Remove the wood thats on the side, tile over it, and add a new mantel.

Are you removing the carpet or panelling or keeping them as is?

You can ask a tile pro to give you an estimate for tiling it over, if it can be done.

Yes, removing carpet and planned to paint over the pine walls. How do you think it would look painted all white?

I would stain it rather than paint. It will look better. Preparation is key. I would remove that little wood door to the right of fireplace. You could improve lighting too.

Some inspiration

Love that chopped wood faux door. Great idea!

Can you elaborate on the staining Flo? I'm assuming you mean the wood. What about the ugly stone?

Stone and wood. Lighten everything up. It is a job for sure. Beverly above is saying same thing. Check on YouTube for videos describing how to do this technique.

Search Paint or Stain Fireplace Stone. There are lots of DIY blogs and videos that will show you how they did it.

I searched " white wash stone fireplace " and lots of different methods came up. I thought this one was very good in the respect that it uses zinsser 123 primer watered down with water. A very simple application and good directions on this u- tube video. Love the door posted above! Great idea! Of course you could always just remove the door and stash real logs.

Love the white wash and the faux wood door. Lighten it up! It has the potential to be an awesome space with some elbow grease and imagination.