow the EPA an irrevocable right to access, construct, operate, and close the repository and the property. We also granted the EPA the right to access, construct, and operate the two open cells on the property for the permanent disposal of waste material excavated from the site.

	•		We agreed to allow the EPA to enter onto the property to construct and maintain such response action structures as are necessary to implement the response actions. The land will have an easement for the EPA to inspect, maintain, and operate the structure. We also agreed to provide storage space and water as needed.

In the event that we complete all of our obligations under the Consent Decree, the EPA will file a Release of Notice of Federal Lien in the Office of the Juab County Recorder and we will be completely relieved of the $60 million liability, resulting in a gain in such future period. As of the current date, we continue to have obligations under the Consent Decree and are in compliance with those terms. The judgment amount of $60 million represents the future value of clean up costs when the terms of the Consent Decree are satisfied on February 9, 2010. The Company has reviewed the Consent Decree and has determined the fair value of its remaining obligations to be $1,075,000.

Employees

We currently have no full time employees.

Corporate Developments

Special Meeting of Stockholders. On December 17, 2007, we filed definitive proxy materials with the Securities and Exchange Commission announcing a Special Meeting of Stockholders that was held on February 1, 2008. All proposals were approved by the affirmative vote of a majority of the shares of Preferred Stock, Common Stock and Convertible Common Stock voting as separate classes and in the aggregate. The proposals were:

	•		The election of Richard R. Schreiber, Steven G. Park, and Peter D. Schreiber as directors of the Company;

	•		Amendment of the Articles of Incorporation:

	•		To increase the amount of authorized Common Stock to 100,000,000 shares,

	•		To reset the par value of the Common Stock and Convertible Common Stock from $0.50 par value per share to par value $0.01 per share,

	•		To set the size of the Board of Directors at a range of one to seven members,

	•		To authorize the election of directors at a time prescribed by the Board of Directors, and

	•		To remove the requirement that only stockholders may act as directors;

	•		The approval and ratification of the prior sale of convertible debentures to the Dimeling, Schreiber and Park Reorganization Fund II, LP; and

	•		The approval and ratification of a non-qualified stock option to one of the Company’s long-time mining consultants.

Changes in Control. On March 7, 2008, Dimeling, Schreiber & Park Reorganization Fund II, L.P., the Company’s then-controlling stockholder (“Fund”), entered into an agreement for the sale of all of its shares of Convertible Common Stock and Common Stock of the Company to Genco Resources Ltd., a British Columbia corporation (“Genco”). The Fund was the sole holder of Convertible Common Stock. Pursuant to that agreement, the Fund agreed to sell and Genco agreed to purchase all 6,477,242 shares of the Convertible Common Stock and 13,034,769 shares of Common Stock, representing all of the shares of Convertible Common Stock and Common Stock owned by the Fund. Upon the closing of the stock purchase agreement on or about March 12, 2008, a change in control of the Company occurred. The shares acquired by Genco represent 64.7% of our issued and outstanding capital stock. Genco agreed to pay the Fund $4,878,002.50 for the shares from its working capital.

On June 23, 2008 Genco entered into an agreement to sell such shares of Convertible Common Stock and Common Stock to Andover Ventures Inc., a British Columbia corporation (“Andover”) (TSX-V-AOX), for two payments aggregating approximately $4.9 million and 1,500,000 shares of Andover common stock following regulatory approval, among other consideration. This transaction would result in a change in control of the Company upon closing. Subsequent payment disputes among Andover and Genco ensued resulting in the filing of multiple cross-lawsuits in the Province of British Columbia and Arizona, which also named the Company as a nominal defendant. The parties announced a settlement of the actions in March 2009 incorporating revised payment terms and the dismissal of the related suits.

Korea Zinc. On August 27, 2008, the Company, Andover and Korea Zinc Co. Ltd. (“Korea Zinc”) entered into an agreement (“Tintic Utah Option Agreement”) by which Andover would purchase Korea Zinc’s 25% interest in Tintic Metals LLC (“Tintic Utah”) and an agreement known as the “Operating Agreement of Tintic Utah Metals LLC” (“Operating Agreement”). Tintic Utah and the Operating Agreement are a partnership between the Company and Korea Zinc under which the Company owns 75% and Korea Zinc owns 25%.

The Tintic Utah Option Agreement consideration, regardless of whether the Tintic Utah Option Agreement is exercised is US$1,000,000. This consideration is payable as follows:

	•		US$500,000 the later of three days following execution date of the agreement or after regulatory approval; and

	•		a further US$500,000 on or before the six month anniversary of the initial payment.

Further, under the terms of the Tintic Utah Option Agreement Andover has the option to purchase Korea Zinc’s interest in the Operating Agreement by making the following additional payment:

•

a further US$2,000,000 on or before the second anniversary of the initial payment.

On August 27, 2008 Andover and the Company entered into an agreement (“Purchase of Interest Agreement”) by which Andover has agreed to sell and the Company has agreed to purchase Andover’s interest in the Tintic Utah Option Agreement and the Operating Agreement. The purchase price is by the issuance of 30,000,000 common shares in the Company at a deemed value of US$0.10 per common share.

On November 20, 2008, the Company, Andover and Korea Zinc agreed to an amended payment plan under which Andover will make the following payments:

	•		US$150,000 on or before November 23, 2008;

	•		a further US$350,000 on or before May 25, 2009;

	•		a further US$500,000 on or before November 23, 2009; and

	•		a further US$2,000,000 on or before November 23, 2010.

Under the terms of the Tintic Utah Option Agreement, if the Company fails to make a payment when due, it has 90 days to make the payment plus interest at a rate of 500 bps plus three month LIBOR.

On November 28, 2008, Chief issued 1,500,000 common shares to Andover in consideration for the payment of US$150,000 to Korea Zinc on November 23, 2008.

Anglo American. In September 2008, the Company and Anglo American US (Utah) Inc. (“Anglo”), (NASD:AAUK), an indirect wholly-owned subsidiary of Anglo American plc, entered into a limited liability company agreement to form Big Hill LLC. Big Hill was organized to explore for and, if justified, develop a porphyry copper-gold molybdenum target located on claims owned or controlled by us. The porphyry target is located in the Tintic Mining District near Provo, Utah. In May 2009, Anglo announced that it would not proceed with the joint venture and withdrew from Big Hill.

Item 1A. Risk Factors.

Smaller reporting companies are not required to provide the information required by this item.

Item 1B. Unresolved Staff Comments.

Smaller reporting companies are not required to provide the information required by this item.

Item 2. Properties

We are the direct or indirect owner of approximately 16,000 acres of patented mining property in the Tintic and East Tintic Mining Districts, located in Juab and Utah Counties of Utah. Title to the 16,000 acres of patented mining ground is vested in us, as the owner of the land. We are an exploration stage company. There is no assurance that a commercially viable mineral deposit exists on any of our properties. Further exploration will be required before a final evaluation may be made as to economic and legal feasibility of a development program.

Description of Land Holdings of our Subsidiaries

Rights Held By Tintic Utah. The rights to approximately 8,500 acres of patented ground located in the East Tintic Mining District of Utah are held by Tintic Utah. Pursuant to the terms of Tintic Utah’s operating agreement, we transferred the mining rights of approximately 11,000 acres of our patented ground and 200 acres of our unpatented mining claims to Tintic Utah. Under the operating agreement, however, ownership of approximately 2,500 acres that were not involved in Tintic Utah’s exploration and development programs reverted back to us, leaving Tintic Utah with 8,500 acres of patented mining property.

The Burgin Mine is included in the property that is held by Tintic Utah. The Burgin Mine had previously been leased by us as part of a Unit Lease, together with properties of other landowners, to Kennecott Corporation. After the Burgin Mine was removed from the Unit Lease in 1978, we leased the Burgin Mine to the Sunshine Mining Company in 1980. When Sunshine became the lessee, it gained the use of the mining shafts and other capital improvements previously made by Kennecott on the properties, including underground access by means of the Apex Number 2 Shaft.

The Apex Shaft, together with the connecting drifts and drill stations, had been rehabilitated by Sunshine at a cost of approximately $6 million. As a result of a successful lawsuit brought by us and South Standard against Sunshine relating to Sunshine’s leases with us and South Standard, the Burgin Mine was returned to us in 1992.

Tintic Utah also holds the rights to the concentrating mill (sometimes referred to as the concentrator). The concentrating mill was built by Kennecott when it was mining from the Burgin Mine under its lease. The concentrator, approximately 24,000 square feet in size, was built to process up to 1,200 tons of lead and zinc ore per day. Tintic Utah rehabilitated the concentrator over a several year period to include a precious metals (gold/silver) flow sheet. The total cost of the renovation was approximately $1,900,000. The concentrating mill processed gold and silver ores from the Trixie Mine during January, February and March 2002. The concentrates produced by the concentrating mill were brokered through H&H Metals, New York, New York, to Penoles Torreon Smelter, Penoles, Mexico.

Property Owned By Chief Gold Mines. Approximately 2,200 acres of patented mining properties located in the East Tintic Mining District of Utah are owned by Chief Gold Mines. Chief Gold Mines acquired the property as the result of a merger of South Standard Mining Company into Chief Gold Mines in 1996.

The Trixie Mine is located on this property that was acquired in its merger with South Standard. South Standard was one of the landowners who joined in a Unit Lease to lease various properties to Kennecott. The Trixie Mine property was included in the land contributed by South Standard to the Unit Lease. Kennecott mined from the Trixie Mine, producing gold and silver that were by-products from a flux material that Kennecott used in connection with refining its copper ore from Kennecott’s Bingham Canyon mining operation in Utah. In 1983, Kennecott sold its interest in the Unit Lease to Sunshine, who operated the Trixie Mine for approximately nine years, producing similar ores for use as flux material. The Trixie Mine was received back by South Standard in 1992. South Standard continued shipping dump materials as flux from the Trixie dump for several years after 1992, but it did not mine the Trixie Mine.

We began mining ore from the Trixie Mine in 2001, and began processing ore at the concentrating mill in January 2002. In March 2002, we encountered unstable mining conditions in the Trixie Mine and suspended mining and processing operations. As a result of the suspended mining and processing operations, we are not generating any revenues and we do not have sufficient funding to make the significant safety improvements required in the Trixie Mine or to continue exploration efforts related to the Trixie Mine.

Central Standard Consolidated Mines. We currently own approximately 23% of the outstanding capital stock of Central Standard Consolidated Mines. Central Standard’s mining property consists of approximately 320 acres located in the north-central portion of the East Tintic Mining District. This property is surrounded by property owned by Tintic Utah. The approximately 320 acres owned by Central Standard is located about 2 miles from the Burgin Mine and the geologic characteristics of the Central Standard property are similar to those of the Trixie Mine.

In May 2006, some of the holdings of Tintic Utah, Central Standard, and Eagle and Blue Bell Mining Co., our subsidiaries, were sold at tax sale. We have been reviewing our options to recover these properties. We redeemed the Tintic Utah and Eagle and Blue Bell properties. The Central Standard properties were not redeemed but were included as part of a broader land-swap package worked out between us and an adjoining property owner.

Other Land Rights in Utah and Juab Counties. In addition to the land owned by our subsidiaries, and companies in which we have an interest, enumerated above, we own approximately 6,000 additional acres of mining land in the Tintic Mining District in Utah.

Exploration of Our Mining Properties

In 2005, we commissioned a group of consultants consisting of mining and geological engineers, as well as metallurgical and hydro-chemical engineers, to conduct a technical survey on our mining properties. This report is posted on our website at www.chiefmines.com and a summary of its contents is described below. The summary below does not contain all information contained in the 2005 report. The section below also describes the current status of development regarding our mining property.

Property Description and Location. Our property in the Tintic Mining District comprises approximately 16,000 acres of patented mining claims. This property is located in Juab and Utah Counties in the State of Utah (see figure No. 2 below). In order to retain title to the patented mining property, we must pay all applicable land taxes each year. Of these mining claims, approximately 8,500 acres of patented mining rights are held by Tintic Utah. The center of the property is approximately 39º — 57’ N latitude and 112º — 20’ W longitude. The area is dominated by the East Tintic Mountains, a north trending fault block range near the eastern margin of the Great Basin.

The consultants have not yet determined the full extent and location of our mining claims. In the technical study, the consultants concentrated their efforts on the East Tintic District, the location of the Burgin Mine. The approximate claim boundary in that area is shown below:

Mineralization and Deposits in the Tintic District

Description of Mined Ore-Bodies. The mined ore-bodies on our property occur as replacement deposits, replacement veins and fissure veins, as well as stockworks and disseminated deposits. Replacement deposits have been the source of more than 90% of the ore produced in the Main Tintic and East Tintic Districts. The replacement deposits range from small masses of less than a ton to masses containing more than 2,000,000 tons. They are irregular in form and commonly connected one to another by narrow stringers or veins of ore. Some deposits show a clear localization by structure, whilst others are seemingly unrelated to structure.

Replacement Deposits. Replacement deposits in the Tintic District occur in five linear zones known as ore-runs. Each ore-run is generally rod-shaped and less than 100 feet wide. Much, if not most of the volume of the ore-run, consists of un-replaced wall rock. These geometries are very difficult to quantify with exploration. Most of the mines in the Main Tintic District carried very small tonnages of proven reserves and relied on continuous underground exploration. Much of this work was completed by lessors. The ore-bodies in the East Tintic District, including the Burgin Mine, show a greater amount of structural control. The major replacement deposits are irregular masses localized by the intersections of northeast trending fissure zones and small thrust faults with porous, permeable and reactive units.

Replacement and Fissure Veins. Replacement veins were mined most commonly in the pyrometasomatic rocks near the margin of the Silver City Stock, where ore replaced the fault gouge and breccia and locally replaced reactive beds. Fissure veins occur in a myriad of short faults typically cutting massive siliceous rock units including quartzite, quartz monzonite, monzonite porphyry, latite, silicified tuff and agglomerate.

Types of Ores in the Tintic District. The ores in the district consist largely of galena and sphalerite with variable amounts of acanthite, argentite, tetrahedrite-tennantite, enargite-famatinite, proustite, hessite, calaverite, native gold and silver and a wide variety of uncommon copper, lead, silver and bismuth sulfosalt minerals. The above mentioned minerals occur in a gangue that is commonly siliceous, ranging in texture from coarsely crystalline quartz near the Silver City stock to fine grained jasperoid even flinty jasperoid in the far north and distal parts of the district. The gangue also includes abundant barite, calcite, dolomite and rhodochrosite. Deep oxidation above the water table reaches depths of 900-2,200 feet in the sediments and has produced a variety of sulfate, carbonate, silicates, arsenates, antimonates, manganates and other mineral varieties.

Mineral Zoning. Mineral zoning in the district is pronounced. Deposits in the south were most valuable for copper and gold. Lead and silver were more prevalent in the north and zinc was the most prevalent mineral in the northern-most deposits. At the Ball Park deposit to the north of the Burgin Mine, silver grades are most commonly less than an ounce and zinc is typically more abundant than lead. In the East Tintic District, metal zonation similar to that seen from south to north across the district can be seen from the deeper parts of some deposits to the shallower regions. The North Lily Mine produced gold and copper ores at depth and moderate grade lead and silver ores from the central and northern parts of the mine. Morris and Mogensen (1978) report the Tintic Standard Mine produced gold-copper ore at depth, silver-lead ore from the central part of the mine and zincian manganese ore from the upper northeastern levels of the mine. The Burgin Mine ores contain lead, zinc, only moderate quantities of silver and insignificant amounts of copper and gold. Rhodochrosite is abundant in Burgin ores in contrast to its relative rarity in other East Tintic ore-bodies.

Modernization and Plan of Improvement

The consultants who conducted the technical study for us in 2005, after spending time on the property and an extensive evaluation of the volumes of historic data, concluded that significant opportunities exist for further development and exploitation of the claims.

Consultant Recommendations for Phase One. At that time, the consultants recommended, at an estimated cost range then of $3,000,000 to $3,500,000, phase one of a plan to increase the value and enhance the prospects of viably operating the following four projects. This most recent estimate is based on the understanding gained during the 2006 program. The Phase One recommendations include:

	•		Advancing the Burgin extension deposit through to a bankable Feasibility Study.

	•		Further development of the concept to sell potable water from a desalination plant fed by pumped water from the Burgin Mine.

	•		Investigation of the economic possibilities of producing and selling halloysite (and other) clays from the Zuma and other areas.

	•		Continued investigation and development of other exploration targets in the claim block and adjacent areas.

Drilling Program.. As part of this Burgin Mine Program, the consultants recommended that an underground drill program be conducted from the Burgin 1050 level, accessed via the Apex No. 2 shaft. Surface drilling has been discounted due to the inability to ensure that the drill penetrates the desired ore zone and exactly twins existing holes. The shaft and 1050 level will need inspection and rehabilitation as necessary. Ventilation, communications and safety facilities will also require attention (see figure No. 5 below). The objectives of this work, at an estimated cost of $2,500,000, will be to provide a NI 43-101 compliant resource and subsequent reserve, to obtain samples for metallurgical testing and to ascertain initial hydrological characteristics relative to ore deposit dewatering.

This drill program will provide technical data to complete essential prerequisites to a Feasibility Study. The necessary technical data includes:

	1.		Twin old holes to provide drill campaign comparisons and statistical analysis and to facilitate a N1 43-101 Resource estimate.

	2.		Metallurgical samples to define concentrate characteristics and the different metallurgy between the indicated Lead and Zinc dominant zones.

	3.		Geotechnical and hydrological data for mine planning and dewatering.

	4.		Logging of ore-body structure

	5.		Packer testing of rock permeability

	6.		Installation of maintaining wells

The collection of this data will also enable us to develop a program which will lead to the plan needed to ensure that the ore-body is effectively dewatered.

Scoping Study.. Following the drilling, the consultants anticipate potential further project financing will be available through public methods. This will require the completion of a N1 43-101 Resource and Subsequent Scoping Study.

As part of a Scoping Study, capital costs should be developed for rehabilitation, repair and re-commissioning of the Concentrator and ancillary facilities. The Concentrator itself is dry and relatively clean and the remaining installed equipment appears to be in good condition, though incomplete in some areas. In contrast, any equipment which is located outside will require major work. The property has suffered from theft, particularly in electrical cabling, piping, tools, and small equipment, such as compressors and welding machines. The gravity circuit consisting of a Knelson concentrator that recovered free gold, has been sold; its replacement cost would be approximately $120,000. Additional equipment has been sold to pay creditors. A detailed inventory and assessment of deficiencies, however, has not yet been undertaken. Every part of the plant will have to be cleaned, repaired and made safe prior to any re-start.

Reclamation Plan. Tailing, waste and rock dumps and all related mine reclamation requirements are covered by approved and bonded permits issued by the State of Utah. By far the largest ore deposits in the district are replacements in carbonate rocks and hence there is virtually no acid generation potential. The Reclamation Plan calls for the removal of mine infrastructure and the grading and re-vegetation of the surface to its original status. An update to the existing mine reclamation plan has been submitted to the State of Utah, which has not yet responded as to its adequacy.

Current and Future Costs of Mining Projects. The total costs incurred to date for exploration on our mining properties is not reasonably quantifiable because exploration has occurred since at least 1909. Many millions of dollars have been spent over the last one hundred years. The consultants who have conducted the technical study for us anticipate that immediate future costs could be between $5 million and $10 million. Further development and exploration is necessary, in conjunction with a feasibility study, before a final evaluation may be made as to economic and legal feasibility of a development program.

Item 3. Legal Proceedings.

Utah Labor Commission Administrative Proceeding. We were named, along with two other corporate entities, as a respondent in an administrative proceeding before the Utah Labor Commission in August 2006. In the proceeding, the seventy-six year old petitioner alleges that he was our employee from 1950 to 1954 and has contracted lung cancer as a result of his employment. The plaintiff sought medical expenses and permanent total disability compensation. The plaintiff is now deceased. His widow has now claimed dependent’s benefits and burial benefits. The trial took place and was settled on May 6, 2008. The Company’s insurer paid all settlement amounts and reimbursed the Company for all defense costs the Company had advanced.

Royce Hackworth and Hackworth Drilling, Inc.. On August 30, 2002, Royce Hackworth and Hackworth Drilling, Inc. (“Hackworth”) filed a complaint against us and Adren Underwood in the Fourth Judicial District Court in and for Juab County, Utah (Civil No. 02060124). The complaint sought monetary relief of $37,697.14 for drilling services that were rendered to us by Hackworth Drilling. Judgment in the amount of $37,697.14 has been entered against us. Hackworth has agreed for the Company to pay this lien through the sales of our land pursuant to the EPA Consent Decree.

Leonard Weitz. On April 23, 2007, Leonard Weitz filed a complaint against us in the Fourth Judicial District in and for Utah County, Utah (Case No. 07010174). An amended complaint was filed on June 23, 2007. The complaint is seeking money damages in the amount of $726,000.00 for alleged breach of contract arising out of Mr. Weitz’s employment agreement with the Company. A scheduling order has been proposed by Plaintiff’s attorney and is under consideration by the Company. We believe we have meritorious defenses to the claims asserted in the action and intend to vigorously defend the matter.

See also “Item 1. Description of Business — EPA Settlement.’’

Item 4. Submission of Matters to a Vote of Security Holders.

None.

PART II


Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our shares of common stock are traded in the over the counter market known as the Pink Sheets under the symbol “CFCM.PK.’’ High and low sales prices of our common stock for each quarterly period during the past two years are as follows:


	High		Low
2008 Market Price
Fourth Quarter	$	0.35	$	0.10
Third Quarter	$	0.41	$	0.10
Second Quarter	$	0.40	$	0.20
First Quarter	$	0.60	$	0.10
2007 Market Price
Fourth Quarter	$	0.50	$	0.10
Third Quarter	$	0.45	$	0.25
Second Quarter	$	0.50	$	0.30
First Quarter	$	0.50	$	0.30

The approximate number of holders of record of our Common Stock as of December 31, 2008 was 2,000. No cash dividends have been declared or paid over the previous five years nor are expected to be paid for the foreseeable future.

Item 6. Selected Financial Data.

Smaller reporting companies are not required to provide the information required by this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

The following discussion is intended to assist in understanding our financial condition and plan of operations. You should read the following discussion along with our financial statements and related notes included in this Form 10-K.

Overview

We were organized in 1909 and own several interests in mining properties in Utah, including the Burgin Mine and the Trixie Mine. Neither mine is currently in operation. Our principal subsidiaries are Tintic Utah Metals, LLC, a Colorado limited liability company and Chief Gold Mines, Inc., a Delaware corporation. Our land holdings consist of approximately 16,000 acres of mining property. Approximately 6,000 acres of this land is subject to being sold pursuant to a Consent Decree with the Environmental Protection Agency.

As a result of the suspended mining and processing operations, we are not generating any revenues and we do not have sufficient funding to make the significant safety improvements required in the Trixie Mine or to continue exploration efforts related to the Burgin Mine. As a result, we have had no significant operating activity since early 2002.

Plan of Operation

The mining aspect of our activities will concentrate on seeking one or more joint venture partners or other arrangements to fund the startup of mining operations. To the extent we enter into such an arrangement, we could contribute mining properties and/or our concentrating mill to any joint venture arrangement in return for a percentage interest in the venture, with potential partner(s) to provide the main portion of cash funding requirements.

We have an immediate cash need. No assurance can be given that we will be able to raise the necessary funds, or if the funds are raised, that we will be able to restart our mining operations.

Our financial statements have been prepared assuming that we will continue as a going concern. We have suffered net losses of $2,790,709 and $1,181,116 for the years ended December 31, 2008 and 2007, respectively. Additionally, as of December 31, 2008, we had an accumulated deficit of $101,118,567. These matters raise substantial doubt about our ability to continue as a going concern.

As of December 31, 2008, we had $950,000 of land and mining claims and $100,000 of mining related buildings, machinery and equipment. The realization of our investment in land and mining claims and mining related buildings and equipment is dependent upon various factors, including: our success in exploration efforts to discover additional mineral resources and in proving the technical feasibility and commercial viability of the identified mineral resources, and our ability to obtain necessary funding to continue exploration of the mining properties and to finance operations.

In December 2005, Dimeling, Schreiber & Park Reorganization Fund II, LP purchased $2.5 million in convertible debentures contingent upon creditors holding more than 50% of our outstanding indebtedness agreeing to settle such outstanding amounts. The funds are held in escrow and dispersed by the escrow agent to pay creditors who settled and to pay legal, accounting and other consulting fees. The debentures automatically converted into our Common Stock at $0.25 per share immediately upon shareholder approval of certain amendments to our Articles of Incorporation, including a decrease in the par value, at a meeting on February 1, 2008. As of that date, $425,205.48 in interest had accrued on the debentures. As a result, 11,700,822 shares of Common Stock were issued to the Fund resulting from the conversion of the debentures and the accrued interest thereon.

On November 28, 2008, we sold 16,941,445 Units in a private placement to six persons at a purchase price of $0.10 per Unit for an aggregate of $1,694,145 in gross proceeds. Each Unit consisted of one share of our Common Stock and one warrant to purchase one share of Common Stock at a price of $0.15 per share until November 28, 2010. No commissions or other fees were paid in connection with the sales.

On December 2, 2008, we sold 3,060,000 Units in a private placement to six persons at a purchase price of $0.10 per Unit for an aggregate of $306,000 in gross proceeds. Each Unit consisted of one share our Common Stock and one warrant to purchase one share of Common Stock at a price of $0.15 per share until December 3, 2010. No commissions or other fees were paid in connection with the sales.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Smaller reporting companies are not required to provide the information required by this item.

Item 8. Financial Statements and Supplementary Data.

See Financial Statements beginning on page F-1.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Management’s Report On Internal Control Over Financial Reporting. Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of company management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2008. In making its assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was not effective as of December 31, 2008, as the result of a material weakness.

This material weakness consisted primarily of insufficient personnel in the accounting and financial reporting function due to the size of our Company and the lack of operations. The Company does not have any full-time paid officers or employees, which prevented its ability to employ sufficient resources to effectively review and analyze elements of the financial statement closing process and prepare and file on a timely basis financial statements in accordance with U.S. GAAP.

Remediation of Material Weakness. As noted above, the size of the Company and its lack of any operations prevents it from being able to employ sufficient resources to enable the Company to have adequate segregation of duties within its internal control system. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures, and will continue to work to address and remedy the material weakness as the position of the Company and its operations permits.

Limitations on the Effectiveness of Internal Controls. Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal controls over financial reporting during the year ended December 31, 2008, that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting, other than the remediation measures described above.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance.

Directors and Executive Officers. The name and age of each of our current directors and executive officers and the positions and offices held by him are:


Name of Directors and			Offices with the	Term During Which
Executive Officers	Age		Company	Served in Office
Robert C. Gardner		67	Director	Director since March 2008
Gordon Blankstein		58	Director. CEO	Director since May 2008; appointed CEO in August 2008
Thomas E. Sawyer		76	Director	Director since August 2008
Manfred Schauer		54	Director	Director since August 2008
Ray Welt		67	Director	Director since October 2008

The following is a brief account of the business experience during the past five years of each current director and executive officer named above.


Robert C. Gardner		Mr. Gardner is co-Chairman of the Board of Genco Resources Ltd., a publicly traded (Toronto Stock Exchange) company engaged in silver production in Mexico. He is currently Chairman of the Board of Stealth Energy Inc. (CNSX: SLH), a petroleum and natural gas company (Aug 2007 — present); and Principal of Gardner & Associates Law Firm(Jan 1988 — present). He was previously Chairman of the Board of Bolero Resources Corp. (TSX Venture: BRU), a mineral exploration company(February 2006 — March 2008) and Andover Ventures, Inc. (TSX Venture: AUX), a precious and base metal exploration and development company ( December 2006 — Sept 2008). Mr. Gardner is currently a Director of the following additional publicly traded companies: Atlas Technology Group, Inc. (OTCBB: ATYG), providing custom outsourced application software support services (August 2005 — present); Kootenay Gold Inc. (CDNX: KTN.V), an emerging exploration Company (June 2003 — present); and Stealth Energy Inc. (August 2007 — present). He was previously a director of Bolero Resources Corp. (February 2006 — March 2008).

Gordon Blankstein		Mr. Blankstein has been the chairman and chief executive officer of Andover Ventures Inc. (TSX Venture: AOX) since September 2008 and a director of Sunwest Ventures Ltd since 1986. He also serves as a director for Digifonica International Inc. (TSX Venture: DIL). Mr. Blankstein has over 30 years experience in the capital markets and has founded several startup companies. Mr. Blankstein obtained a B.Sc. (Agri.) from the University of British Columbia in 1973 and an MBA from the University of British Columbia in 1976. Mr. Blankstein is the founder and remains active in the Mountainview Conservation Society.

Thomas E. Sawyer		Dr. Sawyer has been the chairman and chief executive officer since 2002 of Sawyer Technologies, LLC, a consulting service for international high net worth entities and individuals. He is currently a Director of Digifonica International Inc ((TSX Venture: DIL), a telecommunications service provider (May 2007 — present).

Manfred Schauer		Mr. Schauer, privately owns and operates a consultancy and advisory business based in Auckland, New Zealand. He has an extensive background in banking/treasury and investment banking. Mr. Schauer is currently a director of Andover Ventures Inc, (TSX Venture: AOX), mineral exploration company.

Ray Welt		From 2005-2007, Mr. Welt was a director of of Rocketinfo Inc. (OTCBB: RKTI), a real-time news and business information aggregation and search engine system company. Mr. Welt has a strong background in finance having served as the chief financial officer of several junior public companies and is well versed in the preparation and presentation of financial information.

Audit Committee. We currently do not have a separately designated standing audit committee. The entire Board of Directors performs the functions of an audit committee, but no written charter governs the actions of the Board when performing the functions of what would generally be performed by an audit committee. The Board approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the Board reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor.

We intend to appoint an audit committee in the future.

Corporate Governance Committee. The Company has recently established its Corporate Governance Committee. The members of the corporate governance committee are Mr. Ray Welt and Dr. Tom Sawyer..

Independent Consultants. We do not currently have any employees. We do, however, utilize independent consultants for matters regarding mining explorations and surveys. Our independent consultants cover the full spectrum of mine exploration, development and operations. All are extremely capable and have considerable mining experience. The following details the experience of these consultants:

B. Mountford, P. Eng., is a mining engineer with over 35 years of experience and expertise in all aspects of mining. He has been a principal in several projects that were developed from drill indicated targets through to operating mines. His experience in the United States includes the Montana Tunnels Mine in Montana, Pinson and Pebble in Nevada and Gilt Edge in South Dakota. Most recently he was President of Northern Dynasty Mines, the developer of the Pebble project in Alaska.

D. Barratt, P. Eng., is a senior consultant engineer specializing in metallurgy. He has over 35 years of experience and has provided services to many major and intermediate mining companies throughout the world.

R.H. Sillitoe, Ph.D., is a world renowned consulting economic geologist, the winner of numerous awards for merit and achievement. He travels extensively for most major mining companies and several government agencies.

B. Ainsworth, P. Eng., is a former Vice-President of Exploration for Placer-Dome. Currently, he provides geological expertise and experience to a select group of clients. Of particular relevance in his work for us is his experience in the mining and marketing of clays, including halloysite.

D. Jenkins, P. Geo., is a former Placer Dome Senior Geologist. He has been directly involved in many grass root projects that were developed into mines. Mr. Jenkins is an expert in vein and replacement ore deposition, both of which categorize the Tintic mineralization.

Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors and persons who own more than ten percent of a registered class of the equity securities of the Company (''Reporting Persons’’) to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission. In addition, Reporting Persons are required to furnish us with copies of all Forms 3, 4, and 5 that they file. During 2008 and to date, the following Reporting Persons failed to timely file statements of changes in beneficial ownership on Form 4 or statements of beneficial ownership on Form 3 pursuant to Section 16(a): Gordon Blankstein filed two late reports, a Form 3 (filed on February 2, 2009) and a Form 4 (filed on February 2, 2009) and did not report one transaction on a timely basis; Ray Welt filed two late reports, a Form 3 (filed on February 10, 2009) and a Form 4 (filed on February 10, 2009) and did not report one transaction on a timely basis; Paul Eagland filed two late reports, a Form 3 (filed on February 11, 2009) and a Form 4 (filed on February 11, 2009) and did not report one transaction on a timely basis; Dr. Sawyer filed two late reports, a Form 3 (filed February 6, 2009) and a Form 4 (filed February 6, 2009) and did not report one transaction on a timely basis; Manfred Schauer filed two late reports, a Form 3 (filed on February 10, 2009) and a Form 4 (filed on February 10, 2009) and did not report one transaction on a timely basis; Alan Wright filed two late reports, a Form 3 (filed on February 13, 2009) and a Form 4 (filed on February 13, 2009) and did not report one transaction on a timely basis; Jeff Bates filed one late report, a Form 3 (filed June 10, 2009).

Code of Ethics. The Board of Directors has not adopted a corporate code of conduct and ethics because we have not had operations or employees since 2002. The Board of Directors will adopt a code of conduct and ethics and will disclose this code of conduct and ethics in the reports filed or submitted to the SEC and post a copy on our website as soon as practicable following the re-initiation of our operations.

Item 11. Executive Compensation

Summary Compensation Table for 2008 and 2007


													Change in
													Pension Value
													and
											Non-Equity		Nonqualified
Name and							Stock		Option		Incentive Plan		Deferred		All Other
Principal			Salary		Bonus		Awards		Awards		Compensation		Compensation		Compensation		Total
Position	Year		($)		($)		($)		($)		($)		Earrings ($)		($)		($)
(a)	(b)		(c)		(d)		(e)		(f)		(g)		(h)		(i)		(j)
Gordon Blankstein, Principal Executive Officer		2008		70,000		—		75,000		—		—		—		—		145,000
		2007		—		—		—		—		—		—		—		—
Richard R. Schrieber, Former Principal Executive Officer		2008		—		—		—		—		—		—		—		—
		2007		—		—		—		—		—		—		—		—
Paul Eagland, Former Principal Financial Officer		2008		119,940		—		—		—		—		—		—		119,940
		2007		—		—		—		—		—		—		—		—

Mr. Blankstein received 500,000 shares of Common Stock on December 2, 2008 in lieu of 2009 Directors & Executive Officers Fees. The fair value of the shares issued to Mr. Blankstein was determined to be $0.15 per share, the market value on the date of issuance. This is disclosed in note 3 to the consolidated financial statements shown in Item 8 of this document. The Company does not currently have formal executive employment agreements in place.

Outstanding Equity Awards at December 31, 2008

Number of

Securities

Underlying

Unexercised

Option

Options (#)

Exercise

Option

Exercisable

Price

Expiration

(a)

(b)

($) (e)

Date (f)

Brian Mountford Former Director

4,000,000

0.25

15/11/2018

Outstanding Equity Awards at Fiscal-Year End Table. There are no unexercised options or unvested shares of Common Stock or any awards under an equity incentive plan as of December 31, 2008 other than the following:

On November 15, 2008, 4,000,000 stock options were granted to Brian Mountford Associates Ltd., a company controlled by Brian Mountford (a Director of the Company from May 16, 2008 to September 17, 2008). These non-qualifying stock options are exercisable at $0.25 per share. The options were issued in respect of a settlement agreement dated November 26, 2007. The fair value of the stock options granted was determined using the Black-Scholes Option Pricing Model and resulted in a fair value of $599,454 based on the following assumptions: risk-free interest rate of 3.72%, expected term of 10 years, weighted average stock volatility of 210.99%, and expected future dividends of nil per share. All stock options vested immediately. The term of these stock options is 10 years.

Director Compensation For 2008


	Directors
	Fees
	Earned
	or Paid		Option		All Other
	in Cash		Awards		Compensation		Total
Name	($)		($)		($)		($)
(a)	(b)		(d)		(g)		(h)
Brian Mountford (1)		—		—	$	72,000	$	72,000
Ray Welt	$	3,970		—		—	$	3,970
Alan Wright (2)	$	5,000		—		—	$	5,000


(1)		Mr. Mountford earned $72,000 of consultancy fees paid to his consultancy company, Brian Mountford Associates, Ltd. during 2008 ($6,000 per month). He was a Director of the Company from May 16, 2008 until September 17, 2008. Mr. Mountford received no fees in respect of his role as a Director of the Company.

(2)		Resigned May 15, 2009.

Equity Compensation Plans. The Company does not currently have any equity compensation plans in effect. All outstanding options at December 31, 2008 are nonqualified stock options.


Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table shows as of December 31, 2008, stock ownership of all persons known to management, to be beneficial owners of more than 5% of our Common Stock and our directors and executive officers.


	Amount and Nature of		Percentage of
Name of Beneficial Owners	Beneficial Ownership		Class(1)
Five Percent Shareholders:
Andover Ventures Inc. 890 — 999 West Hastings Street, Vancouver, British Columbia, Canada (2)		33,874,901		44.3	%
Brian Mountford (3)		4,000,000		5.2	%
Robert Blankstein (4)		3,847,000		5.0	%

Directors and Named Executive Officers:
Gordon Blankstein (5)		19,953,000		19.5	%
Paul Eagland (6)		1,400,000		2.3	%
Dr. Thomas Sawyer		200,000		0.4	%
Manfred Schauer		200,000		0.4	%
Ray Welt		200,000		0.4	%

Owned by all directors and officers as a group (6 persons)		22,653,000		36.2	%


(1)		Based upon 6,477,242 shares of Convertible Common Stock, 46,035,456 shares of Common Stock outstanding, 20,001,445 share purchase warrants outstanding and 4,000,000 share options as of December 31, 2008. Holders of Convertible Common Stock and Common Stock share have voting rights.

(2)		Based upon 6,477,242 shares of Convertible Common Stock, 20,246,214 shares of Common Stock outstanding, and 7,151,445 share purchase warrants outstanding as of December 31, 2008. Mr. Gordon Blankstein serves as the chief executive officer of Andover and disclaims beneficial ownership of these shares.

(3)		Includes non-qualified share purchase options to acquire 4,000,000 shares of Common Stock exercisable over the next 60 days.

(4)		Robert Blankstein is the brother of Mr. Gordon Blankstein. He beneficially owns 2,173,500 shares of Common Stock and 1,673,500 share purchase warrants as at December 31, 2008.

(5)		Includes 2,260,000 shares of Common Stock and 2,260,000 share purchase warrants beneficially owed by Mr. Blankstein’s spouse, 2,260,000 shares of Common Stock and 2,260,000 share purchase warrants beneficially owned by the Blankstein Family Trust and 2,246,500 shares of Common Stock and 2,246,500 share purchase warrants beneficially owned by a Company controlled by Mr. Blankstein. 3,460,000 shares of Common Stock and 2,960,000 share purchase warrants are directly owned by Mr., Blankstein. Does not include shares held by Andover Ventures Inc.

(6)		Includes 700,000 shares of common stock and 700,000 share purchase warrants.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Except as set forth below, since January 1, 2006, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or are a party in which:

	•		the amounts involved exceeded or will exceed $120,000 or 1% of the average of our total assets at year-end for the last two fiscal years; and

	•		a director, executive officer, holder of more than 5% of our Common Stock or Convertible Common Stock or any member of their immediate family had or will have a direct or indirect material interest.

Director Independence. We are not listed as an issuer on any national securities exchange or inter-dealer quotation system that requires that the majority of the board of directors be independent. For the purposes of compliance with applicable securities rules, the following describes the independence standards required by a national securities exchange, the Nasdaq Stock Market, Inc., and assesses whether our directors and director nominees, Gordon Blankstein, Dr. Thomas Sawyer, Robert Gardner, Alan Wright, Ray Welt and Manfred Schauer would be considered to be independent directors under Nasdaq’s independence standards were they so required.

The majority of the directors on the board of directors of a newly public company listed on Nasdaq must be independent. An independent director is ''a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the [company]’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.’’ Under Nasdaq Rule 4200, an independent director may not (1) have been employed by the company or its subsidiaries or parent company during the preceding three years; (2) have received, or had a family member that received, compensation in excess of $60,000 from the company during any twelve month period during the preceding three years (other than for board or committee services, benefits under a retirement plan or payments to a family member who is a non-executive employee of the company); (3) have had a family member that was an executive officer of the company during the preceding three years; (4) have received from or given to the company during the current and three preceding years, either directly or through family members or entities under his control, any property or services totaling the greater of $200,000 or 5% of the recipient’s gross revenues for that year, unless the payments arose from investments in the company’s securities or a non-discretionary charitable contribution matching program; (5) be employed or have been employed during the last three years, or have a family member who is employed or was employed, as an executive officer of another company where any of the issuer’s executive officers sat on the compensation committee; or (6) be or have a family member who is a partner at the company’s outside auditor or was a partner or employee of the company’s outside auditor who worked on the company’s audit at any time during the preceding three years. Share ownership in the company by itself will not disqualify a director from being independent.

Mr. Blankstein is not independent under Nasdaq standards. He is an acting executive officer of the Company. In addition, Nasdaq requires that all members of the audit, nominating and compensation committees of the board of directors be independent. The Company audit committee members and compensation committee members are independent.

Item 14 Principal Accounting Fees and Services.

Audit Fees. The aggregate fees billed for the years ended December 31, 2008 and December 31, 2007 for the professional services rendered by Hansen, Barnett & Maxwell, P.C. the Company’s principal accountant, for the audit of the Company’s annual financial statements and review of financial statements or services that are normally provided by the Company’s principal accountant in connection with statutory and regulatory filings or engagements for such fiscal years equaled $53,000 and $74,380, respectively.

Audit-Related Fees. There were no fees billed for the years ended December 31, 2008 and December 31, 2007, for assurance and related services by Hansen, Barnett & Maxwell, P.C. that are reasonably related to audit or review of the Company’s financial statements not reported under “Audit Fees” above.

Tax Fees. The aggregate fees billed for the years ended December 31, 2008 and December 31, 2007 for professional services rendered by Hansen, Barnett & Maxwell, P.C. for tax compliance, tax advice, and tax planning equaled $1,000 and $9,035, respectively, and consisted of assistance in the preparation of tax returns, and general tax research and planning.

All Other Fees. No other fees were billed by Hansen, Barnett & Maxwell, P.C. to the Company during 2008 or 2007.

Pre-Approval Policies and Procedures. The Company standing audit committee pre-approves all services related to the Company’s independent public accountant, described above.

Item 15. Exhibits, Financial Statement Schedules.


EXHIBIT NO.		DESCRIPTION

3.1		Articles of Incorporation, as amended [Incorporated by reference to Exhibit A to the Company’s Schedule 14A Proxy Statement filed on December 17, 1999 (SEC File No. 001-01761)].

3.1A		Amendment to Articles of Incorporation, as amended [Incorporated by reference to Appendix A to the Company’s Schedule 14A Proxy Statement filed on December 14, 2007 (SEC File No. 001-01761)].

3.2		Amended and Restated By-laws [Incorporated by reference to Exhibit 3.2 to the Company’s Form 10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].

10.1		The Operating Agreement of Tintic Utah LLC dated as of July 17, 1996 by and among the Company, Akiko Resources (Utah) Inc. and KZ Utah, Inc. [Incorporated by reference to Exhibit 10B, marked as ''Exhibit A’’, to the Company’s Form 10-KSB filed on April 2, 1997 (SEC File No. 001-01761].[Unable to Locate]

10.2		The First Amendment to Operating Agreement dated as of March 11, 1997 by and among the Company, Akiko Resources (Utah) Inc. and KZ Utah, Inc. [Incorporated by reference to Exhibit 10B, marked as ''Exhibit A’’, to the Company’s Form 10-KSB filed on April 2, 1997, (SEC File No. 001-01761].[Unable to Locate]

10.3		Second Amendment to Operating Agreement dated as of November 10, 1997 by and between the Company and KZ Utah, Inc [Incorporated by reference to Exhibit 10D, filed as Exhibit A, to the Company’s Form 10-K report filed on March 30, 1998 (SEC File No. 001-01761)].

10.4		Third Amendment to Operating Agreement dated as of October 1, 1998 by and between the Company and KZ Utah, Inc [Incorporated by reference to Exhibit 10D, filed as Exhibit A, to the Company’s Form 10-KSB report filed on April 15, 1999 (SEC File No. 001-01761)].

10.5		Fourth Amendment to Operating Agreement dated as of September 9, 1999 by and between the Company and KZ Utah, Inc [Incorporated by reference to Exhibit 10E, filed as Exhibit A, to the Company’s Form 10-KSB report filed on March 30, 2000 (SEC File No. 001-01761)].


EXHIBIT NO.		DESCRIPTION

10.6		Fifth Amendment to the Operating Agreement dated as of January 1, 2001 [Incorporated by reference to Exhibit F, filed as Exhibit A, Form 10-QSB filed on August 14, 2001].

10.7		The Articles of Organization of Tintic Utah LLC is incorporated by reference to an exhibit to Form 10-KSB filed on April 2, 1997.

10.8		Stock Purchase Agreement dated as of November 19, 1999 between the Company and Dimeling, Schreiber & Park [Incorporated by reference to the Company’s Form 8-K report filed on November 30, 1999 (SEC File No. 001-01761)].

10.9		Registration Rights Agreement dated as of November 19, 1999 between the Company and Dimeling, Schreiber & Park [Incorporated by reference to the Company’s Form 8-K report filed on November 30, 1999 (SEC File No. 001-01761)].

10.10		Form of Warrant issued to Dimeling, Schreiber & Park by the Company dated as of November 19, 1999 [Incorporated by reference to the Company’s Form 8-K report filed on November 30, 1999 (SEC File No. 001-01761)].

10.11		EPA Consent Decree [Incorporated by reference to Exhibit 10.11 to the Company’s Form 10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].

10.12		Debenture Purchase Agreement Between the Company & Dimeling, Schreiber & Park as of December 15, 2005 [Incorporated by reference to Exhibit 10.12 the Company’s Form 10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].

10.13		Escrow Agreement Between the Company and Pepper Hamilton LLP as of December 16, 2005 [Incorporated by reference to Exhibit 10.13 to the Company’s Form 10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].

10.14		Chief Consolidated Mining Company Prospect and Retrospect, dated as of November 2005 [Incorporated by reference to Exhibit 10.14 to the Company’s Form 10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].

10.15		Genco Resources Ltd. Stock Purchase Agreement, dated as of March 7, 2008 [Incorporated by reference to the Schedule 13D/A filed on March 13, 2008 (SEC File No. 005-36578)].

10.16		Form of 2008 Warrant Agreement [Incorporated by reference to Exhibit 10.16 to the Company’s Form 10-Q for the quarter ended March 31, 2008 filed on August 7, 2009 (SEC File No. 001-01761).]

21.1		Subsidiary List [Incorporated by reference to Exhibit 21.1 to the Company’s Form 10-KSB/A filed on September 5, 2007 (SEC File No. 001-01761)].

31.1		Certification by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) (filed herewith).

31.2		Certification by Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) (filed herewith).

32		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
TABLE OF CONTENTS


		Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets as of December 31, 2008 and 2007		F-2
Consolidated Statements of Operations for the Years Ended December 31, 2008 and 2007		F-3
Consolidated Statements of Cash Flows for the Years Ended December 31, 2008 and 2007		F-4
Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2007 and 2008		F-5
Notes to Consolidated Financial Statements		F-6


Hansen, Barnett & Maxwell, p.c.
A Professional Corporation		Registered with the Public Company
CERTIFIED PUBLIC ACCOUNTANTS		Accounting Oversight Board

5 Triad Center, Suite 750
Salt Lake City, UT 84180-1128 Phone: (801) 532-2200 Fax: (801) 532-7944		A Member of the Forum of Firms
www.hbmcpas.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and the Stockholders
Chief Consolidated Mining Company

We have audited the accompanying consolidated balance sheets of Chief Consolidated Mining Company and subsidiaries (the Company) as of December 31, 2008 and 2007, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for each of the years then ended. These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Chief Consolidated Mining Company and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has a working capital deficiency and a capital deficiency, has suffered significant losses from operations, has used cash in its operating activities and has significant reclamation and EPA settlement obligations and environmental contingencies that raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

HANSEN, BARNETT & MAXWELL, P.C.

Salt Lake City, Utah
July 28, 2009

F-1

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	December 31,			December 31,
	2008			2007
ASSETS
Cash	$	606,017		$	129,003
Related party loans receivable		241,545			—
Other current assets		20,000			15,471

Total current assets		867,562			144,474

Land and mining claims		950,000			950,000
Buildings, machinery and equipment, net		100,000			150,000
Reclamation funds on deposit		488,300			488,300

Total assets	$	2,405,862		$	1,732,774


LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Bank overdraft	$	18,458		$	—
Accounts payable		214,314			654,277
Related party payable		49,109			391,351
Accrued interest payable		—			408,219
Accrued liabilities		232,180			110,286
Korea Zinc purchase option obligation		850,000			—
Accrued convertible common stock dividends		106,331			862,109

Total current liabilities		1,470,392			2,426,242

Long-term liabilities
Convertible debentures		—			2,500,000
Reclamation obligation		533,576			518,036
EPA settlement obligation		60,000,000			60,000,000

Total long-term liabilities		60,533,576			63,018,036


Minority interest in consolidated subsidiaries		24,727			24,727


Shareholders’ deficit
Preferred stock, $0.50 par value; 1,500,000 shares authorized; 10,899 shares outstanding; liquidation preference of $5,450		5,450			5,450
Convertible common stock, $0.01 par value; 30,000,000 shares authorized; 6,477,242 and 4,060,000 shares outstanding, respectively		64,772			40,600
Common stock, $0.01 par value; 100,000,000 shares authorized; 46,035,456 and 10,635,507 shares outstanding, respectively		460,355			106,355
Additional paid-in capital		41,035,157			34,292,748
Subscription receivable		(70,000	)		—
Accumulated deficit		(101,118,567	)		(98,181,384	)

Total stockholders’ deficit		(59,622,833	)		(63,736,231	)

Total liabilities and stockholders’ deficit	$	2,405,862		$	1,732,774

See the accompanying notes to the consolidated financial statements.

F-2

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Years Ended December
	2008			2007
Operating expenses
General and administrative	$	2,228,537		$	934,314
Mining properties operating and exploration costs		48,671			9,511
Depreciation and depletion		50,000			50,000
Accretion of reclamation obligation		15,540			15,088

Total operating expenses		2,342,748			1,008,913


Other income (expense)
Impairment expense	$	(1,000,000	)	$	—
Interest income		2,735			25,932
Interest expense		(16,986	)		(208,219	)
Gain on forgiveness of debt		566,185			24,777
Other income / (expense)		105			(14,693	)

Total Other income (expense)		(447,961	)		(172,203	)


Net loss		(2,790,709	)		(1,181,116	)

Convertible common stock dividends		(146,474	)		(167,688	)


Loss attributable to common stockholders	$	(2,937,183	)	$	(1,348,804	)


Basic and diluted loss per common share	$	(0.12	)	$	(0.13	)


Basic and diluted weighted-average common shares outstanding		24,435,269			10,635,507

See the accompanying notes to the consolidated financial statements.

F-3

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Years Ended December 31,
	2008			2007
Cash Flows from Operating Activities
Net loss	$	(2,790,709	)	$	(1,181,116	)

Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of reclamation obligation		15,540			15,088
Gain on forgiveness of debt		(566,185	)		(24,777	)
Impairment expense		1,000,000
Stock-based compensation expense		599,454			—
Depreciation and depletion		50,000			50,000
Changes in operating assets and liabilities:
Other current assets		340,471			20,249
Accounts payable		83,396			90,716
Related party payable		49,109			11,046
Accrued interest payable		16,986			208,219
Accrued liabilities		121,894			—


Net Cash Used in Operating Activities		(1,080,044	)		(810,575	)


Cash Flows from Financing Activities
Proceeds from Issuance of Common Stock		1,780,145			—
Related Party Loan		(241,545	)		—
Increase in bank overdraft		18,458			—


Net Cash Provided by Financing Activities		1,557,058			—


Net Change in Cash		477,014			(810,575	)

Cash at Beginning of Year		129,003			939,578


Cash at End of Year	$	606,017		$	129,003


Supplemental Schedule of Noncash Investing and Financing Activities
Common stock issued for services provided	$	348,487		$	—
Common stock issued on conversion of debenture		2,500,000			—
Common stock issued on conversion of debenture interest		425,206			—
Common stock issued in settlement of accrued convertible dividends		902,252			—

Common stock and 1,500,000 warrants issued for payment on Company’s behalf		150,000			—
Common stock issued for Directors and officers services		345,000			—
Convertible common stock dividends accrued		146,474			167,688

See the accompanying notes to the consolidated financial statements.

F-4

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007


																		Stock
	Preferred stock				Convertible common stock				Common stock				Additional paid-		Subscription			purchase			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		in capital		receivable			rights			deficit			deficit)
Balance — December 31, 2006		10,899	$	5,450		4,060,000	$	40,600		10,635,507	$	106,355	$	30,971,001	$	—		$	3,321,747		$	(96,832,580	)	$	(62,387,427	)
Net loss		—		—		—		—		—		—		—		—			—			(1,181,116	)		(1,181,116	)
Expiration of stock purchase rights		—		—		—		—		—		—		3,321,747		—			(3,321,747	)		—			—
Convertible common stock dividends accrued		—		—		—		—		—		—		—		—			—			(167,888	)		(167,888	)

Balance — December 31, 2007		10,899		5,450		4,060,000		40,600		10,635,507		106,355		34,292,748		—			—			(98,181,384	)		(63,736,231	)
Net loss		—		—		—		—		—		—		—		—			—			(2,790,709	)		(2,790,709	)
Correction to prior year		—		—		—		—		3,735		37		—		—			—			—			37
Conversion of debentures		—		—		—		—		10,000,000		100,000		2,400,000		—			—			—			2,500,000
Issuance of common stock for convertible debenture interest		—		—		—		—		1,700,822		17,008		408,198		—			—			—			425,206
Issuance of convertible stock in settlement of convertible stock dividend		—		—		2,417,242		24,172		—		—		878,080		—			—			—			902,252
Issuance of common stock upon conversion of payables to relates parties		—		—		—		—		1,393,947		13,940		334,547		—			—			—			348,487
Issuance of common stock and 20,001,445 warrants for cash		—		—		—		—		18,501,445		185,015		1,665,130		—			—			—			1,850,145
Issuance of common stock and 1,500,000 warrants for payment on Company’s behalf										1,500,000		15,000		135,000											150,000
Issuance of common stock for services		—		—		—		—		2,300,000		23,000		322,000		—			—			—			345,000
Stock based compensation expense		—		—		—		—		—		—		599,454		—									599,454
Subscription receivable		—		—		—		—		—		—		—		(70,000	)		—			—			(70,000	)
Convertible common stock dividends accrued		—		—		—		—		—		—		—		—			—			(146,474	)		(146,474	)


Balance — December 31, 2008		10,899	$	5,450		6,477,242	$	64,772		46,035,456	$	460,355	$	41,035,157	$	(70,000	)	$	—		$	(101,118,567	)	$	(59,622,833	)

See the accompanying notes to the consolidated financial statements.

F-5

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Chief Consolidated Mining Company (''Chief’’) was incorporated in the state of Arizona in 1909. Chief currently is the owner of or has vested interests in approximately 16,000 acres of patented mining property in the Tintic Mining Districts in Utah County and Juab County, Utah. Chief and its subsidiaries (collectively, the ''Company’’) operate as a mineral resource company seeking to engage in the exploration and development of their mining claims and properties.

Accounting Basis — The consolidated financial statements are presented in United States Dollars and in accordance with generally accepted accounting principles generally accepted in the United States of America.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The estimated amount of the reclamation and the EPA settlement obligations are particularly subject to change in the near term.

Principles of Consolidation — The accompanying consolidated financial statements include the accounts of the Company and all majority owned subsidiaries. The Company’s 23% investment in Central Standard was accounted for using the equity method and is carried at zero. Intercompany accounts and transactions have been eliminated in consolidation.

Business Conditions — The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

As of December 31, 2008, the Company had $950,000 of land and mining claims and $100,000 of mining related buildings, machinery and equipment, which in aggregate, represent approximately 44% of total assets. The Company’s buildings, machinery and equipment consist principally of the Tintic Mill located at the Trixie mine. The realization of the Company’s investment in land and mining claims and mining related buildings, machinery and equipment is dependent upon various factors, including the outcome of: (i) the Company’s success in exploration efforts to discover additional mineral resources and in proving the technical feasibility and commercial viability of the identified mineral resources, (ii) the Company’s ability to obtain necessary funding to continue exploration of the mining properties and to finance operations while the Company pursues real estate development alternatives for portions of the Company’s land, (iii) the Company’s success in finding a joint venture partner to provide capital funding for the Company’s continued exploration of its mining properties, (iv) the Company’s ability to profitably lease the Tintic Mill or its mining claims to outside entities, and (v) the Company’s success in selling or developing certain of its land surface rights to fund its continued mining and exploration activities.

In 2002, the Company encountered unstable mining conditions and suspended mining and processing operations. As a result of the suspended mining and processing operations, the Company is not generating mining revenues and does not have sufficient funding to make the significant safety improvements required in the Trixie Mine or to continue exploration efforts related to the Burgin Mine.

F-6

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

During 2002, the Environmental Protection Agency (EPA) completed a study and finalized its actions to be taken in response to the release of waste materials at and around the Eureka Mills Superfund Site located in Juab County, Utah. The EPA is seeking reimbursement from the Company in the amount of $60 million for its portion of the liability based on the ownership and the conduct of mining operations on portions of the site. During 2005, the Company received a consent decree from the EPA and agreed to comply with its conditions, as discussed more fully in Note 10.

These matters raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or liabilities that might be necessary should the Company not be able to continue as a going concern.

The Board of Directors is currently pursuing efforts to obtain additional sources of financing to allow the Company to proceed with its operations. The Company is also investigating selling portions of its land surface rights in order to comply with the EPA Consent Decree.

Land and Mining Claims — Land and mining claims are recorded at the lower of cost, less accumulated depletion, or fair value. Costs of developing mining properties (after completion of exploration) are capitalized. Exploration costs are expensed as incurred until the establishment of a commercially minable deposit or reserve which can be economically and legally produced. When a mining property reaches the production stage, the related capitalized costs are amortized using the units of production method on the basis of proven and probable ore reserves. The Company’s mining properties are periodically assessed for impairment of value and any losses are charged to operations at the time of impairment.

Buildings, Machinery and Equipment — Buildings, machinery and equipment are recorded at the lower of cost or fair value. Major additions and improvements are capitalized while minor replacements, maintenance and repairs that do not increase the useful lives of the assets are expensed as incurred. Depreciation of buildings, machinery and equipment were previously computed using the straight-line method over estimated useful lives of 11 years. In 2006, the Company impaired all of its remaining buildings, machinery and equipment to its recoverable amount and reassessed their estimated useful lives to 5 years.

Impairment of Long-Lived Assets — The Company accounts for long-lived assets pursuant to Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company evaluates its land and mineral properties, buildings, machinery and equipment and other long-lived assets for impairment at least annually and when indications of possible impairment exist and assesses their recoverability based upon anticipated future cash flows from the asset’s or group of assets’ use or sale. If changes in circumstances lead Company management to believe that any of its long-lived assets may be impaired, the carrying value of long-lived assets are reduced by the estimated excess of the carrying value over the fair value of the assets. Fair value is determined by the discounted future cash flows from the asset or group of assets. Impairment of $1,000,000 was recognized on land and mining claims during the year ended December 31, 2008.

F-7

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Related Party Loans Receivable - Loans receivable from related parties are carried at cost, which approximates fair value, unless the loan is impaired.

Reclamation Costs Obligation — The Company provides for reclamation costs and penalties for the retirement obligations associated with tangible long-lived assets. Reclamation liabilities are accrued based on estimates of known environmental exposure in conjunction with feasibility studies and are accreted over the estimated life of the assets.

Income Taxes — The Company follows the provisions of SFAS No. 109, Accounting for Income Taxes, which requires that income tax accounts be computed using the liability method. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities and operating loss and tax credit carryforwards given the provisions of currently enacted tax laws.

Fair Value of Financial Instruments — The carrying amount of the convertible debentures and the reclamation obligation approximates their estimated fair value. The estimated fair value of the convertible debenture can be converted to common stock at a price similar to current market prices. The reclamation obligation is accreted each period using market information regarding interest and discount rates.

EPA settlement obligation — The carrying amount of the EPA settlement obligation is carried at its historical cost in accordance with AICPA SOP 96-1 Environmental Remediation Liabilities and SFAS No. 5 Accounting for Contingencies. The Company recognizes the face value (undiscounted) liability as assessed by the EPA.

Basic and Diluted Loss Per Common Share — Basic loss per common share excludes dilution and is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the year. Diluted loss per common share reflects the potential dilution that could occur if stock options were exercised or convertible debentures or convertible common stock was converted into common stock. The computation of diluted loss per common share does not assume exercise or conversion of securities that would have an antidilutive effect on net loss per common share.

At December 31, 2008 and 2007, there were outstanding options to purchase 4,050,000 and 170,000 shares of common stock respectively, which were excluded from the computation of diluted loss per common share. In addition, for the year ended December 31, 2008 and 2007, there were 6,477,242 and 4,060,000 shares of convertible common stock outstanding and 409,793 shares issuable for accrued dividends that were excluded from the computations of basic and diluted loss per share.

In the year ended December 31, 2007 $2,500,000 of convertible debentures and $408,219 of accrued interest which are convertible at $0.25 per share were excluded from the computation of diluted loss per common share calculation. These potential common shares were excluded because they were antidilutive and would have decreased diluted loss per common share. In the year ended December 31, 2008 the convertible debentures and accrued interest were converted into common stock of the Company.

F-8

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Stock-Based Employee Compensation — The Company has outstanding stock options to directors and employees, which are described more fully in Note 4. The Company accounts for its stock options in accordance with SFAS 123R, Share-Based Payment. SFAS 123R requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. SFAS 123R also requires the stock option compensation expense to be recognized over the period during which an employee is required to provide service in exchange for the award (the vesting period).

Stock-based employee compensation incurred for the years ended December 31, 2008 and 2007 was $599,454 and $0 respectively.

Recent accounting pronouncements — New Accounting Policies - In September 2006, the FASB issued SFAS No. 157, Fair Value Measurement. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. We adopted SFAS No. 157 effective April 1, 2008 and the adoption did not have a significant effect on our consolidated results of operations, financial position or cash flows. In February 2008, the FASB issued FSP SFAS No. 157-2 which delays the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). This deferral of SFAS No. 157 primarily applies to our asset retirement obligation (ARO), which uses fair value measures at the date incurred to determine our liability. We are currently evaluating the impact of the pending adoption in 2009 of SFAS No. 157 non-recurring fair value measures.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115, effective on January 1, 2008, and permits companies to choose, at specified dates, to measure certain eligible financial instruments at fair value. The provisions of SFAS No. 159 apply only to entities that elect to use the fair value option and to all entities with available-for-sale and trading securities. At the effective date, companies may elect the fair value option for eligible items that exist at that date, and the effect of the first remeasurement to fair value must be reported as a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of SFAS No. 159 has not had a material impact on the Company’s financial position or results of operations.

Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting and disclosure for uncertainty in tax positions. The Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns for the open tax years in such jurisdictions. The Company has no significant reserves for uncertain tax positions and no adjustments to such reserves were required upon adoption of FIN 48. No interest or penalties have been levied against the Company and none are anticipated, therefore interest or penalty has been included in our provision for income taxes in the consolidated statements of operations.

F-9

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — NATURE OF OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent accounting pronouncements — In December 2007, the FASB issued a revision of Statement No.SFAS 141 (R), Business Combinations. This Statement establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This Statement applies prospectively to business combinations for which the acquisition date is after the beginning of the first annual reporting period beginning after December 15, 2008. Management does not anticipate this Statement will impact the Company’s consolidated financial position or consolidated results of operations and cash flows.

In March 2008, the FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133. This Statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. This disclosure better conveys the purpose of derivative use in terms of the risks that the entity is intending to manage. Disclosing the fair values of derivative instruments and their gains and losses in a tabular format should provide a more complete picture of the location in an entity’s financial statements of both the derivative positions existing at period end and the effect of using derivatives during the reporting period. Disclosing information about credit-risk-related contingent features should provide information on the potential effect on an entity’s liquidity from using derivatives. This Statement requires cross-referencing within the footnotes, which should help users of financial statements locate important information about derivative instruments. This Statement is effective for financial statements issued for the fiscal years and interim periods beginning after November 15, 2008. Management does not anticipate the adoption of this Statement will impact the Company’s consolidated financial position or consolidated results of operations and cash flows.

In April 2008, FASB issued FASB Staff Position SFAS No. 142-3, Determination of the Useful Life of Intangible Assets (“FSP SFAS No. 142-3”). FSP SFAS No. 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognizable intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142”). The intent of FSP SFAS No. 142-3 is to improve the consistency between the useful life of a recognizable intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R), Business Combinations and other U.S. generally accepted accounting principles. FSP SFAS No. 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The Company does not anticipate that the adoption of FSP SFAS No. 142-3 will have an impact on its financial position or results of operations.

In May 2008, the FASB issued FASB Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), or FSP No. APB 14-1. FSP No. APB 14-1 clarifies that convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14 Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants. Additionally, the FSP specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP No. APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Management is currently assessing the impact this standard will have on the Company’s consolidated financial position or results of operations.

F-10

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 — INVESTMENTS IN SUBSIDIARIES

Tintic Utah Metals Joint Venture — The Company owns a 75% interest in Tintic Utah Metals LLC (''Tintic’’). The Company’s Burgin Mine and the Tintic Mill are located on property owned by Tintic. The remaining 25% is owned by Korea Zinc Co. Ltd. (“Korea Zinc”).

On August 27, 2008, the Company, Andover Ventures Inc. (“Andover”) and Korea Zinc entered into an agreement whereby Andover obtained the exclusive right to purchase Korea Zinc’s 25% interest in Tintic. Andover then transferred to the Company Andover’s right to purchase Korea Zinc’s share of Tintic. Andover, which became the majority shareholder of the Company in March of 2009, agreed to make the required cash payments on behalf of the Company in exchange for the issuance of shares of common stock at $0.10 per share. The terms of the agreement were modified on November 20, 2008.

Under the terms of the modified agreement, the Company is obligated to pay Korea Zinc $1,000,000 for the purchase right. The obligation is non-refundable and is payable through November 23, 2009, then under the option, the Company can purchase the remaining 25% interest from Korea Zinc for $2,000,000 by November 23, 2010.

Upon entering into the agreement, the Company recorded a payable and an increase to land and mining claims for $1,000,000. At December 31, 2008, the fair value of the land and mining claim was zero and resulted in the recognition of a $1,000,000 impairment loss.

As of December 31, 2008, Andover made payments of $150,000 on the Company’s behalf for the option. In return, the Company issued 1,500,000 shares of stock and 1,500,000 warrants to purchase common shares of stock for $0.15 per share through November 28, 2009. The value of the common stock and the warrant was $0.10 per share based on the price common stock and warrants were issued for cash during December 2008. Accordingly, at December 31, 2008, the Company has accrued $850,000 representing its obligation to pay the remaining amount due under the purchase option.

Central Standard Consolidated Mines — The Company owns approximately 23% percent of the outstanding capital stock of Central Standard Consolidated Mines (''Central Standard’’). Central Standard’s mining property consisted of 320 acres located in the north-central portion of the East Tintic Mining District and is surrounded by property owned by Tintic. In May 2006, some of the holdings of Tintic, Central Standard, and Eagle and Blue Bell Mining Co., Chief’s subsidiaries, were sold at tax sale. The Company has been reviewing its options to recover these properties. During April 2007, the Company redeemed the Tintic and the Eagle and Blue Bell properties for $38,000. The Central Standard properties were not redeemed but were included as part of a broader land-swap package worked out between Chief and an adjoining property owner during the first quarter of 2008.

NOTE 3 — CAPITALIZATION

At a special meeting of stockholders on February 1, 2008, the Company’s Articles of Incorporation were amended (a) to increase the amount of authorized common stock to 100,000,000 shares and (b) to reset the par value of the common stock and convertible common stock from $0.50 par value per share to $0.01 par value per shares. The accompanying financial statements have been restated retroactively for all period presented to reflect the changes.

Convertible Common Stock — Dividends on the convertible common stock accrue at a rate of 8% per annum and are payable in-kind with shares of convertible common stock. The terms of the convertible common stock require that the Company not declare dividends on the common stock as long as the convertible common stock is outstanding.

F-11

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — CAPITALIZATION (CONTINUED)

Owners of the convertible common stock have a pre-emptive right to purchase new issuances of securities of the Company before any other investors, not to include certain issuances including securities issued in any public offering or a merger.

Dividends accrue on the convertible common stock at the rate of 8% per annum and are payable in-kind with convertible common shares, and amounted to 525,682 shares and 472,362 shares of convertible common stock were issuable, respectively. The in-kind dividends were valued based on the average market price of the common stock during the period and resulted in recognizing $146,474 and $167,688 of convertible common stock dividends during the years ended December 31, 2008 and 2007, respectively.

On February 1, 2008, the dividend in-kind of $862,109 was converted into 2,316,884 shares of convertible common stock. On March 11, 2008 the dividend in-kind accrued to that date was $40,103. This was converted into 100,358 shares of convertible common stock. As at December 31, 2008, the dividend in-kind accrued was $106,331 and amounted to 409,793 shares of convertible common stock that remain issuable for the year ended December 31, 2008.

Preferred Stock —The shares of preferred stock and common stock of the Company have equal right to receive dividends except that upon liquidation of the Company the preferred shares are entitled to a preferential payment of $0.50 per share.

Stock Purchase Rights — Outstanding stock purchase rights expired and their carrying value of $3,321,747 was reclassified to additional paid-in capital.

Common Stock — On February 1, 2008, the Company issued 11,700,822 shares of common stock upon the conversion of a $2,500,000 convertible debenture and $425,205 of accrued convertible debenture interest, both at $0.25 per share.

On February 25, 2008, the Company issued 1,393,947 shares of common stock upon conversion of $348,487 payables to related parties at $0.25 per share.

On November 28, 2008, the Company issued 10,000,000 shares of common stock and 10,000,000 warrants to purchase common stock at $0.15 per share for $1,000,000 in cash. The warrants are exercisable through November 28, 2010.

On November 28, 2008, the Company issued 5,441,445 shares of common stock and 5,441,445 warrants to purchase common stock at $0.15 per share for $544,144 in cash. The warrants are exercisable through November 28, 2010.

On December 2, 2008, the Company issued 2,300,000 common shares to directors and executive officers of the Company for future compensation. The fair value of the common shares was determined to be $0.15 per common share. On December 3, 2008, the Company issued 3,060,000 shares of common stock and 3,060,000 warrants to purchase common stock at $0.15 per share for $306,000 in cash. The warrants are exercisable through December 3, 2010.

F-12

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 — STOCK OPTIONS

Nonqualified Stock Options — From time to time, the shareholders have approved the issuance of nonqualified stock options to officers and directors. The Board of Directors also issued nonqualified stock options to key employees, to non-employees for services rendered and to a creditor as part of a settlement of a claim in prior years. The nonqualified stock options have various vesting options and must be exercised within ten years or less from the date of grant unless sooner terminated by their terms.

On November 15, 2008, 4,000,000 stock options were granted to a director at an exercise price of $0.25 per common share. The options vested immediately. The fair value of the stock options granted was determined using the Black-Scholes Option Pricing Model and resulted in a value of $599,454 based on the following assumptions: risk-free interest rate of 3.72%, expected term of 10 years, weighted average stock volatility of 211%, and expected future dividends of $0 per share. The amount of $599,454 was expensed in the current period. The risk-free rate was determined using the equivalent Government zero-coupon bonds and the volatility was determined using the Company’s historic weekly share prices for the past five years.

A summary of the status of stock options at December 31, 2008 and 2007 and related changes during the years then ended is as follows:


				Weighted		Average
	Common			Average		Remaining		Range of
	Shares			Exercise Price		Life (Years)		Exercise Prices
Balance, December 31, 2006		170,000		$	2.77		5.43	$	2.19 - $3.00

Balance, December 31, 2007		170,000			2.77		3.43	$	2.19 - $3.00

Issued		4,000,000			0.25		9.88	$	0.25
Expired		(120,000	)		2.95		3.37	$	2.90 - $3.00

Balance, December 31, 2008		4,050,000		$	0.28		9.78	$	0.25 - $2.44

Warrants — As at March 31, 2009, the Company has 20,001,445 warrants outstanding, exercisable at $0.15 per common share.

NOTE 5 — INCOME TAXES

A reconciliation of the expected U.S. federal income tax computed at the statutory rate to the provision for income taxes is as follows for the years ended December 31:


	2008			2007
Tax at federal statutory rate — 34%	$	(831,541	)	$	(401,579	)
State benefit, net of federal tax		(80,708	)		(38,977	)
Expiration of operating loss carryforwards		288,329			67,513
Change in valuation allowance		623,920			373,043

Net tax expense	$	—		$	—

F-13

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 — INCOME TAXES (CONTINUED)

The Company believes it is unlikely that the deferred tax assets will be realized and the deferred tax assets have been fully allowed against. The net deferred tax asset consisted of the following at December 31:


	2008			2007
EPA settlement obligation	$	22,380,000		$	22,380,000
Reclamation obligation		199,024			193,227
Mine exploration costs		1,228,500			1,638,000
Land and mining claims		610,074			610,074
Buildings and equipment		—			58,712
Impairment loss on equity investment		48,994			48,994
Stock-based compensation		281,278			57,682
Operating loss carryforwards		10,380,631			9,517,891

Total deferred tax assets		35,128,501			34,504,580
Valuation allowance		(35,128,501	)		(34,504,580	)

Net deferred tax asset	$	—		$	—

Since operations ceased in 2002, the Company has failed to file its federal income tax returns. The net operating losses expire as follows:


Year of Expiration	Amount
2009	$	930,000
2010		1,284,000
2011		1,038,000
2012		648,000
2018		992,000
2019		1,085,000
2020		2,161,000
2021		3,457,000
2022		2,765,000
2023		1,745,000
2024		1,854,000
2025		2,267,000
2026		1,796,000
2027		2,721,000
2028		3,086,000

	$	27,829,000

F-14

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 — INCOME TAXES (CONTINUED)

The Internal Revenue Code contains provisions that reduce or limit the availability and utilization of net operating loss carryforwards if certain changes in ownership have taken place or will take place. Changes in the ownership of the Company may have resulted in limitations on all pre-existing net operating loss carryforwards of the Company. As a result, management estimates that all of the Company’s net operating loss carryforwards may be limited to utilization of an annual amount not to exceed the value of the Company on the date the Company exceeded the specified levels of allowable changes in ownership multiplied by the Federal long-term tax-exempt rate at that date. If the annual limited amount is unutilized in any particular year, it remains available on a cumulative basis through the expiration date of the applicable net operating loss carryforwards.

NOTE 6 — RELATED PARTY TRANSACTIONS

During the current year, the Company settled amounts payable to Dimeling, Schreiber & Park Reorganization Fund II, LP (“DSP II”) in the amount of $348,487 (December 31, 2007: $348,487). In addition the convertible debentures payable of $2,500,000 (December 31, 2007: $2,500,000) owed to DSP II was converted into Common Stock of the Company (see Note 3 to these consolidated financial statements).

In addition, the Company has accrued payroll liabilities in the amount of $0 and $47,584 to former employees at December 31, 2008 and 2007.

On December 3, 2008 the Company loaned a shareholder $239,029, which is secured by the common shares held by the shareholder in Chief. The loan matures on March 2, 2009 and carries an interest rate of 12% per annum. Interest receivable of $2,516 has been recognized as at December 31, 2008. On March 1, 2009 both parties agreed to a maturity date extension to September 30, 2009.

NOTE 7 — ASSET RETIREMENT OBLIGATIONS

Reclamation of Mines — Prior to 1993, the Company and or companies that were subsequently acquired by the Company leased certain of its mining properties to other companies for operation, exploration and development. Under the terms of the leases, these other companies were obligated to comply with all federal, state and local environmental laws and regulations affecting the mining industry. Tintic has assumed a reclamation obligation from the previous operator of the Burgin Mine. In addition, the Company also holds a small mining permit and reclamation obligation in connection with its Chief Gold properties.

The Company has cash held in escrow in the form of reclamation bonds with the State of Utah to settle the obligations when all mining efforts have been abandoned. All interest income on the bonds is currently being garnished by the Internal Revenue Service to cover certain taxes, penalties, and interest included in accrued liabilities on the Company’s balance sheet. The Company has issued a bond to the State of Utah totalling $488,300 at December 31, 2008.

F-15

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 — ASSET RETIREMENT OBLIGATIONS (CONTINUED)

A reconciliation of the asset retirement obligations associated with reclamation is as follows:


Balance, December 31, 2006	$	502,948
Accretion expense		15,088

Balance, December 31, 2007		518,036
Accretion expense		15,540

Balance, December 31, 2008	$	533,576

NOTE 8 — CONVERTIBLE DEBENTURES

During December 2005, the Company issued convertible debentures in the amount of $2,500,000. The debentures accrue interest at an annual rate of 8%, payable at the time of conversion in additional shares of common stock. The conversion price is $0.25 per share. The debentures automatically convert into shares of common stock upon the approval of the shareholders of certain amendments to the articles of incorporation. Under APB 14, none of the proceeds were attributable to the conversion feature.

On February 1, 2008 the convertible debentures were converted into shares of common stock with shareholder approval being obtained to certain amendments to the articles of incorporation. This resulted in the issuance of 10,000,000 shares of common stock. In addition, the accrued interest due on the convertible debentures amounted to $425,206. This amount was also converted into shares of common stock at $0.25 per share and resulted in the issuance of 1,700,822 shares of common stock.

NOTE 9 — LAND, MINING CLAIMS, AND PROPERTY AND EQUIPMENT

Land and mining claims and buildings, machinery and equipment consisted of the following as of December 31, 2008 and 2007:


	2008			2007
Land and mining claims	$	950,000		$	950,000


Mill	$	250,000		$	250,000
Machinery and equipment		335,778			335,778

Total buildings, machinery and equipment		585,778			585,778
Less: Accumulated depreciation		(485,778	)		(435,778	)

Net buildings, machinery and equipment	$	100,000		$	150,000

Depreciation expense was $50,000 and $50,000 for the years ended December 31, 2008 and 2007. The Company currently owns or has vested interests in approximately 16,000 acres of land.

F-16

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 — OTHER COMMITMENTS AND CONTINGENCIES

On April 23, 2007, Leonard Weitz filed a complaint against the Company in the Fourth Judicial District in and for Utah County, Utah (Case No. 07010174). An amended complaint was filed on June 23, 2007. The complaint is seeking money damages in the amount of $726,000 for alleged breach of contract arising out of Mr. Weitz’s employment agreement with the Company. A scheduling order has been proposed by plaintiff’s attorney and is under consideration by the Company. The Company believes it has meritorious defenses to the claims asserted in the action and intends to vigorously defend the matter.

The Company was named, along with two other corporate entities, as a respondent in an administrative proceeding before the Utah Labor Commission in August 2006. In the proceeding, the seventy-six year old petitioner alleges that he was the Company’s employee from 1950 to 1954 and has contracted lung cancer as a result of his employment. The plaintiff sought medical expenses and permanent total disability compensation. The plaintiff is now deceased. His widow has now claimed dependent’s benefits and burial benefits. The trial took place and was settled on May 6, 2008. The Company’s insurer paid all settlement amounts and reimbursed the Company for all defense costs the Company had advanced.

On August 30, 2002, Royce Hackworth and Hackworth Drilling, Inc. (“Hackworth”) filed a complaint against the Company and Adren Underwood in the Fourth Judicial District Court in and for Juab County, Utah (Civil No. 02060124). The complaint sought monetary relief of $37,697.14 for drilling services that were rendered to the Company by Hackworth Drilling. Judgment in the amount of $37,697.14 has been entered against the Company. Hackworth has agreed for the Company to pay this lien through the sales of our land pursuant to the EPA Consent Decree.

Environmental Protection Agency Settlement — During 2001, the U.S. Environmental Protection Agency (''EPA’’) proposed to place what the agency has titled the ''Eureka Mills Superfund Site’’ (the ''Site’’) on the National Priorities List, as authorized under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (''CERCLA’’). According to the EPA, samples indicate that the soil in the Town of Eureka, Utah is contaminated with lead and, to a lesser extent, arsenic. The Site consists of approximately 150 acres in the town of Eureka, Utah.

On October 18, 2002 the EPA finalized its actions to be taken in response to the release of waste materials at and around the Site. The EPA is seeking reimbursement from the Company for its portion of the liability based on the ownership and the conduct of mining operations in the proximity of the Site. On February 9, 2005, the Company agreed to a judgment with the EPA in the amount of $60 million.

The judgment will remain in effect until the Company has complied with all the requirements of the related consent decree. The following details the Company’s obligations under the judgment:

The Company agrees to use its best efforts to satisfy the judgment by seeking indemnification or recovery from insurance policies. After deducting recovery costs, 70% of all proceeds from insurance policies shall be paid to the United States. Until all claims are exhausted, the Company must provide a report to the United States each year for five years listing insurance claims, the action the Company is taking to recover the amounts, and any recovery obtained.

F-17

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 — OTHER COMMITMENTS AND CONTINGENCIES (CONTINUED)

	2.		The Company agrees to use its best efforts to sell property comprising approximately 6,000 acres, most of which is located north of Highway 6 in both Utah County and Juab County, Utah. Upon the transfer of any such property, the Company shall pay the EPA 100% of net sales proceeds up to $350,000, and then 50% thereafter. If the transfer is less than the tax assessed value of the property or exceeds a total of more than 1,000 acres, the EPA may require an independent appraisal and may object to the transfer based on the sale price. If any portion of such property is not sold by the fifth anniversary of this decree, the Company agrees to auction the property to the highest bidder, engaging a professional auctioneer. The Company cannot hold a mortgage or other security interest from any purchaser.

	3.		The Company agrees, for a five year period from the date of the consent decree, to reimburse the United States 15% of its net income in excess of $2 million during any calendar year. The Company also agrees to pay the US 15% of the net proceeds of the sale of Chief Consolidated Mining Company or the sale of substantially all of its assets in excess of $2 million. The Company will be required to present audited financial statements to the EPA.

	4.		The Company agrees to allow the EPA sole use of borrowed material (top soil, fill and base material) that is free from contaminants. The Company agrees to give uninterrupted and continuous access to the borrowed source 24 hours a day, 365 days a year. The Company shall allow the EPA to use and improve the borrowed source as is necessary to fulfill its purposes.

	6.		The Company agrees to allow the EPA to enter onto the property to construct and maintain such response action structures as are necessary to implement the response actions. The land will have an easement for the EPA to inspect, maintain, and operate the structure.

	7.		The Company agrees to provide storage space and water as needed.

	8.		The Company agrees to allow additional access as needed for various purposes as needed.

In the event the Company completes all of its obligations under the consent decree, the EPA has agreed to file a Release of Notice of Federal Lien in the office of the Juab County Recorder whereby the Company would then be relieved of the $60 million liability, resulting in a gain in such future period.

The judgment amount of $60 million represents the future value of the Company’s share of site clean up costs when the terms of the consent decree are to be satisfied on February 9, 2010. The Company accounts for the liability with respect to the EPA settlement obligation under SFAS 5 and SOP 96-1. The Company recognized the face value (undiscounted) of the liability and there will be no accretion expense in the future.

NOTE 11 — ACCRUED LIABILITIES

Accrued liabilities consisted of the following as of December 31, 2008 and 2007:


	2008		2007
Property taxes accrual	$	55,790	$	—
Professional fees accrual		64,403		—
Other accruals		111,987		110,286

	$	232,180	$	110,286

F-18

CHIEF CONSOLIDATED MINING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 — EXTINGUISHMENT OF LIABILITIES

During the year ended December 31, 2008, $566,185 (December 31, 2007: $24,777) of accounts payable and related party payables were settled. This resulted in a Gain on forgiveness of debt of $566,185 being credited to the statement of operations.

NOTE 13 — SUBSEQUENT EVENTS

On May 26, 2009, 6,477,242 shares of convertible common stock and 624,149 of accrued convertible common stock dividends were converted into 7,101,391 shares of common stock.

F-19

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	CHIEF CONSOLIDATED MINING COMPANY
Dated: July 30, 2009	By:	/S/ GORDON BLANKSTEIN
		Gordon Blankstein, Chairman and Chief Executive Officer
		(Principal Executive Officer)

Dated: July 30, 2009	By:	/S/ JEFF BATES
		Jeff Bates (Principal Financial Officer)

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Dated: July 30, 2009
	Ray Welt, Director

Dated: July 30, 2009	/S/ THOMAS SAWYER
	Thomas Sawyer, Director

Dated: July 30, 2009	/S/ ROBERT GARDNER
	Robert Gardner, Director

	/S/ MANFRED SCHAUER
Dated: July 30, 2009	Manfred Schauer, Director

CHIEF CONSOLIDATED MINING CO 10-K