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<DESCRIPTION>2ND QUARTER 2002 REPORT
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                                                                       EXHIBIT 1


REPORT TO SHAREHOLDERS
2ND QUARTER 2002
(U.S. DOLLARS)

         During the second quarter of fiscal 2002, International Uranium
Corporation ("IUC" or the "Company") pushed forward on a new initiative, which
will expand the Company's interests beyond its core uranium business. Building
on the Company's existing presence and previous work in Mongolia, and given the
highly prospective geological and favorable political environment in the
country, the decision was made to embark on a gold and base metals exploration
program in Mongolia. To date, the Company has secured over 365,000 hectares in
the Gobi region of south central Mongolia. This is in addition to the 1.2
million hectares the Company holds through its 70% interest in the Gurvan Saihan
Joint Venture. The license areas are in regions of strong structural deformation
and alteration with known occurrences of gold, copper, lead, zinc, molybdenum,
fluorine, uranium and rare earths. A summer field program consisting of mapping,
sampling and data analysis has begun with plans already in place to expand the
land position in Mongolia. The Company has engaged Global Mine Discovery
Partnership, LLC, a group of senior exploration professionals with extensive
regional experience and proven exploration/discovery expertise, to manage the
exploration program. The Company continues to hold its interest in the Gurvan
Saihan Joint Venture uranium project, which was placed on stand-by in 2000 due
to the continued depressed uranium commodity markets.

         The Company continues to focus on its alternate feed program through
assertive marketing and development of new initiatives. The Company is currently
evaluating several opportunities to expand the scope of production at the White
Mesa Mill, including two opportunities that would involve processing tantalum
residues to recovery tantalum as well as uranium. The White Mesa Mill will be
starting up in June to process the Ashland 1, Linde, Heritage and Molycorp
alternate feed materials. The processing campaign will run for approximately
eight to ten months; however, the Company is aggressively looking for additional
feeds, which would lengthen the duration of the Mill run.

         Efforts on the Moab tailings project, which involves the Company and
its teaming partner the Washington Group, are presently focused on informing
members of Congress, and in particular the members from Utah and the downstream
Colorado River users, on the benefits of relocating the Moab tailings pile
versus capping-in-place. One of the critical inputs for this project will be the
release of a study being completed by the National Academy of Sciences who were
commissioned by Congress to study the Moab tailings project. The objective of
the Academy's study is to evaluate the social and scientific aspects that would
be relevant to a decision as whether to move or to cap-in-place the Moab
tailings pile. A draft of the study is scheduled to be released in early June.
The conclusions of this study will be considered by the U.S. Department of
Energy ("DOE") in its evaluation of the various alternatives for remediating the
tailings pile. The Company is also pursuing funding for the project's short-term
activities through ongoing discussions with the DOE.

         IUC recorded a net loss of $1,145,937 ($0.02 per share) for the second
quarter of fiscal 2002, and a loss for the first six months of fiscal 2002 of
$2,279,472 ($0.03 per share) as compared with a net loss of $1,036,568 ($0.02
per share) for the second quarter of fiscal 2001 and a loss for the first six
months of fiscal 2001 of $1,745,992 ($0.03 per share). The primary reasons for
the larger loss for the second quarter of fiscal 2002 and fiscal year to date,
as compared to fiscal 2001, are the ramp-up expenses incurred by the Company as
it prepares to restart the White Mesa Mill, the efforts on the Moab tailings
project, the initiation of the Mongolian exploration program, the Company's
vigorous pursuit of other alternate feed opportunities, and finally the decrease
in interest income due to the significant decline in interest rates. The
Company's cash and short-term investment position remains strong at $12,531,841
as of March 31, 2002, as compared to $12,387,858 at December 31, 2001.


<PAGE>

         In April, Christopher J. Harrop retired from the board of directors of
the Company. Chris had been a member of the board since the Company's inception
in 1997. His contributions will be missed, and we would like to thank him for
his input and direction over the years.

MANAGEMENT'S DISCUSSION AND ANALYSIS

         The following discussion and analysis of the financial condition and
results of operations for the Company for the period ended March 31, 2002 should
be read in conjunction with the consolidated financial statements and
accompanying notes. The consolidated financial statements are prepared in
accordance with generally accepted accounting principles in Canada.

OVERVIEW

         IUC is incorporated under the Business Corporations Act (Ontario). The
Company is primarily engaged in the business of recycling uranium-bearing waste
products, referred to as "alternate feed materials," for the recovery of
uranium, alone or in combination with other metals, as an environmentally
preferable alternative to the direct disposal of these waste products. Alternate
feed materials are generally ores or residues from other processing facilities
that contain uranium in quantities or forms that can be recovered at the Mill.
The Company also owns several uranium and uranium/vanadium mines and uranium
exploration properties that have been shut down pending significant improvement
in uranium and vanadium prices. In addition, the Company is engaged in the
selling of uranium recovered from these operations in the international nuclear
fuel market and also sells vanadium and other metals that can be produced as a
co-product with uranium. The Company is also actively involved in a gold and
base metal exploration program in Mongolia.

REVENUES

         The Company receives a recycling fee for a majority of the alternate
feed materials once they are delivered to the Mill. A portion of the fees, equal
to the costs that are incurred receiving materials, is recognized as revenue,
while the remaining recycling fees are recorded as deferred revenue until the
material is processed. In addition to the recycling fees, the Company will
retain the uranium recovered from these materials.

         Revenues for the second quarter and first six months of fiscal 2002
consisted of process milling fees generated under the Company's alternate feed
processing agreements. Revenues for the second quarter and first six months of
fiscal 2002 were $147,256 and $262,243 respectively, as compared to $245,343 and
$521,600 for the second quarter and first six months of fiscal 2001. Revenues of
$47,533 from the sale of vanadium also supplemented the revenues for the first
six months of fiscal 2001. The decrease in process milling revenues was
primarily due to a lower volume of material received at the Mill as compared to
the second quarter and first six months of fiscal 2001. During the first six
months of fiscal 2002 the Company received 8,199 tons of Ashland 1, Linde and
Heritage materials as compared to 25,572 during the first six months of fiscal
2001. The decrease of 17,373 tons or 68% was due to a decline in Ashland 1
material as this project is nearly complete and a reduction in government
funding for the Linde project.

         Due to the continued weak markets for vanadium, the Company elected not
to sell any of its vanadium inventories. The Company continues to hold
approximately 424,000 pounds of vanadium, as black flake, that it intends to
sell as vanadium prices strengthen, and approximately 144,000 pounds of
vanadium, as vanadium pregnant liquor. Vanadium prices continue to be in the
lower range of their historical values, and are currently trading in the range
of $1.10 to $1.30 per pound V(2)O(5)p.


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COST OF PRODUCTS AND SERVICES SOLD

         Alternate feed processing activities for the second quarter and first
six months of fiscal 2002 consisted of the receipt, sampling and analysis of the
Ashland 1, Linde and Heritage materials. Process milling expenditures for the
second quarter and first six months of fiscal 2002 of $159,495 and $273,725
respectively, decreased $65,268 and $133,637 as compared to $224,763 and
$407,362 for the comparable periods in fiscal 2001. The decrease was due to the
lower volume of materials received during the first six months of fiscal 2002 as
compared to fiscal 2001. Costs incurred during the quarter consisted primarily
of payroll and related expenses for personnel, parts and supplies, contract
services and other overhead expenditures required to receive alternate feed
materials. Processing of the Ashland 1, Linde and Heritage material is currently
scheduled to begin during the third quarter of fiscal 2002.

         In addition to FUSRAP (Formerly Utilized Sites Remedial Action Program)
materials, the Company continues to receive deliveries of alternate feeds from
another uranium producer under a long-term arrangement. While the Company will
not receive a processing fee for this particular alternate feed it will produce
uranium from these materials, which will then be sold. These materials will not
be processed until the price of uranium strengthens above current levels. As of
March 31, 2002, there were approximately 4,500 tons of these materials at the
Mill. Materials received from other uranium producers or private industry
sources tend to be relatively high in uranium content but relatively small in
volume as compared to FUSRAP materials.

MILL STAND-BY

         Mill stand-by expenses consist primarily of payroll and related
expenses for personnel, parts and supplies, contract services and other overhead
expenditures required to maintain the Mill on stand-by status until a sufficient
stockpile of alternate feed material has been accumulated to justify an
efficient mill run. The Mill has been on stand-by since the second quarter of
fiscal 2000, when the conventional ore mill run was completed. The Mill is
maintained in good operating condition and is capable of commencing a mill run
at any time, without the need for regulatory approvals or any significant
capital expenditures. Mill stand-by expenses for the second quarter and first
six months of fiscal 2002 of $718,099 and $1,377,572 respectively, increased
$28,955 and $40,102 as compared to $689,144 and $1,337,470 for the comparable
periods in fiscal 2001. The increase was due to the ramping up in the number of
personnel and additional expenditures in preparation of the upcoming mill run,
which is expected to occur in the third quarter of fiscal 2002.

SELLING, GENERAL AND ADMINISTRATIVE

         Selling, general and administrative expenses consist primarily of
payroll and related expenses for personnel, legal, contract services and other
overhead expenditures. Selling, general and administrative expenses for the
second quarter and first six months of fiscal 2002 were $901,276 and $1,485,453
respectively. This represents an increase of $247,280 or 38% and $398,160 or 37%
as compared to expenditure levels of $653,996 and $1,087,293 for the comparable
periods in fiscal 2001. The increase resulted primarily from increased
expenditures for labor and professional services, and other related costs
associated with the Company's involvement in the Moab tailings project,
continuing efforts to expand its alternate feed, uranium-bearing waste recycling
business, and the initiation of the Company's Mongolian exploration program.

OTHER INCOME AND EXPENSE

         Net interest and other income for the second quarter and first six
months of fiscal 2002 was $505,891 and $635,265 respectively, as compared to
$335,184 and $677,010 for the comparable periods in fiscal 2001. The increase of
$170,707 during the comparable second quarter periods was primarily the result
of a $337,284 gain on the sale of short-term investments offset by a decrease of
$200,412 in interest income due to significantly lower interest rates paid on
short-term investments.


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LIQUIDITY AND CAPITAL RESOURCES

         The Company has a strong cash position. At March 31, 2002, the Company
had cash and short-term investments of $12,531,841 as compared to cash and
short-term investments of $14,052,552 at September 30, 2001. At March 31, 2002
the Company had a working capital deficit of $1,645,355 as compared to working
capital of $5,073,981 at September 30, 2001. The decrease of $6,719,336 in
working capital was largely due to the Company's current plan to begin
processing alternate feed material beginning in the third quarter of fiscal
2002. As a result of this plan, deferred revenue of $16,877,013 was accounted
for as a current liability, which results in a working capital deficit. Once the
material is processed, the deferred revenue will be recorded as revenue, which
in turn will result in elimination of the Company's working capital deficit and
a return to a positive working capital position.

         Net cash used in operating activities was $1,684,693 for the first six
months of fiscal 2002 and consisted primarily of the loss from continuing
operations of $2,279,472 and a gain on the sale of short-term investments of
$337,284 offset by decreases in trade receivables of $428,744 and non-cash items
of depreciation and amortization of $411,650.

         Net cash provided by investment activities was $6,960,232 for the six
months ended March 31, 2002 and consisted primarily of proceeds from the sale of
short-term investments of $9,688,953 offset by increases in restricted
investments of $1,919,208. The majority of the increase in restricted
investments was due to the Company depositing an additional $680,000 on December
31, 2001 to secure its reclamation bonds and $1,000,000 to secure the financial
surety behind the uranium concentrate sale and put option agreement entered into
on September 13, 1999. The transaction was accounted for as a deferred credit
and the value of the inventory that could be put to the Company upon exercise of
the put option was reclassified as an other asset.

         Net cash provided by financing activities for the six months ended
March 31, 2002 totaled $1,802,793 and consisted primarily of an increase in
deferred revenues of $1,810,897. Deferred revenues represent processing proceeds
received or receivable on delivery of alternate feed materials but in advance of
the required processing activity. As the Ashland 1, Linde and Heritage materials
are processed in future periods, the deferred revenue will be reclassified as
revenue. The cost of processing these materials will be recorded as process
milling expenditures and the Company's cash position will decrease by the cost
of processing.

ENVIRONMENTAL RESPONSIBILITY

         The Company reviews the anticipated costs of decommissioning and
reclaiming the Mill and mine sites as part of its environmental planning
process. The Company also formally reviews the Mill's reclamation estimate
annually with the U.S. Nuclear Regulatory Commission. Based on these reviews it
was determined that the Company's estimated reclamation obligation of
$12,350,157 is currently sufficient to cover these projected future costs.
However, there can be no assurance that the ultimate cost of such reclamation
obligations will not exceed the estimated liability contained in the Company's
financial statements.

         The Company has posted bonds as security for these liabilities and has
deposited cash, cash equivalents and fixed income securities as collateral
against these bonds. At March 31, 2002, the amount of these restricted
investments collateralizing the Company's reclamation obligations was
$11,444,281. The increase of $919,208, as compared to September 30, 2001, was
primarily due to accrued interest of $239,208 and the Company depositing an
additional $680,000. This brings the collateral to approximately 100% of the
bonded amounts as required by the bonding company.

         The Company has detected some chloroform contamination at the Mill site
that appears to have resulted from the operation of a temporary laboratory
facility that was located at the site prior to and during the construction of
the Mill facility. The source and extent of this contamination are currently
under investigation, and a corrective action plan, if necessary, is yet to be
devised. Although the investigations to


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date indicate that this contamination appears to be contained in a manageable
area, the scope and costs of remediation have not yet been determined and could
be significant.

RESEARCH AND DEVELOPMENT

         The Company does not have a research and development program per se.
Process development efforts expended in connection with the processing of
alternate feeds are included as a cost of processing. Process development
efforts expended in the evaluation of potential alternate feed materials that
are not ultimately processed at the Mill are included in Mill overhead costs.
The Company does not rely on patents or technological licenses in any
significant way in the conduct of its business.

TREND INFORMATION

         During the period 1997 through 2000, the Company saw a deterioration in
both uranium and vanadium prices, from $11.00 per pound of U(3)O(8) and $4.10
per pound of V(2)O(5) in October 1997 to $7.40 per pound of U(3)O(8) and $1.70
per pound of V(2)O(5) at the end of September, 2000. As a result of these
decreases in commodity prices, the Company decided to cease its mining and
exploration activities in 1999, and has shutdown all of its mines and its
Mongolian uranium joint venture, pending any significant increases in commodity
prices. Also as a result of these market events, the Company marshaled its
resources to concentrate its operations on the continuing development of the
alternate feed, uranium-bearing waste recycling business. Although uranium
prices have increased to $9.90 per pound U(3)O(8) as of May 20, 2002, the
vanadium price has fallen even further to approximately $1.20 per pound
V(2)O(5).

         Although the Mill's tailings system currently has capacity to process
all of the alternate feed materials under contract with the Company, this
capacity is expected to run out within the next one to three years, depending on
the level of success of the Company in entering into contracts for the
processing of additional feed materials. In order to provide additional tailings
capacity, the Company will have to repair existing tailings Cell No. 4A, at an
estimated cost of $1.5-$3.0 million. In addition, if Cell No. 4A is put into use
the reclamation obligation for the Mill would increase by approximately $1.0
million, which would require an increase in the Mill's reclamation bond by that
amount. The repair of Cell No. 4A will provide the Company with approximately 2
million tons of additional tailings capacity, which should be ample capacity for
the foreseeable future.

OUTLOOK FOR 2002

         Historically, the Company's operations were significantly dependent
upon uranium and vanadium prices. Due to the low spot price for vanadium and the
continued depressed market for uranium, the Company suspended all U.S. mining
activities in 1999. The Company intends to keep those properties in a shutdown
status indefinitely, pending further improvements in commodity prices, and will
continue to evaluate potential options for the sale of its mining properties and
mining equipment, as they may arise.

         As a result of this reduction in exploration and mining activities, the
Company has focused its resources on the continuing development of the alternate
feed, uranium-bearing waste recycling business. While the Company has had some
success to date in the development of its alternate feed business, the Company
has not to date developed a sufficient backlog of alternate feed material to
result in sustained profitable operations for the Company. The Company will
continue to pursue opportunities in both the private and government sectors for
sources of alternate feeds in an effort to develop this backlog, and also
evaluate other opportunities unrelated to its mining and alternative feed
activities as they may arise.

         The Company's decision to focus its resources and attention primarily
on the development of its alternate feed, uranium-bearing waste recycling
business means that the Company is less susceptible to variations in uranium and
vanadium market prices. Due to the decision to sell all of the uranium inventory
and


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sales contracts, the Company is relying primarily on revenue from alternate feed
processing fees and the uranium produced from these feeds.

         Based on current projections, processing of alternate feed material at
the Mill is scheduled to begin in the third quarter of fiscal 2002 and continue
through the end of the fiscal year. The current backlog of material allows for
approximately nine months of processing. The duration of the mill run will
depend in large part on the schedule for deliveries of materials to the Mill
under the Company's existing alternate feed contracts.

         The Company has initiated a grass roots exploration program for gold
and base metal opportunities in Mongolia. A summer field campaign of mapping,
sampling and analysis of geophysical and satellite imagery data is planned for
2002.

         On January 16, 2002 the prime contractor, IT Corporation ("IT"), for
the Ashland 1 and Linde projects filed for protection under Chapter 11 of the
United States Bankruptcy Code. IUC's contracts for both of these projects are
with IT, which has contracts with the U.S. Army Corps of Engineers (the
"Corps"). On May 3, 2002, The Shaw Group Inc. ("Shaw") completed its previously
announced acquisition of substantially all of the assets and the assumption of
certain liabilities of IT. Prior to the completion of the acquisition by Shaw,
IT received some interim financing from which IUC received $1,475,344 to pay
down outstanding receivables. Approximately all of the $555,837 currently due
IUC is within the Company's 30-day terms. Based on the foregoing, IUC has not
set up an allowance for the IT outstanding receivables.

RISKS AND UNCERTAINTIES

         Under the NRC's Alternate Feed Guidance, the Mill is required to obtain
a specific license amendment allowing for the processing of each new alternate
feed material. Various third parties have challenged certain of the Mill's
license amendments, including the recent Molycorp license amendment, which
challenge is currently ongoing, although none of such challenges have been
successful to date. The Company intends to continue to defend its positions and
the validity of its license amendments and proposed license amendments. If the
Company does not ultimately prevail in any such actions and any appeals
therefrom, the Company's ability to process certain types of alternate feeds, in
certain circumstances, may be adversely affected, which could have a significant
impact on the Company.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         Certain statements contained in the foregoing Management's Discussion
and Analysis and elsewhere in this Report to Shareholders constitute
forward-looking statements. Such forward-looking statements involve a number of
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date the statements were made and readers are advised to consider such
forward-looking statements in light of the risks set forth below.

         Risk factors that could affect the Company's future results include,
but are not limited to, competition, environmental regulations, reliance on
alternate feed income, the ability to develop the alternate feed business,
changes to reclamation requirements, dependence on a limited number of
customers, volatility and sensitivity to market prices for uranium and vanadium,
the impact of changes in foreign currencies' exchange rates, political risk
arising from operating in Mongolia, changes in government regulation and
policies including trade laws and policies, demand for nuclear power,
replacement of reserves and production, receipt of permits and approvals from
governmental authorities (including amendments for each alternate feed
transaction) and other operating and development risks.



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